- (1.) Heard learned counsel for the parties. Petitioner has sought appointment of Arbitrator invoking Clause 29 of the agreement dated 13th September, 2008 under Section 11(6) of the Arbitration and Conciliation Act, 1996. On 7th July, 2017 after hearing the counsel for the parties and upon consideration of rival pleadings and enclosures, the following order was passed proposing the appointment of Second Arbitrator in terms of Clause-29 of the agreement, namely, Mr. G.M.Mishra, learned Advocate practicing in this Court: "Heard counsel for the parties. The instant application has been preferred under Section 11(6) of the Arbitration and Conciliation Act, 1996 by the petitioner for appointment of the second arbitrator in terms of Clause-29 of the agreement dated 13th September 2008 between the petitioner and the respondents as according to him, a dispute has arisen due to non-performance of the terms of contract by the respondents. Clause-29 of the agreement contemplates that in case of any dispute in future, parties or their nominees or successors would make efforts to resolve it through conciliation. However, if the dispute remains unresolved, then both the parties would appoint an Arbitrator. If there is a dispute in appointment of Arbitrator, then both the parties would appoint their own Arbitrator and thereafter the Arbitrator so appointed shall nominate an Umpire/ Presiding Arbitrator. The cost of arbitration proceeding would be shared by both the parties. The agreement in question is in respect of development of land appertaining to M.S. Plot No. 633 and 634, area 3 Katha 9 Chhatak and 25.5 sq.ft. approximately situate at Main Road, Konka, Ranchi, P.S. Lower Bazar, House No.711/A. In terms of the agreement, petitioner was to construct a shopping mall. According to the petitioner, the first party had
(2.) undertaken to get the mutation of the property done in their name and make payment of revenue rent and provide up to date rent receipt. The first party had agreed to provide all the connected documents in this regard to the petitioner as they were necessary for the sanction of the building plan. However, the first party/respondents failed to provide the same. Under the terms of the agreement, petitioner has made payments to the tune of Rs.58,36,000/- approximately. However, though the terms of agreement stipulated construction of the mall within a time period of three years and six months from the date of sanction of the building plan with a penalty clause attached to it, but due to non-performance of the reciprocal promise by the first party/respondents in not furnishing the necessary documents relating to the land, such as original document of ownership, up- to- date rent receipt, up-todate municipal receipt, family partition paper, power of attorney, etc, finally, the petitioner had to serve a notice on 1st December 2016 invoking arbitration Clause-29 for reference of the dispute before an Arbitrator. In terms of Clause-29, second party/petitioner nominated Mr. Satish Kumar Deo s/o Sri Laxmi Narayan Deo having office at H-6, 4th Floor, New Bar Building, Civil Court, Ranchi as Arbitrator. The respondents were called upon to nominate the Arbitrator from their side within 7 days from receipt of the notice as per the agreement so that an Umpire/Presiding Arbitrator can be appointed. This was replied by the respondents vide letter dated 8th December 2016 controverting the allegations made as false, vague, misconceived and manipulated. The respondents also disputed any cause of action invoking arbitration Clause-29 of the said agreement dated 13th September 2008 after passing 8 long years of the execution of the agreement. They also disputed the claim of payments made by the petitioner. According to the respondents, they had cancelled the agreement dated 13th September 2008 long before. After notice the respondents have appeared and filed their counter affidavit. According to the respondents, they had already provided all the required documents which were demanded by the present petitioner in a proceeding under Section 144 of the Criminal Procedure Code being Case No.M-840 of 2015. In the order dated 26th June 2015 it has been mentioned that the required documents were produced before the learned Sub-Divisional magistrate, Ranchi and the same have been received by the petitioner at the time of agreement dated 13th September 2008. As per the terms of the agreement, petitioner has violated the respective conditions of the agreement by demanding the papers after eight years. The respondents have contended that the petitioner has not paid any other amount except Rs.22,25,000/-. Respondents have also issued legal notice for cancellation of the agreement and thereafter made paper publication for cancellation of the agreement. Therefore, the petitioner is not liable for any relief. In reply, the petitioner has contended that the respondents have failed to