ORDER
S.P. Khare, J.
1. This is an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter to be referred to as the ‘Act’) for appointment of the Arbitrator.
2. It is not in dispute that there was an agreement dated 9-12-1997 between the parties. It contains an arbitration clause which is as under:–
“36. In the event of any dispute or difference arising between the consumer and the Board as regards the interpretation of this Agreement or any other matter arising out of or in connection with this Agreement, except a dispute regarding recovery of charges for energy consumed and any other charges such as minimum charges, miscellaneous and other charges or a dispute regarding any matter for which a method of determination is prescribed in the Acts, Rules, Regulations and Conditions of supply mentioned in Clause 38 hereof such dispute or difference shall be referred to the arbitration of two Arbitrators, one to be appointed by each party hereto, and an umpire to be appointed by the Arbitrators before entering upon the reference. The decision or award of the said Arbitrators or Umpire shall be final and binding on the parties hereto and the provisions of the Indian Arbitration Act, 1940 or any statutory modification thereof for the time being in force shall apply to any such reference. Upon every or any such reference the cost of any incidental to the reference and award respectively shall subject to the condition that the amount of such cost to be awarded to either party shall not in respect of a monetary claim exceed the percentages set out below of any such award irrespective of the actual fee, cost and expense incurred by either party be in the direction of the Arbitrators who may determine the amount thereof as between party and shall direct by whom and in what manner the same shall be borne and paid.”
3. The applicant’s case is that by notice dated 15-5-2002 (Annexure A-19) the applicant requested the non-applicants to appoint the Arbitrator. The non-applicants have not proposed the name of any person as Arbitrator. According to the applicant the dispute between the parties is covered by the arbitration clause whereas the case of the non-applicants is that the dispute arisen between the parties is excluded from the purview of the arbitration agreement. Thus, the question of the existence and scope of the arbitration agreement is itself in issue. That can be decided by the Arbitral Tribunal envisaged in the arbitration agreement as per Section 16 of the Act and not by me in administrative capacity as a designate of the Chief Justice. Recently, the Supreme Court has considered this question in Hythro Power Corporation Ltd. v. Delhi Transco Ltd., (2003) 8 SCC 35 : 2003 Arb.W.LJ. 469 (SC) and it has been held whether on the facts of that case an arbitration agreement can be said to have existed by recourse to the arbitration clause in NIT was itself a dispute which deserved to be referred to the Arbitral Tribunal in accordance with the arbitration clause. Section 16 empowers the Arbitral Tribunal to decide the question of existence and validity of the arbitration agreement. The same view has been taken by the Full Bench of Gujarat High Court recently in New India Assurance Co. Ltd. v. Hanjer Fibers Ltd., AIR 2003 Gujarat 311. It has been observed that since the Arbitral Tribunal is competent to rule on its own jurisdiction including ruling of any objection with regard to existence or validity of the arbitration agreement, the order of the Chief Justice with regard to preliminary objection and direction that the preliminary objection to be decided by the Arbitral Tribunal under Section 16 without expressing any final opinion on the said question and leaving it open to the parties to raise that question before the Arbitrator or Arbitrators could not be said to be vulnerable or in any way unjust, unreasonable, arbitrary or invalid requiring interference in exercise of constitutional writ jurisdiction. The parties aggrieved by an arbitral award, after rejection of such plea of jurisdiction or validity or existence of the arbitration agreement can challenge the same by invocation of the provisions of Section 34 of the Act.
4. The arbitration agreement provides for appointment of two Arbitrators. The non-applicants in the present case have not responded to the request of the applicant for appointment of the Arbitrator. Therefore, as per Section 11(6) of the Act, even one independent and impartial person can be appointed as Arbitrator. Hon’ble Justice Shri K.K. Verma, a retired Judge of the High Court residing at Jabalpur is appointed as an Arbitrator in this case. The arbitration proceedings will be conducted at Jabalpur. A copy of this order and a letter of request be sent to him by the Additional Registrar (Judicial).