1989 Supreme(Ori) 27
High Court Of Orissa
G. B. PATTANAIK
SRUSTIDHAR MOHANTY - Appellant
Versus
STEEL AUTHORITY OF INDIA LTD. - Respondent
CIV. REVN. 7 Of 1985
Decided On : 02/21/1989
P.KAR, R.MOHANTY, S.Mishra
An arbitrator's delay in making an award does not render the arbitration proceeding invalid if the parties consent to the extension of time and participate in the proceedings. The arbitrator can enlarge time with the parties' consent. Non-maintenance of an order sheet by the arbitrator does not amount to misconduct. Apprehension of bias based solely on the arbitrator being an employee of one of the parties is not sufficient for his removal unless it is reasonable and well-founded.
Headnote:
ARBITRATION - REMOVAL OF ARBITRATOR - GROUNDS - DELAY IN MAKING AWARD - EXTENSION OF TIME - CONSENT OF PARTIES - MISCONDUCT - NON-MAINTENANCE OF ORDER SHEET - APPREHENSION OF BIAS - EMPLOYEE OF OPPOSITE PARTY.
Fact of the Case:
Petitioner and opposite party entered into an agreement for running a canteen. Disputes arose between the parties, and the arbitrator was appointed as per the arbitration clause in the agreement. The petitioner apprehended that he would not get fair dealing from the arbitrator and filed an application for his removal under Section 11 of the Arbitration Act. The application was rejected by the Subordinate Judge, and the petitioner filed a revision in the High Court.
Finding of the Court:
The High Court held that the arbitrator did not become functus officio after the expiry of four months from entering upon the reference. The parties' consent to the extension of time and participation in the proceedings enabled the arbitrator to make an award. The arbitrator was entitled to enlarge time with the parties' consent. The non-maintenance of an order sheet by the arbitrator did not amount to misconduct. The apprehension of bias based solely on the arbitrator being an employee of one of the parties was not reasonable or well-founded.
Issues: 1. Whether the arbitrator's delay in making the award rendered the arbitration proceeding invalid? 2. Whether the arbitrator had the authority to extend the time for making the award without the parties' consent? 3. Whether the arbitrator's non-maintenance of an order sheet constituted misconduct? 4. Whether the petitioner's apprehension of bias based on the arbitrator being an employee of one of the parties was sufficient for his removal?
Ratio Decidendi: 1. The arbitrator does not become functus officio after the expiry of four months from entering upon the reference. The parties' consent to the extension of time and participation in the proceedings enabled the arbitrator to make an award. 2. The arbitrator was entitled to enlarge time with the parties' consent. 3. The non-maintenance of an order sheet by the arbitrator did not amount to misconduct. 4. The apprehension of bias based solely on the arbitrator being an employee of one of the parties was not reasonable or well-founded.
Final Decision: The High Court dismissed the revision petition and directed the arbitrator to immediately take up the proceedings and dispose of them as expeditiously as possible.
G. B. PATTANAIK, J.
( 1 ) THE order of the Subordinate Judge dt. 29-9-84 rejecting the petitioner's prayer to remove the arbitrator is being challenged in this revision. The petitioner entered into an agreement with opposite party for running a canteen. Disputes having arisen between the parties, invoking the arbitration clause in the agreement, opposite party 2 was appointed as an arbitrator. The petitioner apprehended that he would not get fair dealing from the arbitrator and accordingly he filed an application for removal of the arbitrator u/s. 11 of the Arbitration Act. But that application was rejected by the Subordinate Judge against which the petitioner filed a revision in this Court which was numbered as C. A. No. 466/81. The Civil Revision was dismissed by this Court by order dt. 28-7-83 on the ground that though misconduct was alleged against the arbitrator but the arbitrator had not been made a party. The petitioner thereafter filed a fresh application for removal of the arbitrator, inter alia, on the ground that the arbitrator did not act with reasonable despatch and having entered into the reference in 1980 has not been able to pass an award. It was also urged that the arbitrator unilaterally extended time after expiry of four months of the date of entering into the reference which is without jurisdiction. Misconduct on the part of the arbitrator was also alleged in the arbitration proceeding itself. Objections were filed on behalf of the opposite parties.
( 2 ) ON consideration of the materials on record, the learned Subordinate Judge rejected the petitioner's prayer for removal of the arbitrator. Hence the petitioner has approached this Court.
( 3 ) MR. Kar appearing for the petitioner raised the following contentions : - (I) Under First Schedule, Cl. 3 of the Arbitration Act, an arbitrator is required to submit his award within four months from the date of entering into the reference and the same not having been done, the further continuance of the arbitration proceeding is illegal and without jurisdiction; (ii) In view of S. 22 of the Abitration Act, the arbitrator has no jurisdiction to extend time unless there is consent of both parties. The petitioner not having consented to the unilateral extension is without jurisdiction; (iii) Non-maintenance of an order sheet of the proceeding itself amounts to misconduct and, therefore, the arbitrator is liable to be removed on that score; (iv) The arbitrator being an officer of opposite party 1, the petitioner entertains a reasonable apprehension in his mind that he would not get justice in the hands of the arbitrator and such reasonable apprehension in the mind of the petitioner is sufficient for removal of the Arbitrator.
( 4 ) MR. Mohanty, the learned counsel for the opposite parties, on the other hand, contends that though the arbitrator is required to pass an award within four months from the date of entering upon the reference, yet the arbitrator does not become functus officio as soon as the time for making an award is over. The learned counsel further contends that the reason for delay, as would appear from the order sheet itself is the request by the petitioner to adjourn the proceedings on several occasions and, therefore, the petitioner having obtained time cannot challenge the arbitration proceeding. It is further urged that the power to enlarge time vests with the Court and in fact the Subordinate Judge having extended time by order dt. 30-11-84, there is no illegality in the arbitration proceeding. So far as nonmaintenance of order sheet is concerned, the learned counsel for the opposite parties contends that though the arbitrator has not maintained a regular order sheet like a court of law, but on each date of hearing independent orders have been passed and copies thereof have been communicated to the parties keeping one copy in the file and that would be sufficient for coming to a conclusion that the arbitrator has not acted illegally or unfairly. S