# G K Traders Sole Proprietorship v. UPPCL Opp. Party

- **Citation:** (2014) 3 ILRA 1212
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2014-09-10
- **Case number:** Arbitration Application No. 34 of 2013
- **Bench:** B. Amit Sthalekar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/g-k-traders-sole-proprietorship-v-uppcl-opp-party-43100
- **Pages:** 6

## Headnote

Arbitration and Reconciliation Act-199611(6)-Application
for
appointment
of
arbitrator-on
ground
award
given
by
arbitrator-set-a-side by District Judge and
remanded for fresh consideration-argument
that
remand
without
appointment
of
arbitration-hence
present
application-in
absence
of
pleading
about
death
of
previous arbitrator-without opportunity of
contradiction-can
not
be
basis
for
appointment
of
new
arbitrator-heldapplication not maintainable.
Held: Para-17
In the entire body of the application
nowhere it has been stated that Shri R.D.
Maheshwari
has
expired
and
that
therefore it was necessary to appoint a
new
Arbitrator.
It
is
only
in
the
chronology list of dates and events that
it has been stated that Shri R.D.
Maheshwari
had
expired
in
the
meantime. However, since this fact has
not been categorically stated in the
application under Section 11(6) of the
Act, 1996 and does not appear to be
correct in view of the categorical denial
of his death in paragraph 3 of the
counter affidavit and undenied by the
applicant, I do not find any illegality or
infirmity
if
the
dispute
has
been
remanded to Shri R.D. Maheshwari to
consider afresh in the light of the
observations made by the District Judge.
Case Law discussed:
(2006) 6 SCC 204; (2006) 10 SCC 763; (2012)
7 SCC 71.

## Text

1212
 INDIAN LAW REPORTS ALLAHABAD SERIES
27.1.2014, so it will not be proper for
returning the same to the applicant for
filing it before Lucknow Bench. Under
these
circumstances,
this
transfer
application is transferred to the Lucknow
Bench with notice to both the learned
counsel. Record be sent to the Lucknow
Bench within two weeks and the same be
listed subject to permission of the court
concerned.
6. Registry is directed to take
necessary action for transferring this case
to Lucknow Bench.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 10.09.2014
BEFORE
THE HON'BLE B. AMIT STHALEKAR, J.
Arbitration Application No. 34 of 2013
G K Traders Sole Proprietorship
Applicant
Versus
UPPCL
...Opp. Party
Counsel for the Applicant:
Sri Jaspreet Singh
Counsel for the Opp. Party:
Sri M.P. Yadav
Arbitration and Reconciliation Act-199611(6)-Application
for
appointment
of
arbitrator-on
ground
award
given
by
arbitrator-set-a-side by District Judge and
remanded for fresh consideration-argument
that
remand
without
appointment
of
arbitration-hence
present
application-in
absence
of
pleading
about
death
of
previous arbitrator-without opportunity of
contradiction-can
not
be
basis
for
appointment
of
new
arbitrator-heldapplication not maintainable.
Held: Para-17
In the entire body of the application
nowhere it has been stated that Shri R.D.
Maheshwari
has
expired
and
that
therefore it was necessary to appoint a
new
Arbitrator.
It
is
only
in
the
chronology list of dates and events that
it has been stated that Shri R.D.
Maheshwari
had
expired
in
the
meantime. However, since this fact has
not been categorically stated in the
application under Section 11(6) of the
Act, 1996 and does not appear to be
correct in view of the categorical denial
of his death in paragraph 3 of the
counter affidavit and undenied by the
applicant, I do not find any illegality or
infirmity
if
the
dispute
has
been
remanded to Shri R.D. Maheshwari to
consider afresh in the light of the
observations made by the District Judge.
Case Law discussed:
(2006) 6 SCC 204; (2006) 10 SCC 763; (2012)
7 SCC 71.
(Delivered by Hon'ble B. Amit Sthalekar, J.)
