Back
Karnataka High Court
RUDRAMUNIDEVARU - Appellant
Versus
SHRIMAD MAHARAJ NIRANJAN JAGADGURU dr.GANGADHAR RAJAYOGENDRA MAHASWAMIGALU, moorusaaviramath, HUBLI - Respondent
Decided On : 03-11-05
M.F.A. : 3742 of 2000
ARBITRATION AND CONCILIATION ACT, 1996 - Section 11 -Substitution of Arbitrator -Procedure to be followed.
[S. R. Nayak and S. B. Majage, JJ]: Section 15 deals with termination of mandate and substitution of Arbitrator. Though sub-section (1) of Section 15 purports to state additional grounds for termination of authority of an Arbitrator, the grounds mentioned therein are covered by the grounds set up in clause (b) of sub-section (1) of Section 14 of the Act. On the authority of an Arbitrator being terminated, a substitute Arbitrator in place of the Arbitrator whose authority is terminated has to be appointed and such appointment as per sub-section (2) shall be made by following the same procedure as followed while appointing the Arbitrator. Sub-section (2) of Section 15 provides for filling of the vacancies. The mandate of an Arbitrator stands terminated if it becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay. The mandate of an Arbitrator stands terminated if he withdraws from his office or the parties agree to termination of his mandate. An Arbitrator may withdraw from his office when challenge is made to his appointment. He may also withdraw from his office when he becomes de jure or de facto unable to perform his functions or fails to act without undue delay. In addition thereto, an Arbitrator may withdraw from his office for any reason and, in that case too, the mandate shall terminate. In other words, the appointment of a new Arbitrator shall be as per the provisions of Section 11 of the Act.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Arbitral proceedings
NATURAL JUSTICE - Arbitral proceedings -Minimum requirements of hearing.
[S. R. Nayak and S. B. Majage, JJ]: If the party making an application under Section 34 of the Act to set aside an Arbitral award was not given proper notice of appointment of Arbitrator or of the Arbitral proceedings or was otherwise unable to remain present in the Arbitral proceedings before the Arbitral Tribunal an Arbitral award may be set aside by the Court. The minimum requirements of a proper hearing should include: (i) each party must have notice that the hearing is to take place and of the date, time and place of holding such hearing; (ii) each party must have a reasonable opportunity to be present at the hearing along with his witnesses and legal advisers, if any, if allowed; (iii) each party must have the opportunity to be present throughout the hearing; (iv) each party must have the reasonable opportunity to present statements, documents, evidence and arguments in support of his own case; (v) each party must be supplied with the statements, documents and evidence adduced by the other side; (vi) each party must have a reasonable opportunity to cross-examine his opponent s witnesses and reply to the arguments advanced in support of his opponent s case. It is expected of an Arbitral Tribunal that it should ensure that the date for hearing is not so close that the case cannot be properly prepared. Equally, an Arbitral Tribunal, while fixing the date of hearing, should try to accommodate any party who is placed in difficulty by his absence due to unavoidable circumstances such as illness or compelling engagement of himself elsewhere etc. However, it is true that a party has no absolute right to insist of his convenience being consulted in every respect. The matter is very much within the discretion of the Arbitral Tribunal and the Court may intervene only in the cases of positive abuse. Since each party has a right to remain present throughout the hearing, the Arbitral Tribunal is not to exclude either party even from a portion of hearing without the consent of such party. The Arbitral Tribunal is expected to give opportunity to both the parties to present their respective cases and evidence in support thereof before it. Each of the parties is required to be apprised with statements, documents and evidence adduced by his opponent which are adverse to his case. Each party is also entitled to know any statements, documents, evidence or information s collected by the Arbitral Tribunal itself which are adverse to his interest, if they are not contested. The Arbitral Tribunal is neither to hear evidence nor arguments of one party in the absence of the other party, unless despite opportunity, the other party chooses to remain absent. So also, the Arbitral Tribunal is not to hear evidence in the absence of both the parties unless both the parties choose to remain absent despite proper notice. Each party to arbitration reference is entitled to advance notice of any hearing and of any meeting of the Arbitral Tribunal as provided under Section 24 of the Act. Section 18 of the Act mandates that the Arbitral Tribunal shall treat the parties to the Arbitral reference with equality and that each party to the Arbitral reference shall be given a full opportunity to present his case. Sections 23 and 24 of the Act deal with filing of statement of claim and statement of defence and hearings and written proceedings. It is of utmost importance to take note of the provisions of sub-section (3) of Section 24 of the Act in order to appreciate the contention of the appellant in this case. Sub-section (3) of Section 24 mandates that all statements, documents or other information s supplied to, or applications made to the Arbitral Tribunal by one party shall be communicated to the other party. The object behind the above prescription, to our mind, appears to be that the Arbitral Tribunal before making use of any such statements, documents and information against a party, that party should be apprised of these statements, documents and information s in consonance with the principles of natural justice.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Termination of mandate of Arbitrator
ARBITRATION AND CONCILIATION ACT, 1996 - Section 14 -Termination of mandate of Arbitrator -Grounds for.
