Mukul Mudgal, J.:—

IA. No. 539/04(under Section 5 of the Limitation Act)

1. Allowed subject to all just exceptions. Delay in re-filing trie petition stands condoned.

Arb. P. No. 28/04

1. This is a petition under Section ll(6)(c) of the Arbitration and Con ciliation Act,. 1996(hereinafter referred to as. ‘the Act’) filed by Prasar Bharati for appointment of an independent arbitrator.

2. This petition again raises the questions which repeatedly arise” during proceedings for the appointment of an independent arbitrator under Section ll(6)(c) of the Act. The petitioner had entered into an Ac creditation Agreement dated”5th June, 1997 with the respondent by which the respondent was required to book advertisements for the programmes telecast by the petitioner and the respondent was allowed a commission @ 15% of the advertisement revenue collected by it and rest of the revenue was to be remitted back to the petitioner. Clause 5 of the agreement be tween the parties providing for settlement of disputes by way of arbitration reads as follows:—

“5. In the event of any question, dispute or difference arising under these presents or in connection therewith except as to any matters the decision of which is specially provided for by these presents, the same shall be referred to the sole arbitration of an Officer appointed to be the arbitrator by the Director General, Doordarshan. It will be no objection that the arbitrator is a Government Servant, he has expressed views on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to these presents.

In the event of the arbitrator dying, neglecting or refusing to act or resigning or being unable to act for any reason, it shall be lawful for the Director General, Doordarshan to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. The arbitrator may, from time to time, with the consent of the parties to these presents enlarge time for making and publishing the award.

Upon every and any such reference, the assessment of the costs of an incidental to the refer onced and the award respectively shall be in the discretion of the arbitrator. Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause.”

3. That admittedly upon disputes arising between the parties and in accordance with the above clause, the petitioner had called upon the Director General, Doordarshan and the respondent to appoint an arbitrator by addressing a communication to the Director General as provided in the aforesaid Clause 5 on 8th February, 2003 by a letter admittedly received by the Office of the D.G, Doordarshan as well as the respondent. In reply, the petitioner had been informed by the Directorate General, Doordarshan that the post of the Director General, Doordarshan ‘was lying vacant and its request for appointment of an arbitrator can only be acted upon by the Director General as and when he is appointed and as such no action has been taken on the petitioner's request for appointment of an arbitrator. On 23th January, 2004 the petitioner approached this Court under sub-section (6) of Section 11 of the Act. On 28th January, 2004 notice was issued to the respondents. In reply to the arbitration petition, Mr. Arvind K. Nigam along with Mr. Anish Dayal appears on behalf of the respondents and has raised the following pleas in opposition to the prayer made in the petition for appointment of an arbitrator:—

(i) that there is no arbitration agreement between the parties to appoint an arbitrator as no arbitration clause is contained in the agreement between the parties.

(ii) the dispute is stale one and is barred by limitation.

(iii) the disputes between the parties stood settled as the bank guarantee was returned to the petitioner and

(iv) that the present petition is also barred by limitation.

3. Mr. Rajiv Sharma, the learned counsel for the petitioner submitted that the position of law laid down in respect of an appointment of an arbitrator is well settled by the Supreme Court in the following judgments (i) Konkan Railway Corporation Ltd. v. Rani Construction Pvt. Ltd., (2002) 2 SCC 388 @ Paras 18, 23; (ii) Hythro Power Corporation Ltd. v. Delhi Transco Ltd.., (2003) 8 SCC 35 @ P. 8-9; (iii) Food Corporation of India v. Indian Council of Arbitration & Others, (2003) 6 SCC 564 @ 12, 14; (iv) Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums., (2003) 6 SCC 503 @ 16; (v) State of Orissa & Others v. Gokulanada Jena, (2003) 6 SCC 465 @ 8, 10-11.

