1. By this petition, the petitioner challenges the award dated 27th January 1999 passed by the learned Arbitrator — Shri V.T Chari. It transpires that the plaintiff filed a suit for money decree against the defendant before the Civil Judge, Senior Division, Solapur which was suit No. 303 of 1996. In that suit, the present petitioner was the defendant. He filed an application before the Civil Judge, Senior Division, Solapur stating therein that the dispute between parties should be referred to Shri Chari as an Arbitrator. This application was not opposed by the plaintiff respondent and therefore, the Court appointed by order dated 26th September 1997 Shri Chari as Arbitrator. Pursuant to that appointment, Shri Chari entered reference and made the award.
2. The learned counsel for the petitioner first submits that the appointment of Shri Chari as an Arbitrator was contrary to the provisions of the Act and therefore, according to the learned counsel, the award passed by the Arbitrator is liable to be set aside. He relies on the provisions of sections 2(e), 8, 11 of the Act as also clause 10.2 of the agreement between the parties. The learned counsel appearing for the respondent, on the other hand, submits that under section 8 of the Act, as a judicial authority, the learned Civil Judge, Senior Division, Solapur can refer the parties to arbitration and the parties were free by consent to appoint any person as an Arbitrator. The learned counsel submits that the petitioner themselves went to the Court and made an application, requesting that Shri Chari should be appointed as an Arbitrator, the respondent acceded to that request and therefore, Shri Chari was appointed as an Arbitrator. According to the learned counsel, therefore, in substance the appointment of Shri Chari as an Arbitrator is not made by the Civil Judge, Senior Division, Solapur but by both the parties by consent. He submits that as the appointment of Shri Chari as an Arbitrator was made by consent, there is no question of provisions of section 11 coming into play. The learned counsel submits that though clause 10.2 of the agreement between the parties provides for appointment of Arbitrator by the Chairman-cum-Managing Director of the respondent, it is clear from clause 11.4 of the agreement that parties are free to modify or vary the terms of the contract by mutual consent. The learned counsel submits that the proceedings before the Civil Judge, Senior Division, Solapur clearly show that the parties to the contract viz. the petitioner and the respondent modified clause 10.2 of the agreement when they mutually agreed to appoint Shri Chari as Arbitrator. The learned counsel therefore submits that there is nothing illegal or even irregular in the appointment of Shri Chari as an Arbitrator.
3. Now if in the light of these rival submissions, the record of the case is perused, it becomes clear that according to clause 10.2 of the agreement between the parties, the disputes or differences between the parties were to be referred to arbitration of an Arbitrator to be appointed by the Chairman-cum-Managing Director of the respondent. Clause 11.4 provides that the parties can by agreement vary or modify any of the terms of the contract. The respondent filed a suit for a money decree against the petitioner. In that suit, the petitioner on its own made an application for referring the dispute to the arbitration and suggested the name of Shri Chari as an Arbitrator. It is clear from the order passed by the Civil Judge, Senior Division, Solapur dated 26th September, 1997 that this application was not opposed by the respondent. This clearly means that the respondent not only agreed to the referring of the dispute raised in the suit to an Arbitrator but they also consented to the appointment of Shri Chari as an Arbitrator. Perusal of the provisions of section 8 of the Arbitration Act shows that a judicial authority, before which an action is brought in a matter which is the subject matter of an arbitration agreement, if the parties so apply, can refer the parties to arbitration. In the present case, both the parties to the suit before the Civil Judge agreed for reference of the matter to arbitration. Insofar as the question whether the Civil Judge, Senior Division, Solapur would be a judicial authority within the meaning of section 8 of the Act is concerned, it is clear from the provisions of section 2(3) that the Court for the purpose of Arbitration Act means the Principal Civil Court of original jurisdiction in a district. According to the provisions of the Bombay Civil Courts Act, District Court in each district is the Principal Civil Court of original jurisdiction. Therefore, the Civil Judge, Senior Division, Solapur would not be the Principal Civil Court of original jurisdiction in the district and therefore, it would not be the Court for the purpose of Arbitration Act. It is however clear that the term “Judicial Authority” is a term of wider import and therefore, it would not only include Court but it will also include all authorities which can be described as judicial authorities, in the sense that they administer justice. It goes without saying that the Civil Judge, Senior Division, Solapur administers justice and therefore can be safely described as judicial authority for the purpose of Arbitration Act. Therefore, that part of the order of the Civil Judge, Senior Division, Solapur referring the parties to arbitration would be perfectly within the four corners of the provisions of sub-section (1) of section 8 of the Act. It is clear that despite the contents of clause 10.2 of the agreement between the parties, parties were free by consent to modify the term in the agreement which contemplated the appointment of Arbitrator by the Chairman-cum-Managing Director and appoint the Arbitrator by their mutual consent. In the present case, it cannot be said that the appointment of Arbitrator has been made by the Civil Judge, Senior Division, Solapur. The best that can be said is that the Civil Judge, Senior Division, Solapur by his order recognised the appointment of Shri Chari as an Arbitrator which was made by consent of both the parties. Thus, I do not find any illegality in the appointment of Shri Chari as an Arbitrator. It is further to be seen that even if it is assumed that the petitioner is justified in contending that the appointment of Shri Chari is not as per the agreement between the parties and therefore, the appointment is illegal in view of the provisions of section 4, the petitioner was obliged to raise that objection before the Arbitrator and their failure to do so in terms of the provisions of section 4 of the Arbitration Act amount to waiver of their objection. The objection that the appointment of Shri Chari was not as per the agreement between the parties, was not raised by the petitioner before the Arbitrator. In any case, I have already found that there is no illegality involved in the appointment of Shri Chari as an Arbitrator. It is further to be seen here that it is the petitioner themselves who approached the Civil Judge, Senior Division, Solapur for referring the dispute to the Arbitrator, they also suggested the name of Shri Chari as an Arbitrator. It is further to be seen here that according to the agreement between the parties, the Arbitrator was to be appointed by the Chairman-cum-Managing Director of Cotton Corporation of India i.e the petitioner which itself went before the Civil Judge, Senior Division, Solapur, suggesting the name of Shri Chari appointed as an Arbitrator. Therefore, in my opinion, an inference can safely be drawn that the appointment of Shri Chari was by Cotton Corporation of India itself which according to the agreement between the parties, was to appoint the Administrator. In any case, the conduct of the petitioner of itself getting Shri Chari as an Arbitrator and then turning around and raising objections to his appointment, in my opinion, is unjustifiable.
4. The learned counsel for the petitioner also tried to argue on the merits of the award. However, considering the extremely limited jurisdiction of this Court under section 34 of the Act to set aside the award made by the Arbitrator, could not substantiate this challenge. I thus find that there is no substance in the petition. Considering the conduct of the petitioner, which has been referred to above, in my opinion, this is a fit case where the petitioner should be made to pay costs to the respondent. Petition is therefore dismissed with costs.
5. Certified copy expedited.
Petition dismissed.