THE HON’BLE SRI JUSTICE C.V. NAGARJUNA REDDY WRIT PETITION No.38282 of 2014 Dated: 12.12.2014 Between:
B. Krishna Rao .. Petitioner and Union of India, Rep. by its Under Secretary to Government, Ministry of Agriculture, New Delhi, and others.
.. Respondents Counsel for the petitioner: Mr. N. Jayasurya For Mr. S. Appadhara Reddy Counsel for respondent No.1: Mr. B.Narayana Reddy (Asst. Solicitor General) Counsel for respondents 2to5: G.P for Co-operation (T.S.) The court made the following:
ORDER:
This writ petition is filed for a Mandamus to set aside proceedings in Rc.No.33364/2007/L1 dated 05.11.2007 of respondent No.5.
The petitioner has secured loan of about Rs.3.00 crores from respondent No.6 society. As the petitioner has evidently failed to repay the loan, arbitral proceedings were initiated against him. Respondent No.7, who was appointed as arbitrator by respondent No.5 vide impugned proceedings dated 05.11.2007, issued notice to the petitioner. The petitioner entered his appearance through a counsel and filed memo dated 08.11.2014 seeking supply of certain documents. Thereafter, the petitioner filed this writ petition by challenging the very proceedings issued by respondent No.5, wherein he has appointed respondent No.7 as arbitrator to decide all the disputes that may arise between respondent No.6 and its members.
It is the pleaded case of the petitioner that the appointment of respondent No.7, a practicing advocate, to decide all the disputes that may arise in future is not in consonance with Section 84(4) of the Multi-State Co-operative Societies Act, 2002. The petitioner has also raised a serious apprehension on the impartiality of respondent No.7 on the ground that her appointment was made on her representation dated 30.10.2007. The petitioner has also pleaded that the appointment made by respondent No.5 was not in conformity with notification dated 24.02.2003 issued by the Government of India, Ministry of Agriculture.
I have heard Mr. N. Jayasurya, learned counsel representing Mr. S. Appadhara Reddy, learned counsel for the petitioner, and perused the record.
Section 12(3) of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’), envisages the grounds for challenge of an arbitrator. Section 13 of the Act provided for challenge procedure. Under sub-section (2) thereof, if the parties do not agree on a procedure for challenging an arbitrator, the party who intends to challenge the arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of Section 12, send a written statement of the reasons for the challenge to the arbitral tribunal. Under sub- section (3), unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. Under sub-section (4), if a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award. Sub-section (5) enables the party challenging the arbitrator to make an application for setting aside such an arbitral award in accordance with Section 34 of the Act.
From the above statutory scheme provided under the Act, the petitioner can challenge the jurisdiction of respondent No.7 by following the procedure under Section 13 of the Act. The petitioner cannot, therefore, maintain this writ petition.
The writ petition is accordingly dismissed, however, with liberty to the petitioner to challenge the jurisdiction of respondent No.7, under the provisions of Section 13 of the Act.
As a sequel to the dismissal of the writ petition, W.P.M.P.No.47909 of 2014 shall stand disposed of as infructuous.
C.V. NAGARJUNA REDDY, J 12th December, 2014 IBL