[S. R. Nayak and S. B. Majage, JJ]: Section 14 specifies the grounds for terminating the mandate of an Arbitrator and methods of doing so. The three methods for terminating the mandate are: (D withdrawal of the Arbitrator from his office; (ii) agreement of the parties; (iii) decision by the Court. The mandate of an Arbitrator shall terminate if: (i) the Arbitrator becomes de jure or de facto unable to perform the functions; (ii) the Arbitrator for some other reasons fails to act without undue delay; or (iii) the Arbitrator withdraws from his office; or (iv) the parties agree to the termination of his authority as an Arbitrator.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Right of Arbitrator to withdraw
ARBITRATION AND CONCILIATION ACT, 1996 - Section 14(1)(b) -Right of arbitrator to withdraw -Non acceptance of resignation -Effect.
[S. R. Nayak and S. B. Majage, JJ]: Since it is the right of an Arbitrator to withdraw from his office both in terms of Section 14(1)(b) and Section 15(1)(a), it could not be said that the resignation letters sent by respondents 3 and 5 are of no consequence. Simply because the resignation letters of respondents 3 and 5 are not accepted by the Arbitral Tribunal, it could not be said that even after receipt of the resignation letters by the Arbitral Tribunal, they continued to be the members of the Arbitral Tribunal.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Substitution of Arbitrator
ARBITRATION AND CONCILIATION ACT, 1996 - Section 15 -Substitution of Arbitrator -Procedure to be followed. See, Section 11.
Right of Arbitrator to withdraw
ARBITRATION AND CONCILIATION ACT, 1996 - Section 15(1)(a) -Right of Arbitrator to withdraw -Non acceptance of resignation effect.
[S. R. Nayak and S. B. Majage, JJ]: Since it is the right of an Arbitrator to withdraw from his office both in terms of Section 14(1)(b) and Section 15(1)(a), it could not be said that the resignation letters sent by respondents 3 and 5 are of no consequence. Simply because the resignation letters of respondents 3 and 5 are not accepted by the Arbitral Tribunal, it could not be said that even after receipt of the resignation letters by the Arbitral Tribunal, they continued to be the members of the Arbitral Tribunal.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Natural justice
ARBITRATION AND CONCILIATION ACT, 1996 - Section 24 -Natural justice - Arbitral proceedings - Minimum requirements of hearing.
[S. R. Nayak and S. B. Majage, JJ]: If the party making an application under Section 34 of the Act to set aside an Arbitral award was not given proper notice of appointment of Arbitrator or of the Arbitral proceedings or was otherwise unable to remain present in the Arbitral proceedings before the Arbitral Tribunal an Arbitral award may be set aside by the Court. The minimum requirements of a proper hearing should include: (i) each party must have notice that the hearing is to take place and of the date, time and place of holding such hearing; (ii) each party must have a reasonable opportunity to be present at the hearing along with his witnesses and legal advisers, if any, if allowed; (iii) each party must have the opportunity to be present throughout the hearing; (iv) each party must have the reasonable opportunity to present statements, documents, evidence and arguments in support of his own case; (v) each party must be supplied with the statements, documents and evidence adduced by the other side; (vi) each party must have a reasonable opportunity to cross-examine his opponent s witnesses and reply to the arguments advanced in support of his opponent s case. It is expected of an Arbitral Tribunal that it should ensure that the date for hearing is not so close that the case cannot be properly prepared. Equally, an Arbitral Tribunal, while fixing the date of hearing, should try to accommodate any party who is placed in difficulty by his absence due to unavoidable circumstances such as illness or compelling engagement of himself elsewhere etc. However, it is true that a party has no absolute right to insist of his convenience being consulted in every respect. The matter is very much within the discretion of the Arbitral Tribunal and the Court may intervene only in the cases of positive abuse. Since each party has a right to remain present throughout the hearing, the Arbitral Tribunal is not to exclude either party even from a portion of hearing without the consent of