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2023 Supreme(HP) 51
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
TARLOK SINGH CHAUHAN, VIRENDER SINGH, JJ.
Jai Inder Pal Singh – Appellant
Versus
Jasvinder Singh Narula – Respondent
Arbitration Appeal No. 5 of 2014
Decided On : 03-01-2023
Advocate Appeared:
For the Appellants : J.S. Bhogal, T.S. Bhogal.
For the Respondents: Sunil Mohal Goel, Raman Jamalta.
Point of Law: Section 14(a)(1) of Act relates to inability or incapacity of learned Arbitrator to perform his functions.
Headnote:
Civil Procedure Code, 1908 – Order 6 Rule 17 – Arbitration and Conciliation Act, 1996 – Section 34, 37, 14(a) (1) – Arbitrator - Set aside award - Aggrieved by rejection of objections filed under Section 34 of Arbitration and Conciliation Act, 1996 objector-appellant has filed instant appeal under Section 37 of Act, for setting aside judgment, passed in Arbitration Case, with a further prayer to allow application of appellant for setting aside award – Objections raised by appellant with respect to mental capacity of learned Arbitrator could not have been lightly ignored and an opportunity of establishing/ proving this fact ought to have been granted. [Para 13]
Finding of the Court: As issue of mental capacity of learned Arbitrator itself is in question and because no opportunity was granted to appellant to establish/prove this fact, order passed by learned Single Judge cannot sustain and is accordingly set aside. Since, learned Arbitrator is no longer in land of living and has left for heavenly abode, he cannot be added as a party, however, applicant which seeks to establish mental health of learned Arbitrator, being OMP is allowed and amended petition appearing at page 461 to 472 of paper book alongwith Annexure appended with un-amended petition are now ordered to be taken on record – Matter is remanded back to learned Single Judge for deciding amended application under Section 34 of Act afresh by affording an opportunity to both parties to lead evidence, more particularly, with regard to mental health of learned Arbitrator.
Result: Appeal disposed of.
JUDGMENT :
TARLOK SINGH CHAUHAN, J.
1. Aggrieved by the rejection of the objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short the “Act”) the objector-appellant has filed the instant appeal under Section 37 of the Act, for setting aside the judgment dated 24.09.2013, passed in Arbitration Case No. 40 of 2009, with a further prayer to allow the application of the appellant for setting aside award dated 16.02.2009.
2. The appellant had taken various grounds in his objections for setting aside the award and the same can broadly be enumerated as under:
(a) That the learned Arbitrator had acted without jurisdiction in making an award after re-determining the shares of the parties that was fixed under the partnership deed, which contained the arbitration agreement on the basis of which the matter was referred to arbitration. As per the partnership deed, the respondent had only 25% share in the partnership whereas the learned Arbitrator has re-determined such share to be 83.32%.
(b) that the learned Arbitrator had acted in conflict with public policy of India by allowing claims patently barred by limitation in derogation of the provisions of the Limitation Act.
(c) that the accounts of the partnership having finalized and mutually settled between the parties till the year 2004-05 no award would be made for any period prior thereto.
(d) that no dispute relating to the re-determination of the shares of the partners had been referred to arbitration and since the arbitrator had been appointed in an application under Section 9 of the Arbitration and Conciliation Act 1996, only the dispute detailed therein could be referred to arbitration.
(e) that the learned Arbitrator had not considered vital documents containing the admissions of the respondent herein relating to his share in the partnership.
(f) that the learned Arbitrator had no jurisdiction to order a rectification of the partnership deed which could be done only in a suit filed under the Specific Relief Act.
(g) that at the time of making the award the learned Arbitrator was not in proper health at the time of the award (this was later on sought to be clarified by incorporation that the arbitrator had been admitted as an indoor patient in the PGI Chandigarh w.e.f. 30.1.2009 to 5.3.2009) and that since the award was made on 16.2.200 showed that the same was procured by the respondent by unfair means or by fraud.
(h) that the petitioner having withdrawn only an amount of Rs. 54,11,573/- during the period 1992-1995, the award allegedly showing an over-drawal of Rs. 1.27 crores was perverse to an extent that it would shock the conscious of the Court.
3. It would be noticed that the ground of ill health of the Arbitrator was taken in Para 10 of the objections though erroneously numbered as Para-11 and thereafter corrected, which reads as under:
10. That the petitioner understands that the learned Arbitrator was not in the best health during the period when the award dated 16.02.2009 was passed and the impugned award seemingly has been procured by respondent by using unfair means. On this ground also the award is in conflict with the public policy.
4. The respondent filed the reply, wherein Para-11, reads as under:
Ground 11: That the contents of this paragraph of the application are emphatically denied as the same are contemptuous and amount casting personal aspersions on the Ld Arbitrator, in a veiled manner, upon the integrity of the Ld. Arbitrator, who is a retired Judge of the Hon'ble High Court of Himachal Pradesh. It is submitted that the present respondent had received a letter dated 21-01-2009 from the Ld. Arbitrator containing a direction to submit the requisite stamp papers as the award was finalized. The respondent had sent the stamp papers immediately to the Ld. Arbitrator as per the directions. It is denied that the impugned award has been procured by the respondent by using unfair means, as alleged by the petitioner out. of sheer frustration. Such all
