w w w . L a w y e r S e r v i c e s . i n



Ellora Paper Mills Limited v/s State of Madhya Pradesh


Company & Directors' Information:- R J PAPER MILLS PRIVATE LIMITED [Active] CIN = U21000MH2003PTC142584

Company & Directors' Information:- J P P MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2003PTC010491

Company & Directors' Information:- G V G PAPER MILLS PRIVATE LIMITED [Active] CIN = U02101TZ1985PTC006888

Company & Directors' Information:- R P C PAPER MILLS PVT LTD [Active] CIN = U21012KL1993PTC006959

Company & Directors' Information:- A P PAPER MILLS LTD [Active] CIN = U21011CH1993PLC013966

Company & Directors' Information:- A S T PAPER MILLS LIMITED [Active] CIN = U22012PB1993PLC013222

Company & Directors' Information:- V M D MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004822

Company & Directors' Information:- A R C MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004845

Company & Directors' Information:- ELLORA PAPER MILLS LIMITED [Active] CIN = L36934MH1977PLC019972

Company & Directors' Information:- S AND Y MILLS LIMITED [Not available for efiling] CIN = U17111TZ1994PLC005460

Company & Directors' Information:- D C MILLS PRIVATE LIMITED [Active] CIN = U25199KL1996PTC009988

Company & Directors' Information:- B K PAPER MILLS PVT. LTD. [Active] CIN = U21010MH1970PTC014821

Company & Directors' Information:- R A MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013248

Company & Directors' Information:- V. D. PAPER MILLS PRIVATE LIMITED [Active] CIN = U21098UP2010PTC042677

Company & Directors' Information:- P. J. PAPER INDIA LIMITED [Active] CIN = U21098DL2006PLC151012

Company & Directors' Information:- J M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013113

Company & Directors' Information:- M T A MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1989PTC003048

Company & Directors' Information:- MADHYA PRADESH PAPER MILLS LIMITED [Strike Off] CIN = U21012CT1960PLC000898

Company & Directors' Information:- P A MILLS INDIA LTD. [Not available for efiling] CIN = U17111TN1990PLC019762

Company & Directors' Information:- J K K PAPER MILLS PRIVATE LIMITED [Active] CIN = U21010TZ2008PTC014615

Company & Directors' Information:- K N M MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1990PTC002702

Company & Directors' Information:- S N PAPER MILLS PVT LTD [Active] CIN = U21015PB1995PTC015835

Company & Directors' Information:- S. A. PAPER PRIVATE LIMITED [Active] CIN = U21097WB2009PTC135556

Company & Directors' Information:- V M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2005PTC011763

Company & Directors' Information:- S M PAPER MILLS PVT LTD [Active] CIN = U21012WB1981PTC033674

Company & Directors' Information:- G R PAPER MILLS LIMITED [Active] CIN = L21015UP1981PLC005409

Company & Directors' Information:- M S M PAPER MILLS LIMITED [Strike Off] CIN = U25209MH1996PLC096961

Company & Directors' Information:- S. S. MILLS PRIVATE LIMITED [Active] CIN = U24231GJ1988PTC010885

Company & Directors' Information:- U P PAPER CORPORATION PRIVATE LIMITED [Active] CIN = U45203WB1945PTC012185

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Active] CIN = U51900MH1999PTC122189

Company & Directors' Information:- S T PAPER MILLS PVT LTD [Active] CIN = U21011PB1994PTC014921

Company & Directors' Information:- B J S PAPER MILLS PVT LTD [Strike Off] CIN = U21012PB1992PTC012331

Company & Directors' Information:- J B PAPER MILLS LIMITED [Dissolved] CIN = U21093DL1979PLC009868

Company & Directors' Information:- R B MILLS PVT LTD [Active] CIN = U15141AS1949PTC001939

Company & Directors' Information:- S V M PAPER PRIVATE LIMITED [Active] CIN = U21012DL2004PTC124024

Company & Directors' Information:- B N PAPER COMPANY PRIVATE LIMITED [Active] CIN = U74899DL1993PTC053155

Company & Directors' Information:- K M PAPER PRIVATE LIMITED [Active] CIN = U21012HP1996PTC017834

Company & Directors' Information:- H A PAPER MILLS PVT LTD [Active] CIN = U21023WB1972PTC028203

