M/S Padmavathy Builders And Developers vs Union Of India on 14 September, 2022
14. A three-Judge Bench of this Court in Punj
Lloyd Ltd. (appellant) v. Petronet MHB Ltd. (2006) 2
SCC 638 considered the applicability of Section
11(6) petition and considered the facts which are
similar to the facts of the present case and held that
once notice period of 30 days had lapsed, and the
party had moved the Chief Justice under Section
11(6), the other party having right to appoint
arbitrator under arbitral agreement loses the right to
do so. While taking this view, the Court had referred
29
to the judgment rendered in Datar Switchgears Ltd.
(appellant) v. Tata Finance Ltd. and Another (2000)
8 SCC 151 wherein at page 158 (para 19) SCC, this
Court held as under: "19. So far as cases falling
under Section 11(6) are concerned - such as the
one before us no time limit has been prescribed
under the Act, whereas a period of 30 days has
been prescribed under Section 11(4) and Section
11(5) of the Act. In our view, therefore, so far as
Section 11(6) is concerned, if one party demands
the opposite party to appoint an arbitrator and the
opposite party does not make an appointment within
30 days of the demand, the right to appointment
does not get automatically forfeited after expiry of 30
days. If the opposite party makes an appointment
even after 30 days of the demand, but before the
first party has moved the court under Section 11,
that would be sufficient. In other words, in cases
arising under Section 11(6), if the opposite party has
not made an appointment within 30 days of demand,
the right to make appointment is not forfeited but
continues, but an appointment has to be made
before the former files application under Section 11
seeking appointment of an arbitrator. Only then the
right of the opposite party ceases. We do not,
therefore, agree with the observation in the above
judgments that if the appointment is not made within
30 days of demand, the right to appoint an arbitrator
under Section 11(6) is forfeited."