Manmohan Singh, J. - (1.) PETITIONER Anil Kochhar has filed the present petition under Section 11 of the Arbitration and Conciliation Act, 1996 praying for appointment of a sole arbitrator to adjudicate the disputes between the parties. As far as existence of agreement between the parties is concerned, the respondent has not denied the same. The similar is the position of arbitration clause. The main contention of the respondent is that in exercise of power conferred under Clause 14 of the agreement, Mrs. Rita Kumar, retired IAS, has been appointed as the sole arbitrator to adjudicate the disputes between the parties.
(2.) THE contention of the petitioner is that the said appointment made by the respondent is contrary to the scheme of Section 11(6) of the Act as well as well settled law on the aspect. He submits that before filing of the petition, the petitioner served a notice dated 7th August, 2012 requesting the respondent to hand over the possession of the premises by 31st August, 2012. Since the respondent failed to hand over the vacant and peaceful possession, the petitioner left with no option alternatively requested the respondent to appoint the arbitrator to adjudicate the disputes between the parties within 30 days from the date of receipt of the said notice. The receipt of the notice dated 7th August, 2012 is not denied by the respondent who has also failed to hand over the vacant and peaceful possession of the tenanted premises to the petitioner as mentioned in the notice latest by 31st August, 2012. It is also admitted position that after the expiry of 30 days from the date of receipt of the said notice, the respondent did not appoint the arbitrator in terms of clause 14 of the agreement. In Datar Switchgears v. Tata Finance Ltd., : (2000) 8 SCC 151, the Supreme Court explained as under: 19. So far as cases falling Under Section 11(6) are concerned, such as the one before us, no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed Under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court under Section 11 that would be sufficient. In other words, in cases arising Under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application Under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases. We do not, therefore, agree with the observation in the above judgments that if the appointment is not made within 30 days of demand, the right to appoint an arbitrator Under Section 11(6) is forfeited. 20. In the present case the respondent made the appointment before the appellant filed the application Under Section 11(6) though it was beyond 30 days from the date of demand. In our view, the appointment of the arbitrator by the respondent is valid and it cannot be said that the right was forfeited after expiry of 30 days from the date of demand. 21. We need not decide whether for purposes of Sub -clauses (4) and (5) of Section 11, which expressly prescribe 30 days, the period of 30 days is mandatory or not. The decision in Datar Switchgears (supra) was further affirmed in Punj Lloyd v. Petronet MHB Ltd.,, (2006) 2 SCC 151.
(3.) IN the case of Sikka Promoters Pvt. Ltd. Vs. Municipal Corporation of Delhi, decided on 17th November, 2011 in Arb. P. No. 106/2011 and I.A. No. 5815/2011 by S. Muralidhar, J. who has taken the same view after discussing both the decisions referred above as well as Union of India v. Bharat Battery Manufacturing Co. (P) Ltd., in which case it was held that Section 11(8) of the Act would come to the aid of the appellant therein only if "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." Since that was not done "the appellants are estopped 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.";