LexM/S. S.B.P. AND CO. versus M/S. PATEL ENGINEERING LTD. AND ANR.
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A MIS. S.B.P. AND CO. v. MIS. PATEL ENGINEERING LTD. AND ANR. OCTOBER 26, 2005 B [R.C. LAHOTI, CJ., B.N. AGRA WAL, ARUN KUMAR, G.P. MATHUR, A.K. MATHUR, P.K. BALASUBRAMANYAN AND C.K. THAKKER, JJ.] Arbitration Act, 1940; Ss. 8, 20 and 21 !The Arbitration and C Conciliation Act, 1996; Ss. 2(h), 2(h), 7, 9, //, /61and 34/Code of Civil Procedure, 1908: D Functions performed by the Chief Justice of Supreme Court/Chief Justices of High Courts under Section 11 of the 1996 Act-Administrative or Judicial-Held: Judicial. Held, Per majority: Once a statute creates an authority, confers on it powers to adjudicate and makes its decision final, the decision cannot be termed as purely administrative decision-The ground a/ensuring minimum judicial E interference by itself is not a ground to hold the power so conferred is only an administrative power-When the power is conferred so as to decide on the existence of the conditions justifying appointment of an arbitrator/arbitral tribunal and is conferred on judicial authority/Chief Justice unless shown otherwise, the Chief Justice has to act judicially-When Chief Justice is F called upon to decide on the existence of arbitration agreement/appointment of arbitrawr!constitution of tribunal and confronted with two different points of view contended for by the rival parties in deciding so he .cannot be said to be performing administrative function-Issuance of Notice to opposite party cannot be construed to be merely an intimation but it really gives an G opportunity of being heard-Since the Chief Justice has necessarily to apply his mind before coming to a conclusion to appoint/not to appoint an arbitrator, the decision so arrived at could appropriately be termed as judicial decision. Chief Justice exercising power to appoint an arbitrator/constitute · H arbitral tribunal-Interference by the tribunal-Held: Tribunal cannot go 688 ( S.B.P. AND CO. v. PATEL ENGINEERING LTD. 689 behind the decision of the Chief Justice and rule on its own jurisdiction. A Conferment of power on Chief Justice to appoint an arbitrator- Characteristics of-Held: It cannot be termed as persona designata as it is conferred on a class and not on an individual-Since the intention of the legislature is to entrust the power to the highest judicial authorities in the State/country, the Chief Justice could designate other judge of the same B Court but he cannot designate a District Judge to perform the functions in terms of Section I 1, sub-section (6) of the Act. Order of the arbitral tribunal-Challenge under Article 2261227 of the Constitution-Held: Not permissible. Words and Phrases: 'Court '-Meaning of Held per minority: c D When an appropriate authority after applying its mind in terms of the circumstances enumerated in the Act arrived at a decision, the decision cannot be considered on that basis as judicial/quasi judicial and not administrative-The Chief Justice arrives at a decision of appointing an arbitrator after satisfj;ing itself to the existence of an arbitration agreement E and failure on the part of one of the parties to approve appointment of an arbitrator-Such decision is merely of prima facie in nature and by passing such order he does not decide lis nor contentious issues between the parties- Thus performing of such functions does not make the function of the Chief Justice as judicial/quasi judicial-The power to appoint an arbitrator is given to the Chief Justice to ensure fairness, integrity and impartiality but F that does not mean that the Chief Justice is exercising judicial/quasi-judicial powers-By appointing an arbitrator, the Chief Justice is performing administrative functions, as he is not under the obligation to act judicially- But he is under obligation/duty to act fairly and therefore requires to issue notice to other party before taking a decision to appoint an arbitrator- G Constitution of India, 1950-Articles 226 and 227. Power of Chief Justice-Delegation-Held: Not permissible. Power of Chief Justice to constitute arbitral tribunal/appoint an arbitrator-Interference-Jurisdiction of the High Court-Held: Aggrieved H 690 SUPREME COURT REPORTS [2005] SUPP. 4 S.C.R. A party could invoke the jurisdiction of High Court against an order passed by the Chief Justice, however, the writ court will be circumspect in entertaining a petition and in exercising extra ordinary jurisdiction in such cases. Doctrines: B Doctrine of '
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