Bangalore District Court
M/S.Spml Infra Limited vs ) State Of Karnataka on 13 March, 2017
IN THE COURT OF THE VI ADDL.CITY CIVIL & SESSIONS JUDGE
BENGALURU CITY
CCCH. 11
Dated this the 13th day of March, 2017
PRESENT: Sri.K.M.Rajashekar, B.Sc., LL.B.,
VI Addl. City Civil & Sessions Judge,
Bengaluru City.
A.S.NO: 105/2013
PLAINTIFF : M/S.SPML INFRA LIMITED
(Formerly M/s.Subhash Projects &
Marketing Limited)
Having its Registered Office at :
No.F-27/2 Okhla Industrial Area,
Phase-II, New Delhi - 110 020.
Regional Office at No.8/2,
Ulsoor Road, Bengaluru-560 042.
Reptd.by its Authorised Representative
Sri.J.R.Manjunatha Swamy,
General Manager - Projects.
/VS/
DEFENDANTS : 1) STATE OF KARNATAKA
By its Secretary to Government,
Irrigation Department (Water Resource
Development)
No.304, Vikasa Soudha,
Bengaluru-560 001.
2 AS.105/2013
2) THE MANAGING DIRECTOR
Cauvery Neeravari Nigam Ltd.,
3rd and 4th Floor,
Surface Water Data Centre
Ananda Rao Circle,
Bengaluru - 560 009.
3) THE CHIEF ENGINEER,
Water Resources Department
Government of Karnataka,
Cauvery Neeravari Nigam Ltd.,
Irrigation (South),
Public Office Buildings,
New Sayajirao Road,
Mysore - 570 024.
4) THE EXECUTIVE ENGINEER,
Irrigation Department,
KRS Modernization and Medium
Irrigation Projects Division,
Talagawadi Village, Kagepura,
Malavalli-Maddu Road,
Malavalli - 571 430. Mandya District.
---
JUDGMENT
The Plaintiff has got filed this suit under Section 14 of the Arbitration and Conciliation Act, for terminating the mandate of the Defendant No.3/Arbitrator and for appointment of independent and 3 AS.105/2013 neutral Arbitrator to adjudicate the dispute between the Plaintiff and the Defendants in place of Defendant No.3/Arbitrator.
2) In nutshell Plaintiff's case is that, it is a Public Limited Company conducting the business of undertaking several types of Infrastructure Development Projects in different parts of the country. In response to the tender invited by the Defendants for construction of Civil Works, Design, Supply, Erection, Testing and Commissioning of Mechanical & Electrical components of Nanjapura Lift Irrigation Scheme ('NLIS Project'), they submitted their bid for undertaking the said project and as their bid was lowest amongst other bidders, their bid was accepted and after approval of the Government the said project was entrusted to them by entering into Agreement dated 05.05.1999 which was required to be completed within a period of 24 months from the date of agreement. The execution of the project was delayed on account of various breaches committed by the Defendants and 4 AS.105/2013 accordingly, Plaintiff made several representations requesting the Chief Engineer-Defendant No.3 who is the designated Arbitrator to adjudicate the disputes between the parties and as he did not respond, the Plaintiff filed CMP.No.67/2004 before the Hon'ble High Court seeking appointment of Arbitrator in terms of the agreement. The Defendants prayed for dismissal of said CMP contending that there is no Arbitration clause, the Hon'ble High Court considering the contentions of both the parties, appointed the Chief Engineer (Irrigation South) as the Sole Arbitrator to adjudicate the dispute between the parties vide order dated 20.08.2004 and the same was not acceptable to the Plaintiff as he was not an independent person and got filed an application requesting to appoint an independent Arbitrator in place of Defendant No.3 to adjudicate the dispute, the said application was dismissed by the Hon'ble High Court vide order dated 28.01.2005 directing to raise all the contentions before the Arbitrator itself. Inspite of the order of the Hon'ble High Court, the 5 AS.105/2013 Arbitrator did not enter into reference for adjudication of the dispute even after lapse of 2 years from the date of appointment, hence, the Plaintiff filed an application on 05.09.2006 seeking for appointment of independent neutral Arbitrator to adjudicate the dispute between the parties, the said application was rejected by the Hon'ble High Court by its order dated 14.09.2006 directing the Arbitrator to dispose of the dispute between the parties expeditiously and not later than 6 months from 23.09.2006. Despite the said direction of the Hon'ble High Court, the Arbitrator did not commence the Arbitration proceedings and complete the same as directed, in view of the same, the Plaintiff filed an application on 03.12.2014 under scheme of appointment of Arbitrator by the Hon'ble High Court. On 01.08.2013, the Hon'ble High Court permitted the Plaintiff to withdraw the said application with an observation that he is required to file Arbitration suit under Section 14(2) of the 6 AS.105/2013 Act, before this court to terminate the mandate of the Arbitrator.
