Facts of the case
The respondent No.1, in this case, possesses cold storage at Nagpur. Sri Suresh Wadhwani deals with the management of cold storage. The appellants thus who are the children of Sri Bhaiyalal Jain are occupied with business as commission specialists for rural items. In such a manner they had used the administrations of cold stockpiling during the year 2004 for keeping 50 packs of 'Shingada' which is a horticultural item. As per the appellants thus the respondent No. 1 had neglected to store the products in a fitting way which had made harm to the cool stockpiling. The appellants issued notice to the respondents looking for compensation. The respondent No. 1 in this by its answer not just denied the case set forth by the appellants in this yet in addition made counter case. In this manner, a dispute emerged between the parties. As per respondent No. 1 thus, the parties were represented by an arbitration provision and the parties had consented to arbitrate the dispute. Respondent No. 1, in this way through their case dated 03.06.2006 presented the same before the educated Arbitrator second respondent Sri. S.T. Madnani.
Appellant's father in this in that foundation got issued a notification questioning the very presence of the arbitration provision and all the more especially the arrangement of Sri S.T. Madnani, Advocate as an Arbitrator was questioned. A duplicate of the same was additionally dispatched to the Arbitrator. It is in that light the appellants aggrieved by the petition under Sec. 34 of the Act, 1996 before of the District Judge of Nagpur bringing up criticism regarding the award, all learned District Judge while valuing the same was of the view that the Arbitrator had in actuality gone about as an insight for Sri Suresh, an accomplice of respondent No. 1, which reality was not uncovered as far as Sec. 12 of the Act, 1996 and furthermore on observing Sec. 13 of the Act, found the complaint defended and put aside the award. Respondent No. 1 who was aggrieved by the decision of the arbitrator had filed the petition under Sec. 37(1)(b) of the Act, 1996 to the High Court. By the condemned request the learned Judge of the High Court put aside the order under Sec. 34 of the Act, 1996, and restored the award passed by the Arbitrator. The appellant filed before the Supreme Court against the order of the High Court.
Whether the Appointment of the arbitrator was legitimate or not?
The contention of the parties
Appellant contended that there is no consensus ad idem namely, there is no meeting of minds between the parties regarding the reference of dispute to the Arbitrator, and such term printed in the receipt cannot be relied upon. the objection raised with regard to Sri S.T. Madnani, Advocate acting as the Arbitrator was raised by Sri Bhaiyalalji Jain who is the father of the appellants herein and not by the appellants themselves
The decision of the court
The court said that the award passed by the Arbitrator was not manageable and the learned District Judge was legitimized in engaging the request under Section 34 of the Act, 1996 to put aside the award. In that see, we are of the view that the learned Judge of the High Court of Judicature at Bombay was not correct in permitting the appeal filed against the order of the district judge, Nagpur under Section 37(1)(b) of the Act, 1996. Though it is looked to be made out that the said Sri Prakash has nothing to do with respondent No.1, as called attention to by the guidance for the appellants, the supporting testimony for making the grave confirmation in regard of the First Appeal No.180 of 2007 recorded under Section 37(1)(b) of the Act, 1996 identifying with this very continuing is made by the said Sri Prakash. Hence, the court held that obviously Sri S.T. Madnani learned Arbitrator had gone about as guidance for another case for one of the parties to the question in the instant case.