TMI Blog2003 (9) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... Ghosh, B.P. Subba, B.P. Nirbhay, Shrish Kumar Misra, Gourab K. Banerji, Kaushik Mandal, Ms. Sangeeta Mandal, Kapil Chaudhary, Ms. Jayasree Singh, Ms. Swati Sinha, Ms. Sandhya Goswami, Tarun Johri, Arvind Kumar, Ms. Jaya, C.S. Ashri, P.D. Sharma, Vijay Kumar Sharma, Senthil Jagadeesan, V. Ramasubramanian, J.P. Pandey, D.N. Mishra, Uma Datta, Chinnasamy, Arun Aggarwal, Pallav Saxena and Rao Ranjit for the Appearing Party. JUDGMENT S.B. Sinha, J. - What constitutes a reasonable notice by an arbitrator is the question involved in these appeals which arise out of a judgment and decree dated 1-3-1970 passed by a Division Bench of the Calcutta High Court affirming an order passed by a learned Single Judge setting aside an arbitration award. 2. The basic fact of the matter is not in dispute. Two groups of persons - one Guptas and another Sharmas - held several properties including three firms, six limited companies, one trust and other movable and immovable assets. Both the groups had 50% shares each. The family members of the Guptas and Sharmas Groups were interested in many or in some of the businesses and the firms. The family tree of the Gupta Group is as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conduct of arbitration proceedings according to law. 4.That the said Arbitrator shall have power to proceed ex parte in case the other party fails after reasonable notice to attend before him. 5.That the said Arbitrator shall have powers to ask for any paper, documents and/or information from any of the parties hereto and to draw adverse inference for non-production thereof. 6.That the said Arbitrator shall be free to make use of information, documents, papers received from any source whatsoever if he considers them relevant to the matter and to this regard his decision will be final. 7.That the Arbitrator shall have powers to apply and employ his personal knowledge in the matter under reference while giving his award. 8.That the Arbitrator shall have power to award cost and to ask for periodical deposits towards his own fees and charges, audit charges and/or other charges from the parties hereto in the manner he may think fit and proper. 9.That the said Arbitrator shall not be required to give any reasoning for his determination and award. 10.That the said Arbitrator shall have powers to give directions for the running of the business of the said firm and/or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd may act upon the opinion so taken. 20.The Arbitrator shall have power to cause such maps plans and measurements valuations to be made and taken as he shall deem necessary or expedient and the costs and expenses thereof shall be in the discretion of the Arbitrator and he may accept such valuation as correct and act in terms thereof. ****** 38.Ten days time shall be considered as reasonable time for the purpose of doing or complying with any direction of the Arbitrator." 4. The jurisdiction of the Arbitrator was, thus, of wide import. 5. It is not in dispute that said Shri B.J. Bhide was a Chartered Accountant and a Tax Consultant. He had been dealing with accounts and other matters for and on behalf of the firms and the companies belonging to the parties. The parties indisputably had great faith and confidence in him. 6. During the pendency of the arbitration proceedings, certain disputes arose as regards management, wherefor also intervention of the arbitrator was sought for. Several correspondences passed between the arbitrator and the parties with which we are not concerned at this juncture. 7. The arbitrator gave two awards, which were as regards (1) di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. We may further place on record that keeping in view the fact that the parties are relations and have a large number of properties, this Court at one stage opined that the disputes and differences amongst the parties should be amicably settled and for the said purpose the matter was referred to Hon ble Mr. Justice M.K. Mukherjee, a retired Judge of this Court for conciliation. The learned Judge, however, failed in his efforts in this behalf and submitted a report to that effect before this Court in 2001. 