As per the procedure, the Plaintiff has filed statement of claims on 05.03.2007. The Arbitrator kept on granting time for filing the statement of objections establishing his bias towards the Defendants and ultimately, the Defendants filed their statement of objections on 26.09.2007 after 6 months 20 days after filing of the statement of claim by the Plaintiff. Immediately thereafter, the Plaintiff filed rejoinder. The Arbitrator was not in a position to decide the matter on account of bias towards the Defendants and most of the time the Arbitration proceedings were adjourned either due to the reason that Arbitrator was busy with the administrative works or due to the reason that he did not have necessary skills and expertise in conducting Arbitration case. The Arbitrator is not in a position to dispose of and decide the Arbitration case for the reason that he is subordinate to the State Government and as 7 AS.105/2013 such is not an independent person to adjudicate the dispute and he is completely controlled by the Defendants. The Arbitrator is a party to the dispute as the project work in question was executed under his supervision and he being a party to the litigation cannot decide his own case as no man can be a judge for his own cause. The Arbitrator does not have necessary qualifications as required under Section 12 of the Arbitration and Conciliation Act and skills for adjudication of the legal claims involved in the Arbitration case and are not at all aware of the manner of conducting the Arbitration proceedings. The Chief Engineer designated as the Arbitrator was frequently changed/transferred by the State Government and the Arbitrator was most of the time busy in administrative work and never shown any interest in conducting the Arbitration case and as he is a party to the proceedings, in order to harass the Plaintiff he is not deciding the matter. Now, new Chief Engineer Sri.V.Shivashankar 8 AS.105/2013 has taken charge from 04.06.2012 and after taking charge, he has not conducted any Arbitration proceedings so far. None of the Chief Engineers were ready to hear the matter as they were neither qualified nor have the capacity to conduct an Arbitration case; hence, this suit for the aforesaid reliefs.
3) Notice of this suit was served on the Defendants. Defendants No.2 and 4 entered appearance through their counsel and filed statement of objections. Despite granting sufficient opportunities, Defendant No.1 and 3 have not chosen to file their objections and contest the suit.
4) Defendants No.2 and 4 have filed their objections statement denying the plaint averments in general and para-wise and contended that, the present suit is ill- conceived and not maintainable in law; none of the circumstances envisaged under Section 14 of the Arbitration and Conciliation Act, 1996 exists in the 9 AS.105/2013 present case for invoking the said Section. In furtherance of the appointment of the Arbitrator in CMP.No.67/2004, the sole Arbitrator had conducted several sittings of Arbitration, both the parties have filed their respective pleadings and a detailed evidence has been recorded over a long period of time since the Plaintiff took long time in cross-examining the witness and took adjournment on several occasions. The Plaintiff had participated in the proceedings during the entire period of recording of evidence and arguments without any protest. The long delay in completion of the proceeding is directly attributable to the Plaintiff for seeking adjournments on several occasions. Even though the sole Arbitrator was ready to proceed with the matter for hearing arguments of the parties, the Plaintiff never participated in Arbitration proceedings and was only interested in seeking adjournment on the ground that suit is pending before this court. The sole Arbitrator had never refused to act nor failed to act in 10 AS.105/2013 conducting the proceedings at any point of time, hence, prayed for rejection of the suit.
5) Heard Plaintiff's counsel. Despite granting several opportunities, Defendant No.1 failed to address his arguments, hence, arguments of Defendant No.1 is taken as not addressed. Defendant No.2 and 4 filed their notes of arguments. Inspite of giving sufficient time, Defendant No.3 has not represented before the court. Perused the records and the written arguments submitted on behalf of Defendants No.2 and 4.
6) The points that arise for my consideration are :
1. Whether the Plaintiff has made out a case that the learned Arbitrator becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay as alleged in the plaint?
