# M/s Vidyawati Construction Co v. Allahabad Dev. Auth

- **Citation:** (2020) 12 ILRA 502
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-11-04
- **Case number:** Arbitration and Conciliation Application No. 100 of 2019
- **Bench:** Rohit Ranjan Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-vidyawati-construction-co-v-allahabad-dev-auth-45627
- **Pages:** 15

## Headnote

A. Civil Law -Arbitration and Conciliation Act
(26 of 1996)- Section 2(1)(e),11(4), 11(6) -
Appointment of substitute/new Arbitrator -
Conjoint application U/ss 11(4) & 11(6) for
appointment of substitute/new Arbitrator,
when earlier Arbitrator refused to act or
abandoned the arbitration proceedings -
Section. 14, Failure to act - S. 14 (2)
provides, parties, have to apply to the Court
to decide on the termination of mandate of
the Arbitrator - Held - firstly applicant
should apply to the principal Civil Court of
original jurisdiction in a district in regard to
the termination of mandate & thereafter
only substitution of Arbitrator can be made -
therefore conjoint petition under Section.
11(4) & & 11(6) does not lie & cannot be
heard by the Chief Justice or his designate,
as a petition u/s 14 lies to the "Court" -
since Fora are different a conjoint petition
does not lie (Para 27,36)

Development
Authority
invited
tenders
for
construction of Multi-Storied Complex - Dispute
arose in the year 1994 when final bill submitted by
contractor not released - arbitration clause was
invoked in 1995 & an Arbitrator was appointed -
No timeline fixed or agreed between parties within
which arbitration proceedings was to be concluded
- arbitration proceedings initiated but after 2015,
the proceedings were left abandoned at hands of
parties - neither of parties approached the "Court"
for terminating the mandate of Arbitrator & getting
substituted by another Arbitrator in terms of S.
15(2) - after 2015 till 2019 the matter was not
pursued with the sole Arbitrator - in the year 2019,
concealing that earlier arbitral proceedings initiated
in the year 1995 had not come to an end,
contractor approached Court for the appointment
of Arbitrator under the new Act u/s 11 - Neither
any prayer for terminating the mandate of the
Arbitrator nor any prayer for the substitution of
Arbitrator - Held - applicant after 25 years cannot
claim the benefit of the amended provision of
Section 11(6A) when once he had already availed
the remedy as provided in the agreement &
arbitral proceedings were already pending -
Applicant has to get the mandate of the earlier
Arbitrator terminated in pursuance of Section
14(2) of the Act, as in the eye of law, the earlier
proceedings still exist & the mandate of the earlier
Arbitrator has not come to an end - No relief can
be granted u/s 11(6A) by appointing a new
Arbitrator - Application misconceived (Para 31, 41,
42, 48, 49)

B. Civil Law -Arbitration and Conciliation Act
(26 of 1996) - Section 11(6A) [as amended by
amendment of 2015] - Limitation - After the
amendment, all that the courts need to see u/s
11(6A) is whether an arbitration agreement
exists- nothing more,

## Text

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502 INDIAN LAW REPORTS ALLAHABAD SERIES
no. 5 from the house-in-question which is
stated to be her matrimonial house can only
be examined by a Civil Court in a proper
proceeding. The bar under Section 27 of
the Senior Citizens Act, 2007 will not be
attracted
in
the
instant
case.
Even
otherwise, any such objection, if taken, has
to be examined by the competent court in
the suit proceeding.

30. Third prayer of the application as
noted above, is within the jurisdiction of
the criminal court of law under the Code of
Criminal Procedure.

31. As far as the last prayer is
concerned, the District Magistrate has
issued
necessary
directions
to
the
concerned officer to ensure that no illegal
interference is made in the life and property
of the applicant/petitioner no. 1 by any
person and in case of any such event,
appropriate action be taken by the Station
House Officer concerned.

32. For the above discussion, the
decision of the District Magistrate to reject
the application of petitioner no. 1, though
on technical ground of maintainability need
not be interfered.

33. However, as far as the direction
nos. '2' and '3' contained in the order dated
28th June, 2019 passed by the District
Magistrate, Gautam Budh Nagar, we find
that the direction dated 6.5.2019 having
been passed by way of an interim order on
the application in question cannot be given
effect to after dismissal of the application
itself on the ground of being not
entertainable. The interim direction dated
6.5.2019 having been merged in the final
order of rejection of the application dated
28th June, 2019, cannot survive and cannot
be given effect to. The respondent no. 5,
therefore, cannot be asked to vacate the
accommodation in her possession on the date of
filing of the application by the petitioner no. 1
i.e. on 28th June, 2019. Both the parties herein
have to maintain the position on the spot as on
the date of filing of the application. There shall
be no interference in the lives and property of
the petitioners or that of respondent no. 5 at the
hands of each other, so as to protect the right to
life guaranteed to every person under Article 21
of the Constitution of India.

