1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short "Act 1996") has been filed assailing the judgment and order dated 09.09.2013 passed by District Judge, Allahabad allowing objection under Section 34 of the Act, 1996 in Arbitration Case No. 25 of 2008, Union of India vs. M/s. Vidyawati Construction Company, against award dated 21.02.2008 made by the sole arbitrator.2. Facts in nutshell, are that appellant was awarded a contract for construction of multistorey RCC frame building complex ( Ground + 3 stories) for office of General Manager, Railway Electrification, Allahabad (now Prayagraj) for total cost of Rs.87,76,517/-, and a letter of acceptance of contract was issued on 13.03.1989. Due to administrative reasons, awarded work was reduced from G+3 to G+2 and original cost was revised and reduced to Rs.66,32,912/- and the work was to be completed within 18 months (i.e. by 18.09.1990). However, actual work was completed on 31.05.1993, and final amount paid to the appellant was Rs.68.77 lacs.3. Appellant submitted his final bill for Rs.4,26,54,807/- on 15.04.1994. As respondents did not make full payment hence on 18.05.1996, appellant invoking the arbitration clause sent a registered letter requesting that panel of arbitrators under Clause 64(3)(b) of General Condition of Contract be forwarded to them for selection of an arbitrator. The respondents authorities on 27.06.1996, 07.10.1996 and 17.01.1997, through the said letters required details of the claim made by appellant.4. Sometimes in January, 1997, appellant filed Civil Misc (Arbitration) Application No. 35 of 1997 for appointment of arbitrator under Section 11 (4) of the Act of 1996. This application was contested by the Railway authorities and a counter affidavit was filed, wherein it was stated in para 6 that a panel of arbitrator was appointed by the General Manager. After hearing the parties, this Court on 26.08.1998 appointed one Smt. Tanuja Pandey, as railway nominee and Sri O.P. Narang as the appellant's nominee, as arbitrators. The order further required that as per Clause 64 (3)(b), before entering into the reference two arbitrators were required to nominate an Umpire who shall be the Gazetted Officer and to whom the case may be referred in the event of any difference between the two arbitrators. It was on 05.10.1998 that both the arbitrators jointly agreed and appointed one Sri P.K. Sharma, Chief Engineer N.F. Railway, as Umpire. But a Civil Misc. (Arbitration) Application No. 47 of 1998 was filed by the appellant for complying the earlier order dated 26.08.1998 for appointment of an Umpire by the two arbitrators so appointed. In the counter affidavit filed by Railways, it was stated that both the arbitrators have jointly agreed for name of Sri P.K. Sharma. This Court on 01.11.1999 disposed of the application approving the name of P.K. Sharma as the Umpire.5. The Arbitral Tribunal entered into reference and statement of claim was filed by appellant on 06.01.1999, while statement of defence was filed by respondents Railway on 06.04.1999.6. The appellant in the year 2000 filed a Civil Misc. Review/ Correction Application No. 101974 of 2000 in Arbitration Application no. 47 of 1998 with a prayer that the Umpire appointed by the Court may be treated as the presiding arbitrator of the Arbitral Tribunal in view of Act, 1996. This Court on 15.03.2002 allowed the application filed by appellant and held that the Umpire shall be treated as the presiding arbitrator of the Tribunal. It appears that on 24.04.2002, the presiding arbitrator, P.K. Sharma showed his unwillingness to act as a presiding arbitrator, thus, two arbitrators so appointed by this Court through letter dated 02.05.2000 informed the Registrar of this Court about refusal/ resignation of Sri P.K. Sharma and requested for nominating presiding arbitrator so that the proceedings can be resumed.7. Meanwhile on 10.09.2002, appellant filed a Civil Misc. Modification Application No. 8 of 2002, with a prayer for modifying the earlier order of this Court dated 15.03.2002 for appointing another person as presiding arbitrator (not being a person belonging to Railway Department). This modification application was filed in the earlier Civil Misc. (Arbitration) Application No. 35 of 1997. But on 26.09.2003, the matter was placed before the then Chief Justice, who treated the modification application as application under Section 11 of the Act and appointed Mr. Justice H.N. Seth, a retired Chief Justice of this Court as the sole arbitrator, while the proceedings were pending before the earlier Arbitral Tribunal appointed by this Court on 26.08.1998.8. The first arbitration meeting was held on 05.12.2003 before the sole arbitrator appointed on 26.09.2003, wherein the counsel for both the parties agreed that under order of Chief Justice constituting the Tribunal, appointment of two earlier arbitrators stands superseded and further agreed that respective statement of claim and defence already filed by the parties before previous arbitrators should form basis of adjudication in the present proceedings. Claimant was granted time until 02nd January, 2004 to file statement of claim, while respondents were granted time till 15th January, 2004 for filing statement of defence.9. Both the parties filed their copies of statement of claim, defence and rejoinder, which were filed by them before previous arbitrators in the second meeting held before the sole arbitrator on 14.02.2004. Parties were given time to check and verify whether each of them has filed correct copies of documents and nothing has been omitted therefrom. It was made open to the parties to file additional documents for supporting their respective cases after serving the copies thereof on the other side, fixing 12.03.2004, as the next date.10. In the third meeting held on 12.03.2004, claimant-appellant filed application of date praying that respondents be directed to supply copy of certain documents. On the said date, respondents agreed that they will furnish copies of bill, as far as Measurement Book (M.B's.) were concerned, it was stated that they are Railways internal records and there was no provision for giving copies thereof. After hearing the parties, the sole arbitrator directed the respondent-Railway to supply photo copy of M.Bs. It was further observed that parties had filed their respective statement of claim, defence and reply. As claimants had filed number of annexures as the record show, it had become necessary for the respondents to modify their statement of defence in the light of those annexures and were granted a month's time for this purpose.11. On the next date i.e. 24.04.2004, respondents filed objections under Section 16 of the Act raising dispute to the effect that Tribunal has no jurisdiction to decide the claim. The arbitrator on 20.10.2004 rejected the preliminary objection regarding composition and constitution of the Tribunal on the ground of delay in raising the objections. The arbitrator, thereafter, proceeded and gave award on 21.02.2008. This award was put to challenge through objections under Section 34 of the Act of 1996 before the District Judge, Allahabad, which was numbered as Arbitration Case No. 25 of 2008. The court below on 09.09.2013 set aside the award dated 21.02.2008 passed by Mr. Justice H.N. Seth, a former Chief Justice of this Court considering the objections filed by respondent- Railway under Section 34 of the Act.12. Heard Sri Manish Goyal, learned Senior Counsel assisted by Sri Krishna Agrawal, learned counsel for the appellant and Sri Tarun Varma, along with Sri Anil Kumar, learned counsel for the respondents.13. It is contended on behalf of appellant that the sole basis of order impugned is the ground under Section 34(2)(a)(v) of the Act, 1996 inasmuch as the District Judge recorded a conclusion to the effect that appointment of sole arbitrator by the Chief Justice was against the terms and conditions of the agreement entered into between the parties.14. Sri Manish Goyal, learned Senior Counsel submitted that challenge under Section 35(2)(a)(v) was not available to the respondents as ground of challenge does not fulfill the ingredients of Section 34(2)(a)(v), and the District Judge completely overlooked the qualifying part of the said section and has not noticed the fact that parties derogated and such derogation was permissible under the law. He further submitted that agreement between the parties cannot be the sole criteria and appointment of sole arbitrator cannot be said to dehors the agreement of parties. Section 10 of the Act specifically prohibits appointment of even number of arbitrators, while agreement of the parties specifically provided for appointment of even number of arbitrators and it was only in case when the even number of arbitrators were divided in their opinion that the matter could have travelled to Umpire. This was squarely in violation of Section 10(1) of the Act, and under such circumstances, provisions of Section 10(2) of the Act will apply. This aspect was not dealt by the court below and, therefore, the application could not have been allowed merely on the ground of applying under Section 34(2)(a)(v) of the Act which was to be read along with other provisions of the Act that includes Section 4, Section 10 and Section 16 of the Act.15. According to him, a fundamental