2. Whether the Plaintiff has made out any of the grounds under Section 14 of the Arbitration and Conciliation Act, for the reliefs sought for?11 AS.105/2013
3. What order ?
7) My answer to the above points are :
Point No.1 - In the Negative;
Point No.2 - In the Negative;
Point No.3 - As per final order,
for the following :
REASONS
8) Point No.1 to 3 : Since these points are inter
related to each other, they are taken up together to avoid repetition of facts and for convenience of the court.
Upon going through the materials available on record, it is seen that the Plaintiff is seeking an order to terminate the mandate of the Arbitrator on the ground that there is inordinate delay in disposing of the application, the Arbitrator is subordinate to the State Government and not an independent person to adjudicate this dispute, the Arbitrator is completely 12 AS.105/2013 controlled by the Defendants, hence, he is disqualified; the Arbitrator is a party to the dispute as the project work in question was executed under his supervision, hence, the Arbitrator cannot decide his own case, as no man can judge for his own cause. The Arbitrator is not having requisite qualification required under Section 12 to adjudicate this dispute. The Chief Engineer designated as the Arbitrator was frequently changed by the State Government, hence, the Arbitrator is not in a position to concentrate on this case and is busy with the administrative work and showing least interest in this matter, hence sought for appointment of independent and neutral Arbitrator to adjudicate the dispute between the Plaintiff and the Defendants in place of Defendant No.3/Arbitrator.
9) At this stage, it is relevant to mention the provisions of Section 14 of the Arbitration Act, which reads thus :
13 AS.105/2013
" 14. Failure or impossibility to act. - (1) The mandate of an Arbitrator shall terminate if -
(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of his mandate.
(2) If a controversy remains concerning any of the grounds referred to in clause (a) of sub-
section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate. (3) If, under this section or sub-section (3) of Section 13, an Arbitrator withdraws from his office or a party agrees to the termination of the mandate of an Arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub- section (3) of section 12. "
10) The learned counsel appearing for the Plaintiff vehemently argued that the Arbitrator is subordinate to the State Government and not an independent person to adjudicate this dispute, there is inordinate delay in disposing of the application. The learned counsel appearing for the Plaintiff vehemently further argued that the Arbitrator is completely controlled by the 14 AS.105/2013 Defendants, hence, he is disqualified; the Arbitrator is a party to the dispute as the project work in question was executed under his supervision, hence, the Arbitrator cannot decide his own case, as no man can judge for his own cause. The learned counsel appearing for the Plaintiff pointed out the fact that in spite of specific direction by the Hon'ble High Court to dispose of this matter within six months from 23.09.2006, the Arbitrator has failed to pass the award etc. The learned counsel appearing for the Plaintiff contended that the Arbitrator is not having requisite qualification required under Section 12 to adjudicate this dispute. The Chief Engineer designated as the Arbitrator was frequently changed by the State Government, hence, the Arbitrator is not in a position to concentrate on this case and is busy with the administrative work and showing least interest in this matter etc. 15 AS.105/2013
11) On the other hand, the learned counsel for Defendant No.2 and 4 argued that the present suit is ill-
conceived and not maintainable in law; none of the circumstances envisaged under Section 14 of the Arbitration and Conciliation Act, 1996 exists in the present case for invoking the said Section. The learned counsel for the Defendant No.2 and 4 pointed out the fact that, in furtherance of the appointment of the Arbitrator in CMP.No.67/2004, the sole Arbitrator had conducted several sittings of Arbitration, both the parties have filed their respective pleadings and a detailed evidence has been recorded over a long period of time since the Plaintiff took long time in cross-examining the witness and took adjournment on several occasions. The learned counsel for the Defendant No.2 and 4 argued that the long delay in completion of the proceeding is directly attributable to the Plaintiff for seeking adjournments on several occasions; even though the sole Arbitrator was ready to proceed with the matter for 16 AS.105/2013 hearing arguments of the parties, the Plaintiff never participated in the arbitration proceedings and was only interested in seeking adjournment on the ground that suit is pending before this court etc.
