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1985 DIGILAW 409 (ORI)

RISIDEV BATRA v. UNION OF INDIA

1985-12-07

S.C.MOHAPATRA

body1985
JUDGMENT S.C. Mohapatra, J. - Refusal to remove the Arbitrator is the subject-matter of this application under Section 115 of the Code of Civil Procedure. As per Clause 25 of the written agreement between the petitioner, a works contractor and the Union Government, the Director General of Works, Central Public Works Department, New Delhi, appointed opposite party No. 3 as an Arbitrator on 29.4.1981. The Arbitrator entered into the reference on 15.5.1981 by calling upon the petitioner to file his statement of claim within 15 days. Being accommodated for a longer time to file the claim statement within the 30th June, 1981, the petitioner filed the claim statement on 26.6.1981. Opposite party No. 2 who signed the agreement under Article 299 of the Constitution on behalf of the Union Government, was called upon the file objection to the claim statement by 14.7.1981. He was also accommodated from time to time till 5.10.1981 for filing the counter statement which was at last filed by the opposite party No. 2 on 3.10.1981. Being anxious for early finalisation of the proceeding, the petitioner sent a letter to the Arbitrator to fix the hearing of the case at Bhubaneswar. The Arbitrator (O.P. No. 3) did not send any reply to the petitioner. In this background, an application was filed by the petitioner on 23.10.1981 in Court for removal of the Arbitrator. A perusal of section 11(1) makes it clear that without a finding that the Arbitrator failed to use all reasonable despatch in entering on and proceeding with the reference, there is no scope for removing an Arbitrator in exercise of that power. Even with such a finding, removal of the Arbitrator is discretionary, Such a finding does not lead to the irresistible conclusion that the Arbitrator must be removed. The learned Subordinate Judge has found that the Arbitrator did not proceed with the arbitration proceeding as expeditiously as is expected of him. He did not, however, consider whether it amounted to failure to use all reasonable despatch in proceeding with the reference. On the order hand, he blamed the petitioner to have rushed to the Court for removal of the Arbitrator : In case it would have been a case of mere wrong exercise of discretion, there was no scope for interfering with the discretion of the Court in revision. On the order hand, he blamed the petitioner to have rushed to the Court for removal of the Arbitrator : In case it would have been a case of mere wrong exercise of discretion, there was no scope for interfering with the discretion of the Court in revision. In this case, however, the learned Subordinate Judge failed to exercise the jurisdiction vested in him under Section 11(1) of the Act in not considering whether the Arbitrator failed to use all reasonable despatch in entering in proceeding with, the reference. On this short ground, the order is liable to be set aside. Remitting back the matter for reconsideration by the trial court will cause delay and harassment to the parties. Therefore, it is desirable to consider the question of removal of the Arbitrator in this Civil Revision itself. Clause 3 of the First Schedule to the Act provides for the Arbitrator to make the award within four months of entering on the reference which is treated to an implied term in the agreement. The parties, however, may fix a time other than four months given in clause 3 by standing so in the agreement. It is not disputed in this case that a separate time has not been fixed in the agreement of the parties. To meet the non-compliance with the requirement, the opposite party No. 2 stated in the objection that in the agreement it was provided that the arbitrator with consent of parties may extend the time. This has been accepted by the trial court. Section 28(2) of the Act in categorical terms provides that a clause in the agreement giving the power to enlarge the time is void and is of no effect except when all the parties consent to such enlargement. Neither the petitioner has given his consent nor did the Arbitrator seek for the same for enlargement of time. The Arbitrator remained inactive in spite of the petitioner requesting him for early hearing at Bhubaneswar. Neither the petitioner has given his consent nor did the Arbitrator seek for the same for enlargement of time. The Arbitrator remained inactive in spite of the petitioner requesting him for early hearing at Bhubaneswar. Opposite party No. 2 has tried to explain the silence of the Arbitrator in his objection stating that the Arbitrator could not have heard the matter in absence of the counter on behalf of the opposite party No. 2 : If the Arbitrator would have sough for the consent of the petitioner for enlargement of the time or would have requested the Court for the same section 28(1) of the Act explaining the difficulties in proceeding with the reference, the matter would have been different Where the Arbitrator in spite of section 28(2) of the Act read with Clause 3 of the Schedule thereto remains silent, inference of not using reasonable despatch in proceeding with the reference can be drawn. The Arbitrator in this case is a public official. Onerous duty was cast on him to act in accordance with law. No Court ought to condone the inaction of a public official unless reasonable explained. Opposite party No. 3 received the notice of the trial court as well as of this Court to explain his conduct in proving that he used all reasonable despatch in the proceeding with the reference. He preferred not to appear. In such circumstances, discretion of the Court to enlarge the time enabling the Arbitrator to proceed with the reference and make his award ought not to be exercised. The observation of this Court in a decision Ganesh Chandra Misra v. Artatran Misra and others (ILR 1964 Cut 685) that on submission of the parties to the jurisdiction of the Arbitrator even after expiry of four months, the Arbitrator does not act without jurisdiction, has been specifically overruled by the Supreme Court in a decision State of Punjab v. Hardyal (AIR, 1985 SC 920). The silence of the petitioner from 15.9.1981 when the four months of entering into reference expired till 23-10-1981 would not thus, disentitled the petitioner to move the Court for exercise of the description under section 11(1) of the Act. The power of the Court under section 28(1) of the Act for enlarging the time is to be exercised judiciously as has been held in decision in State of Punjab v. Hardyal (supra). The power of the Court under section 28(1) of the Act for enlarging the time is to be exercised judiciously as has been held in decision in State of Punjab v. Hardyal (supra). No reason has been given the trial court while enlarging the time to indicate that he acted judiciously. The enlarging the time cannot be sustained. On the submission of Mr. R. Mohanty, the learned counsel for the petitioner that the opposite party No. 3 has expressed has inability to proceed with the reference on account of his transfer, Mr. L. Rath, the learned Standing Counsel (Central), submitted that the proceeding has become infructuous. In case I accept the submission of Mr. Rath, Arbitrators would avoid the security of their conduct by Court by expressing their inability to proceed with the reference. The matter, in the circumstances available in each case. In the conclusion, opposite party No. 3 is removed to act as Arbitrator. The trial court shall appoint an Arbitrator in accordance with law fixing his remuneration at a consolidated sum. One of the terms of appointment shall be that the Arbitrator shall give a reasoned award. In the result, the Civil Revision is allowed with costs. Hearing fee is assessed at Rs. 250/- (two hundred fifty). Revision allowed.