# M/S Akash Engineers & Builders v. U.P. Awas/Vikas Parishad & Ors

- **Citation:** (2021) 11 ILRA 5
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-11-10
- **Case number:** ARBITRATION APPLICATION No. 38 of 2021
- **Bench:** Rajan Roy
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-akash-engineers-builders-v-u-p-awas-vikas-parishad-ors-46588
- **Pages:** 8

## Headnote

A. Arbitration and Conciliation Act, 1996 -
Section 11 - challenge to-appointment of
arbitrator-the Housing Commissioner being
ineligible to himself act as Arbitrator in the
matter is also ineligible to appoint any
Arbitrator to resolve the dispute-agreement
relating to appointment of Arbitrator becomes
void
in
view
of
section
12(5)
of
the
Amendment Act-by virtue of section 12(5), if
any person who falls under any of the
categories specified in the Seventh Schedule
shall be ineligible to be appointed as the
arbitrator-the managing director becomes
ineligible by operation of law and also
becomes ineligible to nominate-the principle
here applies "Qui facit per alium facit per se"-
that which cannot be done directly may not be
done indirectly by engaging another outside
the prohibited area.(Para 1 to 22) (E-6)

List of Cases cited:

## Text

11 All. M/S Akash Engineers & Builders Vs. U.P. Awas/Vikas Parishad & Ors.
5
to arbitration. The Arbitration Act facilitates
settlement of dispute through arbitration with
minimal interference of the court, provided there
is a dispute. It is not the case of the appellant
that the Settlement Agreement was obtained by
fraud, misrepresentation or coercion.

14. Learned counsel for the appellant failed
to point out any illegality, infirmity or
jurisdictional error in the impugned order.

15. It is clarified that no other ground was
pressed.

16. The appeal is, accordingly, dismissed
at the admission stage.

17. No Cost.
----------
(2021)11ILR A5
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 10.11.2021

BEFORE

THE HON'BLE RAJAN ROY, J.

ARBITRATION APPLICATION No. 38 of 2021

M/S Akash Engineers & Builders
 ...Applicants
Versus
U.P. Awas/Vikas Parishad & Ors.
 ...Opposite Parties

Counsel for the Applicants:
Pritish Kumar, Shantanu Gupta

Counsel for the Opposite Parties:
Ratnesh Chandra

A. Arbitration and Conciliation Act, 1996 -
Section 11 - challenge to-appointment of
arbitrator-the Housing Commissioner being
ineligible to himself act as Arbitrator in the
matter is also ineligible to appoint any
Arbitrator to resolve the dispute-agreement
relating to appointment of Arbitrator becomes
void
in
view
of
section
12(5)
of
the
Amendment Act-by virtue of section 12(5), if
any person who falls under any of the
categories specified in the Seventh Schedule
shall be ineligible to be appointed as the
arbitrator-the managing director becomes
ineligible by operation of law and also
becomes ineligible to nominate-the principle
here applies "Qui facit per alium facit per se"-
that which cannot be done directly may not be
done indirectly by engaging another outside
the prohibited area.(Para 1 to 22) (E-6)

List of Cases cited:

1. Perkins Eastman Architects DPC Vs. HSCC (India)
Ltd.(2020) AIR SC 59.

2. TRF Ltd. Vs Energo Engineering Projects Ltd.(2017)
AIR SC 3889

3. Roop Chand Vs. St. of Punj. (1963) AIR SC 1503

4. State Bank of India & anr. Vs. S.B.I. Employees
(1987) 4 SCC 370

5. Agnigundata Venikata Ranga Rao Vs. Indukuru
Ramachandra Reddy & ors. (2017) 7 SCC 694

(Delivered by Hon'ble Rajan Roy, J.)

1. Heard.

2. This is an application under section 11
of the Arbitration and Conciliation Act 1996
(hereinafter
referred
as
'Act
1996')
for
appointment of an Arbitrator.

3. Learned counsel for the applicant has
invited attention of the court to the Arbitration
Clause contained in Clause 32-C of the
Agreement, a copy of which is annexed as
Annexure-2 to the application.

