M/S. YASHWITH CONSTRUCTIONS (P) LTD. versus M/S. SIMPLEX CONCRETE PILES INDIA LTD. & ANR.

Citation: [2006] SUPP. 3 S.C.R. 96 · Decided: 03-07-2006 · Supreme Court of India · Bench: P.K. BALASUBRAMANYAN · Disposal: Dismissed

Judgment (excerpt)

A 
MIS. Y ASHWITH CONSTRUCTIONS (P) LTD. 
v. 
MIS. SIMPLEX CONCRETE PILES INDIA LTD. & ANR. 
JULY 3, 2006 
B 
[P.K. BALASUBRAMANY AN AND R. V. RA VEENDRAN, JJ.] 
Arbitration and Conciliation Act, 1996: 
Sections 11 and 15(2)-Appointmenl of arbitrator-Arbitrator initially 
C appointed in terms of the agreement resigned on health ground-Promptly 
another arbitrator appointed by the same party-The other party filing 
application u!s 11 before Chief Justice of High Court for appointment of 
arbitrator-Chief Justice finding the appointment of successor arbitrator in 
order and declining to interfere-Writ Petition-Division Bench agreeing with 
D the view of Chief Justice and dismissing writ petition-Held, since the power 
of the Managing Director of the respondent is saved by Section 15(2) and he 
has exercised that power on the terms of the arbitration agreement, there is 
no irifirmity either in the decision of the Chief Justice or of the Division 
Bench-It is not necessary in this case to go into the question whether the writ 
petition before the High Court was maintainable on the basis that ii challenged 
E an order of the Chief Justice rendered prior to the decision rendered in Patel 
Engineering's case.* 
*SBP & Co. v. Patel Engineering ltd. & Anr., (2005] 8 SCC 618, 
referred to. 
F 
CIVIL APPELLATE JURISDICTION : Special Leave Petition (Civil) 
No. 11279 of 2006. 
From the Judgment and Order of the High Courrt of Judicature, Andhra 
Pradesh at Hyderabad dated 4.3.2005 in A.A. No. 50/2004 and dated 
G 25.I 1.2005 in W.P. No. 8458/2005. 
Kiran Suri for the Petitioner. 
The Judgment of the Court was delivered by 
H 
96 
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YASHWITH CONST. (P) LTD.•·. SIMPLEX CONCRETE PILES INDIA LTD. [PK BALASUBRAMANYAN, l) 97 
P.K. BALASUBRAMANY AN, J. I. Delay condoned. 
A 
2. On a dispute having arisen, the Managing Director of the respondent 
company appointed an arbitrator in terms of the arbitration clause. The 
arbitrator resigned .. Thereupon the Managing Director of the respondent 
company, in view of the mandate in the arbitration agreement promptly 
appointed another arbitrator. At that stage, the petitioner approached the Chief B 
Justice of the High Court under Section I I sub-Section 5 read with Section 
l 5(2) of the Arbitration & Conciliation Act, 1996 (for short "the Act"), 
praying that the Chief Justice may appoint a substitute arbitrator to resolve 
the disputes between the parties. The Chief Justice found that the appointment 
of the second arbitrator by the Managing Director, after the resignation of the C 
first arbitrator, was valid in law since it was permissible under the contract 
and the right to make such an appointment was saved by Section 15(2) of the 
Act. The argument that Section 15(2) of the Act referred to statutory rules 
providing for appointment of Arbitrators and not to a contractual provision 
for such appointment was rejected by the learned Chief Justice. It was held 
by him that no occasion arose for him to appoint an arbitrator under Section D 
11 (6) of the Act in the case. Thus, the application was dismissed leaving the 
parties to pursue their claims before the arbitrator appointed by the Managing 
Director in te1ms of arbitration agreement between the parties. 
3. The petitioner challenged the decision of the learned Chief Justice by 
way of a Writ Petition in the High Court. The Division Bench noticed the E 
decision of this Court in SBP & Co. v. Patel Engineering Ltd. & Anr., [2005] 
8 SCC 618 holding that the order passed by the Chief Justice is a judieial 
order and no Writ Petition would lie in the High Court challenging such an 
order and only an appeal could be filed in the Supreme Court invoking 
Article 136 of the Constitution of India. But the Division Bench thought that F 
since that decision saved appointments made on or before the date that decision 
was rendered by this Court, the Writ Petition filed by the petitioner would 
also be saved and the Writ Petition could be decided on merits. The Division 
Bench held that the position obtaining under Section 8( I) of the Arbitration 
Act of 1940 differed from that available under the present Act especially in 
the context of Section 15 thereof and that in terms of Section 15(2) of the G 
Act, the Managing Director could, on the basis of the arbitration agreement, 
appoint another arbitrator when the originally appointed arbitrator resigned, 
thus attracting Section 15(1)(a) of the Act. It further held that Section 15(2) 
covered

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