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Skabeo (P) Ltd. Vs. the State of West Bengal - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberAward Case No. 173 of 1973
Judge
Reported inAIR1974Cal307
ActsArbitration Act, 1940 - Sections 5 and 11
AppellantSkabeo (P) Ltd.
RespondentThe State of West Bengal
Respondent AdvocateBanerjee, Adv.
DispositionApplication allowed
Cases ReferredRe. Arbitration Hindustan Steel v. Apcejay
Excerpt:
- .....court passed on july 31, 1973 by s. k. roy chow-dhury, j. the order was as follows :--'the court: time to make and file the award by the arbitrator is extended till 15th november, 1973. arbitrator to make as many sittings as possible so as to complete the arbitration proceedings within time. this extension is peremptory unless good cause is shown. arbitrator and all parties to act on a signed copy of the fiat of this order.'3. upon receipt of the copy of the order the arbitrator wrote to the petitioner's solicitor as follows :--'sir, under advice of my government pleader, i am to inform that necessary action on my part will be taken on receipt of 'certified copy' of the hon'ble court's order.' copies of the said letter were forwarded for information to (1) the executive engineer,.....
Judgment:
ORDER

Ramendra Mohan Datta, J.

1. This is an application under Sections 5 and 11 of the Arbitration Act, 1940, inter alia, for an order that leave be given to revoke the authority of the appointed Arbitrator, Sri P. K. Dey, a Superintendent Engineer, Government of West Bengal and for his removal from further acting as such Arbitrator. The petitioner asks for the appointment of some other competent person as Arbitrator in the place and stead of Sri Dey.

2. According to the petitioner, the Arbitrator has misconducted himself by expressing his unwillingness and/or refusal to proceed with the arbitration on a signed copy of the minutes of the order of this Court passed on July 31, 1973 by S. K. Roy Chow-dhury, J. The order was as follows :--

'The Court: Time to make and file the Award by the Arbitrator is extended till 15th November, 1973. Arbitrator to make as many sittings as possible so as to complete the arbitration proceedings within time. This extension is peremptory unless good cause is shown. Arbitrator and all parties to act on a signed copy of the fiat of this order.'

3. Upon receipt of the copy of the order the Arbitrator wrote to the petitioner's Solicitor as follows :--

'Sir,

Under advice of my Government Pleader, I am to inform that necessary action on my part will be taken on receipt of 'certified Copy' of the Hon'ble Court's order.' Copies of the said letter were forwarded for information to (1) The Executive Engineer, Kangsavati Canals Division No. 2, Khatra, Bankura, (2) Chief Engineer (I) West Bengal, and (3) Deputy Secretary I and W Department, West Bengal.

4. The petitioner's Solicitor, Mr. Kar, wrote back on August 28, 1973 to the following effect :--

'Dear Sir,

Your letter No. 1138/TM/117 dated 23-8-1973.

The Court has empowered you to proceed with the arbitration on a copy of the minutes of the order which has been countersigned by the Court Officer as evidence of genuineness of the order made. Formal drawing up of the order and obtaining of the certified copy will lake long time and this period should not be wasted. It may be that it will not be available before the time runs out.

You are therefore requested to act on the signed copy as directed by the Court.

Yours faithfully,

Sd/-

R. C. Kar.'

5. On 8th September, 1973. the Arbitrator. Sri Dcy. wrote to the Superintendent Engineer (I), Kangsabati Circle, Bankura. in-sisling on the certified copy being sent and wrote as follows :--

'Sir.

The certified copy of the Hon'ble Court's order may kindly be sent for my necessary action.'

Copies of the said letter were sent to the said authorities as mentioned above.

6. On 22nd September, 1973, Mr. Kar again wrote to the Arbitrator to the following effect :--

'Dear Sir,

This has reference to your Memo No. 12091/IM-117 dated 8th September, 1973.

I can do no better than to refer you tomy earlier letter to you dated the 28thAugust, 1973, on the subject which willspeak for itself. A copy of the said letter isagain enclosed for your ready reference. Itis unfortunate that in spile of directions contained in the order you are not proceedingwith the reference.Enclo :--

Yours faithfully,

Sd/-

R. C. Kar.'

7. Tt appears that the Arbitrator suddenly changed his mind sometime during the end of September, 1973 and expressed his desire to proceed in the matter but by that time the extended time was nearly at an end and a long time was allowed to be wasted because of such unreasonable and whimsical attitude of the arbitrator. On 19th October, 1973, the petitioner's Solicitor stated that the Court was closed and consequently the Solicitor's office remained closed during the Long Vacation.

8. On 14th November, 1973. when the Court reopened the notice of motion was taken out. A day thereafter the Arbitrator's time to make the Award expired.

9. It clearly appears that the conduct of the Arbitrator was such that he was determined not to proceed with the arbitration in spite of the Court's peremptory order directing that the arbitration must be completed within the time extended by the Court.

