( 1 ) LPG distributionship was awarded to Mrs. Indira Sood, sole proprietor of M/s Vikas Gas Agency (In short the agency ) under the DGR Scheme for the rehabilitation of war effected widows of the defence personnel and their dependents. The Distributionship Agreei-ient was signed on 24th September,1975. The said agreement contained an arbitration clause No. 37 which provided that in case of any dispute the matter shall be REFERRED TO to the arbitration of the person to be appointed by the Managing Director of the Indian Oil Corporation (In short the corporation ). Dispute arose between the Corporation and the Agency. The Corporation preferred TO a claim against the Agency on account of its failure to clear the outstanding amounts. Corporation terminated the dealership vide letter dated 8th April,1992 because the Agency issued unauthorised connections. Hence the Agency preferred TO claim against this termination of dealership. Two references were made to the arbitrator - one of the Corporation and the other of the Agency. Sh. S. K. Gupta was appointed as the Arbitrator by the Managing Director as per Clause 37 of the Contract. Parties had been appearing before the Arbitrator. Tke proceedings in both the references were going on together before the said Arbitrator. Sh. S. K. Gupta, the sole arbitrator retired and relinquished the office in December 1986. On the retirement of the sola arbitrator, the Corporation sought the appointment of another arbitrator. New arbitrator was appointed. He entered upon reference on 3rd March,1987 and made and published the present award dated 21st May,1987.

( 2 ) THE impugned award was filed in the Court.- Notice of filing of the award was issued. On behalf of the Agency objections have been filed against the impugned award mainly on the ground that the Award has been made and published beyond the statutory period permitted under the Agreement, therefore, bad in law. Secondly, during the course of arbitration proceedings fresh settlement was arrived at between the parties which superseded the arbitration agreement. When the arbitration agreement stood superseded, the Arbitrator could not have made and published the award on the basis of the superceded agreement. Moreover, the Arbitrator as per Clause-37 of the agreement was not appointed by the Managing Director. Hence, the appointment of Mr. V. K. Dhir, Arbitrator is not in accordance with the provisions of the agreement. Even otherwise being an employee of the Corporation he was biased, moreover he did not apply his mind. No evidnece was produced by the Corporation to prove that the receipt produced by the agency pertaining to the return of the goods by the Objector was forged. Even otherwise the Corporation had been claiming varying amounts ranging from Rs. l,56,100. 00 to Rs. 2,15,762. 00. The Arbitrator without any evidence and without applying his mind awarded a sum of Rs. 2,01,928. 27p. As there were two references one for wrongful termination and other for claiming Rs. 2,65,762. 00 , both the proceedings ran parallel to each other and were dependent on each other, in substance these proceedings merged with each other. The Arbitrtor instead of giving award on both the claims, preferred TO to give award only in respect of the claim preferred TO by the Corporation. This shows he was biased. He did not bother to give any decision so far as claim preferred TO by the Agency. This shows non application of mind.

( 3 ) THE Corporation contested these objections, inter alia, on the ground that the Arbitration agreement never stood superceded nor any fresh settlement was arrived between the parties during the arbitration proceedings. Sh-S. K. Gupta, the Sole Arbitrator gave directions to both the parties on the claim preferred TO by the Corporation, to reconcile the accounts. Accounts were reconciled by the parties and after the reconciliation of the accounts, the representative of the Agency admitted that an amount of Rs. 2,01,928.