34. For the above discussion, the
order impugned dated 28th June, 2019
passed by the District Magistrate, Gautam
Budh Nagar is modified to the above
extent.

35. It is, however, made clear that the
observations in this order hereinabove shall
not come in the way of the parties in the
regular
proceeding
in
the
plenary
jurisdiction of Criminal or Civil Court. The
parties are free to ventilate their grievances
before the competent Court of law which
shall deal with the same independently.

36. Subject to the above, the writ
petition is dismissed.
----------
(2020)12ILR A502
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.11.2020

BEFORE

THE HON'BLE ROHIT RANJAN AGARWAL, J.

Arbitration and Conciliation Application No. 100 of 2019

M/s Vidyawati Construction Co. ...Applicant
Versus
Allahabad Dev. Auth. ...Respondent

Counsel for the Applicant:
Sri Suresh Kumar Maurya, Sri Ashish Kumar
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
503
Counsel for the Respondent:
Sri Devi Prasad Mishra, Sri Arun Kumar

A. Civil Law -Arbitration and Conciliation Act
(26 of 1996)- Section 2(1)(e),11(4), 11(6) -
Appointment of substitute/new Arbitrator -
Conjoint application U/ss 11(4) & 11(6) for
appointment of substitute/new Arbitrator,
when earlier Arbitrator refused to act or
abandoned the arbitration proceedings -
Section. 14, Failure to act - S. 14 (2)
provides, parties, have to apply to the Court
to decide on the termination of mandate of
the Arbitrator - Held - firstly applicant
should apply to the principal Civil Court of
original jurisdiction in a district in regard to
the termination of mandate & thereafter
only substitution of Arbitrator can be made -
therefore conjoint petition under Section.
11(4) & & 11(6) does not lie & cannot be
heard by the Chief Justice or his designate,
as a petition u/s 14 lies to the "Court" -
since Fora are different a conjoint petition
does not lie (Para 27,36)

Development
Authority
invited
tenders
for
construction of Multi-Storied Complex - Dispute
arose in the year 1994 when final bill submitted by
contractor not released - arbitration clause was
invoked in 1995 & an Arbitrator was appointed -
No timeline fixed or agreed between parties within
which arbitration proceedings was to be concluded
- arbitration proceedings initiated but after 2015,
the proceedings were left abandoned at hands of
parties - neither of parties approached the "Court"
for terminating the mandate of Arbitrator & getting
substituted by another Arbitrator in terms of S.
15(2) - after 2015 till 2019 the matter was not
pursued with the sole Arbitrator - in the year 2019,
concealing that earlier arbitral proceedings initiated
in the year 1995 had not come to an end,
contractor approached Court for the appointment
of Arbitrator under the new Act u/s 11 - Neither
any prayer for terminating the mandate of the
Arbitrator nor any prayer for the substitution of
Arbitrator - Held - applicant after 25 years cannot
claim the benefit of the amended provision of
Section 11(6A) when once he had already availed
the remedy as provided in the agreement &
arbitral proceedings were already pending -
Applicant has to get the mandate of the earlier
Arbitrator terminated in pursuance of Section
14(2) of the Act, as in the eye of law, the earlier
proceedings still exist & the mandate of the earlier
Arbitrator has not come to an end - No relief can
be granted u/s 11(6A) by appointing a new
Arbitrator - Application misconceived (Para 31, 41,
42, 48, 49)

B. Civil Law -Arbitration and Conciliation Act
(26 of 1996) - Section 11(6A) [as amended by
amendment of 2015] - Limitation - After the
amendment, all that the courts need to see u/s
11(6A) is whether an arbitration agreement
exists- nothing more, nothing less (Para 41)

Application dismissed. (E-5)

List of Cases cited :-

1. Mayavati Trading Pvt. Ltd. Vs Pradyuat Deb
Burman 2019(6) Arb.LR 1(SC)

2. Uttarakhand Purv Sainik Kalyan Nigam Ltd. Vs
Northern Coalfields Ltd. 2019(6) Arb.LR 237 (SC)

3. Madras Port Trust Vs Hymanshu International
AIR 1979 SC 1144

4. M/S Reshma Construction Vs St. of Goa 1998
(3) BomCR 837

5. Deputy Manager (Engg.), & anr. Vs
Satyanarayana Contractors Company, Gudivada
& ors. 2009(Suppl.2) Arb.LR.222 (AP)

6. Satya & ors. Vs Vidarbha Distillers & ors. AIR
1998 Bom 210

7. Kurup Engineering Company Pvt. Ltd Vs
Bharat Heavy Electricals Limited & ors. 2008(2)
Arb.LR 290(Delhi)

8. Union of India Vs Singh Builders Syndicate
(2009) 4 SCC 523

9. Cinevistaas Limited Vs Prasar Bharati 2008(4)
Arb.LR 112 (Delhi)

10. Thyssen Stahlunion GMBH Vs S.A.I.L.. JT
1999 (8) SC 66

11.
Ram
Shakti
Construction
Vs
Agra
Development Authority & anr. 2017(2) ADJ 262
504 INDIAN LAW REPORTS ALLAHABAD SERIES
12. Grid Corporation of Orissa Ltd. Vs AES
Corporation & ors. 2002 (7) SCC 736