12) Before taking the case on merits, it is pertinent to note that much water has flown under the bridge after institution of the arbitration proceedings. The Plaintiff herein who is the Claimant before the learned Arbitrator is seeking termination of the appointment of Arbitrator on the ground of delay in disposal of arbitral proceedings. It is to be noted that the Agreement entered into between the parties is on 05.05.1999. The dispute entered the Hon'ble High Court premises in CMP.No.67/2004 and Arbitrator is appointed by order dated 20.08.2004. Since then, the Plaintiff has approached the Hon'ble High Court on several occasions on the one reason or the other and finally filed this petition seeking withdrawal of the mandate to the Arbitrator on the ground that there is inordinate delay in 17 AS.105/2013 disposing of the application and the learned Arbitrator is disqualified to act as an Arbitrator, so also, he has no capacity to deal with this matter etc.
13) The learned counsel appearing for the Plaintiff vehemently argued that from past 17 years this case is pending adjudication before the learned Arbitrator, being a Chief Engineer and having entrusted with heavy administrative work Arbitrator is not in a position to dispose of the matter. Apart from that, he suffers from disqualifications and they have no trust in the Arbitrator. The learned counsel further argued that in spite of there being direction from the Hon'ble High Court to dispose of the matter within six months, the learned Arbitrator showed least respect to the mandate of the Hon'ble High Court and even after lapse of 8 years of the directions from the Hon'ble High Court, this dispute is not disposed of by the learned Arbitrator etc. 18 AS.105/2013 On the other hand, the learned counsel appearing for the Defendant attributed the cause for delay on the Plaintiff alleging that on account of the delayed tactics opted by the Plaintiff the learned Arbitrator was not in a position to dispose of the matter. The Defendant further contended that absolutely there is no latches on the part of the Arbitrator, rather, the pleading and evidence are very voluminous, the Plaintiff has took much time to file claim statement, objections, counter statements and also considerable time for conducting cross-examination, hence, absolutely no delay is attributable to the Arbitrator etc.
14) I have carefully gone through voluminous documents available on record. It is seen that the Hon'ble High Court of Karnataka in CMP.67/2004 by its order dated 20.08.2004 appointed the Chief Engineer (Irrigation) as the sole Arbitrator to adjudicate this matter. However, the Plaintiff again approached the 19 AS.105/2013 Hon'ble High Court by an application dated 05.09.2006 seeking an order to withdraw the authority given to the 3rd Respondent (Arbitrator), wherein, as per Annexure- 'E', the Hon'ble High Court by its order dated 28.01.2005 rejected the claim of the Plaintiff by dismissing the application. The Hon'ble High Court by its order at page No.8 made the following observation:
" Now it is the grievance of the petitioner that the arbitrator so appointed by this Court cannot act independently and hence some other independent arbitrator may be appointed in place of the Chief Engineer. It is no doubt true that paragraph 8 of the scheme framed by this Court empowers the Chief Justice on receipt of a complaint from either party to the arbitration agreement or otherwise that the person designated by him could be withdrawn. But the said paragraph 8 set down the circumstances under which such power could be exercised. It clearly indicates that the person appointed has neglected, refused to act or is incapable of acting or has incurred any disqualification to act as such, the said authority may be withdrawn. But in the instant case, I find that the conditions laid down in paragraph 8 are not satisfied. It is needless to point out that the order once made cannot be withdrawn and if at all it is to be withdrawn then as pointed out by the learned counsel for the petitioner himself it could be withdrawn on being satisfied about the conditions laid down in paragraph 8 of the scheme. When no such conditions are satisfied, this authority cannot withdraw the appointment once made. In this view of the matter, I find that the prayer made in the application filed by the petitioner is not capable of being granted. "20 AS.105/2013
15) Added to that, the Plaintiff herein again approached the Hon'ble High Court by another application under Rule (4) of the Scheme of appointment of Arbitrator Read with Section 11 of the Arbitration and Conciliation Act and sought for appointment of an independent and neutral Arbitrator to conduct the dispute between the parties by withdrawing the powers given to the Chief Engineer as sole Arbitrator. As against the said application, the Hon'ble High Court in CMP.67/2004 by its order dated 14.09.2006 made the following observation :
" I.A.1/2006 is filed for appointment of a new arbitrator in place of third respondent on the ground that the third respondent has not entered upon the reference and he has not initiated any proceedings under the provisions of Arbitration and Conciliation Act, 1966.
Petitioner herein filed this petition for appointment of arbitrator on 10.06.2004 and on 20.08.2004 arbitrator came to be appointed. However within ten days from that date the petitioner filed an application stating that the third respondent is not the suitable person to be appointed for the case as arbitrator. As the said application was filed, the third respondent did not proceed with the arbitration proceedings. The said application came to be dismissed on 28.1.2005.21 AS.105/2013
Even thereafter the third respondent has not entered in appearance.
