Sohan Bai W/O Late Shri Krishan Kumar Nagar Vs Union of India

[2025:RJ-JP:44854]

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

S.B. Civil Arbitration Application No. 64/2024

Sohan Bai W/o Late Shri Krishan Kumar Nagar, Aged About 59 Years, R/o Shishu Niketan Vidhyalaya, Bhimganj Mandi, Rangpur, Kota (Raj.) Operating Trolley No.2 At Kota Railway Station, Kota For Selling Of Food Items.

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----Applicant

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Versus

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Union Of India, Through General Manager, West Central Railway, Jabalpur (Raj.)

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Divisional Railway Manager, West Central Railway, Kota (Raj.)

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Divisional Commercial Manager, West Central Railway, Kota

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Senior Divisional Commercial Manager, West Central Railway, Kota (Raj.)

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----Respondents

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For Petitioner(s)	: Mr. Shailesh Prakash Sharma with
	Ms. Avi Sharma
For Respondent(s)	: Mr. P. C. Sharma with
	Ms. Arpita Joshi

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HON'BLE MR. JUSTICE MANEESH SHARMA

Judgment

REPORTABLE

07/11/2025

The present Arbitration Application has been filed by the applicant under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act of 1996'), seeking appointment of an arbitrator to adjudicate the dispute pending between the parties in relation to the operating of a Refreshment Trolley No. 2 at West Central Railway, Kota. The said trolley was licensed to sell fruits, sweets, tea, and other commodities in the

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name of the applicant’s late husband, Shri Krishan Kumar Nagar, who passed away on 03.11.2023.

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Brief facts giving rise to the present application are that after the demise of her husband, the applicant, Smt. Sohan Bai was not permitted to continue operations or transfer the trolley license in her name, despite the existence of a subsisting agreement dated 08.05.2010. Being aggrieved by the respondents’ actions and their attempt to dispossess her, the applicant filed S.B. Civil Writ Petition No. 3063/2024 titled as ' Sohan Bai vs. Union of India & Ors.', whereby a Co-ordinate Bench of this Court, while disposing of the petition, granted liberty to the applicant to initiate proceedings for appointment of an arbitrator in terms of the Catering Policy, 2017.

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That pursuant to the liberty granted, the applicant, vide notice dated 06.03.2024, requested the respondents to appoint an independent arbitrator not below the rank of a retired District Judge. Despite receipt of the said notice, the respondents failed to act upon it and did not appoint an arbitrator.

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Consequently, the applicant filed the present application under Section 11(6) of the Act of 1996, before this Court on 17.05.2024; and on 31.05.2024, learned counsel for the respondents sought time to file a reply, and the matter was adjourned to 05.07.2024. Surprisingly, during the pendency of this application, the respondents appointed an arbitrator on 11.06.2024. Thereafter, vide order dated 05.07.2024, a Coordinate Bench of this Court stayed the proceedings before the arbitrator so appointed by the respondents.

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Learned counsel for the applicant - Smt. Sohan Bai submits that once the applicant had sent the notice dated 06.03.2024, and subsequently filed this application under Section 11(6) of the Act of 1996, the respondents lost their right to appoint an arbitrator; therefore, the appointment dated 11.06.2024 was without jurisdiction. To support his contention, he further placed reliance upon a judgment passed by the Hon'ble Apex Court in the matter of Union of India Vs. M/s Bharat Battery Manufacturing Co. (P) Ltd.¹ and Deep Trading Company Vs. Indian Oil Corporation² . He further submits that, being an illiterate lady, the applicant lacks legal acumen and that the respondents have knowingly appointed the arbitrator to obtain a favorable forum.

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6 . Per contra , learned counsel for the respondents has opposed the submissions advanced by the learned counsel for the applicant and submitted that the arbitrator was duly appointed in terms of the arbitration clause i.e., Clause 26 of the Catering Policy of 2017, and the applicant, having initiated the arbitration process vide notice dated 06.03.2024, cannot now question the appointment made thereunder. He further argued that the applicant had waived the statutory mandate under Sections 12(5) and 31A(5) of the Act of 1996, and to support his contention, he placed reliance upon a judgment of the Hon'ble Apex Court in Indian Oil Corporation Ltd. Vs. M/s Raja Transport Pvt. Ltd.³ and Union of India Vs. Pradeep Vinod Construction

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Company⁴ .

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1 (2007) 7 SCC 684

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2 (2013) 4 SCC 35

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3 (2009) 8 SCC 520

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4 (2020) 2 SCC 464

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Heard and considered the submissions made by learned counsel for the parties, and perused the material available on record.

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From the record, it is evident that the respondents duly received the applicant's notice dated 06.03.2024 seeking appointment of an independent arbitrator, yet no appointment was made. The applicant, therefore, filed this application on 17.05.2024, the counsel for the respondents sought time to file a reply to the present application on 31.05.2024, and only thereafter, while the present application was pending before this Court, the respondents appointed an arbitrator on 11.06.2024.

