Jharkhand High Court
M/S Central Coalfields Limited vs M/S Rungta Project Limited on 31 August, 2023
Author: Anubha Rawat Choudhary
Bench: Anubha Rawat Choudhary
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Arbitration Appeal No. 01 of 2016
M/s Central Coalfields Limited, a body incorporated and registered
under the Companies Act, 1956 a subsidiary company of Holding
Company Coal India Limited, a Government Company within the
meaning of Section-617 of the Companies Act, 1956 having its
registered Head Office at Darbhanga House, P.O. NCDC, Police
Station Kotwali, District Ranchi represented by Shri Gopal Prasad,
S/o Late Basudeb Prasad, HOD (Personnel Administrative) for M/s
CCL, Darbhanga House, P.S. Kotwali, P.O. NCDC, Darbhanga
House, Ranchi - 834001 ... ... Appellant
Versus
M/s Rungta Project Limited, a company duly incorporates under the
Companies Act, 1956 having its office at Vikash Bhavan, Bariatu
Road, P.O. Bariatu, Police Station - Bariatu, District Ranchi -
834008, represented by - Director, M/s Rungta Project Ltd., at Vikash
Bhawan, Bariatu Road, P.O. Bariatu, P.S. Bariatu, Ranchi - 834008
... ... Respondent
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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
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For the Appellant : Mr. Gulam Mustafa, Advocate
Mr. Sharib Mustafa, Advocate
Mr. Praveen Shankar Prasad, Advocate
For the Respondent : Mr. Pandey Neeraj Rai, Advocate
Mr. Rohit Ranjan Sinha, Advocate
Mr. Akchansh Kishore, Advocate
Mr. Mohit Mukul, Advocate
Mr. Saurabh Sagar, Advocate
Mr. Piyush, Advocate
---
11/31.08.2023 Heard the learned counsels for the parties.
2. This appeal has been filed challenging the Order dated 15.09.2015 passed in Arbitration Misc. Case No. 30 of 2006 by the learned Civil Judge (Sr. Div. No.) - VIII, Ranchi, confirming the Award dated 30.06.2006 said to have been pronounced on 21.08.2006, by the Sole Arbitrator and thereby rejecting the Petition of the Appellant filed under Section 34 read with Section 16 (6) of the Arbitration & Conciliation Act, 1996.
Arguments on behalf of the Appellant a. The learned counsel for the appellant has submitted that the learned court below has passed the impugned order touching upon the merits of the case after recording non-appearance of the appellant. b. It is submitted that the only option which was available to the learned court below in case of non- appearance of the appellant was 2 under Order IX Rule 8 of CPC i.e. the case ought to have been dismissed for default. The learned counsel has also submitted that the provision of Order IX Rule 8 of CPC would apply in proceeding under Section 34 of the Arbitration and Conciliation Act, 1996 as the applicability of CPC to the proceeding has not been expressly excluded by the Act of 1996. The learned counsel has relied upon the judgment passed by the Hon'ble Supreme Court reported in (2002) 5 SCC 510 (ITI Ltd. Vs. Siemens Public Communications Network Ltd.) and has been submitted that in the said case, even the provision of civil revision was made applicable to proceeding arising under the provision of Arbitration and Conciliation Act, 1996. c. The learned court below has also recorded about filing of attendance by the appellant which has been objected to by the appellant in the memo of appeal and he submits that the attendance was never filed by the appellant after the case was transferred from one court to the other. It has been asserted that the attendance dated 24.08.2015, the only attendance alleged to have been filed in the court after transfer of the case was apparently under the same pen and writing as compared to that of the respondent which indicates that the attendance on behalf of the appellant was filed by one and the same person.
