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Reserved On 21.04.2022

Delivered On 25.04.2022

Case :- MATTERS UNDER ARTICLE 227 No. - 2887 of 2022

Petitioner :- The Kisan Sahkari Chini Mills Limited And Another

Respondent :- M/S Sumac International Limited

Counsel for Petitioner :- Ravindra Singh

Counsel for Respondent :- Ashish Malhotra

Hon'ble Neeraj Tiwari,J.

Heard Sri Ravindra Singh, learned counsel for the

petitioners through video conferencing and Sri Shashi Nandan,

learned senior counsel assisted by Sri Ashish Malhotra, learned

counsel for the respondent.

Present petition has been filed challenging the impugned

order dated 08.03.2022 passed by Civil Judge (Senior Division),

Bulandshahar in Misc. Case No. 151 of 2021, arising out of OS

No. 827 of 1993.

Learned counsel for the petitioners submitted that there was

an agreement between the petitioners and opposite party dated

18.04.1990 for certain work. The said agreement was also having

arbitration clause and ultimately, some dispute arose and under

provisions of Section 8 and 9 of Arbitration Act, 1940, as then it

was applicable (hereinafter referred to as “Act, 1940”), Mr. Justice

B.L. Loomba (Retired) was appointed as sole arbitrator in

Arbitration Case No. 827 of 1993 (M/s Sumac International

Limited Vs. State of U.P. and others) vide order dated

24.01.2000. He died on 03.05.2000 and thereafter, Hon'ble Mr.

Justice Pradeep Kant (Retired) was appointed sole arbitrator

under section 446(2) of the Company Act, 1956 (hereinafter

referred to as “Act, 1956”). However, his appointment was set

aside by this Court vide order dated 14.01.2016 passed in

Special Appeal Defective No. 583 of 2015. Thereafter, Justice

Vijay Manohar Sahai (Retired) was appointed as sole Arbitrator

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under Sections 8 and 9 of Act, 1940 and he also died on

11.05.2021. He next submitted that after his death, vide

impugned order dated 08.03.2022, Justice R.N. Kakkar (Retired)

was appointed as sole Arbitrator under Sections 8 and 9 of Act,

1940.

Learned counsel for the petitioners assailing the impugned

order on three grounds; first ground is that Section 8 of Act, 1940

provides for notice to other side as well as opportunity to provide

proposed list of Arbitrator, which has never been provided.

Further, Justice R.N. Kakkar (Retired) has been appointed

without his consent. About second ground, he next submitted that

Section 70 of U.P. Cooperative Societies Act, 1965 (hereinafter

referred to as “Act, 1965”) provides for disputes, which may be

referred to arbitration. The present matter is pertaining to

cooperative societies, therefore, Arbitrator would have been

appointed under provisions of Act, 1965. He next submitted that

as it is legal submission, therefore, it can be raised at any stage

of proceeding. For third ground, he submitted that appointment of

Justice Vijay Manohar Sahai (Retired) as Arbitrator has also been

obtained by playing fraud for which criminal case is pending and

in light of judgement of Apex Court in the matter of Abdul Kadir

Shamsuddin Bubere Vs. Madhav Prabhakar Oak. 1962; AIR

SC 406, no Arbitrator should have been appointed in such

matters. Lastly, he submitted that under such facts and

circumstances, impugned order is bad and liable to be set aside.

Sri Shashi Nandan, learned senior counsel opposed the

submissions raised by learned counsel for the petitioners and

submitted that so far as first ground of challenging the impugned

order is concerned, after death of Justice Vijay Manohar Sahai

(Retired), opposite party has filed Arbitration Case No. 151 of

2021 before Civil Judge (Senior Division), Bulandshahar for

appointment of Arbitrator giving three names of proposed

Arbitrator having name of Justice R.N. Kakkar (Retired) at Serial

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No. 1. Upon which, petitioners have filed detail objection and

never raised any objection against the proposed Arbitrators. Case

was heard on 4