4. The relevant paragraphs of the above decisions of the Supreme Court are as under:—

1. Konkan Railway Corporation's case

“18. There is nothing in Section 11 that requires the party other than the party making the request to be noticed. It does not contemplates a response from that other party. It does not contemplate a decision by the Chief Justice or his designate on any controversy that the other party may raise, even in regard to its failure to appoint an arbitrator within the period of thirty days. That the Chief Justice or his designate has to make the nomination of an arbitrator only if the period of thirty days is over does not lead to the conclusion that the decision to nominate is adjudicatory. In its request to the Chief Justice to make the appointment the party would aver that this period has passed and, ordinarily, correspondence between the parties would be annexed to bear this out. This is all that the Chief Justice or his designate has to see. That the Chief Justice or his designate has to take into account the qualifications required of the arbitrator by the agreement between the parties (which, ordinarily, would also be annexed to the request) and other considerations likely to secure the nomination of an independent and impartial arbitrator also cannot lead to the conclusion that the Chief Justice or his designate is required to perform an adjudicatory function. That the word “decision” is used in the matter of the request by a party to nominate an arbitrator does not of itself mean that an adjudicatory decision is contemplated.

23. In conclusion, we hold that the order of the Chief Justice or his designate under Section 11 nominating an arbitrator is not an adjudicatory order and the Chief Justice or his designate is not a tribunal. Such an order cannot properly be made the subject of a petition for special leave petition to appeal under Article 136. The decision of the three-Judge Bench in Konkan Rly. Corpn. Ltd. v. Mehul Construction Co., (2000) 7 SCC 201 is affirmed.”

2. Hythro Power Corporation Ltd's case

“8. On the facts and background of the dispute briefly indicated above, we find that the designate of the Chief Justice acting ad- -ministratively under Section 11 and the Division Bench of the High Court exercising powers under Article 226 of the Constitution were clearly in error in adjudicating upon the dispute regarding “the validity and existence of the arbitration agreement” and holding that the dispute was not referable to arbitration. 9. This Court in three-Judge Bench decision in Food Corpn., of India v. Indian Council of Arbitration, (2003) 6 SCC 564 and Constitution-Bench decision in the case of Konkan Rly. (supra) has held that the Chief Justice or his designate under Section 11 of the Act exercises purely administrative functions and it is not open to him to discharge any judicial function of adjudicating the dispute even regarding the “existence of arbitration agreement.”

3. Food Corporation of India's case. “Unfortunately, the High Court in this case seems to have proceeded to adopt an adjudicatory role and returned a verdict recording reasons as to the very existence or otherwise of the agreement as well as the tenability and legality or otherwise of making a refer ence to an arbitrator. In view of such peculiar situation, it would be futile for the respondents to contend that the SLPs are not main tainable, particularly in view of the fact that any recourse to have the arbitrator appointed or nominated could be forestalled by the detailed judgment and the findings recorded by the High Court in this matter. In the light of the above, the details pointed out on be half of the ICA regarding the submission as to the provisions of law actually invoked before the High Court, the nature of the application or the character of the order passed pales into insignificance. The objections in this regard are consequently rejected

14. The fact that there is an agreement between parties to have their disputes resolved by reference to an arbitration and that it should be through the ICA and in accordance with the rules or procedure prescribed by the ICA is not in controversy. As indicated earlier, even assuming without accepting for purposes of consideration that there is any infirmity in the arbitration clause which goes to determine as claimed by the respondents the legality, propriety and validity of the constitution of the Tribunal and/or even if there be any objections as to the existence of an enforceable or valid arbitration agreement, it has to be adjudicated by the every Arbitral Tribunal after a reference is made to it on being so constituted and it is not for the ICA or the learned Single Judge in the High Court to undertake this impermissible adjudicatory task of adjudging highly contentious issues between the parties. As observed by the Constitution Bench of this Court, there is nothing in Section 11 of the 1996 Act that requires the party other than the party making the request to be noticed and that it neither does contemplate a response from the other party nor contemplates any decision by the Chief Justice or his nominee on any controversy that the other party may raise, even in regard to its failure to appoint an arbitrator within the stipulated period. The legislative intent underlying the 1996 Act is to minimize the supervisory roles of courts in the arbitral process and nominate/appoint the arbitrator without wasting time, leaving all contentious issues to be urged and agitated before the Arbitral Tribunal itself. Even under the old law, common sense approach alone was commended for being adopted in construing an arbitration clause more to perpetuate the intention of parties to get their disputes resolved through the alternate disputes redressal method of arbitration rather than thwart it by adopting a narrow, pedantic and legalistic interpretation.”

