--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE D.B.: HON'BLE MR. SHANTANU KEMKAR AND HON'BLE MR. S. C. SHARMA, JJ WRIT PETITION NO. 11398 / 2010 M.P. RURAL ROAD DEVELOPMENT AUTHORITY Vs. R. C. CHUGH * * * * * O R D E R ( _____/11/2011) PER S. C. SHARMA, J :- The petitioner, a Society registered under the M.P. Societies Registration Act, 1973, has filed this present petition for quashment of order dt. 18/8/2010, passed by the Arbitration Tribunal, by which the objections raised by the petitioner in respect of jurisdiction of the Tribunal to decide the dispute have been turned down. The contention of the petitioner is that an agreement was executed between the parties for supervision and quality control consultancy for roads under the Pradhan Mantri Gram Sadak Yojna and as per the special terms and conditions of the agreement, clause 10.2 provide for --- 2 --- resolving the dispute by arbitration. The petitioner has further stated that a dispute arose between the parties and the respondent No.1 sent a notice u/S. 11 of the Arbitration & Conciliation Act, 1996 on 28/11/2003 for appointment of Arbitrator requesting the petitioner to nominate its Arbitrator and the petitioner appointed respondent No.4 as its Arbitrator on 13/2/2004. The petitioner has further stated that the Arbitrator appointed by the petitioner as well as the arbitrator appointed by respondent No.1 jointly appointed Hon'ble Shri Justice M. D. Bhatt (Retd.) as the Presiding Arbitrator. The petitioner has further stated that an objection was preferred u/S. 16 before the Tribunal in respect of jurisdiction of the Tribunal to decide the dispute and the arbitration Tribunal on 11/10/2004 passed an order holding that the Tribunal has no jurisdiction to proceed in the matter and the remedy lies before the M.P. Madhyastham Adhikaran (Tribunal) constituted under the provisions of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 as the dispute between the parties relates to a works contract. The petitioner has further stated that respondent No.1 preferred an appeal u/s. 37 of --- 3 --- the Arbitration Act before the Addl. Distt. Judge, Dhar on 15/2/08 and the same was dismissed and thereafter the respondent No.1 approached the Arbitration Tribunal at Bhopal in Ref. Case No. 32/08 and the same was dismissed on 19/1/10 as barred by limitation. Petitioner has further stated that a writ petition was preferred before this Court against the order passed in appeal u/S. 37 and the same was registered as WP NO. 1464 / 2010 and at the same time a Civil Revision was also preferred against the order of the Arbitration Tribunal dt. 19/1/10 and the same was registered as C.R.No. 49/10. The Writ Petition was finally disposed of on 11/3/10 observing that all previous orders passed by the Arbitration Tribunal affirmed in appeal by the Addl. Distt. Judge and order dt. 19/1/2010 passed by the Arbitration Tribunal were not binding upon the parties and it was also observed that the respondent No.2 is free to seek its remedy under the Arbitration & Conciliation Act, 1996. The petitioner has further stated that in view of the order passed in WP No. 1464 / 2010, the Civil Revision ie., CR NO. 49/10 was dismissed as not pressed. The contention of the --- 4 --- petitioner is that this court has not revived the arbitration proceedings and it was only observed that the parties are free to seek remedies under the Arbitration & Conciliation Act, 1996 and therefore the respondent No.1 in utter disregard to the order passed by this Court submitted an application on 25/3/10 before the Arbitration Tribunal constituted in terms of the agreement between the parties and on 30/3/10 the erstwhile presiding arbitrator revived the proceedings and the Presiding Officer also withdrew himself from the proceedings. The petitioner has further stated that two arbitrators including the one appointed by the petitioner appointed a Presiding Officer in terms of the agreement and on 1/7/10 notice was issued for convening the first meeting on 15/7/10. The petitioner has further stated that on 15/7/10 objection was raised in respect of the jurisdiction of the Tribunal and the arbitration tribunal has passed on 18/8/2010 rejecting the objections preferred by the petitioner. The petitioner's grievance is that the same arbitration tribunal could not have proceed ahead in the matter and a fresh arbitration tribunal should have been --- 5 --- constituted in the matter. The petitioner has also raised a ground that the earlier arbitration Tribunal became functus officio and revival of the proceedings after termination of the mandate of the Tribunal without following the procedure of law is contrary to