High Court Of Calcutta
PRATIBHA BONNERJEA
BRIGHT WIRE AND STEEL INDUSTRY - Appellant
Versus
UNION OF INDIA - Respondent
Award Case 107 Of 1983
Decided On : 11/22/1984
{'KEYWORD': 'Arbitration', 'SUBJECT': 'Validity of Award', 'ACT SECTION LIST': ['Arbitration Act, Sch. 1 Para 3'], 'SUMMARY': "The court held that the arbitrator did not exceed his jurisdiction by allowing adjustment of claims between the parties, and that the award was made within the statutory time limit. The court also held that the arbitrator's conduct did not demonstrate bias against the petitioner."}
Fact of the Case:
The petitioner challenged an arbitration award on the grounds of bias, excess of jurisdiction, and being made out of time.
Finding of the Court:
The court found that the arbitrator was not biased against the petitioner, did not exceed his jurisdiction, and made the award within the statutory time limit.
Issues: 1. Whether the arbitrator was biased against the petitioner. 2. Whether the arbitrator exceeded his jurisdiction by allowing adjustment of claims between the parties. 3. Whether the award was made out of time.
Ratio Decidendi: 1. The court held that the arbitrator's conduct did not demonstrate bias against the petitioner. 2. The court held that the arbitrator did not exceed his jurisdiction by allowing adjustment of claims between the parties, as both claims were before the arbitrator and there was no dispute as to the amount withheld. 3. The court held that the arbitrator entered on the reference on the date he considered and disposed of a formal application for extension of time to file a counter statement, and that the award was made within the statutory time limit.
Final Decision: The court dismissed the petition challenging the arbitration award.
( 1 ) IN this application for setting aside the award dated 3rd March 1982 under Ss. 30 and 33 of the Arbitration Act, the petitioner's counsel pressed three grounds as follows : - 1. The arbitrator was biased against the petitioner. 2. The arbitrator has gone beyond the scope of the reference and made the award in excess of his jurisdiction. 3. The award was made out of time and is non est. The rest of the grounds were not pressed.
( 2 ) WITH regard to the first ground, the allegations in the petition are that the arbitrator went out of his ways to accommodate the respondent by allowing it repeated extensions of time to file its statement of claim. According to the petitioner, such a conduct proved that the arbitrator was in favour of the respondent and was biased against the petitioner from the very beginning. It appears that on 9-7-1981 the arbitrator directed the respondent to file statement of claim by 6-8-1981 and the petitioner to file its counter statement on 7-9-1981. On 18-8-1981, at the request of the respondent, the time was extended till 15-9-1981. On 16-9-1981, at the request of the respondent a further extension of time was granted by the arbitrator up to 14-10-1981. The time to file the statement of claim was again extended till 6-11-1981. The respondent filed its statement of claim on 4-11-1981. From the records of the arbitrator I do not find that the petitioner ever took any objection against the extensions granted by the arbitrator to the respondent. The petitioner itself was not ready to file its counter statement on 18-11-1981 as directed by the arbitrator. Therefore, the petitioner made a formal application on 17-11-1981 praying for further time and time was extended till 15-12-1981. On 8-12-1981, the petitioner again prayed for further extension which was again granted till 21-12-1981. The respondent also did not take any objection against these extensions. The petitioner filed its counter statement on 22-12-1981, beyond time but the same was accepted by the arbitrator without any protest or objection from the respondent. On these facts I am unable to hold that the arbitrator was biased against the petitioner. I find that the Arbitrator gave indulgence to both the parties equally and no question of bias can arise on these facts. Moreover, this application has been made for setting aside the award on the ground of bias. The petitioner has to establish actual bias on the part of the arbitrator in making the award. Mere apprehension of alleged bias is no ground for setting aside the award.
( 3 ) THE next point is that in the award, the arbitrator has gone beyond the scope of the reference. This ground has been made on the basis of clause 2 of the award which is as follows : -"claim of Union of India against the contractor for Rs. 1,47,035 (Rupees one lakh forty seven thousand thirty five) towards risk purchase loss is allowed. The balance amount withheld by the Union of India on account of the claim decided hereunder would be released to the contractor after realisation of the amount awarded in favour of Union of India as above. "
( 4 ) ACCORDING to the petitioner no claim for adjustment was made before the Arbitrator by the respondent and as such the arbitrator by allowing adjustment acted in excess of his jurisdiction which rendered the award bad in law. It is an admitted position that during the pendency of the arbitration proceeding, the respondent had withheld Rs. 2,03,609/- which was admittedly payable to the petitioner by the respondent. The counter-claim in respect of the sum so withheld was made by the petitioner before the arbitrator and the annexure 20 to the counter-claim specifically mentioned this figure. Mr. Bhabra appearing in support of the petition invites my attention to the condition 18a of the General Conditions of Contract (Form D. G. S. and D. 68 Revised ). In accordance with this condition, the respondent was entitled to withhold this sum of money until the
FOLLOWED ON : Bharati Mukharjee v. M/s. Shiv Trading Co.
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