13. Lalit Kumar V. Sanghavi Vs Dharamdas V.
Sanghavi 2014 (136) AIC 117 (SC)

14. Nimet Resources Inc. & anr. Vs Essar Steels
Ltd. (2009) 17 SCC 313

15. Baghel Infrastructures Pvt. Ltd. Vs N.T.P.C.
Ltd. & 3 ors. Arbitration and Concili. Appl. u/s
11(4) No.37 of 2014

16. Duro Felguera, S.A. Vs Gangavaram Port
Ltd. (2017) 9 SCC 729

(Delivered by Hon'ble Rohit Ranjan Agarwal, J.)

1. Heard Sri Ashish Kumar, learned
counsel for the applicant and Sri Arun
Kumar, learned counsel for the respondentDevelopment Authority.

2. This application under Section
11(4) and 11(6) of Arbitration and
Conciliation Act, 1996 (hereinafter referred
to as "Act, 1996") has been filed for
appointment of an independent Arbitrator,
preferably a retired Judge of this Court.

3. Facts, in nutshell, are that on
26.02.1985,
Allahabad
Development
Authority (Now known as Prayagraj
Development
Authority,
for
short
"Authority")
framed
a
project
for
construction of Multi-Storey Complex at
Clock Tower, Chowk then Allahabad (now
Prayagraj).
Tender,
inviting
for
construction of Commercial Complex, was
issued on the said date. Cost of project was
quantified approximately at Rs.57 lakhs.
Applicant-Company
being
the
lowest
bidder, the bid was accepted on 19.03.1985
and an agreement was entered between the
parties on 04.04.1985 for construction of
two-storey Commercial Complex, to be
completed within six months from the date
of commencement. However, at a later
date, the said project was changed to fourstorey
Complex
along
with
one
Powerhouse building and the cost was also
varied. The contract contains arbitration
clause no.46 providing for adjudication of
dispute by Arbitrator as per the provisions
of Arbitration Act, 1940 (old Act) as well
as any statutory modifications thereafter.
As per the terms of the agreement,
construction was not completed within six
months as such period was extended and it
was
completed
on
31.8.1987.
The
applicant-Company
was
paid
about
Rs.1,14,00,000/- out of twelve running bills
for amount of Rs.1,14,43,922.01. However
final bill was submitted by applicant on
09.12.1989
before
the
Authority.
According to the applicant, as the bill was
not cleared by the authority, a Writ Petition
No.9086 of 1993 was filed before this
Court seeking a writ of mandamus
commanding the respondent-Authority to
release the final amount of bill. This Court
on 21.01.1994 disposed of the writ petition
directing
the
Vice-Chairman
of
the
Authority to decide the claim of applicantCompany within a period of one month
from the date on which certified copy of
the order is produced before him. On
17.06.1994 the Vice Chairman of the
respondent-Authority rejected the claim of
the applicant-Company. The applicantCompany on 11.02.1995 sent a letter to the
Vice-Chairman of the respondent Authority
appointing one Sri R.C.Jain, fellow of
Indian Institute of Architect,
as
an
Arbitrator invoking the arbitration clause
and requested the Authority to appoint
another Arbitrator in terms of the Clause
46, and in case the Authority fails to
appoint Arbitrator within 15 days, the
Arbitrator appointed by the applicant shall
adjudicate the dispute between the parties
as sole Arbitrator. On 06.02.1995, the Vice
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
505
Chairman of the Authority informed the
applicant that the matter had already been
decided and the claim of the applicant has
been rejected on 17.06.1994, thus question
of appointing Arbitrator does not arise.

4. The applicant Company on
07.02.1996 submitted 18 claims before the
Arbitrator, who issued notice to the
Authority on 14.04.1996, but the Authority
neither appeared before the Arbitrator nor
filed the reply. Various dates were fixed by
the
sole
Arbitrator
Sri
R.C.Jain
as
14.02.1997,
12.4.1997, 23.4.1997
and
24.4.1997 for hearing the matter. The sole
Arbitrator could not give the award within
the statutory period, as such an application
was filed for extension of time before the
Court under Section 28 of the Arbitration
Act, 1940 (old Act). The Court extended
the period with the condition that award be
given by 3rd June, 1997. Arbitrator
thereafter fixed 19.05.1997 for hearing and
award was delivered on 23.05.1997 for a
sum of Rs.1,17,91,714/- as principal and
interest on Rs.88,12,763/- at the rate of
18% from the date of award till decree or
payment whichever is earlier.