d. In absence of the appellant, the learned court below has decided the legality and validity of the objection which was rejected by the learned Arbitrator under Section 16 of the aforesaid Act of 1996 primarily by referring to the judgment passed by Hon'ble Supreme Court reported in (2005) 8 SCC 618 (SBP & Co. V. Patel Engg. Ltd & Anr.). He submits that the said judgment was prospective in nature and was decided on 26.10.2005 and the arbitrator in the present case was appointed on 09.02.2005. He has referred to the last paragraph of the said judgment. He has further submitted that prior to the pronouncement in the case of Patel Engineering (supra) the appointment of arbitrator was considered to be administrative exercise of the concerned judge of the High Court, but post the said judgment, the legal position has changed, but with prospective effect. e. He has also referred to Section 16 (2) of the Act of 1996 to submit that there is a clear provision that the objection that the 3 Arbitrator Tribunal does not have the jurisdiction, is required to be raised not later than the submission of the statement of defence. However, a party shall not be precluded from raising such a plea merely because he has appointed or participated in the appointment of an arbitrator. He submits that therefore the consent given by the appellant at the time of appointment under Section 11 (6) of Arbitration and Conciliation Act, 1996 by itself could not have been a reason for rejecting the application under Section 16 of the Act of 1996.
f. The learned counsel for the appellant has also submitted that the procedure which was required to be followed for the appointment of arbitrator was not at all followed, inasmuch as, the notice for appointment of arbitrator was required to be issued to the Director (T) but the notice was admittedly issued in the name of Chairman- cum- Managing Director. He has referred to Clause 95 read with the definition clause and has submitted that the notice having not been issued to the right person, the same cannot be said to be notice in terms of Clause 95 and therefore the appointment of Arbitrator was not in accordance with the contract and consequently, the learned Arbitrator did not have the necessary jurisdiction to enter into reference and decide the arbitral proceeding. He submits that this point was specifically raised under Section 16 and was wrongly decided by the learned Tribunal which called for interference by the learned court below but impugned order rejecting the petition under Section 34 has been passed in absence of the appellant, who was the petitioner before the learned court below.
g. The learned counsel has further submitted that apart from the aforesaid two points, the appellant had raised other grounds of challenge under Section 34 of the Act of 1996, but the learned court below while deciding the matter in absence of the appellant has not at all touched the said grounds.
h. With regards to the power of the Court to proceed under Order XVII Rule 3 of CPC on account of non-appearance of one or the other party, it has been reiterated that the only option for the court is to proceed under Order IX and it was open to the learned court below to proceed under Order XVII Rule 3. In response to the recent judgment 4 passed by the Hon'ble Supreme Court reported in 2023 SCC Online SC 356 (Prem Kishore and Others vs. Brahm Prakash & Others), the learned counsel has referred to paragraph Nos. 43, 44, 45, 46, 51, 52, 53 and 57 of the said judgment to submit that it does not apply to the facts and circumstances of this case as the petition involved in the present case is a petition filed under Section 34 of the Arbitration and Conciliation, Act, 1996 and there was no occasion to lead any evidence.
Arguments on behalf of the Respondent i. The CPC has no applicability in the matter. The Act of 1996 is a complete Code in itself and no specific exclusion of applicability of CPC was required to be mentioned in the Act of 1996. The judgment which has been relied upon by the appellant reported (2002) 5 SCC 510 (supra) was subject matter of consideration in the judgment reported in (2017) 2 SCC 37 and the ratio of the judgment decided in the earlier judgment of the year 2002 has been referred to the larger Bench.
ii. In terms of Section 34 (a) of the Act of 1996, it was for the appellant to appear and show before the learned court below that the grounds available thereunder were made out to set aside the arbitral award. The appellant having not appeared has failed to do the needful, the impugned order does not call for any interference and court was not under any obligation to dismiss the case for default in absence of the applicant. He has also submitted that the provision under Section 34 (b) could have been exercised by the court suo- motu also, had the court found any such ground calling for interference in terms of Section 34 (2) (b) of the Act of 1996. iii. In response to the judgement passed in the case of Prem Kishore (Supra), it has submitted that the learned court below has rightly exercised its jurisdiction and passed the impugned order. He has also submitted that if the argument of the appellant is taken that Order XVII Rule 2 and 3 are not applicable, then Order IX Rule 8 also would not be applicable.
