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Paramjit Singh Vs. State of Himachal Pradesh - Court Judgment

LegalCrystal Citation
CourtHimachal Pradesh High Court
Decided On
Case NumberO.M.P. No. 122 of 1974
Reported inAIR1979HP17
ActsArbitration Act, 1940 - Sections 8(1) and 30
AppellantParamjit Singh
RespondentState of Himachal Pradesh
Appellant Advocate K.D. Sud, Adv.
Respondent Advocate H.K. Paul, Adv.
DispositionPetition allowed
Cases ReferredKeshavlal v. Bai Lakshmi
.....arbitrator to be set aside. -..........parties with regard to this contract with the result that as per clause (25) of the agreement the chief engineer appointed the above referred mr. m. l. bansal as the sola arbitrator.3. at the time when mr. bansal was appointed as arbitrator, he was working as superintending engineer, 2nd circle, simla. it is found that thereafter mr. bansal was transferred as superintending engineer, 3rd circle, solan. the contract work, with regard to which thedispute had arisen, was required to be done within the jurisdiction of superintending engineer, 3rd circle, solan, and therefore mr. bansal thought that after his transfer as superintending engineer, 3rd circle, solan, it would not be proper for him to act any more as the arbitrator in this case. therefore, on 20th aug. 1973, mr. bansal addressed.....

T.U. Mehta, Ag. C.J.

1. This petition is filed under Sections 30 and 33 of the Indian Arbitration Act, 1940 for setting aside the award given by one Mr. M. L. Bansal, Superintending Engineer, 3rd Circle, Himachal Pradesh Public Works Department, Solan on 20th Nov. 1974 as Arbitrator.

2. The petitioner is a bridge contractor and had undertaken construction work of a bridge across Manal Khad as per agreement dated 23rd Dec. 1970. Disputes arose between 'the parties with regard to this contract with the result that as per Clause (25) of the agreement the Chief Engineer appointed the above referred Mr. M. L. Bansal as the sola Arbitrator.

3. At the time when Mr. Bansal was appointed as Arbitrator, he was working as Superintending Engineer, 2nd Circle, Simla. It is found that thereafter Mr. Bansal was transferred as Superintending Engineer, 3rd Circle, Solan. The contract work, with regard to which thedispute had arisen, was required to be done within the jurisdiction of Superintending Engineer, 3rd Circle, Solan, and therefore Mr. Bansal thought that after his transfer as Superintending Engineer, 3rd Circle, Solan, it would not be proper for him to act any more as the Arbitrator in this case. Therefore, on 20th Aug. 1973, Mr. Bansal addressed one letter to his Chief Engineer Shri H.C. Malhotra, The relevant portion of this letter is given as under:

'Meanwhile, I have fixed the first date of hearing for 13th and 14th Sept. 1973 at Paonta. Since I have been transferred as Superintending Engineer, . 3rd Circle, Solan, and the case pertains to the superintendence of that Circle, I will not be able to conduct the hearing in the abovementioned case under the circumstances. I will, therefore, request you to appoint some other Arbitrator in this particular case.'

On the same day, he addressed a similar letter to the parties to the dispute, that is, the present petitioner and the Executive Engineer, Bridges & Construction Division at Paonta. This letter contains the following statement:

'Since I have been transferred aa Superintending Engineer, 3rd Circle, Himachal Pradesh P.W.D., Solan, it will not be conducive for me to conduct the proceedings in the above cited case due to the fact that Bridges Construction Division, P.W.D., Paonta will be under the superintendence of that Circle.'

On 3rd Sept. 1973, the Chief Engineer under whom Shri Bansal was working gave a reply to the above referred letter as under:

'You are advised to continue as an Arbitrator in the matter.'

It is an admitted fact that thereafter Mr. Bansal proceeded with the work of arbitration and gave his award.

4. In this petition, the petitioner has, inter alia, contended that the above correspondence between the Arbitrator Mr. Bansal and his Chief Engineer shows very clearly that though Mr. Bansal was not willing to go on with the work of arbitration, he had to do so as he was compelled by his superior, namely, the concerned Chief Engineer, Simla. It wag contended that in view of these facts the award given by the Arbitrator is void ab initio.

5. There are other contentions alsoraised in this petition as a result ofwhich this Court has framed followingissues on 28th May, 1975, and has therefore, recorded evidence with reference to them:

Issue No. I: Whether the contract was wrongly terminated, as alleged by the petitioner-claimant?

Issue No. 2: Whether Shri M. L. Bansal, Superintending Engineer, could not act as Arbitrator and the award made by him is invalid?

Issue No. 3: Whether no opportunity was afforded to the petitioner-claimant to adduce evidence and the award violates a principle of natural justice and was without jurisdiction?