5. The said award was submitted
before Civil Judge (Senior Division)
Allahabad for making the award Rule of
the Court, and an application was registered
as Suit No.327 of 1997. The Authority filed
objection under Section 30/33 of the
Arbitration Act, 1940 (old Act), which was
registered as Case No.395 of 1997. The
Court below made the award Rule of the
Court and rejected the objection of the
Authority vide judgment and order dated
24.05.1999.

6. The Authority thereafter filed First
Appeal From Order No.1072 of 1999
before this Court challenging the order
dated 24.5.1999. This Court on 20.9.2001
while allowing the appeal of the Authority,
set aside the order of the Court below dated
24.5.1999 as well as award of the
Arbitrator dated 23.05.1997 and remitted
back the matter to the Arbitrator to take
decision afresh in view of the observation
made in the said order. This order was
challenged by the applicant before Hon'ble
Apex Court and vide judgment dated
09.04.2008 the Apex Court dismissed the
Civil Appeal No.4027 of 2002. Against the
said order, a Review Petition No.13735 of
2008 was preferred by the applicant which
was also dismissed by the Apex Court on
20.08.2008. After dismissal of the Civil
Appeal as well as Review Petition, the
applicant approached the Arbitrator on
18.09.2008 for starting up arbitration
proceedings as per the remand order of this
Court dated 20.09.2001.

7. The applicant has brought on
record
through
second
supplementary
affidavit some of the correspondence made
by him to the Arbitrator on 30.10.2008,
27.12.2008,
25.01.2009,
31.03.2009,
26.10.2009,
04.02.2010,
10.07.2010,
02.09.2010,
16.03.2011,
14.06.2011,
22.03.2012,
30.08.2012,
04.12.2012,
02.08.2013, 02.09.2013, 23.12.2013 and
reminder dated 28.07.2014 for fixing date
for hearing. Further, few receipts of the
years 2009, 2011 and 2015 have been
brought on record as Annexure-2 to the
second
supplementary
affidavit
demonstrating that the reminders were sent
to the sole Arbitrator Sri R.C. Jain for
fixing date. All these facts regarding earlier
appointment of Arbitrator by the applicant
in the year 1996, as well as award of the
year 1997 and the award being made Rule
of the Court on 24.05.1999 and they being
challenged by the Authority before this
Court in Appellate jurisdiction has not been
506 INDIAN LAW REPORTS ALLAHABAD SERIES
disclosed by the applicant in his application
under Section 11 (4) and 11 (6) of the Act,
1996. It is only when the Authority filed its
counter affidavit and disclosed the fact, that
the applicant had filed the first and second
supplementary affidavit bringing on record
the facts that earlier the sole Arbitrator
appointed at their instance, the award was
pronounced in the year 1997 and the same
which was made Rule of the Court was set
aside by this Court on 20.09.2001, was
ultimately challenged before the Apex
Court and after the dismissal of the Civil
Appeal and Review Petition on 09.04.2008
and 20.08.2008, the applicant approached
the sole Arbitrator for rehearing of the
matter.

8. Furthermore, the applicant invoked
the Arbitration clause on 12.08.2019
seeking an appointment of the Arbitrator.

9. Sri Ashish Kumar, learned counsel
appearing for the applicant submitted that
this application under Section 11 (6) be
read with Sections 14 and 15 of Act, 1996
as when earlier Arbitrator refused to act or
abandoned the arbitration proceedings, a
substitute or new Arbitrator be appointed.
He further submitted that earlier Arbitrator,
Sri R.C. Jain was appointed as a nominee
Arbitrator on behalf of the applicant and
when the Authority refused to appoint
another Arbitrator in terms of Clause 46,
Sri Jain proceeded as sole Arbitrator.

10. The second limb of the argument
is that the Arbitration Clause 46 provides
for any statutory modification, and as the
new Arbitration and Conciliation Act came
in the year 1996 is applicable, and
thereafter amendment of 2015 as per
Section 11 (6A), the Court can only
examine the issue with relation to existence
of Arbitration Clause and the issue of
limitation will be left to be decided by the
Arbitrator. The present claim of the
applicant is not barred by limitation as the
applicant had invoked Arbitration Clause
on 11.02.1995 i.e. within time after the
rejection of application by Vice Chairman
of the Authority on 17.06.1994. It is also
contended that as far as remand of the
matter back to Arbitrator is concerned, the
order dated 20.09.2001 passed by this
Court had attained finality by the Apex
Court, and as the Arbitrator did not decide
the issue and had abandoned, thus, the
mandate of the Arbitrator stood terminated
and Court has to appoint a substitute/new
Arbitrator.

11. Lastly, it was contended that
though
the
arbitration
proceedings
commenced under the old Act of 1940, but
the new Act of 1996 would be applicable as
is clear from Clause 46 which provides that
any
statutory
modification
will
be
applicable to the arbitration proceedings
and thus it is saved by Section 85(2)(a) of
the Act, 1996.

