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1999 DIGILAW 622 (CAL)

William Jacks & Co. v. Hindustan Steel Works Construction Ltd.

1999-12-02

PINAKI CHANDRA GHOSE

body1999
JUDGMENT 1. This is an application filed by the petitioner inter alia praying for an order that:- (a) Delay if any in making this application may kindly be condoned. (b) This Hon'ble Court may be pleased to appoint an umpire in place and stead of the said 2nd umpire Mr. Justice P.C. Barooah (Retd.) (Since deceased). (c) The proposed umpire to be appointed by this Hon'ble Court may be directed to proceed with the matter from the stage left over by the said 2nd umpire and the proceedings before the said 2nd umpire may be treated as proceedings before the umpire to be appointed. (d) Cost and incidental to this application be cost in the arbitration proceedings. 2. The facts of the case briefly are as follows:- On 21st January, 1976, the petitioner entered into an agreement for supply and installation of a Batching Plant to be used for the construction of the Supa Dam, being part of the Kalinadi Hydel Project. The said agreement contained an arbitration clause, Disputes and differences arose between the parties and whereas on 16th August, 1976, the petitioner filed an application for filing or the said arbitration agreement and to refer the disputes and differences between the parties to an arbitrator to be appointed by this Hon'ble Court. 3. By an order dated 1st November, 1976, the said agreement was directed to be filed and parties were directed to appoint arbitrators in terms of the said agreement. Accordingly, Mr. P.K. Khaitan and Mr. Subimal Som were appointed as the arbitrators. The said arbitrators appointed Mr. Justice S. Burman, a retired Judge, as an umpire in respect of such proceedings. The said joint arbitrators differed and as a result whereof the said umpire Mr. S. Burman (a retired Judge) held sittings and after the demise of said Mr. S. Burman, Mr. P.C. Barooah (a retired Judge), since deceased, was appointed as the umpire in place and stead of Mr. S. Burman, since deceased. 4. After the appointment of Mr. P.C. Barooah (a retired Judge) as an umpire who proceeded from the stage left over by the first umpire and the proceedings before the first umpire was treated as proceeding before the said 2nd umpire. During January 21, 1986 and August 2, 1992, the said 2nd umpire held several sittings of the parties. 4. After the appointment of Mr. P.C. Barooah (a retired Judge) as an umpire who proceeded from the stage left over by the first umpire and the proceedings before the first umpire was treated as proceeding before the said 2nd umpire. During January 21, 1986 and August 2, 1992, the said 2nd umpire held several sittings of the parties. Thereafter, in or about May 1993, the umpire died without concluding the hearing of the said proceedings. Thereafter, negotiations took place between the Advocates of the parties for selection of an umpire in place and stead of the said Mr. P.C. Barooah (a retired Judge), since deceased. But since then no steps have been taken by the petitioner till 18th March, 1999 when this present application has been filed by the petitioner inter alia praying for the orders stated hereinabove. 5. Mr. Pranab Roy, learned Senior Advocate, appearing on behalf of the petitioner has submitted that an arbitral proceeding is alternative to and substitute for a suit in a domestic forum. As a suit does not abate by reason of the death, retirement, resignation or transfer of a learned Judge before whom the same may be pending, the arbitral proceeding too does not a fortiori come to an end by reason of the death or resignation of or expiry of the time to make the award by the arbitrator at the umpire, as the case may be. 6. He also submitted that an arbitral proceeding, once commenced, may be brought to an end only by two methods i.e., the same culminating in an award or being superseded by or under the authority of the Court. There is no question of automatic abatement of an arbitral reference. 7. He further submitted that an arbitral proceeding may be said to be dormant but not dead by reason of the arbitrator dying, resigning or otherwise being rendered functus officio. 8. Mr. Roy further contended that in a pending suit, the tight to apply was a right which accrued and it is not barred by lapse of time. In support of his submission he relied upon the judgments reported in Kedar Nath Dutt vs. Harra Chand Dutt, ILR 8 Cal 420; Subba Chariar vs. M. Pillai & other, ILR 36 Mad 553 and S.K. Sahgal vs. Maharaj Kishore Khanna, AIR 1959 SC 809 . 9. In support of his submission he relied upon the judgments reported in Kedar Nath Dutt vs. Harra Chand Dutt, ILR 8 Cal 420; Subba Chariar vs. M. Pillai & other, ILR 36 Mad 553 and S.K. Sahgal vs. Maharaj Kishore Khanna, AIR 1959 SC 809 . 