Mohd Aslam v. Abdul Salam @Bhaiyan & Anr

ORDER 2I.10.2011 o.M.P. 578/2010 & I.A.Nos. 13338/2010. 10196/2011. 11787/20il. and 1178812011 oh

¶1This is a petition, captioned Arbitration and Conciliation Act. as one under Sections 14 and 15 of the 1996 ('the Act'), seeking rwo alternative o.M.P. s78/2010 & t9/2011 Page I of7 reliefs. It is prayed that arbitration proceedings commenced by Respondent No. 2, who was appointed as an Arbitrator by Respondent No. 1 to adjudicate the disputes and differences between the Petitioner and Respondent, should be withdrawn and assigned to some other independent Arbitrator nominated by the Court. The alternative prayer is that the arbitration proceedings initiated on the basis of purported agreement to sell { dated 16th May 1986 shouldbe quashed onthe grounds of delay and laches and abuse of process of law.

¶2Invoking an arbitration clause contained in the agreement to sell entered into between the parties, Respondent No. 1 nominated Respondent No. 2 to act as an Arbitrator. The explanation given by Respondent No. 1 for waiting more than24 years to invoke the said clause is that there was some litigation q concerning half of the properfy in question between the Petitioner and some third parties in which there was an interim order. The litigation ended with an order passed by the Supreme Court in 2010. It was only thereafter that Respondent No. 1 could invoke the arbitration clause.

¶3The contention of the Petitioner, on the other hand o.M.P. 578/2010 & 19/2011 is that the invocation Page 2 of7 l1/ of the arbitration clause was barred by laches. Reliance is placed on the decision of this Court in Blue Dart Express Ltd. v. Sangum Property 152

(2008) DLT 599. A separate ground urged is that purported agreement to sell dated 16th May 1986 was itself a forged and fabricated document. Therefore, ?try arbitral proceedings commenced on the basis of a clause in the said agreement would be non est and vitiated. Reliance is placed on the decisions in India Household und Heolthcare Ltd v. LG Household and Hesltltcare Ltd. AIR 2007 SC 1376 and Shikha Arora v. DSSSB 179

(20r1) DLT s68.

¶4Counsel for the Petitioner is unable to point out any specific provision in the Act which permits aparty to seek the removal of the Arbitrator by filing an application directly in the High Court. Section 14 (2) contemplates an application to the Court only where a conhoversy arises whether the mandate of the Arbitrator has terminated on account of his being de jure or de facto unable to perform his functions or where he fails to act without undue delay. On the facts of the present case, the said provision cannot be invoked. The challenge is not regarding the de jure or de facto inability of the Arbitrator to perform his functions but whether at all he should be o.M.P. 578/2010 & I9/2011 Poge3 of7 l9 appointed.

¶5Section 13 (2) of the Act permits a parly who intends to challenge the appointment of the Arbitrator to send a written statement of reasons for the challenge, within 15 days after becoming aware of the constitution of the Tribunal, to the Arbitral Tribunal itself. In other words, the challenge to the validity of the appointment of an Arbitrator, who has not been appointed by the order of the Court under 11 (6) of the Act, has to be made in the first instance before the Arbitral Tribunal itself. What should happen if the Arbitral Tribunal rejects such challenge is provided under Section 13 (a) of the Act. Where upon a challenge unless the Arbitrator who is challenged withdraws from office, it is the Arbitral Tribunal that should decide on such challenge. The legal position in this regards has been explained in Dharam Prakash v. Union of India 2007 (1) Arb. LR 308 (Del) (DB) and Bhurat Heavy Electricals Ltd. v. C N Garg 2000 (3) Arb. LR 674 (Del) (DB).

¶6Likewise, under Section 16 of the Act the challenge to the validity of an arbitration agreement has also to be raised only before the Tribunal. That o.M.P. 578/2010 & 19/201 I Pnge 4 of 7 t\ provision itself spells out the consequence where the Tribunal either accepts or rejects such challenge. On neither of the grounds urged in the present petition does the Act envisage a parry directly approaching the High Court with an application seeking the removal of an Arbitrator who has entered upon reference.

¶7For the aforementioned reasons, this Court holds that the present petition seeking the reliefs as noticed hereinbefore is not maintainable in this Court. The Petitioner should first file an application before the leamed Arbitrator raising the challenge in terms of Section 13 (2) of the Act.

¶8In the present case, the Arbitrator nominated by Respondent No. 1, i.e., Respondent No. 2, entered upon reference and issued notices to the parties on 14th september 2010. The present petition was filed on 28th September 2010. While directing notice to issue in the petition on 1't October 2010, this Court stayed the arbitral proceedings initiated by Respondent No. l. Consequently, although the period of limitation under Section 13 (2) of the Act is 15 days, in view of the pendency of the present petition in this Court it o.M:P. 578/2010 & 19/201 r 1r is directed that if the Petitioner approaches the learned Arbitral Tribunal with an appropriate application within a period of t'wo weeks from today, the delay in the Petitioner filing such application before the Arbitrator shall stand condoned. In other words, if an application challenging the appointment of Arbitrator is filed within fwo weeks, the learned Arbitrator will dispose of such application in accordance with law on merits and will not reject it on the ground of the delay in making such application.

¶9With the above directions and observations, the interim order dated l't October 2010 is vacated and the petition and all applications are disposed of. o.M.P. 19/2011

¶10This is a petition under Section 9 of the Act. Considering the fact that the Arbitrator has already entered upon reference, it is open to the Petitioner to approach the learned Arbitrator for appropriate interim directions in accordance with law.

¶11O.M.P. No. 19 of 2011 is accordingly disposed of.

¶12The originals of any of the documents filed in these proceedings can be o.M.P. s78/2010 & r9/20r r w returned to counsel for the respective parties subject to their being replaced by copies certified to be true by the respective Advocates.

¶13A copy of this order be given dasti to learned counsel for the parties under signature of the Court Master. S. MURALIDHAR. J ocToBER 21, 20ll a{ y) o.hr.P. 578/2010 & 19/201r Poge 7 of 7

L .. t t f. i $- * #24 + IN THE HIGH COURT OF DELHI AT NEW DELHI O.M.P'. 57812010 & I.A. Nos. 1333 812010, 10196/2011, 11787 and 117871201t MOHD ASLAM ..... Petitioner Mr. S.K. Bhalla, Advocate. Through: VETSUS ABDUL SALAM @ BHAIYAN & ANR ..... Respondents Through: Mr. M.B. Singh, Advocate. ,/ M ABDUL SALAM @ BHAIYAN ..... Petitioner Through: Mr. M.B. Singh, Advocate. #29 + VETSUS SAEED AHMAD & ORS Through: ..... Respondents l4r. S.K. Bhalla, Advocate. CORAM: JUSTICE S. MURALIDHAR