The main legal point established in the judgment is that the competency of the arbitrator and the proper notice in the arbitration proceedings are crucial for the validity of the arbitration award.

JUDGMENT : – Heard finally. This appeal has been preferred under section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act, 1996”) against the order dated 5-7-2016, passed by the XV Additional District Judge, Indore in arbitration case No. 86/2013, wherein an application filed by the appellant/defendant under section 34 of the Act of 1996 has been rejected affirming the award passed by the sole arbitrator on 10-5-2013.

2. In brief, the facts of the case are that the appellant is a proprietorship concern and is running its business in the name and style of ‘Chokhi Dhani’. In the year 2003, the appellant entered into an agreement with the respondent M/s J. S. Construction as the contractor for construction of a water park, Clause 46 of which refers to arbitration. In connection with the said agreement, a dispute arose between the parties in respect of payment towards the work carried out by the contractor as it was alleged by the contractor that the appellant has withheld an amount of Rs. 14,95,960/- due to it and thus, for the appointment of an arbitrator, an application under section 11 of the Act of 1996 was also filed by the respondent before this Court which was registered as AC No. 8/2007, and came to be decided by this Court vide its order dated 28-4-2010, permitting the respondent to withdraw the petition with liberty to approach the named arbitrator under Clause 46.

3. After withdrawal of the aforesaid application AC No. 8/2007, the respondent designated the Architect as the sole arbitrator as according to the agreement between the parties, the Architect is defined as ‘Kalp Kartik Architects’. The said Architect served a notice of arbitration to the appellant and immediately, an application under Order 7, Rule 11 of Civil Procedure Code was field before him objecting his appointment as the arbitrator. The aforesaid application was rejected by the arbitrator vide its order dated 3-12-2012, holding that all the issues have been settled by the order of High Court dated 28-4-2010 passed in AC No. 8/2007.

4. The appellant’s case is that thereafter, the counsel appearing for the appellant before the arbitrator sought time to file reply and on 12-12-2012, the arbitrator passed the order which reads as under : –

“Shri Rupesh Kumar, Advocate for the respondents present. Request for new date for filing reply. New date shall be conveyed to respondents. Arbitrator”

5. Appellant’s further case is that despite this order, no date was conveyed to them and finally, an ex-parte award was passed on 10-5-2013. Against the said order dated 3-12-2012, passed by the arbitrator rejecting the application filed by the appellant under Order 7, Rule 11 of Civil Procedure Code, a civil revision was also filed before this Court being CR No. 8/2013, but after passing of the final award by the arbitrator, the aforesaid civil revision had become infructuous hence it was not proceeded with. The award passed by the arbitrator on 10-5-2013 was challenged by the appellant under section 34 of the Act of 1996, before the District Judge, Indore which was dismissed by the District Judge vide impugned order dated 5-7-2016, hence, this appeal.

6. Shri S. C. Bagadia, learned senior counsel appearing for the appellant has submitted that a perusal of Clause 46 of the agreement clearly reveals that the Architect and Arbitrator are two different entities and could not be treated as the same and the so called arbitrator appointed in this case was never appointed as an arbitrator either by the agreement between the parties, or by the Court. It is also submitted that the Arbitrator so appointed he was not qualified as provided in Clause 56 of the Agreement, but this objection was not dealt with in the impugned order. Counsel has submitted that when the arbitrator himself was not competent and qualified as specifically provided in the arbitration agreement itself: the arbitration proceedings and the final award passed by him stand vit