4. Hindustan Petroleum Corpn. Ltd. ‘s case

“16. It is clear from the language of the section, as interpreted by the Constitution Bench judgment in Konkan Rly (supra) that if there is any objection as to the applicability of the arbitration clause to the facts of the case, the same will have to be raised before the Arbitral Tribunal concerned. Therefore, in our opinion, in this case the courts below ought not to have proceeded to examine the applicability of the arbitration clause to the facts of the case in hand but ought to have left that Issue summons to the respondents in the ordinary course as well as by registered A.D returnable on to be determined by the Arbitral Tribunal as contemplated in clause 40 of the Dealership Agreement and as required under Sections 8 and 16 of the Act.”

5. State of Orissa'scase(supra)

“8. However, we must notice that in view of Section 16 read with Sections 12 and 13 of the Act, as interpreted by the Constitution Bench of this Court in Konkan Rly (supra) almost all disputes which could be presently contemplated can be raised and agitated before the arbitrator appointed by the Designated Judge under Section 11(6) of the Act. From the perusal of the said provisions of the Act, it is clear that there is hardly any area of dispute which cannot be decided by the arbitrator appointed by the Designated Judge. If that be so, since an alternative efficacious remedy is available before the arbitrator, a writ court normally would not entertain a challenge to an order of the. Designated Judge made under Section 11(6) of the Act which includes considering the question of jurisdiction of the arbitrator himself. Therefore, in our view even though a writ petition under Article 226 of the Constitution is available to an aggrieved party, ground available for challenge in such a petition is limited because of the alternative remedy available under the Act itself.

10. The challenge of the appellant in the writ petition against the order of the Designated Judge is based on the following facts:

(i) The contract between the parties was executed before the Act came into force, hence, the Act does not apply.

(ii) Dispute is a stale one having arisen nearly 20 years ago.

(iii) Clause 23 of the agreement contemplates the adjudication of a dispute by a company arbitrator.

(iv) No person other than an arbitrator nominated in clause 23 of the agreement has any jurisdiction to entertain the disputes.

11. All these grounds of attack, in our opinion, can very well be raised before the arbitrator appointed by the Designated Judge, hence, on the facts of the case, we find that the writ petition of the appellant was liable to be dismissed by the High Court. For this reason, we do not think it appropriate to remand the matter back to the High Court. Therefore, we dismiss this appeal permitting the appellant to raise all its contentions before the arbitrator appointed by the Designated Judge.”

5. The principles of law which therefore govern the appointment/constitution of an arbitrator/arbitral tribunal under Section 11 of the Act which emerge from the aforesaid judgments of the Supreme Court are as follows:—

(a) an order under Section 11(6) nominating an arbitrator is not an adjudicatory one [Konknn Rly's case (supra)]

(b) No judicial functions can be discharged under Section 11 and not even a dispute regarding the validity or existence of an arbitration agreement can be gone into in the exercise of administrative power under Section 11 [Hythro Power Corprn's case (supra)]

(c) Even if an infirmity in the arbitration clause goes to determine the legality, validity and propriety of the constitution of the arbitral tribunal, it has to be exercised by the arbitral tribunal and under Section 11 the High Court cannot undertake the highly judicial determination of highly contentious issues. The legislative intent underlying the 1996 Act was to minimize and limit the supervisory role of Courts and to ensure that all contentious issues were raised before the arbitral tribunal [FCI's case (supra)]