iv. The learned counsel for the respondent has also submitted that it has been held by the Hon'ble Supreme Court in the judgement reported in (2020) 17 SCC 324 at paragraph 61 that a proceeding 5 under Section 34 of the Arbitration and Conciliation Act, 1996 is a summary proceeding. He has also relied upon the judgement passed by the Hon'ble Supreme Court reported in (2011) 5 SCC 758 and has referred to paragraph 10 thereof to submit that the jurisdiction of the Court while examining petition under Section 34 of the Act of 1996 is essentially supervisory jurisdiction.
v. The learned counsel has also submitted that this Court may also decide all the grounds which were raised under Section 34 though it is not in dispute that the other grounds which were raised under Section 34 were not decided by the learned court below. Findings of this court
3. From perusal of the records of this case, it is not in dispute that Arb. Misc. Case No. 30 of 2006 was running in the Court of Sub- Judge XI, Ranchi till 18.06.2015 and on 18.06.2015 the case was directed to be transferred to the Court of Sub-Judge VIII, Ranchi by virtue of Judicial Commissioner's Order No. 34 dated 27.05.2015 and a direction was passed to transfer the case to the concerned Court which was to be listed on 18.08.2015 before Sub-Judge VIII, Ranchi.
4. The order-sheet reflects that the records were duly received in the Court of Sub-Judge VIII, Ranchi from the Court of Sub-Judge XI, Ranchi and on 18.08.2015 itself but the appellant did not appear. However, the respondent entered appearance by filing a Vakalatnama. The next date fixed was 24.08.2015.
5. On 24.08.2015, the order-sheet mentions that attendance was filed on behalf of both the parties but the appellant did not appear and the respondent was partly heard. The matter was posted for the next day i.e. 25.08.2015.
6. On 25.08.2015, the appellant did not appear and further argument was advanced on behalf of the respondent. The matter was then fixed on 26.08.2015.
7. On 26.08.2015 also, the appellant did not appear and on that date also the argument of the respondent was heard in absence of the appellant. The next date was fixed on 04.09.2015.
8. On 04.09.2015 also, the appellant did not appear. Attendance was filed on behalf of the respondent, but nobody had appeared to argue the case and the matter was directed to be posted on 07.09.2015.
69. On 07.09.2015, nobody had appeared on behalf of either parties. The matter was directed to be posted on 08.09.2015.
10. On 08.09.2015, the appellant was again absent but attendance was filed on behalf of the respondent. The appellant was granted opportunity to argue the case by way of last indulgence. The matter was posted on 09.09.2015.
11. On 09.09.2015 also, the appellant did not appear. However, attendance was filed from the side of the respondent. It was recorded that number of opportunities was granted to the appellant to argue the case and last chance was also granted and consequently the proceeding was closed and the matter was directed to be posted for judgment on 15.09.2015.
12. The learned counsel for the appellant has denied the filing of attendance from the side of the appellant on 24.08.2015 and has submitted that after transfer of the case from Sub-Judge XI, Ranchi to Sub-Judge VIII, Ranchi, the appellant lost track of the case which ultimately resulted in passing of the impugned order without hearing of the appellant.
13. In order to dispute the attendance filed on behalf of the appellant on 24.08.2015, it is alleged that the attendance of the appellant was filed under the same pen and handwriting as that of the respondent. This Court is of the considered view that such dispute raised by the appellant regarding filing or non-filing of attendance by the appellant on 24.08.2015 cannot be permitted to be raised in appeal particularly when the appellant has not raised any such grievance before the learned court below in whose record the attendance of the appellant has been found.
14. Admittedly, the case was pending at the stage of final hearing. On repeated date, the learned court below recorded non-appearance of the appellant and the respondent commenced its hearing in absence of the appellant and ultimately, the impugned order has been passed touching upon the merits of the case instead of dismissing the case for non-prosecution. The argument of the appellant is that the case could not have been decided on merits in absence of the appellant. Further argument is that the learned court below has not considered many vital points raised in the petition under Section 34 of the Arbitration and 7 Conciliation Act, 1996 and even the point of jurisdiction which has not been properly decided.
