ORDER : 1. This is an appeal from the judgment and order dated 18.08.2011 delivered in Misc.(ARB) 02 of 2009 by the District Judge, West Tripura, Agartala whereby the award passed by the sole arbitrator in Arbitration Proceeding No. ARB/PP/01/2006 has been set aside. 2. Briefly stated, the essential facts are that the respondent and the appellant entered in a job contract by the agreement No. AGT/DS/CHEM/JOBCONTRACT/TEND-1/2003-04 and 2004-05 dated 28.05.2003 for mud handling and other miscellaneous unskilled works at the drilling sites of the ONGC, the appellant herein, for the year 2003-04 and 2004-05 with a provision for renewal for further one year, if required. The fact which is undisputed is that the respondent, herein after referred to as contractor, deposited a sum of Rs.4,77,360/- in the form of special term deposit for two years in the name of F & AO, ONGC Limited, Tripura Asset, Agartala as per the terms in the agreement as the security deposit for due and proper performance of contract. There was no allegation against the contractor as regards the performance of contract. The contractor discharged all his contractual obligations and finally the contract expired on 31.03.2006. As the contract was not further renewed the contractor by his letter dated 03.04.2006, addressed to the Location Manager, Mud Services, ONGC, Tripura Asset, requested for releasing the said security deposit. As the contractor did not receive any response, on 08.05.2006, the contractor addressed another letter for the same purpose. Finally, the contractor served a formal notice on 02.06.2006. Then the said location manager, in reply, informed the contractor by his letter dated 14.06.2006 that the amount from the fixed deposit has been released after deduction of Rs.3,42,272/- which was paid by the ONGC as compensation to the father and legal heirs of a contingent labourer namely, Jitendra Tripura who died on 16.02.2005. Jitendra Tripura beyond his duty hour went to have his bath in an underground water tank far away from his work site and at the time of spreading his wet cloth in the nearby wire gauze fencing, he got electrocuted and died. The said location manager informed that unfortunate incident of death to the Inspector of Factories and Boilers, Govt. of Tripura, Agartala. The said location manager informed that unfortunate incident of death to the Inspector of Factories and Boilers, Govt. of Tripura, Agartala. At the request of the said Inspector of Factories and Boilers, the ONGC paid the said compensation to the father and legal heirs of the deceased workman under the Workmen's Compensation Scheme. The contractor however, at that point of time denied any liability of such payment. Thereafter, keeping the contractor in the dark, the ONGC conveyed a public meeting on 06.08.2005 at Nalua under Belonia Sub-Division. In the said meeting, Sri Badal Choudhury, the State Finance Minister was present as the Chief Guest and the ONGC official handed over a cheque of Rs.3,42,272/- through the Finance Minister to the father of Jitendra Tripura. On 30.06.2006, the ONGC, the appellant herein, released a cheque dated 21.07.2006 for Rs.2,22,651/- by registered post after deducting Rs.3,42,272/- from the security deposit which was maintained in the term deposit as stated. The petitioner raised the dispute to the Chief Managing Director of the ONGC and asked for appointment of the sole arbitrator for deciding the dispute in terms of Clause-15 of the said agreement. The contractor asked for appointment of the sole arbitrator from law knowing persons as the dispute involved some complicated questions of law. The Chief Managing Director appointed Sri Pradip Prasad, Deputy General Manager (F&A), ONGC, Tripura Asset, Agartala, the sole Arbitrator. Such appointment was communicated to the contractor by the letter dated 14.11.2006. By a letter dated 18.12.2006, the contractor expressed his apprehension of bias from the sole arbitrator as he is the Deputy General Manager (F & A), ONGC and he would naturally have the inclination to protect the interest of the ONGC. The said objection was heard under Section 13(2) of the Arbitration and Conciliation Act, 1996. But the said objection was rejected by the sole arbitrator and the sole arbitrator after hearing both the sides passed the award against the respondent holding that deduction of Rs.3,42,272/- was just and proper. 3. The contractor felt aggrieved and he applied under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award. The said application was registered by the District Judge, West Tripura, Agartala as Misc. ARB 02 of 2009. While disposing the said application by the impugned judgment and order, the District Judge has observed inter-alia that: “4.6. 3. The contractor felt aggrieved and he applied under Section 34 of the Arbitration and Conciliation Act, 1996 for setting aside the award. The said application was registered by the District Judge, West Tripura, Agartala as Misc. ARB 02 of 2009. While disposing the said application by the impugned judgment and order, the District Judge has observed inter-alia that: “4.6. Section 12 of the said new Arbitration Act mandates that “when a person is approached in connection with his possible appointment as an Arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.” But in the instant case, the selected Arbitrator being a man of Opposite Parties himself utterly violated this mandatory provision and even after getting the no-confidence letter from the petitioner stolidly proceeded to decide the case. In such a situation it is apparent with justifiable ground that both the opposite parties as well as the Ld. Arbitrator have violated the basic concept of Sections 11 and 12 of the Arbitration and Conciliation Act, 1996. The established legal maxim that “justice is not only to be done but also shall have to be shown to have done” has also been disregarded by the opposite parties and another maxim “nemo judex in causa sua” that “one should not be Judge in his own cause” has also been violated. 