ASOPA, J. - (1.) BOTH the writ petitions are arising out of the same arbitral proceedings, although against the different orders, one is against the order dated 2. 4. 2005 passed by the Additional District Judge, Khetri whereby the application of the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act of 1996') has been dismissed and another is against the order of rejection of the amendment application for adding the counter claim of 30 crores by the Arbitrator vide order dated 20. 5. 2005. Since one of the common question involved in both the writ petitions is interference of this Court under Article 226 of the Constitution of India with regard to arbitral proceedings, therefore, I also think it proper to decide both the writ petitions together by a common order.
(2.) THE facts of S. B. Civil Writ Petition No. 3068/2005 are that after the appointment of Shri A. P. Choudhary as Arbitrator by this Court, an application was moved under Section 14 of the Act of 1996 that the sole Arbitrator has failed and/or unable to function as Arbitrator within the meaning of the Act of 1996, therefore, the impugned order dated 2. 4. 2005 of the Additional District Judge, Khetri be quashed and set aside and arbitration proceedings be declared de facto and de jure terminated. THE grounds taken in the said application are that the petitioner- Company through its Chairman and Managing Director, who is authorised, has appointed Shri T. Arvind, Sr. Dy. General Manager (Admn.) HCL, KCC as Arbitrator but the High Court has cancelled the appointment of Shri T. Arvind being made during the proceeding under Section 11 of the Act of 1996 in the High Court and appointed Shri A. P. Choudhary, a retired Director of India Oil Corporation as Arbitrator, which is contrary to the five Judges Constitutional Bench of the Supreme Court in Konkan Railway Case. It was further stated that since the order, of appointment of Arbitrator under Section 11 is administrative order and not a judicial order, therefore, the same can be assailed before the civil Court. The other facts to substantiate the main argument that the Arbitrator has become de facto and de jure unable to perform his functions are that he has failed to perform his obligation to allow the parties to frame the rules under Section 19 of the Act of 1996, did not disclose the parties in writing to give rise a justifiable doubts as to his independence or impartiality and further refusal to move the Court to summon the witnesses for which applications have been moved and rejected by him. The respondent No. 1 filed reply to the said writ petition and submitted that Sections 5 and 11 of the Act of 1996 deal with the extent of judicial intervention and it has been provided that no judicial authority shall intervene on the matters of arbitration except where it is so provided under the Act of 1996. The aforesaid reply was filed on 14. 9. 2005 and subsequently on 26. 10. 2005, seven Judges Bench of the Supreme Court has overruled the judgment of th five Judges Bench of the Supreme Court in Konkon Railway Corporation Ltd. and held that the power of the Chief Justice or his nominee for appointment of Arbitrator is a judicial power which will subject to an appeal under Section 136 of the Constitution of India and restrict judicial intervention under Articles 226 and 227 of the Constitution of India. As regards the other facts which were submitted by the counsel for the respondent that the order passed by the Arbitrator under Sections 13, 16 and 27 have been specifically made ground of challenge by filing the application under Section 14 of the Act. The remaining grounds can also be challenged by filing the application under Section 34 of the Act of 1996 after award but the same cannot be a ground for an application under Section 14 on the Act of 1996 for failure or impossibility to act which the petitioner has miserably failed to prove before the Additional District Judge, Khetri. The facts of S. B. Civil Writ Petition No. 7794/2005 are that during the advance stage of arbitral proceedings, an application for amendment in the counter claim by adding additional claim of 30 crores was filed by the petitioner-Company which was rejected by the Arbitrator on the ground of delay/barred by time. The case of the petitioner-Company is that the Arbitrator has violated the basic principles of the amendment.
(3.) THE respondent No. 1 has filed reply and submitted that the petitioner is trying to upset th proceedings of the arbitration and as per Section 5 and 11 of the Act of 1996, th Courts should be restrained from interfering with the arbitration proceedings except in the manner provided in the 1996 Act. The submission of the counsel for the petitioner in S. B. Civil Writ Petition No. 3068/2005 is that the trial Court has committed an error of law in not terminating the Mandate of an Arbitrator as the Arbitrator has become de facto or de jure unable to perform his functions. The petitioner has placed reliance on (1) Sikkim Subba Associates vs. State of Sikkim (2001) 5 SCC 629, (2) Harbanslal Sahnia and another vs. Indian Oil Corpn. Ltd. and others, (2003) 2 SCC 107, (3) Sanjana M. Wig (Ms) vs. Hindustan Petroleum Corpn. Ltd. , (2005) 8 SCC 242 and (4) S. B. P. & Co. vs. M/s. Patel Engineering Ltd. and Anr. (supra ). The submission of the counsel for the respondents is that Sections 5 and 11 of the Act of 1996 deal with the extent of judicial intervention and it has been provided that no judicial authority shall intervene on the matters of arbitration except where it is so provided under the Act of 1996. It was further submitted that the Arbitrator was appointed with the consent of both the parties and in case the petitioner has any objection, then he ought to have objected the same before the High Court. The further submission of the counsel for the respondents is that the application under Section 14 of the Act of 1996 was not maintainable as all the grounds taken by the petitioner are relating to framing of the rules challenged to the procedure which are permissible to be objected after passing of the final Award in a proceeding under Section 34 of the Act of 1996. The Additional District Judge has considered all the aspects of the matter and passed the legal order. It was also submitted that the application has been filed with the ulterior motive to obstruct the proceedings going on before the Arbitrator. The counsel for the respondents has placed reliance on CDC Financial Services (Mauritius Ltd. vs. BPL Communications Ltd. And others, 2005 (2) RAJ 43 (SC) and S. B. P. & Co. vs. M/s. Patel Engineering Ltd. and Anr. , (2005) 8 SCC 618. ;