Madhya Pradesh High Court
Anjad Public Higher Secondary School ... vs M/S Educomp Solutions Ltd. on 28 November, 2017
~1~
AC No. 75/2017
Indore, Dated: 28/11/2017
Shri R.S. Chhabra learned counsel for applicant.
Shri Amit Kumar Washinde learned counsel for
respondents.
Heard finally with consent.
This arbitration case under Section 11(5) of the Arbitration & Conciliation Act, 1996 has been filed by applicant for appointing independent arbitrator for resolving the dispute between the parties.
Inspite of service of notice and grant of opportunity by this court no reply has been filed by respondents, instead counsel for respondents has chosen to oppose the AC orally.
The applicant has come to this court with the plea that it is running a school by the name of Anjad Public Higher Secondary School at Anjad Barwani and an agreement dated 24/8/2011 was executed between the applicant and respondents for providing smart class programme by the respondents and applicant had obtained services from the respondents till 2014 and all dues were cleared. Thereafter since the expected service was not provided by respondents, and inspite of request the service was not improved and there was a financial crisis therefore, the applicant had requested the respondents vide letter dated 3/12/2014 to discontinue the service and thereafter the request was repeated by subsequent letters. Inspite of that respondents had raised the demand of Rs. 8,54,470/- which was duly replied by applicant and on account of said demand now there is a dispute between the parties.
~2~ The respondents had unilaterally appointed arbitrator and applicant has received the notice dated 29th May 2017 from the said arbitrator but since the arbitrator was not acceptable therefore, the response dated 29/6/2017 was sent to the arbitrator with copy thereof to the respondents and present AC was filed.
Learned counsel for applicant submits that respondents have failed to act in accordance with the arbitration clause and arbitrator so appointed by respondents is not acceptable therefore, an independent arbitrator needs to be appointed and that no cause of action has arisen within the jurisdiction of Delhi court.
Learned counsel for respondents has raised an objection that as per arbitration clause only Delhi court has the jurisdiction.
I have heard the learned counsel for parties and perused the record.
Execution of the agreement dated 24th August 2011 Annex.A-3 between the parties is not in dispute. Clause 9.1 which is the arbitration clause provides as under:
"9.1 ARBITRATION If any dispute or difference of any kind whatsoever arise between the parties in connection with or arising out of this Agreement or any part thereof, such dispute or difference shall be referred to an acceptable sole Arbitrator under the provisions of the Indian Arbitration and Conciliation Act, 1996, or any enactment or modification there under. The sole Arbitrator shall be appointed by Party A. The venue for arbitration shall be at new Delhi and the language shall be English. The Courts in New Delhi shall have jurisdiction to entertain all disputes between the parties."
~3~ As per the aforesaid clause the dispute between the parties is to be referred to the "acceptable sole arbitrator" and said arbitrator is to be appointed by party A. The record reflects that respondents have appointed the sole arbitrator who had sent the notice dated 29th May 2017 Annex. A-11 to the applicant. The sole arbitrator has not been appointed with consent of the applicant and reply of applicant dated 29/6/17 Annex.A-12 reveals that sole arbitrator is not acceptable to the applicant.
That apart, only party A was required to appoint the arbitrator, whereas the sole arbitrator has been appointed by party A & B both as reflected in Annex.A-11.
Hence I am of the opinion that sole arbitrator appointed by respondent is not in accordance with clause 9.1 of the arbitration agreement and that respondent has failed to act in accordance with the said clause 9.1 of the agreement.
So far as jurisdiction of this court is concerned, though the arbitration clause provides that court in New Delhi will have jurisdiction to entertain all dispute between the parties but applicant has raised a specific plea in paragraph 16 of AC that the agreement was executed at Anjad i.e. within the jurisdiction of this court and no cause of action either wholly or in part had accrued outside the territorial jurisdiction of this court.
Learned counsel for respondents has failed to point out any cause of action which had arisen within the jurisdiction of Delhi Court.
It is settled position in law that parties through the agreement can exclude the jurisdiction of the court but by agreement they cannot confer jurisdiction upon a court, which ~4~ otherwise had no jurisdiction. Therefore, in the facts of the present case the objection of respondents as regard the jurisdiction cannot be accepted and no benefit can be granted on the basis of judgment of the Supreme court in the matter of State of West Bengal and others Vs. Associated Contractors reported in (2015) 1 SCC 32 and order dated 20th February 2015 in Civil Appeal No. 2077/2015 in the matter of M/s Bhandari Udyog Limited Vs. Industrial Facilitation Council and another.
Having regard to the aforesaid analysis, I am of the opinion that the dispute exists between the parties and in order to resolve the dispute an independent arbitrator need to be appointed.
Hence, I propose name of Shri Devendra Singh Solanki, retired District Judge to be the learned Arbitrator for deciding the dispute.
Let the declaration in terms of Section 11(8) and 12(1) of the amended Arbitration Act in the prescribed form as contained in 6th Schedule of the Act be obtained from the proposed Arbitrator by the Principal Registrar of this Court before the next date of hearing.
List on 8/1/2018.
(Prakash Shrivastava) Judge BDJ Bhunesh Digitally signed by Bhuneshwar Datt DN: c=IN, o=High Court of Madhya Pradesh, ou=Administration, postalCode=452001, st=Madhya Pradesh, war Datt 2.5.4.20=3fb5bcda9fd75d95d6c7cdcbd09 2ee5a74a94a5534aed3a66d9385cfcfc201 e0, cn=Bhuneshwar Datt Date: 2017.12.01 11:31:24 -08'00'