4. The fact of the matter is that prior to
filing
of
this
application
the
Housing
Commissioner has appointed a retired District
Judge as Arbitrator to resolve the dispute.
6 INDIAN LAW REPORTS ALLAHABAD SERIES

5. Contention of the applicant's counsel in
this regard is that the Housing Commissioner
being ineligible to himself act as Arbitrator in
the matter is also ineligible to appoint any
Arbitrator in view of the law laid down by
Hon'ble the Supreme Court in the case of
Perkins Eastman Architects DPC v. HSCC
(India) Ltd., AIR 2020 SC 59. In this regard he
contends that the arbitration clause in this case is
similar to the arbitration clause in the said case
and based on this he relies upon paras 15 and 16
of the said judgment. He also relies upon a
Three Judge Bench decision of the Supreme
Court in case of TRF Ltd. V. Energo
Engineering Projects Ltd., AIR 2017 SC 3889,
which has also been considered in case of
Perkins Eastman Architects DPC (supra). He
also relies on paras 1, 53, 56 and 57 of the said
report in support of his contention.

6. On the other hand, Sri Ratnesh Chandra,
learned counsel for the opposite party says that
the provisions contained in section 11(2), 11(6),
12, 13 and 14 of the Act 1996 have not been
taken into consideration by Hon'ble the Supreme
Court in the said decisions, therefore, in his
opinion, as per the Arbitration Clause, the
Housing Commissioner was well within his
jurisdiction
to
appoint
an
impartial
Administrator in the form of a retired District
Judge and the same cannot be faulted. He in this
regard refers to paras 17, 18 and 19 of his
objections.

7. This court has perused the paragraphs 17
to 19 of the objections filed by the opposite
party as also the decisions relied upon by the
petitioner's counsel. Arbitration clause [Clause
32(c)] in the case at hand reads as under:

"Except where otherwise provided in
the contract every dispute, difference or question
which may at any time arise between the parties
hereto or any Person claiming under them,
touching or arising out or in respect of this deed
or the subject matter thereof shall be referred to
the sold arbitration of the person appointed by
the Housing Commissioner of the Parishad. It
will be no objection to any such appointment
that the arbitrator so appointed is a servent of
the parishad, that he had to deal with the
matters to which the contract relates and that in
the course of his duties as a servent of the
parishad he had expressed views on all or any of
the matters in dispute or difference in the event
of the arbitrator to whom the matter is originally
referred being transferred or vacting his officer
or being unable to act for any reason he said
Housing Commissioner shall appoint another
person to act as arbitrator. Such person shall be
entitled to proceed with the reference for the
stage it was lefe be his predecessor. It is also a
term of this contract that no person other than a
person appointed as aforesaid should act as
arbitrator and if for any reason that is not
possible the matter is not to be referred to the
arbitration at all. In all cases where the amount
of the claim in dispute is Rs. 50,000/- (Rupees
fifty thousand) and above the arbitrator shall
give reasons for the award.

It is a term of the contract that the
parties invoking the arbitration shall specify the
dispute or disputes to be referred to arbitration
together with the amount or amounts claimed in
respect of each such dispute.

Subject as aforesaid, the provisions of
the Arbitration Act 1940, or any statutory
modification or re-enactment thereof and the
rules made thereunder and for the time. being
inforce
shall
apply
to
the
arbitration
proceedings.

The arbitrator may from time to time
with the consent of the parties enlarge the time
for making and publishing the award."