12. Reliance has been placed upon
decisions of Apex Court in the case of
Mayavati Trading Pvt. Ltd. vs. Pradyuat
Deb Burman 2019(6) Arb.LR 1(SC),
Uttarakhand Purv Sainik Kalyan Nigam
Limited vs. Northern Coalfields Limited
2019(6) Arb.LR 237 (SC) and Madras Port
Trust vs. Hymanshu International AIR
1979 SC 1144 on the question of limitation.

13. On the question of applicability of
old or new Act, reliance has been placed
upon the decisions in case of M/S Reshma
Construction vs. State of Goa 1998 (3)
BomCR 837 and Deputy Manager
(Engg.), & Another vs. Satyanarayana
Contractors Company, Gudivada &
others 2009(Suppl.2) Arb.LR.222 (AP).
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
507

14. As far as appointment of
substitute/new Arbitrator is concerned,
reliance has been placed on decisions in the
case of Satya and ors. vs. Vidarbha
Distillers and others AIR 1998 Bom 210;
Kurup Engineering Company Pvt. Ltd.
vs. Bharat Heavy Electricals Limited
and others 2008(2) Arb.LR 290(Delhi);
Union of India vs. Singh Builders
Syndicate
2009(4)
SCC
523
and
Cinevistaas Limited vs. Prasar Bharati
2008(4) Arb.LR 112 (Delhi).

15. Per contra, Sri Arun Kumar,
counsel
appearing
for
the
Authority
submitted that this application under Section
11(4) and 11(6) of the Act, 1996 has been
filed concealing the relevant material facts
from the Court. It is submitted that it is a dead
claim of the applicant and remedy of
arbitration has already been exhausted after
an Arbitrator was appointed under the old
Act. He further submitted that vide order
dated 17.6.1994 the Vice Chairman after
hearing the applicant and Executive Engineer
had held that the applicant was not entitled
for any outstanding against him. Moreover, a
sum of Rs.3,79,552.23 had to be returned by
the applicant to the Authority. It is further
contended that after dismissal of the Review
Petition by the Apex Court in the year 2008,
the applicant had written to the sole
Arbitrator for the first time on 18.9.2008 and
no communication has been made after
11.3.2015 as per the documents filed by the
applicant along with second supplementary
affidavit. Thus, after about 12 years from the
date of decision of Apex Court, the applicant
has
approached
this
Court
for
the
appointment of Arbitrator under the new Act
invoking the clause in the year 2019
concealing the earlier arbitration proceedings.

16. It is contended by counsel for the
respondent that proceedings initiated under
the old Act, which has commenced prior to
the coming of the new Act shall be held as
per the provisions of old Act and reliance
has been placed upon decision of Apex
Court in the case of Thyssen Stahlunion
GMBH vs. Steel Authority of India Ltd.
JT 1999 (8) SC 66. He further contended
that in view of provisions of Section 16(3)
of the old Act, an award remitted by the
Court to the Arbitrator for reconsideration
shall become void on the failure of the
Arbitrator to reconsider it and submit his
decision within the time fixed. As no time
was fixed while the matter was remitted
back, thus the award has to be made
considering the provisions of Section 3 of
the old Act read with first Schedule under
which the Arbitrator is required to make his
award within four months.

17. Lastly it was contended that
though the Apex Court had held that while
deciding application under Section 11(4)
and 11(6) of the new Act the Court is
empowered to see only whether an
arbitration agreement exist, but before
appointing an Arbitrator, Court can look
into
the
maintainability
of
fresh
proceedings under the new Act when
proceedings under the old Act has already
been initiated though had not been decided.
Reliance has been placed upon decision of
this Court in the case of M/s Ram Shakti
Construction vs. Agra Development
Authority and another 2017(2) ADJ 262
where the Court held that it is imperative
that a satisfaction is arrived that live claim
exist which could be arbitrated upon.

18. I have heard counsel for the
parties and perused the material on record.

19. This is an application under
Section 11(4) and 11(6) of Act, 1996 for
appointment of Arbitrator invoking the
508 INDIAN LAW REPORTS ALLAHABAD SERIES
arbitration clause 46 as contained in
agreement
dated
04.04.1985
entered
between the parties. According to para 20
of
the
affidavit
to
the
application,
arbitration
clause
was
invoked
on
12.8.2019 for the appointment of an
independent Arbitrator.