15. The following points arise for consideration by this Court: -
a. On account of non-appearance of the of the applicant before the Court on a date fixed for arguments on a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, whether the learned court below could have decided the case on merits by exercise of powers under Order XVII Rule 2 and 3 of CPC or the only option was to dismiss the case for non-prosecution under Order IX Rule 8 of CPC?
b. In case it is held that the learned court below could have exercised powers under Order XVII Rule 3 of CPC and decided the case on merits even in absence of the appellant, then further point for consideration would be- Whether the learned court below is justified in not considering the various grounds raised in the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 while deciding the petition.
Point no. (a)
16. It is the specific case of the appellant that the learned court below could not have decided the case on merits and the only option which was available to the learned court below in absence of the appellant was to dismiss the case for non-prosecution under Order IX Rule 8. Such a course of action by the learned court below could have given him an opportunity to explain the circumstances before the learned court below itself and the appellant could have got the petition restored to its original file. However, such an opportunity has been lost as the decision has been taken touching upon the merits of the case and under such circumstances, this appeal has been filed.
17. In the judgment passed by the Hon'ble Supreme Court in the case of Prakash Chander Manchanda vs. Janki Manchanda reported in (1986) 4 SCC 699, it has been held in Paragraph 6 and 7 as under: -
"6. ...It is clear that in cases where a party is absent only course is as mentioned in Order 17(3)(b) to proceed under Rule 2. It is therefore clear that in absence of the defendant, the Court had no option but to proceed under Rule 2, Similarly the language of Rule 2 as now stands also clearly lays down that if any one of the parties fail to appear, the Court has to proceed to dispose of the suit in one of the modes directed under Order 9. The explanation to Rule 2 gives a discretion to the Court to proceed under Rule 3 even if a party is absent but that discretion is limited only in cases 8 where a party which is absent has led some evidence or has examined substantial part of their evidence. It is therefore clear that if on a date fixed, one of the parties remain absent and for that party no evidence has been examined upto that date the Court has no option but to proceed to dispose of the matter in accordance with Order 17 Rule 2 in any one of the modes prescribed under Order 9 of the Code of Civil Procedure. It is therefore clear that after this amendment in Order 17 Rules 2 and 3 of the Code of Civil Procedure there remains no doubt and therefore there is no possibility of any controversy. In this view of the matter it is clear that when in the present case on 30th October 1985 when the case was called nobody was present for the defendant. It is also clear that till that date the plaintiffs evidence has been recorded but no evidence for defendant was recorded. The defendant was only to begin on this date or an earlier date when the case was adjourned. It is therefore clear that upto the date i.e. 30th October, 1985 when the trial court closed the case of defendant there was no evidence on record on behalf of the defendant. In this view of the matter therefore the explanation to Order 17 Rule 2 was not applicable at all. Apparently when the defendant was absent Order 17 Rule 2 only permitted the Court to proceed to dispose of the matter in any one of the modes provided under Order 9.
7. It is also clear that Order 17 Rule 3 as it stands was not applicable to the facts of this case as admittedly on the date when the evidence of defendant was closed nobody appeared for the defendant. In this view of the matter it could not be disputed that the Court when proceeded to dispose of the suit on merits had committed an error. Unfortunately even on the review application, the learned trial Court went on in the controversy about Order 17 Rules 2 and 3 which existed before the amendment and rejected the review application and on appeal, the High Court also unfortunately dismissed the appeal in limine by one word." (Emphasis supplied)
18. The aforesaid judgment was considered in (2023) SCC Online 356 (Prem Kishore & Others vs. Brahm Prakash & Others) and the provisions of Order XVII Rule 2 and 3 of CPC were considered from paragraph 42 onwards.
19. It has been held in paragraph 43 of the aforesaid judgement of Prem Kishore(supra) that Order 17 Rule 2 of CPC provides that where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other order as it thinks fit.
It has been further held in paragraph 44 of the judgment that the Order 17 Rule 2 of the CPC provides that where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned, the Court may, in its discretion, proceed with the case as if such party was present.
20. It has been held in paragraph 45 of the judgment that under Order 17 Rule 3 of CPC, however, provides that where any party to a suit to whom time has been granted fails to produce his evidence, or to 9 cause the attendance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the Court may decide the suit forthwith if the parties are present or if the parties are, or any of them is absent, proceed under Rule 2.
