M. K. Chawla ( 1 ) SHRI Pramod Kumar Mittal, petitioner in Suit No. 564a/1982 is the brother of respondent , Shri Niranjan Kumar Mittal. They were doing business in the name and style of M/s. Kaushal Metal Industries at DSIDS Sheds No. 26-27, Phase II, Okhla, New Delhi. This business was started by executing the partnership deed dated 21-9-1980. One of the clauses of the partnership deed contained an arbitration clause which provided for resolving disputes by the sole arbitration of their father, Shri Kishan Chand Mittal. Subsequently various disputes arose between the brothers which ultimately resulted in the reference of disputes to the learned arbitrator. Shri Kishan Chand Mittal made and published the award on 24-5-1982. ( 2 ) PRAMOD Kumar Mittal filed an application under Section 14 (2) of the Arbitration Act in this Court praying for the issuance of directions to the arbitrator to file the award and the proceedings so that the same may be made a rule of the court. The learned arbitrator immediately on the service of the summons of the application filed the award and the proceedings in court, the notice of which was taken by the parties on 28-6-1982. The respondents within the stipulated period filed the objections to which a suitable reply was given by the petitioner. On the pleadings of the parties the following issues were framed :- "1. Whether the arbitrator has misconducted himself or the proceedings 2. Whether the award has been improperly procured ? 3. Whether there was no valid reference for arbitration ? 4. Relief". Learned counsel for the parties agreed that the evidence in the case can be led by way of filing affidavits. The petitioner himself filed the affidavit in support of his submissions while the respondent also cared of file his own affidavit. Later on at the request of the respondent Shri K. . C. Mittal was summoned for his evidence and was also cross-examined at length. ( 3 ) I have heard the arguments of the learned counsel for the parties and with their help goce through the record carefully. ( 4 ) THE only contention raised by the learned counsel for the respondent/objector is that be was not given as opportunity of being heard and the award being ex parte is liable to be set aside.
( 4 ) THE only contention raised by the learned counsel for the respondent/objector is that be was not given as opportunity of being heard and the award being ex parte is liable to be set aside. According to him on 21-1-1982 the respondent received a notice from the learned arbitrator for his appearance before him on 27-1-1982 but on 25-1-19s2 informed the arbitrator that on the appointed date he will be out of Delhi in connection with his business and that the hearing be adjourned for 25-2-1982. The learned arbitrator how-ever, instead of adjourning the proceedings required the petitioner to file his statement of claim and closed the proceedings on 12-2-1982 by stating that the respondent is not interested to join the proceedings, completely ignoring the fact that he was not in town and had already requested for an adjournment beyond 25-2-1982. The learned arbitrator according to the counsel for the respondent has acted in haste and without even giving reasonable time and opportunity has made and published the award which is liable to be set aside. ( 5 ) THE submission of the learned counsel for the petitioner on the other band is that the respondents even after the service of the notice for 27-1-1982 remained in Delhi till 27-1-1982 when the case was fixed for hearing but be intentionally avoided to appear before the learned arbitrator. His further sub-mission is that before proceeding ex parte the learned arbitrator issued two notices under certificate of posting for 5-2-1982 and for 12-2-i 982. But in spite of the service of the notices the respondent did not care to put in appearance and as such the learned arbitrator was justified in publishing the award. ( 6 ) MOST of the facts are not in dispute. The bare perusal of the arbitration proceedings indicates that on 21 1-1982 the learned arbitrator called upon the parties to appear before him on 27-1-1982 for the adjudication of the disputes which have arisen between the parties. This notice was duly served upon both the parties. On the adjourned hearing Pramod Kumar Mittal did appear but no information was received from the side of the respondent, Shri N. K. Mittal. However, in order to afford an opportunity to the respondent the learned arbitrator directed the issuance of another notice for 5-2-1982 to the respondent.