20. It is not disputed by the applicant
that at the time of filing of the application
under Section 11(4) and 11(6) of the new
Act, the entire facts of the case was not
disclosed by him and simplicitor it was
alleged that there existed a dispute between
the parties and pursuant to Clause 46 of the
agreement arrived in the year 1985 between
them, an Arbitrator be appointed. It was
when the counter affidavit was filed by the
Authority, the true picture revealed and it
was brought to the notice of the Court that
earlier round of arbitration proceedings had
been initiated and held at the behest of the
applicant. It is also not in dispute that the
applicant had himself approached this
Court through Writ No.9086 of 1993 for
the release of his final bill, and on
21.01.1994 direction was issued to the Vice
Chairman of the Authority to decide the
claim of the applicant. It is also not in
dispute that on 17.6.1994 the claim was
rejected by the Development Authority
thereafter the arbitration Clause 46 was
invoked appointing one Sri R.C.Jain, who
proceeded to adjudicate upon the dispute as
sole Arbitrator. An award was made on
23.5.1997 which was subsequently made
Rule of the Court on 24.5.1999. Till this
stage
the
respondent-Authority
never
appeared before Arbitrator, but the order
making award Rule of the Court as well as
award was challenged by the Authority
through F.A.F.O. No.1072 of 1999 which
was allowed on 20.9.2001, and the mater
was remitted back to the Arbitrator for
decision afresh with certain observations.
As the matter was carried to the Apex
Court at the behest of the applicant, Civil
Appeal of the applicant was dismissed on
09.04.2008 and Review Petition was also
rejected on 20.8.2008. During this period,
new Arbitration and Conciliation Act, 1996
came into force which provided for repeal
and saving clause in Section 85 of the Act.

21. It is also not in dispute that after
dismissal of the appeal by Apex Court the
applicant had approached the Arbitrator Sri
R.C.Jain on 18.9.2008, for hearing of the
matter afresh in view of the remand order
passed by this Court. It appears that the
applicant continued to request the sole
Arbitrator till the year 2015 for fixing date in
the matter at regular intervals, but after 2015
till 2019 the matter was not pursued with the
sole Arbitrator, and in the year 2019, a fresh
notice was given to the respondent Authority
invoking the arbitration clause and the
present application being filed for the
appointment of a new Arbitrator.

22. However, during exchange of
pleadings the applicant has tried to improve
upon his case by filing supplementary
affidavit disclosing the earlier sequence of
arbitral proceedings initiated by him and
held before Arbitral Tribunal of Sri
R.C.Jain and various orders passed by this
Court and the Apex Court. Further through
rejoinder affidavit the applicant has tried to
built up a case for substitution of an
Arbitrator in terms of Sections 14 and 15 of
new Act as the mandate of the Arbitrator
stood terminated in view of Section
14(1)(a), as he was unable to perform his
function or has failed to act without undue
delay. But the original application under
Section 11(4) and 11(6) was never
amended to bring the facts, and the prayer
was made through various supplementary
affidavits and rejoinder affidavit.
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
509

23. It is no doubt true that mere
mentioning of incorrect provision or not
mentioning any provision under which the
application is filed would not oust the
jurisdiction of the Court or the relief
claimed by the parties, but the pleadings
made in the application discloses the
intention of the application which is for
appointment of new Arbitrator and not for
substitution.

24. The argument raised on behalf of
the applicant has now to be tested on the
touchstone of Sections 14 and 15 of the
amended Act, which are extracted as under:

"14. Failure or impossibility to act.-
(1) The mandate of an arbitrator shall
terminate and he shall be substituted by
another arbitrator, 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 sub-section
(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 shall 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
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."

25. Now, coming to Section 14 of the
Act, it mandates that authority of an
Arbitrator shall terminate on two conditions
being satisfied, firstly he becomes de jure
or de facto unable to perform his functions
or he fails to act without undue delay. The
second condition is when the Arbitrator
withdraws from the office or the parties
agreed to the termination of his mandate.

26. In such a situation, if the parties
unless agree, have to apply to the Court to
decide on the termination of mandate of the
Arbitrator, in terms of sub-section (2) of
Section 14.

27. The corresponding provision was
there under Section 8(1)(b) and Section 11
of the 1940 Act (old Act). Thus, the party
aggrieved has to approach to the ''Court' as
defined under Section 2(1)(e) of the Act,
which means the principal Civil Court of
510 INDIAN LAW REPORTS ALLAHABAD SERIES
original jurisdiction in a district. Thus a conjoint
reading of Section 11(4) and Section 14 clarify
that a petition does not lie and can be heard by
the Chief Justice or his designate as a petition
under Section 14 lies to the "Court" since Fora
are different. A conjoint petition does not lie, this
was held by Hon'ble Apex Court in the case of
Grid Corporation of Orissa Ltd. Vs. AES
Corporation & Ors. 2002 (7) SCC 736.

28. In Lalit Kumar V. Sanghavi v.
Dharamdas V. Sanghavi 2014 (136) AIC 117
(SC) it was held that an application under
Section 14(2) of the Act for decision on
termination of the mandate of an Arbitrator lies
only before the "Court" as defined in Section
2(1)(e) of the Act.