Company & Directors' Information:- M M PAPER PRIVATE LIMITED [Active] CIN = U21098WB2009PTC135633

Company & Directors' Information:- S A PAPER MILLS INDIA PRIVATE LIMITED [Strike Off] CIN = U21094TG2014PTC095780

Company & Directors' Information:- T K PAPER MILLS PVT LTD [Strike Off] CIN = U21012PB1980PTC004150

Company & Directors' Information:- T S PAPER MILLS PRIVATE LIMITED [Active] CIN = U21012PB2003PTC026292

Company & Directors' Information:- B T MILLS PRIVATE LIMITED [Active] CIN = U18101MH1997PTC109479

Company & Directors' Information:- T R MILLS PRIVATE LIMITED [Active] CIN = U17111KA1954PTC000799

Company & Directors' Information:- C P PAPER PRIVATE LIMITED [Amalgamated] CIN = U74899DL1994PTC062173

Company & Directors' Information:- J K MILLS LTD [Strike Off] CIN = U17200WB1946PLC013603

Company & Directors' Information:- ELLORA PAPER MILLS LTD [Strike Off] CIN = U21011WB1974PLC029786

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Amalgamated] CIN = U18101MH2003PTC138487

Company & Directors' Information:- J J PAPER MILLS PVT LTD [Under Liquidation] CIN = U21013WB1976PTC030835

Company & Directors' Information:- J S PAPER PRIVATE LIMITED [Strike Off] CIN = U21012RJ1990PTC005366

Company & Directors' Information:- H S PAPER MILLS PRIVATE LIMITED [Strike Off] CIN = U21012DL2005PTC135805

Company & Directors' Information:- PAPER INDIA PVT LTD [Strike Off] CIN = U51109WB1957PTC023601

Company & Directors' Information:- PAPER CORPORATION OF INDIA LIMITED [Dissolved] CIN = U99999MH1945PTC004331

Company & Directors' Information:- U P PAPER CORPN PVT LTD [Strike Off] CIN = U21093WB1945PTC012785

    AC. No. 100 of 2019

    Decided On, 27 August 2021

    At, High Court of Madhya Pradesh

    By, THE HONOURABLE CHIEF JUSTICE MR. MOHAMMAD RAFIQ

    For the Petitioner: Sandeep Bajaj, Siddharth Shrivastava, Advocate. For the Respondent: Pushpendra Yadav, Additional Advocate General.



