High Court Of Delhi
MANORY PLASTIC INDUSTRIES - Appellant
Versus
FOOD CORPORATION OF INDIA - Respondent
Suit 2489 of 1986
Decided On : 01/09/1992
Arbitration Act - Setting Aside Award - The court set aside the award on the basis of the objection regarding the Arbitrator having misconducted the proceedings by taking fresh evidence on record after both parties had closed their case and concluded arguments without giving the petitioner an opportunity to rebut the fresh evidence.
Fact of the Case:
The petitioner filed a petition under Section 14 of the Arbitration Act for directions to the Arbitrator to file the award along with all the records of proceedings. The Arbitrator filed the award, and the petitioner filed objections to the award under Sections 16, 30, and 33 of the Arbitration Act. The respondents did not appear, and the petitioner was directed to file an affidavit by way of evidence.
Finding of the Court:
The court found that the award was liable to be set aside due to the Arbitrator's misconduct in allowing fresh evidence on record without giving the petitioner an opportunity to rebut it.
Issues: The main issue was the misconduct of the Arbitrator in allowing fresh evidence without providing the petitioner with an opportunity to respond.
Ratio Decidendi: The court held that the basic requirement of natural justice and procedural fairness was not met as the Arbitrator allowed fresh evidence without giving the petitioner a chance to rebut it, leading to the setting aside of the award.
Final Decision: The award was set aside, and the suit was disposed of.
( 1 ) M/s. Manori Plastic Industries, petitioner herein filed the present petitioner under Section 14 of the Arbitration Act for directions to the Arbitrator, respondent No. 2 to file the award along with all the records of proceedings. In pursuance of the notice of the said application the Arbitrator filed the award along with the original proceedings. Notice of filling of award was issued to the parties. In pursuance of the said notice, only the petitioner i. e. , M/s. Manory Plastic Industries, has filed objections to the award under Sections 16, 30 and 33 of the Arbitration Act. The objections have been membered as I. A. 4623/87. Inspite of various opportunities neither the respondents put in appearance nor any reply has been filed to the objections filed by the petitioner. The respondent were ultimately proceeded exparte vide order dated 6th May, 1988. The petitioner was directed to file affidavit by way of evidence. In compliance with the said directions, the petitioner has filed the affidavit.
( 2 ) I have heard the counsel for the petitioner/objector. He has raised various objections against the award. However, I am of the view that the award is liable to be set aside on one of its objection which is basic to the entire issue and, therefore, I need not go into the other objections. This objection of the petitioner is regarding the Arbitrator having misconducted the proceedings by taking fresh evidence on record after both the parties had closed their case and even the arguments had been concluded. According to the petitioner, he had not been given any opportunity to rebut or meet the fresh documentary evidence which was placed on record by the opposite side before the Arbitrator. From the record, it appears that on 18th July, 1986, both the parties were heard by the Arbitrator on their respective cases and after the hearing both parties closed their case. The matter thereafter was pending, before the Arbitrator for making of the award. In order to support his contention, Mr. Khurana, learned counsel for the petitioner/objector has drawn my attention to a letter dated 13th October, 1986 from the office of the Director General of Supplies and Disposals and addressed to the Arbitrator annexing certain documents to be placed before the Arbitrator in relation to the arbitration proceedings. The said letter along with the documents was received in the office of the Arbitrator on 17th October, 1986, as per the endorsement contained on the said letter itself. The award was made on 20th October, 1986. In fad, the petitioner/objector has made a grievance about this in his letter dated 29th October, 1986 also which is on record of the arbitration proceedings. I think it is a basic requirement of rules of natural justice as well as the procedure followed before any authority or tribunal that if one party places fresh material on record by way of evidence, the other party should be given a chance to meet the same. The Arbitrator could very well refuse to take any further/fresh evidence on record. But if he does not do so and allows some fresh evidence to be brought on record, the opposite party must get a notice about the same and a reasonable opportunity to rebut the same. This basic requirement has not been complied with by the Arbitrator in the present case and, therefore, the award can not be sustained. Accordingly, on the basis of this objection alone, the award is set aside. I express no opinion about the other objections. I. A. 4623/87 stands disposed of. There will be no order as to costs.
( 3 ) SUIT No. 2489/86 In view of the award having been set aside, the suit stands disposed of.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.