BHARAT SANCHAR NIGAM LTD. AND ANR. versus DHANURDHAR CHAMPATIRAY

Citation: [2009] 16 S.C.R. 398 · Decided: 11-12-2009 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Case Partly allowed

Judgment (excerpt)

A 
B 
[2009] 16 (ADDL.) S.C.R. 398 
BHARAT SANCHAR NIGAM LTD. AND ANR. 
v. 
DHANURDHAR CHAMPATIRAY 
(Civil Appeal No. 8230 of 2009) 
DECEMBER 11, 2009 
[TARUN CHATIERJEE AND AFTAB ALAM, JJ.] 
Arbitration and Conciliation Act, 1996: 
c 
s. 11 (6) - Appointment of arbitrator - Arbitrator not 
appointed within 30 days of demand - Right to make 
appointment of arbitrator would not be forfeited but would 
continue, but such right should be exercised before the other 
party files application under s. 11 before High Court - On facts, 
0 High Court did not focus on the agreement or conditions 
necessary to secure appointment of independent and 
impartial arbitrator - Since requirement of sub-section (8) of 
s. 11 was not dealt with by High Court, appointment of arbitrator 
became vulnerable - Matter remanded to High Court for 
E decision afresh. 
Parties entered into a contract for work construction. 
The contract contained arbitration clause in terms 
whereof the Chief Engineer in charge of work at the time 
of dispute and in absence of Chief Engineer, 
F Administrative head of the department was to be 
appointed as a sole arbitrator. The said provision 
envisaged that in terms thereof no person other than the 
one appointed by such Chief Engineer or Administrative 
Head should act as arbitrator to decide the disputes 
G referred to him. Dispute arose between the parties. 
Respondent sent letters to the Chief Engineer of the 
appellant no.1 on different dates requesting for 
appointment of an arbitrator to adjudicate the disputes. 
The appellants did not give response to the letters of 
H 
398 
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BHARAT SANCHAR NIGAM LTD. v. DHANURDHAR 399 
CHAMPATIRAY 
respondent. Thereaftar respondent filed petitions under A 
Section 11 (6) of the Arbitration and Conciliation Act, 1996. 
However, according to the case made out by the 
appellants appointment of Principal Chief Engineer as an 
arbitrator was already made on 9.3.2005. By impugned 
order, High Court allowed the application under Section 
8 
11 (6) and appointed arbitrator in place of the 
departmental nominee who was appointed by the Chief 
Engineer of the appellants. Hence the appeals. 
Partly allowing the appeals and remitting the matter 
to High Court, the Court 
C 
HELD: 1. A plain reading of Section 11(5) of the 
Arbitration and Conciliation Act, 1996 would show that if 
one party demands appointment of an arbitrator and the 
other party does not appoint any arbitrator within thirty 0 
days of such demand, the right to appointment at the 
instance of one of the parties does not get automatically 
forfeited. If the appellant makes an appointment even after 
thirty days of demand but the first party has not moved 
the Court under Section 11, that action on the part of the 
E 
appellant would be sufficient. In the instant case, High 
Court did not focus on requirements required by the 
agreement or other conditions necessary to secure the 
appointment of independent and impartial arbitrator. 
Since the requirement of sub-section (8) of Section 11 
F 
was not at all dealt with by High Court, appointment of 
arbitrator without dealing with the said sub-section 
became vulnerable. [Para 8 and 11] [403-E-G; 406-G-H; 
407-A-H] 
Northern Railway Administration, Ministry of Railway v. 
G 
Patel Engineering Company Ltd. (2008) 10 SCC 240, relied 
on. 
Punj Lioyd Ltd. v. Petronet MHB Uc. (2006) 2 SCC 638; 
Datar Switchgears Ltd. v. Tata Finance Ltd. And Another H 
400 SUPREME COURT REPORTS [2009] 16 (ADDL.) S.C.R. 
A (2000) 8SCC 151; Ace Pipeline Contracts Private Limited v. 
+ 
Bharat Petroleum Corporation Limited (2007) 5 SCC 304; 
Union of India v. Bharat Battery Manufacturing Co. Pvt. Ltd. 
(2007) 7 sec 684, referred to. 
B 
Case Law Refernce: 
(2006) 2 sec 638 
referred to 
Para 8 
(2000) 8SCC 151 
referred to 
Para 9 
(2001) s sec 304 
referred to 
Para 10 
c 
(2007) 1 sec 684 
referred to 
Para 10 
(2008) 10 sec 240 
relied on 
Para 10 
CIVIL APPELLATE JURISDICTION : Civii Appeal No. 
D 8230 of 2009. 
From the Judgment & Order dated 5.1.2007 of the High 
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Court of Orissa at Cuttack Arbitration Petition No. 11 of 2005. 
WITH 
E C.A. Nos. 8231, 8232, 8233, 8234 of 2009. 
Debasish Moitra, Ajit Kumar Pande for the Appellants. 
Parmanand Gaur (N.P.) for the Respondent. 
F 
The Judgment of the Court was deliverd by 
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TARUN CHATTERJEE, J. 1. Leave granted. 
2. These appeals by special leave have been filed against 
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,., 
the orders dated 5th of January 2

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