error was committed by the court below in setting aside the award on the misconceived ground of Section 34(2)(a)(v) and the application could not have been entertained.16. Reliance has been placed upon decision in case of Narayan Prasad Lohia vs Nikunj Kumar Lohia & Ors, AIR 2002 SC 1139 (Para 16 and 19), and B.S.N.L. Ltd. vs. Motorola India (P. Ltd.), 2008 (12) SCALE 720 (Para 18).17. Secondly, it was submitted that challenge to jurisdiction of appointment of sole arbitrator stood waived by conduct of respondents and hence by virtue of Section 4 of the Act, respondents were not competent to challenge the jurisdiction of arbitrator. It was submitted that order of appointing the sole arbitrator was made on 26.09.2003 and against the said appointment, neither any appeal was filed nor any objection was raised while the sole arbitrator was being appointed by the then Chief Justice. As it is evident from proceedings before the sole arbitrator on 05.12.2003, 14.02.2004 and 12.03.2004 that the parties and their advocates have acquiesced to the jurisdiction of sole arbitrator and also acquiesced to the previous appointment of two arbitrators being superseded. The objection for the first time came up after order were passed on 12.03.2004, directing respondents to provide photo copies of M.Bs. relating to reinforcement of steel to the claimant which was an uncomfortable order for respondents that an objection was raised on 24.04.2004 relating to jurisdiction of the Tribunal.18. This according to him, was an abuse of process on the part of respondents who is a State and is bound to act fairly. All these aspects have been dealt in extenso by sole arbitrator but no reason has been given by the court below (District Judge) for upsetting the finding so recorded. It was also submitted that statement of defence was already on record and the parties in their first meeting had accepted that the statement of claim and defence filed before the previous arbitrator should form basis of adjudication before the sole arbitrator and the arbitrator had granted time till 15th January, 2004 for submitting statement of defence.19. As the second meeting was held on 14.02.2004, parties had filed statement of claim, defence and rejoinder, as such any objections in regard to challenge to jurisdiction in view of provisions contained in Section 16(2) of the Act could have been raised till that point of time but respondents-Railways filed objection on 24.04.2004 after the filing of statement of defence which was rightly repelled by the arbitrator on 20.10.2004. Thus, by legal fiction, waiver will come into play as contemplated by Section 4 of the Act and challenge to jurisdiction of Arbitral Tribunal stood waived by conduct of respondents. Reliance on this point of waiver has been made in case of Narayan Prasad Lohia (supra), Motorola India (P. Ltd.) (supra) and State of Orissa and others vs. Gokulananda Jena, (2003) 6 SCC 465 (Paras 5, 6 and 7).20. The third point canvassed by learned Senior Counsel was that the sole arbitrator rightly recorded finding while rejecting the objection of the respondents as to jurisdiction of Arbitral Tribunal, while the District Judge solely relying upon the decision of the Apex Court in the case of S.B.P. and Co. vs. M/s. Patel Engineering Ltd. and another, AIR 2006 SC 450, held that appointment of sole arbitrator could not have been challenged and the said judgment was prospective while the sole arbitrator was appointed in the year 2003 and only objections under Section 16(2) could have been made before the Arbitral Tribunal.21. According to him, neither the points raised nor statutory provisions have been dealt by the court below and without appreciating the statutory scheme of Part-I of the Act, learned District Judge had proceeded to hold the appointment of sole arbitrator against the terms and conditions of the agreement. It was further contended that the court below misconstrued the provision and did not notice the fact that where technical qualifications are not mentioned in the arbitration clause, then the parties can derogate and under such circumstances, this Court rightly appointed a retired Judge as a sole arbitrator and the court below had not touched upon the impact of Section 10 or Section 4 of the Act.22. Reliance has been placed upon decision in the case of Northern Eastern Railway and others vs. Tripple Engineering Works, 2014 (3) Arb. LR 327 (SC), Dakshin Shelters P. Ltd. vs. Geeta S. Jauhari, (2012) 5 SCC 152, Union of India vs. BESCO Ltd., AIR 2017 SC 1628 and Bharat Wire Ropes Ltd. vs. Union of India and others, (2012) 5 ADJ 644.23. The next point canvassed by Sri Goyal was that the appointment of sole arbitrator and award pronounced by him have subserved the purpose of parties and this Court had rightly appointed a retired Judge as sole arbitrator instead of appointing presiding arbitrator, as the very purpose of Act of 1996 is to provide speedy remedy instead of formal process of litigation. It is designed to provide alternative dispute resolution and in order to achieve objective that different facets are to be weighed that, inter alia, include low cost, early disposal and convenience of parties, and these three facets are not exhaustive but illustrative.24. According to him, what is to be made is that prejudice may not be caused to any of the parties and in the present case no single ground was taken in application under Section 34 by respondents that they suffered any prejudice in the decision making process of the sole arbitrator. The outcome may be their prejudice but that is how the law takes its own course. Further, there is no statement to the effect that arbitrator was biased or the decision making process stood invalidated by the conduct of arbitrator, thus, under such circumstances, proceedings before sole arbitrator subserved the purpose of arbitration and did not cause prejudice to either of the parties. Reliance on this issue has been placed upon decision in case of Abdul Gaffar vs. Sri Jaichandlal Ashok Kumar and Co. Pvt. Ltd. and another, JT (2000) 8 SC 152 and Citibank N.A. vs. TLC Marketing and another, (2008) 1 SCC 481.25. Sri Goyal then invited the attention of the Court to Section 23 of the Act which is statement of claim and defence. Sub-section (1) of Section 23 provides that within the period of time agreed upon between the parties or determined by Arbitral Tribunal, the claimants shall state the fact supporting his claim, the points at issue and relief or remedy sought, and the respondents shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.26. According to him, sole arbitrator on 05.12.2003 had granted time uptil 15th January, 2004 for filing statement of defence which was filed in the second meeting held on 14.02.2004 by respondents-Railways. Now, according to Section 16(2), plea regarding that Arbitral Tribuanl does not have jurisdiction shall be raised not later than the submissions of statement of defence, thus, Section 16(2) has to be read along with Section 23(1) of the Act, and in the present case objections challenging the very Arbitral Tribunal were raised by respondents on 24.04.2004 i.e in the fourth meeting, thus, the said objections were rightly rejected by the sole arbitrator.27. While Section 25 provides for default of a party and Sub-section (b) of Section 25 is in regard to the respondent failing to file his statement of defence in accordance with Sub-section (1) of Section 23, in that case the Arbitral Tribunal shall continue the proceedings without treating that failure in itself has an admission of the allegation by the claimant. Thus as the statement of defence, according to Sri Goyal was filed on 14.02.2004 and objections to the constitution of the Arbitral Tribunal was not filed as per provisions of Section 16(2), there is a default committed by the respondents which cannot be cured and Section 25(b) provides for the default in case of non filing of statement of defence by respondent, the same shall be treated as a default by respondents in not filing the objections as mandated in Section 16(2), at the time of filing of written statement.28. Replying to the above arguments, Sri Tarun Varma, learned counsel appearing for respondents submitted that as per Clause 64(3)(a)(ii) of General Condition of Contract two arbitrators, who shall be the Gazetted Railway Officer of equal status, were to be appointed in manner laid down in Clause 64(3)(b), one from the Department side and other from the side of contractor, and the two arbitrators so nominated shall nominate an Umpire who shall also be Gazetted Railway Officer.29. According to him, this Court on the Application No. 35 of 1997, on 26.08.1998 had appointed Smt. Tanuja Pandey from the side of respondents and Sri O.P. Narang, from the side of contractor-appellant, as arbitrator and by the same order, they were required to nominate an Umpire as provided in Clause 64(3)(b). As one P.K. Sharma was jointly agreed as an Umpire, this Court on 01.11.1999, accepted his nomination. It was on the correction application filed by appellant in the year 2000 that Sri P.K. Sharma was treated as presiding arbitrator of the Tribunal instead of an Umpire vide order dated 15.03.2002.30. As Arbitral Tribunal had already entered into reference on 06.01.1999, presiding arbitrator showed his unwillingness to