1 IN THE HIGH COURT OF BOMBAY AT GOA APPLICATION FOR APPOINTMENT OF ARBITRATOR NO.17/2008 Shri Sayyad Bashasab Sheshgiri, major, resident of Madani Manzil, Betim, Bardez, Goa through his power of attorney holder S. Sheshgiri. ......... Petitioner. V/s. 1. a Smt. Rosaria Basilia Cecilia Zama Travasso e Souza. b. Smt. Augusta D'Souza, both since deceased through Legal Representatives. Smt. Livinia Dourado, major, r/o. Cortalim Goa. 2. Smt. Maria Yvette D'Souza e Lobo, r/o. Ramnagar, Betim, Goa. 3. Smt. Maria Ida D'Souza e Conceicao, r/o. House No.B-283, Betim, Bardez, Goa. 4. Shri Agnelo B. D'Souza, major, r/o. Betim, Bardez, Goa. 5. Smt. Rosa Elvira Fernandes D'Souza, major, r/o. Betim, Bardez, Goa. 6. Francisco D'Souza,. Near Syndicate Bank, Betim, Bardez, Goa. 7. Shri Henrique D'Souza, major, r/o. Betim, Bardez, Goa. 8. Smt. Lucia D'Souza, major, r/o. Betim, Bardez, Goa. 9. Smt. Lizette D'Souza, 2 major, r/o. Opposite Port Trust, Wadbunder Mazgaon, Mumbai. ....... Respondents. Ms. A. A. Agni, Advocate for the petitioner. Mr. M. B. D'Costa, Senior Advocate with Mr. J. A. Lobo, Advocate for respondent Nos. 1(a) and 2. Mr. Rohit Bras De Sa, Advocate for respondents No. 3 to 5, 7 & 8. CORAM :- D.G. KARNIK, J. Date :- 26th August, 2010. ORAL ORDER : By this petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act”), the petitioner seeks appointment of an arbitrator. 2. By Agreement for Sale dated 12th March, 2004, respondent Nos. 4, 6, 7 and two other persons agreed to sell a property known as “Vollo” situated at Betim, Village Reis Magos to the petitioner. The other respondents to the petition are said to be the heirs of other two vendors who have died before filing of the petition. According to the petitioner, the respondents committed breach of the agreement for sale. The agreement for sale contains an arbitration clause which provides that in the event any disputes arise between the parties, then the same 3 shall be referred to an arbitrator as per the Arbitration Act. Disputes having arisen between the parties, the petitioner, by a notice dated 11th February, 2008, requested the respondents to concur with the appointment of an arbitrator to arbitrate upon the disputes. The respondents raised several objections and did not concur with the name of the arbitrator. Thereupon, the present petition has been filed by the petitioner for appointment of an arbitrator. 3. There is no dispute between the parties that the Agreement for Sale dated 12th March, 2004 contains an arbitration clause and the arbitration is to be at the hands of a sole arbitrator. The learned Counsel for respondents No.1 and 2 submitted that respondents No.1 and 2 apart from being heirs of the deceased vendors, also have a share in the property independently. They are co-owners in their own right. They were not parties to the agreement for sale and they have not agreed to sell their independent share in the property to the petitioner. As such, they are not bound by the agreement of sale executed by the other co-owners. Consequently, any agreement between the petitioner on the one hand and respondent Nos. 1 and 2 on the other hand is not binding to them. 4 4. It is not established as yet whether respondents No.1 and 2 have any independent share in the property. That is a matter which they can and have to raise before an appropriate forum. Needless to say that any decision of the Arbitral Tribunal would not be binding on them qua their share, if any, which they may have independent of the original vendors. However, so far as the share claimed by them by way of inheritance through original vendors is concerned, they will be bound by the arbitration agreement in view of Section 40 of the Arbitration Act. 5. Learned Counsel for respondents No.3, 4, 5, 7 and 8 submitted that respondent No.4 has already filed a suit bearing Civil Suit No.55/2009 before the District Judge-II for a declaration that the receipt dated 21.9.2006 was a forged receipt and no consideration whatsoever had been paid to him under the receipt and, therefore, the receipt was void. He further submitted that in the said suit, a written statement has been filed by the present petitioner who has not made any application under Section 8 of the Arbitration Act and thus acceded to the jurisdiction of the Civil Court. Consequently, he cannot proceed with the arbitration. Perusal of paragraph 8 of the affidavit-in-reply filed by respondent No.4 shows that the respondent had only 5 challenged the receipt dated 21st September, 2006 to be forged one and has not challenged the agreement of sale. In paragraph 8 of the affidavit in reply the respondent No.4 has stated “I was advised to file a civil suit to seek a declaration that the receipt dated 21.9.06 is a forged receipt and no consideration whatsoever has been paid to me under the Agreement of Sale dated 12.3.04 and, therefore, the said receipt is illegal, unlawful and void.” In the whole of the affidavit, respondent No.4 has not denied the execution of the Agreement for Sale dated 12th March, 2004. The Counsel for respondent No.4, however, submitted that though it has not been stated in paragraph 8 or anywhere else in the affidavit that respondent No.4 has not signed the Agreement for Sale dated 12th March, 2004, yet in the said suit in fact he has challenged the execution of the Agreement for Sale dated 12th March, 2004. He submitted that the respondent No.4 has challenged the very existence of the Agreement dated 12th March, 2004 and, therefore, an arbitrator cannot be appointed. In my view, the submission has no merit. Section 16 of the Arbitration Act empowers the Arbitral Tribunal to rule on its jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement. The Arbitral Tribunal would be competent to decide even on the 6 question of existence or validity of the arbitration agreement alleged to have contained in the Agreement for Sale dated 12th March, 2004. Appointment of an Arbitrator cannot be denied on the ground that respondent No.4 has challenged existence and/or validity of the arbitration agreement. In view of the fact that prima facie there is an agreement between the parties and/or the persons through whom they claim which contains an arbitration clause and since there is no objection valid in law for the appointment of an arbitrator, an arbitrator needs to be appointed. 6. After this part of the order was pronounced in the open Court, I inquired with the learned Counsel for the parties as to whether they agree upon the name of an arbitrator. Without prejudice to the rights and contentions of the parties to the jurisdiction of the Arbitral Tribunal, the Counsel for the parties agree upon the name of Shri R. G. Ramani, Advocate as a sole arbitrator. The petition is allowed. Shri R. G. Ramani, Advocate having Office at Panaji Goa, is appointed as the sole arbitrator. D.G. KARNIK, J. ssm.