APHC010148432025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3525] MONDAY, THE SEVENTH DAY OF APRIL TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO THE HONOURABLE DR JUSTICE K MANMADHA RAO CIVIL REVISION PETITION Nos.:786 & 787 of 2025 CIVIL REVISION PETITION NO: 786/2025 Between: M/s Srivalli Shipping And Transport Pvt.ltd., and Others ...PETITIONER(S) AND M/s Sundaram Finance Limited ...RESPONDENT Counsel for the Petitioner(S): 1. K B RAMANNA DORA Counsel for the Respondent: 1. C PRAKASH REDDY CIVIL REVISION PETITION NO: 787/2025 Between: M/s Srivalli Shipping And Transport Pvt. Ltd and Others ...PETITIONER(S) AND M/s Sundaram Finance Limited ...RESPONDENT 2 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 Counsel for the Petitioner(S): 1. K B RAMANNA DORA Counsel for the Respondent: 1. C PRAKASH REDDY The Court made the following common order: (per Hon’ble Sri Justice R. Raghunandan Rao) As the issues raised and the parties, in both these Civil Revision Petitions, are one and the same, they are being disposed of, by way of this common order. 2. The petitioners herein had obtained financial assistance from the respondent for purchase of motor vehicles. On account of default in payment, arbitration proceedings were invoked by the respondent and the arbitrator, appointed by the respondent, had passed separate awards, dated 08.05.2023 awarding certain amounts to the respondent. 3. The respondent, in execution of these awards, had moved execution petitions, bearing E.P.Nos.143 & 278 of 2024, before the Learned Principal District Judge, Visakhapatnam. 4. The petitioners raised disputes as to the maintainability of the execution petitions as well as the question of whether the awards passed by the arbitrator can be executed at all. 3 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 5. The case of the petitioners was that the arbitrator had been acting as an arbitrator for the respondent in a large number of cases, exceeding 100 cases. The petitioners contend that, in such circumstances, the award itself is non-est and void in as much as the same is violative of Section 12 (5) of the Arbitration and Conciliation Act, 1996 (here-in-after referred to as “the Act”). 6. The respondent contended that the appointment of the arbitrator cannot be treated as void in as much as the provision of Section 12 (5) of the Act speaks of the restrictions under the 7th Schedule to the Act, whereas the contention raised by the petitioners would only attract the provisions of the 5th Schedule. 7. The Learned Principal District Judge, by two separate orders, dated 19.02.2025 & 28.02.2025, had rejected the contentions of the petitioners and directed sale of the property that was sought to be attached and sold. 8. Aggrieved by these orders, the petitioners have approached this Court, by way of the present two Civil Revision Petitions. 9. Sri K. B. Ramanna Dora, learned counsel for the petitioners would contend that the awards are riddled with mistakes and have been passed with clear non-application of mind. As an example, the learned counsel would point to the finding of the body of the award that the vehicles of the petitioners had been sold for Rs.4,25,000/-, whereas the sale price of the 4 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 same vehicle, at the end of the award is shown as Rs.2,84,270/-. The learned counsel would submit that the arbitrator has been acting as a stock arbitrator, who was blindly passing awards, without considering any of the actual facts. The learned counsel would also contend that the petitioners had objected to the appointment of the arbitrator, on the ground that he was acting as a regular arbitrator, for the respondent and the same was not permissible. The learned counsel would also rely upon a Judgment of the Hon’ble Supreme Court in the case of Central Organisation for Railway Electrification vs. ECI-SPIC-SMO-MCML (JV)1, wherein, the Hon’ble Supreme Court had held that unilateral appointment clauses in public-private contracts are violative of Article 14 of the Constitution of India and that unilateral appointment of sole arbitrator gives rise to justifiable doubts as to the independence and impartiality of the arbitrator. 10. Sri C. Prakash Reddy, learned counsel for the respondent would submit that the scope of Section 47 of C.P.C. would not extend to going into the merits and demerits of the decree that is to be executed. The learned counsel would also submit that the Learned Principal District Judge has gone through the contentions of the petitioners and has given cogent reasons for declining to go into the issues raised by the petitioner. 11. The case of the petitioners is that the award passed by the arbitrator is to be treated as non-est and void on two grounds. Firstly, the 1 2024 SCC Online SC 3219 5 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 appointment of the arbitrator to a unilateral appointment and secondly, the appointment of the arbitrator is hit by Section 12 (5) of the Act. 12. Section 12 (5) of the Act reads as follows: “(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 having arisen between them, waive the applicability of this sub-section by an express agreement in writing.” 13. This provision stipulates that the appointment of an arbitrator would be subject to the provisions contained in the 7th Schedule to the Act. The conditions set out in the 7th Schedule, do not relate to unilateral appointment or appointment of an arbitrator, who is dealing with large number of cases of the appointing party. This issue has been addressed in the 5th Schedule of the Act. The provisions of the 5th Schedule make it clear that appointment of arbitrator, who had, within the past three years, been appointed as an arbitrator on two more occasions by one of the parties would give rise to justifiable doubts as to the independence or impartiality of such an arbitrator. 6 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 14. Such an appointment regarding the impartiality of an arbitrator would be a good ground for raising a challenge to the award. However, such a challenge would be maintained under Section 34 of the Act. Such a challenge cannot be raised at the stage of the execution petition. 15. On the question of unilateral appointment of an arbitrator, the Hon’ble Supreme Court, though in the context of public-private contract, in the Judgment cited above, held that such unilateral appointment clause would not be applicable from the date of the said Judgment. In the present case, the arbitrator was appointed prior to the Judgment of the Hon’ble Supreme Court, passed on 08.11.2024. In view of the fact that the Hon’ble Supreme Court had itself directed that the Judgment would apply prospectively, such Judgment would not be of any assistance to the petitioners herein. 16. In the circumstances, these two Civil Revision Petitions are dismissed. There shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, shall stand closed. _______________________ R RAGHUNANDAN RAO, J _______________________ Dr. K MANMADHA RAO, J Date: 07.04.2025 MJA 7 RRR, J & Dr. KMR, J C.R.P.Nos.786 & 787 of 2025 134 THE HONOURABLE SRI JUSTICE R RAGHUNANDAN RAO AND THE HONOURABLE DR JUSTICE K MANMADHA RAO CIVIL REVISION PETITION Nos.:786 & 787 of 2025 (per Hon’ble Sri Justice R. Raghunandan Rao) 07.04.2025 MJA