the provisions of the Arbitration & Conciliation Act, 1996. The petitioner has prayed for quashing of order dt. 18/8/2010. A reply has been filed on behalf of respondent No.1 and the stand of the respondent No.1 is that an arbitration Tribunal was constituted by nominating two arbitrators by the petitioner as well as by respondent No.1 and the presiding officer was nominated by the two arbitrators. The petitioner has further stated that the arbitration Tribunal has earlier opined that the dispute has to be resolved by the M.P. Arbitration Tribunal keeping in view the provisions of M.P. Madhyastham Adhikaran Adhiniyam, 1983 and the matter has travelled before this court earlier and this court in WP No. 1464 / 2010 has held that the petitioner Company is at liberty to seek its remedy under the provisions of the Arbitration & Conciliation Act, 1996. Contention of the --- 6 --- respondent No.1 is that an Arbitration Tribunal was constituted as per the provisions of the Arbitration & Conciliation Act, 1996 and therefore it is only the Arbitration Tribunal which is having the jurisdiction to decide the dispute and the arbitration tribunal has rightly turned down the objection raised by the present petitioner in respect of the jurisdiction. It has also been vehemently argued before this court that the present writ petition is not at all maintainable in the light of the judgment delivered by the apex court in the case of S. B. P. Company Vs. Patel Engineering Limited and another reported in (2009) 10 SCC 293 decided by the apex court and the remedy, if any, available to the petitioner is to challenge the award delivered by the arbitration tribunal. Heard learned counsel for the parties at length and perused the record. In the present case, the agreement was executed between the parties as contained in Annexure P/2 and clause 10.2 of the agreement provides for settlement of dispute by redressal committee. The Committee as per the terms and --- 7 --- conditions of the agreement is required to give its decision within 60 days and any party not satisfied with the decision of the committee is free to refer the case for arbitration under the provisions of Arbitration & Conciliation Act, 1996. The respondent No.1 on 28/11/2003 sent a notice u/S. 11 of the Arbitration & Conciliation Act, 1996 requesting the petitioner to nominate its arbitrator and the petitioner nominated respondent No.4 as his arbitrator on 13/2/2004. The arbitrator nominated by the petitioner and the arbitrator nominated by respondent No.1 jointly appointed Hon'ble Shri Justice M. D. Bhatt (Retd.) as the Presiding Arbitrator. It is pertinent to note that an objection was preferred u/S. 16 before the Arbitration Tribunal in respect of jurisdiction of the Tribunal to decide the dispute and the arbitration Tribunal on 11/10/2004 passed an order holding that the Tribunal has no jurisdiction to proceed in the matter and the remedy lies before the MP Arbitration Tribunal constituted under the provisions of the M.P. Madhyastham Adhikaran Adhiniyam, 1983 as the dispute between the parties relates to works contract. --- 8 --- An appeal was preferred u/S. 37 of the Arbitration & Conciliation Act, 1996 before the Addl. Distt. Judge, Dhar on 15/2/08 and the same was dismissed and thereafter the respondent No.1 approached the Arbitration Tribunal, Bhopal and the case was registered as Reference Case No. 32/2008. The reference case was dismissed as barred by limitation on 19/1/10. It is pertinent to note that a writ petition was also preferred before this Court against the order passed by the Addl. Distt. Judge, Dhar in an appeal preferred u/S. 37 and the same was registered as WP No. 1464/2010 and at the same time a Civil Revision was also preferred against the order of the Arbitration Tribunal dt. 19/1/10, the same was registered as CR No. 49/10. The Writ Petition was finally disposed of on 11/3/10 observing that all previous orders passed by the Tribunal affirmed in appeal by the Addl. Distt. Judge and order dt. 19/1/10 passed by the Arbitration Tribunal were not binding upon the parties and it was also observed that respondent No.2 is free to seek a remedy under the Arbitration & Conciliation Act, 1996. The Civil Revision ie., CR NO. 49/10 was dismissed as not --- 9 --- pressed. The order passed by the Division Bench of this Court reads as under : Civil Revision No. 49 of 2010 11/02/2010 Shri S. C. Bagadia, Senior Advocate with Shri D. K. Chhabra, Advocate, for the petitioner. Shri Prakash Verma, Advocate, for the respondents. Viney Mittal, J (Oral) Learned senior counsel for the petitioner states that the present petition be disposed of as not pressed, in view of the