Judgment Text

1. This application under Section 14 read with Sections 11 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act of 1996” for short) has been filed by the petitioner-Ellora Paper Mills Limited, seeking termination of the mandate of originally constituted Arbitral Tribunal and appointment of a new Arbitrator.2. Facts of the case, as averred in the application, are that the petitioner Company is engaged in manufacturing of printing and writing paper of various grades. Its plant is located in Maharashtra State. The respondent issued a tender for supply of the cream wove paper and duplicating paper for the year 1993-94. The petitioner participated in the said tender process and was awarded contract for supply of 1510MT of Cream Wove and 238 MT of Duplicating Paper aggregating 1748 MT vide supply order dated 22.9.1993. According to the terms of the payment, 90% of the amount was to be paid by the respondent immediately after receipt of paper and balance 10% after receipt of the test report. According to the petitioner, it supplied 420 MT of cream wove and 238 MT of duplicating paper to the respondent but the respondent not only did not make the payment of 90% of the amount, as per the terms of the contract, but also rejected some consignment without any justification, causing huge loss to the petitioner. The respondent vide letter dated 15.11.1993 informed the petitioner that the paper supplied by them does not conform to the specification and therefore cannot be utilized. The petitioner made several representations to the respondent in the year 1993 seeking details and asserting that the paper meets the requirements which failed to invoke any response, much less positive response. The petitioner then filed a civil suit in the year 1994 for permanent injunction against the respondent in the Civil Court at Bhopal seeking to restrain them from awarding the supply order to the third party. The respondent, however, in the meantime, awarded the said contract to the third party for remaining supply and therefore, the said suit became infructuous. The petitioner therefore filed another suit seeking recovery of an amount of Rs.95,32,103/- bearing Civil Suit No.2-B/98 before the Civil Court, Bhopal. During the pendency of the said suit, the respondent preferred an application under Section 8 of the Act of 1996 seeking stay of the proceedings on the ground that there exists an arbitration clause in the agreement between the parties. The Civil Court however rejected the said application vide order dated 27.2.1999. The respondent then filed Revision Petition No.1117/1999 before this Court which was allowed vide order dated 03.05.2000. This Court referred the parties to the arbitration by Stationery Purchase Committee comprising of the officers of the respondent. Against the said order of this Court, the petitioner filed Special Leave Petition bearing SLP (C) No.13914/2000 before the Supreme Court, which however was dismissed as withdrawn vide order dated 28.9.2000. The respondent constituted the Arbitral Tribunal, styled as Stationery Purchase Committee comprising their officers. The petitioner filed its objection to the constitution of the Arbitral Committee on 12.9.2000. The petitioner also challenged its jurisdiction by filing an application under Section 13 of the Act of 1996. The learned Arbitral Tribunal however vide order dated 2.2.2001 rejected the said application of the petitioner. Aggrieved thereby the petitioner filed a writ petition bearing W.P. No.1824/2001 before this Court which however was dismissed vide order dated 24.1.2017 with liberty to the petitioner to raise objections before the appropriate forum. In the meanwhile, the National Company Law Tribunal admitted and initiated the proceedings against the petitioner under the Insolvency and Bankruptcy Code. The Corporate Insolvency Resolution Process was commenced which ultimately culminated on its approval on 26.6.2018.3. Shri Sandeep Bajaj and Shri Siddharth Shrivastava, learned counsel for the petitioner submitted that the respondent constituted the Arbitral Tribunal of Stationery Purchase Committee, which comprises only of the officers of the respondent viz :- Additional Secretary, Department of Revenue as President and (i) Deputy Secretary, Department of Revenue, (ii) Deputy Secretary, General Administration Department, (iii) Deputy Secretary, Department of Finance, (iv) Deputy Secretary/Under Secretary, General Administration Department and (v) Senior Deputy Controller of Head Office, Printing as Members. Learned counsel submitted that since the respondent/department itself is a party to the dispute, its officers, by virtue of Section 12(5) of the Act of 1996, are ineligible to perform as Arbitrator or members of the Arbitral Tribunal. Learned counsel for the petitioner in support of his argument has relied on the judgment of Supreme Court in TRF Ltd. vs Energo Engineering Projects Limited reported in (2017) 8 SCC 377 wherein it was held that the person who has become ineligible to be appointed as the Arbitrator in terms of Section 12(5) of the Act of 1996, can neither continue as arbitrator nor can appoint anyone else as arbitrator.4. It is contended that this Court in the case of M/s HCL Technologies Limited Vs. Madhya Pradesh Computerization of Police Society (MPCOPS) (Arbitration Case No.38/2020) decided on 26.2.2021, relying on the aforesaid judgment of the Supreme Court in the case of TRF Ltd. (supra) and another judgment of the Supreme Court in the case of Perkins Eastman Architects DPC and another Vs. HSCC (India) Ltd. reported in (2019) SCC Online SC 1517 held that since MPCOPS is itself in dispute with the applicant therefore in view of the mandate of Section 12(5) read with the stipulations contained in Fifth and Seventh