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The General Manager Kalinga Iron Works (Spun Pipe Plant) Vs. B. Rajkumar Patra - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberCivil Revision No. 582 of 1982
Judge
Reported in60(1985)CLT428; 1985(II)OLR363
ActsArbitration Act, 1940 - Sections 14(2), 30 and 33; Arbitration Rule - Rule 13(11); Code of Civil Procedure (CPC) , 1908 - Sections 115; Orissa High Court Rules
AppellantThe General Manager Kalinga Iron Works (Spun Pipe Plant)
RespondentB. Rajkumar Patra
Appellant AdvocateG. Rath, N.C. Panigrahi and B.K. Nayak
Respondent AdvocateS. Das, A. Bagchi and Ashok Mohanty
DispositionPetition allowed
Cases ReferredState of Orissa v. Gangaram Chhapolia and Anr.
Excerpt:
.....18.6.1982 resulting in reduction of pay of employee on promotion held, it is not legal. statutory rules cannot be altered or amended by such executive orders or circulars or instructions nor can they replace statutory rules. - the note of the day to day proceeding by the arbitrator, the memorandum of inspection and the documents of the like nature would be necessary. 10. on the aforesaid analysis, i am satisfied that rejection of the application of the petitioner was not appropriate and the said application has to be allowed......or a signed copy thereof to be filed in court in the manner prescribed in rule 3.(ii) where an award is filed by the arbitrators or umpire under sections 14(2) of the act, they shall send to the court under sealed cover the award or a signed copy thereof together with any proceedings or depositions and documents which may have been taken and proved before them and the opinion pronounced by the court on the special case under sections 14(3) of the act, if any, together with the full address of all the persons who are parties in the arbitration proceedings. they shall also send with the award a copy of the notice given to the parties concerned under sections 14(1) of the act together with an affidavit of service of such notice and of attestation of their signatures on the award, if the.....
Judgment:

S.C. Mohapatra, J.

1. General Manager of a factory belonging to a State Public Sector Undertaking is the petitioner in this Civil Revision, which arises out of an order of the Subordinate Judge, Champua, refusing the prayer of the petitioner to call for the records from the Arbitrator.

2. By order dated 17. 7. 1980 in Misc. Case No. 78 of 1979, the Subordinate Judge, Keonjhar, in exercise of power under Section 8(2) of the Arbitration Act, 1940 ( hereinafter referred to as the 'Act') appointed Shri Prananath Bhuyan, Advocate, Keonjhar,to settle the disputes between the petitioner and the opposite party. The opposite party was a works contractor executing the work for the petitioner. The Arbitrator decided the dispute on the basis of the documents filed, oral evidence recorded and his local inspection awarding Rs. 3, 70,000/- to the claimant. He also awarded pendente lite interest @ 10% from 15. 1. 1979 on the basis of the submission of the counsel for the claimant opposite party since the counsel for the petitioner did not raise any objection. The Arbitrator made the Award and signed it on 25. 2. 1982 on a stamp paper supplied by the opposite party which the opposite party had obtained from a stamp vendor of Bhubaneswar on 23. 2. 1982. The Award was filed in the Court of the Subordinate Judge, Keonjhar, on 25 2. 1982 on the very day it was signed. No notice of the making and signing of the Award was given to the parties as provided in Section 14(1) of the Act.

3. On receipt of the Award, a suit was registered, numbered as O.S. No. 11 of 1932 fixing 16. 3 1982 for objection. No notice was, however, sent by the Court though directed. However, the petitioner and the opposite party appeared on the date fixed. A memorandum was filed on behalf of the opposite party to transfer the case to the newly established Court of Subordinate Judge at Champua within whose jurisdiction the factory is situated. The objection filed by the petitioner under Sections 30 and 33 of the Act in the Court of Subordinate Judge, Keonjhar, was registered as Misc. Case No 21 of 1982 after the case was transferred to Champua. The suit was renumbered as T. S. No. 56 of 1982 of that Court.

4. Petitioner filed an application on 12. 7. 1982 to call for entire case record of Misc. Case No. 78 of 1979 of the Court of Subordinate Judge, Keonjhar, in which the Arbitrator was appointed under Section 8 of the Act, and to direct the Arbitrator Shri Prananath Bhuyan to send the records of the Arbitration proceeding conducted by him to enable him to satisfy the Court on the objection filed by him. This application having been rejected by the impugned order,the present Civil Revision has been filed.

5. Relying upon the decision reported in 45(1978) C. L. T. 106 (The Board of Trustees, Paradeep Port Trust v. M/s. Radio Foundation Engineering Ltd., and Ors.), Mr. G. Rath, the learned counsel for the petitioner submitted that the learned Subordinate Judge exercised his jurisdiction with material irregularity in rejecting the application to direct the Arbitrator to send all records and proceedings as provided under Section 14(2) of the Act and Rule 13(ii) of the Rules made by this Court under the Act.