8. The above quoted clause contains an
Arbitration Clause. As per the said clause, the
Housing Commissioner of the U.P. Awas Evam
Vikas Parishad is to appoint the sole Arbitrator
for resolving the disputes mentioned therein.
11 All. M/S Akash Engineers & Builders Vs. U.P. Awas/Vikas Parishad & Ors.
7

9. The Arbitration Clause which was the
subject matter of consideration by Hon'ble the
Supreme Court in the case of Perkins Eastman
Architects DPC (supra) reads as under :

" 24. DISPUTE RESOLUTION

24.1 Except as otherwise provided in
the contract all questions and disputes relating
to the meaning of the specifications, design,
drawings
and
instructions
herein
before
mentioned and as to the quality of services
rendered for the works or as to any other
question,
claim,
night,
matter
or
thing
whatsoever in any way arsing out of or relating
to the contract, design, drawings, specifications
estimates
instructions,
orders
or
these
conditions or otherwise concerning the works or
the execution or failure to execute the same
whether arising during the progress of the work
or
after
the
cancellation,
termination,
completion or abandonment thereof thereof shat
be dealt with as mentioned hereinafter:

(i) If the Design Consultant considers
any work demanded of him to be outside the
requirements of the contract or disputes on any
drawings, record or decision given in writing by
HSCC on any matter in connection with arsing
out of the contract or carrying out of the work,
to be unacceptable, he shal promptly within 15
days request CGM, HSCC in writing for written
instruction or decision. There upon, the CGM,
HSCC shall give his written instructions or
decision within a period of one month from the
receipt of the Design Consultant's letter. If the
CGM HSCC fails to give his instructions or
decision in writing within the aforesaid period
or if the Design Consultant(s) is dissatisfied with
the instructions or decision of the CGM HSCC,
the Design Consultants) may, within 15 days of
the receipt of decision, appeal to the Director
(Engg.) HSCC who shall offer an opportunity to
the Design Consultant to be heard, if the latter
so desires, and to offer evidence in support of
his appeal The Director (Engg.1. HSCC shat
give his decision within 30 days receipt of
Design
Consultant's
appeal
the
Design
Consultant is dissatisfied with the decision, the
Design Consultant shall within a period of 30
days from receipt of this decision, give notice to
the CMD, HSCC for appointment of arbitrator
failing which the said decision shall be final
binding and conclusive and not referable to
adjudication by the arbitrator.

(ii) Except where the decision has
become final, binding and conclusive in terms of
sub-Para (i) above disputes or difference shall
be referred for adjudication through arbitration
by a sole arbitrator appointed by the CMD
HSCC within 30 days form the receipt of request
from the Design Consultant. If the arbitrator so
appointed is unable or unwilling to act or
resigns his appointment or vacates

his
office
due
to
any
reason,
whatsoever another sole arbitrator shall be
appointed in the manner aforesaid. Such person
shall be entitled to proceed with the reference
from the reference from the stage at which it was
left by his predecessor. R is a term of this
contract that the party invoking arbitration shal
give a list of disputes with amounts claimed in
respect of each such dispute along with the
notice for appointment of arbitrator and giving
reference to the rejection by the CMD, HSCC of
the appeal it is also a term of this contract that
no person other than a person appointed by such
CMD, HSCC as aforesaid should act as
arbitrator. It is also a term of the contract that if
the Design Consultant does not make any
demand for appointment of arbitrator in respect
of any claims in writing as aforesaid within 120
days of receiving the intimation from HSCC that
the final bill is ready for payment, the claim of
the Design Consultant shall be deemed to have
been waived and absolutely barred and HSCC
shall be discharged and released of all liabilities
under the contract and in respect of these
claims. The arbitration shall be conducted in
accordance
with
the
provisions
of
the
Arbitration and Conciliation Act, 1996 (26 of
1996) or any statutory modifications or re-
8 INDIAN LAW REPORTS ALLAHABAD SERIES
enactment
thereof
and
the
rules
made
thereunder and for the time being in force shall
apply to the arbitration proceeding under this
clause."

10.

In
the
said
clause
also
the
C.M.D.H.S.C.C. was required to appoint a sole
Arbitrator.