29. While dealing with somewhat similar
situation, the Supreme Court had appointed an
Arbitrator on application under Section 11(5)
and (6) of the Act, held that application under
Section 14(2) of the Act was not maintainable
before the Supreme Court for terminating the
mandate of an Arbitrator, as jurisdiction which
the Chief Justice or his designate exercises
under Section 11(6) of this Act is limited and it
becomes functus officio after exercising the
same (Nimet Resources Inc. and Another vs.
Essar Steels Ltd. (2009) 17 SCC 313).

30. The Apex Court held that there is no
automatic termination of the mandate of an
Arbitrator on the alleged ground of his failure
to act without undue delay, and it is the Court
which will have to resolve the dispute whether
the Arbitrator had failed to act without undue
delay. In case the Arbitrator fails to conclude
arbitration proceedings within fixed timeline
agreed between the parties and the same
having not been extended, the mandate of the
Arbitrator automatically terminates.

31. In the present case, there was no
timeline fixed or agreed between the parties
within which the arbitration proceedings
was to be concluded and from the conduct
of the parties, it appears that after 2015, the
proceedings were left abandoned at the
hands of the parties and neither of them
approached the "Court" as defined under
Section 2(1)(e) for terminating the mandate
of Arbitrator and getting substituted by
another Arbitrator in terms of subsection
(2) of Section 15.

32. Prior to 23.10.2015, Section 14
read as under :

"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 sub-section
(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."

33. Thus, post amendment Section 14
of Act, 1996 was amended to the extent
that on failure on part of Arbitrator as
provided under sub-section (1) of Section
14 the party unless otherwise agreed
between them, apply to the Court to decide
on termination of mandate and he shall be
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
511
substituted by another Arbitrator, which
earlier did not find place in the unamended
provisions of Section 14.

34. Reverting back to the dispute
between the parties, it is evident from the
conduct of the applicant that his approach
towards getting the matter resolved through
arbitration proceedings was very casual, as
the party has to approach the Court where
Arbitrator fails to act without undue delay.
In the present case, no effort was made for
about 12 years in getting the mandate of an
Arbitrator terminated.

35. While dealing with Section 15(2),
this Court in case of Arbitration and
Concili. Appl. u/s 11(4) No.37 of 2014
(Baghel Infrastructures Pvt. Ltd. Vs.
N.T.P.C. Ltd. And 3 Ors) decided on
10.11.2014 held as under :

If an arbitrator refuses to act as an
arbitrator, a substitute arbitrator would be
appointed in his place under sub-section
(2) of Section 15, except where the
intention of the parties was to refer the
disputes to arbitration by a particular
person only.

"Rules" referred to in Section 15(2)
would refer not only to any statutory rules
or rules framed under the Act or under the
Scheme, but also mean that substitute
arbitrator must be appointed according to
the
original
agreement
or
provision
applicable to the appointment of the
arbitrator at the initial stage. (Yashwitha
Construction (P) Ltd. vs. Simplex Concrete
Piles India Ltd.8).

In National Highways Authority of
India vs. Bumihiway D.D.B. Ltd.9, Supreme
Court held that provisions of Section 15(2)
states that a substitute arbitrator shall be
appointed according to the rules applicable
to the appointment of arbitrator being
replaced. Appointment of retired Chief
Justice by the High Court under Section
11(6) was set aside and directions was
given that India Road Congress be
approached as per the agreed procedure to
appoint the arbitrator.

The applicant has not challenged the
appointment of the arbitrator, but submits
that once the application under section 11
has been filed, the respondent have lost
their right to appoint any arbitrator, is
wholly misconceived.

In the facts of the present application,
the arbitrator was already appointed and
on his resignation another arbitrator has
been appointed as per the terms and
conditions
of
the
agreement,
the
application which is ostensibly moved
under section 11 of the Arbitration and
Conciliation Act to terminate the mandate
of the earlier arbitrator, is misconceived
and not maintainable.

Since
the
application
is
not
maintainable accordingly dismissed.

36. After careful consideration of
Sections 14 and 15 of the Act as well as the
law laid down by the Apex Court it is clear
that the applicant should apply to the
''Court' in regard to the termination of
mandate and the substitution of Arbitrator
can only be made in pursuance thereof.

37. The other point canvassed by the
counsel that in view of the amended
provisions of Section 11(6A), this Court
cannot go into the question of limitation
and only on the basis of existence of the
arbitration clause, will appoint Arbitrator.

38. It is no doubt correct that after
2015 amendment the Court is only
empowered to see the existence of an
arbitration clause as held by the Apex
Court in the case of Duro Felguera, S.A. vs.
512 INDIAN LAW REPORTS ALLAHABAD SERIES
Gangavaram Port Limited (2017) 9 SCC
729. Relevant paras 48 and 59 read as
under :

"48. Section 11(6-A) added by the
2015 Amendment, reads as follows:

"11(6-A) The Supreme Court or,
as the case may be, the High Court, while
considering any application Under Subsection (4) or Sub-section (5) or Subsection (6), shall, notwithstanding any
judgment, decree or order of any Court,
confine to the examination of the existence
of an arbitration agreement." (emphasis
supplied)

From a reading of Section 11(6A), the
intention of the legislature is crystal clear
i.e. the Court should and need only look
into one aspect-the existence of an
arbitration agreement. What are the factors
for deciding as to whether there is an
arbitration agreement is the next question.
The resolution to that is simple-it needs to
be seen if the agreement contains a Clause
which provides for arbitration pertaining to
the disputes which have arisen between the
parties to the agreement.