such party. The Arbitral Tribunal is expected to give opportunity to both the parties to present their respective cases and evidence in support thereof before it. Each of the parties is required to be apprised with statements, documents and evidence adduced by his opponent which are adverse to his case. Each party is also entitled to know any statements, documents, evidence or information s collected by the Arbitral Tribunal itself which are adverse to his interest, if they are not contested. The Arbitral Tribunal is neither to hear evidence nor arguments of one party in the absence of the other party, unless despite opportunity, the other party chooses to remain absent. So also, the Arbitral Tribunal is not to hear evidence in the absence of both the parties unless both the parties choose to remain absent despite proper notice. Each party to arbitration reference is entitled to advance notice of any hearing and of any meeting of the Arbitral Tribunal as provided under Section 24 of the Act. Section 18 of the Act mandates that the Arbitral Tribunal shall treat the parties to the Arbitral reference with equality and that each party to the Arbitral reference shall be given a full opportunity to present his case. Sections 23 and 24 of the Act deal with filing of statement of claim and statement of defence and hearings and written proceedings. It is of utmost importance to take note of the provisions of sub-section (3) of Section 24 of the Act in order to appreciate the contention of the appellant in this case. Sub-section (3) of Section 24 mandates that all statements, documents or other information s supplied to, or applications made to the Arbitral Tribunal by one party shall be communicated to the other party. The object behind the above prescription, to our mind, appears to be that the Arbitral Tribunal before making use of any such statements, documents and information against a party, that party should be apprised of these statements, documents and information s in consonance with the principles of natural justice
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Affected to be appraised
ARBITRATION AND CONCILIATION ACT, 1996 - Section 24 -Affected to be appraised -Arbitration proceedings -Arbitration agreement not providing for enquiry in conformity with principles of natural justice -Duty of Court.
[S. R. Nayak and S. B. Majage, JJ]: Affected should be apprised is the constitutional creed flowing from Article 14 postulates. Of course, in certain circumstances, law may permit denial of right of hearing, but in order to deny that it should have a legal basis. Simply because the Arbitral agreement provides that the Arbitral Tribunal can evolve its own procedure to be followed in the conduct of the enquiry, from that provision, it cannot be said that the Arbitral agreement dispenses with the applicability of principles of natural justice and fairness in procedure. It is well-settled that though a statute or an instrument does not specifically include principles of natural justice, the Court is bound to read into such statute or instrument the principles of natural justice.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Affected to be appraised
ARBITRATION AND CONCILIATION ACT, 1996 - Section 24 -Affected to be appraised -Arbitration proceedings -Arbitration agreement not providing for enquiry in conformity with principles of natural justice -Duty of Court.
[S. R. Nayak and S. B. Majage, JJ]: Affected should be apprised is the constitutional creed flowing from Article 14 postulates. Of course, in certain circumstances, law may permit denial of right of hearing, but in order to deny that it should have a legal basis. Simply because the Arbitral agreement provides that the Arbitral Tribunal can evolve its own procedure to be followed in the conduct of the enquiry, from that provision, it cannot be said that the Arbitral agreement dispenses with the applicability of principles of natural justice and fairness in procedure. It is well-settled that though a statute or an instrument does not specifically include principles of natural justice, the Court is bound to read into such statute or instrument the principles of natural justice.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Valid arbitral tribunal
ARBITRATION AND CONCILIATION ACT, 1996 - Section 34 -Valid arbitral tribunal -Certain members tendered resignation - Not accepted -Validity of award passed thereafter.