act, which was intimated to the Registrar of this Court on 02.05.2002. Simultaneously, a modification application was also moved by the appellant for appointment of presiding arbitrator which was dealt by the Chief Justice as an application under Section 11 and a new Arbitral Tribunal de novo was constituted, without superseding or terminating the mandate of the earlier Tribunal.31. Sri Varma submitted that the Tribunal which was constituted by this Court on 26.08.1998 was still in existence as the proceedings before the same were not terminated, neither the order appointing sole arbitrator took note of the fact that earlier Arbitral Tribunal was in existence and order passed on 26.09.2003 superseded the earlier Arbitral Tribunal. It is also contended that neither there was any prayer in the modification application for terminating the Arbitral Tribunal nor for appointment of sole arbitrator and prayer was made only for appointment of presiding arbitrator not being an officer of Railway. As the earlier appointments of two arbitrators were in terms of Clause 64 of the GCC, fresh appointment made was against the agreement/ contract entered into between the parties.32. Sri Varma submitted that appointment of the sole arbitrator made on 26.09.2003 could not be challenged in view of the law prevalent at that time as in case of Konkan Railway Corporation Ltd. and another vs. Rani Construction Pvt. Ltd., (2002) 2 SCC 388, it was held by Apex Court that such an order was an administrative order.33. He further submitted that on the first date before the sole arbitrator, consent given by counsel as regards constitution of Tribunal of sole arbitrator is not binding on the Railways as held in the case of B.S. Bajwa vs. State of Punjab, (1998) 2 SCC 523. As on that date appellants were directed to file claim by 2nd January, 2004 and respondents' statement of defence by 15th January, 2004. On 14.02.2004, which was the second date fixed before the sole arbitrator, the parties had filed their copies of statement of claim, defence and rejoinder which were filed by them before previous arbitrators and nothing new was filed and the sole arbitrator had granted time for verifying the documents filed by each of the parties and had also granted time to file additional documents for supporting their respective cases.34. It was in the third meeting held on 12.03.2004 that claimant/ appellant had filed application requiring the respondents to file certain documents, wherein the sole arbitrator had directed the respondents to supply photo copies of M.B's. relating to reinforcement of steel to the claimant. The sole arbitrator had recorded in the said proceedings that claimant had filed number of annexures and thus respondents were granted liberty to modify their statement of defence in light of those annexures. On the next date fixed i.e. fourth meeting which was held on 24.04.2004, respondents had filed their objections under Section 16(2) and thus, there was no delay as the sole arbitrator had already granted time to modify their statement of defence, meaning thereby that statement of defence till that date was not complete.35. He, next submitted that plea of waiver raised by appellant as mandated in Section 4 of the Act of 1996 cannot be attracted in the present case, as after the Arbitral Tribunal was constituted on 26.08.1998 by this Court in terms of agreement, there was no need to file objection as to jurisdiction. However, subsequently the Chief Justice on 26.09.2003 had appointed a retired Chief Justice of this Court as sole arbitrator against the agreement without terminating the mandate of the earlier Arbitral Tribunal, hence the Railways filed objection as to jurisdiction/ composition of Tribunal under Section 16 before the Arbitral Tribunal of sole arbitrator.36. According to him, reliance placed on decision of B.S.N.L vs. Motorola India Pvt. Ltd. (supra) does not come to the rescue of appellant. He further submitted that proceedings before Arbitral Tribunal of Sri H.N. Seth was going on and no hearing had taken place, except exchange of pleadings and permitting respondents to rectify/ modify their defence statements, thus, no hearing commenced till 24.04.2004 nor defence statement filed by respondents had attained finality.37. As far as Section 10 of the Act is concerned, he submitted that as agreement Clause 64 of General Condition of Contract provides for two arbitrators, who are to be nominated by both the parties (i.e Railway and Contractor) and the two appointed arbitrators were to nominate an Umpire, which was followed, while application under Section 11 of the appellant was decided on 26.08.1998. Reliance has been placed upon decision of the Apex Court in case of M.M.T.C. Limited vs. Sterlite Industries (India) Ltd., AIR 1997 SC 605.38. The third point canvassed by Sri Varma is that while appointing Arbitral Tribunal under Section 11, the Court cannot alter the terms of contract and cannot direct for appointing a sole arbitrator in place of three arbitrators as provided in the agreement, as it would amount to altering the terms of agreement entered into between the parties.39. Reliance has been placed upon decision of Apex Court in case of SVG Molasses Co. B.V. vs. Mysore Mercantile Co. Ltd. and others, 2007 (9) SCALE 89 (Paras 12 and 15), Indian Oil Corporation Ltd. vs. Raja Transport (P) Ltd., MANU/SC/1502/2009 and Antrix Corporation Ltd. vs. Devas Multimedia P. Ltd., (2014) 11 SCC 560.40. Referring to Sections 12 and 13 of the Act, respondents counsel submitted that it is no doubt true that arbitrators may be challenged on the ground of justifiable doubts, independence, impartiality and not possessing qualification. While Section 13 provides a party who intends to challenge arbitrator on the grounds mentioned in Section 12 within 15 days after becoming aware.41. He contended that Respondent-Railways never challenged the arbitrator on the ground of justifiable doubts, independence, impartiality and qualification and their case was not covered under Sections 12 and 13 of the Act, which is also reflected from the order of sole arbitrator dated 20.10.2004 rejecting their objection. The case of respondents is solely against the composition of the Arbitral Tribunal and objection was filed under Section 16(2) of the Act.42. According to him, the law prevailing at the time when order under Section 11 was passed that it was an administrative order in terms of the law laid down by the Apex Court in case of Konkan Railway Corporation Ltd. (supra) and no appeal would lie against such order and the decision of S.B.P. and Co. (supra) came subsequently thus, was not applicable at that time and the Apex Court in the case of Gokulananda Jena (supra) had already held that all the grounds of attack can very well be raised before the arbitrator as alternative remedy is available under the Act itself.43. Reliance has also been been placed on a decision of Division Bench of this Court in case of Rail India Technical and Economic Services Ltd. vs. Vidyawati Construction Ltd., Writ Petition No. 16445 of 2001, decided on 24.05.2001, wherein it was held that writ petition was not maintainable as any objection to be raised against the order of Chief Justice has to be raised under Section 16 of the Act.44. It was then contended that Section 15 of the Act of 1996 provides that where a mandate of an arbitrator terminates, a substitute arbitrator shall be appointed. In the present case, as the presiding arbitrator P.K. Sharma resigned/ withdrawn, a substitute arbitrator could have been appointed as per Section 15(2) of the Act which was not done. Reliance has been placed upon a decision in case of National Highways Authority of India vs. Bumihiway DDB Ltd. (JV) and others., (2006) 10 SCC 763.45. The next point raised by learned counsel was that provisions of Section 34 of the Act clearly provides the grounds for setting aside Arbitral Award, wherein Section 34(2)(a)(v) itself provides that award may be set aside when the composition of Arbitral Tribunal is not in accordance with agreement. As a retired Chief Justice was appointed as the sole arbitrator against the terms of the agreement, so this case squarely fell within the ambit of Section 34(2)(a)(v). As in the application filed under Section 34, answering respondents had requested that point raised as regards to the composition of Arbitral Tribunal be decided first as a preliminary issue, against which the appellant had filed objections and the court below after hearing the parties decided the objection on 09.09.2013. Reliance has been placed on decision of Apex Court in case of Lion Engineering Consultants vs. State of H.P. and others, 2018 (16) SCC 758.46. I have heard learned counsel for the parties and perused the material on record.47. Before proceeding to decide the issue in hand, a glance of the General Condition of Contract (GCC) is necessary, which is extracted hereasunder:"64. (1) Demand of arbitration. - In the event of any dispute or difference between the parties here to as to the construction or operation of this contract, or the respective rights and liabilities of the parties, on any matter in question, dispute or difference on any account, or as to the withholding by the railway of any certificate to which the contractor may claim to be entitled to or if the Railway fails to make a decision within a reasonable time then and in any such case, but except in any of the excepted matters referred to in clause 63 of these conditions, the Contractor, after 90 days of his presenting his final claim on disputed matters, may demand in writing that the dispute or difference be referred to arbitration. Such demand for arbitration shall specify the matters which are in question dispute or difference and only such dispute or difference of which the demand has been made and no other shall be referred to arbitration.