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HIGH COURT OF CALCUTTA
Bose
EAST INDIA FILM STUDIOS - Appellant
Versus
P. K. MUKHERJEE - Respondent
Matter 3 Of 1952
Decided On : MAY 29, 1952
ARBITRATION - REVOCATION OF APPOINTMENT - DEFENCE OF INDIA ACT, 1939 - SECTION 19 - ARBITRATION ACT, 1940 - SECTION 5 - GENERAL CLAUSES ACT, 1897 - SECTION 16 - APPOINTED ARBITRATOR - REVOCATION OF AUTHORITY - PROCEDURE - JURISDICTION.
Fact of the Case:
The petitioner, a film producer, had his studio and laboratory requisitioned by the Government under the Defence of India Act, 1939. A reference was made to an arbitrator under Section 19 of the Act to determine the compensation payable. The arbitrator, Mr. Majumdar, entered upon the reference and commenced hearing the case. After several hearings, the Government revoked Mr. Majumdar's authority as arbitrator and appointed another person in his place.
Finding of the Court:
The court held that the Government had no jurisdiction to revoke Mr. Majumdar's authority as arbitrator. The court found that Section 19(1)(g) of the Defence of India Act, 1939, which provides that "save as provided in this section and in any rules made thereunder, nothing in any law for the time being in force shall apply to arbitration under this section," was intended to keep arbitrations under the Act unaffected by any other law having any bearing on the subject. The court also found that Section 46 of the Arbitration Act, 1940, which extends the provisions of the Act to statutory arbitrations, applied to arbitrations under Section 19 of the Defence of India Act, 1939, because the Defence of India Act was an enactment which was in force at the time the Arbitration Act, 1940, came into operation. The court further found that Section 5 of the Arbitration Act, 1940, which provides that "the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court," was applicable in cases of revocation of authority of an appointed arbitrator under Section 19 of the Defence of India Act, 1939, because there was no provision for revocation of the authority of an arbitrator in Section 19 of the Act or the rules made thereunder. The court also found that the rules framed under Section 19 of the Defence of India Act, 1939, which provide for substitution of another arbitrator in place of the appointed arbitrator and for removal of the appointed arbitrator, did not apply to the facts and circumstances of the case.
Issues: 1. Whether the Government had the jurisdiction to revoke the authority of the appointed arbitrator, Mr. Majumdar, under Section 19 of the Defence of India Act, 1939? 2. Whether Section 46 of the Arbitration Act, 1940, applied to arbitrations under Section 19 of the Defence of India Act, 1939? 3. Whether Section 5 of the Arbitration Act, 1940, was applicable in cases of revocation of authority of an appointed arbitrator under Section 19 of the Defence of India Act, 1939? 4. Whether the rules framed under Section 19 of the Defence of India Act, 1939, applied to the facts and circumstances of the case?
Ratio Decidendi: 1. The court held that the Government had no jurisdiction to revoke the authority of the appointed arbitrator, Mr. Majumdar, under Section 19 of the Defence of India Act, 1939, because: a. Section 19(1)(g) of the Defence of India Act, 1939, was intended to keep arbitrations under the Act unaffected by any other law having any bearing on the subject. b. Section 46 of the Arbitration Act, 1940, which extends the provisions of the Act to statutory arbitrations, applied to arbitrations under Section 19 of the Defence of India Act, 1939, because the Defence of India Act was an enactment which was in force at the time the Arbitration Act, 1940, came into operation. c. Section 5 of the Arbitration Act, 1940, which provides that "the authority of an appointed arbitrator or umpire shall not be revocable except with the leave of the Court," was applicable in cases of revocation of authority of an appointed arbitrator under Section 19 of the Defence of India Act, 1939, because there was no provision for revocation of the authority of an arbitrator in Section 19 of the Act or the rules made thereunder. d. The rules framed under Section 19 of the Defence of India Act, 1939, which provide for substitution of another arbitrator in place of the appointed arbitrator and for removal of the appointed arbitrator, did not apply to the facts and circumstances of the case.
Final Decision: The court made the rule absolute and directed the respondents Nos. 1 and 2 to forbear from giving effect to the orders dated 24-11-1951 and 22-12-1951. The petitioner was entitled to the costs of the present proceedings.
( 1 ) THIS is an application under Article 226 of the Constitution for an appropriate writ directing the respondents Nos. 1 and 2 to withdraw or cancel an order of revocation of appointment of an arbitrator dated 24-11-1951 and for direction upon the said respondents to forbear from giving effect to that order.
( 2 ) THE petitioner carries on business of production and exploitation of films and for the purpose of such business he has his building, studio laboratory situated at Tollygunge in the suburbs of Calcutta. In the year 1942, the building, studio, laboratory and the garages belonging to the petitioner were requisitioned by the Government under the Defence of India Act, 1939. As no agreement could be reached between the petitioner and the Government as to the compensation payable in respect of the requisition, a reference was made by the Collector under the provisions of Section 19, Defence of India Act by an order made on 20-6-1944 and this reference was registered as Land Acquisition Case No. 41/44.
( 3 ) IT appears that thereafter, arbitrators were purported to have been appointed by the Government from time to time, but none of the arbitrators entered upon the reference. By an order made on 27-2-1950, one Mr. J. C. Majumdar who was the Additional District Judge of Alipore was appointed as arbitrator by the Government of West Bengal in its Department of Land Revenue. Mr. Majumdar entered upon the reference and commenced hearing of the arbitration case. The petitioner filed his statement of claim before the arbitrator and claimed a sum of about seven lakhs of rupees by way of compensation in respect of the said acquisition. Various documents and books of account, were disclosed and placed before Mr. Majumdar in the course of the arbitration proceedings and evidence of witnesses was taken by the arbitrator for several days. The petitioner also called an export witness to prove the valuation of the properties in question and this witness was examined and cross-examined for about two days and it appears that the arbitrator himself put questions to the witness. It also appears that during the arbitration proceedings, local inspection was necessary and so all the parties including the arbitrator inspected the requisitioned premises on or about 31-1-1951.
( 4 ) IT is alleged in the petition that since the inspection, considerable repairs and improvements and alterations have been made to the premises in question and the character of the property has been considerably altered as a result of the same. After the said inspection the hearing was further continued on 7-2-1951 and 8-2-1951. On the last mentioned date, an objection was taken for the first time by the lawyer appearing for the Government that the reference to the arbitrator was not sufficiently comprehensive and so all the disputes relating to the question of compensation could not be entertained by him.
( 5 ) ON 30-5-1951, Mr. Majumdar was clothed with powers for determining the question of compensation in respect of the various requisitions of the entire portions of the buildings and studios of the petitioner and the case was fixed for hearing finally on 3-12-1951 after several adjounments had been granted in the meantime.
( 6 ) ON 3-12-1951, the petitioner had his main witness brought down from Bombay and the petitioner was represented by counsel and solicitor on that day. After the petitioner had tendered his witness, one Mr. Sarogi, for completion of his examination and cross examination, the arbitrator informed the petitioner in the presence of the parties and the lawyers that by an order dated 24-11-1951 the authority of Mr. Majumdar as appointed arbitrator had been revoked or cancelled by the Government of West Bengal and so he had become functus officio. It is alleged in the petition that Mr. Majumdar had at no time failed or refused to act nor was he or is incapable of acting as such arbitrator, but he had to give up the proceedings in view of
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