An arbitrator must follow the principles of natural justice and if he mishandles the arbitration proceedings likely to cause substantial miscarriage of justice he misconducts the proceedings.

( 1 ) THE respondent Union of India invited tenders for an air-conditioning plant for telephone exchange building at Manglore in June, 1964. M/s Bombay Ammonia (P) Ltd. petitioner submitted a tender dated 15th July, 1964. The Union of India issued acceptance of tender dated 10th November, 1964. Disputes arose between the I parties and Mr. S. K. Bahadur, Joint Secretary and Legal Advisor to the Government of India, Ministry of Law, and Justice was appointed as sole arbitrator by the Director General of Supplies and Disposal. The petitioner submitted his claim. The respondent Union of India filed its counter claim. The arbitrator by his award dated 28th July, 1980 rejected the claims of the petitioner and the respondent. The Union of India in its objections has alleged that the arbitrator misconducted himself and the proceedings, that there is an error apparent on the face of the Award, that the arbitrator has misread and mis-interpreted the relevant conditions of the contract especially Clause No. 12 of the Conditions of Contract governing supplies of plant and machinery (Form No. DGS and D 71 ). The petitioner/claimant has also filed objections (I. A. No. 3135 of 1981) raising various questions on merits of the controversies between the parties. The petitioner also alleges that the arbitrator misconducted himself and the proceedings, that the award is based on no evidence, that the arbitrator has not applied his mind to the matters before him, that there is an error apparent on the face of the award. (contd. on col. 2)

"issue No. 1 Whether the contract was executed in terms of the agreement. Issue No. 2 Whether the rejection of the plant was unjustified Issue No. 3 Whether the claimant contractor is entitled to receive from the respondent Rs. 69,488. 50 as balance due after the execution of the contract. Issue No. 4 Whether the respondent is entitled for the refund of Rs. 1,67,743. 50 from the claimant contractor. Issue No. 5 Whether the claimant is entitled for interest pendente lite and future interest till final realisation Issue No. 6 Whether the respondent would be entitled for any other relief against the claimant contractor in the circumstances of the case.

( 2 ) THERE were six issues before the arbitrator and his award on these issues reads as under: (for table see below)

( 3 ) FROM the pleadings of the parties before the arbitrator it is apparent that one of the points in dispute was about the capacity of the air-conditioning plant. According to the petitioner the capacity was only 32 TR while according to the respondent the capacity of the plant, to be installed, was 45. 2 TR. The petitioner submitted his tender besides other persons. The petitioner applied to the arbitrator for production of various offers/tenders with all technical details, received by the Union of India in respect of the tender in question in response to the invitation to tender. It is in the proceedings of the arbitrator dated 15th March, 1980 that The contract was not executed by the claimant contractor in terms-of the agreement. The rejection of the plant was justified. Claim rejected. No. The Department did not follow the correct procedure laid down in the conditions of contract for getting the balance work done at the risk and cost of the contractor. Apart from this, there is no provision for the refund of the amount of the contract, Claim rejected. Claim rejected. the DGS and D undertook to produce the relevant papers for the inspection of the arbitrator on the adjourned date of hearing. Mr. C. P. Dua, Director Incharge of the petitioner company filed his affidavit dated 26th April, 1980 before the arbitrator who directed the Union of India to file a reply. It appears that Union of India did not file any counter affidavit. The Union of India also did not produce before the arbitrator the tenders submitted by other contractors regarding the installation of the air conditioning plant in question. Learned counsel for the petition