1. This is an application filed under
section 11(6) of the Arbitration and
Conciliation Act, 1996 ( the Act, 1996)
praying for appointment of an Arbitrator
to resolve the dispute between the
applicant and the respondent.
2.
Briefly stated the facts of the case
are that tenders were invited for sale of 15.6
Megawatt Power House at Chandausi
District Moradabad. The said power plant
was to be sold on "as is where is" basis. The
applicant's bid was found to be the highest
bid at Rs.2,21,56,000/-. The agreement was
signed between the applicant and the
respondent on 18.5.1996 but thereafter some
dispute arose between the parties with regard
to implementation of the contract. The
applicant submitted an application before the
Chairman/Managing Director of the U.P.
Power Corporation Ltd. ( U.P. PCL) to
3 All]. G.K. Traders Sole Proprietorship Vs. UPPCL
1213
nominate
an
Arbitrator.
The
Chairman/Managing Director, U.P. PCL by
his letter dated 1.4.2002 appointed one Shri
R.D. Maheshwari as the sole Arbitrator. Shri
R.D. Maheshwari issued notices to the
parties on 29.7.2002 calling upon them to
appear before him on 16.8.2002. The
arbitration proceedings proceeded before
Shri R.D. Maheshwari and an award was
given on 27.5.2007 by which the claim of the
applicant as well as the counter claim of the
respondent was rejected. Aggrieved the
applicant filed an application before the
Court of District Judge, Lucknow under
section 34 of the Act, 1996 being R.S. No.
56 of 2007. The District Judge, Lucknow by
his judgment dated 20.4.2013 set aside the
award holding that the Arbitrator has ignored
voluminous records and documents as well
as oral evidence in the form of different
letters issued by the Chief Engineer and it
was held that it was also the obligation of the
Arbitrator to refer to each and every
substantive letter indicated by the parties in
support of their respective contentions. The
matter was referred to the Arbitrator with a
direction to hear the learned counsel for the
parties again and to pass award afresh by
disposing of issues and every issue supported
with reasons within a period of four months.
3. On receipt of the judgment of the
District Judge, Lucknow, the applicant is
stated
to
have
approached
the
Chairman/Managing Director, U.P. PCL
requesting him to appoint an Arbitrator to
hear and decide the dispute in the light of
the judgment passed by the District Judge,
Lucknow. However, when no Arbitrator
was appointed the applicant had no option
but to file the present application before
this Court under Section 11(6) of the Act,
1996.
4. I have heard Shri Jaspreet Singh,
learned counsel for the applicant and Shri
M.P. Yadav, learned counsel for the
respondent-U.P. PCL and perused the
documents on record.
5. The principal submission of the
learned counsel for the applicant is that
once the Arbitrator has given his award he
had become functus officio and therefore
on remand by the District Judge,
Lucknow, the matter could not have been
referred to or heard by the same
Arbitrator and it was obligatory on the
part of the respondent-Corporation to
appoint another Arbitrator who would
hear the matter afresh and it was only
when the Chairman/Managing Director,
U.P. PCL did not appoint an Arbitrator
that this application under Section 11(6)
of the Act, 1996 had to be filed for
intervention of the High Court in
appointing an Arbitrator. In support of his
submission, learned counsel for the
applicant has referred to the provisions of
Section 14 and 15 of the Act, 1996 and he
submitted that the mandate of an
Arbitrator shall terminate if:
(a) he becomes de jure or de facto
unable to perform his function or for other
reasons fails to act without undue delay;
and
(b) he withdraws from his office or
the parties agree to the termination of his
mandate or as provided under Section 15
of the Act the mandate of the Arbitrator
shall terminate.
6. Shri Jaspreet Singh, learned
counsel for the applicant further referred
to the provisions of Section 32 of the Act,
1996 and submitted that the arbitral
proceedings shall be terminated by the
final arbitral award or by order of the
Arbitral Tribunal under sub section (2)
and further submits that the Arbitral
1214
 INDIAN LAW REPORTS ALLAHABAD SERIES
Tribunal shall issue an order for the
termination of the arbitral proceedings for
the reasons mentioned in sub Section (2)
of Section 32 and in the sub Section (3) of
Section 32 the mandate of the Arbitral
Tribunal
shall
terminate
with
the
termination of the arbitral proceedings.