4.7 Ld. Counsel of the petitioner referred a decision in between Bihar State Mineral Dev. Corporation Vs. Encon Builders (I) Pvt. Ltd. (reported in AIR 2003 (Supreme Court) 3688 (B) wherein Hon'ble Apex Court observed to the effects.” There cannot be any doubt whatsoever that an arbitration agreement must contain the broad consensus between the parties that the disputes and differences should be referred to a domestic tribunal. The said domestic tribunal must be an impartial one. It is well-settled principle of law that a person cannot be a Judge of his own cause. It is further well-settled that justice should not only be done but manifestly seen to be done. Actual bias would lead to an automatic disqualification where the decision-maker is shown to have an interest in the outcome of the case. Actual bias denotes an arbitrator who allows a decision to be influenced by partiality or prejudice and thereby deprives the litigant of the fundamental right to a fair trial by an impartial tribunal.” Ld. Actual bias would lead to an automatic disqualification where the decision-maker is shown to have an interest in the outcome of the case. Actual bias denotes an arbitrator who allows a decision to be influenced by partiality or prejudice and thereby deprives the litigant of the fundamental right to a fair trial by an impartial tribunal.” Ld. Counsel for the petitioner also referred another decision in between Kashmiri Lal Vs. Commissioner (Appeals), Jalandhar (reported in AIR 2010 Punjab and Haryana 183). In that decision at para 7 Hon'ble Punjab and Haryana High Court observed to the following effect: “Admittedly, the Assistant Registrar, Cooperative Societies, who decided the dispute and gave the award, Annexure P-1, was at the relevant time member of the Managing Committee of the Abohar Society. The arbitration was initiated at the instance of Abohar Society and award was given ultimately in its favour. It is well settled that justice must not only be done but must appear to be done. Since the Assistant Registrar was an ex-officio member of the Managing Committee of the Abohar Society when dispute was referred to him, in my considered view, he should have refrained from deciding the same.” Admittedly when the petitioner proposed for referring the matter to arbitrator pursuant to the arbitration clause of the agreement, he filed petition requesting the Director to appoint a law knowing person as arbitrator and proposing names of two persons vide his letter dated 18.09.2006 as stated above. But the Director while appointing the arbitrator did not take into consideration the matter rather ignored the same and appointed the arbitrator of his own choice and ignoring the choice of the petitioner, unilaterally and without giving any response to the petition. Sub Section (5) of Section 13 of the Act also gives scope to the petitioner to challenge the award of arbitrator if the petitioner had his challenge as to the appointment of the arbitrator.” 4. By the impugned judgment, it has been further held that the ONGC had no jurisdiction or competence to make payment without being routed through the Commissioner for the Workmen's Compensation for protection of interest of the deceased workman, in particular, and his legal representatives. This power of disbursement of compensation has been vested with the Commission for Workmen's Compensation and but with none. This power of disbursement of compensation has been vested with the Commission for Workmen's Compensation and but with none. On the basis of these two findings as referred above the arbitral award dated 12.05.2009 passed by the sole arbitrator was set aside by the District Judge, West Tripura. 5. Mr. P.B. Dhar, learned counsel appearing for the appellants has seriously criticised the findings returned by the impugned judgment. According to Mr. Dhar, learned counsel that the impugned judgment has not been passed in conformity with the parameters for purpose of exercising the jurisdiction by the District Judge for setting aside the arbitral award. Mr. Dhar, learned counsel has contended that sub-section (2) of the Section 34 of the Arbitration and Conciliation Act, 1996 requires proof that a party was under some in-capacity or the arbitration agreement was not valid under the law to which the parties have subjected them or failing in any obligation under the law for the time being in force, the party making the application was not given proper notice of appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present the case or the arbitrator dealt with a dispute, not contemplated by or not falling within the terms of the submission to the arbitrator or it contains decision on matters beyond the scope of the submission to arbitration, provided that if the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award that contains decisions not submitted to arbitration may be set aside; or the composition of arbitral tribunal or arbitral procedure was not in accordance with agreement of the parties, unless such agreement was in conflict with this part from which the parties cannot derogate failing such agreement, was not in accordance with that part; or if the court finds that the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force or the arbitral award is in conflict with the public policy of India. 6. Mr. Dhar, learned counsel appearing for the appellants has robustly submitted that in the application filed under Section 34, no ground was placed. As such, proof or no proof, is not a matter to be looked into. 6. Mr. Dhar, learned counsel appearing for the appellants has robustly submitted that in the application filed under Section 34, no ground was placed. As such, proof or no proof, is not a matter to be looked into. He has further submitted that under the Arbitration and Conciliation Act, 1996, there are three sections which basically confer the power on the court to intervene in the matter. The next section which confers a power on the court to judicially intervene is Section 37(2). The court can intervene also on an application under Section 14(2) of the said Act. In other words, a conjoint reading of Section 5, Section 34, Section 37 and Section 14(2) of the Act of 1996 will show that the court can intervene only in the cases covered under Section 14, Section 34 and Section 37. Section 14 of the Arbitration and Conciliation Act 1996 deals with failure and on impossibility to act which is not the case in hand and as such to acquire the jurisdiction by the District Judge to interfere in the award, the conditions as reflected in the Section 34(2) of the Arbitration and Conciliation Act, 1996 has to be satisfactorily proved. In this regard, Mr. Dhar, learned counsel has sought to expand his submission that the finding that by not appointing 'an independent person' having the knowledge of law, the Chief Managing Director had acted against the basic principle of justice, is entirely untenable in as much as clause 15 of the agreement provides as under: “Except as otherwise provided elsewhere in the contract, in case of any dispute, difference, question or disagreement on matter whatsoever shall, before or after completion or abandonment of work or during extended period, hereafter arises between the parties hereto or the respective representatives or assignees concerning with the construction, meaning, operation or effect of the contract or out of or relating to the contract or breach thereof shall be referred to a sole arbitrator to be appointed by a Director of the ONGC at the time of dispute.” 