Learned counsel for the respondents submit that there is change of officers and the present officer has taken charge since six months only and now that it is brought to his notice he would enter upon the reference forthwith and decide the dispute in accordance with law within the time to be fixed by this court.
In view of the aforesaid submission it is not necessary to appoint one more arbitrator in place of third respondent. The petitioner who got an arbitrator appointed, within ten days makes an application seeking for change in the arbitrator. He cannot complain of delay as he is the cause for delay in disposal of this arbitration matter. Nonetheless the third respondent also had the responsibility of entering upon the reference and concluding the matter within a reasonable time. Under the circumstances, in my view justice of the case would be met if the third respondent is called upon to enter reference forthwith and fix a date for appearance of the parties. It may be made within a week so that thereafter the arbitrator would proceed with the matter and dispose of the matter expeditiously. Hence, I pass the following order.
I.A.1/2006 for appointment of new arbitrator is dismissed.
Third respondent appointed as arbitrator in this case shall enter upon the reference forthwith.
The third respondent is before court. He agreed to enter upon the reference tomorrow itself.
Both parties shall appear before the third respondent on 23.09.2006 at 11.00 a.m. without waiting for any notice to be sent by third respondent.22 AS.105/2013
After both parties appear before him on 23.9.2006, the arbitrator shall proceed with the arbitration and dispose of the dispute between the parties expeditiously and not later than six months from 23.9.2006."
16) In addition to it, again the Plaintiff approached the Hon'ble High Court in the very same Civil Misc.Petition for the similar relief. The Hon'ble High Court by its order dated 01.08.2013 passed the following order :
"Order on I.A.No.1/12 Learned counsel appearing for the petitioner, in view of the judgment of the Supreme Court in Nimet Resources Inc. and another Vs. Essar Steels Limited [(2009) 17 SCC 313], seeks permission to withdraw this application, with liberty to file appropriate proceedings before the Principal Civil Court of Original Jurisdiction.
Application is disposed of, as withdrawn with liberty as prayed. All contentions on merits and the questions of law are kept open. "
17) As rightly pointed out by the Defendant, the Plaintiff herein became unsuccessful for successive three times before the Hon'ble High Court for the very same 23 AS.105/2013 relief i.e. for withdrawing the mandate to the learned Arbitrator. Even though the Plaintiff makes allegation against the learned Arbitrator as the person who is responsible for the delay, but upon careful perusal of the claim statement it indicates that the pleadings are very voluminous, much less, runs up to 400 and odd pages. Equal numbers of interim applications were also available on record which is presented by this very same plaintiff.
18) On perusal of the materials available on record, it is seen that, based on the directions of the Hon'ble High Court of Karnataka, the learned Arbitrator proceeded to conduct the Arbitration in this matter in accordance with law and issued required notice and called upon the parties to appear before him on 23.09.2006 vide Annexure P.2. It is seen that by letter dated 23.09.2006 the Plaintiff himself insisted for the Arbitrator to terminate the proceedings in view of disability. However, it took considerable time for filing counter and addressing 24 AS.105/2013 arguments and the learned Arbitrator by his order dated 15.12.2006 rejected the claim of the Plaintiff and as per Annexure-P.12 directed the parties to proceed with the matter. However, the Plaintiff as per Annexure-P.13 by his letter dated 19.12.2006 sought two months time for submission of claim. Apart from that, again as per Annexure-P.16, the Plaintiff themselves sought for some more time vide their letter dated 19.01.2007. Again as per Annexure P.17, additional time was sought for by the Plaintiff themselves. Apart from that, as per Annexure- P.18, Plaintiff themselves claimed that since they have to receive number of documents from various places, they require longer period to submit their claim. This request was made by their letter dated 15.02.2007. It is pertinent to note that there are voluminous oral evidence and documentary evidence got placed by both the parties. The case paper also indicates that the Plaintiff themselves have sought for time as per Ex.P.4 to file their re-joinder statement. As per Annexure-P.35 again 25 AS.105/2013 the very same Plaintiff have sought time claiming that due to continuous holidays during Deepavali and their Chairman has to proceed on some urgent official matters from outside Bengaluru, he