TMI Blog1995 (9) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... s. is 9548/92 was also filed by the appellant in the said OMP and there was an interim order on 31st July, 1992 in this appeal that the Arbitrator would not make and publish the award and that he could proceed with the matter and the appellant society was to participate in the proceedings. 3. The following are the facts : The first respondent-contractor was engaged in connection with the construction of 78 houses for the appellant Society. The contract was in the year 1988. Three years thereafter, disputes arose and the respondent-contractor moved a petition under Section 20 of the Arbitration Act for appointment of an Arbitrator, which was registered as Suit No. 479/91. This Court appointed the second respondent Mr. A. Sankaran, as the Arbitrator on 18.2.91. He was Additional Director General, Central P.W.D. (Retired). The fee of the Arbitrator was fixed at ₹ 10,000/- to be paid by the parties. In another order in is 1045/91 passed on the same date, the Court appointed Mr. S. P. Kapil, retired Chief Engineer of Delhi Development Authority as Local Commissioner for carrying out certain measurements at the site in the presence of the parties or their representatives. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Arbitrator is alleged to have stated that ₹ 300/- could be paid by the respondent/contractor on behalf of the petitioner as the respondent has to get award of several lacs of rupees. Then the respondent immediately paid ₹ 300/- more. In view of the above observations said to have been made by the Arbitrator, the appellant fears that the Arbitrator has made up his mind to make the award in favor of the respondent. (2) On 14.7.1992, appellant filed list of witnesses. On 15th July, 1992 it was represented by the respondent/contractor that they had nothing to argue except what was stated in the claims and that the matter be posted for arguments. The request of the appellant for adducing oral evidence was rejected by the Arbitrator and appellant's counsel was asked to proceed with the further arguments. This conduct of the Arbitrator showed that the Arbitrator was inclined in favor of the contractor. (3) That on 13th July, 1992 the Arbitrator had stated that in this case his prestige was involved and he was meeting all expenses from his own pocket for coming to Delhi from Madras and was incurring other expenses and that this fact was confirmed by the petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reasoned order on a preliminary objection, (c) had not passed a reasoned order on a preliminary objection, (c) on his non-statement of case for opinion of Court, (d) on the arbitrary decision as to length of time of oral arguments, (e) the other party providing hotel accommodation and an ticket (on the petitioner refusal to contribute, and (f) non-consideration of counter-claims and (g) Change of venue. Even so, it was held that, on those facts, a reasonable apprehension of bias did not arise. Mere suspicion of bias was not sufficient. There must be a 'real' likelihood of bias. The Supreme Court said that the apprehension must be healthy and reasonable from an average point of view and not based on mere apprehension or vague suspicion of whimsical, capricious and unreasonable people. In Jiwan Kumar Lohia v. Durga Dutt Lohia 1991ECR577(SC) , it was again stated by the Supreme Court that the test of likelihood of bias as applied to a tribunal was whether a reasonable person, in possession of relevant information, would have thought that bias was likely and the tribunal was likely to be disposed to decide the matter only in a particular way . That was the position in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties agree to continue the Arbitrator at a particular date of hearing of the case without raising any objection as regards any anterior action of the arbitrator, they must, in our view, be deemed to have waived their objections unless there be a proper Explanation for not raising objection before further participating in the proceedings. In this case there is no such Explanation. Hence the objection must be deemed to have been waived. Further the Arbitrator had, by his letter refuted the allegations in regard to the events dated 20.4.1992 and the respondent too had filed his objections denying the same by way of supporting affidavits of those present on 20.4.1992. In any event, when the stakes were in crores on each side and the appellant Society had refused to pay a partly sum of ₹ 300/- in advance towards copying expenses, the fact that the Arbitrator directed the Contractor to pay on behalf of the appellant ₹ 300/-, to be adjusted later, could not be treated as indication of any bias - having regard to the stringent tests laid down by the Supreme Court. The first ground for attributing bias Therefore cannot be accepted. (B) The second ground is that on 14.7.1992, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The arbitrator has normally to permit parties to adduce evidence where oral evidence is felt necessary. Arbitrary refusal to permit oral evidence will undoubtedly amount to misconduct. It has also been held that in order to entitle a party to impeach the award on the ground of the Arbitrator's improper refusal to permit oral evidence, it must be shown that the witnesses were distinctly tendered to the Arbitrators. (Bihar State Co-op. Bank v. Phosphate Co. Ltd. AIR1975Pat63 . Manindra Nath Mandal v. Mohan Roy (1912) 15 C LJ 360, Commander, Bangalore Area v. Armugam Nagaratnam AIR 1954 May 46. Where, however, there was nothing to show that the Arbitrator was not acting within his powers or where he in the exercise of a prudent and wise discretion had declined to summon the witnesses Rajendranath Dass v. Abdul Hakim Khan AIR 1918 Cal. 399, or where the evidence was unnecessary and would not have in any way influenced the decision of the Arbitrators Keshrimal Pyar Chand v. Basantilal Pyarchand AIR1966MP56 , there could be no misconduct. A decision to decline to receive evidence on any matter is, however, in ordinary circumstances, a delicate step to take, for the refusal to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court case). He also felt that the disputes could be decided on the pleadings and statement of facts filed by both sides. Let us assume that the order was erroneous and Therefore amounted to violation of principles of natural justice. That may be a ground for finding misconduct but still, that by itself, does not prove bias. In fact, the Arbitrator did not keep his reasons secret, but he made them public by passing a reasoned order. On the facts stated above, we are unable to hold that any bias can be attributed to him. Further there is no proof that any witness was actually tendered before the Arbitrator for evidence. In fact, now the learned single Judge in the impugned order, has already allowed the appellant to examine its witnesses. We Therefore reject the second ground for attributing bias. 19. The third ground of attack is that on 13.7.92, the Arbitrator stated that his prestige was involved and that he had been meeting all the expenses from his pocket for coming to Delhi from Madras and the Society wrote about this to the Arbitrator on 14.7.92. It is argued that this showed the personal interest that was being taken by the Arbitrator in the case. 20. Initially, we als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had been coming to Delhi. So far as the present case was concerned, the sitting charge rate is ₹ 500/-. Future expenses for 16/18 sittings were estimated by him at ₹ 18,000/-. He wants to finish the case during two visits to Delhi by taking up the matter day by day. Therefore, the allegation that his TA expenses for coming from Madras to Delhi will add to the load of expenses is not well founded. He has shifted the expense of 5 out of 6 sitting to another case. Then, a further contention was raised by the appellant that in his above Report he had not given any indication as to whether the other cases for which he was coming to Delhi were posted on the same dates on which the present case was posted to. We then passed another order on 24.7.95 calling for information and a further report dated 1.8.95 was filed by the Arbitrator, giving dates. We found that the other cases were also being posted during the same period. Further there is no specific contention before us that the opposite party i.e. the contractor was paying the air-fare. For the above reasons, the contention that the Arbitrator was taking special interest in this case and was Therefore disqualified cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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