7.
Shri M.P. Yadav, learned counsel
for the respondent-U.P. PCL, on the other
hand, submitted that the provisions of
Sections 14 and 15 and 32 of the Act, 1996
would have no application to the facts of the
present case inasmuch as the Act, 1996 itself
came into force w.e.f. 22.8.1996 and since
the agreement itself was entered into
between the parties on 18.5.1996 therefore
the Act, 1996 would not apply and the
parties would be governed by the provisions
of the Arbitration Act, 1940. He further
submitted that on receipt of notice from the
applicant to appoint an Arbitrator the matter
was considered and it was decided that it was
not necessary to appoint an Arbitrator as the
District Judge, Lucknow had remanded the
matter to the Arbitrator after setting aside his
award and that Shri R.D. Maheshwari, the
then Arbitrator was still alive and had not
expired as wrongly stated in the application
and that Shri R.D. Maheshwari was fully
competent to hear the matter afresh.
8. In paragraph 3 of the counter
affidavit filed by the respondents it has
been stated that the Arbitrator had already
been appointed and the matter had been
remanded to him and therefore there was
no need of appointment of another
Arbitrator.
9. To be able to appreciate the
submissions made by the learned counsel
for the applicant it would be necessary to
reproduce here the provisions of Sections
14, 15 and 32 of the Act, 1996:
"14. Failure or impossibility to act. -
(1) The mandate of an arbitrator shall
terminate if -
(a) he becomes de jure or de facto
unable to perform his functions or for
other reasons fails to act without undue
delay; and
(b) he withdraws from his office or
the parties agree to the termination of his
mandate.
(2)If
a
controversy
remains
concerning any of the grounds referred to
in clause (a) of sub-section (1), a party
may, unless otherwise agreed by the
parties, apply to the Court to decide on
the termination of the mandate.
(3)If, under this section or subsection (3) of section 13, an arbitrator
withdraws from his office or a party
agrees to the termination of the mandate
of an arbitrator, it shall not imply
acceptance of the validity of any ground
referred to in this section or sub-section
(3) of section 12.
15. Termination of mandate and
substitution of arbitrator. - (1) In addition
to the circumstances referred to in section
13 or section 14, the mandate of an
arbitrator shal terminate-
(a) where he withdraws from office
for any reason; or
(b) by or pursuant to agreement of
the parties.
(2) Where the mandate of an
arbitrator
terminates,
a
substitute
arbitrator shall be appointed according to
the rules that were applicable to the
3 All]. G.K. Traders Sole Proprietorship Vs. UPPCL
1215
appointment of the arbitrator being
replaced.
(3) Unless otherwise agreed by the
parties, where an arbitrator is replaced
under sub-section (2), any hearings
previously held may be repeated at the
discretion of the arbitral tribunal.
(4) Unless otherwise agreed by the
parties, an order or ruling of the arbitral
tribunal made prior to the replacement of
an arbitrator under this section shall not
be invalid solely because there has been a
change in the composition of the arbitral
tribunal.
32. Termination of proceedings.- (1)
The
arbitral
proceedings
shall
be
terminated by the final arbitral award or
by an order of the arbitral tribunal under
sub-section (2).
(2) The arbitral tribunal shall issue an
order for the termination of the arbitral
proceedings where-
(a) the claimant withdraws his claim,
unless the respondent objects to the order
and the arbitral tribunal recognises a
legitimate interest on his part in obtaining
a final settlement of the dispute,
(b)
the
parties
agree
on
the
termination of the proceedings, or
(c) the arbitral tribunal finds that the
continuation of the proceedings has for
any other reason become unnecessary or
impossible.
