CKK Catering Services v Indian Railway Catering and Tourism Corporation Ltd and Southern Railway

# **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN MONDAY, THE 14[TH] DAY OF NOVEMBER 2022 / 23RD KARTHIKA, 1944 ``` ## **`AR NO. 102 OF 2021`** ## **`PETITIONER:`** ``` CKK CATERING SERVICES A PARTNERSHIP FIRM HAVING ITS OFFICE AT PB NO.1776, SOUTH RAILWAY STATION ROAD, ERNAKULAM-682016, REPRESENTED BY ITS MANAGING PARTNER, MR.C.K.K.MOIDOO. BY ADVS. ``` ``` M.GOPIKRISHNAN NAMBIAR K.JOHN MATHAI JOSON MANAVALAN KURYAN THOMAS PAULOSE C. ABRAHAM RAJA KANNAN DOMINIC ANTONY ``` ## **`RESPONDENTS:`** ``` 1M/S INDIAN RAILWAY CATERING AND TOURISM CORPORATION LTD. HAVING ITS REGISTERED OFFICE AT B-148, 11TH FLOOR, STATESMAN BUILDING, BARAKAHMBA ROAD, NEW DELHI-110001, AND ALSO HAVING ITS REGIONAL OFFICE AT 40/8194, SALIH ARCADE, 1ST FLOOR, CONVENT ROAD, ERNAKULAM-682025, REPRESENTED BY ITS DEPUTY GENERAL MANAGER-CATERING. ``` ``` *2M/S SOUTHERN RAILWAY DIVISION OFFICE, COMMERCIAL BRANCH, THIRUVANANTHAPURAM – 695014, REPRESENTED BY ITS SENIOR DIVISIONAL COMMERCIAL MANAGER *(IMPLEADED AS ADDITIONAL 2ND RESPONDENT AS PER ORDER DATED 24/01/2022 IN I.A. NO. 01/2022 IN A.R. NO. 102/2021) ``` ``` BY ADVS. SMT.ASHA CHERIAN, SC, IRCTC SHRI.SHRI.DINESH RAO A., SC, R2 SRI.S.BIJU, -R2 ``` ``` THIS ARBITRATION REQUEST HAVING BEEN FINALLY HEARD ON 08.11.2022, THE COURT ON 14.11.2022 DELIVERED THE FOLLOWING: ``` AR 102/2021 2 ## **ORDER** The petitioner is a partnership firm engaged in the business of catering services. The 1[st] respondent is the Indian Railway Catering and Tourism Corporation Ltd (hereinafter referred to as 'IRCTC', for short). The Southern Railway, the 2[nd] additional respondent floated tender for operation of a Vegetarian Refreshment Room (for brevity, 'VRR') at Ernakulam Junction Railway Station. The bid submitted by the petitioner was accepted and Letter of Award dated 25.03.2015 was issued by the Southern Railway to the petitioner for operation of the VRR for a period of five years from 05.05.2016 to 04.05.2021. The petitioner was called upon to remit an amount of Rs. 63,11,926/- towards security deposit after adjusting the EMD of Rs. 2,58,704/- paid along with the bid. The petitioner produced a bank guarantee to the AR 102/2021 3 tune of Rs. 63,11,926/- towards security deposit in favour of Southern Railway and commenced operation of the VRR on 05.05.2016. Annexure A master license agreement dated 15.06.2016 was also executed between the petitioner and the Southern Railway. 2.Pursuant to the Catering Policy, 2017 of the Ministry of Railway, IRCTC was made responsible for management of catering services and by way of Annexure B tripartite agreement dated 14.08.2017 between the Southern Railway, IRCTC and the petitioner, the Southern Railway assigned all its rights and liabilities as licensor under Annexure A master license agreement to the IRCTC, subject to certain amendments provided in clause 8 of Annexure B. 3. In terms of Annexures A and B agreements, the petitioner operated the VRR and remitted the license fee for the period 2018-19. On 06.12.2018, the petitioner AR 102/2021 4 informed the Southern Railway that, after the expiry of the period for which license fee was paid, i.e. after 04.05.2019, the petitioner would like to stop operating the VRR. The petitioner operated the VRR only up to 04.05.2019. While so, in the month of September, 2019, the IRCTC invoked the bank guarantee submitted by the petitioner. The petitioner, therefore, issued Annexure C notice dated 29.10.2019 to IRCTC invoking the arbitration clause contained in Annexures A and B agreements alleging that the IRCTC had illegally invoked the bank guarantee submitted by the petitioner. By Annexure D letter, IRCTC appointed Shri.Ashok Kumar, an Ex IRTS officer as sole arbitrator in terms of Article 19.2 of Annexure A master license agreement. 