Union Of India vs Sham Sunder on 19 May, 2009

 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
                        C.R. No. 6263 of 2006
                                  Date of decision : May 19, 2009
Union of India
                                                    Petitioner

                       Versus

Sham Sunder
                                                    Respondent

CORAM : HON'BLE MR. JUSTICE A.N. JINDAL

Present:   Mr. Puneet Jindal, Advocate with
           Mr. Ashutosh Gupta, Advocate
           for the petitioner


A.N. JINDAL, J. (ORAL)

The petitioner has challenged the order dated 8.4.2006

passed by District Judge, Gurdaspur, accepting the application under

Sections 7 and 8 of the Arbitration and Conciliation Act, 1996 (herein

referred as the Act) directing the respondent to appoint Arbitrator

within two months. While assailing the validity of the aforesaid order,

the petitioner has urged that the application under Section 8 of the

Act is maintainable only in a pending suit. However, independent

application for appointment of the Arbitrator could have been filed

under Section 11(6) of the Act before the Hon’ble Chief Justice and

as such no application having been filed by the respondent except in

the aforesaid circumstances, is not maintainable.

Arguments heard.

Admittedly, no suit was pending when the District Judge

passed an order for appointment of Arbitrator. Section 8 can be

pressed into service only if any matter is pending before a judicial

authority. Section 8 of the Act reads as under:-

“(1) A judicial authority before which an action is brought
C.R. No. 6263 of 2006 2

in a matter which is the subject of an arbitration

agreement shall, if a party so applies not later than when

submitting his first statement on the substance of the

dispute refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall

not be entertained unless it is accompanied by the

original arbitration agreement or a duly certified copy

thereof.

(3) Notwithstanding that an application has been made

under sub-section (1) and that the issue is pending before

the judicial authority, an arbitration may be commenced or

continued and an arbitral award made.”

Now coming to the other question whether the District

Judge, Gurdaspur, could appoint an Arbitrator under Section 11(6) of

the Act. The matter is no more res integra in view of the Apex Court

judgment SBP & Co. versus Patel Engineering Ltd. and another

(2005) 8 Supreme Court Cases 618, where it was observed that

District Judge did not have any authority to appoint the arbitrator as

the power vested only with Hon’ble the Chief Justice of the High

Court which could be delegated to any other Judge of the High Court.

The Apex Court in paras No. 47(i), (ii) and (xi) has observed as

under:-

“(i) The power exercised by the Chief Justice of the

High Court or the Chief Justice of India under Section 11

(6) of the Act is not an administrative power. It is a
C.R. No. 6263 of 2006 3

judicial power.

(ii) The power under Section 11(6) of the Act in its

entirety could be delegated, by the Chief Justice of the

High Court only to another Judge of that Court and by the

Chief Justice of India to another Judge of the Supreme

Court.

            xx               xx        xx          xx          xx

           (xi)         Where District Judges had been designated

by the Chief Justice of the High Court under Section 11(6)

of the Act, the appointment orders thus far made by them

will be treated as valid; but applications if any pending

before them as on this date will stand transferred, to be

dealt with by the Chief Justice of the High Court

concerned or a Judge of that Court designated by the

Chief Justice.”

Thus, the position of law as referred to above, is quite

explicit when a Constitution Bench of Apex Court has opined that the

power exercised under Section 11(6) of the Act is not administrative

but judicial and its delegation by Hon’ble the Chief Justice of the High

Court could be only to a brother Judge of the same Court. The

judgment of Apex Court is dated 26.10.2005. However, still the

impugned order was passed on 8.4.2006 by the District Judge,

Gurdaspur exercising the power under Section 11 of the Act, which in

fact did not vest in him on the date. It is unfortunate that the

judgment of Constitution Bench of Apex Court was neither noticed by
C.R. No. 6263 of 2006 4

the District Judge nor it was brought to his notice by either of the

parties which resulted into the avoidable error. Once it is found that

District Judge did not have any jurisdiction to pass the order on the

date, there is no other option but to set aside the same and restore

status quanti. The case shall now be dealt with in terms of law laid

down by Apex Court in SBP Company’s case (supra).

The revision is disposed of accordingly.

                                                         (A.N.JINDAL)
 19.05.2009                                                JUDGE
 reena