could not clear the statement of objections etc., and sought time. Again as per Annexure P.36, Plaintiff has sought an adjournment. It is significant to note that not only officials of the Plaintiff Company are busy, but as rightly pointed out by the learned counsel appearing for the Defendant, the learned counsel for the Defendant appears to be too busy as well. The Plaintiff has left no opportunity to seek adjournment in the name of the counsel also. It is claimed as per Annexure-P.65 that 'As our legal counsel Sri.Chiddanandayya is pre-occupied with urgent matters and as he needs some more time to prepare himself for cross examination of the witness, we request to postpone the hearing fixed on 21.10.2009.' Again as per Annexure-P.66, the Plaintiff claim that their legal counsel is pre-occupied with some urgent matters and that he 26 AS.105/2013 needs more time to prepare for the cross-examination. Once again as per Ex.P.73 it is claimed that, "Sri.L.M.Chiddanandayya legal counsel has discussed with you over telephone and requested you to postpone the Arbitration hearing on account of pre-occupation that Supreme Court case at Delhi on 29.03.2010 to 3rd April and 4th April 2010". Again as per Annexure-P-76 Plaintiff claim that 'our counsel has number of cases in the High Court which he could not cancel it at eleventh hour' and sought for fixing another date for hearing. Again as per Ex.P.78 Plaintiff claimed that 'the counsel for the Plaintiff is not available on 28th, 29th and 30.04.2010 and he will be away from Bangalore to attend Supreme Court cases at Delhi.' Again under Annexure-P.80 it is claimed by the Plaintiff that 'on account of the Respondent witness Sri.C.V.Nangundarau Swamy being drafted for the Gram Panchayath elections as Administrative Officer and therefore could not be available for the arbitration till the election process is over.' and sought an adjournment. It 27 AS.105/2013 is significant to note that it is the specific contention of the Plaintiff at para-7 of the plaint that, despite the direction of the Hon'ble High Court the Arbitrator did not commence the arbitration proceedings and did not complete the arbitration proceeding within 6 months as directed by the Hon'ble High Court and he was constrained to file an application before the Hon'ble High Court for contempt and for withdrawing the mandate etc.
19) The case paper indicates that the learned Arbitrator appears to have fed up with the attitude of the parties regarding dodging the matter for no reasons, hence the learned Arbitrator vide his letter dated 27.05.2010 as per Annexure-P.81 has expressed that 'It is observed that in recent times much difficulty is being experienced to fix up dates for Arbitration which is agreeable to all the parties concerned.' This fact clearly indicates the quantum of tremendous pressure received by the learned Arbitrator and the lethargic response on 28 AS.105/2013 the part of the Plaintiff as well as the Defendants. The very wording clearly indicates tremendous pressure received by the poor learned Arbitrator and also clearly indicates that in spite of learned Arbitrator willing to dispose of the matter in compliance with the directions of the Hon'ble High Court, the parties are not co-operating. In addition to that, as per Annxure-P.86, a long adjournment was sought by the Plaintiff themselves stating that mother of Sri.L.M.Chidanandayya, Advocate, is seriously ill and admitted in the hospital for urgent operation and he is not in a position to attend the arbitration etc. All these factors clearly indicate that the Plaintiff has left nothing to opt a clever trick or tactic to prolong the matter. Apart from that, Sri.M.M.Chidanandayya, learned Advocate has issued a notice to the Arbitrator dated 09.03.2013 alleging that 'even after lapse of 8 years from the date of appointment of Arbitrator the Arbitration case could not be completed. In view of long delay 29 AS.105/2013 in disposing of the case by the Arbitrator we have filed an application before the Hon'ble High Court seeking for change of Arbitrator and appointment of independent and neutral Arbitrator to adjudicate the dispute and directed the learned Arbitrator not to hold any hearing till disposal of the application seeking change of Arbitrator.'
20) Apart from that, an interim application also filed before this court under Section 14(2) seeking direction to restrain the Arbitrator from passing any order in the Arbitration proceedings. It is significant to note that not only the Plaintiff has contributed for unreasonable delay in disposal of this matter; there is equal contribution on the part of the Defendant as well. The materials on record indicates that Defendants also not hesitated in taking the adjournments for one reason or the other. 30 AS.105/2013 But unfortunately, the entire blame was put against the learned Arbitrator alone.