4. The sole arbitrator accepted the nomination, made declaration under section 12 (1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act' AR 102/2021 5 for short) and conducted various sittings. The petitioner filed Annexure I application under section 16 of the Act before the arbitrator challenging his jurisdiction which was dismissed by Annexure K order on 25.10.2021 and the petitioner was asked to file statement of claim. The petitioner contends that the appointment of the arbitrator was unilaterally done by the IRCTC and the consent to the constitution of the Arbitral Tribunal was given by the counsel for the petitioner before the arbitrator without instruction from the petitioner. The petitioner submits that the appointment of the sole arbitrator by the IRCTC is ex-facie illegal and bad in law and is liable to be set aside by this Court. According to the petitioner, the issues to be adjudicated by the arbitrator are with respect to the invocation of the bank guarantee by the IRCTC and whether the petitioner is entitled to get back the amount covered by the bank guarantee and the earnest money AR 102/2021 6 deposit from IRCTC. The petitioner contends that, as per Article 19 of Annexure A agreement and clause 8.9 of Annexure B agreement, any dispute or differences of any nature between the petitioner and the IRCTC shall be referred to a sole arbitrator to be appointed in terms of the Act. Accordingly, the petitioner has requested for appointment of an arbitrator under section 11 of the Act for the adjudication of disputes that have arisen between the parties. 5.A counter affidavit is filed on behalf of IRCTC wherein it is stated that when the IRCTC took steps for closure of VRR and demanded arrears of license fees invoking Article 18.2 of the master license agreement, the petitioner filed W.P.(C) No.3769/2019 under Article 226 of the Constitution of India and the learned Single Judge, in view of the arbitration clause in the agreement enabling the parties to resolve the dispute by invoking AR 102/2021 7 the alternative dispute resolution mechanism, disposed of the writ petition leaving open the liberty of the petitioner to move in terms of the Act and coercive steps pursuant to closure notice was suspended for ten days. It is pursuant to Annexure C lawyer notice issued on behalf of the petitioner, the IRCTC appointed the arbitrator as per Annexure D communication. It is stated that the sitting of the arbitrator was held on various days and the petitioner entered counsel. the appearance through During pendency of the arbitration proceedings, the petitioner approached this Court by filing W.P. (C) No. 35294/2019 for return of the bank guarantee from the respondents and the said writ petition was dismissed on 19.01.2021. Subsequent to the dismissal of W.P. (C) No. 35294/2019, the petitioner filed application under section 16 of the Act before the arbitrator and during the pendency of that application, AR 102/2021 8 the petitioner filed A.R.No.53/2021 before this Court on 15.07.2021 for appointment of an independent arbitrator. After the dismissal of the application under section 16 of the Act by the arbitrator on 25.10.2021, the petitioner filed Claim Statement before the arbitrator under protest and filed the present Arbitration Request and A.R. No. 53/2021 was withdrawn. Referring to the proceedings of the arbitrator, the 1[st] respondent states that the petitioner had agreed to the constitution of the Tribunal and had attended the proceedings through counsel. Regarding the contention of the petitioner that the IRCTC unilaterally appointed the arbitrator by circumventing the provisions of the Act, it is stated that no amendment is made in Annexure B tripartite agreement with regard to the appointment of arbitrator and even in Annexure A master license agreement, it is stated that the dispute shall be settled as per the provisions of 'Arbitration and AR 102/2021 9 Conciliation Act, 1996'. It is further stated that though some amendments are mentioned in Annexure B tripartite agreement, there is no change in the procedure of appointment of arbitrator mentioned in Article 19 of master license agreement. It is stated that the CMD of IRCTC has nominated the arbitrator from the list of empanelled arbitrators and that the appointment of arbitrator is in terms of Article 19 of master license agreement and the appointment of arbitrator or Annexure K order of the arbitrator under section 16 of the Act is not under challenge. 