11. Based on a consideration of the said
clause the Supreme Court opined as under :

"It was thus held that as the Managing
Director became ineligible by operation of law
to act as an arbitrator and that once the identity
of the Managing Director as the sole arbitrator
was lost, the power to nominate someone else as
an arbitrator was also obliterated. The relevant
Clause in sat case had nominated the Managing
Director himself to be the sole arbitrator and
also empowered said Managing Director to
nominate another person to act as an arbitrator.
The Managing Director thus had two capacities
under said Clause, the first as an arbitrator and
the second as an appointing authority. In the
present case we are concerned with only one
capacity of the Chairman and Managing
Director and that is as an appointing authority.

We thus have two categories of cases.
The first, similar to the one dealt with in RTF
Limited4 (AIR 2017 SC 3889) where the
Managing Director himself is named as an
arbitrator with an additional power to appoint
any other person as an arbitrator. In the second
category, the Managing Director is not to act as
an arbitrator himself but as empowered or
authorized to appoint any other person of his
choice or discretion as an arbitrator If, in the
first category of cases, the Managing Director
was found incompetent, it was because of the
interest that he would be said to be having in the
outcome or result of the dispute. The element of
invalidity would thus be directly relatable to and
arise from the interest that he would be having
in such outcome or decision. If that be the test,
similar invalidity would always arise and spring
even in the second category of cases. If the
interest that he has in the outcome of the
dispute, is taken to be the basis for the
possibility of bias, it will always be present
irrespective of whether the matter stands under
the first or second category of cases. We are
conscious that if such deduction is drawn from
the decision of this Court in TRF Limited, all
cases having clauses similar to that with which
we are presently concerned, a party to the
agreement would be disentitled to make any
appointment of an Arbitrator on its own and it
would always be available to argue that a party
or an official or an authority having interest in
the dispute would be disentitled to make
appointment of an Arbitrator.

16. But, in our view that has to be the
logical deduction from TRF Limited. Paragraph
50 of the decision shows that this Court was
concerned
with
the
issue,
"whether
the
Managing Director, after becoming ineligible by
operation of law, is he still eligible to nominate
an Arbitrator" The ineligibility referred to
therein, was as a result of operation of law, in
that a person having an interest in the dispute or
in the outcome or decision thereof, must not only
be ineligible to act as an arbitrator but must
also not be eligible to appoint anyone else as an
arbitrator and that such person cannot and
should not have any role in charting out any
course to the dispute resolution

by having the power to appoint an
arbitrator. The next sentences in the paragraph,
further show that cases where both the parties
could nominate respective arbitrators of their
choice were found to be completely a different
situation. The reason is clear that whatever
advantage a party may derive by nominating an
arbitrator of its choice would get counter
balanced by equal power with the other party.
But, in a case where only one party has a right
to appoint a sole arbitrator, its choice will
always have an element of exclusivity in
determining or charting the course for dispute
11 All. M/S Akash Engineers & Builders Vs. U.P. Awas/Vikas Parishad & Ors.
9
resolution. Naturally, the person who has an
interest in the outcome or decision of the dispute
must not have the power to appoint a sole
arbitrator. That has to be taken as the essence of
the amendments brought in by the Arbitration
and Conciliation (Amendment) Act, 2015 (Act 3
of 2016) and recognised by the decision of this
Court in TRF Ltd."

12. From a reading of the said judgment it
is evident that various earlier decisions as also
the provisions of the Act 1996 have been
considered.

13. In the aforesaid decision Supreme
Court has also considered the earlier decision in
TRF Ltd. (supra). In para-1 of the T.R.F. Ltd.
(supra) the Supreme Court has spelt out the
question which fell for its consideration. It reads
as under:

"In this batch of appeals, by special
leave, the seminal issues that emanate for
consideration are; whether the High Court,
while dealing with the applications under
Section 11(6) of the Arbitration and Conciliation
Act, 1996 (for brevity, the Act"), is justified to
repel the submissions of the appellants that once
the person who was required to arbitrate upon
the disputes arisen under the terms and
conditions of the contract becomes ineligible by
operation of law, he would not be eligible to
nominate a person as an arbitrator, and second,
a plea that pertains to statutory disqualification
of the nominated arbitrator can be raised before
the court in application preferred under Section
11(6) of the Act, for such an application is not
incompetent.
For
the
sake
of
clarity,
convenience and apposite appreciation, we shall
state the facts from Civil Appeal No. 5306 of
2017."