9. He also submitted that an arbitration agreement for submission of disputes and differences between the parties shall not fail merely by reason of the failure of machinery. On the contrary as held by the Privy Council, in case of a reference becoming abortive for any reason whatsoever it is the duty and the privilege of the Court to have the same revived and to remove the impasse. In support of his such submissions he relied upon a judgment reported in Cameron vs. Cuddy & another, 1914 AC 651. 10. According to him, on a conjoint reading of Sections 5, 12 (2), 19 and 28 of the Arbitration Act, 1940, the following principles emerge:- (i) A reference, which has already commenced would remain pending until expressly superseded by Court. (ii) Authority of an arbitrator/umpire does not cease merely by reason of his becoming functus officio. Such authority has to be revoked with express leave of Court. (iii) The Court has the power to extend time for an arbitrator umpire to make an award irrespective of whether he became functus officio by the time such award was made. 11. Learned Advocate appearing on behalf of the respondents submitted that this application is not maintainable inter alia that this application has been filed by the petitioner long after the death of the said umpire and in fact more than three years have been taken to file this application. He further submitted that the grounds for delay in making this application has not been explained by the petitioner. According to him, the Article 137 of the Limitation Act applies to this case and this application is wholly barred under the provisions of the said Article. He further submitted that the case cited by the petitioner has no application in the facts and circumstances of this case. He also submitted that the limitation for appointment of the new arbitrator is three years from the date of the right to apply accrues. 12. He further submitted that the case cited by the petitioner has no application in the facts and circumstances of this case. He also submitted that the limitation for appointment of the new arbitrator is three years from the date of the right to apply accrues. 12. He further relied upon judgments reported in The National Small Industries Corporation Limited vs. M/s. Bhanot Engineering Work, AIR 1991 Delhi 238 and reported in Hindustan Flash Light Mfg. Co. Ltd. vs. Great American Insurance Co. Ltd., AIR 1963 Cal 149 , and contended that in the said judgments it has been held that the application for the appointment of any umpire/arbitrator after eight years after the death of the predecessor amounts to abandon of the said arbitration proceedings. 13. After considering the facts and circumstances of this case I do not find that any cogent reason has been given by the petitioner for not filing the application after the death of the erstwhile umpire and further more it's a fact that if the parties do not take any steps in the matter to proceed with the arbitration proceedings, it will be treated that the proceedings has been abandoned by the parties. In the instant case, in my opinion judgment reported in AIR 1963 Cal 149 (supra), applies and I do not have any hesitation to hold that no steps have been taken by the petitioner after the death of the umpire which tantamounts to abandon the said proceedings. Furthermore, no reasons have been given in this application that why such application has not been filed till March 1999. I am not satisfied with the application filed by the petitioner and further no sufficient cause has been shown for delay in making this application by the petitioner and as such no order can be passed on this application. 14. I have also considered the case reported in Hindusthan Steel Ltd. vs. Amarnath Sharma, AIR 1971 Orissa 288 and I am wholly accepting the said judgment in holding that the discretion under Section 28 will not be exercised in favour of a party who himself has been negligent and guilty of dilatory tactics. 14. I have also considered the case reported in Hindusthan Steel Ltd. vs. Amarnath Sharma, AIR 1971 Orissa 288 and I am wholly accepting the said judgment in holding that the discretion under Section 28 will not be exercised in favour of a party who himself has been negligent and guilty of dilatory tactics. In my opinion, the petitioner did not take any steps for a long time as it has appeared from the petition and is an admitted fact that the erstwhile, umpire P.C. Barooah (a retired Judge), since deceased, was suffering for a long period and in fact could not hold meeting after August 2, 1992. It is also the case of the petitioner that the umpire died in or about May 1993. It is further stated by them that the negotiations took place for selection of an umpire between the Advocates, but it is unknown to this Court why such along time has been taken for not filing any application before this Court when the parties have not agreed in the name of an umpire so long. No reasons have been stated in the petition, in my opinion, the exercise of discretion in extending the time should be exercised by the Court after considering all these facts. In these circumstances, I am unable to accede to the prayers made by the petitioner and accordingly this application must fail and hereby dismissed, however, without any costs.