6. A Statement is filed on behalf of the additional second respondent stating that the dispute is between IRCTC and the petitioner and the said respondent has no role to play in the dispute. 7. Heard Sri. Joson Manavalan, the learned counsel for the petitioner, Smt. Asha Cherian, the learned counsel AR 102/2021 10 for the 1[st] respondent and Sri.S.Biju for the additional second respondent. 8. Sri. Joson would contend that as per Article 19 of Annexure A master license agreement and clause 8.9 of Annexure B or tripartite agreement, any dispute differences of any nature between the petitioner and the IRCTC shall be referred to a sole arbitrator to be appointed in terms of the Act. The appointment of the sole arbitrator is unilaterally made by the CMD of IRCTC, a signatory to Annexure B, who is ineligible under section 12 (5) read with the seventh schedule to the Act. Sri. Joson relied on the decisions of the Hon'ble Supreme Court in **TRF Ltd.** _**v**_ **. Energo Engineering projects Ltd.** [2017 KHC 4463: (2017) 8 SCC 377: AIR 2017 SC 3889] and **Bharat Broadband Network Limited** _**v**_ **. United Telecoms Limited** [2019 KHC 6456: AIR 2019 SC 2434:(2019) 5 SCC 755] to contend that neither a AR 102/2021 11 party to the disputes nor a person nominated by it can be appointed as an arbitrator. 9. Per contra, Smt. Asha would contend that the question as to disqualification under section 12 (5) is not raised in the Arbitration Request and that the petitioner ought to have applied to the competent court to decide the termination of the arbitrator under section 14 (1) (a) instead of filing an Arbitration Request. Smt. Asha relied on the decision of the Hon'ble Supreme Court in _**v**_ **Swadesh Kumar Agarwal . Dinesh Kumar Agarwal and others** [AIR 2022 SC 2193]. Smt. Asha would further submit that, as per Article 19 (2) of Annexure A master license agreement, the dispute has to be referred to sole arbitration of a gazetted railway officer by the General Manager of the Zonal Railway awarding the license and after the tripartite agreement, the CMD of IRCTC has appointed the sole arbitrator as per the procedure under AR 102/2021 12 Article 19.2 and the sole arbitrator has filed a statement under section 12 (1) of the Act that he does not fall within the ambit of the seventh schedule. 10. Article 19 of Annexure A master license agreement reads as follows: ## “ARTICLE 19 DISPUTE RESOLUTION: 19.1. In the event of any dispute, controversy or claim of any kind or nature arising under or in connection with this Agreement between the parties (hereinafter called "Disputes''), the parties shall firstly attempt to amicably resolve such Disputes through negotiations and discussions. 19.2. In the event that Disputes between the parties subsist beyond 30 days of negotiations between the Parties, then the Dispute shall be settled as per the provisions of Arbitration and Conciliation Act 1996. The dispute shall be referred to: (a) A Sole arbitration of a Gazetted Railway Officer appointed AR 102/2021 13 to be the Sole arbitrator, by the General Manager of the Zonal Railway awarding the License. The Gazetted Railway Officer to be appointed as arbitrator however will not be one of those who had an opportunity to deal with the matters to which the contract relates or who in the course of their duties as railway servant have expressed views on all or any of the matters under dispute or difference. (b) In the event of the arbitrator dying, neglecting or refusing to act or resigning of being unable to act for any reason, or his award being set aside by the court for any reason, it shall be lawful for the authority appointing the arbitrator to appoint another arbitrator in place of the outgoing arbitrator in the manner aforesaid. (c) It is further a term of this contract that no person other than the person