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1996 Supreme(Bom) 557
IN THE HIGH COURT OF BOMBAY
S.M. Jhunjhunuwala, J.
Prakashnarayan Shaktia ..... Petitioner.
Versus
Hotel Corporation of India Limited another.... Respondents.
Arbitration Petition No. 20 of 1993 in Award No. 114 of 1992, decided on 7-10-1996.
Advocates appeared :
Virag v. Tulzapurkar with Ms. Nitya Mehta instructed by S.H. Mehta, for the petitioner.
S.U. Kamdar with R.C. Dhuru, K.B. Swamy and Ms. E. Pereira instructed by Bhasin Co., for the respondents.
Headnote:Section 30-Proceedlng Before arbitrator-Evidence-Technical rules of-Not apply quality and quantity of evidence is for arbitrator to decide.-As aforesaid the quality and quantity of evidence is for the Arbitrator to decide. The technical rules of Law of Evidence do not apply to the proceedings before an arbitrator, Though Mr. Tulzapurkar has put reliance on the case of Delhi Development Authority, New Delhi v, (M/s,) Alkaram, New Delhi, reported in AIR 1982 Del 365, in support of his submission that if there is no evidence before an arbitrator or award is based on no evidence, the Court can set aside such an award. In the facts of the case, it cannot be held that the Award is based on no evidence at all. The adequacy of evidence is not to be examined by the Court in the present proceedings. Admittedly six documents were produced by the Ist Respondent before the Arbitrator which according to the Arbitrator, were sufficient to adjudicate the claim of the 1st Respondent.
Section 30-WIllingly entering petitioner into arbitration agreement-Giving guarantee without pressure on behalf of respondent-Agreement not unconscionable.-If a contract or a clause in a contract is found unreasonable or unfair or irrational one must look to the relatives bargaining power of the contracting parties. In dotted line contracts, there would be no occasion for a weaker party to bargain or to assume to have equal bargaining power. He has either to accept or leave the services or goods in terms of the dotted line contract. His option would be to either accept the unreasonable or unfair terms or for-go the service for ever. With a view to have the services of the goods the party enters into a contract with unreasonable or unfair terms contained therein and he would be left with no option but to sign the contract. In the instant case, there was no question of any bargaining power between the petitioner and the 1st Respondent. The principles as laid down by the Supreme Court to term a contract as unconscionable do not apply to the facts of the present case. The petitioner had signed the said agreement willingly and had given the guarantee on behalf of the 2nd Respondent without any pressure or force from the 1st Respondent,
Sections 30 and 28 Schedule 1, Clause 1(3)-Jurisdiction-It is Court who decides to finality-Not an arbitrator-Arbitrator on his own cannot extend time-Consent of the parties is a must.- The arbitration clause as contains in the said agreement provides that any dispute arising between the parties thereat could be referred to sale arbitration of a nominee of the 1st respondent. The word any will have the same significance and/or amplitude as the words arising out of or in deletion to in connection with and it will cover all disputes arising under the said agreement between the parties thereto including the dispute as to the existence of jurisdiction of the Arbitrator. In the case of Renusagar Power Company Ltd, v. General Electric Company, reported in AIR 1985 SC 1156. the Supreme Court has held that whether all kinds of disputes inclusive of arbitrators jurisdiction come within the scope or purview of arbitration clause or not primarily depends upon the terms of the clause itself; it is a question of what a party intends to provide and what language they employ. Expression such as arising out of or In respect of or in connection with or in relation to or in consequence of or relating to the contract have the widest amplitude and contains and include even the question a as to the existence validity and effect of the arbitration agreement. Ordinarily, as a rule, an arbitrator cannot cloth himself with power to decide the question of his Own jurisdiction nut here is nothing to prevent the parties from investing him with the power to decide the questions. In the case of U.P. Rajkriya Niraman Nigan Ltd. v. Indu Pvt. Ltd. reported in JT 1996 (2) SC 322 the Supreme Court has held that the existence or validity of an arbitration agreement shall be finally decided by the Court alone. The arbitrators therefore, conclusively by themselves the existence or validity of an arbitration agreement since it is the very foundation on which the arbitrators proceed to adjudicate the dispute.
2.The petitioner has been in the employment of 1st respondent and, at all material times, was working in the Engineering Department thereof. The 2nd respondent was also in the employment of the 1st respondent. One Raghavendra Kulkarni was working in the Engineering Department of the 1st respondent where at the petitioner, at all material times, was also working. According to the petitioner, being in the same Department, the petitioner knew the said Raghavendra Kulkarni. The 2nd respondent was a friend of the said Raghavendra Kulkarni.
3.It is the case of the petitioner that in or around the month of March, 1989, the petitioner was informed by the said Raghavendra Kulkarni that the 2nd respondent was selected by the 1st respondent for training abroad and was in need of a character certificate which the said Raghavendra Kulkarni had agreed to give him. The said Raghavendra Kulkarni inquired of the petitioner whether the petitioner would witness the papers which were required to be executed between the respondents. According to the petitioner, the petitioner answered the query in the affirmative and on or about 12th April, 1989, the 2nd respondent came to the said Raghavendra Kulkarni and asked him to sign some papers who signed the same. It is also the case of the petitioner that the said Raghavendra Kulkarni thereafter accompanied by the 2nd respondent approached the petitioner and informed the petitioner that he had issued a character certificate and requested the petitioner to witness certain papers. According to the petitioner, the petitioner in good faith and on the basis of the representations made by the said Raghavendra Kulkarni and the 2nd respondent, signed at the place shown by the 2nd respondent. The petitioner believed the representations made by the 2nd respondent and the said Raghavendra Kulkarni without reading or knowing the contents of the papers and only when the petitioner was served with the papers in the matter of arbitration, the petitioner, on going through the papers, learnt that his signatures were taken on an agreement purporting to name the petitioner as guarantor therein. It is also the case of the petitioner that on perusal of the said agreement and the claim of the 1st respondent against the petitioner in arbitration, the petitioner realised the fraud which, according to the petitioner, was perpetrated by the 2nd respondent along with the said Raghavendra Kulkarni and that the signatures of the petitioner were fraudulently obtained by misrepresentation on the said agreement. In the arbitration commenced by the 1st respondent against the 2nd respondent and the petitioner on the basis of the arbitration agreement contained in the said Agreement the Award has been made by which the 2nd respondent and the petitioner have been jointly and severally directed to pay to the 1st respondent the net sum of Rs. 1,81,910/- within a period of 60 days from the date thereof with interest at the rate of 14.5% per annum from the date of the Award to the date of the decree. The cost of the arbitration determined at Rs. 5,000/- has also been directed to be paid to the 2nd respondent. The said Award has been filed in this Court and has been challenged by the petitioner. Though the 2nd respondent is a party to the petition, as per the Order passed on 27th August, 1996, the petition as against the 2nd respondent has been dismissed for want of prosecution. The 2nd respondent has also been directed under the Award to make payment of the amounts awarded to the 1st respondent since the liability of the petitioner and the 2nd respondent, as determined by the Arbitrator, is held to be joint and/or several. The 2nd respondent has not challenged the said Awa