7. As such, the nomination and appointment of the sole arbitrator entirely falls within the discretion of the Director of the ONGC. Mr. Dhar, learned counsel appearing for the appellant has further submitted that one person for being the officer of the ONGC cannot ipse dixit be held to be bias. As such, the nomination and appointment of the sole arbitrator entirely falls within the discretion of the Director of the ONGC. Mr. Dhar, learned counsel appearing for the appellant has further submitted that one person for being the officer of the ONGC cannot ipse dixit be held to be bias. When someone is appointed as the sole arbitrator he has to act with fairness and in accordance with law and in terms of the provisions of the agreement in particular. The possibility of bias being abstract in nature can be attributed to one and all. The decision as relied by the District Judge for passing the impugned judgment is entirely misplaced. Mr. Dhar, learned counsel has relied on a decision of the apex court in Indian Oil Corporation Ltd. & Ors. Versus Raja Transport (P) Ltd. reported in (2009) 8 SCC 520 where the apex court has enunciated the law as under: “There can however be a justifiable apprehension about the independence or impartiality of an Employee-Arbitrator, is such person was the controlling or dealing authority in regard to the subject contract or if he is a direct subordinate (as contrasted from an officer of an inferior rank in some other department) to the officer whose decision is the subject matter of the dispute. Where however the named arbitrator though a senior officer of the government/statutory body/government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officers (usually heads of department or equivalent) of a government/statutory corporation/ public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract.” [Emphasis supplied] 8. Mr. Dhar, learned counsel has continued to contend that mere apprehension of bias expressed by a party cannot by itself a ground for setting aside the arbitral award. Mr. Dhar, learned counsel has continued to contend that mere apprehension of bias expressed by a party cannot by itself a ground for setting aside the arbitral award. In this regard, he has referred a decision of the apex court in International Airports Authority of India vs. K.D. Bali and Another, reported in (1988) 2 SCC 360 where it has been held as under : “It is not a question of the effect which misconduct on his part had in fact upon the result of the proceeding, but of what effect it might possibly have produced. It is not enough to show that, even if there was misconduct on his part, the award was unaffected by it, and was in reality just; arbitrator must not do anything which is not in itself fair and impartial. See Russell on Arbitration, 18th Edition page 378 and observations of Justice Boyd in Re Brien and Brien. (1910) 2 IR 84 at P. 89. Lord O’Brien in King (De Vosci) v. Justice of Queen's County : ( 1908) 2 Ir R 285 observed as follows: "By bias I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias. I do not think that their vague suspicions of whimsical capricious and unreasonable people should be made a standard to regulate our action here. It might be a different matter if suspicion rested on reasonable grounds was reasonably generated and but certainly mere flimsy ground elusively generated and morbid suspicions should not be permitted to form a ground of decision." (Emphasis supplied) See Queen v. Rand : (1866) 1 QB 230; Ramnath v. Collector, Darbhanga : ILR 34 Pat 254; Queen v. Meyer : (1875) 1 QBD 173 and Eckersley v. Mersey Docks and Harbour Board : (1894) 2 QB 667. 6. In the words of Lord O. Brien, LCJ there must be a real likelihood of bias. It is well settled that there must be a real likelihood of bias and not mere suspicion of bias before the proceedings can be quashed on the ground that the person conducting the proceedings is disqualified by interest. See in this connection Gullapathi Nageswara Rao v. State of Andhra Pradesh, (1960) 1 SCR 580 and Mineral Development Ltd. v. State of Bihar, (1960) 2 SCR 609 . See in this connection Gullapathi Nageswara Rao v. State of Andhra Pradesh, (1960) 1 SCR 580 and Mineral Development Ltd. v. State of Bihar, (1960) 2 SCR 609 . Recently this Court in a slightly different context in Ranjit Thakur v. Union of India, AIR 1987 SC 2386 had occasion to consider the test of bias of the Judge. But there must be reasonableness of the apprehension of bias in the mind of the party. The purity administration requires that the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party. But we agree with the learned Judge of the High Court that it is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. While on this point we reiterate that learned counsel appearing for the petitioner in his submissions made a strong plea that his client was hurt and had apprehension because the arbitrator being the appointee of his client was not acceding to the request of his client which the petitioner considered to be reasonable. We have heard this submission with certain amount of discomfiture because it cannot be and we hope it should never be in a judicial or a quasi-judicial proceeding a party who is a party to the appointment could seek the removal of an appointed authority or arbitrator on the ground that appointee being his nominee had not acceded to his prayer about the conduct of the proceeding. It will be a sad day in the administration of justice if such be the state of law. Fortunately, it is not so. Vague suspicions of whimsical, capricious and unreasonable people are not our standard to regulate our vision. It is the reasonableness and the apprehension of an average honest man that must be taken note of. In the aforesaid light, if the alleged grounds of apprehension of bias are examined, we find no substance in them. It may be mentioned that the arbitrator was appointed by the Chief Engineer of the petitioner, who is in the service of the petitioner.” [Emphasis supplied] 9. In the aforesaid light, if the alleged grounds of apprehension of bias are examined, we find no substance in them. It may be mentioned that the arbitrator was appointed by the Chief Engineer of the petitioner, who is in the service of the petitioner.” [Emphasis supplied] 9. On the other hand, as to the finding that by paying the