Arbitration Case No. 102 of 2009 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 102 of 2009 Date of Decision: 19.3.2010 M/s Rajiv Kumar Aggarwal ..Petitioner Versus Punjab Police Housing Corporation Limited and another ..Respondents CORAM: HON'BLE MR. JUSTICE MUKUL MUDGAL, CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present :- Mr. Raman Sharma, Advocate, for the petitioner. Mr. Vikas Singh, Advocate, for the respondents. *** MUKUL MUDGAL, C.J. (Oral) 1. This petition has been filed by the petitioner under Section 11 of the Arbitration & Conciliation Act, 1996 (for short ' the Act), for appointment of a sole Arbitrator to adjudicate upon the disputes between the parties. 2. Clause 25-A of the agreement contains the Arbitration Clause which reads as under:- “ 25-A. Arbitration etc. of the Punjab Police Housing Corporation Limited Form-1 is amended as under:-” If any question, difference or obligation whatsoever shall Arbitration Case No. 102 of 2009 [2] arise in any way connected with or arising out of this instrument of the meaning of operation of any part thereof or the rights, duties or liabilities of either party, than save in so far as the decision of any such matter is hereinbefore provided for and has been so decided, every such matter including whether its decision has been otherwise provided for and/or whether it has been finally decided accordingly or whether the contract should be terminated or has been rightly terminated and as regards the rights and obligations of the parties as the result of such termination shall be referred for arbitration to the Managing Director Punjab Police Housing Corporation Limited or his nominee within 180 days or in (6) six months from the payment of the final bill to the contractor or from the date registered notice is sent to the contractor to the effect that his final bill is ready for payment and his decision shall be final and binding and where the matter involves a claim for the payment or recovery or deduction of money, only the amount, if any, awarded in such arbitration shall be recoverable in respect of the matter referred.” 3. The existence of arbitration clause and invocation of the said clause are not denied by the respondents. 4. Learned counsel for the respondents has submitted that Kuldeep Singh, Chief Engineer has already been appointed as Arbitrator vide letter dated 15.10.2009. On the other hand, the petitioner's case is that the appointment of Arbitrator was made after he had moved this Court on 5.10.2009 under Section 11(6) of the Act for the purpose. In this regard, he placed reliance upon Datar Switch Gears Vs. Tata Finance Ltd. and another, 2000(8) Supreme Court Cases, 151, wherein the Hon'ble Supreme Court has laid down the law that once a party moves to the Court under Section 11 seeking appointment of an Arbitrator after the expiry of the period of 30 days provided under Sub Section 4 of Section 11 of the Act, in that situation, the respondent cannot assert that it has the right to appoint an Arbitrator as per the agreement. Relevant para No. 19 of the said judgment reads Arbitration Case No. 102 of 2009 [3] as follows:- “ 19. So far as cases falling under Section 11(6) are concerned -- such as the one before us -- no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11, that would be sufficient. In other words, in cases arising under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator under Section 11(6) is forfeited.” 5. This judgment was followed in Union of India vs. Bharat Battery Manufacturing Co. (P) 2007(7) SCC 684. 6. Learned counsel for the respondent then submitted that petitioner has joined the proceedings and moved an application before the Arbitrator raising objections with regard to his impartiality. In my view, even if the respondent has joined the proceedings and moved an application before the Arbitrator for raising certain objections, that would not debar it from moving this Court for appointment of an Arbitrator under Section 11(6) of the Act in view of the law position laid down in Datar Switchgears Ltd. (supra) which specifically stipulates that right of the respondent to appoint an Arbitrator under Section 11(6) of the Act is forfeited after the expiry of 30 days of the Arbitration Case No. 102 of 2009 [4] invocation of the arbitration clause and immediately after a party moves the Court under Section 11(6) of the Act for appointment of an Arbitrator. In this view of the matter, the plea taken by the respondent cannot be sustained. 7. Accordingly, this petition is allowed and Shri B.R.Bansal, Addl. District & Sessions Judge (Retd.) is appointed as a sole Arbitrator to adjudicate upon the disputes between the parties. In the meanwhile, the parties will exchange the statements of claim and response thereof. The statement of claim be supplied to counsel for the respondents within four weeks and response to the statement of claim shall be supplied to the counsel for the petitioner within four weeks thereafter. The parties shall appear before the Arbitrator on 5.7.2010 at 4.00 P.M. or on an agreed date convenient to the parties but not later than a fortnight from the date of exchange of pleadings as directed aforesaid. The Arbitrator shall dispose of the reference not later than six months from the date of first appearance of the parties. The Arbitrator shall fix his own fee. (MUKUL MUDGAL) CHIEF JUSTICE 19.03.2010 'ravinder'