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1985 Supreme(Del) 216
High Court Of Delhi
VIDYA GROVER - Appellant
Versus
D.D.GROVER - Respondent
ORIGINAL MISCELLANEOUS PETITION 47 of 1982.
Decided On : 05/21/1985
The authority of an appointed arbitrator shall not be revocable, except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement.
Headnote:
ARBITRATION - REVOCATION OF REFERENCE - GROUNDS - MISCONDUCT OF ARBITRATOR - DELAY IN PROCEEDINGS - CORRECTION OF DEPOSITION - EXAMINATION OF PARTY AS WITNESS - ENLARGEMENT OF TIME FOR MAKING AWARD.
Fact of the Case:
Petitioners, widow and daughter of deceased partner, filed arbitration cases against surviving partner (brother) on the basis of arbitration clause in partnership deeds. 2 married sisters were joined as parties on their application u/0. 1 R. 10, CPC. On 8. 4. 80, parties jointly requested appointment of Shri I. D. Dua (Retired) as arbitrator. They also agreed that widow and daughter would be paid by D. D. Grover Rs. 3000. 00 p. m. for using factory premises. Arbitrator entered upon reference on 27. 8. 80 and as he could not conclude within 4 months, parties jointly got time extended u/s 28. Last extention expired on 31. 3. 82, Petitioners applied for extention. D. D. Grover did not join them and instead applied for removal of arbitrator and revocation of reference on the plea that proceedings were being protracted and arbitrator was acting beyond jurisdiction by entertaining pleas of fraud and forgery against him.
Finding of the Court:
1. The authority of an appointed arbitrator shall not be revocable, except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. 2. Leave to revoke is to be granted in a sparing and cautious manner, for the parties are, particularly speaking not to be relieved of the obligation entered into by them to have their disputes decided by a tribunal of their own choice merely because anyone of them entertains an apprehension that the arbitrator s decision may go against him. 3. The grounds on which leave to revoke may be given have been put under five heads : (a) Excess or refusal of jurisdication by arbitrator; (b) Misconduct of arbitrator; (c) Disqualification of arbitrator; (d) Charge of Fraud; (e) Exceptional cases. 4. Where fraud is imputed to a party and his character is involved, it would be difficult to say that he ought not to have the opportunity of clearing himself from so grave a personal imputation in open court. 5. Merely because some allegations have been made that accounts are not correct or that certain items are exaggerated and so on, that is not enough to induce the court to refuse to make a reference to arbitration. 6. It is only in cases of allegation of fraud of a serious nature that the court will refuse as decided in Russell s case (1880) 14ch. D. 471 to order an arbitration agreement to be filed and will not make a reference. 7. The discretion conferred by S. 28 of the Act on the Court to enlarge time is very wide and while exercising its discretion all that the court has to satisy itself is that the extension of time is not likely to work injustice or wrong and that the case is a fit one granting the indulgence asked for. 8. The use of words in S. 11 (1) of the Act, "fails to use all reasonable despatch" simply implies that the arbitrator has not proceeded with arbitration without unnecessary delay. 9. The arbitrator has not been able to give his decision on this particular question he cannot be dubbed guilty of legal misconduct, more so when the question is pretty moot and debatable one.
Issues: 1. Whether the arbitrator's authority can be revoked on the grounds of misconduct, delay in proceedings, correction of deposition, and examination of party as witness? 2. Whether the time for making the award can be enlarged?
Ratio Decidendi: 1. The authority of an appointed arbitrator shall not be revocable, except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. 2. Leave to revoke is to be granted in a sparing and cautious manner, for the parties are, particularly speaking not to be relieved of the obligation entered into by them to have their disputes decided by a tribunal of their own choice merely because anyone of them entertains an apprehension that the arbitrator s decision may go against him. 3. The grounds on which leave to revoke may be given have been put under five heads : (a) Excess or refusal of jurisdication by arbitrator; (b) Misconduct of arbitrator; (c) Disqualification of arbitrator; (d) Charge of Fraud; (e) Exceptional cases. 4. Where fraud is imputed to a party and his character is involved, it would be difficult to say that he ought not to have the opportunity of clearing himself from so grave a personal imputation in open court. 5. Merely because some allegations have been made that accounts are not correct or that certain items are exaggerated and so on, that is not enough to induce the court to refuse to make a reference to arbitration. 6. It is only in cases of allegation of fraud of a serious nature that the court will refuse as decided in Russell s case (1880) 14ch. D. 471 to order an arbitration agreement to be filed and will not make a reference. 7. The discretion conferred by S. 28 of the Act on the Court to enlarge time is very wide and while exercising its discretion all that the court has to satisy itself is that the extension of time is not likely to work injustice or wrong and that the case is a fit one granting the indulgence asked for. 8. The use of words in S. 11 (1) of the Act, "fails to use all reasonable despatch" simply implies that the arbitrator has not proceeded with arbitration without unnecessary delay. 9. The arbitrator has not been able to give his decision on this particular question he cannot be dubbed guilty of legal misconduct, more so when the question is pretty moot and debatable one.