(d) Any objection to the applicability of the arbitration clause will have to be raised before the arbitral tribunal [Hindustan Petroleum's case (supra)]—

(e) There is hardly any area of dispute which cannot be decided in arbitration by the arbitrator appointed under Section 11 [State of Orissa's case (supra)]

6. I will deal with the first plea raised by the respondent. The position of law laid down by the Hon'ble Supreme Court in the aforesaid judgments is clear and unambiguous and is to the effect that the functions of this Court under Section 11 are administrative and not adjudicatory and even the dispute regarding the existence of arbitration agreement cannot be adjudicated by this Court and ought to be adjudicated by the arbitrator. It has further been held that the Court should not adopt an adjudicatory role and even returned a verdict recording reasons as to the very existence or otherwise of the agreement as contended by the respondents. This Court cannot at this stage, therefore, determine this plea sought to be raised by the respondent.

7. The respondent's second plea as to the question of limitation both qua the claim and qua the present petition has been specifically dealt with by the Hon'ble Supreme Court in the State of Orissa's case (supra). Thus-all the grounds raised by the respondents in opposition to the petition stands covered by the well settled position of law as discernible from the judgments of the Hon'ble Supreme Court extracted above.

8. At this stage, Mr. Nigam, the learned counsel appearing on behalf of the respondent has relied upon an order of the Hon'ble Supreme Court in Angang Group Intnl. Trade Corporation v. Pipavav Railway Corporation Ltd., (2003) 10 SCC 51 wherein a learned Single Judge of the Hon'ble Supreme Court in an order under Section 11(6) of the Act observed as follows:—

“4. Considering all facts and circumstances and the contentions raised by the respective parties, it is to be noted that it is not one of those clear-cut cases as contended, in which it could be said that there is no contract at all between the parties, on the face of it. The matter is such that it may require probe and enquiry into the objections raised by the respondent and if is only feasible and appropriate that the arbitrator himself may embark upon any such enquiry in case any objection or issue is raised by the respondent before the arbitrator regarding existence of an agreement between the parties.” Even if it is assumed that the said order of a learned Single Judge under Section 11(6) of the Act in Angang Group Intnl. Trade Corporation's case (supra) supports the proposition notwithstanding the law laid down by the Hon'ble Supreme Court in the decisions summarized above in the present case, it cannot be said in the present case that there is no contract at all between the parties. Accordingly, the aforesaid order will not apply to the facts of the present case. At this stage, Mr. Nigam made another submission that since his client being dragged into the determination of a stale issue, the costs of arbitration upto date should be borne by the petitioner initially until the decision of the preliminary issues is arrived at by the arbitrator. In my view, this would be an adjudicatory function and as rightly submitted by Mr. Sharma, the learned counsel for the petitioner and I am not inclined to pass such an order putting the costs at the door of the petitioner pending determination of the preliminary issue.

9. In this view of the matter and the provision of Clause 5 providing for arbitration and in view of the well settled position of law as extracted above in the present case, Mr. Justice CM. Nayar, a retired Judge of this Court is appointed as the arbitrator to adjudicate the disputes between the parties. Statements of claims shall be filed by either party on or before the next date, fixed before the arbitrator. The arbitrator to fix his fees in consultation with the counsel for the parties. Parties to appear before the arbitrator on 2nd November, 2004 at 4.30 PM. Both the counsel agree that the arbitrator be directed to dispose of the reference expeditiously and not later than six months. Accordingly, the arbitrator is requested to dispose of the reference not later than 6 months from the date of the first hearing of the reference. It is open to the parties to raise all the contentions/pleas raised in these proceedings or those available to them in law before the arbitrator.

10. The petition stands allowed and disposed of accordingly.