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High Court Of Delhi
M.S.KUANNA - Appellant
Versus
NEW DELHI MUNICIPAL COMMITTEE - Respondent
ORIGINAL MISCELLANEOUS PETITION 50 of 1983.
Decided On : 11/12/1984
ARBITRATION - REMOVAL OF ARBITRATOR - DELAY IN PROCEEDINGS - MISCONDUCT - POWER OF COURT TO APPOINT NEW ARBITRATOR - ARBITRATION ACT, 1940, SECS. 11, 12, 28.
Fact of the Case:
Petitioner, a contractor, filed a petition under Sections 11 and 12 of the Arbitration Act, 1940, seeking the removal of the arbitrator appointed to resolve disputes between the petitioner and respondent, New Delhi Municipal Committee (NDMC). The petitioner alleged that the arbitrator had failed to proceed with the arbitration proceedings with reasonable dispatch and had misconducted himself by not reminding NDMC to file its claim or reply to the petitioner's claim for a long time.
Finding of the Court:
The court found that the arbitrator had indeed failed to use all reasonable dispatch in entering upon and proceeding with the reference and making the award, and had misconducted himself in the proceedings. The court noted that the arbitrator had not called upon NDMC to file its counter-statements until more than 10 months after the petitioner had submitted its claim, and that the arbitrator had not provided any reasonable explanation for this delay.
Issues: 1. Whether the arbitrator had failed to use all reasonable dispatch in entering upon and proceeding with the reference and making the award? 2. Whether the arbitrator had misconducted himself in the proceedings? 3. Whether the court had the power to appoint a new arbitrator?
Ratio Decidendi: 1. The court held that the arbitrator had failed to use all reasonable dispatch in entering upon and proceeding with the reference and making the award. The court noted that the arbitrator had not called upon NDMC to file its counter-statements until more than 10 months after the petitioner had submitted its claim, and that the arbitrator had not provided any reasonable explanation for this delay. 2. The court held that the arbitrator had misconducted himself in the proceedings. The court noted that the arbitrator had not reminded NDMC to file its claim or reply to the petitioner's claim for a long time, and that this had caused unnecessary delay in the arbitration proceedings. 3. The court held that it had the power to appoint a new arbitrator. The court noted that Section 12(2)(a) of the Arbitration Act, 1940, empowers the court to appoint a new arbitrator when it removes the sole arbitrator or all the arbitrators.
Final Decision: The court removed the arbitrator and appointed a new arbitrator to decide the disputes and differences between the parties.
( 1 ) HE petitioner M. S. Khanna Associates (P) Limited, Contractors, F-22, Bha-gat Singh Market, New Delhi has put up this petition undersections 1) and 12 of the Arbitration Act, 1940 (hereinafter to be referred to as the Act) for the removal of Mra. S. Khullar, respondent No. 2, as Arbitrator who entered upon. the reference on 21-4-1981 to resolve the disputes and differenceswhich had arisen between the petitioner on the one hand andrespondent No. 1. New Delhi Municipal Committee on the otherand for appointing another arbitrator in his place. The arbitration clause No. 25 appearing in the contract, between the partieswas invoiced by the petitioner as early as 14-1-1980 and in pursuance thereof the Administrator of respondent No. 1 N. D. M. C. appointed Mr. A. K. Guha as Arbitrator to adjudicate upon thedisputes between the parties vide letter dated 24-9-1980 butmr. Guha resigned as an Arbitrator subsequently without takingup the matter and thereafter the Administrator appointed respondent No. 2 A. S. Khullar as the sole arbitrator or vide his letterdated 16-4-1981.
( 2 ) IT is alleged that after entering upon the reference on21-4-1981 even though the Arbitrator had called upon the partiesto file their submissions of claims before him and the petitionercomplied with that direction, respondent No. 1 did not and thearbitrator misconducted himself in not reminindg respondentno. 1 to file its claim or reply to the claim of thepetitioner for a long time and rather allowed respondent No. 1to raise take objection such as that respondent No. 1 had notbeen supplied the copy of the claim of the petitioner which objection was raised by respondent No. 1 after very long time. The petitioner has been supported by the affidavit deposed tomr. D. D. Chawla one of the Directors of the petitioner company.
( 3 ) THIS application has been resisted by respondent No. 1and in its reply it has controverted the allegations of any dilatory tactics on the part of respondent No. 1 or any unreasonabledelay on the part of the arbitrator, by asserting that copy ofthe claim had not been supplied to it by the petitioner and itwas supplied only as late as 4-6-1982 and further that the arbitrator who was Vigilence Officer of respondent No. 1 N. D. M. Cwas assigned some duties in the ASTAD as a result of whichhe was not free to hurry up with the giving of the award, andwhen the arbitrator vide his letter dated 21-1-1983 requestedthe parties to appear before him on 14-2-1983 at 3. 00 P. M. for further proceedings with the matter and the matter was adjourned to 16-3-1983 at the request of the respondent No. 1n. D. M. C. , the petitioner refused to participate in the arbitrationproceedings for the reason that he had already moved thispresent petition. The averments in the reply have been supported by two affidavits one deposed to by Mr. N. C. Jain, Secretary ,n. D. M. C. and the other by the arbitrator A. S. Khullar himself. Rejoinder has also been filed by the petitioner controverting theassertions of respondent No. 1 and this rejoinder is again supported by the affidavit deposed to by D. D. Chawla one of thedirectors of the petitioner-company. The learned counsel forrespondent No. 1 challenges the maintainability of this petitionon the ground that the statutory period of four months withinwhich an arbitrator is to make and pronounce his award hasalready expired as a result of which the arbitrator had becomefunctus officio and consequently the question of his removal asarbitrator did not arise and there was no necessity of makingsuch a petition and in support of this proposition he has reliedupon an authority of Calcutta High Court reported as Arbnhindusthan Steel v. Appejay Pr. Ltd. AIR 1967 Cal 291this authority does support this contention of the learnedcounsel for respondent No, 1. It has laid down as follows : "the authority of an arbitrator cannot be revoked whenin law the arbitrator docs not exist and/or cannotfunction. In other w
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