(2) Obligation during pendency of arbitration.- Work under the contract shall, unless otherwise directed by the Engineer, continue during the arbitration proceedings and no payment due to payable by the Railway shall be withheld on an account of such proceedings provided however shall be open for arbitrator or arbitrators to consider and decide whether or not such work should continue during arbitration proceedings.(3) (a) Arbitration- Matter in question dispute or difference to be arbitrated upon shall be referred for decision to:(I) A sole arbitrator who shall be General Manager or a nominated by him in that behalf in cases where the claim in question is below Rs. 300000/- and in cases where the issues involved not of a complicated nature. The General Manager, shall be the Sole Judge to decide whether or not the issues involved are of complicated nature.(ii) Two Arbitrators, who shall be Gazetted Railway Officers equal status to be appointed in the manger laid down in claim 64(3)(b) for all claims of Rs. 300000/- and above and for all claim irrespective of the amount of value of such claims if the issue involved are of a complicated nature. The General Manager, shall be the sole Judge to decide whether the issues are of a complicated nature or not. In the event, of the two Arbitrators being divided in their opinion the matter under dispute will be referred to an Umpire to be appoint in the manner laid down in sub clause 3(b) for his decision.3. (b) For the purpose of appointing two arbitrators as referred to in sub clause (a) (ii) above the Railway will send a panel of more then three names of Gazetted Railway Officers of one or more depart of the Railway of the Contractor, who will be asked to suggested to the General Manager one name out of the list for appointment as the contractor/ nominee. The General Manager, while so appointing the Contractor/ nominee will also appoint a second arbitrator as the Railway nominee either from the panel or from outside the panel, ensuring that one of the two arbitrators so nominated is invariably from the accounts Department before entering upon the reference the two Arbitrator shall nominate an Umpire who shall be a Gazetted Railway Officer whom the case will be referred to in the event of any difference between the two arbitrators. Officers of the Junior Administrative grade of the Accounts Department of the Railway shall be considered as of equal status to the officers in the intermediate administrative grade of other department of the Railway for the purpose of appointment as arbitrators.3. (c) If the sole arbitrator appointed under sub clause (a)(i) or one or both the arbitrators appointed under sub clause (b) above resigns his appointment/ resign their appointments or vacated his office/ vacate their offices or is/ are unable or unwilling to act for any reason whatsoever or dies/ die. The General Manager may appoint a new arbitrators to act in his/their place in accordance with the provisions of sub clause (a)(i) of sub clause (b) above as the case may be. Such arbitrator/ arbitrators, as the case may be shall be entitled to proceed with the reference from the stage at which it was left by the previous arbitrator/ arbitrators.3. (d) The Arbitrator or Arbitrators or the Umpire shall have power to call for such evidence by way of affidavit or otherwise as the Arbitrator or Arbitrators or Umpire shall think proper, and it shall be the duty of the parties here to do or cause to be done all such things as may be necessary to enable the Arbitrator or Arbitrators or Umpire to make the award without any delay.3. (e) It will be no objection that the person appointed as Arbitrator, Arbitrators, Umpire are Government servants and that in the course of their duties as Govt. servants they have expressed view on all or any of the matter in dispute.3. (f) Subject as aforesaid, Arbitrator Act 1940 and the Rules there under and any statutory modification thereof shall apply to the Arbitration proceedings under this clause."48. From the perusal of Clause 64(3)(a)(ii), two arbitrators who are Gazetted Railway Officers of equal status are to be appointed for claims of Rs. 3 lacs and above, and in case of difference of opinion, the matter is to be referred to Umpire in a manner laid down in sub clause 3(b). As it is not in dispute that it was on the application of the appellant filed before this Court for appointment of arbitrator in terms of the agreement under Clause 64(3)(b) of General Condition of Contract, that this Court on 26.08.1998 after hearing both the parties appointed Smt. Tanuja Pandey, arbitrator from the side of respondent-railway and Sri O.P. Narang as arbitrator from the side of appellant. The Court made clear that as per Clause 64(3)(b), before entering into arbitration, arbitrators were required to nominate an Umpire.49. As record reveals that though both the arbitrators had agreed on the name of one P.K. Sharma as an Umpire, but the same was not conveyed to the appellant, as such another arbitration application no. 47 of 1998 was preferred for the appointment of Umpire. It was through counter affidavit that Railways brought on record name of Sri P.K. Sharma as an Umpire and Court on 01.11.1999 granted approval to his name and the application was disposed of finally.50. It appears that in the arbitration application no. 47 of 1998, a review/ correction application was filed by the appellant for treating the Umpire, P.K. Sharma as presiding arbitrator of the Arbitral Tribunal as the new act envisages provision for presiding arbitrator and not Umpire. This Court on 15.03.2002 while allowing the application, directed that Sri P.K. Sharma be treated as presiding arbitrator of the Tribunal instead of Umpire. In the meantime, the arbitrators had already entered into the reference and appellant had filed their statement of claim on 06.01.1999 and statement of defence was filed by respondents-Railways on 06.04.199951. The two arbitrators, on 02.05.2000 apprised the Registrar of this Court that presiding arbitrator, P.K. Sharma was unable to act and in his place another presiding arbitrator be appointed.52. Simultaneously, appellant also approached this Court through Civil Misc. Modification Application No. 8 of 2002 filed in earlier Arbitration Application No. 35 of 1997, with a prayer for modifying the order dated 15.03.2002 and appointing another person as presiding arbitrator (not being a person belonging to Railway Department). It appears that this modification application was placed before the then Chief Justice who on 26.09.2003, treating the modification application as a fresh application under Section 11 of the Act appointed one Mr. Justice H.N. Seth, a retired Chief Justice of this Court as the sole arbitrator. The order appointing sole arbitrator did not take care of the fact that earlier Arbitral Tribunal constituted by this Court on 26.08.1998 was already in existence and proceedings were going on, as both the parties had filed their statement of claim and defence under Section 23, and mandate of the earlier Tribunal was not terminated.53. The contention of learned counsel for the appellant to the extent that the order states that considering facts and circumstances of the case, the Chief Justice proceeded to appoint the sole arbitrator, meaning thereby that the mandate of the earlier Tribunal stood terminated, cannot be accepted on two counts, firstly, that the order dated 26.09.2003 was passed on the modification application which was filed by appellant himself with a prayer for appointing a presiding arbitrator in place of P.K. Sharma, who till then was presiding and had showed his unwillingness to act further. Thus, the Court was very much aware of the fact that Arbitral Tribunal was already in existence and there was a limited prayer for substituting presiding arbitrator in place of P.K. Sharma. The procedure adopted by the Court was not correct as it could not have made any fresh appointment under Section 11 and only a presiding arbitrator could have been substituted, when the mandate of the earlier presiding arbitrator had come to an end.54. Secondly, the order dated 26.09.2003, in fact, launched a fresh arbitration proceeding by substituting Arbitral Tribunal of a sole arbitrator de novo without terminating the mandate of the earlier Arbitral Tribunal constituted by this Court in the year 1998 and the statement of claim and defence had already been moved by the parties. The only option which was left to the Chief Justice at that point of time was to have modified the order dated 15.03.2002 by substituting with a new presiding arbitrator or after termination of the earlier Arbitral Tribunal could have constituted a new Arbitral Tribunal.55. In the case of SVG Molasses Co. B.V. (supra), the Apex Court held that the Court