appointed by the authority as aforesaid should act as arbitrator and that if for any reason that is not possible, the matter is not to be referred to arbitrator at all. (d) The arbitrator may from time to time with the consent of all the parties to the contract enlarge the time for making the award. AR 102/2021 14 (c) Upon every and any such reference the assessment of the cost incidental to the reference and award respectively shall be in the discretion of the arbitrator. (f) Subject as aforesaid, the Arbitration and Conciliation Act, 1996 and the rules there under and any statutory modifications thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this clause. (g) The venue of the arbitration shall be the place from which the acceptance note is issued or such other place as the arbitrator at his discretion may determine. (h) In this clause the authority to appoint the arbitrator includes, if there be no such authority, the officer who is for the time being discharging the functions of that authority, whether in addition to other functions or otherwise. 19.3. The award passed shall be final and binding and both Parties waive the right to appeal or contest the arbitral award. 19.4. It is further clarified that during the resolution of the Disputes, the Licensee shall be obligated for the AR 102/2021 15 continued performance of its obligations under the Agreement until the resolution of the Disputes.” 11.Pursuant to the Catering Policy, 2017 of the Ministry of Railway, IRCTC was made responsible for management of catering services and by way of Annexure B tripartite agreement, the Southern Railway assigned all its rights and liabilities as licensor under Annexure A master license agreement to the IRCTC, subject to certain amendments provided in clause 8 of Annexure B. Clauses 7 and 8 of Annexure B tripartite agreement read as under: “Terms and Conditions of the Agreement: 7. The Licensee shall continue to provide catering services in Vegetarian Refreshment Room at Ernakulam Junction till 04.05.2021 i.e. for the period of license awarded by Southern Railway, unless terminated earlier by CCM/Southern Railway or CMD/IRCTC. AR 102/2021 16 8. CCM/Southern Railway or acting through other authorized officers hereby assign its rights and liabilities as Licensor to IRCTC acting through CMD/IRCTC. The terms and conditions as provided in the agreement dated 15.06.2016 signed between M/s. C K K Catering Service and Southern Railway shall form the basis of this agreement. However the following amendments shall prevail over the earlier agreement. 8.1 CMD/IRCTC or his authorized officers shall have the power to inspect the trains and impose fines, if any. 8.2 CMD/IRCTC shall have the power to terminate in case of any violation of this agreement and terms and conditions of the agreement dated 15.06.2016. 8.3 CCM/Southern Railway or authorized officials of Indian Railways shall continue to have supervision & monitoring of catering on all kitchen units. CCMs of the concerned Zonal Railways shall impose and realize fines/penalties on Licensee/ IRCTC in case of deficiencies/complaints of catering services on trains under the management of IRCTC as per the provisions of Master License Agreement of the AR 102/2021 17 SBD, except for termination. 8.4 CMD/IRCTC shall depute IRCTC's supervisor for monitoring of catering services on Vegetarian Refreshment Room. Contact number of the supervisor shall be prominently displayed. The supervisor shall be accountable for the performance of the contractor. 8.5 For the unit Vegetarian Refreshment Room, awarded by Southern Railway on 25.03.2015 and reassigned to IRCTC as per this agreement, license fee shall be shared between Southern Railway and IRCTC in the ratio of 40:60 respectively from the date of handing over of the unit to IRCTC. 8.6 The licence fee w.e.f 14.08.2017 shall be paid to CMD/IRCTC. 8.7 If any licence fee has been paid in advance by the licensee for period when the kitchen unit has been taken over by CMD/IRCTC, the same shall be transferred by Southern Railway to CMD/IRCTC. 