14. In para 6 the submissions have been
noticed one of which was that the relevant
clause in the Agreement relating to appointment
of Arbitrator has become void in view of section
12(5) of the Amendment Act, for the Managing
Director having statutorily become ineligible,
cannot act as an Arbitrator and that acts as a
disqualification and in such a situation to sustain
the stand, that is, the nominees have been
validely appointed as Arbitrators would bring in
an
anomalous
situation
which
is
not
countenanced in law. Once the owner/employer
has been declared disqualified in law, a nominee
by the owner to Arbitrate upon is legally
unacceptable.

15. As the Arbitration Clause which was
the subject matter of the said proceedings before
the supreme court provided for the Managing
Director or his nominee to be the sole Arbitrator
in the event of a dispute, the Supreme Court of
India held in paras 53, 54, 55, 56 and 57 as
under:

"53. First, we shall deal with Clause
(d). There is no quarrel that by virtue of Section
12(5) of the Act, if any person who falls under
any of the categories specified in the Seventh
Schedule shall be ineligible to be appointed as
the arbitrator. There is no doubt and cannot be,
for the language employed in the Seventh
Schedule, the Managing Director of the
Corporation has become ineligible by operation
of law. It is the stand of the learned senior
counsel for the appellant that once the
Managing Director becomes ineligible he also
becomes ineligible to nominate. Refuting the
said stand, it is canvassed by the learned senior
counsel for the respondent that the ineligibility
cannot extend to a nominee if he is not from the
Corporation and more so when there is apposite
and requisite disclosure. We think it appropriate
to make it clear that in the case at hand we are
neither concerned with the disclosure nor
objectivity nor impartiality nor any such other
circumstance. We are singularly concerned with
the issue, whether the Managing Director, after
becoming ineligible by operation of law, is he
10 INDIAN LAW REPORTS ALLAHABAD SERIES
still eligible to nominate an arbitrator. At the
cost of repetition, we may state that when there
are two parties, one may nominate an arbitrator
and the other may appoint another. That is
altogether a different situation. If there is a
clause requiring the parties to nominate their
respective arbitrator, their authority to nominate
cannot be questioned. What really in that
circumstance can be called in question is the
procedural compliance and the eligibility of
their arbitrator depending upon the norms
provided under the Act and the Schedules
appended thereto. But, here is a case where the
Managing
Director
is
the
"named
sole
arbitrator" and he has also been conferred with
the power to nominate one who can be the
arbitrator in his place. Thus, there is subtle
distinction. In this regard, our attention has
been drawn to a two-judge Bench decision in
State of Orissa and others v. Commissioner of
Land Records and Settlement, Cuttack and
others. In the said case, the question arose can
the Board of Revenue revise the order passed by
its delegate. Dwelling upon the said proposition,
the Court held:

"25. We have to note that the
Commissioner when he exercises power of the
Board delegated to him under Section 33 of the
Settlement Act, 1958, the order passed by him is
to be treated as an order of the Board of
Revenue and not as that of the Commissioner in
his capacity as Commissioner. This position is
clear from two rulings of this Court to which we
shall presently refer. The first of the said rulings
is the one decided by the Constitution Bench of
this Court in Roop Chand v. State of Punjab (AR
1963 SC 1503), In that case, it was held by the
majority that where the State Government had,
under Section 41(1) of the East Punjab Holdings
(Consolidation
and
Prevention
of
Fragmentation)
Act,
1948,
delegated
its
appellate powers vested in it under Section 21(4)
to an officer, an order passed by such an officer
was an order passed by the State Government
itself and not an order passed by any officer
under this Act" within Section 42 and was not
revisable by the State Government. It was
pointed out that for the purpose of exercise of
powers of revision by the State under Section 42
of that Act, the order sought to be revised must
be an order passed by an officer in his own right
and not as a delegate of the State. The State
Government was, therefore, not entitled under
Section 42 to call for the records of the case
which was disposed of by an officer acting as its
delegate."