in exercise of its jurisdiction under Section 11(6) of the Act cannot sub-plant the agreement of the parties, as they had entered into arbitration agreement with their eyes wide open. Relevant Paras, 11, 12 and 15 are extracted hereasunder:"11. The 1996 Act envisages party autonomy. The constitution of the arbitral tribunal in the manner in which it is to be appointed concededly depends upon the type of substantive agreement. When the parties to the agreement are to nominate one arbitrator each on their behalf, the third arbitrator is appointed by the nominated arbitrators. It is not in dispute that Respondents herein have failed and/or neglected to appoint an arbitrator in terms of the arbitration agreement. A submission was made by the learned Counsel appearing on behalf of Respondents that they would face immense difficulties in proceeding before an arbitral tribunal at Amsterdam in Netherlands; but this Court in exercise of its jurisdiction under Section 11(6) of the 1996 Act cannot supplant the agreement of the parties. The parties entered into the Arbitration Agreement with their eyes wide open. They knew the terms thereof. This Court in exercise of its jurisdiction under Section 11(6) of the 1996 Act cannot alter the terms of the contract.It is idle to contend that there is no arbitration clause. It is furthermore not in dispute that the applicant is a company carrying on business from Netherlands. The goods are also said to be of Iranian origin. It would, therefore, not be correct to say that the agreement does not fall within the scope of International Commercial Arbitration as defined in Section 2(1)(f) of the 1996 Act. The identity and location of the Petitioner being a foreign country would bring the case within the purview of International Commercial Arbitration.12. In this case, we are not concerned as to whether any of the respondents has complied with his obligations under the contract or not, the same would fall for determination by the Arbitral Tribunal, nor are we concerned with under what circumstances the said agreement was entered into. The plea raised on behalf of the respondents that by shifting the scene of activity to the Netherlands would be getting undue advantage of situation to the Petitioner is again a matter wherewith we are not concerned at this stage. The law applicable to the agreement may be the Indian law but the same would not mean that the arbitration agreement is invalid. This Court cannot also direct appointment of a single Arbitrator in place of three Arbitrators or change the place of Arbitration as provided for in the agreement. The same would amount to alteration of terms of the agreement entered into by and between the parties. In terms of Section 11(6) of the 1996 Act, the Court would derive jurisdiction only when a person being a party to the Arbitration agreement fails to perform a function entrusted to it thereunder. It is, therefore, not possible to accede to the request of the learned Counsel for the Arbitrator.15. In National Highways Authority of India and Anr. v. Bumihiway DDB Ltd. (JV) and Ors. MANU/SC/4201/2006: (2006)10SCC763 , it was opined:44. The parties have entered into a contract after fully understanding the import of the terms so agreed to from which there cannot be any deviation. The Courts have held that the parties are required to comply with the procedure of appointment as agreed to and the defaulting party cannot be allowed to take advantage of its own wrong.It is also not a case where Petitioner has waived its right under the arbitration agreement, as was the case of B.S.N.L. and Ors. v. Subhash Chandra Kanchan and Anr. MANU/SC/8490/2006: AIR2006SC3335."56. In Union of India vs. M.P. Gupta, 2004 LawSuit (SC) 139, the Apex Court held that in view of express provision contained, two Gazetted Railway Officers shall be appointed as the arbitrators, a Judge appointed by High Court was held to be invalidated. Relevant Paras 3 and 4 are extracted hereasunder:"3. The relevant part of clause 64 runs as under:"64. Demand for arbitration.- (3)(a)(ii) Two arbitrators who shall be gazetted railways officers of equal status to be appointed in the manner laid in clause 64(3)(b) for all claims of Rs. 5,00,000.00 (Rupees five lakhs) and above, and for all claims irrespective of the amount or value of such claim if the issues involved are of a complicated nature. The General Manager shall be the sole judge to decide whether the issues involved are of a complicated nature or not. In the event of the two arbitrators being undecided in their opinions, the matter under dispute will be referred to an umpire to be appointed in the manner laid down in sub-clause (3)(b) for his decision. (3)(a)(iii) it is a term of this contract that no person other than a gazetted railway officer should act as an arbitrator/ umpire and if for any reason, that is not possible, the matter is not to be referred to arbitration at all."4. In view of the express provision contained therein that two gazetted railway officers shall be appointed as arbitrators, Justice P. K. Bahri could not be appointed by the High Court as the sole arbitrator. On this short ground alone, the judgment and order under challenge to the extent it appoints justice P.K. Bahri as sole arbitrator is set aside. Within 30 days from today, the appellants herein shall appoint two gazetted railway officers as arbitrators. The two newly appointed arbitrators shall enter into reference within a period of another one month and thereafter the arbitrators shall make their award within a period of three months. The appeal is allowed in part and to the extent indicated above. There shall be no order as to costs."57. In Antrix Corporation Ltd. (supra), the Apex Court held that arbitration clause once invoked and an arbitrator having been appointed, the arbitration agreement could not have been invoked for second time. Relevant Para 31 is extracted hereasunder:"31. The matter is not as complex as it seems and in our view, once the Arbitration Agreement had been invoked by Devas and a nominee Arbitrator had also been appointed by it, the Arbitration Agreement could not have been invoked for a second time by the Petitioner, which was fully aware of the appointment made by the Respondent. It would lead to an anomalous state of affairs if the appointment of an Arbitrator once made, could be questioned in a subsequent proceeding initiated by the other party also for the appointment of an Arbitrator. In our view, while the Petitioner was certainly entitled to challenge the appointment of the Arbitrator at the instance of Devas, it could not do so by way of an independent proceeding Under Section 11(6) of the 1996 Act. While power has been vested in the Chief Justice to appoint an Arbitrator Under Section 11(6) of the 1996 Act, such appointment can be questioned Under Section 13 thereof. In a proceeding Under Section 11 of the 1996 Act, the Chief Justice cannot replace one Arbitrator already appointed in exercise of the Arbitration Agreement.It may be noted that in case of Gesellschaft Fur Biotechnologische Forschun GMBH v. Kopran Laboratories Ltd. and Anr. [(2004) 13 SCC 630], a learned Single Judge of the Bombay High Court, while hearing an appeal Under Section 8 of the 1996 Act, directed the claims/disputes of the parties to be referred to the sole arbitration of a retired Chief Justice with the venue at Bombay, despite the fact that under the Arbitration Agreement it had been indicated that any disputes, controversy or claim arising out of or in relation to the Agreement, would be settled by arbitration in accordance with the Rules of Reconciliation of the International Chamber of Commerce, Paris, with the venue of arbitration in Bombay, Maharashtra, India. This Court held that when there was a deviation from the methodology for appointment of an Arbitrator, it was incumbent on the part of the Chief Justice to assign reasons for such departure. "58. In Grid Corporation of Orissa (supra), Supreme Court held that once the Arbitral Tribunal was constituted, no ground arose for the application to be entertained under Section 11 for appointment of arbitrator. Relevant Para 25 is extracted hereasunder:"25. In Konkan Railway Corporation Ltd. and Ors. (supra) it has been held (vide para 21) that in spite of an appointment having been made by the Chief Justice or his designate an objection as to the constitution of the arbitral tribunal being improper or without jurisdiction is capable of being raised before the arbitral tribunal itself under Section 16 of the Act, for an objection not only as to the width of jurisdiction but also one going to the very root of its jurisdiction is entertainable by the arbitral tribunal under Section 16. That being so assuming without holding that there is any substance in the plea of the petitions it is open for them to raise the same before the arbitral tribunal. Once the arbitral tribunal has come into existence, as it has - in my opinion in the facts and circumstances of the case a petition under Section 11(6) of the Act is not an appropriate remedy which the petitioners have chosen. None of the grounds contemplated by Clauses (a), (b) and (c) of Sub-section (6) of Section 11 exists. There is no deficiency in the constitution the arbitral tribunal attributable to any of the parties or the arbitrators. There