..

59. The scope of the power under Section
11(6) of the 1996 Act was considerably wide in
view of the decisions in SBP and Co. vs. Patel
Engg. Ltd., (2005) 8 SCC 618 and National
Insurance Co. Ltd. vs. Boghara Polyfab (P) Ltd.
(2009) 1 SCC 267. This position contained till
the amendment brought about in 2015. After the
amendment, all that the courts need to see is
whether an arbitration agreement exists- nothing
more, nothing less. The legislative policy and
purpose is essentially to minimise the Court's
intervention at the stage of appointing the
arbitrator and this intention as incorporated in
Section 11(6-A) ought to be respect."

39. This judgment was followed by
the Apex Court in case of Mayavati
Trading Pvt. Ltd. (supra), in which in para
10, Court held as under :

"This being the position, it is clear
that the law prior to the 2015 Amendment
that has been laid down by this court,
which would have included going into
whether accord and satisfaction has taken
place, has now been legislatively overruled.
This being the position, it is difficult to
agree with the reasoning contained in the
aforesaid judgment as Section 11(6A) is
confined to the examination of the existence
of an arbitration agreement and is to be
understood in the narrow sense as has been
laid down in the judgment in Duro
Felguera, S.A.- see paras 48 and 59."

40. However, in case of Uttarakhand
Purv Sainik Kalyan Nigam Limited (supra)
the Apex Court while approving Section
11(6A) in para 9.9, held as under :

"9.9. The doctrine of "KompetenzKompetenz",
also
referred
to
as
"Compétence-Compétence",
or
"Compétence de la recognized", implies
that the arbitral tribunal is empowered and
has the competence to rule on its own
jurisdiction, including determining all
jurisdictional issues, and the existence or
validity of the arbitration agreement. This
doctrine is intended to minimize judicial
intervention, so that the arbitral process is
not thwarted at the threshold, when a
preliminary objection is raised by one of
the parties.

The doctrine of kompetenz-kompetenz
is, however, subject to the exception i.e.
when the arbitration agreement itself is
impeached as being procured by fraud or
deception. This exception would also apply
to cases where the parties in the process of
negotiation, may have entered into a draft
agreement as an antecedent step prior to
12 All. M/s Vidyawati Construction Co. Vs. Allahabad Dev. Auth.
513
executing the final contract. The draft
agreement would be a mere proposal to
arbitrate,
and
not
an
unequivocal
acceptance of the terms of the agreement.
Section 7 of the Contract Act, 1872
requires the acceptance of a contract to be
absolute and unqualified. [Dresser Rand
SA vs. Bindal Agro-Chem Ltd. (2006) 1
SCC 751=2006(1)Arb.LR 171 (SC)=2006
SCACTC 15(SC);See also Bharat Sanchar
Nigam Ltd. vs. Telephone Cables Ltd.,
(2010) 5 SCC 213=2010(4) Arb.LR 218
(SC)=2010 SCACTC 113 (SC);Refer to
PSA Mumbai Investments PTE Ltd. vs.
Board of Trustees of the Jawaharlal Nehru
Port Trust & Anr. (2018) 10 SCC
525=2018(5) Arb.LR 185 (SC).] If an
arbitration agreement is not valid or nonexistent, the arbitral tribunal cannot
assume jurisdiction to adjudicate upon the
disputes. Appointment of an arbitrator may
be refused if the arbitration agreement is
not in writing, or the disputes are beyond
the scope of the arbitration agreement.

Article V(1)(a) of the New York
Convention states that recognition and
enforcement of an award may be refused if
the arbitration agreement ''is not valid
under the law to which the parties have
subjected it or, failing any indication
thereon, under the law of the country where
the award was made'."

41. Thus from the reading of the
amendment brought in the year 2015
through
Section
11(6A),
the
words
existence of an arbitration clause has to be
seen and nothing more or nothing less is to
be seen by the Court which has now the
approval of the Apex Court through the
above judgments. But in the present case
the dispute arose in the year 1994 when the
claim of the applicant Company was
rejected by the respondent- Development
Authority and the arbitration clause was
invoked in 1995 and an Arbitrator was
appointed. Thus, the applicant after 25
years cannot come and claim the benefit of
the amended provision of Section 11(6A)
when once he had already availed the
remedy as provided in the agreement clause
46 and the matter had travelled up to the
Apex Court and his Review Petition being
rejected on 20.8.2008.

42.