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1966 Supreme(Del) 121

High Court Of Delhi
MOHAMMAD - Appellant
Versus
AGGARWAL FINANCE PRIVATE LIMITED - Respondent
First Appeal Order 176D of 1964
Decided On : 11/16/1966

Advocates Appeared:
G.R.BHATIA, J.R.TANDON, R.K.SINGHAL

The mere fact that the arbitrator was the son of the counsel for one of the parties did not, by itself, invalidate the reference.

Headnote:

ARBITRATION - APPOINTMENT OF ARBITRATOR - DISQUALIFICATION - RELATIONSHIP BETWEEN ARBITRATOR AND COUNSEL FOR PARTY - INTEREST IN CONTROVERSY - VALIDITY OF REFERENCE - OPPORTUNITY TO REBUT EVIDENCE - PROCEDURE - ADJOURNMENTS - HIGH COURT RULES AND ORDERS, VOL. I, CHAPTER 1-H, PARAGRAPHS 14, 15 AND 16.

Fact of the Case:

The appellant challenged the validity of an arbitration award on the ground that the arbitrator was the son of the counsel for the opposite party, and that he was not given an opportunity to rebut the evidence led by the opposite party.

Finding of the Court:

The court held that the mere fact that the arbitrator was the son of the counsel for one of the parties did not, by itself, invalidate the reference. The court also held that the appellant was not entitled to a further opportunity to rebut the evidence led by the opposite party, as he had not asked for such an opportunity in the court below.

Issues: 1. Whether the appointment of the arbitrator was invalid due to his relationship with the counsel for one of the parties? 2. Whether the appellant was entitled to a further opportunity to rebut the evidence led by the opposite party?

Ratio Decidendi: 1. The court held that the mere fact that the arbitrator was the son of the counsel for one of the parties did not, by itself, invalidate the reference. The court reasoned that an arbitrator is expected to possess the judicial detachment of a Tribunal entrusted with the sacred and solemn function of adjudicating upon a dispute between rival contestants, but it does not necessarily follow from this basic requirement that when father and son or two brothers are independently practising the profession of law, one must be considered to be possessed of personal interest in all the professional engagements of the other. 2. The court held that the appellant was not entitled to a further opportunity to rebut the evidence led by the opposite party, as he had not asked for such an opportunity in the court below. The court reasoned that the appellant had the opportunity to produce his entire evidence on the issues of which the onus was on him, and that he did not ask for any opportunity to adduce any evidence in rebuttal. The court also noted that the appellant had addressed arguments on the case without any protest and took the chance of securing a decision on the merits.

Final Decision: The appeal was dismissed.

Dua, J.

( 1 ) THIS is a first appeal from the order of a learned Subordinate Judge 1st Class, Delhi, dated 6th April, 1964, passim? a decree for possession of the Fargo make passenger bus 1960 Model No. MPE 7390 or in the alternative for the recovery of Rs. 20,000, and also passing a decree for the recovery of Rs 33,147. 00 in favour of the Aggarwal Finance, Private, Limited, Respondent 1n the present appeal, against the appellant Mohammad and Liaqat Hussain. The impugned order was made in the proceedings following the appointment of an arbitrator under section 20 of the Arbitration Act and the making of award by the arbitrator. The arbitrator filed his award in the Court on 30th April. 1962, and in pursuance of notice of the said award, objections were raised by Mohanimad, the present appellant. Those objections were disallowed by the Court below by means of the impugned order. It is under these circumstances that the present appeal has been preferred

( 2 ) ON the pleadings of the parties in the Court below seven issues were framed, but they were all decided against the objector, except issue No. 4, which dealt with the locus standi of the objector, but was not pressed by the applicants in the Court below. On appeal to this Court, the main contention, which has been pressed on behalf of the appellant, is that the arbitrator was the son of the counsel lor the opposite party and this factor, according to the submission, vitiates the entire award. In the Court below, as is apparent from the Older, the plea was that the arbitrator was the brother of the counsel lor the applicants and for this reason the award could not be said to have been given by the person, who could be considered to be uninterested in the proceedirgs and was. therefore, liable to be quashed. Issue No. 7 under which arguments were addressed on this objection, was decided against the objector on the ground that there was no proper evidence to show that the arbitrator and his brother, who was said to be a counsel for the applicants, had their office in the same building. Before me, reliance has been placed on a Division Bench decision of the Court of the Judicial Commissioner of Sind in Ghulam Ulohamed Khan v. Gopaldas Lal Singh which is an authoriry for the proposition that in cases of arbitration where a person is appointed by two parties to exercise judicial duties, there should be uberrima fides on the part of all parties concerned in relation to his selection and appointment and every disclousure which might in the least affect the minds of those who are proposing to submit their dispute to the arbitration of any particular individual, as regards his selection and fitness for the post ought to be made, so that each party may have every opportunity of considering whether the reference to arbitration to that particular individual should or should not be made. In the reported case, the arbitrator was found to be related to one of the parties as the brother of his son-in-law and this was held to afford a real likelihood of an operative prejudice on his part. The existence of that relationship with one of the parties, unknown to the other, was held to disqualify him from acting as an arbitrator. On this finding, the submission was revoked. Reference has also been made to the Bench decision of the Calcutta High Court in K. P. Ghose v. Rajani Kant Chatterjee. which was relied upon by the Sind Court in the case of Ghulam Mohammad Khan. In the Calcutta case, the arbitrator was the retained pleader of the plaintiff and this effect was not known to the dafendant. In my view, merely because the arbitrator who is a practising lawyer, happens to be either a brother or a son of a lawyer, who is a counsel for one of the parties, this circumstance by itself, and without more, would not invalidate the reference on the argument that the arbitrator has an interest in one of the parties to the controversy. It is, of course, true that an arbitrator is selected by the parties as a








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