This notice was duly served upon both the parties. On the adjourned hearing Pramod Kumar Mittal did appear but no information was received from the side of the respondent, Shri N. K. Mittal. However, in order to afford an opportunity to the respondent the learned arbitrator directed the issuance of another notice for 5-2-1982 to the respondent. The proceedings of the said date go to show that by that time the learned arbitrator had received a notice from the respondent, Shri N. K. Mittal that 27-1-1982 is not suitable to him as he would be going on tour and will be back only after 25-2-1982 and as such a fresh date be fixed after 25-2-1982. The proceedings further go to show that the learned arbitrator took note of the tact that Shri N. K. Mittal was in Delhi upto 31-7-1982 and has intentionally avoided appearing before him, and as such he is not interested to join the proceedings. A direction was issued to the petitioner to file his statement of claim and the documents on 12-2-1982. The petitioner did comply with this requirement and the last order indicated that the proceedings were closed and the case was fixed for pronouncement and publication of the award, the information of which will be conveyed to the parties later on. ( 7 ) I have carefully perused the copies of the notices alleged to have been sent to the respondent for 5-2-1982 and 12-2-1982. The notices only indicate the next date of hearing and the place and time where the proceedings are to be taken. There is no mention of the fact that the learned arbitrator intended to proceed ex parte against the respondent in case he failed to appear on any of those hearings. As already observed earlier without calling upon the respondent to file his counter claim or affording him an opportunity of being heard the learned arbitrator made and published his award on 24-3-1982. ( 8 ) THIS award prima facie is liable to be set aside on the short ground that the learned arbitrator, even after having received a letter of request from the respondent that he would be but of Delhi on the date when he is expected to appear before the learned arbitrator and requesting him to fix another dt. after 25-1-1982, had no occasion to have fixed any date prior to 25-2-1982.
after 25-1-1982, had no occasion to have fixed any date prior to 25-2-1982. The sending of notices for 5-2-1982 and 12-2-1982 is merely a formality when it was known to the petitioner and the arbitrator that the respondent would be out of Delhi. Further more in none of these notices the learned arbitrator indicated to the respondent that in case he failed to appear before him on the adjourned hearing he will be proceeded ex parte. It may be that there is no hard and fast rule of giving notice by the arbitrator of his intention to proceed ex parte but the principles of natural justice require that a person cannot be condemned unheard and he should be afforded a reasonable opportunity of being heard. In the instant case the respondent was out of Delhi. On 5-2-1982 and 12-2-1982, to the knowledge of the learned arbitrator. Admittedly there was no service of any of these notices even though they were sent through UPC. Even if there had been the service on the respondent, but in view of the fact that these notices did not contain the warning that in case the respondent failed to appear he will be proceeded ex parte, the service of such notices is of no consequence. Learned counsel for the respondent has rightly placed reliance on a judgment of this court reported as Lovely Benefit Chit Fund Pvt. Ltd. v. Puran Dutt Sood and others1; wherein under similar circumstances the ex parte award was set aside. Sultan Singh, J. REFERRED TO to number of authorities cited at the bar and ultimately held as under:- "that an Arbitrator ought not to proceed ex parte against to party if he has failed to appear at one of the sittings. The Arbitrator should fix another date for hearing and given notice to the defaulting party, of his intention to proceed ex parte on aspecified date, time and place. Even after notice if the defaulting party does not take part in the proceedings the Arbitrator may proceed in his absence. that where an ex parte award has been made the principle to be applied is that the award will not be upheld unless it is apparent that the failure to give notice of intention to proceed ex parte has not caused any prejudice to the party against whom the ex parte award was made.
that where an ex parte award has been made the principle to be applied is that the award will not be upheld unless it is apparent that the failure to give notice of intention to proceed ex parte has not caused any prejudice to the party against whom the ex parte award was made. " ( 9 ) THE learned counsel for the respondent has pointed out from the conclusion of the award that the respondent not only was divested of the business of Kaushal Metal Industries but was further required to pay a sum of Rs. 1,59,255. 00 to the petitioner. His non-appearance has caused prejudice to the respondent and this part of the award also satisfies the second observation made in the above said judgment. ( 10 ) AS a result of the above discussion I have no hesitation to set aside the award of Shri Krishan Chand Mittal dated 24. 3 1982 and remit the matter to the learned arbitrator for reconsideration with the direction to afford a reasonable opportunity of being heard to the respondent before making/publishing the award. The parties are directed to appear before the learned arbitrator at 2 p. m. on 30-7-1980 at his residence, F-4/9, Krishan Nagar, Delhi- 110051. The learned arbitrator shall announce and publish the award within 4 months thereafter. ( 12 ) LEARNED counsel for the respondent half-heartedly tried to make out a case for the removal of the learned arbitrator by alleging that the arbitrator is biased towards his client and he does not expect fair deal and justice from him. Learned counsel also pointed out few instances of bias. This argument is devoid of any substance as none of the allegations/instances are supported by any oral or documentary evidence. Further more Shri K. C. Mittal is the father of the parties and both of them have already agreed to his arbitration at the time of the execution of the partnership agreement, and as such his prayer for the removal of the arbitrator is hereby declined.