[S. R. Nayak and S. B. Majage, JJ]: As a consequence of the resignation tendered by respondents 3 and 6, vacancies arose in the offices held by them and, therefore, those vacancies ought to have been filled by new Arbitrators as per the provisions of Section 11 of the Act. There is also no controversy between the parties that when respondents 3 and 5 tendered resignation to the offices held by them in the Arbitral Tribunal, since they are the nominees of the appellant, the appellant sought time to nominate new Arbitrators in place of respondents 3 and 5, but, the Arbitral Tribunal without acceding to his request, proceeded to pass the impugned Arbitral award on the ground that respondents 3 and 5 have given their opinion in the course of the proceedings and therefore, there is no need to appoint new Arbitrators in their places. Therefore, it is quite clear that without there being a properly constituted Arbitral Tribunal, the only three Arbitrators. The Arbitral Tribunal was a multimember body and therefore what was of importance and need was the joint deliberation from amongst all the members of the Arbitral Tribunal. There is a sound rationale behind the insistence that in a multimember body all the members should participate on all the material dates of enquiry. That insistence helps the members of the Arbitral Tribunal to influence/pursue each other, to appreciate each other s view point and ultimately to arrive at a conscious and unanimous opinion, if that is possible or to accept the opinion of the majority with respect and perfect understanding. The Arbitral Tribunal in this case is deprived of the essence of deliberations from amongst all the members of the Arbitral Tribunal.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Setting aside arbitral award
ARBITRATION AND CONCILIATION ACT, 1996 - Section 34 -Setting aside arbitral award -Grounds for. See, Section 24.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Non-compliance of Principles of natural justice
ARBITRATION AND CONCILIATION ACT, 1996 - Section 34 -Non-compliance of Principles of natural justice -A ground for setting aside arbitral award.
[S. R. Nayak and S. B. Majage, JJ]: If the party making an application under Section 34 of the Act to set aside an Arbitral award was not given proper notice of appointment of Arbitrator or of the Arbitral proceedings or was otherwise unable to remain present in the Arbitral proceedings before the Arbitral Tribunal an Arbitral award may be set aside by the Court. The minimum requirements of a proper hearing should include: (i) each party must have notice that the hearing is to take place and of the date, time and place of holding such hearing; (ii) each party must have a reasonable opportunity to be present at the hearing along with his witnesses and legal advisers, if any, if allowed; (iii) each party must have the opportunity to be present throughout the hearing; (iv) each party must have the reasonable opportunity to present statements, documents, evidence and arguments in support of his own case; (v) each party must be supplied with the statements, documents and evidence adduced by the other side; (vi) each party must have a reasonable opportunity to cross-examine his opponent s witnesses and reply to the arguments advanced in support of his opponent s case. It is expected of an Arbitral Tribunal that it should ensure that the date for hearing is not so close that the case cannot be properly prepared. Equally, an Arbitral Tribunal, while fixing the date of hearing, should try to accommodate any party who is placed in difficulty by his absence due to unavoidable circumstances such as illness or compelling engagement of himself elsewhere etc. However, it is true that a party has no absolute right to insist of his convenience being consulted in every respect. The matter is very much within the discretion of the Arbitral Tribunal and the Court may intervene only in the cases of positive abuse. Since each party has a right to remain present throughout the hearing, the Arbitral Tribunal is not to exclude either party even from a portion of hearing without the consent of such party. The Arbitral Tribunal is expected to give opportunity to both the parties to present their respective cases and evidence in support thereof before it. Each of the parties is required to be apprised with statements, documents and evidence adduced by his opponent which are adverse to his case. Each party is also entitled to know any statements, documents, evidence or information s collected by the Arbitral Tribunal itself which are adverse to his interest, if they are not contested. The Arbitral Tribunal is neither to hear evidence nor arguments of one party in the absence of the other party, unless despite opportunity, the other party chooses to remain absent. So also, the Arbitral Tribunal is not to hear evidence in the absence of both the parties unless both the parties choose to remain absent despite proper notice. Each party to arbitration reference is entitled to advance notice of any hearing and of any meeting of the Arbitral Tribunal as provided under Section 24 of the Act. Section 18 of the Act mandates that the Arbitral Tribunal shall treat the parties to the Arbitral reference with equality and that each party to the Arbitral reference shall be given a full opportunity to present his case. Sections 23 and 24 of the Act deal with filing of statement of claim and statement of defence and hearings and written proceedings. It is of utmost importance to take note of the provisions of sub-section (3) of Section 24 of the Act in order to appreciate the contention of the appellant in this case. Sub-section (3) of Section 24 mandates that all statements, documents or other information s supplied to, or applications made to the Arbitral Tribunal by one party shall be communicated to the other party. The object behind the above prescription, to our mind, appears to be that the Arbitral Tribunal before making use of any such statements, documents and information against a party, that party should be apprised of these statements, documents and information s in consonance with the principles of natural justice.
Case Referred:
Relied: 2004(2) R. A. J. 573 (Bom).