8.8 The continuation of license/licensee w.e.f 14.08.2017 shall be subject to a No Dues certificate given by Southern AR 102/2021 18 Railway to licensee. However there is an amount of Rs. 21,000/- due from licensee on fine which may be collected by IRCTC. 8.9 In case of any dispute the matter shall be referred for arbitration to a Sole Arbitrator to be appointed as per Arbitration & Conciliation Act, 1996 as amended from time to time. 8.10 At the end of tenure of the license, the licensee shall hand over the peaceful possession of the pantry car/kitchen unit to CMD/IRCTC.” 12.Annexure A master license agreement provides that, in the event of any dispute, controversy or claim of any kind or nature arising under or in connection with the said agreement between the parties, the dispute shall be settled as per the provisions of the Arbitration and Conciliation Act, 1996. Annexure B tripartite agreement provides that the terms and conditions as provided in the master license agreement shall form the basis of the AR 102/2021 19 tripartite agreement, however the amendments enumerated therein shall prevail over the master license agreement and one such amendment therein provides that, in case of any dispute, the matter shall be referred for arbitration to a sole arbitrator to be appointed as per Arbitration and Conciliation Act, 1996 as amended from time to time. In the light of Article 19 of Annexure A master license agreement amended by clause 8.9 of Annexure B tripartite agreement, any dispute, controversy or claim of any kind or nature arising under or in connection with the said agreements between the parties shall be referred for arbitration to a sole arbitrator to be appointed as per Arbitration and Conciliation Act, 1996. 13. Section 12 of the Arbitration and Conciliation Act, 1996 reads as under: “12.Grounds for challenge.—(1) When a person is AR 102/2021 20 approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances— (a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, whether financial, business, professional or other kind, which is likely to give rise to justifiable doubts as to his independence or impartiality; and (b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months. Explanation1.—The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator. Explanation 2.—The disclosure shall be made by such person in the form specified in the Sixth Schedule. (2)An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without AR 102/2021 21 delay, disclose to the parties in writing any circumstances referred to in sub-section (1) unless they have already been informed of them by him. - (3) An arbitrator may be challenged only if- - (a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or - (b) he does not possess the qualifications agreed to by the parties. (4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made. (5) Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator: Provided that parties may, subsequent to disputes AR 102/2021 22 having arisen between them, waive the applicability of this sub-section by an express agreement in writing. Thus, section 12 (5) provides that, a person whose relationship with the parties or the counsel or the subject – matter of dispute falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. The proviso to section 12 (5) provides that the parties may, subsequent to the disputes arisen between them, waive the applicability by express agreement in writing. Item Nos 1 and 5 of the Seventh Schedule to the Act read as follows: "Arbitrator's relationship with the parties or counsel'' 1. The arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party. ## xxxx xxxx xxxx 5. The arbitrator is a manager, director or part of the management, or has a similar controlling influence, in AR 102/2021 23 an affiliate of one of the parties if the affiliate is directly involved in the matters in dispute in the arbitration.” 14. In the case on hand, the CMD of IRCTC has appointed the sole arbitrator and the appointment is, therefore, hit by item No. 5 of the seventh schedule. There is no express agreement in writing waiving the applicability of the sub-section. In **TRF Ltd.