54. Be it noted in the said case,
reference was made to Behan Kunj Sahkan Awas
Samiti v. State of U.P. , which followed the
decision in Roop Chand v. State of Punjab , is
seemly to note here that said principle has been
followed
in
Chairman,
Indore
Vikas
Pradhikaran (AIR 2007 SC 2458) (supra).

55. Mr. Sundaram, has strongly relied
on Firm of Pratapchand Nopaji (AIR 1975 SC
1223, Para 8(supra). In the said case, the threejudge Bench appled the maxim "Qui facit per
alium facit per se". We may profitably
reproduce the passage:

"9. ... The principle which would
apply, if the objects are struck by Section 23 of
the Contract Act, is embodied in the maxim "Qui
facit per alium facit per se" (What one does
through another is done by oneself). To put & in
another form that which cannot be done directly
may not be done indirectly by engaging another
outside the prohibited area to do the legal act
within the prohibited area. It is immaterial
whether, for the doing of such an illegal act, the
agent employed is given the wider powers or
authority of the "pucca adatia", or, as the High
Court had held, he is clothed with the powers of
an ordinary commission agent only."

56. The aforesaid authorities have
been commended to us to establish the
proposition that if the nomination of an
arbitrator by an ineligible arbitrator is allowed,
it would tantamount to carrying on the
proceeding of arbitration by himself. According
to learned counsel for the appellant, ineligibility
11 All. M/S Akash Engineers & Builders Vs. U.P. Awas/Vikas Parishad & Ors.
11
strikes at the root of his power to arbitrate or
get it arbitrated upon by a nominee.

57. In such a context, the fulcrum of
the controversy would be, can an ineligible
arbitrator,
like
the
Managing
Director,
nominate an arbitrator, who may be otherwise
eligible and a respectable person. As stated
earlier, we are neither concerned with the
objectivity nor the individual respectability. We
are only concerned with the authority or the
power of the Managing Director. By our

analysis, we are obligated to arrive at
the conclusion that once the arbitrator has
become ineligible by operation of law, he cannot
nominate another as an arbitrator. The
arbitrator becomes ineligible as per prescription
contained in Section 12(5) of the Act. It is
inconceivable in law that person who is
statutorily ineligible can nominate a person.
Needless to say, once the infrastructure
collapses, the superstructure is bound to
collapse. One cannot have a building without
the plinth. Or to put it differently, once the
identity of the Managing Director as the sole
arbitrator is lost, the power to nominate
someone else as an arbitrator is obliterated.
Therefore, the view expressed by the High Court
is not sustainable and we say so."

16. In view of the above decisions it is
evident that even as per the arbitration clause
which is involved in this case, although the
Housing Commissioner was required to
appoint the sole Arbitrator, but in view of the
law discussed hereinabove and the provisions
of the Act 1996 he himself being ineligible to
arbitrate in a matter he ipso facto becomes
ineligible for appointing an Arbitrator to
resolve the dispute for the reasons already
detailed in the above mentioned decisions.

17. Although after the amendment of
2015 in the Act 1996 this Court is only
required to see the Arbitration Clause, but
considering the contentions raised it was
necessary to deal with the same as has been
done hereinabove.

18. At this stage Sri Ratnesh Chandra
submitted that he may be granted a certificate
under Article 134A read with Article 133 of
the Constitution of India. Contention of Sri
Chandra is that the bar contained in Clause 3
of Article 133 is not attracted in this case in
view of the subsequent insertion of Article
134A. He also submits that the judgment in
T.R.F.'s case is not applicable as in the said
case the Managing Director was himself
empowered to act as sole Arbitrator or to
appoint a nominee, whereas it is not so in this
case. Sri Pritish Kumar, learned counsel for
the applicant disagrees with this proposition
and says that in view of Clause 3 of Article
133 of the Constitution of India State Appeal
will not lie and the request of the learned
counsel
for
the
opposite
party
is
misconceived.