compensation directly to the father of the deceased workmen and other legal heirs the ONGC acted in breach of the agreement, Mr. Dhar, learned counsel has submitted that the relevant clause in the agreement cannot be held to be opposed to the public policy of India. He has submitted that Section 28 of the Workmen Compensation Act is a rider to Section-8 of the Workmen Compensation Act. Clause 16 of the agreement No. AGT/DS/CHEM/ JOBCONT RACT/TEND-I/2003-04 and 2004-05 provides as under: “16. INDEMNITY The Contractor agrees to protect, defend, indemnify and hold ONGC, its employees and its other contractors indemnify and harmless from and against all claims demands and causes of action, liabilities, expenses costs, fines, judgments of every kind and character without limit, which any arise in favour of contractor’s employees, agents and their employees on account of bodily injury or death or damage to personal property as a result of the operations contemplated hereby regardless of whether said claims, damage or causes or action arise out of the negligence or otherwise in whole or in part, unworthiness, or other faults, including preexisting conditions of ONGC, its other contractors, partners joint ventures, employees or agents.” 10. There is no dispute that the ONGC had made payment of the entire amount directly to the father of the deceased worker and his legal heirs without depositing the same before the Commissioner Workmen's Compensation. Mr. Dhar, learned counsel appearing for the appellant, ONGC has acceded that Section-8 of the Workmen's Compensation Act prohibits payment of compensation in respect of workman whose injury has resulted in death and no payment of lump sum as compensation to woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner. Mr. Dhar, learned counsel appearing for the appellant, ONGC has acceded that Section-8 of the Workmen's Compensation Act prohibits payment of compensation in respect of workman whose injury has resulted in death and no payment of lump sum as compensation to woman or a person under a legal disability, shall be made otherwise than by deposit with the Commissioner. No such payment, if made under any circumstances directly by an employer shall be deemed to be a payment of compensation: provided that in case of a deceased workman, an employer may make to any dependant advances on account of compensation of an amount equal to three months' wages of such workman and so much of such amount as does not exceed the compensation payable to that dependant. That amount shall be deducted by the Commissioner from such compensation and repaid to the employer. Section-28 of the Workmen's Compensation Act provides as under: “Where the amount of any lump sum payable as compensation has been settled by agreement whether by way of redemption of a half-monthly payment or otherwise, or where any compensation has been so settled as being payable to a woman, or a person under a legal disability a memorandum thereof shall be sent by the employer to the Commissioner, who shall, on being satisfied as to its genuineness, record the memorandum in a register in the prescribed manner: Provided that:- (a) no such memorandum shall be recorded before seven days after communication by the Commissioner of notice to the parties concerned.” 11. Despite the provision being unequivocal in nature, Mr. Dhar, learned counsel appearing for the appellant, ONGC, has emphatically contended that the provisions of Section-28 of the Workmen's Compensation Act, 1923 has relegated the provisions of Section-8 of the Workmen's Compensation Act to a substantial extent. 12. Appearing for the respondent-contractor, Mr. S. Bhattacharji, learned counsel has submitted that the said clause16 of the agreement for making payment of compensation to the legal heirs of the deceased workman is contrary to the public policy qua Section-23 of the Indian Contract Act as well as Section-8 of the workmen's Compensation Act. He has further raised a question that whether Clause-15 of the agreement as regards the appointment of the arbitrator, is opposed to the public policy or not. According to Mr. He has further raised a question that whether Clause-15 of the agreement as regards the appointment of the arbitrator, is opposed to the public policy or not. According to Mr. Bhattacharji, learned counsel, object of the provisions of Section-11 read with Section 12 of the Arbitration and Conciliation Act, 1996 is to secure appointment of an independent, impartial and qualified arbitrator who enjoy the confidence of the parties to arbitration. The appointment procedure should be fair and transparent in keeping with the said object and should not provide any scope to the appointing authority to act whimsically or arbitrarily. Contrary to that principle and object, the clause-15 of the agreement has unleashed unfettered and unguided power for nominating the sole arbitrator/arbitrator. He has also referred a decision of the apex court in Central Inland Water Transport Corporation Ltd. and another vs. Brojo Nath Ganguly and another reported in AIR 1986 SC 1571 to hold that any agreement arrived at, in the context of unequal bargain would be ultra vires vis-a-vis Article-14 of the Constitution of India and thus it would be hit by Section-23 of Indian Contract Act. In Central Inland Water Transport Corporation Ltd. and another vs. Brojo Nath Ganguly and another the apex court has approvingly restated the provision from the Uniform Commercial Code, as in force in the United States: “A bargain is not unconscionable merely because the parties to it are unequal in bargaining position, nor even because the inequality results in an allocation of risks to the weaker party. But gross inequality of bargaining power, together with terms unreasonably favourable to the stronger party, may confirm indications that the transaction involved elements of deception or compulsion, or may show that the weaker party had no meaningful choice, no real alternative, or did not in fact assent or appear to assent to the unfair terms.” [Emphasis supplied] 13. But gross inequality of bargaining power, together with terms unreasonably favourable to the stronger party, may confirm indications that the transaction involved elements of deception or compulsion, or may show that the weaker party had no meaningful choice, no real alternative, or did not in fact assent or appear to assent to the unfair terms.” [Emphasis supplied] 13. In the para-90 of Central Inland Water Transport Corporation Ltd. and another vs. Brojo Nath Ganguly and another, the apex court has in unequivocal terms held further that: “It will also apply where