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2004 DIGILAW 354 (HP)

H. P. S. E. B. v. ANSAL PROPERTIES

2004-12-27

LOKESHWAR SINGH PANTA

body2004
JUDGMENT Lokeshwar Singh Panta, J.: The Himachal Pradesh State Electricity Board (for short HPSEB1) has filed this petition under Article 227 of the Constitution of India, challenging the order dated 12.3.2004 marked (Annexure P-3) and order dated 25.3.2004 marked (Ext. P-5) recorded by sole Arbitrator (respondent No. 2) herein whereby cost-of Rs. 15,000/- was imposed upon the petitioner-Board during the arbitral proceedings and its application under Sections 12(3) and 13 of the Arbitration and Conciliation Act, 1996 has been dismissed. 2. The petitioner-Board and respondent No. 1 had entered into a agreement for the construction of civil work comprising Intake Structure, Link Tunnel, underground Desilting Tank etc. etc. in Distt. Kangra, vide Agreement No. 1/91 dated 21.2.1991. The stipulated time for completion of the said work was for 24 months. Respondent No. 1-claimant, however, could not complete the said work within the agreed time. Time was extended to the claimant from time to time after reserving the right of the petitioner-Board to recover liquidated damages for the delay in the completion of the works and as such the work finally be completed on 8.4.1997. 3. The petitioner-Board imposed compensation for delayed completion of work under Clause 2 of the Agreement amounting to Rs. 68,00,000/-. A Civil Suit No. 3/200 has been filed before this Court which is pending adjudication. 4. The respondent-claimant in the meantime, sought the reference of certain disputes which arose from the execution of the work. The disputes were referred to the Arbitration of Shri J.M.S. Jaswal on 27.6.1997. Thereafter, Shri S.R. Khidtta was appointed as the Sole Arbitrator who did not proceed with the reference and then Shri S.C. Mahajan. Chief Engineer (Retd.)-respondent No. 2 herein was appointed as the Sole Arbitrator. 5. The respondent-claimant preferred claims before the Arbitrator and the said claims were contested and resisted by the Board. On 26.9.2003 the petitioner-Board filed an application before the Arbitrator seeking permission to lead evidence on its behalf which was allowed by the Arbitrator on the same day. The petitioner-Board filed affidavits as well as the list of witnesses sought to be examined on its behalf. On 26.9.2003 the petitioner-Board filed an application before the Arbitrator seeking permission to lead evidence on its behalf which was allowed by the Arbitrator on the same day. The petitioner-Board filed affidavits as well as the list of witnesses sought to be examined on its behalf. The respondent No. 2 fixed the date of hearing for 4th February, 2004 on which date the petitioner-Board sought adjournment on the ground that the High Court was closed for vacation and as such the Advocates representing the petitioner-Board were not available nor witnesses were available for recording their evidence. The respondent No. 2 adjourned the arbitration proceedings to 12th March, 2004 for recording evidence of the witnesses of the petitioner-Board. 6. On 11.3.2004, in the evening according to the petitioner-Board, it transpired that the Civil Suit filed by it was also listed before the High Court for recording evidence of the witnesses of the Board. Some of the witnesses sought to be examined by the petitioner-Board before the Arbitrator were the same who were also to be examined in the High Court. The record in both the cases was common. A telephone request was made to the respondent No. 2 at 5.10 p.m. on his Mobile Number requesting him to take up the matter in the post lunch session on 12.3.2004, when the proceedings before the High Court would have finished. The respondent No. 2 acceded to the request of the petitioner-Board. The counsel and the witnesses of the petitioner-Board reached the venue of the Arbitration at 1.30 p.m. but to their utter surprise and shock the Arbitrator informed the petitioner-Board that proceeding had already been conducted in its absence. Respondent No. 2 denied any such request having been made to him on telephone as alleged by the petitioner-Board or its counsel. The petitioner-Board thereafter made an application to respondent No. 2 detailing the facts and to incorporate the request made by the learned Counsel representing the petitioner-Board in the proceedings which by that time had not been drawn up. The request of the learned Counsel was flatly declined by respondent No. 2. Consequently, the respondent No. 2 imposed cost of Rs. 15,000/- on the petitioner-Board for being absent from the proceedings on 12.3.2004. 