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1998 Supreme(Del) 77
High Court Of Delhi
J.K.ENTERPRISE - Appellant
Versus
WIN MEDICARE LIMITED - Respondent
ORIGINAL MISCELLANEOUS PETITION 6 of 1995
Decided On : 01/28/1998
Subject
Arbitration Law - Revocation of Arbitrator's Authority
Act Referred
Headnote
Held:
There cannot be any doubt about the proposition that the purity of justice requires that the party to an arbitration proceedings should not have an apprehension that the arbitrator is biased and is likely to decide against the party. But it is also true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased. The apprehension must be judged form a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. Moreover while indorsing and fully maintaining the integrity of the principle justice should not only be done, but should manifestly be seen to be done, it is important to remember that the principle should not be led to the erroneous impression that justice should appear to be done than it should in fact be done. Taking into consideration the overall facts and circumstances it does not appear that there is any reasonable basis to form an opinion that any of the arbitrator was biased against the petitioner. The conduct of the petitioner himself during the period of his appearance and after 19th February, 1994 has been such which indicated only one thing that he wanted that the proceedings should always end in his favor and when he felt it could be otherwise also, he refused to cooperate in the arbitration proceedings. In every litigation there shall always be an apprehension of the matter being decided against one of the parties for the matter cannot be decided in favor of all participating in the proceedings but only in favor of one or the other party. None of the parties should expect that the arbitrator shall always accede to his prayer about the conduct or adjournment of the proceedings.
It will be a sad day in the administration of justice if such be the state of law. In absence of any bias or any of the grounds, namely, (1) excess or refusal of jurisdiction by arbitrator, (2) misconduct of the arbitrator, (3) disqualification of the arbitrator, (4) charges of fraud and (5) exceptional cases the authority of the arbitrators cannot be revoked.
Section 28 — Extension of time — Consideration for — Conduct of parties acquiescing in the proceedings is a relevant consideration.
Under Section 28 of the Arbitraton Act, 1940, the Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time the time for making the award. In the case in hand the time has already expired. The powers of the court under Section 28 are vast and wide. It can enlarge the time before or after the time for making the award has expired; and after the award has been made; and even against the intention expressed in the arbitration agreement not to extend the time. Similarly, there is no restriction to grant extension of time even suo moto. But it has to be exercised with judicial discretion. In case the delay has occasioned on account of conduct of the party in seeking adjournments after adjournments the Court would not favor enlargement of time for a person should not take advantage of his own wrong. The Court has to satisfy itself that the extension of time is not likely to work injustice or wrong. Similarly where the arbitrators were prevented from making the award by an order of stay from the Court the time should certainty be extended. Where the conduct of the party in appearing before the arbitrator even after expiry of time for making the award without any objection is a material fact to be considered in favor of enlarging the time.
MUKUL ROHTAGI, S.B.GHOSH, S.K.KAPOOR, SUSHMITA BANERJI
( 1 ) THIS judgment shall dispose of two petitions Nos. OMP 6/95 and OPM 62/94 one for removal of arbitrators and another for extension of time.
( 2 ) THE applicant in OMP No. 6/95 filed under Sections 5 and 11 of the Arbitration Act seeks removal and revocation of the authority of the two Arbitrators in the following terms:
(A) revoke the authority of the Joint Arbitrators being the respondents No. 2 and 3 in the present application; (b) to remove the Joint Arbitrators being the respondent No. 2 and 3 in the present application and to appoint a sole Arbitrator such as a Retd. Judge of this Hon ble Court in their place and stead; (c) in the alternative to direct the Umpire to enter into reference in terms of the letter dated 26. 4. 1994 being annexure A-12 of the present application ; and (d) to pass such further order and/or orders, direction and/or directions be given as your Lordship may deem fit and proper.
( 3 ) BY notice dated 19th July, 1993 the two arbitrators appointed by the parties informed the parties that they have fixed the hearing for 30th July, 1993 for arguments and final disposal (vide annexure A-2) and on 30th July, 1993 the hearing continued and a major part of the counter claim for a sum of Rs. 37,72,848 of the respondent No. 1 relating to claim No. 5 was allowed to be withdrawn. The arguments continued and case was adjourned from time to time. On 19th February, 1994 at the beginning of the meeting Shri Ramji Srinivasan, Co-Arbitrator strongly recommended the parties to reach a settlement in the matter in the presence of the Arbitrators then and there. The petitioner was not prepared for any talk of settlement. Shri Ramji Srinivasan was insisting for talk of settlement. To Co-Arbitrator Shri G. S. Chatterjee seemed to be in silent agreement. Shri Ramji Srinivasan, Co-Arbitrator was showing an uncalled for interest in the matter and an attempt was made by Shri Ramji Srinivasan to compel the proprietor to agree to one sided settlement to the detriment of the petitioner. Consequently due to strong resistance on part of the petitioner and his counsel the alleged settlement could not be forced through. After the session was over, Shri Ramji Srinivasan actually threatened the proprietor of the petitioner firm that since he has not agreed to settle the matter the petitioner would be taken to High Court and shall have to face the consequences thereof. Such utterances on the part of the arbitrator raised a reasonable apprehension of bias in the mind of the petitioner and the petitioner, therefore, reasonably apprehend that the learned Arbitrators are biased against the petitioners. On this basis the revocation of the authority of the arbitrator is sought.
( 4 ) ON behalf of respondent it is contended that the allegations are completely vague. Terms of alleged settlement has not been disclosed and the alleged threat even if it is accepted as correct does not make out any case of threat. For, persuading the parties to settle the matter amicably to avoid any unnecessary dispute being taken to the Court, would not amount to any threat.
( 5 ) I have heard the learned counsel for the parties at length and gone through the record.
( 6 ) IN support of his contention to revoke the authority of the Arbitrators learned counsel for the petitioner also relies upon the case of M/s. Amarchand Lalitkumar v. Shree Ambika Jute Mills Ltd. , AIR 1966 SC 1036. In that case the Supreme Court took the following view:
". . . . IT is true that on an application under S. 5 it is not necessary to show that the arbitrator is in fact biased and it is enough to show that there is a reasonable ground for apprehension that the arbitrator will be biased. But the reasonable ground must be established to the satisfaction of the Court to which an application for leave to revoke the authority of an appointed arbitrator is made. . . . . . . Before the Court exercise its discretion to give leave to revoke an arbitrator s authority, it sho
