The court ruled that an arbitrator's failure to disclose a conflict of interest and the claimant's inaction regarding necessary permissions invalidated the award, violating public policy.

CAV JUDGMENT

(PER : HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE SUNITA AGARWAL)

1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (in short as the "Arbitration Act' 1996") has been preferred by the original claimant in arbitration case, viz. CMA No. 05/2012 before the arbitral tribunal, viz. the learned sole arbitrator who has declared the award dated 24.10.2016.

2. We may note, at the outset, that the order dated 20.10.2016 passed by the learned sole arbitrator in rejecting the applications Exhibit 44 and 15 others has also been subjected to challenge before the civil court under Section 34 of the Act, 1996 apart from the impugned award dated 24.10.2016. In all, 16 arbitration references being CMA Nos. 5 to 20 of 2012 were decided by the learned arbitrator vide common award dated 24.10.2016 and the award reads as under :-

"(1) It is hereby declared that the Power of Attorney dated August 31st 2007 Exh. 10 executed by respondent in favour of the claimant is irrevocable and cannot be revoked. It is declared that cancellation of Power of attorney by the respondent is bad in law and Power of attorney Exh. 10 remains in force.

(2) Claimant is directed to put in fixed deposit for a period of three months in any nationalized Bank in Ahmedabad an amount of Rs. 3,63,825/- (Rupees Three Lac Sixty Three Thousand Eight Hundred Twenty Five only) being balance of sale consideration of the land bearing Survey No. 802 admeasuring 6,374 Sq. mt. situate at Mouje Sachana, Taluka Viramgam, District Ahmedabad of this claim within two months from the date of receipt of this order.

(3) Claimant shall communicate the fact of such fixed deposit with a Xerox copy of such fixed deposit to the respondent by registered post A. D.

and speed post.

(4) On receipt of the communication of Fixed Deposit from the claimant, the respondent is directed to make an application to the competent authority for conversion of land to non-agricultural land from agricultural land within 15 days from the date of receipt of the communication of fixed deposit.

(5) On receipt of necessary requisite permission for change of Tenure and N. A. use, Respondent shall communicate the same to claimant in writing at the earliest by Registered Post A.D. and Speed Post and execute Registered Sale-deed.

(6) In case of default, parties may take legal action for the further implementation of Award.

(7) Respondent shall pay cost of claimant and bear his own cost quantified at Rs. 14,10,000/- (Rupees Fourteen Lacs Ten Thousand only) (amount split up Rs 10.50,000/- Fees of sole arbitrator, Rs. 1,05,000/- remuneration of administrative assistant, Rs. 1,05,000/- Miscellaneous Expenses and Rs.1,50,000/- advocate's fees) for all the consolidated matters."

3. A perusal of the award indicates that the claimant, viz.

the appellant herein, a Company incorporated under the provisions of the Companies Act, 1956 promoted by K. Raheja Corporation, Mumbai, is a major developer engaged in the business of group housing, commercial and industrial developments across India. The claimant claims to be the purchaser of lands from four respondents/owners of different survey numbers, who have been termed as vendors no.1, 2, 3 and 4 in the award. There were 16 claim petitions consolidated for 16 parcels of lands owned by four different owners and the dispute was with respect to the purchase of the said property after they were converted into Non-agricultural purposes by way of registered agreements to sell entered into by the claimant with the respondents on different dates over a period of one year between the years 2007-2008, as is evident from the table.

4. A perusal of the Deed of agreements to sell given in the table indicates that 16 agreements to sell were executed on different dates between 29.03.2007 to 25.03.2008. It was the case of the claimant-appellant herein before the learned arbitrator that the respondents executed in the form of agreements to sell, an irrevocable Power of Attorney, appoi