TMI Blog1988 (3) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... of any suspicion in the mind of the reasonable man of bias of the arbitrator. - Special Leave Petition (Civil) No. 2545 of 1988 - - - Dated:- 29-3-1988 - SABYASACHI MUKHARJI, and S. RANGNATHAN, JJ. JUDGMENT From the Judgment and Order dated 2.2.1988 of the Bombay High Court in Arbitration Petition No. 234 of 1987. G. Ramaswamy, Additional Solicitor General, K.V. Kini, S. Bharthari and P.H. Parekh for the Petitioner. K.S. Cooper, D. Karkali, R. Karanjawala and Mrs. M. Karanjawala for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. After hearing the parties fully we had by our order dated 10th March, 1988 dismissed the special leave petition under Article 136 of the Constitution. We stated therein that we would indicate the reasons by a separate judgment later. We do so by this judgment. This is a petition for leave to appeal under Article 136 of the Constitution from the judgment and order of the learned Judge of the High Court of Bombay dated 2nd February, 1988. By the impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent No. 1, Shri K.D. Bali, sole arbitrator under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of second reference and though respondent No. 2 submitted its claim within the stipulated period, the petitioner had again delayed doing so according to the learned Judge and according to the assertions of respondent No. 2 for a period of three months. On 16th May, 1986 the Chief Engineer made reference No. 2 with regard to claims amounting to Rs.1.17 crores to the arbitrator. On 23rd December, 1986 the Chief Engineer of the petitioner made another reference being reference No. 3 to the arbitrator with regard to claims amounting to Rs.5.81 crore. The petitioner by its applications of 8th and 9th June, 1987 expressed its objections to the references Nos. 2 and 3 made by the Chief Engineer as according to the petitioner the said references were null and void as these were irregularly made. On 26th June, 1987 the petitioner by its written submissions took preliminary objection before the arbitrator to the said arbitration proceedings, being lack of jurisdiction of the arbitrator on account of the fact that he was not validly appointed as far as references Nos. 2 and 3 were concerned. The petitioner by its application dated 3rd August, 1985 noted that respondent No. 1 had not n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time to make the award by 15th February, 1988. The main contention for the revocation of the authority of the arbitrator was about the alleged apprehension in the mind of the petitioner about bias of the sole arbitrator. The learned Judge of the High Court was unable to accept any ground for alleged apprehension. It is apparent as the learned Judge noted that respondent No. 2 had complied with the directions of the arbitrator about the conduct of the proceedings but the petitioner went on seeking adjournments after adjournments. Respondent No. 2 complained to the arbitrator on 4th May, 1987 about the delaying tactics adopted by the petitioner and thereupon the arbitrator directed that the hearing would take place on 8th and 9th June, 1987 and no further adjournment would be granted. After this direction was given by the arbitrator, the petitioner addressed a letter dated 25th May, 1987 to the arbitrator objecting to the jurisdiction in respect of the second and third references. The objections to the jurisdiction raised by the petitioner were, that the claim made in the second and third references were barred by principles analogous to Order II Rule 2 of the Code of Civil Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner's advocate remained absent. Thereafter the hearing proceeded on 6th November and 11th November, 1987 as well as on 13th, 18th and 19th November, 1987. Respondent No. 2 concluded arguments, while the arguments on behalf of the petitioner were advanced on December 3, 1987. The arguments further proceeded on December 8 and 9, 1987. Thereafter on December 17, 1987 the present petition was filed for revocation of the appointment of respondent No. 1 as the sole arbitrator. In our opinion, the above narration gives a glimpse how a party can try to prolong a proceeding. Several points were taken in support of the application for revocation. It was sought to be urged that the petitioner had lost confidence in the sole arbitrator and was apprehensive that the arbitrator was biased against the petitioner. It is necessary to reiterate before proceeding further what are the parameters by which an appointed arbitrator on the application of a party can be removed. It is well settled that there must be purity in the administration of justice as well as in administration of quasi-justice as are involved in the adjudicatory process before the arbitrators. It is well said that once the arbitrato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not have apprehension that the authority is biased and is likely to decide against the party. But we agree with the learned Judge of the High Court that it is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. While on this point we reiterate that learned counsel appearing for the petitioner in his submissions made a strong plea that his client was hurt and had apprehension because the arbitrator being the appointee of his client was not acceding to the request of his client which the petitioner considered to be reasonable. We have heard this submission with certain amount of discomfiture because it cannot be and we hope it should never be in a judicial or a quasi-judicial proceeding a party who is a party to the appointment could seek the removal of an appointed authority or arbitrator on the ground that appointee being his nominee had not acceded to his prayer about the conduct of the proceeding. It will be a sad day in the administration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including on the ground of jurisdiction. The learned Single Judge of the High Court has so held and we are in agreement with him on this point. The third circumstances was that the petitioner had filed application under section 13(b) of the Act calling upon the arbitrator to state a special case for the opinion of the Court on the question of law and the failure of the arbitrator to raise this question of law was indicative of the bias. We are unable to accept this argument. Section 13(b) confers power on the arbitrator to state special case but it does not make it obligatory on the part of the arbitrator to state a special case as soon as the party desires to do so. In the instant case the petitioner itself agitated issue of jurisdiction before the arbitrator and by its conduct submitted the question of jurisdiction and other questions of law for determination of the arbitrator. Once having done so, it was not proper for the petitioner to ask the arbitrator to state a special case. This, in our opinion, is no ground for bias. The fourth ground was that the first reference, where the claim involved was Rs.85 lakhs, was heard for a considerable time, while the arguments in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at respondent No. 1 was not willing to submit to the dictates of the petitioner, the petitioner declined to contribute for the air-ticket and providing for accommodation. No party should be allowed to throw out the arbitration proceeding by such tactics and if the arbitrator has not surrendered to pressure in our opinion, the arbitrator cannot be faulted on that score nor the proceedings of the arbitrator be allowed to be defeated by such method. There was another ground sought to be made before us that there was a loss of confidence. We find no reasonable ground for such loss of confidence. Every fancy of a party cannot be a ground for removal of the arbitrator. It was alleged that there were counter claims made by the respondents. These counter claims have not yet been dealt with by the arbitrator. Our attention was drawn to page 188 of Volume II of the paper book where a counter claim had been referred to. It appears that the petitioner has separately treated these counter claims. These counter claims have not yet been considered by the arbitrator. That is no ground for any apprehension of bias. An affidavit was filed before us that on 6th March, 1988 a letter was served indic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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