a man has no choice, or rather no meaningful choice, but to give his assent to a contract or to sign on the dotted line a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial transaction. In today's complex world of giant corporations with their vast infra-structural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly disproportionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The court must judge each case on its own facts and circumstances.” [Emphasis supplied] 14. Mr. Bhattacharji, learned counsel appearing for the respondents has asserted further that the appointment of a Subordinate Officer as the arbitrator is opposed to the public policy. He has reiterated what has been returned by the impugned judgment. According to Mr. Bhattacharji, learned counsel, one should not be the judge of his own cause. Justice is not only to be done but shall have to be shown to have been done. On relying a decision of the apex court in Oil and Natural Gas Corporation Ltd. vs. SAW Pipes Ltd. Mr. Bhattacharji, learned counsel has asserted that violation on the statutory provisions is opposed to the public policy. Justice is not only to be done but shall have to be shown to have been done. On relying a decision of the apex court in Oil and Natural Gas Corporation Ltd. vs. SAW Pipes Ltd. Mr. Bhattacharji, learned counsel has asserted that violation on the statutory provisions is opposed to the public policy. In para-22 of Oil and Natural Gas Corporation Ltd. vs. SAW Pipes Ltd. reported in AIR 2003 SC 2629 , the apex court has observed as under: “Therefore, in a case where the validity of award is challenged there is no necessity of giving a narrower meaning to the term 'public policy of India'. On the contrary, wider meaning is required to be given so that the 'patently illegal award' passed by the Arbitral Tribunal could be set aside. If narrow meaning as contended by the learned senior counsel Mr. Dave is given, some of the provisions of the Arbitration Act would become nugatory. Take for illustration a case wherein there is a specific provision in the contract that for delayed payment of the amount due and payable, no interest would be payable, still however, if the arbitrator has passed an award granting interest, it would be against the terms of the contract and thereby against the provision of S.28(3) of the Act which specifically provides that “Arbitral Tribunal shall decide in accordance with the terms of the contract.” Further, where there is a specific usage of the trade that if the payment is made beyond a period of one month, then the party would be required to pay the said amount with interest at the rate of 15 percent. Despite the evidence being produced on record for such usage, if the arbitrator refuses to grant such interest on the ground of equity, such award would also be in violation of sub-sections (2) and (3) of S.28 Section 28(2) specifically provides that arbitrator shall decide ex aequo et bono (according to what is just and good) only if the parties have expressly authorised him to do so. Similarly, if the award is patently against the statutory provisions of substantive law which is in force in India or is passed without giving an opportunity of hearing to the parties as provided under S.24 or without giving any reason in a case where parties have not agreed that no reasons are to be recorded, it would be against the statutory provisions. In all such cases, the award is required to be set aside on the ground of patent illegality.” [Emphasis supplied] 15. While further expanding his argument on the aspect and ambit of the term 'the public policy of India'. Mr. Bhattacharji, learned counsel appearing for the respondent has submitted that the law has been culled out by the apex court in Oil and Natural Gas Corporation Limited vs. Saw Pipes Limited reported in AIR 2003 SC 2629 and the same law has been restated by the apex court in the subsequent and well known decision in Macdermot International v Burn Standard Company reported in (2006) 11 SCC 181 . He has submitted that the ambit and scope of Section-34 of the Arbitration and Conciliation Act has been elaborately discussed in Macdermot International v Burn Standard Company and also in Delhi Development Authority vs. RS Sharma reported in (2008) 13 SCC 80 . The legal principle those emerged from those decisions of the apex court may be summarised as under: “That the arbitral award which is contrary to the substantive provision of law including the Arbitration and Conciliation Act, 1996 or against the terms of respective contract or patently illegal or prejudicial to the rights of the parties is open to interference under Section 34(2) of the Arbitration and Conciliation, Act, 1996. That apart an award by the arbitral tribunal can be set aside if it is contrary to (i) fundamental principles of Indian law or (ii) interest of India or (iii) justice or morality.” 16. Mr. Bhattacharji, learned counsel appearing for the respondent has further submitted that on the broader plane, from that judgment it can also be culled out that if an award is so unfair and unreasonable that shocks the conscience of the court, it is always open to the court to consider whether the award is against the specific term of the contract and if so, interference with it on the ground that it is patently illegal and opposed to public policy of India. Mr. Mr. Bhattacharji, learned counsel for the respondent has succinctly put forward that the clause-15 of the agreement providing the procedure for appointing arbitrator is opposed to the public policy. According to him, the object of Section-11 read with Section-12 of the Arbitration and Conciliation Act, 1996 is to secure appointment of an independent, impartial and qualified arbitrator who will enjoy the confidence of parties to arbitration. For this purpose, the appointment procedure should be fair and transparent being attuned with the said object. The clause-15 of the agreement has provided unfettered and unguided power to the appointing authority to nominate arbitrator without making any space for the opinion of the other contracting party. Since the ONGC is having dominating position vis-a-vis the contractor, it gives rise to a situation where the contractor had to enter into an agreement in the standardised printed form offered by the ONGC. This provision having been ultra vires vis-a-vis Article-14 of the Constitution of India is hit by Section-23 of the Indian Contract Act. However, Mr. Bhattacharji, learned counsel did not make any submission on the proposition of the apex court in Indian Oil Corporation and Limited 7 Ors. vs. Raja Transport (P) Ltd which