ARBITRATION – Appointment of Arbitrator – Unilateral appointment – Validity Paras 30, 31, 32, 33, 43 Sole Arbitrator appointed unilaterally by Finance Company through its Legal Manager – Said authority falls within categories of Seventh Schedule – Person ineligible to act as arbitrator cannot nominate another arbitrator – Appointment of sole arbitrator held invalid – Arbitrator lacked inherent jurisdiction to pass award – Held, award without jurisdiction and non est.

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ARBITRATION – Appointment of Arbitrator – Unilateral appointment – Validity

Paras 30, 31, 32, 33, 43

Sole Arbitrator appointed unilaterally by Finance Company through its Legal Manager – Said authority falls within categories of Seventh Schedule – Person ineligible to act as arbitrator cannot nominate another arbitrator – Appointment of sole arbitrator held invalid – Arbitrator lacked inherent jurisdiction to pass award – Held, award without jurisdiction and non est.

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ARBITRATION – Section 12(5) r/w Seventh Schedule – Ineligibility – Effect

Paras 25, 26, 33, 41, 42

Ineligibility under Section 12(5) is statutory – Person having relationship covered under Seventh Schedule becomes de jure unable to act – Mandate of such arbitrator automatically terminates – Appointment by such ineligible person is ex facie invalid – Held, arbitrator had no jurisdiction.

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ARBITRATION – Unilateral appointment – Article 14 – Equal treatment of parties

Paras 21, 23, 43

Clause permitting unilateral appointment of sole arbitrator gives rise to justifiable doubts as to independence and impartiality – Such unilateral power violates principle of equal treatment of parties – Held, violative of Article 14 of Constitution of India.

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ARBITRATION – Waiver – Section 4 vs Section 12(5) – Distinction

Paras 36, 37, 41

Waiver under Section 4 relates to procedural non-compliance – Waiver of ineligibility under Section 12(5) requires express agreement in writing after dispute – In absence of such express written waiver, plea of waiver not sustainable – Held, no waiver in present case.

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ARBITRATION – Express waiver – Requirement

Paras 25, 36, 42

Right to object to appointment of ineligible arbitrator cannot be waived by implication – Requires clear and unequivocal express agreement in writing – In absence of such agreement, statutory ineligibility continues – Held, proviso to Section 12(5) not attracted.

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ARBITRATION – Jurisdiction – Inherent lack – Stage of objection

Paras 27, 28, 12

Objection to inherent lack of jurisdiction of arbitrator can be raised at any stage, including collateral proceedings – Even in execution or revision proceedings such plea maintainable – Held, objection permissible.

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ARBITRATION – Execution of award – Validity

Paras 7, 32, 43

Execution proceedings based on award passed by arbitrator lacking jurisdiction – Such award being non est cannot be executed – Order of attachment founded on such award unsustainable.

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ARBITRATION – SARFAESI and Arbitration – Concurrent remedies

Paras 6, 8

Arbitration proceedings and SARFAESI proceedings are cumulative remedies – Both can proceed simultaneously – One does not bar the other – Issue not pressed in view of settled law.

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CIVIL PROCEDURE – Article 227 – Scope of interference

Para 2

Civil Revision Petitions under Article 227 maintainable to examine jurisdictional errors – Where order suffers from lack of jurisdiction, interference warranted.

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Ratio

Unilateral appointment of sole arbitrator held invalid – Award without jurisdiction – No waiver – Execution proceedings unsustainable – Revisions liable to be allowed/set aside (as per final operative portion).