13. Mr. Bhasker P. Gupta, learned senior counsel appearing on behalf of the appellants, has raised a short question in support of these appeals. The learned counsel would submit that the findings of the learned Single Judge as also the Division Bench of the High Court that no reasonable notice was given to Ghanshyamdas Gupta by the arbitrator in terms of the arbitration agreement suffers from manifest error insofar as the entire fact situation obtaining in this case had not been taken into consideration. The learned counsel would submit that the arbitrator was required to submit his award by 30-6-1976. He had been holding arbitration proceedings wherein Ghanshyamdas G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.Drafts of resignation letters from the Directorship of Ltd. Companies and/or partnership firms and/or from the office of Trusteeship are enclosed herewith. Kindly complete therein the name and address of the Company and/or the name and address of the partnership firm in which you or otherwise whom you represent are Director and/or Partner and/or a Trustee and return to me the said resignation letters duly signed by you and/or the others as the case may be, leaving the date blank. If required, you can have copies made of these resignation letters to cover all the persons represented by you in your Group. Please ensure that these resignation letters reach me by 5-6-1976. Arising out of this, I am arranging to send to you in a day or two Transfer Deeds which should be signed by you or the other persons whom you represent, at the place marked with an "X" in pencil and witnessed by a known person and returned to me with the relevant shares scrip of the concerned Limited Company. The next meeting in connection with the finalisation of the arbitration proceedings will be held in Calcutta on 8-6-1976. I have a mind to have continuous sittings up to 12-6-1975 and declare the Award imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken to its logical conclusion, a reasonable notice in the facts and circumstances of this case should be inferred. It was further submitted that Rambabu Gupta, Kamal Kumar Gupta and Brij Mohan Gupta attended the meeting also on 19-6-1976. 17. Mr. Gupta would urge that the purported letter of the Arbitrator to the parties asking them to send a letter to him stating that they would not challenge the award would not vitiate the arbitration proceedings. 18. Mr. Parijat Sinha, learned counsel appearing on behalf of Respondent Nos. 22 to 32, Mr. Vijay Kumar Sharma, appearing in person and Mr. Gourab Banerji, appearing on behalf of some members of the Sharma Group, supported the contentions of Mr. Bhasker Gupta. 19. Mr. Bijan Kumar Ghosh, learned counsel appearing on behalf of the respondents, however, drew our attention to the objections raised before the learned Single Judge of the Calcutta High Court and submitted that in the peculiar facts and circumstances of this case, the Court should not only consider the same de novo but also must take into consideration the subsequent events. According to the learned counsel, as the cross-objections filed by the objector-responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural orders and directions including those imposing limits as to time and content of submissions and evidence but also the Arbitrator has a right of managing the hearing. In Russell on Arbitration , 22nd Edition the law is stated thus: "5-057 Managing the hearing. Similarly, a Tribunal cannot be expected to sit through extended oral hearings listening to long winded submissions on irrelevant matters. The Tribunal is entitled, and under section 33 is obliged and encouraged, to avoid the unnecessary delay and expense that would be caused by such an approach. The Tribunal should take a grip on the proceedings and indicate to the parties those areas on which it particularly wishes to be addressed and those which it does not consider relevant to the real issues in dispute. If a party fails to heed such guidance, the Tribunal might seek to focus the proceedings by allocating the remaining hearing time between the parties. Thus the Tribunal is entitled to do, provided it will allow a reasonable time for both parties to put forward their argument and evidence." 23. For constituting a reasonable opportunity, the following conditions are required to be observed: 1.Each party must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence. Thus, the question of cross-examination the witnesses appearing on behalf of the other parties did not arise. Submissions must have been made by the parties themselves. Ghanshyamdas Gupta does not say that he had difficulty in appearing on 15-6-1976 or any subsequent date and he had asked for adjournment. Even otherwise, a party has no absolute right to insist on his convenience being consulted in every respect. The matter is within the discretion of the arbitrator and the Court will intervene only in the event of positive abuse - Montrose Cannel Foods Ltd. s case ( supra ). If a party, after being given proper notice, chooses not to appear, then the proceedings may properly continue in his absence - British Oil Cake Mills Ltd. v. Horace Battin Co. Ltd. [1922] 13 LT. L. Rep. 443. 