The withdrawal of an arbitrator does not terminate the arbitration proceedings; therefore, parties must pursue their claims within the arbitration framework as outlined in the Arbitration Act, 1996.

ORAL ORDER

The plaintiff in O.S.No.1552/2013, on the file of I Additional Civil Judge, Bengaluru Rural District, Bengaluru is before this Court challenging an order dated 14.02.2020, by which, the Court dismissed the suit as not maintainable.

2. (i) A suit in O.S.No.1552/2013 was filed for declaration that the plaintiff is entitled to 50% of the land, which was described in schedule to the suit and to effect partition by metes and bounds. The plaintiff claimed that he and the defendant had contributed equally for purchase of the property described in the schedule to the suit but the sale deed was executed only in the name of the defendant. Later, they entered into a settlement on 20.11.2005, in terms of which, the defendant admitted that the plaintiff had paid 50% of the sale consideration and it was agreed that the suit property shall be put for sale and the proceeds shall be shared equally between the plaintiff and the defendant. It was also provided that the parties may agree to divide the property into two equal portions. The memorandum of understanding dated 20.11.2005 provided for settlement of disputes between the plaintiff and the defendant through arbitration by Mr. Sadasiva Reddy.

(ii) The plaintiff purportedly demanded his share in the property but the defendant did not co-operate in finalizing the claim, following which, Arbitrator was requested to enter reference. The Arbitrator entered reference and issued notice to both the parties to appear before him. The defendant addressed a communication dated 19.11.2012 requesting a joint arbitration with one Mr. Rajasekaran, which was accepted by the plaintiff. However, the said Mr. Rajasekaran did not indicate his willingness to be an Arbitrator. The defendant therefore stopped appearing before the Arbitrator.

(iii) Consequently, the Arbitrator in terms of a communication dated 23.08.2013 dropped the proceedings on the ground that there was not even a single sitting for more than 2 years and therefore he directed the parties to work out their remedy before the Civil Court.

(iv) The plaintiff therefore filed O.S.No.1552/2013 for the aforementioned reliefs. Since the defendant was placed ex parte, after hearing the plaintiff, the suit was set down for judgment. At that stage, the defendant filed an application for setting aside the ex parte decree and also an application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act, 1996’) read with Order VII Rule 11 (d) of the Code of Civil Procedure. It was contended by the defendant that since the Arbitrator had withdrawn from the proceedings, the parties were bound to workout such remedy that are available to them under the Act, 1996 Act and therefore the plaintiff cannot approach the Civil Court.

3. (i) The application was contested by the plaintiff, who contended that the order passed by the Arbitrator amounted to termination of his mandate under Section 32 (c) of the Act, 1996 and therefore the plaintiff cannot be left remediless to workout his rights under the memorandum of understanding dated 20.11.2005. Thus, it was contended that the suit was maintainable.

(ii) The Trial Court in terms of the impugned order, allowed the application and dismissed the suit as not maintainable in view of Section 8 of the Act, 1996,

(iii) While holding so, it held that “the Arbitration proceedings has already started by issuing notices to the parties but the plaintiff has filed the present suit holding that Arbitrator has opined to approac