Schedules of the Act of 1996, it cannot now appoint the arbitrator. Learned counsel for the petitioner argued that all the erstwhile members of the Stationery Purchase Committee, who initiated the arbitration proceedings, have ceased to hold their respective positions as the constitution of the Arbitral Tribunal pertains to the year 2001. Now therefore a new Arbitral Tribunal in any case will have to be constituted and an independent and impartial Arbitrator should be appointed in terms of Section 11 of the Act to resolve the disputes between the parties. It is submitted that according to Section 11 of the Act of 1996, only a person can be appointed as an Arbitrator, which cannot be a specified post like Deputy Secretary of Stationery Purchase Committee. When an Arbitrator is approached in connection with his possible appointment, he is mandatorily required to disclose his relationship with the parties or his interest in the subject matter of the dispute in terms of Section 12 of the Act of 1996, a bare perusal of which makes it clear that ineligibility of an Arbitrator is to be seen from the date when an Arbitrator is approached by the party for his possible appointment. Therefore, no member of Stationery Purchase Committee can now be appointed as Arbitrator. Learned counsel in support of his argument has placed reliance on the judgment of Delhi High Court in the case of Omaxe Infrastructure and Construction Ltd. Vs. Union of India and another reported in 2018 SCC Online Del 8914. It is argued that the dispute in the present matter between the parties pertains to the year 1993 when the claim of the petitioner was for Rs.95,32,103/- (Rs.Ninety Five Lakh Thirty Two Thousand One Hundred and Three only) and now because of lapse of time the total amount of claim including the interest thereon would far exceed Rupees One Crore. The petitioner is contesting the dispute for last 28 years and therefore, the mandate of Arbitral Tribunal is liable to be terminated and an impartial arbitrator is required to be appointed in terms of Section 11 of the Act of 1996 to adjudicate the disputes between the parties.5. Shri Pushpendra Yadav, learned Additional Advocate General submitted that the agreement was entered into between the petitioner and the Government of Madhya Pradesh in respect of supply of Cream Wove Paper and Duplicating Paper pursuant to supply order dated 22.9.1993. Clause 7 of that the agreement clearly provides that if any dispute in respect of this agreement or any provision thereof arises between the parties, or any matter in relation thereto, except in respect of matters declared to be conclusive in the agreement, every such dispute shall be referred to the Stationery Purchase Committee of the Government, Madhya Pradesh, Bhopal for arbitration, whose decision shall be final, conclusive and binding on the parties. Since the dispute between the parties arose and the petitioner filed Civil Suit for permanent injunction in the Civil Court, the respondent filed an application under Section 34 of the Arbitration Act, 1940 seeking stay of the proceedings on the ground of Arbitration Clause and the trial Court vide order dated 22.7.1999 rejected the said application. The respondent then filed revision petition before this Court, which was allowed vide order dated 3.5.2000 relegating the parties to avail the remedy of arbitration before the Stationery Purchase Committee. The petitioner filed SLP (C) No.13914/2000 against the said order before the Supreme Court. The same was dismissed as withdrawn vide order dated 28.9.2000 reserving the right of the petitioner to challenge the jurisdiction of the Arbitrator. The petitioner thereafter filed objection under Section 13 of the Act of 1996 challenging constitution of the Arbitral Committee as well as its jurisdiction. The Committee, however vide order dated 2.2.2001 rejected the said objection. Aggrieved by the aforesaid order of the Arbitral Committee, the petitioner filed WP No.1824/2001 before this Court, which too was dismissed vide order dated 24.1.2017, while reserving liberty to the petitioner to raise objection before the appropriate forum at appropriate stage. The petitioner has now filed the present application under Section 14 read with Section 11 and 15 of the Arbitration & Conciliation Act, 1996 seeking appointment of the Arbitrator.6. Shri Pushpendra Yadav, learned Additional Advocate General submitted that Arbitral Tribunal in the present case was constituted pursuant to the order of this Court dated 3.5.2000 passed in Civil Revision No.1117/1999. Although thereafter Section 12(5) in the Act of 1996 has been inserted w.e.f. 23.10.2015, but this sub section does not apply to the cases, where Arbitrator has already been appointed on or before commencement of Arbitration & Conciliation (Amendment) Ordinance 2015. Since Section 12(5) was inserted w.e.f. 23.10.2015, it will have only prospective effect and that all the arbitral proceedings which were initiated prior to Amendment Ordinance 2015, could be continued under the unamended provision. It is argued that in the present case, the Arbitral Tribunal was constituted in pursuance of the order passed by this Court much prior to insertion of Section 12(5) by way of 2015 Amendment Act w.e.f. 23.10.2015, the same would therefore have no applicability to the present case. Learned Additional Advocate General in support of his arguments has relied on the judgments of the Supreme Court in Aravali Power Co. Power Ltd. Vs. Era Infra Engineering reported in (2017) 15 SCC 32, S. P. Singla Constructions Vs. State of Himanchal Pradesh reported in (2019) 2 SCC 488, Rajasthan Small Industries Corporation Vs. Ganesh Containers reported in (2019) 3 SCC 382, Union of India Vs. Pradeep Vinod Construction Co. reported in (2020) 2 SCC 464 and Government of India Vs. Vedanta Ltd. reported in (2020) 10 SCC 1.7. Alternatively, Shri Pushpendra Yadav, learned Additional Advocate General submitted that this Court has no jurisdiction to exercise the power under Section 14 of Arbitration & Conciliation Act. As per sub-section 2 of Section 14, if the controversy pertains to any of the grounds referred to in Clause (a) of Sub Section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate. The Court has been defined in Section 2(e) to mean in case of an arbitration other than international commercial arbitration, the Member of Civil Court of original jurisdiction in a district and includes High Court in exercise of its ordinary original civil jurisdiction having jurisdiction to decide the question forming subject matter of arbitration if same had been the subject matter of the suit. In the light of definition of Court, only a Civil Court including High Court exercising its original civil jurisdiction, has jurisdiction to entertain the application under Section 14 of the Act of 1996. Since the High Court of Madhya Pradesh does not have original civil jurisdiction to entertain the application, it would have no jurisdiction to entertain the present application. Therefore, the present application is not maintainable and deserves to be dismissed.8. I have given my anxious consideration to the rival submissions and perused the record.9. The application filed by the petitioner seeks not only to terminate the mandate of originally constituted Arbitral Tribunal but also to appoint a new Arbitrator. The argument of the learned counsel for the petitioner is mainly founded on amended sub-section (5) inserted in Section 12 of the Act of 1996, which inter alia provides that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. But the question that requires answer in the present case is whether this subsection would apply to arbitration proceeding which had already commenced prior to introduction of the amendment by Act 3 of 2016 with effect from 23.10.2015. In other words, whether sub-section (5) of Section 12 read with Seventh Schedule appended to the Act of 1996 can be relied by a party which had already appeared before the Arbitral Tribunal, as in this case, the petitioner, who had already appeared before Arbitral Tribunal and participated in the proceedings, can now seek termination of the mandate of the Arbitral Tribunal? This argument has to be examined against the backdrop of the facts in the present case already noticed in the beginning of the judgment. For the sake of repetition, it may be stated again that the petitioner filed a Civil Suit in the year 1998 seeking recovery of security amount of Rs.95,32,103/- before the Civil Court. The respondent preferred an application under Section 8 of the Act of 1996 praying for stay of the proceedings on the ground that there existed an arbitration clause in the agreement between the parties. The Civil Court however rejected the application by order dated 27.2.1999. Then the respondent filed a revision petition before this Court, which was allowed by this Court on 3.5.2000. This Court relegated the parties to arbitration by Stationery Purchase Committee comprising of officers of the respondent. The petitioner challenged the aforesaid order by filing the Special Leave Petition before the Supreme Court, which was however dismissed as withdrawn vide order dated 28.9.2000. It was thereafter that the respondent constituted the Arbitral Tribunal, styled as Stationery Purchase Committee. The petitioner objected to the constitution of the Arbitral Tribunal by filing an application under Section 13 of the Act of 1996 on 12.9.2000. The Arbitral Tribunal however rejected the said application on 2.2.2001. The petitioner then filed a writ petition before this Court, which was also dismissed vide order dated 24.1.2017 with liberty to raise objection before the appropriate forum. Sheet anchor of the petitioner’s argument is that in view of the law enunciated by the Supreme Court in TRF Ltd. (supra), all the five officers constituting the Stationery Purchase Committee, being employees of the respondent, have rendered themselves ineligible to continue as Arbitrators. Since they have become ineligible to continue as Arbitrators, they also cannot appoint another person as Arbitrator. It is contended that the original members of the Arbitral Tribunal, who initiated the proceedings have since ceased to hold their respective office, therefore, in any case a new Arbitral Tribunal will have to be constituted and therefore, an impartial and independent Arbitrator is required to be appointed in terms of Section 11 of the Act of 1996.10. The Supreme Court in Aravali Power Company Pvt. Ltd. Vs. Era Infra Engineering Ltd. (2017) 15 SCC 32 relying on its earlier judgment in Indian Oil Corporation Ltd. & others Vs. Raja Transport Pvt. Ltd. (2009) 8 SCC 520, held that mere fact that the arbitrator is an employee is not ipso facto a ground to raise any presumption of bias or partiality so long as there is no justifiable apprehension about arbitrator’s independence or impartiality. It was held that appointment of the Chief Executive Officer as the sole arbitrator in terms of the arbitration clause by rejecting the demand of the respondent for appointment of an independent arbitrator cannot be faulted. In that case, the respondent participated in the arbitration proceedings without raising any objection and for the first time after the Amendment Act, 2015 came into effect, raised objection regarding constitution of the Arbitral Tribunal. The High Court entertained the apprehension of the respondent as reasonable in exercise of power under Section 11(6) applying principles of impartiality/neutrality and to avoid doubt in the mind of