is no occasion for filing a request petition under Section 11(6) of the Act. "59. In Baghel Infrastructure Pvt. Ltd. vs. N.T.P.C. Ltd. and three others, this Court on 10.11.2014, while deciding arbitration and conciliation application no. 37 of 2014, relying upon the various decisions of the Apex Court held that arbitrator already appointed as per terms and conditions of the agreement, then application moved under Section 11 to terminate the mandate of the earlier arbitrator is misconceived and not maintainable.60. In the case of National Highways Authority of India and others (supra), after fully understanding the importance of arbitration agreement so agreed between the parties, held that there cannot be any deviation. Relevant Para 29 is extracted hereasunder:"29. As rightly pointed out by the appellants, the High Court failed to appreciate that in accordance with Section 15(2) of the Act on the termination of the mandate of the Presiding Arbitrator, the two nominated arbitrators were first required to reach a consensus and on their failure to arrive at a consensus only respondent No. 2 was authorized to make the appointment. Unless respondent No. 2 failed to exercise its jurisdiction, the High Court could not assume jurisdiction under Section 11(6) of the Act. Respondent No. 1 has wrongly invoked the jurisdiction of this Court without first following the procedure agreed to between the parties. Thus no cause of action had arisen in the facts of the case to seek the appointment from the High Court under Section 11(6) of the Act and thus the said petition was premature. The High Court also is not correct in relying on the contention of the respondent No. 1 that in case one of the arbitrators is retired Chief Justice, the Presiding Arbitrator should be at least a retired Chief Justice or a retired Judge of a High Court with considerable experience. It was submitted by learned Solicitor General appearing for the appellants that the said finding of the High Court is self contradictory inasmuch as if the Presiding Arbitrator is a retired Judge of the High Court and one of the arbitrators is a retired Chief Justice of the High Court, the member of hierarchy is upset. Even otherwise, there does not exist any such provision in law which requires that if one of the arbitrators is a retired Judge the Presiding Arbitrator also has to be a retired Judge. The parties have entered into a contract after fully understanding the import of the terms so agreed to from which there cannot be any deviation. The Courts have held that the parties are required to comply with the procedure of appointment as agreed to and the defaulting party cannot be allowed to take advantage of its own wrong. "61. Thus, the very appointment made on 26.09.2003, ignoring the earlier Arbitral Tribunal constituted on 26.08.1998 and without terminating the mandate of the arbitrators who were appointed in terms of the agreement between the parties, was against the law laid down by the Apex Court, and the argument of the appellant that the earlier appointment of Arbitral Tribunal stood terminated once the Arbitral Tribunal consisting of sole arbitrator was appointed in the year 2003, cannot be accepted as the only application made by appellant was for substitution of presiding arbitrator in place of P.K. Sharma.62. Thus, the finding recorded by court below on the objections filed under Section 34 is correct that the Court cannot go beyond the terms of agreement when there is a specially procedure laid down for the appointment of arbitrators.63. Argument of Sri Goyal, learned Senior Counsel that the court below had not noticed the fact that parties derogated and such derogation was permissible under the law, cannot be accepted as the agreement Clause 64(3)(b) categorically provides for the appointment of two arbitrators, one from each side and two arbitrators to nominate an Umpire. As it is not in dispute in the present case that the appellant had approached this Court for invocation of the agreement Clause 64(3)(b), and Court had appointed two gazetted officers from the panel of Railways, one from the side of the appellant and other from the respondents' side, further, they were required to nominate an Umpire within a month. The appellant moved second application no. 47 of 1998 for the appointment of Umpire and agreed on the name of P.K. Sharma, who was to conduct as an Umpire and the Court approved his candidature vide order dated 01.11.1999.64. Thereafter, it was on the application of appellant that designation of Sri P.K. Sharma, Umpire was changed/ modified to presiding arbitrator on 15.03.2002. Thus, the appellant cannot blow hot and cold at the same time, as it was on his application that the Court had appointed two arbitrators as well as presiding arbitrators who were conducting the arbitration and constituted Arbitral Tribunal of three persons. As both the parties in the year 1999 itself had submitted themselves to the Arbitral Tribunal and had filed their statement of claim and defence, thus, no question of Section 10 of the Act arises as the parties are bound by their agreement and the Court had appointed the arbitrators in pursuance to Clause 64(3)(b) and there was no violation of provisions of Section 10(1) of the Act and Section 10(2) does not come into play.65. As the Apex Court had already ruled in case of SVG Molasses Co. B.V.(supra) that Court cannot alter the terms of contract/ agreement. Similarly, in M.M.T.C. Ltd. (supra) held that two arbitrators appointed shall appoint an Umpire before proceeding with the reference and there was nothing in the new Act to make such agreement unenforceable. Relevant Paras 11, 12 and 13 are extracted hereasunder:"11. The arbitration clause provides that each party shall nominate one arbitrator and the two arbitrators shall then appoint an umpire before proceeding with the reference. The arbitration agreement is valid as it satisfies the requirement of Section 7 of the New Act. Section 11(3) requires the two arbitrators to appoint the third arbitrator or the umpire. There can be no doubt that the arbitration agreement in the present case accords with the implied condition contained in para 2 of the First Schedule to the Arbitration Act, 1940 requiring the two arbitrators, one each appointed by the two sides, to appoint an umpire not later than one month from the latest date of their respective appointment.12. The question is: whether there is anything in the New Act to make such an agreement unenforceable? We do not find any such indication in the New Act. There is no dispute that the arbitral proceeding in the present case commenced after the New Act came into force and, therefore, the New Act applies. In view of the term in the arbitration agreement that the two arbitrators would appoint the umpire or the third arbitrator before proceeding with the reference, the requirement of Sub-section (1) of Section 10 is satisfied and Sub-section (2) thereof has no application. As earlier stated the agreement satisfies the requirement of Section 7 of the Act and, therefore is a valid arbitration agreement. The appointment of arbitrators must, therefore, be governed by Section 11 of the New Act.13. In view of the fact that each of the two parties have appointed their own arbitrators, namely, Justice M.N. Chandurkar (Retd.) and Justice S.P. Sapra (Retd.), Section 11(3) was attracted and the two appointed arbitrators were required to appoint a third arbitrator to act as the presiding arbitrator, failing which the Chief Justice of the High Court or any person or institution designated by him would be required to appoint the third arbitrator as required by Section 11(4)(b) of the New Act. Since the procedure prescribed in Section 11(3) has not been followed the further consequence provided in Section 11 must follow. "66. Reliance placed by the appellant on the decision of Narayan Prasad Lohia (supra), does not help him much, as in the said case two arbitrators had arbitrated and the award was challenged on this ground, but in the present case the General Condition of Contract in Clause 64(3)(b) provided for the two arbitrators, one from each side who were to nominate an Umpire. However, relevant Paras 5, 14, 16 and 19 of the said judgment are extracted hereasunder:"5. On 22nd December, 1997 the 1st Respondent filed an Application in the Calcutta High Court for setting aside the Award dated 6th October, 1996. On 17th January, 1998 the 2nd Respondent filed an Application for setting aside this Award. One of the grounds, in both these applications, was that the Arbitration was by two Arbitrators whereas under the Arbitration and Conciliation Act, 1996 (hereinafter called the said Act) there cannot be an even number of arbitrators. It was contended that an arbitration by two arbitrators was against the statutory provision of the said Act and therefore void and invalid. It was contended that consequently the Award was unenforceable and not binding on the parties. These contentions found favour with a single Judge of the Calcutta High Court who set aside the Award on 17th November, 1998. On 18th May, 2000 the Appeal was also dismissed. Hence this Appeal to this Court.14. We have heard the parties at length./ We have considered the submissions. Undoubtedly, Section 10 provides that the number of arbitrators shall