2020 Supreme(All) 319
IN THE HIGH COURT OF ALLAHABAD
Jaspreet Singh, J.
Deepak Goel – Appellant
Versus
Sri Avinash Chandra and Ors. – Respondent
ARBITRATION APPLICATION No. 49 of 2019
Decided On : 17-02-2020
Advocate Appeared:
For the Appellants : Sachin Garg
Point of Law
Provisions of Section 15(2) require that when the mandate of an arbitrator terminates either by his withdrawal from office, or pursuant to an agreement by the parties, or for any reason, a substitute arbitrator shall be appointed according to the rules applicable to the appointment of the arbitrator being replaced.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 11(6) - petitioner and the respondents had entered in a builder's agreement - In terms of the aforesaid agreement, the property - situated at Meer Jan Lane was to be developed by the petitioner by raising a four storied construction comprising of lower ground floor, upper ground floor, first floor and second floor. The said agreement also provided that the entire construction would be raised on the cost of the petitioner. However, 70% of so constructed area was to vest with the petitioner and the remaining 30% of the area would vest with the respondents – Held, In absence of any notice given by the petitioner to the respondents seeking appointment of a substitute arbitrator mutually or with consent and not having complied with this original procedure, hence, the petition under Section 11(6) of the Act of 1996 is bad and not maintainable accordingly it is liable to be dismissed. However, in case if the law so permits, the petitioner shall be at liberty to approach the respondents for getting a substitute arbitrator appointed in accordance with the agreed procedure and law – Petition dismissed - (Para 42 and 43).
Facts of the Case:
Petitioner and the respondents had entered in a builder's agreement - In terms of the aforesaid agreement, the property - situated at Meer Jan Lane, - was to be developed by the petitioner by raising a four storied construction comprising of lower ground floor, upper ground floor, first floor and second floor - Agreement also provided that the entire construction would be raised on the cost of the petitioner. However, 70% of so constructed area was to vest with the petitioner and the remaining 30% of the area would vest with the respondents.
Finding of the Court:
In absence of any notice given by the petitioner to the respondents seeking appointment of a substitute arbitrator mutually or with consent and not having complied with this original procedure, hence, the petition under Section 11(6) of the Act of 1996 is bad and not maintainable accordingly it is liable to be dismissed. However, in case if the law so permits, the petitioner shall be at liberty to approach the respondents for getting a substitute arbitrator appointed in accordance with the agreed procedure and law.
Result: Petition dismissed
JUDGMENT :
1. Heard Shri N.K. Seth, learned Senior Advocate assisted by Shri Sachin Garg, learned counsel for the petitioner.
2. The instant petition has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act of 1996", for short).
3. Briefly, the facts are that the petitioner and the respondents had entered in a builder's agreement dated 23.04.2009. In terms of the aforesaid agreement, the property i.e. House No.95/56 (Old No.19 situated at Meer Jan Lane, Gautam Budh Marg, Latouche Road, Lucknow) was to be developed by the petitioner by raising a four storied construction comprising of lower ground floor, upper ground floor, first floor and second floor. The said agreement also provided that the entire construction would be raised on the cost of the petitioner. However, 70% of so constructed area was to vest with the petitioner and the remaining 30% of the area would vest with the respondents.
4. Be that as it may, certain disputes arose in between the parties. The agreement as mentioned above contained an arbitration clause, which reads as under:-
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5. It is the case of the petitioner that after the disputes had arisen, he invoked the arbitration clause and wrote a letter to the respondents dated 21.08.2017 calling upon the respondents to resolve the dispute failing which the petitioner would approach the nominated arbitrator in terms of the agreement. It has further been submitted that since the respondents did not respond to the said notice, consequently, the petitioner by means of the letter dated 01.01.2019 addressed to the nominated arbitrator required him to enter into the reference to adjudicate the disputes arisen in between the parties in term of the agreement dated 23.04.2009.
6. It has further been submitted that the named arbitrator by means of his letter dated 02.01.2019, a copy of which has been annexed as Annexure No.4 with the petition, recused himself and withdrew from the office of the arbitrator and required the parties to nominate some other arbitrator. It is thereafter that the petitioner preferred the instant petition under Section 11(6) of the Act of 1996 seeking the appointment of an arbitrator.
7. This Court by means of the order dated 05.08.2019 had issued notices to the respondents. Since, the office report on service indicated that the respondents were unserved, accordingly, by means of the order dated 16.10.2019 fresh notices were again directed to be issued to the respondents.
8. The office report further indicates that in compliance of the order passed by this Court dated 16.10.2019, the learned counsel for the petitioner had failed to take steps. Later, by means of the order dated 13.11.2019, the petitioner filed fresh steps for the respondents and as per the office report dated 07.12.2019, it was reported that the respondents were not residing at the given addresses and thus, the service was not sufficient. Since, thereafter, the matter remained pending before this Court and on 21.01.2020, this Court passed the following order, which reads as under:-
"Heard Shri Sachin Garg, learned counsel for the petitioner.
The office report dated 07.12.2019 has reported that the respondents No.1 to 5 could not be served for the reasons that the addresses are incomplete. The addresses as mentioned in the petition have now occupied by some other persons and the premise has already been sold. In absence of the correct addresses, the respondents could not be served.
Learned counsel for the petitioner shall provide the correct addresses of the respondents by filing a supplementary affidavit within ten days.
Learned counsel for the petitioner shall also satisfy the Court as