get the development agreement registered despite notice dated 18th February 2015. The respondents have got the land mutated in their name only on 9th January 2016 as per the order enclosed at Annexure-5 to the reply. According to the counsel for the petitioner, paper publication has no sanctity so far as the cancellation of agreement is concerned. In substance, it is the case of the petitioner that on account of non-performance of the reciprocal promise by the first party/respondents herein, an arbitrable dispute has arisen on refusal of the respondents to supply the necessary papers even after the notice dated 1st December 2016. The respondents have also not appointed their own Arbitrator even after receipt of the notice dated 1st December 2016 in terms of Clause-29 and Section 11(4) of the Arbitration and Conciliation Act, 1996. The reply on the part of the respondents through letter dated 8th December 2016 is, in fact, a refusal to perform their reciprocal promise which gave a cause of action to the petitioner to seek reference of the dispute before the Arbitrator. Therefore, the dispute is alive and it is well within the period of limitation in terms of Article 54 of the Limitation Act, 1963. I have considered the submissions of the counsel for the parties and have gone through the relevant materials on record and the agreement in question. From perusal of the pleadings on record, specially the notice issued by the petitioner dated 1st December 2016 and the reply furnished by the respondents dated 8th December 2016, it is evident that an arbitrable dispute exists in respect of the agreement dated 13th September 2008. Clause-29 of the said agreement is an arbitration clause available to the parties to invoke in case of such a dispute. It further appears that on refusal of the respondents to supply the necessary papers even after the notice dated 1st December 2016, the petitioner had a definite cause of action to be raised. Therefore, the dispute is alive and has not become stale. The respondents have failed to appoint their Arbitrator despite 30 days' notice in terms of the provisions of Sub-Section(4) of Section-11 of the Act of 1996. In these circumstances, this Court is satisfied that necessary ingredients to invoke the provisions of Section 11(6) of the Act of 1996 have been fulfilled on the part of the petitioner. The respondents have failed to appoint their own Arbitrator within the time prescribed as per the notice dated 1st December 2016 have forfeited their right to appoint an Arbitrator. In such circumstances, this Court is inclined to appoint Mr. G.M. Mishra, learned Advocate practicing in this Court as the Second Arbitrator in terms of Clause-29 of the agreement. The Arbitrator nominated by the petitioner and Mr. G.M. Mishra, both are required to submit the declaration under Section 12 of the Arbitration and Conciliation Act, 1996 as amended by Amendment Act 3 of 2016. Let both the learned Arbitrators file a declaration within a period of one week. Post the matter on 14th July, 2017." In terms of Section 12 of the Arbitration and Conciliation Act, 1996 as amended by the Amendment Act 3 of 2016, both the Arbitrators were required to file their declarations. The declarations have been filed by Mr. G. M. Mishra and Mr. Satish Kumar Deo, which are at Flags-C and D dated 13th July, 2017 and 14th July, 2017. Both have stated that they had no past or present relationship with or interest in any of the parties or in relation to the subject matter of dispute, whether financial, business, professional or other kind which may create any justifiable doubt as to their independence or impartiality. Having considered the declarations made, in terms of the order dated 7th July, 2017, Mr. G.M.Mishra is appointed as Second Arbitrator in terms of Clause-29 of the agreement apart from Mr. Satish Kumar Deo, the Arbitrator appointed on behalf of the petitioner. Both the Arbitrators are required to nominate the Presiding Arbitrator. Learned Registrar General is required to communicate the order for appointment to both the learned Arbitrators and also provide xerox copy of the entire pleadings of the instant arbitration application to both of them at the addresses given in their declarations. Learned Arbitrators would proceed to hold their meeting for nomination of the Presiding Arbitrator within a period of 2 weeks from the date of communication of the instant order. The arbitration proceedings be concluded in an expeditious manner thereafter keeping into account the statutory mandate prescribed under Section 29A of the Arbitration and Conciliation Act, 1996. It is open for the learned Arbitrators to fix their fees and lay down the rates of other expenses to be borne during the proceeding also keeping in mind the objectives laid down under the Arbitration and Conciliation Act 1996 as amended by the Act of 3 of 2016. Accordingly, this application is allowed. ;