the petitioner, but the Supreme Court while reversing the judgment of the High Court held that the fact that the named arbitrator happens to be an employee of one of the parties to the arbitration agreement has not by itself, before the Amendment Act came into force, rendered such appointment invalid and unenforceable.11. In judgment of Supreme Court in Raja Transport Pvt. Ltd. (supra) relied on by the Supreme Court in Aravali Power Company Pvt. Ltd. (supra), the same argument was repelled by the Supreme Court holding thus:-“34. The fact that the named arbitrator is an employee of one of the parties is not ipso facto a ground to raise a presumption of bias or partiality of lack of independence on his part. There can however be a justifiable apprehension about the independence or impartiality of an Employee-Arbitrator, if such person was the controlling or dealing authority in regard to the subject contract or if he is a direct subordinate (as contrasted from an officer of an inferior rank in some other department) to the officer whose decision is the subject matter of the dispute.35. Where however the named arbitrator though a senior officer of the government/statutory body/government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officer(s) (usually heads of department or equivalent) of a government/statutory corporation/ public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract.*** *** ` ***45. If the arbitration agreement provides for arbitration by a named Arbitrator, the courts should normally give effect to the provisions of the arbitration agreement. But as clarified by Northern Railway Administration [Northern Railway Admn. V Patel Engg. Co.Ltd. (2008) 10 SCC 240], where there is material to create a reasonable apprehension that the person mentioned in the arbitration agreement as the Arbitrator is not likely to act independently or impartially, or if the named person is not available, then the Chief Justice or his designate may, after recording reasons for not following the agreed procedure of referring the dispute to the named arbitrator, appoint an independent Arbitrator in accordance with section 11(8) of the Act. In other words, referring the disputes to the named arbitrator shall be the rule. The Chief Justice or his designate will have to merely reiterate the arbitration agreement by referring the parties to the named arbitrator or named Arbitral Tribunal. Ignoring the named Arbitrator/Arbitral Tribunal and nominating an independent arbitrator shall be the exception to the rule, to be resorted for valid reasons.”12. The view similar to Raja Transport Pvt. Ltd. (supra) was also taken by the Supreme Court in ACE Pipeline Contracts (P) Ltd. Vs. Bharat Petroleum Corpn Ltd. (2007) 5 SCC 304 and Union of India and another Vs. M.P. Gupta (2004) 10 SCC 504 holding that mere fact that the named arbitrator is an employee of one of the parties is not ipso facto a ground to raise any presumption of bias or partiality or lack of independence on his part.13. In Union of India Vs. Parmar Construction Company (2019) 15 SCC 682, the Supreme Court upon a conjoint reading of Section 21 of the Principal Act and Section 26 of the Amendment Act, held that where the request to refer the dispute to arbitration has been sent and received by the other side before the 2015 Amendment Act came into force and in other words where the arbitration commenced prior to 23.10.2015, the provision of the 2015 Amendment Act shall not apply to such of the arbitral proceedings which have commenced in terms of the provisions of Section 21 of the Principal Act unless the parties otherwise agree. The Court should first appoint the arbitrators in the manner provided for in the arbitration agreement but where the independence and impartiality of the arbitrator(s) appointed/nominated in terms of the arbitration agreement is in doubt, or where the Arbitral Tribunal appointed in the manner provided in the arbitration agreement has not functioned and it becomes necessary to make fresh appointment, the Chief Justice or his designate, in the given circumstances, after assigning cogent reasons in appropriate cases, may resort to an alternative arrangement to give effect to the appointment of independent arbitrator under Section 11(6) of the Act of 1996.14. In Union of India Vs. Pradeep Vinod Construction Company (2020) 2 SCC 464, the respondent(s) were registered contractors with the Railways and the request of respondent(s) for appointment of arbitrator invoking Clause 64 of the contract was declined by the Railways stating that their claims have been settled and respondent(s) have issued “no claim” certificate and executed supplementary agreement recording “accord and satisfaction” and hence, the matter is not referable to arbitration. Reversing judgment of the High Court, the Supreme Court held that since request for appointment of arbitrator was made much prior to coming into force of Amendment Act, 2015, provisions of Amendment Act, 2015 shall not apply to arbitral proceedings in terms of Section 21 of the Principal Act unless the parties otherwise agree. Thus, request by respondent(s) contractors should be examined in accordance with the principal Act, 1996, without taking resort to Amendment Act, 2015. Reversing the judgment of the High Court, the Union of India was directed by the Supreme Court to appoint arbitrator in terms of Clause 64(3) of the agreement within a period of one month under intimation to the respondent(s) contractors.15. In S.P.Singla Constructions Pvt. Ltd. Vs. State of Himachal Pradesh and another (2019) 2 SCC 488, the Chief Engineer, H.P. PWD appointed Superintendent Engineer pursuant to request of appellant as arbitrator in terms of Clause 65 of agreement but appellant-petitioner challenged such appointment