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1992 Supreme(MP) 348

A. G. Qureshi, J.
H. lshwarlal and Sons v. Hukum Chand Mills
C. R. No. 154 of 1990 (1); Decided on 27.6.1992.

Advocates:
P. B. S. Nair for applicant; D.S. Kale for non-applicant

Headnote:Arbitration Act, 1940 -- Ss.8 and 20 -- party remaining absent throughout in proceedings for appointment of an arbitrator -- arbitrator appointed -- such appointment cannot be challenged on the ground of disqualification or bias of arbitrator -- party can get it set aside when award is filed in the Court.

        ek/;LFke~ vf/kfu;e] 1940 && /kkjk 8 rFkk 20 && e/;LFk dh fu;qfDr dh dk;ZokbZ esa i{kdkj vk|ksikar vuqifLFkr jgk && e/;LFk fu;qDr && ,slh fu;qfDr e/;LFk dh fujgZrk vFkok i{kikr ds vk/kkj ij vk{ksfir ugha fd;k tk ldrk && i{kdkj U;k;ky; esa Qkby fd, tkus ij vf/kfu.kZ; vikLr djk ldrh gSA

JUDGMENT

It is not in dispute that when the petitioner did not give its consent for the appointment of the sole arbitrator, the respondent filed an application under section 8 of the Arbitration Act before the Court. A notice of the petition was issued to the non-applicant, whereupon on 18.11.1989 a telegram was received by the Court wherein the petitioner sought time of three weeks for submitting its reply but no reply was submitted and the case was fixed for 21.12.1987 and 21.1.1988. The petitioner did not appear either personally or through its counsel.

The case was, therefore, fixed for 18.2.1988. On that date also the petitioner did not make its appearance. The application for revocation was based before the lower Court on the ground that as there was no dispute between the parties the Court had no jurisdiction to appoint arbitrator under section 8 of the Act. Shri Vora is a Director of the non-applicant Mills. Therefore, he is inclined to favour the non-applicant. The application has not been filed under clause 20 of the relevant agreement. As such, the appointment of the single arbitrator is against the terms of the agreement. In any case Shri Vora being a person interested in the non-applicant, he should not have been appointed as an arbitrator. It was argued before the lower Court that there is serious dispute between the parties.

Therefore, a notice for appointment of a single arbitrator was sent to the other party. Merely because Shri Vora happans to be a director of the non-applicant Mills, it cannot be said that he cannot be appointed as arbitrator. Every opportunity was available to the applicant to appear before the Court and challenge the appointment of Shri Vora or appointment of single arbitrator but the applicant chose to remain absent. Only on the basis of an apprehension in the mind of the applicant, the order passed by the Court cannot be revocked. The learned lower Court was of the opinion that the non-applicant did not appear in the preceedings before the Court and, therefore, he cannot raise the aforesaid pleas after the appointment of the arbitrator. The Court is also of the view that no dispute was referred to Shri Vora. He has been merely appointed as a sole arbitrator for resolving the dispute between the parties and merely because he happens to be a Director of the Mills, it cannot be said that he is bias. Further more, to safeguard the interest of the parties, the order of appointment of arbitrator specifically directs the award to be filed in the Court.

Held: In view of the proceedings before the lower Court, it is manifest that the application for appointment of sole arbitrator was not opposed by the present petitioner despite being afforded opportunities to oppose the application. It appears that he all through remained absent and did not oppose the application.

Therefore, the Court was left with no option but to come to a conclusion that the opposite party is not interested in contesting the petition and the appointment of the sale arbitrator. As regards the fact that Shri Vora is a director of the company, this itself cannot be a ground for holding that he would be unfair in a corporate body. If an officer of the body is appointed an arbitrator then an inference cannot be drawn only on this ground alone. The party is always free to challange the award when filed in the Court to bring before the Court the circumstances showing the bias or unfairness of the arbitrator. A Division Bench of this Court in the case of Ramsahai v. Harishandra (AIR 1963 M P 143) ha!; held that if a party is unable to seek revocation, it can still, get the award itself set aside on the ground of misconduct of the arbitrator. It has further been held that if the arbitrator had personal disqualifications and such disqualification was known to the party at the time of the reference, then at a later stage the order of appointment cannot be revoked on the ground of personal disqualification. The Supreme Court in the case of U


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