7. The request of the learned Counsel was flatly declined by respondent No. 2. Consequently, the respondent No. 2 imposed cost of Rs. 15,000/- on the petitioner-Board for being absent from the proceedings on 12.3.2004. 7. The petitioner-Board thereafter field an application under Section 12(3) and 13 of the Arbitration and Conciliation Act, 1996 for bringing to the notice of the respondent No. 2 the doubts as to his independence and impartiality in conducting the arbitral proceedings. The respondent No. 2, vide order dated 25.3.2004 has dismissed the said application of the petitioner-Board without even calling for reply from respondent No. 1. 8. Feeling aggrieved and dissatisfied with the orders dated 12.3.2004 and 25.3.2004, the petitioner-Board filed the present petition under Article 227 of the Constitution of India challenging the said orders inter alia on the ground that the respondent No. 2 has fallen into grave error in exercise of his jurisdiction and the order of imposition of cost of Rs. 15,000/- on the petitioner-Board for being absent from the proceedings is bad in law and cannot be sustained. The petitioner-Board also challenged the said orders on disputed questions of facts. 9. Respondent No. 2 has filed reply to the petition raising preliminary objection that this court has no jurisdiction under Article 227 of the Constitution of India to interfere with the order of the Arbitrator in proceedings under Arbitration and Conciliation Act, 1996. Further, it is submitted that since 1997 when the proceedings were conducted by the different Arbitrators, the petitioner-Board has been taking adjournments on one pretext or the other. The respondent No. 2 has stated the dates of the arbitration proceedings conducted from time to time and the adjournment sought for by the petitioner-Board on a number of occasions. 10. No counter to the petition has been filed by respondent No. 1. 11. I have heard learned Counsel for the parties and examined the material on record. Mr. J.S. Bhogal, learned senior Counsel appearing on behalf of the petitioner-Board contended that the Arbitration and Conciliation Act, 1996 would not take away the jurisdiction of this court under Article 227 of the Constitution of India. If the Arbitrator has exercised its jurisdiction erroneously or he has exceeded to set aside the orders of the Arbitrators. In support of his submission reliance is placed in Surya Dev Rai v. Ram Chander Rai and others, 2003(6) Supreme Court Cases 675. 12. If the Arbitrator has exercised its jurisdiction erroneously or he has exceeded to set aside the orders of the Arbitrators. In support of his submission reliance is placed in Surya Dev Rai v. Ram Chander Rai and others, 2003(6) Supreme Court Cases 675. 12. Per contra Mr. Ajay Kumar, learned Counsel representing the respondent No. 1 has contended that this court in exercise of jurisdiction under Article 227 should not interfere in interlocutory order of the Arbitrator as Arbitrator is neither Court or Tribunal as provided under the said Article. 13. Mrs. Pratima Malhotra, Advocate has adopted the arguments of Mr. Ajay Kumar, Advocate. 14. I have given my thoughtful consideration to the rival contention of learned Counsel, for the parties on the question of maintainability of this petition against the impugned orders of the Arbitrator. 15. It is not in dispute that jurisdiction vested in the High Court under Article 227 is a revisional jurisdiction in the scope and nature of power of superintendence over all Courts and Tribunals through out the territory in relation to which exercises jurisdiction. The vital question that arises for consideration in the present case is whether Arbitrator is the Court or Tribunal within the scope of Article 227 of the Constitution of India. Their Lordships of the Honble Supreme Court in Anglo American Direct Tea Trading Co. Ltd. v. Their Workmen and another, AIR 1963 Supreme Court 874 have deal with the scope and comparison of Art. 136(1) with Article 133(1) and 134(1) of the Constitution of India vis-a-vis the decisions of the arbitrators to whom industrial dispute are