21. The Hon'ble Supreme Court further in paragraph 53 to 56 of the judgment held as under: -
"53. Thus, the dictum as laid by this Court in Prakash Chander Manchanda (supra) is that it will be within the discretion of the Court to proceed under Rule 3 even in the absence of evidence but such discretion is limited only in cases where a party which is opposing has led some evidence or has examined substantial part.
54. Let us apply the aforesaid dictum as laid by this Court to the facts of the present case. In the case on hand, after the first eviction petition was instituted, the defendants therein filed their written statement denying the relationship of landlord and tenant. After the written statement came on record, no further evidence was led by the plaintiffs. All that was on record was in the form of pleadings in the plaint. The Additional Rent Controller took the view that after the written statement came on record, it was the duty of the plaintiffs to establish or prove the landlord tenant relationship and having failed to adduce any evidence, the suit was liable to be dismissed and accordingly was dismissed. The High Court interpreted or rather construed the order of the Additional Rent Controller as one under Rule 3 of Order 17 and, therefore, took the view that the findings as regards the relationship of landlord and tenant could be said to be on merits.
55. We are afraid, the High Court committed an error in taking the view that the order passed by the Additional Rent Controller could be said to be one passed in exercise of powers under Rule 3 of Order 17 of the CPC.
56. The power conferred on Courts under Rule 3 of Order 17 of the CPC to decide the suit on the merits for the default of a party is a drastic power which seriously restricts the remedy of the unsuccessful party for redress. It has to be used only sparingly in exceptional cases. Physical presence without preparedness to co-operate for anything connected with the progress of the case serves no useful purpose in deciding the suit on the merits and it is worse than absence. In any contingency, the discretion is always with the Court to resort to Rule 2 or 3 respectively or to grant an adjournment for deciding the suit in a regular way in spite of default. Rules 2 and 3 respectively are only enabling provisions. In order to decide the suit on the merits, the mere existence of the conditions enumerated in Rule 3 alone will not be sufficient. There must be some materials for a decision on the merits, even though the materials may not be technically interpreted as evidence. Sometimes the decision in such cases could be on the basis of pleadings, documents and burden of proof. Anyhow, it is appreciable for the Court to indicate by the judgment that the decision is for default or on the merits. The only alternative of the Court in cases covered by Rule 3 or the explanation to Rule 2 is not to decide on the merits alone. If such an interpretation is given, it will amount to an unjustified preference to one who purposely absents than to one who presents but unable to proceed with the case. 'Appearance' and 'presence' have well recognised meanings. They imply presence in person or through pleader properly authorised for the purpose of conducting the case. Rule 3 comes into play only when presence is to proceed with the case, but default is committed in any one of the three ways mentioned in Rule 2 or explanation to Rule 2 is extracted. Those are cases in which some materials are there for the Court to decide the case on 10 the merits and not cases where decision could only be for default. That is clear from a combined reading of Rules 2 and 3 respectively and the explanation. In this case, none of these conditions were present and the decision was evidently for default. Rule 2 alone is attracted." (see: R. Ravindran v. M. Rajamanickam, 2006 SCC Online Mad 169)
22. In the present case, the petition under Section 34 of the Arbitration and Conciliation Act, 1996 was pending for final arguments and accordingly there was no further material required to be brought on record. In such circumstances, the learned court below repeatedly placed the matter for arguments and the arguments were also being advanced on behalf of the respondent on more than one occasion. After waiting for a couple of dates, the learned court below posted the matter for arguments of the appellant by way of last chance and when the appellant did not appear the case was decided on merits.
23. In view of the judgment passed by the Hon'ble Supreme Court, this Court is of the considered view that in absence of the appellant, who was the applicant before the learned court below, the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 could have been decided on merits even in absence of the appellant.
