R.C. Jain, J.
1. This is an application under Section 34 of the Arbitration and Conciliation Act, 1996 made on behalf of the applicant - Lalit Kala Akademi, for setting aside the award of the sole arbitrator dated 10.5.1999. The main grounds set-up for setting aside the award are as under:
'1. The alleged award is null and void as the same is not in accordance with the mandatory requirements of the Act. There was no agreement whatever executed by the Akademi with the 1st respondent. The tender document clause 45, would not, in any was bind the Akademi.
2. The very Arbitration proceedings would not lie in view of the passing of the take over Act by the Central Government. As per provisions of 3(3) the agreement entered by the then management of the Akademi stood automatically terminated. The 1st respondent did not challenge the Act or the termination and having acted thus it would not be open to it to seek to enforce only one clause i.e. clause 45 of its agreement by referring to Arbitration. Thus the very initiation of the proceedings is illegal and void.'
2. Learned counsel for the petitioner submits that at the beginning of the arbitral proceedings, i.e. soon after receiving a notice from the Arbitrator, the petitioner had sent a communication dated 7.8.1998 to the Arbitrator objecting to the jurisdiction of the arbitrator to enter upon the reference and to hold the arbitral proceedings and to make an award more particularly in view of the provisions of Section 3(3) of the Lalit Kala Akademi (Taking Over of Management) Act, 1997 (Act No. 17 of 1997) (in short the 'Act'). The arbitrator, as it would appear from the proceedings and the award, over-looked those basic objections which can be said to be objections within the meaning of Section 16 of the Arbitration and Conciliation Act, 1996 and proceeded with the arbitral proceedings and made and published the impugned award. Section 16 of the 1996 Act confers the power on the Arbitral Tribunal to rule on its jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement. In other words, this section casts an obligation on the Arbitral Tribunal to consider and answer any objection in regard to its jurisdiction and existence or validity of arbitration agreement.
3. In this view, I am fortified by the Constitution Bench decision of the Hon'ble Supreme Court in the case of Konkan Railways Corporation Limited and Another Vs . Rani Construction Pvt. Ltd : [2002]1SCR728 . In that case the Hon'ble Supreme Court had the occasion to morefully consider the ambit and scope of the power of the Chief Justice or his nominee while deciding an application under Section 11 of the Arbitration and Conciliation Act, 1996. In that case the Apex Court observed that Section 16 of the Act empowers the Arbitral Tribunal to rule on its jurisdiction and the expression '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, but goes to the very root of its jurisdiction. It is, thereforee, open for any party to challenge before the Arbitral Tribunal that it had been wrongly constituted. Since this Court cannot go into or decide any controversial question raised by the parties as the same falls under the domain of the arbitrator, there is no escape from the conclusion that the present petition deserves to be allowed and an arbitrator needs to be appointed to settle the disputes/differences between the parties.
4. The learned arbitrator failed to exercise the said jurisdiction and discharged the obligation enjoined upon him by law by not answering the objections raised by the petitioner in regard to his jurisdiction and non-existence of the arbitration agreement more particularly in view of the provisions of the 'Act'. The arbitrator rather chose to proceed with the matter and answered the claims on merits.
5. Learned counsel for the petitioner submits that the award is liable to be set aside and, at least, remitted back to the arbitrator for a consideration and adjudication of the above important aspect. On the other hand, learned counsel for respondent No. 1 has urged that the arbitration agreement relied upon by respondent No. 2 was independent of the main contract and even if the contract had come to an end by virtue of the provisions of Section 3(3) of the 'Act', the arbitration agreement was remained unaffected. The next submission is that by making the award on merits, the arbitral tribunal shall be deemed to have over-ruled the objection in regard to the jurisdiction of the arbitral tribunal to enter the reference and also in regard to non-existence of invalidity of the arbitration agreement.
6. This Court having considered the matter in its entirety and more particularly having regard to the nature of the objections raised by the petitioner before the Arbitral Tribunal in regard to its jurisdiction and existence and validity of the arbitration agreement, is of the considered opinion that the Arbitral Tribunal ought to have considered and answered the same in the first instance before it ventured to decide the claims of respondent No. 1 on merits. Depending on the outcome of the said dispenstion, it would have been open for the parties to have their statutory remedy.
7. For the foregoing reasons and in the result this petition is allowed and the award of the sole arbitrator, Mr. Promod Adlakha, dated 10.5.1999 is hereby set aside. However, having regard to the totality of the facts and circumstances, the matter is remitted back to the arbitrator with the direction that in the first instance the arbitral tribunal shall treat the letter of the petitioner dated 7.8.1998 as objections under Section 16 of the Arbitration and Conciliation Act, 1996 in regard to his own jurisdiction as also about the existence or validity of arbitration agreement between the parties and depending on the same further proceedings, if necessary, shall be taken up in accordance with law. Needless to mention that observations made herein are only for the purpose of deciding the present application and the arbitral tribunal shall be free to take its own view in the matter. The petition stands disposed of accordingly. Parties are directed to appear before the sole arbitrator on 25th July, 2005 at 4.00 P.M.