on premise that arbitrator had not been appointed by name but had been appointed by designation. Reliance in that case was also placed on Section 12(5) as amended with effect from 23.10.2015 by Amendment Act 3 of 2016. It was held that Amendment Act shall not apply to the Arbitral Tribunal which had commenced its proceedings before its enforcement, inasmuch as same cannot have retrospective operation in arbitral proceedings already commenced unless parties otherwise agree. Repelling the argument of the appellant, similar to the one raised in the present case, the Supreme Court held that it was permissible to appoint a person by designation. The arbitration agreements involving government contracts providing that an employee of department or a higher official unconnected with the work or contract will be arbitrator are neither void nor unreasonable. Once appointment of arbitrator is made at the instance of Government, arbitration agreement could not have been invoked for second time. In the present case also when on invocation of arbitration clause by the petitioner, the Arbitral Tribunal consisting of the officers named by designation had already been appointed and has been acted upon, it cannot be said that there ever remained any vacuum in the Arbitral Tribunal because mere change of incumbents by reason of transfer or retirement would not make any difference as they were made members of the Arbitral Tribunal by designation and not by name. Therefore, there does not arise any necessity to appoint another Arbitral Tribunal.16. The Supreme Court in the judgment in Central Organization for Railway Electrification Vs ECI-SPIC-SMO-MCML (JV) reported in 2019 SCC Online SC 1635, considered the case of TRF Limited, supra, relied upon by learned counsel for the petitioner. The Supreme Court also considered that after amendment of the Arbitration and Conciliation Act, 1996 w.e.f. 23.10.2015, the Railway Board made modification in Clause 64 of the General Conditions of Contract and issued notification dated 16.11.2016 for implementation of modification. The Supreme Court in Central Organization for Railway Electrification, supra in Paragraphs-31 & 39 of the judgment held as under:"31. As discussed earlier, as per the modified Clause 64(3)(b) of GCC, when a written and valid demand for arbitration is received by the General Manager, the Railway will send a panel of at least four names of retired railway officers empanelled to work as arbitrators. The contractor will be asked to suggest to the General Manager at least two names out of the panel for appointment as contractor's nominee within thirty days from the date of dispatch of the request by the Railway. Vide letter dated 27.07.2018, the respondent has sought for appointment of an arbitrator for resolving the disputes. The appellant by its letter dated 24.09.2018 (which is well within the period of sixty days) in terms of Clause 64(3)(a)(ii) (where applicability of Section 12(5) of the Act has been waived off) sent a panel of four serving railway officers of JA Grade to act as arbitrators and requested the respondent to select any two from the list and communicate to the office at the earliest for formation of Arbitration Tribunal. By the letter dated 26.09.2018, the respondent conveyed their disagreement in waiving the applicability of Section 12(5) of the Amendment Act, 2015. By the letter dated 25.10.2018, in terms of Clause 64(3)(b) of GCC (where applicability of Section 12(5) has not been waived off) the appellant has nominated a panel of four retired railway officers to act as arbitrators and requested the respondent to select any two from the list and communicate to the appellant within thirty days from the date of the letter for formation of Arbitration Tribunal. The respondent has neither sent its reply nor selected two names from the list and replied to the appellant. Without responding to the appellant, the respondent has filed petition under Section 11(6) of the Arbitration and Conciliation Act before the High Court on 17.12.2018. When the respondent has not sent any reply to the communication dated 25.10.2018, the respondent is not justified in contending that the appointment of Arbitral Tribunal has not been made before filing of the application under Section 11 of the Act and that the right of the appellant to constitute Arbitral Tribunal is extinguished on filing of the application under Section 11(6) of the Act.xxx xxx xxx39. There is an express provision in the modified clauses of General Conditions of Contract, as per Clauses 64(3)(a)(ii) and 64(3)(b), the Arbitral Tribunal shall consist of a panel of three Gazetted Railway Officers [Clause 64(3)(a)(ii)] and three retired Railway Officers retired not below the rank of Senior Administrative Grade Officers [Clause 64(3)(b)]. When the agreement specifically provides for appointment of Arbitral Tribunal consisting of three arbitrators from out of the panel serving or retired Railway Officers, the appointment of the arbitrators should be in terms of the agreement as agreed by the parties. That being the conditions in the agreement between the parties and the General Conditions of the Contract, the High Court was not justified in appointing an independent sole arbitrator ignoring Clauses 64(3)(a)(ii) and 64(3)(b) of the General Conditions of Contract and the impugned orders cannot be sustained."17. In Rajasthan Small Industries Corporation Ltd. Vs. Ganesh Containers Movers Syndicate (2019) 3 SCC 282, the Supreme Court held that the Amendment Act, 2015, as made effective with effect from 23.10.2015, cannot have retrospective operation in the arbitral proceedings already commenced unless the parties otherwise agree. In that case, proceedings before the Arbitral Tribunal continued till 17.8.2011 an