according to this court required response. Mr. Bhattacharji, learned counsel has reiterated the grounds that the respondents had taken while challenging the arbitral award under Section 34(2) of the Arbitration and Conciliation Act, 1996 before the District Judge, West Tripura, Agartala. According to him, since a subordinate officer had been appointed as the arbitrator by the Director, ONGC that was entirely opposed to the public policy. Even such challenge was raised before the arbitrator under Section 13(5) of the Act, but the said challenge was not sustained by the arbitrator. According to Mr. Bhattacharji, learned counsel, their apprehension came true as finally the arbitral award was passed against them. In this regard, Mr. Bhattacharji, learned counsel has referred a decision of the apex court in Bihar State Mineral Development Corporation Limited v. Encon Builders Pvt. Ltd. reported in AIR 2003 SC 3688 , where the apex court had occasion to deal with the aspect of bias vis-a-vis Section 34 of the Arbitration and Conciliation Act, 1996 and held as under: 17. Bhattacharji, learned counsel has referred a decision of the apex court in Bihar State Mineral Development Corporation Limited v. Encon Builders Pvt. Ltd. reported in AIR 2003 SC 3688 , where the apex court had occasion to deal with the aspect of bias vis-a-vis Section 34 of the Arbitration and Conciliation Act, 1996 and held as under: 17. There cannot be any doubt whatsoever that an arbitration agreement must contain the broad consensus between the parties that the disputes and differences should be referred to a domestic Tribunal. The said domestic Tribunal must be an impartial one. It is a well settled principle of law that a person cannot be a Judge of his own cause. It is further well-settled that justice should not only be done but manifestly seen to be done. 18. Actual bias would lead to an automatic disqualification where the decision-maker is shown to have an interest in the outcome of the case. Actual bias denotes an arbitrator who allows a decision to be influenced by partiality or prejudice and thereby deprives the litigant of the fundamental right to a fair trial by an impartial Tribunal. 19. The case at hand not only satisfies the test of real bias but also satisfies the real danger as well as suspicion of bias. (See Kumaon Mandal Vikas Nigam Ltd. v. Girja Shankar Pant and others, (2001) 1 SCC 182 ). 20. xxxxx xxxxx xxxxx 21. In "the law and practice of commercial arbitration in England by Sir Michael J. Mustill and Stewart C. Boyd, it is stated:- "Since the general principles of law relating to bias apply in the same way to arbitrations as to other Tribunals, and since instances which are sufficiently serious to bring about the intervention of the Court are very rare indeed, there is need to deal with the subject in detail." 22. In 'Russell on Arbitration,' 22nd Edition, the law is stated thus : "4-030 Actual and apparent bias. A distinction is made between actual bias and apparent bias. Actual bias is rarely established, but clearly provides grounds for removal. More often there is a suspicion of bias which has been variously described as apparent or unconscious or imputed bias. In 'Russell on Arbitration,' 22nd Edition, the law is stated thus : "4-030 Actual and apparent bias. A distinction is made between actual bias and apparent bias. Actual bias is rarely established, but clearly provides grounds for removal. More often there is a suspicion of bias which has been variously described as apparent or unconscious or imputed bias. In such majority of cases, it is often emphasised that the challenger does not go so far as to suggest the arbitrator is actually biased, rather that some form of objective apprehension of bias exists. 4-032 Pecuniary interest. There is an automatic disqualification for an arbitrator who has a direct pecuniary interest in one of the parties or is otherwise so closely connected with the party that can truly be said to be a judge in his own cause. 5-052 Impartial, S. 33(1) of the Arbitration Act, 1996 states that the Tribunal must act "impartially." An arbitrator must also appear impartial and if there are justifiable doubts as to his impartiality this will provide a ground for his removal by the Court under S. 24(1)(a) of the Arbitration Act , 1996 or may mean that the award can be challenged." [Emphasis supplied] 17. Finally the question, which is of paramount importance, centres around the deduction of the money, required for payment of compensation on account of death of the workmen. There is no finding from the Commissioner for Workmen's Compensation, of the competent jurisdiction, whether the accident occurred during employment of the deceased employee, or the quantum of compensation or holding the ONGC liable qua the contractor for compensation. The admitted position is that the liability has been acknowledged simply because the death took place within ONGC complex, even though in a far away place from the work-site. That apart, Mr. Bhattacharji, learned counsel has succinctly submitted that neither the deduction of compensation nor its payment is sustainable in law. If there was any liability arising from that 'purported' accident and there was any occasion of depositing the money, the ONGC was under obligation to deposit the said money to the Commissioner Workman Compensation in terms of Section 8 of the Workmen's Compensation Act, now the Employees Compensation Act. If there was any liability arising from that 'purported' accident and there was any occasion of depositing the money, the ONGC was under obligation to deposit the said money to the Commissioner Workman Compensation in terms of Section 8 of the Workmen's Compensation Act, now the Employees Compensation Act. The ONGC does not have any authority to directly make payment to the deceased workman inasmuch as, in accordance with the procedure as laid down, the liability and its extent is to be determined. The contractor has his right to contest such claim on various aspects. But in this case, the ONGC has made the compensation without any communication to the respondent nor there was any determination of the extent of compensation, if at all payable. Now the ONGC has taken a plea that under Section 28 of the Workmen's Compensation Act, they can pay such amount directly to the workman. 