19. In view of decision of the Supreme
Court reported in (1987) 4 SCC 370, State Bank
of India & anr. v. S.B.I. Employees' Union &
anr., and the decision reported in (2017) 7 SCC
694, Agnigundala Venkata Ranga Rao v.
Indukuru Ramachandra Reddy & ors., as this
matter is being considered by a Single Judge
Bench, therefore, in view of the Article 133(3)
of the Constitution, Article 134A is not attracted.

20. Now in view of the aforesaid the name
of Hon'ble Mr. Justice Pankaj Naqvi (Retd.) R/o
Bungalow No. 24, Behind Sai Mandir, Drumund
Road, Allahabad, is proposed for appointment as
Arbitrator.

21. Parties have agreed for arbitral
proceedings for taking place at Lucknow.

22. Let a copy of the pleadings on record
be sent to Hon'ble Mr. Justice Pankaj Naqvi
(Retd.) for eliciting his disclosure in terms of
12 INDIAN LAW REPORTS ALLAHABAD SERIES
Section 11(8) read with Section 12(1) of the Act,
1996 and Schedule VI and VII as amended by
Act 2015, appended thereto, as also his consent
for appointment as an arbitrator for resolving the
dispute.

23. Needless to say that fees shall be
payable to the Arbitrator as per the Fourth
Schedule, read with the proviso to section
11(3)(A) of the Act 1996.

24. Steps to be taken by the applicant to
facilitate the aforesaid.

25. List this case on 06.12.2021 for further
proceedings.
----------
(2021)11ILR A12
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 06.12.2021

BEFORE

THE HON'BLE RAJAN ROY, J.

ARBITRATION APPLICATION No. 39 of 2021

M/S Akash Engineers & Builders
 ...Applicants
Versus
U.P. Awas/Vikas Parishad & Ors.
 ...Opposite Parties

Counsel for the Applicants:
Pritish Kumar, Shantanu Gupta

Counsel for the Opposite Parties:
Ratnesh Chandra

A. Arbitration and Conciliation Act, 1996Section
11-challenge
to-appointment
of
arbitrator-the Housing Commissioner being
ineligible to himself act as Arbitrator in the
matter is also ineligible to appoint any
Arbitrator to resolve the dispute-agreement
relating to appointment of Arbitrator becomes
void in view of section 12(5) of the Amendment
Act-by virtue of section 12(5), if any person
who falls under any of the categories specified
in the Seventh Schedule shall be ineligible to
be appointed as the arbitrator-the managing
director becomes ineligible by operation of law
and also becomes ineligible to nominate-the
principle here applies "Qui facit per alium facit
per se"-that which cannot be done directly may
not be done indirectly by engaging another
outside the prohibited area.(Para 1 to 22) (E-6)

List of Cases cited:

1. Perkins Eastman Architects DPC Vs. HSCC (India)
Ltd.(2020) AIR SC 59.

2. TRF Ltd. Vs Energo Engineering Projects Ltd.(2017)
AIR SC 3889

3. Roop Chand Vs. St. of Punj. (1963) AIR SC 1503

4. S.B.I. & anr. Vs. S.B.I. Employees (1987) 4 SCC
370
5. Agnigundata Venikata Ranga Rao Vs. Indukuru
Ramachandra Reddy & ors. (2017) 7 SCC 694

(Delivered by Hon'ble Rajan Roy, J.)

1. Heard.

2. This is an application under section 11
of the Arbitration and Conciliation Act 1996
(hereinafter
referred
as
'Act
1996')
for
appointment of an Arbitrator.

3. Learned counsel for the applicant has
invited attention of the court to the Arbitration
Clause contained in Clause 32-C of the
Agreement, a copy of which is annexed as
Annexure-2 to the application.

4. The fact of the matter is that prior to
filing
of
this
application
the
Housing
Commissioner has appointed a retired District
Judge as Arbitrator to resolve the dispute.

5. Contention of the applicant's counsel in
this regard is that the Housing Commissioner
being ineligible to himself act as Arbitrator in