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It is pertinent to note here that the sole arbitrator appointed by the respondents on 11.06.2024 also happens to be an employee of the respondents in the position of a Sr. DCM, Kota, which is contrary to the legislative mandate of Section 12(5) of the Act of 1996, as the same cannot be said to be an impartial appointment. Thus, the submission advanced by learned counsel for the respondents qua the applicant's waiver lacks merit, as it is an established law that the principle of estoppel cannot override the law. Moreover, the case laws so relied upon by the learned counsel for the respondents relate to the position of law in the pre-amendment era, i.e., before the Amendment Act of 2019, and are therefore distinguishable on facts.

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The Hon'ble Apex Court, in Datar Switchgears Ltd. Vs. Tata Finance Ltd. and Ors.⁵ while examining the scope of appointments made by the opposite party in the teeth of Section

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5 (2000) 8 SCC 151

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11 (6) of the Act of 1996 has held as under:

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"So far as cases falling Under Section 11(6) are conceded-such as the one before us-no time limit has been prescribed under the Act, whereas a period of 30 days has been prescribed Under Section 11(4) and Section 11(5) of the Act. In our view, therefore, so far as Section 11(6) is concerned, if one party demands the opposite party to appoint an arbitrator and the opposite party does not make an appointment within 30 days of the demand, the right to appointment does not get automatically forfeited after expiry of 30 days. If the opposite party makes an appointment even after 30 days of the demand, but before the first party has moved the Court Under Section 11, that would be sufficient. In other words, in cases arising Under Section 11(6), if the opposite party has not made an appointment within 30 days of demand, the right to make appointment is not forfeited but continues, but an appointment has to be made before the former files application Under Section 11 seeking appointment of an arbitrator. Only then the right of the opposite party ceases."

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Further, the Hon'ble Apex Court, in Union of India Vs. M/s Bharat Battery Manufacturing Co. (P) Ltd. (supra) , has held that once a party files an application under Section 11(6), the other party's right to appoint an arbitrator is forfeited/ceased, and any subsequent appointment is without jurisdiction.

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Similarly, in Deep Trading Company Vs. Indian Oil Corporation (supra) , it was held that once the stipulated period under the notice lapses and proceedings under Section 11(6) are initiated, the other party's right to appoint an arbitrator is forfeited/ceased.

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Furthermore, a Co-ordinate Bench of this Court in M/s V K Sood Engineers And Contractors Vs. Union of India⁶ , while applying the principles laid down in Union of India Vs. M/s Bharat Battery Manufacturing Co. (P) Ltd. (supra) has held as under:

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"It is apparent from the judgments as referred hereinabove that while in Bharat Battery Manufacturing Co. (P) Ltd. (supra), the Hon'ble Supreme Court held that once a party files an application under Section 11 (6) of the Act of 1996, the other party extinguishes

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6 (2021) 2 RLW 1565

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its right to appoint an arbitrator in terms of the clause of the agreement thereafter. The right to appoint arbitrator under the clause of agreement ceases after Section 11 (6) petition has been filed by the other party before the Court seeking appointment of an arbitrator."

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Applying the above principles to the facts of the present case, this Court is of the considered view that the appointment of the arbitrator by the respondents on 11.06.2024, during the pendency of the present application, is per se illegal, invalid, and without jurisdiction.

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In view of the foregoing discussion and the settled position of law, the present Arbitration Application is allowed. This Court appoints Shri Ramesh Chand Meena (RHJS) (Retd. District Judge), residing at 10-H-25, Parijat Yojana, Mahaveer Nagar-III, Kota (Rajasthan) – 324005 (Contact No. 9414179666), as the sole arbitrator to adjudicate and resolve the dispute between the parties.

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The aforesaid appointment is subject to the sole arbitrator’s declaration of independence, impartiality, and availability as required under the Act of 1996. The fees of the sole arbitrator shall be determined in accordance with the relevant rules or as determined by the Sole Arbitrator with the consensus of the parties.

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The Registry is directed to intimate the Arbitrator- Shri Ramesh Chand Meena (RHJS) (Retd. District Judge) residing at 10-H-25, Parijat Yojana, Mahaveer Nagar-III, Kota (Rajasthan) – 324005 (Contact No. 9414179666) for his approval and declaration in terms of Section 11(8) read with Section 12(1) of the Act of 1996.

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All issues raised by the parties before the Arbitrator shall be considered on merits in accordance with the law except as regards the appointment of an arbitrator.

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Since, as per Section 29A of the Act of 1996, the arbitration proceedings are required to be concluded within the scheduled time as stipulated therein, it is expected from the parties to appear before the Arbitrator on 08.12.2025 or on any other date as informed by the Arbitrator, subject to the agreement between the parties. Furthermore, the parties shall provide their respective E-mail/ contact number/ mobile number and/or also of their authorized representatives/ Lawyers appearing on their behalf before the Arbitration Tribunal, in order to facilitate the Arbitrator to send information/communication to the parties, whenever required. The information sent by the Arbitrator, on such address/ E-mail/ cellphone of the parties or to their authorized representatives/ Lawyers, shall be treated as sufficient communication unless the same is not changed.

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Accordingly, the present Arbitration Application is allowed with the aforesaid directions. No order as to costs.

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All pending applications, if any, also stand disposed of.

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(MANEESH SHARMA),J

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Seema/123

Sohan Bai W/O Late Shri Krishan Kumar Nagar v. Union of India

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Sohan Bai W/O Late Shri Krishan Kumar Nagar v. Union of India

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