21) Upon going through the materials available on record and the provisions of Section 14 of the Arbitration and Conciliation Act, 1996, it is made clear that the mandate of the Arbitrator can be terminated if the learned Arbitrator becomes de jure or de fact unable to perform his functions or for other reasons fails to act without undue delay. But herein is the case, even though delay is contributed against the learned Arbitrator, but as stated above, it is clear that absolutely there is no lapse on the part of the Arbitrator, rather, the Plaintiff themselves are solely responsible for non disposal of these proceedings. Even though Plaintiff contended that the learned Arbitrator is incompetent to deal with this matter, but the Hon'ble Supreme Court in the judgments reported in (2005) 8 SCC 618 between SBP & Co., Vs. Patel Engineering Ltd., and another, wherein it is mandated that 31 AS.105/2013 " B. Arbitration and Conciliation Act, 1996-S.11(6) and (8) - Preliminary matters to be determined under by Chief Justice or his designate - Appointment of Arbitrator thereupon - Considerations involved -
Nature of adjudication involved - Held (per majority), Chief Justice or his designate while functioning under S.11(6) is bound to decide whether (i) he has jurisdiction, in the sense whether party making motion has approached the right High Court, (ii) there is a valid Arbitration agreement in terms of S.7,
(iii) person before him with the request, is a party to the Arbitration agreement, and (iv) there is a dispute/live claim subsisting which is capable of being arbitrated upon (though question whether the live claim made comes under the purview of the Arbitration agreement should be left to be decided by the Arbitral Tribunal on taking evidence, along with merits of the claims involved) - On coming to a conclusion on these aspects, he has to enquire if conditions for exercise of his power under S. 11(6) have been fulfilled; and if Arbitrator has to be appointed, who is the fit person in terms of the provision -
Chief Justice is entitled to seek opinion of an institution in matter of nominating an Arbitrator qualified in terms of S.11(8), if the need arises, but order appointing Arbitrator could only be that of Chief Justice or his designate - These are all adjudications which affect the rights of parties, and Chief Justice cannot constitute Arbitral Tribunal without considering these questions - It is for this reason that the power is conferred on the highest judicial authority in the State or the country under S.11(6), and which has to act judicially thereunder - Per C.K.Thakker.J., dissenting, at stage of exercising powers under S.11(6), though Chief Justice is bound 32 AS.105/2013 to apply his mind to allegations and counter- allegations of the parties, the satisfaction required is merely of prima facie nature and Chief Justice does not decide a lis nor any contentious issue hereunder."
This fact clearly indicates that even before appointing the Arbitrator the Hon'ble High Court has considered all these aspects in detail and arrived at a decision appointing the 3rd Defendant as the Arbitrator. Added to that, the Hon'ble High Court in three successive orders declined to withdraw the mandate of the Arbitrator by passing considered orders. The Hon'ble High Court held that 'order once made cannot be cancelled'. Added to that, vide order dated 14.09.2006 the Hon'ble High Court specifically mentioned that the Petitioner who got the Arbitrator appointed within 10 days makes an application seeking for change in the Arbitrator, he cannot complain of delay as he is the cause for the delay for disposal of this Arbitration matter. As rightly pointed out by the 33 AS.105/2013 Defendants, even the Hon'ble High Court has considered that the delay is due to attitude on the part of the Plaintiff themselves. Under these circumstances, I am of the opinion that, when the matter is at the fag end of the disposal and as it is reported that the evidence is concluded and arguments were also addressed by the parties, only thing left is passing of award. Under such circumstances, there may not be any justification in withdrawing the mandate holding that there is unreasonable delay in disposal of the application.
22) In view of the discussions made above, I hold that no case is made out by the Plaintiff under the provisions of Section 14 of the Arbitration and Conciliation Act, 1996 to withdraw the mandate of the Arbitrator. On the other hand, making frivolous allegations against the Arbitrator attracts a punitive costs against the Plaintiff, hence, the suit of the Plaintiff deserves to be dismissed, accordingly I answer the 34 AS.105/2013 above points in the negative and proceed to pas3s the following :
ORDER The suit of the Plaintiff is hereby dismissed with costs of Rs.10,000/-.
(Dictated to the Judgment Writer, transcribed and computerized by her, transcript thereof corrected and then pronounced by me in open Court, dated this the 13th March, 2017.) (K.M.RAJASHEKAR) VI Addl.City Civil & Sessions Judge Bengaluru City.