Rajasthan High Court - Jaipur
Union Of India & Ors vs Rajasthan Micro & Small Enterprises ... on 20 November, 2015
Author: Anupinder Singh Grewal
Bench: Anupinder Singh Grewal
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
O R D E R
D.B. CIVIL SPECIAL APPEAL (WRIT) NO.355/2015.
IN
S.B. CIVIL WRIT PETITION NO.16038/2013.
Union of India & Ors.
Vs.
Rajasthan Micro & Small Enterprises Facilitation Council & Anr.
Date of order:- 20/11/2015.
HON'BLE MR.JUSTICE AJIT SINGH, ACTING CHIEF JUSTICE
HON'BLE MR.JUSTICE ANUPINDER SINGH GREWAL
Mr.P.C. Sharma for the appellants.
Mr.Arpit Srivastava for respondent No.1.
Mr.Ajay Gupta for respondent No.2.
*****
BY THE COURT:-
This intra-court appeal is directed against the order dated 03/03/2015 passed by the learned Single Judge of this High Court whereby, he has dismissed the appellants' S.B. Civil Writ Petition No.16038/2013.
Respondent No.2 has filed an application before the Rajasthan Micro & Small Enterprises Facilitation Council (in short, the Council) for recovery of Rs.47,094/- against the appellants. On the other hand, appellants have claimed that as per accounts office of North-Western Railway, payment of Rs.79,869/- is outstanding against respondent No.2. This application of respondent No.2 for recovery is pending before the Council.
Aggrieved, the appellants rushed to the High Court by filing S.B. Civil Writ Petition No.16038/2013 for a declaration that Council has no jurisdiction over the dispute. The appellants took the plea that there being a contract agreement between the parties containing an arbitration clause, Council has no jurisdiction over the dispute. The appellants also averred that remedy available to respondent was under the provisions of Arbitration and Conciliation Act, 1996. The learned Single Judge however disagreed with the appellants and by the impugned-order, dismissed the writ petition. It is in this background, the present appeal has been filed.
The learned Single Judge relying upon the decisions of Supreme Court in Registrar, Cooperative Society Vs. Krishan Kumar Singhania : (1995) 6 SCC 482 and Punjab Electricity Board Vs. Guru Nanak Cold Storage : (1996) 5 SCC 411, has held that Council has the jurisdiction to decide the claim of respondent.
Now also, by the Arbitration and Conciliation (Amendment) Ordinance, 2015, sub-Section (5) of Section 12 of the principal Arbitration and Conciliation Act, 1996 has been inserted. It reads, as under:-
12(5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.
And clause 1 of the Seventh Schedule referred to in Section 12(5) is, as under:-
Arbitrator's relationship with the parties or counsel
1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party.
A bare reading of the above quoted amendment incorporated in the Arbitration and Conciliation Act, 1996, makes it clear that notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. Also, the 'arbitrator' means an employee, consultant, advisor or has any other past or present business relationship with the party.
In the case at hand, as per clause 63 of the contract executed between the appellants and respondent No.2, all disputes and differences of any kind whatsoever arising out of or in connection with the contract, is required to be referred by the latter to the railway and the railway shall within 120 days after receipt of such representation, must make a notified decision on all matters referred to in writing. But, with the changed legal position due to insertion of new Section 12(5) in the Arbitration and Conciliation Act, 1996, an officer or employee of appellants-Railway has become ineligible to be appointed as arbitrator. The appellants thus cannot insist respondent No.2 to avail the remedy of Arbitration through their Arbitrator as mentioned in the contract agreement.
The appeal has no merit and is accordingly dismissed.
(Anupinder Singh Grewal), J (Ajit Singh), Acting C.J. Anil
All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.
Anil GoyalPS