** (supra), the Hon'ble Supreme Court referred to section 12 (5) of the Act in the context of appointment of an arbitrator by a Managing Director of a Corporation, who became ineligible to act as arbitrator under the seventh schedule. The Court held: “50. First, we shall deal with Clause (d). There is no quarrel that by virtue of S.12(5) of the Act, if any person who falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as the arbitrator. There is no doubt and cannot be, for the AR 102/2021 24 language employed in the Seventh Schedule, the Managing Director of the Corporation has become ineligible by operation of law. It is the stand of the learned senior counsel for the appellant that once the Managing Director becomes ineligible, he also becomes ineligible to nominate. Refuting the said stand, it is canvassed by the learned senior counsel for the respondent that the ineligibility cannot extend to a nominee if he is not from the Corporation and more so when there is apposite and requisite disclosure. We think it appropriate to make it clear that in the case at hand we are neither concerned with the disclosure nor objectivity nor impartiality nor any such other circumstance. We are singularly concerned with the issue, whether the Managing Director, after becoming ineligible by operation of law, is he still eligible to nominate an arbitrator. At the cost of repetition, we may state that when there are two parties, one may nominate an arbitrator and the other may appoint AR 102/2021 25 another. That is altogether a different situation. If there is a clause requiring the parties to nominate their respective arbitrator, their authority to nominate cannot be questioned. What really in that circumstance can be called in question is the procedural compliance and the eligibility of their arbitrator depending upon the norms provided under the Act and the Schedules appended thereto. But, here is a case where the Managing Director is the "named sole arbitrator" and he has also been conferred with the power to nominate one who can be the arbitrator in his place....” “54. In such a context, the fulcrum of the controversy would be, can an ineligible arbitrator, like the Managing Director, nominate an arbitrator, who may be otherwise eligible and a respectable person. As stated earlier, we are neither concerned with the objectivity nor the individual respectability. We are only concerned with the authority or the power of the Managing Director. By our analysis, we are obligated to arrive at the conclusion AR 102/2021 26 that once the arbitrator has become ineligible by operation of law, he cannot nominate another as an arbitrator. The arbitrator becomes ineligible as per prescription contained in S.12(5) of the Act. It is inconceivable in law that person who is statutorily ineligible can nominate a person. Needless to say, once the infrastructure collapses, the superstructure is bound to collapse. One cannot have a building without the plinth. Or to put it differently, once the identity of the Managing Director as the sole arbitrator is lost, the power to nominate someone else as an arbitrator is obliterated. Therefore, the view expressed by the High Court is not sustainable and we say so.” 15. In **TRF Ltd.** (supra), the Hon'ble Supreme Court held that an appointment made by an ineligible person is itself _void ab initio_ . Following the decision in **TRF Ltd.