28. In D.L. Miller Co. Ltd. s case ( supra ) the law is stated in the following terms: "13. The doctrine of arbitrators legal misconduct has been so over-worked in recent years that across the whole branch of case law on this point one finds the blazing trial of principles of natural justice. They are discussed and agitated in an atmosphere of complete unreality and divorced fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 392, this Court followed, inter alia , Managing Director, ECIL v. B. Karunakar [1993] 4 SCC 727 and State Bank of Patiala v. S.K. Sharma [1996] 3 SCC 364 and held that an order passed in a disciplinary proceeding cannot ipso facto be quashed merely because a copy of the enquiry report has not been furnished to the delinquent officer, but he is obliged to show that by non-furnishing of such a report he has been prejudiced, would apply even to cases where there is requirement of furnishing a copy of enquiry report under the statutory rules. 33. In Aligarh Muslim University v. Mansoor Ali Khan [2000] 7 SCC 529, it was held: "24. The principle that in addition to breach of natural justice, prejudice must also be proved has been developed in several cases. In K.L. Tripathi v. State Bank of India [1984] 1 SCC 43 Sabyasachi Mukharji, J. (as he then was) also laid down the principle that not mere violation of natural justice but de facto prejudice (other than non-issue of notice) had to be proved. It was observed, quoting Wade s Administrative Law (5th Edn., pp. 472-75), as follows (SCC p. 58 para 31): It is not possible to lay down rigid rules as to when t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The judges, anxious as always to preserve some freedom of manoeuvre, emphasise that it is not possible to lay down rigid rules as to when the principles of natural justice are to apply: nor as to their scope and extent. Everything depends on the subject-matter . Their application, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject-matter of the case. In the application of the concept of fair play there must be real flexibility . There must also have been some real prejudice to the complainant: there is no such thing as a merely technical infringement of natural justice." 37. In Khaitan (India) Ltd. v. Union of India Cal. LT 1999 (2) HC 478, one of us said : "The concept of principles of natural justice has undergone a radical change. It is not in every case, that the High Courts would entertain a writ application only on the ground that violation of principles of natural justice has been alleged. The Apex Court, in State Bank of Patiala v. S.K. Sharma reported in 1996 (3) SCC 364 has clearly held that a person complaining about the violation of the principles of natural justice must show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Nos. 1 and 19. 39. Furthermore, in this case Ghanshyamdas Gupta expressly relinquished his right by filing an application stating that he would withdraw his objection. Such relinquishment in a given case can also be inferred from the conduct of the party. The defence which was otherwise available to Ghanshyamdas Gupta would not be available to others who took part in the proceedings. They cannot take benefit of the plea taken by Ghanshyamdas Gupta. Each party complaining violation of natural justice will have to prove the misconduct of the arbitrator Tribunal in denial of justice to them. The appellant must show that he was otherwise unable to present his case which would mean that the matters were outside his control and not because of his own failure to take advantage of an opportunity duly accorded to him. - Minmetals Germany GmbH v. Ferco Steel Ltd. [1999] 1 All ER (Comm) 315. This Court s decision in Renusagar Power Co. Ltd. v. General Electric Co. AIR 1994 SC 860 is also a pointer to the said proposition of law. 40. Keeping in view the facts and circumstances of this case, we are of the opinion that Ghanshyamdas Gupta cannot be said to have been refused a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant, Appellant Nos. 2 and 9 and Respondent Nos. 1 to 4, 7, 19, 22 and 28 have violated the said orders by surrendering the tenancy rights purported to be in violation of order dated 16-8-1982. It is further alleged that several other appellants and respondents have similarly violated the interim orders passed by this Court. No order appears to have been passed on the contempt petition. A direction was merely issued that this matter may be considered at the time of final hearing. 45. Keeping in view the fact that the appeal remained pending for a long time, it is not advisable that this Court now adjudicate upon the factual disputes. We, thus, do not intend to pass any order on the said applications. 46. We may, however, observe that an appropriate proceeding may be initiated by the parties concerned before the executing court, if any occasion arises therefore. I.A. No. .... in C.A. No. 2809 of 1979 for substitution of L.Rs. of Deceased Respondent No. 5: The I.A. is allowed. I.A. No. .... in C.A. Nos. 2809-10 of 1979 for withdrawal of V/A on behalf of Appellant Nos. 9 and 10: No orders are necessary to be passed. For the reasons aforementioned, the impugned ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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