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1991 Supreme(SC) 598

SUPREME COURT OF INDIA
B.C. RAY, M.N. VENKATACHALIAH AND S.C. AGRAWAL, JJ.
Jiwan Kumar Lohia and another, Appellants
Versus
Durgadutt Lohia and others, Respondents
Civil Appeal No. 4341 of 1991 (arising out of S.L.P. (c) No. 2449 of 1991), D/-30-10-1991.
Advocates appeared :
Mr. S.K. Kapur, Sr. Advocate, Mr. P. Chatterjee, Mr. O.P. Gagar, Mr. C.K. Jain, Mr. C.S. Vidyanathan and Mr. S.R. Setia, Advocates with him, for Appellants; Mr. A. K. Sen, Mr. Anil B. Divan, Mr. P.C. Sen, Mr. Santhosh Hegde and Mr. S.N. Mukherjee, Sr. Advocates, Mr. Gopal Subramanium, Mr. Dilip Singh, Ms. Rashmi Dhariwal, Mr. S. Menon, Mr. Rahim Dhariwal and Mr. S. Ganesh, Advocates with them, for Respondents.

Advocates:
A.K.SEN GUPTA, Anil B.Divan, C.K.JAIN, C.S.VAIDYANATHAN, DILIP SINHA, GOPAL SUBRAMANIUM, O.P.GARG, P.C.SEN, P.CHATTERJI, RASHMI DHARIWAL, S.GANESH RAO, S.K.KAPOOR, S.N.MUKHERJEE, S.R.Setia, SANTOSH HEGDE, Sudarsh Menon

Headnote:

Arbitration Act, 1940 - Sections 5, 11 and 12 - Arbitrator and alternatively for his removal - Whether there is a reasonable ground for apprehension that arbitrator will be biased - Appeal are descendants of a common ancestor - Certain disputes arose amongst them which gave rise to two suits Title Partition and Administration Suit filed by Shankar and others in court of Assistant District Judge and Title Suit filed by appellant against in 3rd Court of Subordinate Judge - Both these suits were withdrawn and thereafter on November parties entered into an arbitration agreement for referring their disputes to arbitration and were appointed as joint arbitrators - After holding reference for two years nine months joint arbitrators on August expressed their inability to make the award and thereafter by order September passed by High Court of Calcutta authority of joint arbitrators was revoked and they were removed and Mr. Justice a retired Judge of said High Court was appointed as the sole arbitrator - Held, High Court were disturbed to find that the learned Judge, while commenting on the conduct of the arbitration proceedings by the arbitrator has made observations which are highly disparaging. Apart from the fact that the said remarks were completely uncalled for, we are of the view that the language used does not behoove the dignity and judicial decorum of the Court - In State of this Court has observed – Court may observe in conclusion that Judges should not use strong and carping language while criticizing conduct of parties or their witnesses - They must act with sobriety moderation and restraint - They must have humility to recognize that they are not infallible and any harsh and disparaging strictures passed by them against any party may be mistaken and unjustified and if so they may do considerable harm and mischief and result in injustice - Appeal allowed

JUDGMENT

S. C. AGRAWAL, J.:- Special leave granted.

2. Heard learned Counsel for the parties.

3. This appeal is directed against the order dated December 21, 1990 passed by the High Court of Calcutta whereby the application filed by respondents Nos. 1 and 2 under Sections 5, 11 and 12 of the Arbitration Act, 1940 for revoking the authority of the arbitrator and alternatively for his removal was allowed and Mr. Justice Anil Kumar Sen, retired Chief Justice of the said High Court who had been appointed as the sole arbitrator under order of the High Court dated February 20, 1987 was relieved of his charge and Mr. Justice Shambu Chandra Ghosh, retired Chief Justice of the said High Court was appointed as the sole arbitrator in place and stead of the learned out-going arbitrator.

4. The parties to this appeal are descendants of a common ancestor. Certain disputes arose amongst them which gave rise to two suits; Title Partition and Administration Suit No. 37 of 1975 filed by Gouri Shankar Lohia, Durga Dutt Lohia and others in the court of Assistant District Judge, Dibrugarh and Title Suit No. 185 of 1975 filed by Rabindra Kumar Lohia, appellant No. 2 herein, against Durga Dutt Lohia in the 3rd Court of Subordinate Judge, Alipore. Both these suits were withdrawn and thereafter, on November 4, 1976, the parties entered into an arbitration agreement for referring their disputes to arbitration. Mr. B. P. Khaitan, Mr. Nathmal Himatsingha and Mr. S. K. Rajgaria were appointed as joint arbitrators. After holding the reference for two years nine months, the joint arbitrators, on August 30, 1979, expressed their inability to make the award and thereafter by order dated September 12, 1980, passed by the High Court of Calcutta, the authority of joint arbitrators was revoked and they were removed and Mr. Justice A. K. Mukherjee, a retired Judge of the said High Court, was appointed as the sole arbitrator. By order dated February 20, 1987, passed by the High Court, Mr. Justice A. K. Mukherjee was removed as the sole arbitrator and in his place Mr. Justice Anil Kumar Sen, retired Chief Justice of the said High Court, was appointed as the sole arbitrator. The said arbitrator entered reference on June 5, 1987. He recorded the evidence of the claimants which was closed on November 21, 1989, and directions were issued for adducing evidence on behalf of respondent No. 1, Durga Dutt Lohia. While the statement of Durga Dutt Lohia was being recorded by the arbitrator an application was moved on March 16, 1990 by the respondents Nos. 1 and 2 in the High Court of Calcutta for removal/ substitution of the arbitrator. The said application was allowed by the learned Judge of the High Court by order under appeal.

5. The revocation of the authority of the arbitrator was sought by the respondent applicants before the High Court on the ground of bias on the part of the arbitrator. With regard to bias in relation to a judicial tribunal the test that is applied is not whether in fact a bias has affected the judgment but whether a litigant could reasonably-apprehend that a bias attributable to a member of the tribunal might have operated against him in the final decision of the tribunal [Manaklal v. Dr. Prem Chand, 1957 SCR 575 at Pp. 5801]. In Ranjit Thakur v. Union of India (1987) 4 SCC 611, this Court has laid down that "the test of likelihood of bias is whether a reasonable person, in possession of relevant information, would have thought that bias was likely" and whether the person concerned ,was likely to be disposed to decide the matter only in a particular way". These tests would also apply to an arbitrator. But while considering whether there is a reasonable ground for apprehension that the arbitrator will be biased, on an application under S. 5 of the Arbitration Act, 1940, the Court should be satisfied that substantial miscarriage of justice will take place in the event of its refusal of the said application. The discretion to give leave to revoke an arbitrato








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