** (supra), the Supreme Court in **Bharat Broadband Network Limited** (supra) held that when a person AR 102/2021 27 becomes ineligible to be appointed as an arbitrator under section 12(5) of the Act, section 14(1)(a) gets attracted inasmuch as the arbitrator becomes _de jure_ unable to perform his functions and his mandate automatically terminates, and he shall then be substituted by another arbitrator. The Court held: “17. The scheme of S.12, S.13, and 14, therefore, is that where an arbitrator makes a disclosure in writing which is likely to give justifiable doubts as to his independence or impartiality, the appointment of such arbitrator may be challenged under S.12(1) to 12(4) read with S.13. However, where such person becomes "ineligible" to be appointed as an arbitrator, there is no question of challenge to such arbitrator, before such arbitrator. In such a case, i.e., a case which falls under S.12(5), S.14(1)(a) of the Act gets attracted inasmuch as the arbitrator becomes, as a matter of law (i.e., _de jure_ ), unable to perform his functions under S.12(5), being AR 102/2021 28 ineligible to be appointed as an arbitrator. This being so, his mandate automatically terminates, and he shall then be substituted by another arbitrator under S.14(1) itself. It is only if a controversy occurs concerning whether he has become _de jure_ unable to perform his functions as such, that a party has to apply to the Court to decide on the termination of the mandate, unless otherwise agreed by the parties. Thus, in all S.12(5) cases, there is no challenge procedure to be availed of. If an arbitrator continues as such, being _de jure_ unable to perform his functions, as he falls within any of the categories mentioned in S.12(5), read with the Seventh Schedule, a party may apply to the Court, which will then decide on whether his mandate has terminated. Questions which may typically arise under S.14 may be as to whether such person falls within any of the categories mentioned in the Seventh Schedule, or whether there is a waiver as provided in the proviso to S.12(5) of the Act. As a matter of law, it is important to note that the proviso to S.12(5) AR 102/2021 29 must be contrasted with S.4 of the Act. S.4 deals with cases of deemed waiver by conduct; whereas the proviso to S.12(5) deals with waiver by express agreement in writing between the parties only if made subsequent to disputes having arisen between them.” 16. Since the CMD of IRCTC has appointed the sole arbitrator, the appointment is hit by section 12(5) of the Act read with item No.5 of the seventh schedule and Shri.Ashok Kumar has become _de jure_ unable to perform his function as an arbitrator. Regarding the contention of Smt. Asha that the petitioner ought to have applied to the competent court to decide the termination of the arbitrator under section 14 (1) (a), it is only if a controversy occurs concerning whether the arbitrator has become _de jure_ unable to perform his functions as such, i.e., whether he falls within the seventh schedule or AR 102/2021 30 whether there is a waiver under the proviso to section 12(5), that a party has to apply to the Court to decide on the termination of the mandate. In the present case, the challenge to the arbitrator is made on grounds mentioned in section 12 of the Act and the petitioner had challenged the jurisdiction of the Arbitral Tribunal before the Tribunal itself. Therefore, the decision in **Swadesh Kumar Agarwal** (supra) will not be of any assistance to Smt.Asha as the challenge to the arbitrator here is on ground mentioned in section 12 and that it is unilateral. In the case on hand, the CMD of IRCTC could not have appointed the sole arbitrator and the appointment is hit by item No. 5 of the seventh schedule. The appointment made by an ineligible person is _void ab initio_ . Annexures A and B agreements provide that, in the event of any dispute, controversy or claim of any kind or nature arising under or in connection with the said agreements between AR 102/2021 31 the parties, the dispute shall be settled as per the provisions of the Arbitration and Conciliation Act, 1996. The mandate of Shri.Ashok Kumar being void, I deem it necessary to appoint a sole arbitrator to consider and resolve the disputes between the parties. This Arbitration Request is accordingly allowed in the following manner: (i) I nominate Mr.Justice N.K. Balakrishnan, Punartham, Savitha Road, Near Kottankavu Temple, Vennala P.O, Kochi-682028 as the sole arbitrator to adjudicate and resolve the disputes that have arisen between the parties to this case relating to Annexures A and B agreements. (ii) The