(3) Subject to section 33 sub-section
(4) of section 34, the mandate of the
arbitral tribunal shall terminate with the
terminaton of the arbitral proceedings."
10. Learned counsel for the
applicant
submitted
that
since
the
Arbitrator has already given his award
therefore he became de jure unable to
perform his function. He further referred
to the provisions of Section 15 of the Act
to submit that the mandate of the
Arbitrator had come to an end and
therefore on remand the dispute could not
have been referred to the same Arbitrator.
He further referred to the provisions of
Section 32 of the Act to submit that the
mandate of the Arbitral Tribunal stood
terminated with the termination of the
arbitral proceedings and therefore the
Arbitrator became functus officio and
therefore incompetent to hear the dispute
afresh. Reliance has been placed on the
following judgments of the Supreme
Court:
1.(2006) 6 SCC 204 (Yashwith
Constructions (P) Ltd. Vs. Simplex
Concrete Piles India Ltd. and another)
2.(2006) 10 SCC 763 (National
Highways Authority of India and another
Vs. Bumihiway DDB Ltd. (JV) and
others;
3.(2012) 7 SCC 71 (ACC Limited
Vs. Global Cements Limited)
11. In paragraph 4 of the judgment
in the case of Yashwith Construction
(supra) the Supreme Court specifically
referred to the provisions of Section 15 of
the Act, 1996 and has observed that when
the Arbitrator originally appointed in
terms
of
the
arbitration
agreement
withdrew
for
health
reasons,
the
Managing
Director,
as
authorized
originally by the arbitration agreement,
promptly appointed a substitute arbitrator.
The question therefore was whether in the
absence of power vested upon the
Managing Director could the substitute
Arbitrator have been appointed. The
Supreme Court held that what Section
1216
 INDIAN LAW REPORTS ALLAHABAD SERIES
15(2) contemplates is the appointment of
a substitute Arbitrator or replacing of the
Arbitrator by another according to Rules
that were applicable to the appointment of
the original Arbitrator who was being
replaced and held that there was no failure
on the part of the party concerned as per
the arbitration agreement to fulfill his
obligation in terms of the Section 11 of
the Act so as to attract the jurisdiction of
the Chief Justice under Section 11(6) of
the Act for appointing a substitute
Arbitrator. Section 11(6) of the Act has
application only when a party or the
person concerned had failed to act in
terms of the arbitration agreement.
12. In this case the Chief Justice of the
High Court had declined to exercise his
power under section 11(5) read with Section
15(2) of the Act, 1996 to appoint a substitute
Arbitrator and the appointment of the
substitute Arbitrator by the Managing
Director after the resignation of the first
Arbitrator was found to be valid. In my
opinion the said judgment has no application
to the facts of the present case.
13. In National Highways (supra)
the Supreme Court was again considering
the provisions of Section 15(2) of the Act
and on the facts of that case held that the
High Court had failed to appreciate that in
accordance with Section 15(2) of the Act
on termination of the mandate of the
Presiding Arbitrator the two nominated
Arbitrators were first required to arrive at
a consensus and on their failure to arrive
at a consensus only was the respondent
no. 2 authorized to make the appointment.
Unless respondent no. 2 failed to exercise
its jurisdiction, the High Court could not
assume jurisdiction under section 11(6) of
the Act. This judgment also does not help
to advance the submission of the learned
counsel for the applicant.
14. In ACC Ltd. (supra) also the
Court was considering the provisions of
Sections 14 and 15 of the Act, 1996
particularly
with
regard
to
the
appointment of a substitute Arbitrator and
Supreme
Court
held
that
on
the
appointment of a substitute Arbitrator no
application
for
appointment
of
independent Arbitrator under Section 11
of the Act, 1996 could be filed. This case
also does not help the applicant.
15. The provisions of Sections 14,
15 and 32 of the Act, 1996 speak of
termination of the mandate of the
Arbitrator where he becomes de jure or de
facto unable to perform his function or for
other reasons fails to act without undue
delay or withdraws from his office or the
parties agree to termination of his
mandate.