18. Mr. Bhattacharji, learned counsel appearing for the respondents has submitted that such plea is based on a misconstruction of Section 28 as well as Section 8 of the Workmen's Compensation Act. The respondent does not have any liability under the contract and as such, the liabilities of payment made to the workmen in breach of the agreement as well as of the statutory provision cannot be fastened with the respondent. On both counts, the arbitral award is liable to be set aside. Ancillary to the submission, Mr. Bhattacharji, learned counsel for the respondents has contended that no reason has been provided by the Arbitrator as required under Section 31(3) of the Arbitration and Conciliation Act. It is also against the public policy. 19. From the rival contentions, the pertinent questions those fall for consideration before of this court are: (i) Whether appointing an officer of the ONGC as the sole arbitrator is unsustainable? (ii) Whether there was any determination of the liability in terms of clause 16 of the agreement? (iii) Whether the finding as returned by the District Judge, West Tripura, Agartala that the Arbitrator has violated the basic concept of Section 11 and 12 of the Arbitration and Conciliation Act, 1996 is sustainable or not? (iv) Whether the arbitral award is liable to be set aside within the ambit of Section 34(2) of the Arbitration and Conciliation Act, 1996? 20. (iv) Whether the arbitral award is liable to be set aside within the ambit of Section 34(2) of the Arbitration and Conciliation Act, 1996? 20. In Bihar State Mineral Development Corp v. Econ Builders Pvt. Ltd., the apex court has observed that there cannot be any doubt whatsoever that an arbitration agreement must obtain the broad consensus between the parties that the disputes and differences should be referred to a domestic Tribunal. The said domestic Tribunal must be an impartial one. It is a well settled principle of law that a person cannot be a Judge of his own cause. It is further well-settled that justice should not only be done but manifestly has to be done. Actual bias would lead to an automatic disqualification where the decision maker is shown to have an interest in the outcome of the case. The actual bias denotes that an arbitrator who allows a decision to be influenced by partiality or prejudice, deprives thereby the litigant from the fundamental right of a fair trial by an impartial Tribunal. The illustration has also been provided in the impugned judgment from Kashmiri Lal Vs. Commissioner (Appeals), Jalandhar, reported in AIR 2010 Punjab and Haryana 183. 21. The controversy falls definitely within the corner-stone that whether the Arbitrator has a definite interest in the outcome of the case. The word ‘interest’ is a far greater element towards understanding inherent bias in the person who is supposed to be or is appointed as the Arbitrator. In this regard, the decision of the apex court in Indian Oil Corporation Ltd. & Ors. Vs. Raja Transport (P) Ltd. is apposite. There, the apex court has in unequivocal terms observed that, if the Arbitrator is not appointed following the agreed procedure or in the event there the parties or the two appointed Arbitrators failed to reach an agreement, then the Chief Justice or his designate may exercise the power under sub-section (6) of Section 11 of the Arbitration and Conciliation Act. Therefore, the jurisdiction of the Chief Justice or his designate can only be invoked when there is a failure to act as per the agreed procedure within the reasonable time. Therefore, the jurisdiction of the Chief Justice or his designate can only be invoked when there is a failure to act as per the agreed procedure within the reasonable time. It has been clearly stated that where the appointment procedure has been agreed between the parties, but the cause for invoking the jurisdiction of the Chief Justice or his designate under clauses (a) (b) or (c) of sub-section (6) has not arisen, then the question of exercising power under sub-section (6) by the Chief Justice or his designate does not arise. The condition-precedent for approaching the Chief Justice or his designate for taking necessary measures under subsection (6) is that (i) a party failing to act as required under the agreed procedure; or (ii) the parties (or the two appointed arbitrators), failing to reach an agreement, expected of them under the agreed appointment procedure; or (iii) a person/institution who has been entrusted with any function under the agreed appointment procedure, failing to perform such function. As such, there had been no occasion in this case to approach the Chief Justice or his designate as the agreed procedure had been acted upon by the Director, ONGC. The controversy began with the appointment of the arbitrator on the ground of contemplated bias, as the Arbitrator so appointed is admittedly an Officer of the ONGC. 22. In Indian Oil Corporation Ltd. & Ors. vs. Raja Transport (P) Ltd., the apex court has observed that: “There can however be a justifiable apprehension about the independence or impartiality of an Employee-Arbitrator, if such person was the controlling or dealing authority in regard to the subject contract or if he is a direct subordinate (as contrasted from an officer of an inferior rank in some other department) to the officer whose decision is the subject matter of the dispute. Where however the named arbitrator though a senior officer of the government/statutory body/government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officer/s (usually heads of department or equivalent) of a government/statutory corporation/public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract.” [Emphasis supplied] 23. Therefore, senior officer/s (usually heads of department or equivalent) of a government/statutory corporation/public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract.” [Emphasis supplied] 23. Thus, the law is well delineated and the prohibited province has been well demarcated. The senior officers of a Government/statutory organisation, public sector undertakings, not associated with the contract are considered to be independent and impartial and not barred from functioning as an arbitrator merely because their employer is a party to the contract. In view of this, it cannot be held that the appellants acted illegally or against the public policy. As consequence thereof, the finding returned by the District Judge as to the appointment of the arbitrator is interfered with and set aside. The question that remains now for consideration is that whether the sole arbitrator acted within the province of the agreement while holding that the deduction made by the appellants from the security deposit of the respondent is justified. For purpose of this, if we revisit the provisions of clause 16, it would be apparent that the ONGC has been indemnified and kept harmless from and against all claims, demands and causes of