voluntarily referred under Section 10-A, Industrial Disputes Act, 1947. Their Lordships have held that for invoking Art. 136(1) two conditions must be satisfied; (1) the act complained against much have the character of a judicial or a quasi-judicial act as distinguished from a mere executive or administrative act, and (2) the authority whose act is complained against much be a court or a Tribunal. Unless both the conditions are satisfied. Art. 136(1) cannot be invoked. Their Lordships concluded that the Arbitrator under Section 10-A, Industrial Disputes Act, 1947 is not exactly in the same position as a private Arbitrator, does not mean that he is a Tribunal under Article 136. Unless both the conditions are satisfied. Art. 136(1) cannot be invoked. Their Lordships concluded that the Arbitrator under Section 10-A, Industrial Disputes Act, 1947 is not exactly in the same position as a private Arbitrator, does not mean that he is a Tribunal under Article 136. Even if some of the "trappings of a Court are present in his case, he lacks the basic, the essential and the fundamental requisite in that behalf because he is not invested with the States inherent judicial power. He is appointed by the parties and the power to decide the dispute between the parties who appoint him is derived by him from the agreement of the parties and from no other source. The fact that his appointment once made by the parties is recognized by Section 10-A and after his appointment he is clothed with certain powers and has thus, no doubt, some of the trappings of a Court, does not mean that the power of adjudication which he is exercising is derived from the State and so, the main test in determining the question about the character of an adjudicating body is not satisfied. Hence, from the decision of an Arbitrator under Section 10-A special leave to appeal to Supreme Court under Article 136(1) cannot be granted. Further, it is observed that from the mere fact that a writ under Art. 226 may lie against the award pronounced by an arbitrator acting under Section 10-A it cannot be concluded that such an Arbitrator is a "tribunal" within article 136(1) because Art. 226 is in a sense wider than Art. 136, the power conferred under Art. 226 not being conditioned or limited by the requirement that the writs can be issued only against an order of a Court or a Tribunal. 16. Their Lordships further held as under: (Para 23 AIR P. 884). Like Art. 136, Art. 227 also refers to courts and Tribunals and what we have said about the character of the Arbitrator appointed under Section 10A by reference to the requirements of Art. 136 may prima facie apply to the requirements of Art. 227." 17. In the present case the Arbitrator was appointed by the parties in terms of the arbitration clause. In the present case the Arbitrator was appointed by the parties in terms of the arbitration clause. The Arbitrator has conducted the proceedings from time to time and finally on 12.3.2004 vide impugned order (Annexure P-3) for repeated default of the petitioner-Board, the respondent No. 2 imposed cost of Rs. 15,000/- upon it. The said order is interlocutory in nature. In the light of the above settled proposition of law, the Arbitrator whose act is complained against in the present proceedings cannot be said to be a Court or Tribunal to attract the provision of Act. 227 of the Constitution. Therefore, the present petition under Article 227 of the Constitution of India is not maintainable against the impugned orders dated 12.3.2004 (Annexure P-3) and dated 25.3.2004 (Annexure P-5) recorded by the Sole Arbitrator. It is also well settled that this court under Article 227 cannot assume unlimited prerogative to correct all species of hardship or wrong decisions made within the limits of the jurisdiction of the Court or Tribunal. 18. The petition is dismissed on the sole ground that the same is not maintainable under Article 227 of the Constitution of India, without embarking upon the disputed facts, claim and counter-claim raised by learned Counsel for the parties in the course of the hearing of this petition. 19. Interim order of stay dated 24.6.2004 stands vacated. The application is accordingly dismissed. 20. However, the dismissal of this petition will not preclude the petitioner-Board to challenge the impugned orders of the Arbitrator before an appropriate Court/Authority as permissible under law.