Case: B.S.N.L.  Vs. M/S. Subash Chandra Kanchan

The parties herein entered into a contract pursuant to a notice inviting tender by Appellant No. 1 for the work of construction of 9 Nos. Type-V quarters at Jayadev Vihar, Bhubaneshwar. The said contract contained an arbitration clause in terms whereof the Chief Engineer, Telecommunication/Postal Department in charge of the work at the time of dispute or if there be no Chief Engineer the administrative head of the said Telecommunication/Postal Department was to be appointed as an arbitrator. The said provision envisaged that in terms thereof no person other than the one appointed by such Chief Engineer or administrative head of the Telecommunication/Postal as aforesaid should act as arbitratorA notice in terms of arbitration agreement contained in clause 25 of the contract was issued by the Respondents on 7.1.2002. A letter appointing one Shri Gurbax Singh, Principal Chief Engineer (Arb.), New Delhi as the sole arbitrator was said to have been drafted on 4.2.2002. It, however, was dispatched on 7.02.2002. On the same day, having regard to the fact that allegedly the Managing Director of the Appellant did not respond to the notice issued to him, an application was filed by Respondent herein before the High Court of Orissa purported to be under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the 1996 Act)It is stated that the said Shri Gurbax Singh submitted his resignation whereupon the Chief Engineer appointed one Shri A.K. Naik as the sole arbitrator on 7.07.2002. He is also said to have resigned and in his place Shri Gurbax Singh was again appointed as arbitrator on 17.03.2003. The appointments were made during pendency of the said proceedings before the High Court under the 1996 Act. When the matter came up for hearing before a Division Bench of the High Court, in its order dated 20th January, 2006, it was recorded:Learned counsel for the petitioners placed before me a list of names of six persons to appoint one of them as Arbitrator and to refer to him the dispute between the parties for adjudication in terms of the arbitration clause. On being asked, learned counsel for the opposite parties submits that he has no objection if Shri B.C. Bhattacharya, Chartered Engineer, Former Chief Engineer, W.B. P.W.D., FD-216/4, Salt Lake City, Kolkata - 700 091 is appointed as Arbitrator and the dispute between the parties in terms of arbitration clause is referred to him for adjudication. In view of the aforesaid, said Shri B.C. Bhattacharya is appointed as Arbitrator and the dispute between the parties in terms of the arbitration clause is referred to him for adjudicationThe learned arbitrator appointed by the High Court thereafter entered into reference. The parties hereto appeared before him on 18.03.2006 and participated in the proceedings. Respondent also filed his statement of claim. The learned arbitrator has called upon the Appellants to file their written statementHowever, on 27th January, 2006, an application was filed by Appellant herein purported to be under Section 151 of the Code of Civil Procedure for modification of the said order dated 20.1.2006 contending:2. That after dictation of orders when the counsel of the op. party went out, a Junior Lawyer informed him that Your Lordship had dictated that the counsel for the opp. Party has no objection if Shri B.C. Bhattacharya, Chartered Engineer, and former C.E.W.B. PWD Kolkata is appointed as the Arbitrator, which due to inadvertence, had escaped notice/audibility of the opp. Party counsel3. That then the counsel for the opposite party promptly rushed to the court and with due permission of your Lordship, apprised about such dictation with a rest for omission of the No Objection portion which occurred due to some communication lapses. And Your Lordship was considerable and gracious enough to ask the Stenographer on duty at that time to take down the sought for change after confirming from me whether it was about Mr. Bhattacharya of KOLKATAThe prayer made in the said application reads as under:Under the circumstances stated above, the opposite party, therefore, earnestly pray that your Lordship may graciously be pleased in the ends of justice to direct appropriately for proper reflection of your Lordships subsequent instruction in the orderBy an order dated 3rd March, 2006, the High Court refused to recall its order dated 20th January, 2006 stating:Now, learned counsel for opposite parties appears and submits that the aforesaid recording that he had no objection against the appointment of Shri B.C. Bhattacharya is not correct and in fact he had objection. He wants this to be recorded in the order. But, I do not find any reason to change the appointment of Shri B.C. Bhattacharya as the Arbitrator, as I am told that Shri B.C. Bhattacharya has already started functioning as Arbitrator by issuing notice to the concerned parties. Further, the learned counsel for opp. Parties could not give any reason as to why he has objection against the appointment of Shri B.C. Bhattacharya as Arbitrator. In this view of the matter, no further order is required to be passed.

Court's reasoning:
But, herein the issue is entirely different. Apart from failure on the part of the Managing Director of the Appellant to appoint an arbitrator within the specified time, the Appellants evidently waived their right under the arbitration agreement. Mr. Sharmas submission to the effect that the learned counsel who consented to the appointment of Shri Bhattacharya was a junior counsel and he had no instructions in this behalf cannot be accepted. No such statement was made before the High Court. It had never been contended before the High Court that the counsel had no authority to make such concession. Moreover, the application filed under Section 151 of the Code of Civil Procedure by the Appellant did not contain such statements. The High Court, thus, did not commit any error in recording that such a concession had in fact been made by the learned counsel. In a matter of this nature again, the High Courts decision subject to just exception must be held to be finalFurthermore, in terms of Order III, Rule 1 of the Code of Civil Procedure, a litigant is represented by an advocate. A concession made by such an advocate is binding on the party whom he represents. If it is binding on the parties, again subject to just exceptions, they cannot at a later stage resile therefrom. The matter may, however, be different if a concession is made on a question of law. A wrong concession on legal question may not be binding upon his client. Here, however, despite the stand taken by the Appellant in its written statement before the High Court the learned Advocate consented to appointment of a person as an arbitrator by the High Court in exercise of its jurisdiction under Section 11 of the 1996 Act, in our considered view, the same should not be permitted to be resiled from. A person may have a legal right but if the same is waived, enforcement thereof cannot be insisted.