r K Q HIGH COURT OF CHHATTISGARH AT BILASPUR Arbitration ApDlication No.22 of 2008 APPLICANT: NON-APPLICANT: Versus M/s Lark Constructions Pvt. Ltd. Bharat Alluminium Company Limited POST FOR ORDER ON 03 -1-2011 .^-''^ Sd/- Dhirendra Mishra Judge 01 -1-2UIT '1'."% '^;-..,' l './ 1 ^^ ^^v HIGH COURT OF CHHATTISGARH AT BILASPUR Arbitration ApDlication No.22 of 2008 APPLICANT: NON-APPLICANT: M/s Lark Constructions Pvt. Ltd., a limited company duly registered under the relevant provisions of Company Act ~ 1923, having its principal office at Ground Floor, "Runanubandh", Road No.l, Sector-19, New Panvel district ' Raigad (Mah.) 410206, represented by the Managing Director Shri A.D. Patrikar, aged about 59 years, son of late Shri Diwakar Patrikar, R/o "Runanubandh", S-2, Road No.- 1, Sector No.-19, New Panvel district Raigad (Mah) 410206 Versys Bharat Alluminium Company Limited, P.0. . Balco Nagar, Korba, CG Present: Shri S.P. Bhandarkar with Shri A.K. Mishra, counsel for the applicant. Shri Abhishek Sinha, counsel for the non-applicant. O R P ER' y (Passed on Ty<Manuary. 2011) Dhirendra Mishra, J. 1. The applicant has filed this application under Sectiop. 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter refereed to as (the Act of 1996?) and prayed for appointment of an Arbitral Tribunal for settlement of disputes between the parties. 2. Briefly stated case of the applicant is that he entered into an arbitration agreement (Annexure-A/2) for construction of road and the estimated cost of the work was Rs. 1175 lakhs. He successfully executed and completed the work under the contract along with additional work as ordered by the non-applicant, however, the non-applicant failed to ^ discharge its duties in making due payment to the applicant in time. The applicant initiated arbitration proceedings vide his letter dated 28-3- 2007 and 26-12-2007 (Annexure-A/4 85 A/3), submitted his statement of claims and requested for appointment of arbitrator. The Chief Executive Officer and the Whole Time Director of the non-applicant through his letter dated 16-2-2008 communicated the applicant that Hon'ble Justice Shri V.K. Agrawal, -,(retd.), former Judge of the Madhya Pradesh High Court has been appointed as sole Arbitrator in the matter (Annexure-A/ 5). 3. Grievance of the applicant is that appointment of arbitrator is not in accordance with the procedure prescribed under clause 17.1 of the agreement, as the authority competent to act as sole arbitrator or to nominate any other person as sole arbitrator on his behalf is only the President of the Balco whereas, in the present case, the aforesaid procedure has not been followed and the communication of appointment of arbitrator has been made by the Whole Time Director of the non- applicant. The applicant considering that appointment has been made by the President of Balco participated in the arbitration proceeding and submitted his statement of claims to the constituted Arbitration Tribunal. The applicant came to know from reply dated 12-7-2008 (Annexure-A/6) of the non-applicant that the post of the President has been abolished long back and the appointment has been made by the Whole Time Director of the non-applicant firm. 4. Learned counsel for the applicant submitted that in view of the above admitted facts, it is evident that appointment of sole arbitrator by the non-applicant is not in accordance with the provisions contained in clause 17.1 of the agreement. The applicant vide its notice dated 18-7- 2008 (Annexure-A/7) gave its consent to the non-applicant to appoint any of the Hon'ble retired Judges mentioned in para-7 of the application, however, the non-applicant declined to accept the proposal vide their letter dated 30th July, 2008 (Annexure-A/8) and also failed to rectify the defect. In these circumstances, the instant application for appointment of arbitrator has been filed. 5. Shri Abhishek Sinha, learned counsel for the non-applicant argued that pursuant to the request made by the applicant, Arbitral Tribunal of the sole arbitrator Hon'ble Justice Shri V.K. Agrawal, retried Judge of the Madhya Pradesh High Court has been constituted vide letter dated 16-2- 2008 as per arbitration clause 17 contained in the agreement. At the time of execution of the agreement, there was post of President in the company, however, at present, there is no post or person holding the post of President of Bharat Aluminum Company. The powers, functions and authorities which were with the President of the Balco, are now being exercised by the Chief Executive Officer and the whole time Director i.e. the head of the Company and thus, appointment ofArbitral Tribunal by the whole time Director and the Chief Executive Officer is strictly in accordance with clause 17 of the agreement. The arbitrator was appointed on 16-2-2008 and intimation was given to the applicant forthwith. The applicant was fully aware that the appointment was being made by the whole time Director and the Chief Executive Officer of Balco, as would be evident from letter dated 16-2-2008, however, he did not prefer to challenge the authority or correctness of appointment and proceeded to appear before the Tribunal and agreed to procedure for arbitration and arbitration fees etc. were also filed. An objection with respect to the appointment has been made beyond the period of limitation prescribed under Section 13 ofthe Act of 1996. 6. Heard learned counsel for the parties. K /",;";~\ Y 'w^ ^ p»w 7. Indisputably, the Chief Executive Officer and the whole time Director of the non-applicant vide its letter dated 16th February, 2008 nominated Hon'ble Justice Shri V.K. Agrawal, (retd.), former Judge of the Madhya Pradesh High Court and former President of the Consumer Dispute Redressal Commission, as sole Arbitrator for.resolution of the dispute raised by the applicant. It is also not in dispute that subsequent to his appointment, the applicant has participated in the arbitration proceeding and submitted his statement of claims before the Arbitral Tribunal. During the course of hearing, it was fairly submitted by learned counsel for the applicant that the applicant has no grievance against functioning of Hon'ble Justice Shri V.K/ Agrawal, as sole arbitrator and the instant application has been filed only because appointment of Arbitral Tribunal by the Chief Executive Officer/the whole time Director of the non-applicant is not in accordance with clause 17 ofthe agreement. 8. Taking into consideration the uncontroverted contention of the non- applicant that there is no post of the. President in the non-applicant organization at present, the Chief Executive Officer and the whole time Director is the head of the Institution and he is the successor of the President and is performing all the functions of the President in the organization, I am of the opinion that appointment of Arbitral Tribunal by the Chief Executive Offlcer and the whole time Director vide Annexure A/5 dated 16-2-2008 cannot be faulted. 9. The application is accordingly rejected. Sd/- DhirendraMishra Judge Barve