RAMESHWAR DAS AGRAWAL AND ANR. versus KIRAN AGRAWAL AND ORS.

Citation: [2007] 12 S.C.R. 488 · Decided: 23-11-2007 · Supreme Court of India · Bench: G.P. MATHUR · Disposal: Appeal(s) allowed

Judgment (excerpt)

_,_ 
A 
RAMESHWAR DAS AGRA WAL AND ANR. 
v. 
KIRAN AGRA WAL AND ORS. 
NOVEMBER 23, 2007 
B 
' 
" . 
[G.P. MATHUR AND P. SATHASIVAM,JJ.J 
Arbitration and Conciliation Act, 1996-s. I I-Application 
under-Appointment of arbitrator by Chief Justice of High Court 
c without passing reasoned order and without adverting to claim and 
objection of the parties-Sustainability of-Held: In the light of 
principles laid down in SEP & Co. 's case, order under s.11 (6) is a 
judicial pronouncement-It is incumbent on part of Chief Justice or 
designated Judge to consider claim of both the parties and pass 
D reasoned order-Hence, order of Chief Justice not sustainable and set 
aside-Matter remitted to High Court for consideration in the light of 
SEP & Co 's case. 
Dispute arose between the parties. In terms of the agreement, first 
E respondent filed application under section 11 of the Arbitration and 
Conciliation Act, 1996 for appointment of arbitrator. High Court issued 
notice to all the respondents, but most of them were not sen-ed. 
Appellant sought time to file counter affidavit and stated that no dispute 
remained for adjudication. The Chief Justice of the High Court rejected 
).. 
F the request of the appellant and appointed a retired judge as an 
arbitrator. Hence the present appeal. 
Allowing the appeal and remitting the matter to High Court, the 
Court 
G 
HELD: 1. The impugned order passed by the Chief Justice of High 
,.___,, .. 
Court is set aside and is remitted back to the High Court to pass fresh 
order in the light of the principles laid down in SEP & Co. v. Patel 
Engineering Ltd and Another's case. [Para 10) [497-AJ 
H 
488 
RAMESHW AR DAS AGRA WAL v. KIRAN AGRAWAL 
489 
~ 
2.1. From a seven-judge Bench decision of this Court in SBP & A 
Co. v. Patel Engineering Ltd and Another, it is clear that the power being 
exercised by the Chief Justice or the designated Judge under section 
11 of the Arbitration and Conciliation Act, 1996 is not an administrative 
power but it is a judicial power. An appeal would lie against that order 
., ..A 
only under Article 136 of the Constitution to this Court. Though the B 
decision in Konkan Railway Corpn. Ltd has been overruled, the Bench 
clarified that appointment of arbitrators or Arbitral Tribunals therefore, 
made are to be treated as valid, all objections being left to be decided 
under section 16 of the Act. After the decision of this Court in SBP & 
Co. v. Patel Engineering Ltd and Another it is incumbent on the part of c 
the Chief Justice or a designated Judge to consider the claim of both 
parties and pass a reasoned order. [Para 8) [494-B, C, D; 495-A, BJ 
2.2. Unfortunately, the decision in SBP & Co. v. Patel Engineering 
Ltd. and Another's case though decided earlier i.e. on 26.10.2005 was 
not brought to the notice of the Chief Justice, who passed an order, D 
subsequent to the same i.e. on 09.12.2005. In view of the fact that an 
order passed under section 11 ( 6) is a judicial order and in the light of 
the stand of the appellants, the impugned order appointing an Arbitrator 
without adverting to the claim and objection of both parties cannot be E 
sustained. The order did not show any reason for appointing an 
Arbitrator. Inspite of a request made for filing an affidavit opposing the 
application for appointment of an Arbitrator, the ChiefJustice did not 
afforded further time. Except respondent No.4, notice was not served 
on the other respondents and without hearing them an order was passed 
appointing an arbitrator. The order did not satisfy the requirement of F 
law laid down by this Court in SBP & Co. v. Patel Engineering Ltd and 
Another's case. [Para 8) [494-D, E, F; 495-A, B, C; 496-D, E) 
SBP & Co. v. Patel Engineering Ltd and Anr., [2005) 8 SCC 618, 
followed. 
G 
l·----
Konkan Railway Corporation Ltd. v. Rani Construction Private 
Limited, [2002) 2 SCC 388, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5366 of 
2007. 
H 
490 
SUPREME COURT REPORTS 
[2007) 12 S.C.R. 
A 
From the final Judgment and Order dated 9.12.2005 of the High 
Court of Judicature at Allahabad in A.A. No. 54 of2003. 
Manoj Swarup and Lalita Kohli (for Mis. Manoj Swarup & Co.) 
for t.11e Appellants. 
B 
Jay Savla, Reena Bagga, Gaurav Agrawal and Ashutosh Lohia for 
'> ' 
the Respondents. 
The Judgment of the Court was delivered by 
P. SATHASIV AM, J. (1) Leave granted. 
c 
(2) This appeal is directed against the order dated 09.12.2005 
passed by the Hon'ble Chief J

Excerpt shown. Read the full judgment & AI analysis in Lexace.