Final Decision: 1. The petition for leave to revoke the reference or to remove the arbitrator is dismissed. 2. The application for enlargement of time for making the award is allowed and the time is enlarged upto 31. 12. 85.
( 1 ) VED Raj and D. D. Grover were brothers. They were jointly doing some businesses etc. since 1967. Ved Raj died on 17. 1. 78 leaving behind mother, wife and a daughter. Widow and daughter filed arbitration cases u/s 20 against surviving partner (brother) on the basis of arbitration clause in partnership deeds. 2 married sisters were joined as parties on their application u/0. 1 R. 10, CPC. On 8. 4. 80, parties jointly requested appointment of Shri I. D. Dua (Retired) as arbitrator. They also agreed that widow and daughter would be paid by D. D. Grover Rs. 3000. 00 p. m. for using factory premises. Arbitrator entered upon reference on 27. 8. 80 and as he could not conclude within 4 months, parties jointly got time extended u/s 28. Last extention expired on 31. 3. 82, Petitioners applied for extention. D. D. Grover did not join them and instead applied for removal of arbitrator and revocation of reference on the plea that proceedings were being protracted and arbitrator was acting beyond jurisdiction by entertaining pleas of fraud and forgery against him. After detailing above facts, judgment proceeds:
( 2 ) SECTION 5 of the Act lays down that the authority of an appointed arbitrator shall not be revocable, except with the leave of the court, unless a contrary intention is expressed in the arbitration agreement. Admittedly, in the instant case, there is no stipulation in the arbitration aggreement itself for the revocation of the authority of the arbitrator appointed by the court with the consent of both the parties, Hence, his authority is irrevocable except by leave of the court. The Section itself is silent as to the ground on which such leave can be granted. However, it is well settled that leave to revoke is to be granted in a sparing and cautious manner, for the parties are, particularly speaking not to be relieved of the obligation entered into by them to have their disputes decided by a tribunal of their own choice merely because anyone of them entertains an apprehension that the arbitrator s decision may go against him. In the well-known treatise on the subject "russell on Arbitration" (16 Edition, page 54), the following proposition of law is enunciated :
"in considering the exercise by the court of the power of revocation it must not be forgotten that arbitration is a particular method for the settlement of disputes. Parties not wishing the law s delays know, or ought to know, that in referring a dispute to arbitration they take the arbitrator for the better or for worse, and that his decision is final both as to fact and law. In many cases the parties prefer arbitration for these reasons. In exercising its discretion cautiously and sparingly, therefore, the court no doubt has these circumstances in view, and considers that parties should not be relieved from a tribunal they have chosen because they find they are likely to lose owing to mistakes in the arbitrator s decision, which they have agreed to be bound by. "
( 3 ) THIS passage has been quoted with approval by the Supreme Court in M/s Amarchand v. Shree Ambica Jute Mills Ltd. AIR 1965 SC 1036, and the Supreme Court has amplified the legal position by stressing further that :
"before the Court exercises its discretion to give leave to revoke an arbitrator s authority, it should be satisfied that a substantial miscarriage of justice will take place in the event of its refusal. The grounds on which leave to revoke may be given have been put under five heads : (a) Excess or refusal of jurisdication by arbitrator; (b) Misconduct of arbitrator; (c) Disqualification of arbitrator; (d) Charge of Fraud; (e) Exceptional cases. "
( 9 ) THE principal ground pressed into service by the learned counsel for the respondent is that a number of documents have been put forward by the parties which have altered the nature of proceedings as serious allegations of fraud and forgery have been allowed to be levelled for the first time during arbitration proceedings and were
