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Section 11 of The Act where a fresh Arbitrator was appointed. When the High Court's order was challenged before the Supreme Court with a plea that the Arbitration Clause pre-existed the 2015 Amendment of The Act and inclusion of Section 12(5) and Schedule 7 Hon'ble Supreme Court while dismissing the petition challenging the High Court order ruled that, "So far as the submission on behalf of the petitioners that the agreement was prior to the insertion of Sub-Section 5 of Section 12 read with 7th Schedule to the Act and therefore the disqualification under Sub-Section 5 of Section 12 read with 7th Schedule to the Act shall not be applicable and that once an arbitrator-Chairman started the arbitration proceedings thereafter the High Court is not justified in appointing an Arbitrator are concerned the aforesaid has no substance and can to be accepted in view of the decision of this Court in TRF Limited Judgment(supra), Bharat Broadband Network Judgment(supra), Voestalpine Schienen Judgment (supra). In the aforesaid decisions this Court had an occasion to consider in detail the object and purpose of insertion of Sub-Section 5 of Section 12 read with 7th Schedule to the Act. In the case of Voestalpine Schienen Judgment(supra) it is observed and held by this Court that the main purpose for amending the provision was to provide for 'Neutrality of Arbitrators'. It is further observed that in order to achieve this, Sub-section 5 of Section 12 lays down that notwithstanding any prior agreement to the contrary, any person whose relationship with the parties or counsel or the subject-matter of the Kotak Mahindra Bank Limited Vs. Manju and Anr., Ex. No. 44/2022 page 23 of 46 dispute falls under any of the categories specified in the 7 th Schedule, he shall be ineligible to be appointed as an arbitrator. It is further observed that in such an eventuality i.e. when the arbitration clause finds foul with the amended provisions (Sub-Section 5) of Section 12 read with 7 th Schedule the appointment of an Arbitrator would be beyond pale of the arbitration agreement, empowering the Court to appoint such arbitrator as may be permissible. It is further observed that , that would be the effect of non- obstante clause contained in Sub-Section5 of Section 12 and the other party cannot insist on appointment of the arbitrator in terms of the arbitration agreement..........

(Emphasis Supplied)

33.In case title M/s Fam Bhagat Infratech Private Limited Vs. Alok Kumar Agarwal22, Hon'ble High Court while dealing with the challenge to Arbitral Clause which provided that 'Unilateral Appointment of Arbitrator' ruled, "Clearly, in view of the law laid down by the Supreme Court in Perkins Eastman and Bharat Broadband as well as Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the 7 th Schedule thereto, Clause 9.1 is rendered unsustainable in law, as it confers exclusive jurisdiction to one of the parties to the arbitration agreement to appoint the arbitrator.

39. Owing to inherent illegality in 'Unilateral Appointment of Sole Arbitrators' by one of the disputing parties is now so well established by Parliament and the Hon'ble Supreme Court that in several cases the parties themselves concede to this Legal Position and accept that unilateral appointment made by them may be set aside. In case titled Ekta Medical Systems Private Limited Vs. 24 2022 SCC Online CAL 751 25 2022 SCC Online Del 1137 Kotak Mahindra Bank Limited Vs. Manju and Anr., Ex. No. 44/2022 page 28 of 46 Institute of Liver and Biliary Sciences26, when the petitioner raised the issue of unilateral appointment and carrying on of arbitral proceedings in violation of Section 12(5) read with Schedule 7 of the Act while citing Perkins Eastman. Ld. Counsel for respondent, simply conceded to the legal position and paved the way for appointment of a neutral arbitrator by the High Court. Hon'ble Delhi High Court ruled that, "The petitioners, by this petition, seek termination of the mandate of the arbitrator, presently in seisin of the disputes between the parties in view of Section 12(5) of the Arbitration and Conciliation Act, 1996 ("the 1996 Act") read with judgments of the Supreme Court in Bharat Broadband Network Ltd. Vs. United Telecoms Ltd., Perkins Eastman Architects DPC vs. HSCC(India) Ltd. And Haryana Space Application Centre Vs. Pan India Consultants Pvt. Ltd........ Mr. Sanjay Poddar, learned Senior Counsel for the respondent, fairly concedes to the applicability of Section 12(5) of the 1996 Act as well as the aforesaid decisions and, therefore submits that this Court may appoint an arbitrator in place of the arbitrator presently in seisin of the disputes."

80.In Kishore Samrite Vs. The State of UP 36, Hon'ble Supreme Court expounded that:

"As and when the Courts found that a litigating party is abusing the Court process and had approached the Court with unclean hands without disclosing complete facts, they shall be burdened with exemplary and deterrent cost. In the cited case while observing that the petitioner have misused the judicial process, a cost of Rs.5 lacs was imposed."

81.It is pertinent to mention here that all the NBFCs are functioning in India under business licence from Ministry of Finance, Govt. of India or a dual licence from MoF as also RBI. It is expected of such NBFCs which has Pan India presence and are important player in financial infrastructure of developing Nation that they shall function within the sphere of procedure duly established by Law and shall never cross the Lakshman Rekha set by governing statutes, bye-laws and binding authoritative Judgments of Hon'ble Supreme Court. Instead of aligning their Arbitration Agreements/Clauses and Arbitral Practices in consonance with Section 12(5) read with Schedule 7 of Arbitration and Conciliation Act, 1996 post its amendment in 2015, they continued to harp over their age-old law practices of having in-house Unilaterally Appointed Arbitrators. The NBFCs ought to have aligned their arbitral practices with the changing times as suggested by Justice B. N. Srikrishna Report on Arbitration dated 30.07.2017 and the 2015 and 2019 Amendments carried out in the Arbitration and Conciliation Act, 1996.