- (1.) REPORTABLE Heard learned counsel for the parties.
(2.) A dispute has arisen between the parties with regard to memo of agreement dated 24th January, 1996 for distribution of Indane Gas (Liquefied Petroleum Gas, Domestic and Commercial). The applicant vide letter dated 23rd July, 2010 (Annexure-5) requested the Senior Area Manager, Indane Area Office, Indian Oil Bhavan, Ashok Chowk, Adarshnagar, Jaipur for appointment of arbitrator then again vide letter dated 6th August, 2010 (Annexure-6) the applicant requested the Senior Area Manager, Indane Area Office, Jaipur, for forwarding its request for appointment of Arbitrator to the competent authority, which is said to be Director (Marketing) but till the date of filing of the application i.e. 18th September, 2010 no arbitrator was appointed. Submission of Mr. Suresh Pareek, learned counsel for the applicant is that since the notice (Annexure-5) was given on 23rd July, 2010 and then again on 6th August, 2010, therefore, as per Section 11 (3) of the Arbitration and Conciliation Act, 1996 the non-applicants were bound to appoint Arbitrator within 30 days and if not within 30 days, then before filing of the application i.e. 18th September, 2010 but before even before filing of the application, no Arbitrator was appointed. However, the Arbitrator was appointed vide order dated 27th December,2010 (Annexure-R/3). Therefore, they have lost their right to refer the matter to the Arbitrator and the applicant is entitled for appointment of independent Arbitrator. In support of his submissions, counsel for the applicant has placed reliance on the judgment of the Apex Court in the matter of Bharat Sanchar Nigam Ltd.& Anr. vs. Dhanurdhar Champatiry { 2010(1) Arb. LR 280 (SC} . Mr. Pareek further submits that the said notice was given to Sr. Area Manager during the course of business transaction to the subordinate officer, therefore, the same be treated to be to the competent authority i.e. the Director (Marketing). Otherwise also, the said notice was acted upon by the Director (Marketing). In support of his submission, Mr. Pareek placed reliance on the decision of the Delhi High Court in the matter of M/s.Civtech Engineers Pvt.Ltd. vs. M/s. M.N.Securities (P) Ltd. & Anr. {2011 (1) R.A.J. 368(Del)}. Mr. A.K. Bhargava, lerned counsel for the non-applicants raised an objection that the notice dated 23rd July, 2010 was given not to the officer concerned i.e. Director (Marketing) as per clause 37A of the Dealership Agreement, therefore, the same cannot be treated a notice to the officer concerned. I have gone through the application, reply filed on behalf of the non-applicants and further considered the rival submissions.
(3.) BEFORE proceeding further, the relevant portion of para 8 of the judgment of the Apex Court in the matter of Bharat Sanchar Nigam Ltd.(supra):- "8. A plain reading of Section 11(5) of the Act would show that if one party demands appointment of an arbitrator and the other party does not appoint any arbitrator within thirty days of such demand, the right to appoint at the instance of one of th parties does not get automatically forfeited. If the appellant makes an appointment even after thirty days of the demand but the first party has not moved the court under Section 11, that action on the part of the appellant would be sufficient. In other words, in cases arising under Section 11(6), if the respondent has not made an appointment within thirty days of demand, right to make an appointment of an arbitrator is not forfeited but continues, but such appointment shall be made before the other party files the application under Section 11 seeking appointment of an arbitrator before the High Court. It is only then the right of the respondent ceases." (Emphasis supplied) 7. In the case of M/s. Sivtech Engineers Pvt. Ltd. (supra), learned Single Judge of the Delhi High Court in para 10 of the judgment observed as under:- " 10.Firstly, the facts of this case are peculiar as it was the respondent no.2 who was dealing with the petitioner in relation to the contract in question. All dealings after the issuance of the letter dated 04.05.2006 took place between the petitioner on the one hand and respondents on the other hand. Respondent no.2 could have either acted as the agent of respondent no.1 in its dealings with the petitioner, or as an assignee of the contract between the petitioner and respondent no.1. If the submission of the respondents, that respondent no.2 was only acting for an on behalf of respondent no.1 is to be accepted, it would follow that respondent no.2 acted as the agent of respondent no.1. Notice to agent is notice to principal, provided it is given in the course of business transacted by the agent for the principal. (See section 229 of the Contract Act). The notice invoking arbitration issued to respondent no.2 was given in the course of business transaction by the petitioner with the respondents. Therefore, it would "have the same legal consequences as if it had been given to or obtained by the principal", i.e. Respondent no.1. Therefore, as between the petitioner and respondent no.1, the said notice stands served on respondent no.1. Consequently, the petitioner cannot be faulted for invoking the arbitration agreement by writing to respondent no.2 and not to respondent no.1. Even, when the notice dated 08.02.2010 was issued, the respondent no.2 did not respond back to say that it had no power to appoint the arbitrator, and the notice should be issued to the respondent no.1. Consequently, reliance placed on the decision in Maa Communication (supra), prima facie, appears to be misplaced at this stage, in the peculiar facts of the present case. It cannot be said in the facts of this case, at this stage, whether or not the contract stood assigned by respondent no.1 to respondent no.2. Consequently, it cannot be said whether the power to appoint the arbitrator stood assigned to respondent no. 2 or not. The meaning and effect of the communication dated 04.05.2006 issued by respondents, on the agreement dated 05.11.2005, in the light of their subsequent conduct would be a matter determinable by an arbitral tribunal constituted by resort to clause 50 of the said agreement. Consequently, whether the said decision in Maa Communication (supra) has relevance, would also depend on the effect of the communication dated 04.05.2006 and the conduct of the parties." (Emphasis supplied) On consideration of the aforesaid judgments, I am of the view that the notice given to the Sr. Area Manager (LPG) during the course of business transaction is to be treated a notice to the officer concerned i.e. Director (Marketing) as mentioned in clause 37(a) of the Indane (Liquefied Petroleum Gas) Distributorship (Domestic & Commercial) Agreement and further the right of the respondent to seek appoint the Arbitrator is not forfeited but continues, but such appointment shall be made before the other party files the application under 11 of the Arbitration and Conciliation Act, 1996 before the High Court. Adverting to the facts of this case, the said right of the respondents continues till 18th September, 2010 when the instant application was filed before this Court and appointment of Arbitrator vide order dated 27th December,2010 is not valid. After 18th September, 2010, the right of the respondents to appoint Arbitrator stands forfeited as per the the aforesaid judgment of the Apex Court in the matter of Bharat Sanchar Nigam (supra). ;