10. The Arbitrator sought independent legal advice behind the back of the parties, which the Arbitrator was not entitled to and since he had acted in that manner it clearly amounted to misconduct on his part in conducting the proceedings which he was entrusted with by the parties. In his letter dated 23rd August, 1973, it is clearly stated that he sought advice from his Government Pleader. It is difficult to appreciate how an Arbitrator, who was to act impartially, should seek the advice of a lawyer and specially of a Government lawyer without referring the matter to the parties themselves. It seems that he totally forgot his position that as an arbitrator he was made the judge of all facts and law and he could not have any independent legal advice without referring the same to the parties beforehand.

11. Mrs. Banerjee, appearing on behalf of the respondent, the State of West Bengal, contends that the Arbitrator had no mala fide motive and he intimated to the parties that he had sought such advice from a lawyer. To my mind, that is no excuse at all. The Arbitrator is not expected to take advice from any lawyer in the matter where he is to exercise his own discretion and to give his own decision. Such discretion must be exercised in a reasonable and fair manner and such decision must be his own and independent of any outside legal advice. If he has any doubt as to what was to be done under the circumstance, he could have placed the matter before the parties and found out the exact position as to whether he could proceed under the circumstance on a signed copy of the minutes of the order of the Court. He should have appreciated that the Court desired that the matter was to be expcditiously disposed of and time was not to be wasted like that and that on that basis a peremptory order was made by the Court. By his own conduct he did not allow the matter to proceed. The said order was made by S. K. Roy Chowdhury, J., in an application under Section 28 of the Arbitration Act, 1940, for extension of time for the Arbitrator to make the Award and the said order was made in the presence of the Government Solicitor, Mr. N. C. Mitra. If the Arbitrator had any doubt about this Court's order, he could have written to the said Government Solicitor with a copy to the petitioner's Solicitor enquiring into the order regarding the extension granted by the Court. Instead of taking any such step, he sought independent legal advice on this point.

12. I am clearly of the opinion that the Arbitrator misconducted himself and the proceedings before him and such misconduct should call for his removal as an Arbitrator under the provisions of Section 11 read with Section 5 of the Arbitration Act, 1940. He has failed to use reasonable despatch in proceeding with the reference. In spite of repeated letters from Mr. R. C. Kar explaining the implication of the Court's order, his con-duct was such that it amounted to refusal to carry out or obey the Court's order. In my opinion, an order should be made as prayed for.

13. Mrs. Banerjee appearing on behalf of the State of West Bengal contends that since the time has expired, the Arbitrator has become functus officio and there cannot now be any question of his removal from acting as such arbitrator. In my opinion, this is not an application for extension of time under Section 28 of the Arbitration Act. All that the Court has been called upon to decide before the time expired, is whether in the facts and circumstances of this case there should be an order under Section 11 read with Section 5 of the Arbitration Act for removal of the arbitrator and for revoking his authority.

14. Mrs. Banerjee has referred to me the case of Re. Arbitration Hindustan Steel v. Apcejay (Pvt) Ltd., reported in : AIR1967Cal291 . In that case the time of the arbitrators to make the award expired and thereafter one of the parties filed a suit. The respondent therein served a notice on the arbitrator under Section 35 of the Arbitration Act but ultimately did not make any application under Section 34 for stay of the suit. On the contrary the respondent filed its written statement. On such facts, that application was made for the removal of the arbitral ors and for revoking their authority and for a declaration that the arbitration agreement had ceased to have any effect with respect to the differences referred to the said arbitrators and for other reliefs. On those facts, the learned Judge observed that there could be no question of revoking the authority of an arbitrator when in law the arbitrators did not exist and/or could not function and accordingly prayers for removal and revocation of the authority on those grounds were held to be misconceived.

15. In my opinion, on the facts and circumstances of this case the case reported in : AIR1967Cal291 is distinguishable inasmuch as in this case on the date of the application the time to make the award by the arbitrator did not expire. The Court's decision has been sought for to find out whether in future this arbitrator should proceed with the arbitration or not. Tt might very well be that in future an extension might be obtained and if that would be so done, the present arbitrator will be entitled to proceed with the arbitration even though he is guilty of misconduct. I accordingly take the view that a decision ought to be given on the materials placed before me.

16. I accordingly give leave in terms of prayer fa) to revoke the authority of the appointed arbitrator Sri P. K. dC and I revoke his authority. There will also be an order in terms of prayer (b) removing the said Sri P. K. De from further acting as such Arbitrator. The question of the appointment of any arbitrator in the place and stead of Sri P. K. De is left open and suitable orders would be passed by this Court a week hence. In the meantime, the parties are directed to come ready with an agreed name from the Government panel of arbitrators. In default, the Court will make the appointment on the adjourned date.

17. Costs in the arbitration proceedings.


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