action, liabilities, expenses, costs, fines, judgments of every kind and character without limit, which may arise in favour of the contractor’s employee, agent and their employees on account of bodily injury or death or damage to personal property as a result of the operation contemplated thereby regardless of whether the said claims, damage or causes or action arose out of the negligence or otherwise, in whole or in part, unworthiness or other faults including pre-existing conditions of ONGC and other contractors and partners, joint ventures, employees or agents. Therefore, unless the ‘liability' is determined it cannot be held within the province of the clause 16 that the contractor, the respondent herein is or was liable either to indemnify or to make good of the compensation that has been paid even without communication of such incident to the respondent. The compensation is well defined in Section 2(c) of the Workmen's Compensation Act, 1923. It means compensation as provided by that act. No other liability in this regard can be contemplated unless the compensation is determined under the provision of the Workmen's Compensation Act, 1923. The compensation is well defined in Section 2(c) of the Workmen's Compensation Act, 1923. It means compensation as provided by that act. No other liability in this regard can be contemplated unless the compensation is determined under the provision of the Workmen's Compensation Act, 1923. The Commissioner for Workmen's Compensation is appointed under Section 20 as the sole authority to determine such compensation. If such determination reached its finality that becomes the liability to be indemnified by the respondent if such liability is within the bounds of Clause 16 of the agreement. No such liability has been determined in accordance with the procedure as prescribed. 24. The appellants, ONGC and its officers have stated that within Section-28 of the Workmen's Compensation Act, 1923 they had right to make the payment and as such what payment has been made that becomes the liability. Such submission emanates from the gross misconstruction and misreading of Section 28. Section 28 of the Workmen's Compensation Act fundamentally deals with the registration of agreements where the compensation has been settled by agreement, whether by way of redemption of a half monthly payment or otherwise or, where any compensation has been settled and is payable to a woman or a person under legal disability. A memorandum therefore shall be sent by the employer to the Commissioner, who shall, on being satisfied as to the genuineness, record the memorandum in the prescribed manner. There are two parts in the process of the registration of agreements. The first part deals with amount of any lump sum payable to as compensation and as has been settled by agreement whether by way of redemption of half monthly payment or otherwise and any compensation which has been so settled has been payable to a woman or to a person under legal disability. There is no such agreement, at least that has been brought in the knowledge of the respondent-contractor. There had been no settlement with the dependants of the deceased or there is no settlement as to the woman or a person under legal disability. Even no memorandum for satisfaction as to its genuineness was forwarded to the Commissioner for Workmen's Compensation and hence there was no lawful process for purpose of determining the liability. That apart, this section makes the registered agreement enforceable under the Workmen's Compensation Act, 1923. Even no memorandum for satisfaction as to its genuineness was forwarded to the Commissioner for Workmen's Compensation and hence there was no lawful process for purpose of determining the liability. That apart, this section makes the registered agreement enforceable under the Workmen's Compensation Act, 1923. But here the ONGC has made the payment to the legal heirs or the family of the deceased workman without giving any opportunity to the contractor whether he was under liability to pay any compensation for the death of the respondent which according to the respondent is wholly unrelated to the employment of the deceased workman. Section 8 of the Workmen's Compensation Act has clearly stipulated that no payment of compensation in respect of a workman whose injury is resulted in death and no payment of lump sum as compensation to a workman or a person under a legal disability shall be made, otherwise than the deposit with the Commissioner and no such payment be made directly by an employer, and if made that shall not be deemed to be a payment of compensation. In the case of a deceased workman an employer may pay any amount to the dependant or any advance or any compensation of an amount equal to 3 (three) months' wages of such workman and so much of such amount shall not also exceed the compensation payable to the dependant/s and such payment shall be deducted by the Commissioner from such compensation and repaid the same to the employer. Therefore, Section 8 has clearly prohibited from making any compensation in respect of a workman, whose injuries have resulted in his death. Making of the payment in disregard to the provisions of Section-8 is against the statutory provision and hence such payment made by the ONGC was against the public policy as well as against the scope and ambit of Clause 16 of the agreement and hence the arbitral award by which it has been held that the Inspector of the Factories and Boilers had asked the ONGC to pay the said compensation and since the ONGC had paid the said amount of Rs.3,42,272/-to the legal heirs of the deceased workman, cannot be held sustainable. 25. Accordingly, the arbitral award is set aside in exercise of power conferred by Section 34(2) of the Arbitration and Conciliation Act, 1996. 25. Accordingly, the arbitral award is set aside in exercise of power conferred by Section 34(2) of the Arbitration and Conciliation Act, 1996. Since the arbitral award has been interfered with, the ancillary question that has been raised by Mr. Bhattacharji, learned counsel appearing for the respondents as to the absence of reasoning is not required to be dealt comprehensively. By way of observation, it can be stated that the Arbitrator is under bounden duty to provide reasons for its finding, may be brief, under Section 31(3) of the Arbitration and Conciliation Act, 1996 unless the parties agree to waive such reasoning. We have set aside the arbitral award on different grounds which are quite distinct from those as provided by the District Judge, West Tripura, Agartala. 26. In the result, the appeal stands dismissed. Send down the records.