IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 49 of 2009 Date of decision 6.4.2011 M/s Ajanta Sales Corporation through Mr. Nilambar Khullar and anr ……petitioners Vs. Ms/ Ishan Retail Ltd. through its CEO and another ……respondents CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. Harkesh Manuja, Advocate for the petitioners Mr. J.S. Toor, Advocate for respondents. Hemant Gupta, J Petitioner has sought appointment of an Arbitrator in respect of the dispute arising out of an Agreement dated 16.6.2008. Vide the aforesaid Agreement, petitioner was appointed as a Franchisee for the Merchandise of the goods of the respondents herein. The dispute arose between the parties. The petitioner, vide the notice (Annexure P-4) dated 19.11.2008 sought appointment of an Arbitrator but no Arbitrator was appointed by the respondent. The petitioner filed a petition before this Court on 17.12.2008. The office of this Court returned the same with some objections. The objections were met on 6.3.2009. The petition came up for hearing on 24.7.2009 but on that date, the petition was adjourned to 25.9.2009 and subsequently for 9.10.2009. It was on 9.10.2009, the notice was ordered to be served. It is the case of the respondents that the Arbitrator has been appointed in terms of the Agreement on 9.9.2009 i.e. before even the notice was issued by this court. Since such appointment is prior to the issue of notice of the present petition to the respondents, therefore, the Arb Case NO. 49 of 2009 petitioner cannot continue with the present petition. It is also pointed out by Mr. Toor that such Arbitrator has given his Award and execution proceedings have been initiated by respondents. The petitioner filed the p[resent petition before this court on 17.12.2008. The office objections were removed on 6.3.2009. Without eaming the question whether the petition can be deemed to be filed on 17.12.2008, it is apparent from record that the petition was complete in all respects on 6.3.2009. The arbitrator has been appointed after more than six months i.e. on 9.9.2009. Thus the Arbitrator has been appointed after invocation of the jurisdiction of this Court by the petitioner. Therefore, in view of the judgment of the Hon’ble Supreme Court Datar Switchgears Ltd. Vs. Tata Finance Ltd and another (2000) 8 SCC 151, the respondent is not competent to appoint an Arbitrator. Later in Union of India v. Bharat Battery Mfg. Co. (P) Ltd.,(2007) 7 SCC 684, the Hon’ble Supreme Court held: 9. We are unable to countenance the submission of the learned counsel for the appellant. Section 11(8) of the Act could have come to the aid of the appellant had the appellant appointed the arbitrator within 30 days from the date of receipt of request to do so from the respondent or the extended time, as the case may be. In the present case, as noticed above, Section 11(6) petition was filed on 30-3-2006 by the respondent. The appellant stated to have appointed one Dr. Gita Rawat on 15-5-2006 i.e. after Section 11(6) petition was filed by the respondent on 30-3-2006, which is not permissible in law. In other words, the appellants are stopped from making an appointment of the arbitrator in terms of Clause 24 of the agreement after Section 11(6) petition is filed by the respondent. Once Section 11(6) petition is filed before the court, seeking appointment of an arbitrator, the power to appoint an arbitrator in terms of arbitration clause of the agreement ceases” 2 Arb Case NO. 49 of 2009 Therefore, in view of the judgments of the Hon’ble Supreme Court, the respondents cannot appoint an Arbitrator after the petition under Section 11(6) of the Act has been filed. The appointment of an Arbitrator by respondents is after the filing of the present petition on 17.12.2008 without the permission of this Court is not legal and cannot be sustained. The subsequent proceedings leading to the Award and execution are also not sustainable for the reason that after the petition was filed before this Court, respondents could not appoint Arbitrator. In view of the said fact, present petition is allowed. Mr. B.S. Mehndiratta, former District and Sessions Judge resident of H. No. 5802- B, Sector 38-West, Chandigarh is appointed as the Arbitrator. Since, the dispute is of an amount of Rs. 5,00,000/-, both the parties agrees to pay Rs. 50,000/- as the fee inclusive all other expenses to be shared equally. Disposed of in above terms. [HEMANT GUPTA] JUDGE 6.4.2011 preeti 3