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2010 Supreme(MP) 874
IN THE HIGH COURT OF MADHYA PRADESH (GWALIOR BENCH)
S.K. Gangele, J.
Aashirwad Foods and Beverages
Vs.
Shri Arunendra Mohan Pathak and Ors.
Arbitration Case No. 1/2010
Decided On: 08.12.2010
Headnote:Arbitration and Conciliation Act, 1996 -- Ss.11 and 14(1)( a) -dispute between partners of a registered firm -- two arbitrators were appointed to solve -- they failed to perform their duties -- one of them willing to withdraw from arbitration proceedings -- Chief Justice designated the High Court to hear the proceedings -- it was absolutely as per provisions -- High Court has the power to appoint the new arbitrator -arbitrator is appointed accordingly.
Held: Hence, as per the aforesaid principle of law laid down by the Honble Supreme Court and the learned Single Judge of the Bombay High Court as per the statutory provisions of the Act of 1996, in my opinion, this Court has power to appoint arbitrator under the facts of the present case because the non-applicants No.3 and 4 have failed to perform their duties and the respondent No.3 has submitted his wilingness to withdraw from the arbitration proceedings.
Consequently, the application of the applicant is hereby allowed. Shri S.S. Trivedi, retired District Judge, is hereby appointed as Arbitrator in this matter. Parties are directed to appear before the Arbitrator. The Arbitrator will fix the procedure of the arbitration and fee of the Arbitrator will be Rs.5,000/- (Rupees Five thousand only) per sitting. The fees of the Arbitrator shall be shared by both the parties in equal proportion. (2009)4 SCC 523 followed. AIR 1998 Bombay 210 relied on. [Paras 12 & 13]
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S.K. Gangele, J.
1. The applicant has filed this application under Section 14(1)(a) of Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996') for appointment of an arbitrator in place of earlier arbitrators, i.e., non-applicant Nos. 3 and 4.
2. Applicant and non-applicant Nos. 1 and 2 are partners of a registered firm registered under the provisions of Partnership Act, named as Aashirwad Foods & Beverages, Malanpur, District Bhind having its Head Office at Gwalior. The partnership deed has been filed as Annexure A-1. There was a dispute between the partners and the non-applicant Nos. 1 appointed the non-applicant No. 3 and the non-applicant No. 2 appointed the non-applicant No. 4 as arbitrators to decide the dispute. As per the applicant only one arbitration proceeding was held on 22-9-2010 by the arbitrator and since then nothing has happened. The dispute is persisting. The applicant issued a notice, Annexure P-12 to the partners to resolve the dispute and conclude the arbitration proceedings. As per the applicant in spite of that the arbitrators have not proceeded further to conclude the arbitration proceedings and the arbitrators do not want to complete the arbitration proceedings. The applicant has also filed an application I.A. No. 13663/2010 for taking additional facts and documents on record. Along with the aforesaid application, he filed a letter of non-applicant No. 3-Mr. U.C. Verma, who was one arbitrator mentioning the fact that he does not want to continue as an arbitrator, hence, he is resigning.
3. The non-applicant No. 1 in reply resisted the request of the applicant for appointment of the arbitrator in place of non-applicant Nos. 3 and 4. The non-applicants submitted that the application filed by the applicant before this Court under Section 14(1)(a) of the Act of 1996 is not maintainable. It has further been submitted that this Court has no power and jurisdiction to appoint an arbitrator. It has further been contended that the original arbitration proceeding has not been filed, hence, the arbitrator could not be appointed by this Court. The territorial jurisdiction of this Court has also been disputed. It has further been disputed that there is a dispute exists between the parties.
4. Learned Senior Counsel appearing on behalf of the applicant contended that the non-applicant Nos. 3 and 4 failed to perform their duties and only one sitting of arbitrators since 2008 has been held and one arbitrator non-applicant No. 3 has submitted his willingness to leave from the arbitration proceedings. In such circumstances, this Court has power to appoint an arbitrator because the dispute is in existence as per the act of the non-applicant Nos. 1 and 2 in regard to appointment of arbitrators. In support of his contentions, learned Counsel relied on the following judgments:
(i) Smt. Satya Kailashchandra Sahu and Ors. v. Vidarbha Distillers, Nagpur and Ors., AIR 1998 Bom. 210; and
(ii) Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523.
5. Contrary to this learned Senior Counsel appearing on behalf of the non-applicant No. 1 contended that this Court has no jurisdiction to appoint the arbitrator. It has further been contended that the applicant has not filed the copy of agreement in regard to appointment of the arbitrator and there does not exist any dispute for appointment of the arbitrator. He further submitted that the application filed by the applicant before this Court is not maintainable. In support of his contentions, learned Senior Counsel relied on the following judgments:
(i) S.B.P. & Co. v. Patel Engineering Ltd. and Anr. = AIR 2006 SC 450 :2006(1) M.P.H.T. 61 (SC)
(ii) Dr. Pratap Singh Hardia v. Sanjay Chawrekar 2008 (IV) MPJR 263; and
(iii) Atul Singh and Ors. v. Sunil Kumar Singh and Ors., AIR 2008 SC 1016.
6. Undisputed facts of the case are that two arbitrators, i.e., non-applicant Nos. 3 and 4 were appointed to solve the dispute. From the facts of the case, it is clear tha