not be an even number. The question still remains whether Section 10 is a Non-derivable provision. In our view the answer to this question would depend on question as to whether, under the said Act, a party has a right to object to the composition of the arbitral tribunal, if such composition is not in accordance with the said Act and if so at what stage. It must be remembered that arbitration is a creature of an agreement. There can be no arbitration unless there is an arbitration agreement in writing between the parties.16. It has been held by a Constitution Bench of this Court, in the case of Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd. MANU/SC/0053/2002: 1SCR728 that Section 16 enables the arbitral tribunal to rule on its own jurisdiction. It has been held that under Section 16 the arbitral tribunal can rule on any objection with respect to existence or validity of the arbitration agreement. It is held that the arbitral tribunals authority under Section 16, is not confined to the width of its jurisdiction but goes also to the root of its jurisdiction. Not only this decision is binding on this Court, but we are in respectful agreement with the same. Thus it is no longer open to contend that, under Section 16, party cannot challenge the composition of the arbitral tribunal before the arbitral tribunal itself. Such a challenge must betaken, under Section 16(2), not later than the submission of the statement of defence. Section 16(2) makes it clear that such a challenge can be taken even though the party may have participated in the appointment of the arbitrator and/or may have himself appointed the arbitrator. Needless to state a party would be free, if he so choose, not to raise such a challenge. Thus a conjoint reading of Sections 10 and 16 shows that an objection to the composition of the arbitral tribunal is a matter which is derogable. It is derogable because a party is free not to object within the time prescribed in Section 16(2). If a party chooses not to so object there will be a deemed waiver under Section 4. Thus, we are unable to accept the submission that Section 10 is a Non-derivable provision. In our view Section 10 has to be read along with Section 16 and is, therefore a derogable provision.19. In our view, Section 34(2)(a)(v) cannot be read in the manner as suggested. Section 34(2)(a)(v) only applies if "the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties". These opening words make it very clear that if the composition of the arbitral tribunal or the arbitral procedure is in accordance with the agreement of the parties, as in this case, then there can be no challenge under this provision. The question of "unless such agreement as in conflict with the provisions of this Act" would only arise if the composition of the arbitral tribunal or the arbitral procedure is not in accordance with the agreement of the parties. When the composition or the procedure is not in accordance with the agreement of the parties then the parties get aright to challenge the award. But even in such a case the right to challenge the award is restricted. The challenge can only be provided the agreement of the parties is in conflict with a provision of Part I which the parties cannot derogate. In other words, even if the composition of the arbitral tribunal or the arbitral procedure is not in accordance with the agreement of the parties but if such composition or procedure is in accordance with the provisions of the said Act, then the party cannot challenge the award. The words "failing such agreement" have reference to an agreement providing for the composition of the arbitral tribunal or the arbitral procedure. They would come into play only if there is no agreement providing for the composition of the arbitral tribunal or the arbitral procedure. If there is no agreement providing for the composition of the arbitral tribunal or the arbitral procedure and the composition of the arbitral tribunal or the arbitral procedure was not in accordance with Part I of the said Act then also a challenge to the award would be available. Thus so long as the composition of the arbitral tribunal or the arbitral procedure are in accordance with the agreement of the parties, Section 34 does not permit challenge to an award merely on the ground that the composition of the arbitral tribunal was in conflict with the provisions of Part I of the said Act. This also indicates that Section 10 is a derogable provision. "67. Similarly, reliance placed upon judgment of Apex Court in case of Motorola India Pvt. Ltd. (supra) is also of no help to appellant. Relevant Para 18 is extracted hereasunder:"18. Pursuant to Section 4 of the Arbitration and Conciliation Act, 1996, a party who knows that a requirement under the arbitration agreement has not been complied with and still proceeds with the arbitration without raising an objection, as soon as possible, waives their right to object. The High Court had appointed an arbitrator in response to the petition filed by the appellant. At this point, the matter was closed unless further objections were to be raised. If further objections were to be made after this order, they should have been made prior to the first arbitration hearing. But the appellant had not raised any such objections. The appellant therefore had clearly failed to meet the stated requirement to object to arbitration without delay. As such their right to object is deemed to be waived."68. The second ground raised on behalf of the appellant as to waiver by conduct of respondents in not challenging the order constituting the Arbitral Tribunal of sole arbitrator stood waived by virtue of Section 4 of the Act, cannot be accepted, as the law prevalent at that time was that it was an administrative order and the remedy available was by filing objections before the Tribunal, the judgment rendered by Apex Court in case of S.B.P. and Co. (supra) was delivered on 26.10.2005, which provided that appointment of arbitrator/ Arbitral Triubnal by designated authority was a judicial order. Till that date, the law prevalent was that such an order was an administrative order in view of Konkan Railway Corporation Ltd. (supra).69. Argument raised by appellant as to respondents having acquiesced to jurisdiction of the sole arbitrator and their right stood extinguished, cannot be accepted, as the consent before the sole arbitrator will not amount to termination of mandate of Arbitral Tribunal constituted on 26.08.1998 in terms of the agreement executed between the parties. Moreover, time was granted on 12.03.2004 for amending the statement of defence, thus pleadings before sole arbitrator were not complete and the objection filed under Section 16(2) was within the time frame as mandated.70. The Supreme Court in case of Motorola India Pvt. Ltd. (supra) had held that the objections were to be raised before the first date of hearing. In the present case, no hearing had taken place and only the exchange of documents were being made between the parties. In Gokulananda Jena, the Apex Court had held that grounds available for challenge in writ petition under Article 226 of the Constitution is limited because of alternative remedy available under the Act itself, which is provided in Section 16 read with Sections 12 and 13 of the Act.71. Coming to the next point raised by appellant that as no technical qualification of arbitrators were mentioned in the arbitration clause, then the parties can derogate and appointment of a retired Judge subsequently by the Court as sole arbitrator was justified and the court below had not touched upon the impact of Section 10 or 4 of the Act.72. Decision in case of Tripple Engineering Works (supra) relied upon is distinguishable in the present case as in the said case, arbitration could not commence, as in the year 2002 the Northern Eastern Railway which had entered into contract with the contractor, was bifurcated into Northern Eastern Railway and East Central Railway and despite the agreement of year 1994, no arbitrator was appointed and the Court found that a period of two decades has elapsed since the contractor had raised his claim for alleged wrongful termination of two contracts. As it is evident in the present case that arbitration clause was invoked in the year 1997, on 26.08.1998 two arbitrators were appointed, while Arbitral Tribunal had already entered into reference in the year 1999 itself. Decision in the case of Dakshin Shelters P. Ltd. (supra) is also of no help to the appellant as the arbitrators were already appointed by the Court on 26.08.1998.73. In the case of BESCO Ltd. (supra), the Court while appointing an arbitrator not being a railway officer was in terms of General Conditions and Special Conditions of Contract which did not provide specific railway officer while in the present case the General Condition of Contract, Clause 64(3)(b) provided for two gazetted railway officers, one from the side of appellant and other from the side of Railway and this Court on 26.08.1998 had appointed two arbitrators, who therein had chosen a presiding arbitrator which had the stamp of this Court on 01.11.1999, thus, no question arose for forming a fresh Arbitral Tribunal without terminating the mandate of the earlier one. Reliance placed on the decisions are totally distinguishable to the facts of the present