6. Section 14 of the Act reads as follows :

'14 Award to be signed and filed:

(1) When the arbitrators or umpire have made their award, they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration and award.

(2) The arbitrators or umpire shall, at the request of any. party to the arbitration agreement or any person claiming under such party or if so directed by the Court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed In Court, and the Court shall thereupon give notice to the parties of the filing of the award.

(3) Where the arbitrators or umpire state a special case under Clause(b) of Sections 13, the Court, after giving notice to the parties and hearing them, shall pronounce its opinion thereon and such opinion shall be added to and shall form part of the award'

Rule 13 of the Rules made by this Court under the Act reads as follows:

'Rule 13. (i) The Arbitrators or umpire or any of the parties to the arbitration may cause an award or a signed copy thereof to be filed in Court in the manner prescribed in Rule 3.

(ii) Where an award is filed by the Arbitrators or umpire under Sections 14(2) of the Act, they shall send to the Court under sealed cover the award or a signed copy thereof together with any proceedings or depositions and documents which may have been taken and proved before them and the opinion pronounced by the Court on the special case under Sections 14(3) of the Act, if any, together with the full address of all the persons who are parties in the arbitration proceedings. They shall also send with the award a copy of the notice given to the parties concerned under Sections 14(1) of the Act together with an affidavit of service of such notice and of attestation of their signatures on the award, If the sealed cover is sent by post, it shall be sent under registered cover, acknowledgement due. The award so filed shall form part of the record.

(iii) Where the award is filed by a party to the arbitration under Clause (2), any patty to the arbitration may move the Court to direct the arbitrators or umpire to produce before it any proceedings, depositions or documents which may have been taken and proved before them together with the record of the arbitration which may be in their possession.'

7. Referring to a decision of the Supreme Court reported in A.I.R. 1975 S. C. 1259 ( K. P. Poulose v. State of Kerala and Anr.) this Court has held in 45 (1978) C. L. T. 106 {supra) that if the Arbitrator Ignores material documents to arrive at a just decision to resolve the controversy between the parties, it would amount to legal misconduct.

8. Misconduct of the Arbitrator may be legal or factual. Whether the Arbitrator has misconducted himself in a proceeding would be an inference from proved facts and circumstances. The observation of this Court in a decision reported in 54(1982) C. L. T. 214 ( State of Orissa v. Gangaram Chhapolia and Anr.) throws much light on the present day misconduct of Arbitration. In paragraph at page 220 it has been observed :

'......If one were asked 'what afflicts the State of Orissa ?'.

The answer could be 'inter alia, the malady of the racket of arbitration.' Arbitration of late is being considered as a sure way to over night riches and affluence. It has become a big business. Should not a Judge take note of 'the felt necessities of the time ?. He can no longer be impervious to the winds that blow outside. Leaving the seclusion of his ivory tower, he should come out to the streets to feel the total push and pressure of the cosmos'.........'

It was further observed in paragraph 9 at pages 222-223 :

'......A nagging and disturbing thought, however, persists. Can a rule prevalent in a different time and in a different clime be considered to be healthy and wholesome for us today a time of eroded values and devalued norms. Or should the law cater to the needs of the present day community.

Vast changes are taking place with regard to concepts and systems. Should we continue to hold on to a principle because it is in vogue for crors of years or should we take cognizance of the changed times and the current demands and alter the rule, the law. The horizon of the concept of natural justice is widening day after day...'

What has been observed in context of the State of Orissa is more true in respect of public sector undertakings in the control of the State of Orissa.

9. It is true that the scope of the Court to interfere with a non-speaking Award is very limited. However an Arbitrator who is a Judge of a choice of the parties is no exception to fair-play. Though the minimum fair-play expected is observance of the principle of natural justice, something more is expected of a parson occupying some position in the society on account of his avocation, training and background. Though a non-speaking Award given by such a person will not ipso facto become void, the Court, which appointed him on account of his position and capacity, would examine the Award to consider if the same is reasonable. Where the Arbitrator does not give the parties a chance to produce the materials or does not give opportunity of being heard, or where even the most liberal view of the materials on record cannot lead a reasonable man to draw an inference as has been drawn by the Arbitrator, the Court will not hesitate to set it aside. A Court exercising the power under Sections 30 of the Act is not merely to put the rubber stamp of validity to an Award. For examination of the reasonableness and validity of the Award, therefore, the documents and the evidence recorded would be necessary. The note of the day to day proceeding by the Arbitrator, the memorandum of inspection and the documents of the like nature would be necessary. With the said object Sections 14 of the Act provided that the Arbitrator shall cause the documents and evidence to be filed together with the Award.

10. On the aforesaid analysis, I am satisfied that rejection of the application of the petitioner was not appropriate and the said application has to be allowed. I direct that the learned Subordinate Judge shall call for the documents from the Arbitrator including the day to day proceeding if maintained by him and the memorandum of local inspection prepared by him.

11. In the result, the Civil Revision is allowed. No costs.


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