Judgment:
P.P. Naolekar, C.J.
1. Manik Ratan Business Pvt. Ltd. and the State of Arunachal Pradesh have entered into a contract whereunder the Contract was required to supply a particular brand/make of power transformers at Bomdila and installation and commissioning of the same. The contract was entered into on 2.12.1997. Admittedly the contract between the parties contained an arbitration clause as Clause No. 25 of the agreement, whereunder in case of any dispute referred therein the matter shall be referred to the sole arbitration of the person appointed by the Chief Engineer-in-charge of the work at the time of dispute or if there be no Chief Engineer the Administrative Head of the said Department at the time of such appointment. Difference and dispute regarding the testing and commissioning of the transformer and in the matter related thereto has arisen between the parties and therefore, as per the case of the petitioner, it has invoked the arbitration clause by addressing a letter of request to the Chief Engineer/Administrative Head, Department of Power, Government of Arunachal Pradesh calling upon him to appoint an Arbitrator. The letter was dated 293.2002. The letter of request was received by the Department on 17.4.2002. According to the petitioner in spite of service of the letter/notice requesting for appointment of Arbitrator, invoking the Clause 25 of the agreement, no Arbitrator was appointed, therefore, the petitioner approached this Court on 9.9.2002 for appointment of Arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short 'the Act 1996'). The matter was listed before the Court on 10.9.2002 and on 17.9.2002 Shri N.N. Saikia, learned Advocate General for the State of Arunachal Pradesh sought further time to obtain instructions from the Government and the matter was adjourned for three weeks as prayed for by the learned Advocate General. Later on during the pendency of the petition before this Court on 21.10.2002 a letter was issued by the Executive Engineer (Elect) Bomdila Electrical Division to the Chief Engineer (P), requesting for appointment of Arbitrator in terms of Clause 25 of the agreement. As per the request made by the Executive Engineer (Elect) the Chief Engineer, Department of Power appointed Shri S.N. Pandey, Superintending Engineer, Rupa Circle, Arunachal Pradesh PWD, Rupa as the sole Arbitrator.
2. It is submitted by the learned counsel for the applicant that once the matter has been placed before the Court for appointment of Arbitrator by filing a petition under Section 11(6) of the Act, 1996, the Chief Engineer has no authority to appoint an Arbitrator exercising the power under Clause 25 of the contract entered into between the parties. On the other hand, it is submitted by the learned counsel for the respondent State of Arunachal Pradesh that no notice as alleged by the petitioner was served in accordance with law, therefore, the power under Section 11(6) of the Arbitration Act cannot be exercised or invoked by the Court for appointment of the Arbitrator.
3. The facts on record would reveal that a notice has been issued on 29.3.2002 invoking the arbitration clause by the petitioner. It is also a fact that on 9.9.2002 a petition under Section 11(6) of the Act 1996 has been filed and the State of Arunachal Pradesh has been represented by the learned Advocate General on 10.9.2002 in the case. Thus, while the matter was been pending before this Court the respondent exercised the power as per Clause 25 of the agreement and appointed Sri S.N. Pandey, as the sole Arbitrator to adjudicate the dispute between the parties. Once the Arbitrator has not been appointed as requested by the letter/notice and an application is being filed under Section 11(6) of the Act 1996 the Court gets jurisdiction to appoint Arbitrator, who need not be an Arbitrator as mentioned in the Contract containing the arbitration clause.
4. The question now is whether the Arbitrator could be properly appointed to adjudicate upon the matter when objection is raised challenging service of notice by the respondent State. Non-service of notice would be a question of fact and law, which can be adjudicated by the Arbitrator himself. The said position is being explicity made clear in the matter of Konkan Railway Corporation Ltd. and Anr. v. Rani Construction Pvt. Ltd., (2002) 2 SCC 388=2002(1) Arb. LR 326 (SC). wherein the Apex Court in paragraph 21 stated thus :
'It might also be that in a given case the Chief Justice or his designate may have nominated an Arbitrator although the period of thirty days had not expired. If so, the Arbitral Tribunal would have been improperly constitute and be without jurisdiction. It would then be open to the aggrieved party to require the Arbitral Tribunal to rule on its jurisdiction. Section 16 provides for this. It states that the Arbitral Tribunal may rule on its own jurisdiction. That the Arbitral Tribunal may rule 'on any objections with respect to the existence or validity Of the arbitration agreement' shows that the Arbitral Tribunal's authority under Section 16 is not confined to the width of its jurisdiction, as was submitted by learned counsel for the appellants, but goes to the very root of its jurisdiction. There would, therefore, be no impediment in contending before the Arbitral Tribunal that it had been wrongly constituted by reason of the fact that the Chief Justice or his designate had nominated an Arbitrator although the period of thirty days had not expired and that, therefore, it had no jurisdiction.'
5. From the above it is clear that it is open for the parties to contend before the Arbitral Tribunal that his appointment is not in accordance with the law because proper notice has not been served. In that view of the matter, I direct that Justice (Smt.) M. Sharma, Retired Judge of the Gauhati High Court, be appointed as the sole Arbitrator to enter into the adjudication process to adjudicate the dispute between the parties, arising out of the agreement entered between the parties herein. The parties shall approach the Arbitrator for taking up the arbitration proceeding and the Arbitrator shall proceed in the matter in accordance with law.
6. Petition stands accordingly disposed of.