The argument of the learned counsel for the appellant that no evidence was led in the matter and hence the only option was to dismiss the case in terms of Order IX Rule 8 of CPC is devoid of any merit as the proceedings challenging the award under Section 34 of the Arbitration and Conciliation Act is of the nature of summary proceedings and in the instant case admittedly, the case was pending at the stage of final hearing. In the judgment reported in Prem Kishore (supra), it has been held that in order to decide the suit on merits, the mere existence of the conditions enumerated in Rule 3 alone will not be sufficient. There must be some materials for a decision on the merits, even though the materials may not be technically interpreted as evidence. Sometimes the decision in such cases could be on the basis of pleadings, documents and burden of proof. This Court is of the considered view that the condition precedent to decide the case on merits in absence of the appellant, who was the applicant in the case, was fully satisfied and no procedural irregularity has been committed by the learned court below in deciding the case on merits in absence of the appellant. Therefore, the argument of the appellant that in absence 11 of the appellant, the only course open to the Court was to dismiss the case in terms of Order IX Rule 8 of CPC is rejected.
24. The point No. (a) is accordingly decided against the appellant and in favour of the respondent.
Point no. (b)
25. Having decided the point No. (a) as aforesaid, this Court is also of the considered view that once the learned court below decided to exercise power under Order XVII Rule 3 of CPC and decide the case on merits in absence of the appellant, then the Court was under a duty to decide the relevant questions which arise for consideration on the basis of the available records which was admittedly running at the stage of final hearing.
26. In the present case, the learned arbitrator was appointed for adjudication of disputes between the parties by this Court under Section 11(6) of the Arbitration and Conciliation Act, 1996 vide order dated 09.02.2005. In the arbitration proceedings one petition was filed challenging the jurisdiction of the learned arbitrator with regards to his appointment as arbitrator by filing a petition under Section 16 of the Arbitration and Conciliation Act, 1996 which was dismissed by the learned arbitrator in 4th meeting vide order dated 24.12.2005 whose operative portion is quoted as under:-
"16. Both the parties accept (and so does Hon'ble High Court) that clause 95 of the general conditions governing the contract is the arbitration agreement. A simple reading of this clause reveals that all disputes are to be referred to Director on the Board of the company in charge of Operations. This position of Director does not operate outside the domain of the Chief Executive office who is also the Chairman of the Board. The CMD is responsible for overseeing the functioning of all positions big or small, within the defined formal organization structure of CCL. This clause does not prescribe any format or any procedure for reaching the pedestal of the Director in his role as Arbitrator or adjudicator. Immediately after occurrence of reason for dispute RPL became concerned and active. So do the various correspondences show verbal interactions at various levels, as stated by RPL apart. But no cognizance was taken by CCL authorities.
17. In my examination and conclusion, appeal of RPL to High Court for appointment of an Arbitrator under Section 11(6) of A&C Act of 1996 was quite lawful and totally in order.
18. The Respondents, if they had anything to say, could have said during hearing by the High Court. The fact remains that appointment of a Sole Arbitrator by High Court was done by 12 consent of both parties. When CCL failed to abide by the provisions of clause 95 of the agreement, despite all letters and notices to them, specially the last one to CMD CCL, the recourse of invoking Section 11 of A&C Act was lawful and so is appointment of Sole Arbitrator by Hon'ble High Court.
19. With the Arbitrator put in place the role of Director as defined in the arbitration agreement (C1 95) stands automatically transferred to him (the Sole Arbitrator).
20. And so the objections of the learned counsel of the Respondents stand quelled and it is decided that we proceed in the matter further."
27. From perusal of the aforesaid order dated 24.12.2005, it is apparent that the same has been passed on merits and not merely on the basis of the fact that sole arbitrator was appointed vide order passed by this court under Section 11(6) dated 09.02.2005 passed in A.A. No. 24 of 2004.
28. The learned court below has failed to consider the other points raised in the petition filed under Section 34, except the jurisdictional point raised and decided under Section 16 of the Arbitration and Conciliation Act, 1996. The grounds for setting-aside of the award under Section 34 of the Arbitration and Conciliation Act,1996 were certainly required to be considered, whatever be its merit as to whether they were within the permissible grounds to challenge the award, but no such exercise has been undertaken by the learned court below. Rather, the learned court below has not even referred to the other points of challenge to the award. It is also important to note that even the point of jurisdiction raised under Section 16 has not been properly considered, inasmuch as, there is no discussion about the order dated 24.12.2005 passed by the learned arbitrator in his 4th meeting deciding the objection under Section 16 of the Arbitration and Conciliation Act, 1996 and thus the legality and validity of the aforesaid order passed by the learned arbitrator has not been considered. The findings of the learned court below is quoted as under: -
"5. On hearing the learned counsel for the opposite party/ claimant and perusal of the petition filed u/s 34 r/w Section 16(6) of the Act I find that the sole question which is material to be adjudicated which has been highlighted by the petitioner is that whether the appointment of Arbitrator was lawful or not?
