The judicial nature of proceedings under section 11(6) of the Arbitration and Conciliation Act, 1996, and the requirement for providing an opportunity of hearing before the appointment of an Arbitrator.

ORDER : – The instant review petition has been preferred for recalling of order dated 20-5-2021 passed in A. C. No. 37/2021 by which the application under section 11(6) of Arbitration and Conciliation Act, 1996 (for short “the Act”), preferred by respondent has been allowed and sole Arbitrator (former Judge, High Court of Madhya Pradesh) was appointed.

2. Precisely stated facts of the case are that an agreement was executed in year 2015 between Director General of Police, Government of Madhya Pradesh on behalf of the Governor of Madhya Pradesh and respondent for installation of CCTV Cameras in High Court Premises, Bench at Indore. In pursuance thereof, work order has been issued on 14-1-2015 and CCTV Cameras were installed at High Court premises, Bench at Indore.

3. It appears that said CCTV Cameras were found to be of inferior quality and many deficiencies and irregularities were found in whole installation project, therefore, as per the agreement, respondent-Company was blacklisted for one year vide order dated 8-9-2020. Said blacklisting order was passed in following terms : –

4. Against the said order of blacklisting, petitioner preferred a writ petition vide W. P. No. 13738/2020, which was dismissed vide order dated 21-9-2020 by Division Bench of this Court. In the said writ petition, respondent-company raised the suspicion over impartiality of Director General of Police as an Arbitrator as per clause 20 of the agreement according to which in case of any dispute, Director General of Police was to be appointed as sole Arbitrator. Said contention was rejected by the Division Bench and petition was dismissed.

5. Thereafter, a review petition vide R. P. No. 937/2020 was preferred by respondent-Company before the same Division Bench but same was dismissed vide order dated 1-10-2020.

6. Thereafter, SLP was preferred by respondent before the Hon’ble Supreme Court of India vide SLP No. 13452-13452/2020, Nidhi (I) Industries vs. State of Madhya Pradesh and another but same also got dismissed vide order dated 17-12-2020. However, respondent (petitioner therein) was given liberty to submit a fresh representation to the authority concerned to revisit blacklisting order and in pursuance thereof, a representation was preferred by the respondent-Company before the Director General of Police. On his behalf, order dated 31-12-2020 was passed by Inspector General of Police (Intelligence) and rejected the same and upheld the order of blacklisting. Again, a writ petition was filed by respondent vide W. P. No. 5073/2021 before the Division Bench of this Court and Division Bench vide order dated 31-3-2021 dismissed the writ petition in limine while giving liberty to respondent to avail the conciliation/arbitration clause available under the agreement in question.

7. In between, respondent-Company issued show cause notice invoking arbitration under section 11 of Act of 1996 on 20-1-2021,which was replied by the petitioner vide reply dated 10-2-2021 in which offer to go for arbitration was turned down on the ground that Hon’ble Supreme Court already given a chance to agitate the case before the competent authority i.e. Director General of Police and respondent-Company already availed of the said remedy and his representation was rejected earlier, therefore, there is no need for going for arbitration.

8. Against the said rejection order, respondent-Company filed an application under section 11(6) of the Act of 1996 before the designated Authority (Single Bench of this Court).

9. After filing of said application on 12-3-2021, matter was listed on 25-3-2021 on which date respondent-Company was directed to file rejection order dated 31-12-2020. Thereafter, matter was listed on 17-5-2021 and on the said date also, it was informed on behalf of respondent-Company that rejection order has been filed. Thereafter, matter was placed on 20-5-2021 and on said date, application was heard and sole Arbitrator as referred above was appointed. Although one Govern