Appointment of successor to Mathadipathi
BOMBAY PUBLIC TRUSTS ACT, 1950 - Appointment of successor to Mathadipathi -Dispute as to -Multi-member arbitral tribunal constituted -Some members resigned -Without hearing affected parties tribunal proceeded to pass award with remaining members -Matter remanded to Arbitral Tribunal for de novo disposal. See, Arbitration and Conciliation Act, 1996 - Sections 11, 14, 24 & 34.
Case Referred: Relied: 2004(2) R. A. J. 573 (Bom).
Appointment of successor to Mathadipathi
BOMBAY PUBLIC TRUSTS ACT, 1950 - Appointment of successor to Mathadipathi -Dispute as to -Multi-member arbitral tribunal constituted -Some members resigned -Without hearing affected parties tribunal proceeded to pass award with remaining members -Matter remanded to Arbitral Tribunal for de novo disposal. See, Arbitration and Conciliation Act, 1996 - Sections 11, 14, 24 & 34.
Case Referred: Relied: 2004(2) R. A. J. 573 (Bom).
( 1 ) THE appellant herein is the applicant in Miscellaneous Application no. 66 of 1999. This appeal preferred under Section 37 (l) (b) of the arbitration and Conciliation Act, 1996 (for short, 'the Act') is directed against the judgment and order dated 5th September, 2000, passed in miscellaneous Application No. 66 of 1999 on the file of the Court of the first Additional District Judge, Dharwad. The Court below by the order under appeal has dismissed Miscellaneous Application No. 66 of 1999 filed by the appellant herein under Section 34 of the Act.
( 2 ) THE facts of the case in brief are as follows.- there is a well-known Veerashaiva Math called Moorusaavira Math at Hubli having large number of devotees in the Veerashaiva community not only in the State of Karnataka but also from outside. Moorusaavira Math is registered as a public trust under the provisions of the Bombay Public Trust Act, 1950 (for short, 'the BPT Act' ). The first respondent was the Mathadipathi and sole trustee of the Math as noted in the P. T. Register at the relevant point of time. As noted in the PT register, the succession to the office of the Mathadipathi is by way of appointment of a successor by the existing Mathadipathi in accordance with the opinion of Lingayath Devotees of Hubli and Dharwad. The appellant was appointed as successor by the first respondent with the unanimous consent of Lingayath Devotees of Hubli and Dharwad on 17-10-1991 and a document to that effect was registered on 30th october, 1991. When the matter stood thus, the first respondent sought to cancel the appointment of the appellant as successor by executing a cancellation deed dated 19-10-1995. It appears that that led to differences and disputes between the first respondent and the appellant. However, those differences and disputes between them were settled by intervention of the devotees and well-meaning people of Hubli and dharwad who adore the office of the Mathadipathi in high esteem and reverence. Under the said settlement, the first respondent decided to forgive and forget the past and the appellant was again appointed as successor as per the wish of the devotees thereby, in effect, cancelling the cancellation deed dated 19-10-1995 and affirming the appointment of the appellant as successor as per registered deed dated 30th October, 1991. In that regard, the first respondent executed a deed dated 16-10-1998 and the same was duly registered. When the matter stood thus, the first respondent quite curiously and within a short time executed another cancellation deed dated 2-11-1998 cancelling the appointment of the appellant as the Mathadipathi without consulting and obtaining the consent of the Lingayat devotees of Hubli-Dharwad and without informing the appellant. However, it is the case of the appellant that he was installed as Mathadipathi after performing necessary ceremonies, poojas etc. , on 7th and 8th November, 1998 in pursuance of the deed execvited by the first respondent on 16-10-1998. The cancellation of the appointment of the appellant as Mathadipathi by the first respondent by executing cancellation deed dated 2-11-1998, it is claimed, created chaos and tense feeling amongst the devotees of the math and in the smooth administration of the Math. When the matter stood thus, due to the intervention of the devotees, leaders of the veerashaiva Community and other prominent citizens of Hubli and dharwad, the appellant and the first respondent ultimately agreed to refer the dispute between them to the Arbitral Tribunal consisting of five Arbitrators. In terms of the arbitration agreement, out of five arbitrators, the first respondent was to nominate two Arbitrators, the appellant was to nominate two Arbitrators and the Chief Minister of karnataka was to nominate one Arbitrator and all the Arbitrators were required to be Mathadipathies of different Maths. In terms of the arbitration agreement, the appellant nominated third and fifth respondents as hi
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