In
the
present
case
the
Arbitrator has neither withdrawn from his
office nor has he avoided performance of
his function de jure or de facto. All that
has happened is that he gave an award
which was set aside by the District Judge
and the matter was remanded to the
Arbitrator to consider the dispute afresh in
the light of the observations made by the
District Judge in his judgment. It is the
clear
stand
of
the
respondents
in
paragraph 7 of their counter affidavit and
not denied by the applicant that the
dispute has been referred to the Arbitrator
for decision on the points referred by the
District Judge and therefore there was no
need of appointment of an Arbitrator.
16. In paragraph 3 of the counter
affidavit it has also been stated that the
earlier Arbitrator Shri R.D. Maheshwari is
3 All]. Rakesh Srivastava "Nyayik" Vs. State of U.P. & Anr.
1217
still alive and it has wrongly been
mentioned that he has expired.
17. In the entire body of the
application nowhere it has been stated that
Shri R.D. Maheshwari has expired and
that therefore it was necessary to appoint
a new Arbitrator. It is only in the
chronology list of dates and events that it
has
been
stated
that
Shri
R.D.
Maheshwari had expired in the meantime.
However, since this fact has not been
categorically stated in the application
under Section 11(6) of the Act, 1996 and
does not appear to be correct in view of
the categorical denial of his death in
paragraph 3 of the counter affidavit and
undenied by the applicant, I do not find
any illegality or infirmity if the dispute
has
been
remanded
to
Shri
R.D.
Maheshwari to consider afresh in the light
of the observations made by the District
Judge.
18. In this view of the matter, the
application under section 11(6) of the Act,
1996 is absolutely misconceived in law,
devoid of merit and not maintainable and
is accordingly rejected.
--------
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 15.10.2014
BEFORE
THE HON'BLE SUDHIR AGARWAL, J.
Criminal Misc. Transfer Application No. 64
of 2008
Rakesh Srivastava "Nyayik"
...Applicant
Versus
State of U.P. & Anr.
...Respondents
Counsel for the Petitioner:
Sri Sanjay Srivastava, Sri S.I. Siddiqui,
S.M.A Kazmi
Sri Saiful Islam Siddiqui, Tahira Kazmi, Sri
Syed Safdar Ali Kazmi
Counsel for the Respondents:
A.G.A., Sri Manish Tewari, Sri Ankur
Tandon, Sri Ashwani Kumar Awasthi
Cr.P.C. Section 407- Transfer of Session
Trail
Case
from
Varanasi
to
another
adjoining district-on ground the applicant
being social worker and author of book
subject to life of prisoners- explosure of
mafia, bureaucrats and politicians-safety of
applicant in danger as per report confirmed
by
SSP-held-mere
apprehension
not
enough-unless
supported
by
same
material-can not be grated on a fancied
notion of litigant-transfer not be allowedbut considering entire fact and with consent
of both parties counsel-application allowed
with observation of expedition conclusion
of Tail within 6 month-necessary followup
directions to jailor, SSP given.
Held: Para-15 & 17
15. Mere allegations like substantial
prejudice, non-availability of congenial
atmosphere for a free trial cannot be
held the sole ground of transfer. Mere
apprehension is not enough unless it is
supported with some material. A party,
either complainant or the accused should
not ordinarily be allowed to have the
Forum of his/her own choice. A transfer
applicant cannot be allowed to make
unfounded charges. A transfer should
not be granted on a fancied notion of a
litigant. Where the ground for transfer is
not substantiated and as such does not
exist, the application for transfer should
not be allowed. It should not be allowed
to help a litigant to choose a Bench of his
own choice.
17. Looking to the entire facts of the
case and also with consent of learned
counsel
appearing
for
parties,
for
transfer of trial at Allahabad, in my view,
it would be appropriate if the aforesaid
Sessions Trial is transferred to Allahabad
with
appropriate
direction
for
its
expeditious adjudication and conclusion.