Registry is directed to communicate a copy of this order to the learned arbitrator, within a period of two weeks from today and to obtain a Statement of Disclosure from the learned arbitrator under S.11(8) read with S.12(1) of the Arbitration and Conciliation Act, 1996. AR 102/2021 32 (iii) Once the Disclosure Statement is obtained from the learned arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case. - (iv) The fees of the arbitrator shall be governed by the Fourth schedule to the Arbitration and Conciliation Act, 1996. - (v) In order to enable the arbitrator to commence the proceedings without delay, the parties shall appear before the arbitrator at 11 a.m. on 04.01.2023. Sd/- **MURALI PURUSHOTHAMAN JUDGE** AR 102/2021 33 ## **`A PPENDIX OF AR 102/2021`** |`PETITIONER ANNEXURES`|| |---|---| |`Annexure A`|`TRUE COPY OF THE MASTER LICENSE AGREEMENT`| ||`DATED 15.06.2016 EXECUTED BETWEEN THE`| ||`PETITIONER AND THE 1ST RESPONDENT.`| |`Annexure B`|`TRUE COPY OF THE TRIPARTITE AGREEMENT DATED`| ||`14.8.2017 EXECUTED BETWEEN THE PETITIONER`| ||`AND THE RESPONDENTS.`| |`Annexure C`|`TRUE COPY OF THE NOTICE DATED 29.10.2019`| ||`ISSUED ON BEHALF OF THE CLAIMANT TO THE`| ||`RESPONDENT.`| |`Annexure D`|`TRUE COPY OF THE LETTER DATED 5.12.2019`| ||`ISSUED BY THE RESPONDENT TO SHRI.ASOK`| ||`KUMAR.`| |`Annexure E`|`TRUE COPY OF THE PROCEEDINGS DATED`| ||`21.1.2020 ISSUED BY THE ARBITRATOR`| |`Annexure F`|`TRUE COPY OF THE PROCEEDINGS DATED`| ||`18.2.2020 ISSUED BY THE ARBITRATOR.`| |`Annexure G`|`TRUE COPY OF THE PROCEEDINGS DATED`| ||`14.7.2020 ISSUED BY THE ARBITRATOR.`| |`Annexure H`|`TRUE COPY OF THE PROCEEDINGS DATED 9.2.2021`| ||`ISSUED BY THE ARBITRATOR.`| |`Annexure I`|`TRUE COPY OF THE APPLICATION DATED`| ||`25.2.2021 FILED UNDER SECTION 16 OF THE`| ||`ARBITRATION AND CONCILIATION BEFORE THE`| ||`ARBITRATOR`| |`Annexure J`|`TRUE COPY OF THE PROCEEDINGS DATED`| ||`11.3.2021 ISSUED BY THE ARBITRATOR`| |`Annexure K`|`TRUE COPY OF THE ORDER DATED 25.10.2021`| ||`PASSED BY THE ARBITRATOR`| |`Annexure L`|`TRUE COPY OF THE PROCEEDINGS DATED`| ||`25.10.2021 ISSUED BY THE ARBITRATOR.`| |`Annexure M`|`TRUE COPY OF A.R. NO. 53 OF 2021(ALONG WITH`| ||`ANNEXURES) FILED BY THE PETITIONER BEFORE`| ||`THIS HON'BLE COURT.`| |`Annexure N`|`TRUE COPY OF THE COUNTER AFFIDAVIT DATED`| ||`1.10.2021 (ALONG WITH ANNEXURES) FILED BY`| ||`THE RESPONDENT HEREIN IN A.R. NO. 53 OF`| ||`2021.`| |`Annexure O`|`TRUE COPY OF THE COUNTER AFFIDAVIT DATED`| AR 102/2021 34 ||`8.9.2021 (ALONG WITH ANNEXURES) FILED BY`| |---|---| ||`SOUTHERN RAILWAY IN A.R. NO. 53/2021`| |`RESPONDENT EXHIBITS`|| |`Exhibit R1(A)`|`TRUE COPY OF COMMUNICATION DATED 11.12.2019`| ||`OF THE ARBITRATOR TO GGM/OCS/IRCTC/NEW`| ||`DELHI AND TO M/S. C.K.K.CATERING SERVICE.`| |`Exhibit R1(B)`|`TRUE COPY OF LETTER DATED 21.1.2020 OF THE`| ||`PETITIONER TO THE ARBITRATOR`| |`Exhibit R1(C)`|`TRUE COPY OF PROCEEDINGS DATED 18.2.2020`| |`Exhibit R1(D)`|`TRUE COPY OF STATEMENT & PETITION`| ||`(I.A.2/2020) OF IRCTC IN W.P.35294/2019`| |`Exhibit R1(E)`|`TRUE COPY OF E.MAIL ADJOURNMENT APPLICATION`| ||`DATED 14.7.2020 OF USMAN KHAN, ADVOCATE,`| ||`SUPREME COURT OF INDIA`| |`Exhibit R1(F)`|`TRUE COPY OF PROCEEDINGS DATED 20.8.2020 OF`| ||`THE ARBITRATOR`| |`Exhibit R1(G)`|`TRUE COPY OF E-MAIL OF ADV. USMAN G. KHAN`| ||`DATED 19.8.2020 TO THE ARBITRATOR`| |`Exhibit R1(H)`|`TRUE COPY OF ADJOURNMENT APPLICATION DATED`| ||`19.8.2020 ADV.USMAN G. KHAN TO THE`| ||`ARBITRATOR`| |`Exhibit R1(I)`|`TRUE COPY OF E.MAIL DATED 18.8.2020 OF`| ||`C.K.K. MOIDOO TO THE ARBITRATOR`| |`Exhibit R1(J)`|`TRUE COPY OF PROCEEDINGS DATED 23.9.2020 OF`| ||`THE ARBITRATOR`| |`Exhibit R1(K)`|`TRUE COPY OF E.MAIL DATED 21.10.2020 OF`| ||`C.K.K. MOIDOO TO THE ARBITRATOR`| |`Exhibit R1(L)`|`TRUE COPY OF E.MAIL DATED 10.11.2021 OF`| ||`ADV. USMAN KHAN TO THE ARBITRATOR`| |`Exhibit R1(M)`|`TRUE COPY OF RELEVANT PAGES OF CATERING`| ||`POLICY 2017 ISSUED BY RAILWAY BOARD`| |`Exhibit R1(N)`|`TRUE COPY OF DECLARATION OF ARBITRATOR`| ||`UNDER SECTION 12(1) OF THE ARBITRATION AND`| ||`CONCILIATION ACT`| spc/