Vijay Kumar Sharma @ Manju vs Raghunandan Sharma @ Baburam & Ors

2. The first respondent and appellant are brothers. The first respondent filed a suit (Civil Suit No.100 of 2006) against the appellant alleging that their father Durganarayan Sharma died on 20.10.2005 leaving a will dated 21.10.2003 bequeathing portions of property bearing No.B-133, Bapu Nagar, Jaipur (for short the suit premises) to him, and that the appellant who was in possession of the said portions, was liable to deliver possession thereof to the first respondent on the basis of the said will. The Executors of the said will were impleaded as defendants 2 and 3 (respondents 2 and 3 herein).

3. The appellant herein, in turn filed a Civil Suit No.53 of 2007 for partition and separate possession of his one-sixth share in the ancestral properties. He also sought a declaration that the will dated 21.10.2003 propounded by the first respondent was fabricated, null and void. In the said partition suit, first respondent and his son were impleaded as defendants 1 and 6; appellant's another brother and three sisters were impleaded as defendants 2 to 5; the son of another brother who had been given away in adoption was impleaded as defendant no.7; and the executors under the will were impleaded as defendants 8 and 9.

4. The two suits were consolidated for trial. Respondents 2 and 3 claiming to be the executors of the will of Durganarayan Sharma filed an application under section 8 of the Arbitration & Conciliation Act, 1996 (`Act' for short) in the said suits alleging that the deceased Durganarayan Sharma had made a declaration on 15.10.2005, shortly before his death, that if there was any dispute in connection with the will, the same should be decided by Shri U.N. Bhandari, Advocate; that the parties to the two suits being children and grandchildren of Durganarayan Sharma were bound by the said declaration and the disputes which were the subject matter of the two suits should therefore be decided by arbitration. The trial court heard the said application and by order dated 19.9.12007, held that in view of the said provision for resolution of disputes by arbitration, its jurisdiction was barred by the provisions of the Act. Consequently, the trial court dismissed both the suits, under Order 7 rule 11 of the Code of Civil Procedure (`Code' for short).

6. The first respondent accepted the decision of the trial court and filed a claim statement on 20.10.2007 before Shri U.N. Bhandari, the sole Arbitrator named in the declarations of his father, the reliefs earlier sought by him in Civil Suit No. 100/2006. The said U.N. Bhandari issued notices to the appellant and other non-petitioners in the claim. The appellant appeared before Shri U.N. Bhandari, and objected to his jurisdiction to act as an arbitrator, contending that there was no arbitration agreement between the parties. He also pointed out that neither he nor first respondent had signed the declaration of his father giving consent to Shri U.N. Bhandari being the Arbitrator. He also brought to the notice of Shri Bhandari, that the order dated 19.9.2007 passed by the trial court had been stayed by the High Court. He also challenged the continuation of Shri Bhandari as an arbitrator by alleging bias against him. In these circumstances on 17.11.2007, Shri Bhandari withdrew himself from the arbitrator. On such withdrawal, the first respondent filed an application under section 11(6) read with section 14(1)(b) and 15(2) of the Act for appointment of an independent arbitrator. The designate of the Chief Justice who heard the matter, allowed the said application by the impugned order dated 16.5.2008, and appointed an Arbitrator to resolve the disputes. The said order is challenged in this appeal by special leave.

15. We are therefore of the view that there is no arbitration agreement between the parties and the learned Designate committed a serious error in allowing the application under sections 11 and 15(2) of the Act and holding that there is an arbitration agreement between the parties to the dispute and appointing an arbitrator.

17. In view of the foregoing, this appeal is allowed and the impugned order of the Designate of the Chief Justice appointing an Arbitrator is set aside.