204 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ARB-612-2024 ( O&M )

Date of decision : 06.02.2026 M/s Jai Jai Baba Daya Nath Ji Rice Mill …….Applicant Versus Punjab State Grain Procurement Corporation Limited and others ….Respondents CORAM: HON'BLE MR. JUSTICE SHEEL NAGU, CHIEF JUSTICE Present : Mr. Ramandeep Singh, Advocate, for the applicant.

Mr. Mayank Bajaj, Advocate (arguing counsel), and Mr. Shivam Bansal, Advocate, for the respondents.

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SHEEL NAGU, CHIEF JUSTICE

1. Instant application u/s 11 (6) of the Arbitration and Conciliation Act, 1996 (‘1996 Act’ for brevity), seeks appointment of an Arbitrator. 2. Reply filed on behalf of the respondents has been perused.

3. The applicant entered into agreements dated 21.10.2010 (Annexure A-2) and 09.01.2012 (Annexure A-3) with respondent No.2 for custom milling of paddy, containing an arbitration clause, which reads as under :

“26. The rice miler will not pledge the paddy of the State agencies with the commercial banks for availing cash credit limit. If he indulges in this malpractice, he will be immediately black listed and the stocks of paddy/rice shall be lifted from his mill to other mills at his risk and cost.

27. All the disputes and difference arising out of or in any manner touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly provided for the contract) shall be referred to the sole arbitrator of the Director/Managing Director or any person appointed by him in this behalf. There will be no objection to any such appointment that the person appointed is or was an employee of Food and Supplies Department, Punjab/Agency or that he had to deal with the matter to which the contract relates and that in the course of his duties such an employee of the Food and Supplies Department, Punjab/Agency had expressed views on all or any of the matter in dispute or difference. The award of such arbitration shall be final and binding on the parties to this contract. It is a term of this contract that in the event of the arbitrator being transferred or vacating his office or being unable to act for any reason, the Director/Managing Director at the time of such transfer, vacation of office, death or inability shall appoint another person to act as arbitrator. Such a person shall be entitled to proceed with reference from and the stage where it was left by his predecessor.”

4. Dispute erupted between the parties. Respondent No.2 had raised the claim that applicant firm had not supplied the requisite amount of rice and instituted arbitration proceedings by appointing Shri Ravinder Singh, PCS (J) as sole arbitrator who passed an Award dated 14.01.2014 in favour of respondent No.2.

4.1 The applicant filed an objection petition u/s 34 of 1996 Act to the said award, mainly on the ground that the award was passed without giving him an opportunity to represent himself. The same was allowed by learned Additional District Judge, Pataiala, vide order dated 12.08.2022 (Annexure A-

4) and the award was set aside. Thereafter, arbitration proceedings were again initiated at the instance of respondent No.2, who appointed Shri S.K. Garg (Retd. Judge) as sole arbitrator unilaterally. The applicant served notice dated 25.11.2024 (Annexure A-7) upon the respondents seeking termination of the Arbitral Tribunal constituted in contravention of 1996 Act and the law laid down by the Apex Court, but to no avail.

5. Learned counsel for the respondents could not dispute existence and execution of arbitration agreement, service of notice, dispute between the parties being arbitrable and the cause not being a deadwood. They, however, submit that the applicable had actively participated in the proceedings taken before Mr. S.K. Garg (Retd. Judge) acting as sole arbitrator on 14.08.2024 and thereafter had filed an application u/s 16 of 1996 Act on 29.01.2025 and so, cannot raise objections to the appointment of the said Arbitrator after joining the proceedings.

6. Th