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d thereafter, no progress was made. The respondent filed application under Sections 11 and 15 before the High Court on 13.5.2015 seeking appointment of an arbitrator for adjudication of the disputes and differences between the appellant and the respondent. The Supreme Court held that the respondent having participated in the proceedings before the Arbitral Tribunal for quite some time and also having expressed faith in the sole arbitrator, was not justified in challenging the appointment of Managing Director of appellant Corporation as the sole arbitrator. Further in the absence of any material to show that arbitrator had not acted independently or impartially, there could not be a presumption of bias or lack of independence on his part. It was held that the High Court was not right in appointing the arbitrator without keeping in view the terms of the agreement between the parties. In the present case too, the petitioner has not been able to produce any material to show any bias or partiality on the part of any of members of the Arbitral Tribunal and therefore failed to substantiate that one or more of them have not acted impartially or independently.18. The matter can be examined even from another angle. The Supreme Court in the case of Union of India vs. Parmar Construction Company, reported in (2019) 15 SCC 682, held that conjoint reading of Section 21 of principal Act and Section 26 of the Amendment Act, 2015 leaves no manner of doubt that the provisions of the 2015 Amendment Act shall not apply to such of the arbitral proceedings which have commenced in terms of the provisions of Section 21 of the Principal Act unless the parties otherwise agree. The Supreme Court also held that the request by respondent contractors for referring the dispute to arbitration was made and received by the appellants much before the 2015 Amendment Act came into force. Thus, the applications/requests made by the respondent contractors have to be examined in accordance with the principal Act, 1996 without taking resort to the 2015 Amendment Act which came into force from 23.10.2015. This was also the view taken by the Supreme Court in BCCI vrs. Kochi Cricket Private Ltd. (2018) 6 SCC 287.19. The judgment of this Court in M/s HCL Technologies Limited (supra) cited by the petitioner is distinguishable on facts. The dispute in that case arose much after the enforcement of the Amendment Act, 2015 came into effect from 23.10.2015. In fact, as would be evident from para 5 of that judgment, notice was served by the applicant on non-applicant on 16.6.2020 invoking the arbitration clause contained in Clause 1.23 of the agreement proposing to nominate the name of a retired Acting Chief Justice of this Court as the sole arbitrator to resolve the dispute between the parties. Not only that judgment therefore is distinguishable on facts but the ratio of that judgment does not apply to the present matter.20. In view of the aforesaid discussion, the present application fails and it is hereby dismissed. It would be however open for the petitioner to participate in proceedings before the Arbitral Tribunal constituted by the respondent as Stationery Purchase Committee which shall decide the matter expeditiously in accordance with the law.21. There shall be no order as to costs.
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