6. In this regard the contention of the petitioner is that the appointment of sole Arbitrator has been made at premature stage apart from this the plea of not serving notice of appointment of 13 Arbitrator to the petitioner and violation of clause 95 of the GTC has been raised and it has been submitted by the petitioner that the appointment of the Arbitrator is bad in law and award is liable to be set aside on this ground.
7. Contrary to this the learned counsel for the claimant/ opposite party submitted before this court that the appointment of Arbitrator by the Hon'ble Court is just and proper and suffers no defect. It has also been mentioned that this court has no jurisdiction to enter into the validity of the appointment of Arbitrator by Hon'ble High Court of Jharkhand in this regard the learned counsel for the claimant/ opposite party has relied on 2006(1) JCR 190 (SC) wherein Hon'ble Apex Court has held that "(C) Constitution of India. Articles 226 and 227-Arbitration and Conciliation Act, 1996, Section 11(6) - Appointment of arbitrator - In discharge of judicial function - An appeal will be against that order only under Article 136 of the Constitution."
8. After going through the aforesaid case law 1 find that it has been well discussed by the Hon'ble Apex Court that if an Arbitrator has been appointed by the Hon'ble Chief Justice or any person designated on his behalf is a judicial order and if any party is aggrieved by the order of the appointment of Arbitrator the only remedy is an appeal under Article 136 of the Constitution. Since the award has mainly been challenged on the sole ground that appointment of the Arbitrator by the Hon'ble High Court of Jharkhand is bad in law. That this plea is not tenable before this court, had the petitioner any grievance against the order of appointment of Arbitrator by Hon'ble High Court, he was at liberty to prefer appeal before the Hon'ble Apex Court but the same has not been adopted by the petitioner and therefore I find that this plea of the petitioner is not maintainable.
9. Considering the-facts and circumstances discussed above I find that petition u/s 34 r/w Section 16(6) of the Arbitration Act is not maintainable hence this Misc. Case No. 30 of 2006 is hereby dismissed. Office is directed to consign the record in record room as per law."
29. In the aforesaid facts and circumstances, the impugned order is perverse on account of non-consideration of many points of challenge raised under Section 34 of the Arbitration and Conciliation Act, 1996 and also improper adjudication with regards to the objection to the jurisdiction of the learned arbitrator raised under Section 16, decided on merits vide order dated 24.12.2005 which was challenged under Section 16(6) of the Arbitration and Conciliation Act, 1996. Accordingly, the impugned order is set-aside and the matter is remitted to the commercial court, Ranchi for fresh consideration. All the points are left open to be decided in accordance with law without being influenced by any observation made in this judgement.
30. The point no (b) is accordingly decided in favour of the appellant and against the respondent.
31. Let a copy of this order be placed before the Commercial Court of the District Court, Ranchi which would now have the necessary 14 jurisdiction to deal with the petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 involved in the present case.
32. The parties to appear before the Commercial Court, Ranchi on 15.09.2023.
33. Considering the fact that the petition for setting-aside the Award was filed as back as in the year 2006, the Commercial Court, Ranchi shall make all endeavor to dispose of the matter within a period of three months from 15.09.2023. The parties to cooperate with the proceedings for expeditious disposal of the matter.
34. The amount of Rs. 24,00,000/- (Rs. Twenty Four Lakhs Only) deposited before this court pursuant to the order date 01.09.2016 which has been kept in fixed deposit in the name of learned Registrar General of this Court is directed to be returned to the appellant with accrued interest.
35. This appeal is accordingly disposed of.
36. Pending I.A, if any, is closed.
(Anubha Rawat Choudhary, J.) Mukul