case.74. In Bharat Wire Ropes Ltd. (supra), the Court deviated from the agreement from appointing any gazetted railway officer as no name as contemplated by agreement came forward from either side. While in the present controversy, the Court invoking an agreement Clause 64(3)(b) on 26.08.1998, had already appointed two gazetted officers from the panel, as agreed by the parties, thus, this case is totally distinguishable in facts of the present case.75. In Aargee Engineers and Co. and another vs. Era Infra Engineering Ltd. and others, (2017) 4 ADJ 513, this Court while deviating from the agreement, appointed arbitrator as the main arbitrator failed to act but in the present case it was not such a case and the Arbitral Tribunal was already in existence and only presiding arbitrator was to be substituted. Reliance placed in case of Basai Steels Pvt. Ltd. vs. Gobins India Engineering Pvt. Ltd. and another, 2018 (5) Arb. LR 480(Karn.) (DB) is not applicable in the present case.76. Thus, it is clear that when agreement itself provides for arbitrators who are gazetted railway officer, then no question arises to derogate from the said arbitration clause and appoint a retired Judge. The law on this point is clear that no derogation in the appointment of arbitrator can be made where the clause specifically provides for certain persons to be appointed as arbitrator.77. Now, coming to the next point as to the award made by sole arbitrator which could sub-serve the purpose of parties and whether the Court had rightly appointed a retired Judge instead of appointing a presiding arbitrator on the application moved by appellant for modification of order dated 15.03.2002. No doubt it is true that Act provides for speedy remedy for disposal of dispute between the parties, but that does not giv
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e any room for bypassing the procedure laid down in the Act itself.78. As the Arbitration is creature of agreement, the parties cannot be allowed to deviate from the same where the agreement is a valid agreement as per Section 7 of the Act.79. As it was never a case of the respondents that they had suffered any prejudice in the decision making process of the sole arbitrator, nor they had raised any bias against him and the only objection was to the composition of the Arbitral Tribunal, which was not in accordance as this Court had already constituted the Arbitral Tribunal in the year 1998 itself in pursuance of the agreement executed between the parties, thus, the argument raised that respondents not having raised any bias against the sole arbitrator nor the court below recording any finding, the award so made could not be set aside, cannot be accepted in the facts of the present case, as the constitution of the Tribunal is a very genesis of the dispute and the same having been raised by respondents within time, the arbitrator should not have proceeded and gave his award and the court below had rightly allowed the objections filed under Section 34.80. Decisions rendered in Abdul Gaffar (supra) and Citibank N.A. (supra) are not applicable in the present dispute as this Court had already invoked the arbitration Clause 64(3)(b) on 26.08.1998 and appointed two arbitrators who were to appoint an Umpire.81. As far as, argument regarding filing of statement of claim and defence under Section 23(1) read with Section 16(2), argument of Sri Goyal that objections under Section 16(2) cannot be filed later than submission of statement of defence is what the Act mandates. Now the question in the present case is the date on which statement of defence was filed by respondents-railways.82. As it is not in dispute that before the earlier Tribunal, the statement of claim was filed by the appellant on 06.01.1999, while statement of defence was filed on 06.04.1999. These claims were agreed to be filed before the subsequent Arbitral Tribunal constituted on 26.09.2003, and on 05.12.2003, arbitrator had granted time till 15th January for filing the same. On 02.01.2004, arbitrator through his letter had extended that time for filing statement of defence till 05.02.2004. Proceedings of the second meeting, held on 14.04.2004, indicate that the copies of statement of claim, defence and rejoinder, which were filed before the previous arbitrators were filed before the subsequent Arbitral Tribunal, and parties were granted time to check and verify, and further time was granted for filing additional documents. Proceedings of third meeting dated 12.03.2004 indicates that appellant had required certain documents from the respondents and they were directed by arbitrator to provide the necessary copies and further time was granted to respondents to modify their statement of defence, as claimants had filed number of annexures before the arbitrator.83. Thus, statement of claim and defence was not complete as the arbitral proceedings had started de novo before the second Arbitral Tribunal constituted by the Court, documents were being placed before the arbitrator and time was granted for amending their claims. It was on 24.04.2004 when objection was raised regarding composition of Arbitral Tribunal by respondents, thus, it cannot be said that time for filing of statement of defence had closed, as in the previous meeting, time was granted for amending the statement of defence, meaning thereby that statement of defence from the side of respondents was not complete.84. In Motorola India Pvt. Ltd. (supra), objections were not raised before the first date of hearing and the Hon'ble Supreme Court was of the view that such objections cannot be sustained, while in the present case, the stage of filing of statement of defence was not over as mandated in Section 16(2). Moreover, later part of Sub-section (2) of Section 16 provides that a party shall not be precluded from raising plea that Arbitral Tribunal does not have jurisdiction merely because he has appointed or participated in the appointment of arbitrator. Thus, the right of respondents does not stand closed in view of fact that it had appeared and participated when the matter was heard on 26.09.2003, as the right of the respondents is preserved by this statutory provision for raising objection.85. Considering the facts and circumstances of the case, I find that the Tribunal constituted on 26.09.2003, consisting of sole arbitrator was without terminating the mandate of the earlier Tribunal, constituted by the Court on 26.08.1998, and by the consent of the parties before arbitrator, the mandate of the said Tribunal could not have been terminated and the arbitrator on 05.12.2003 wrongly assumed his jurisdiction and noted down that earlier Tribunal stood superseded in view of consensus made by learned counsel for the parties.86. Furthermore, as the statements of claim and defence were being finalised between the parties before the subsequent arbitrator, the objections had come up from the respondents' side on 24.04.2004, which cannot be said to be beyond the period prescribed under Section 16(2), as till date the arbitrator himself had kept it open and had granted the opportunity to respondents to modify their statement of defence and in case respondents had not filed their objections on 24.04.2004, and had modified their statement of defence then, question of delay would have arisen.87. No question of waiver in view of Section 4 arises on the part of respondents as they had never objected to the earlier Arbitral Tribunal and it was after 26.09.2003 when arbitration proceeded de novo, then before finalisation of statement of defence, statutory objections under Sub-section (2) of Section 16 were moved questioning the composition of Arbitral Tribunal.88. Question of derogation does not arise as the agreement between the parties binds them and arbitration being creature of agreement, such derogation is not permissible under the law. Clause 64(3)(b) of the agreement provided for the composition of the Arbitral Tribunal of two arbitrators, who were to appoint an Umpire. As appointment of two arbitrators were made in pursuance to the order of this Court on 26.08.1998 and subsequently an Umpire was appointed on 01.11.1999, the court below rightly repelled the argument of derogation and further, no violation of Section 10(1) of the Act arises and appointment of de novo Arbitral Tribunal on the basis of Section 10(2) of the Act, cannot be justified.89. Appointment of Arbitral Tribunal had been made as per the agreement clause invoked by the appellant before this Court in the year 1997, and constituting fresh Arbitral Tribunal without replacing the earlier Tribunal or terminating its mandate, was against the agreement entered into between the parties, as well as there being no dispute either between the parties to the very constitution of the Arbitral Tribunal in the year 1998. Simply, on the basis of modification application that fresh Arbitral Tribunal was constituted without taking note of the earlier proceedings.90. The court below rightly after hearing and considering the objections under Section 34 of the respondents as well as the reply of appellant, set aside the arbitral award dated 21.02.2008.91. No interference is required in the order dated 09.09.2013 passed by court below, the appeal is devoid of merits and is hereby dismissed.92. However, parties to bear their own costs.