order passed today by this Court in WP No. 1464 / 2010. Ordered accordingly. It is pertinent to note that an application was preferred before the Arbitration Tribunal and the order passed by this Court was brought to the notice of the Arbitration Tribunal and on 30/3/10 the erstwhile Presiding Officer revived the proceedings and at the same time on 30/3/10 Hon'ble Shri Justice M. D. Bhatt (Retd.), on account of health problems withdrew from the Office. That thereafter two Arbitrators meaning thereby one nominated by the petitioner and the one nominated by respondent No.1 appointed Shri S. C. Garg, Retd. Chief Engineer, MP PWD as the Presiding Arbitrator. The order --- 10 --- sheet appointing Presiding Arbitrator is also on record and the same reads as under : Consequent to the withdrawal from office by the 3rd & Presiding Arbitrator Justice (retd) M. D. Bhatt, as informed by him vide his communication dated 30/03/2010, the matter of appointment of a substitute Arbitrator under Section No. 15 (2) read with Section 11 (3) of the Arbitration & Conciliation Act, 1996 has been considered & it is agreed to appoint Shri Satish Chandra Garg (retd.) Chief Engineer, MP, PWD, resident of 204 Sapphire Avenue, 7, M.G.Road, Indore (Tel : 94250 60774), who has considered to act as the third Arbitrator. The petitioner's grievance is that the question of reviving the proceedings in the peculiar facts and circumstances of the case does not arise as the proceedings stood terminated earlier by an order dt. 11/10/04 and therefore fresh arbitrator should have been appointed by the parties and a fresh Presiding Officer should have been appointed in the matter. He has placed heavy reliance upon Sec. 32 of the Arbitration & Conciliation Act, 1996 and his contention is that once the Arbitration Tribunal has terminated the proceedings, the question of revival of the --- 11 --- same does not arise in the peculiar facts and circumstances of the case and the order passed by the Division Bench of this Court will certainly not at all revive the arbitral proceedings. Sec. 32 of the Arbitration & Conciliation Act, 1996 reads as under : 32. Termination of proceedings.- (1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub – section (2). (2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where - (a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute, (b) the parties agree on the termination of the proceedings, or (c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible. (3) Subject to section 33 and sub section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings. This Court has carefully gone through the aforesaid statutory provision and in the present case the Division --- 12 --- Bench has categorically held that the provisions of Arbitration & Conciliation Act, 1996 are applicable in respect arbitration proceedings. The Division Bench has also observed that any adverse order passed by any of the authorities shall not be treated to be binding upon the petitioner Company and therefore this court does not find any reason to interfere with the order passed by the Arbitration Tribunal wherein the person who was nominated by the petitioner himself has consented for appointment of a particular Presiding Officer. Not only this, in the present case, the Arbitration proceedings are going on, the remedy available to the petitioner is to challenge the final award passed by the Arbitrator. The apex court in the case of S.B.P. & Company Vs. Patel Engineering Ltd., and another (2005) 8 SCC 618 has held that once the matter reaches the arbitration Tribunal or the sole arbitrator, the High Court would not interfere with the orders passed by the Arbitrator or by the Arbitration Tribunal during the course of the arbitration proceedings and the parties could approach the Court only in terms of Sec. 37 of the Act or in terms Sec. 34 --- 13 --- of the Act. In the present case, the arbitration proceedings have been revived the Arbitrator appointed by the petitioner and the Arbitrator appointed by the respondent No.1 have appointed a presiding arbitrator and the arbitration proceedings are going on and therefore merely because the objection of the petitioner has been turned down in respect of jurisdiction vide order dt. 18/8/10, it cannot be said that the petitioner is having a remedy to approach this Court by filing a writ petition. The petitioner shall certainly be free to raise all possible grounds while assailing the award passed by the Arbitration Tribunal keeping in view the peculiar facts and circumstances of the case. Resultantly, the writ petition is dismissed. No order as to costs. (SHANTANU KEMKAR) (S. C. SHARMA) J U D G E J U D G E KR