Issue No. 4: Whether the Arbitrator has misconducted himself or the proceedings, for the reasons stated?

Issue No. 5: Whether the award has been improperly procured or is otherwise invalid as stated?

Issue No. 6: To what relief, if any, is the petitioner-claimant entitled?

6. The first contention raised by Shri Sud, who appeared on behalf of the petitioner, was that the award given by the Arbitrator is ab initio void, because it is apparent from the above stated correspondence between him and his Chief Engineer that the Arbitrator was virtually compelled to work as such against his wish.

7. The above quoted correspondence, in my opinion, reveals beyond any shadow of doubt that after Mr. Bansal was transferred as Superintending Engineer, 3rd Circle, Solan, he felt it embarrassing to work as Arbitrator, because the work in question was required to be executed within his own Circle. His interest as Superintending Engineer, 3rd Circle, Sclan, was thus in clear conflict with the duties which he was expected to discharge as Arbitrator. Under the circumstances, Mr, Bansal was fully justified in requesting the Chief Engineer to make some other appointment of an Arbitrator. Mr. Bansal went so far as to inform even the contending parties that it would not be possible for him to go on with the work of Arbitrator. In spite of this, the Chief Engineer advised Mr, Bansal to continue as Arbitrator in the matter. The Chief Engineer being an officer superior to Mr. Bansal, the latter had to carry out his advice, and in fact he did carry out the advice against his own will. There is absolutely nothing in the record to show that the subsequent work of arbitration which Mr. Bansal had undertaken was as a result of any change inhis decision not to work as an Arbitrator. Under the circumstances, it is clear that the arbitration work which Mr. Bansal carried out after the above referred correspondence between him and the Chief Engineer was as a result of the compulsion caused by the advice given by the Chief Engineer.

8. The question, therefore, to be considered is what is the effect of the above finding. It is one of the cardinal principles of all judicial and quasi-judicial proceedings that the Judge or the Arbitrator concerned cannot be compelled to work as such. If one is so compelled, against his wish, then the decision given by him would obviously not remain the decision of a free agent. This principle is accepted by Section 8 (1) (b) of the Arbitration Act which says that if any appointed Arbitrator neglects or refuses to act or is incapable of acting, or dies and the arbitration agreement does not show that it was intended that the vacancy should be supplied, and the parties or the Arbitrator, as the case may be, do not supply the vacancy, any party may serve the other parties or the Arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy. This section, therefore, gives a statutory recognition to the principle that no Arbitrator can be compelled to work in face of his refusal to act as an Arbitrator,

The principle is recognised by several decisions, the earliest of which is Allahabad decision in Shibcharan v. Ratiram reported in (1885) ILR 7 All 20. It was held in that case that where several matters were referred to Arbitrators who refused to act and the court of tbe first instance passed an order directing them to proceed and to make award and they on the passing of such order made the award, all the proceedings taken by the Arbitrators in obedience to the order of the court directing them to arbitrate against their will would be null and void. The same view is expressed by that High Court in the subsequent case of Basdeo Mal v. Kanhaiya Lal reported in AIR 1921 All 361, wherein it is observed that it is one of the essential principles of law of arbitration that the adjudication of disputes by arbitration should be the result of the free consent of the Arbitrator to undertake the duties of arbitrating between the contending parties who have agreed to repose confidence in his judgment This view is reiterated in the Lahore decision in Lal Khan v. Kashmiri Lal reported in AIR 1930 Lah 125.

9. It was contended on behalf of tha respondent-State by Shri Paul that in this case after the Chief Engineer advised Mr. Bansal to continue as Arbitrator in the matter, the latter did continue and therefore it should be held that Mr. Bansal was subsequently persuaded to act as Arbitrator. In support of this contention reliance was placed on the Bombay decision given in Keshavlal v. Bai Lakshmi reported in AIR 1929 Bom 50. The facts of that case were slightly different, because they show that after the Arbitrators returned the proceedings to the court on the ground that plaintiffs appeared before them under protest, the court wrote back to the Arbitrators requesting them to finish the work saying that the protest did not matter, and that the court had full confidence in them. The High Court of Bombay held that this request of the court did not amount to compulsion on the Arbitrators and, therefore, the proceedings undertaken by the Arbitrators were not vitiated. In my opinion, this decision has no relevance to the facts of the present case, because these facts show that Chief Engineer who was a superior of the Arbitrator, has virtually commanded him to proceed with his work of arbitration, and therefore the Arbitrator had no other option but to proceed with the work under compulsion.

10. It was contended that it is not open to the petitioner to take up this contention in view of the fact that he has appeared before the Arbitrator during all stages of the proceedings before him and has also once sought the extension of lime under Section 28 of the Act. In my opinion, even this contention is not available to the respondent-State, because if the proceedings before the Arbitrator were void ab initio then no amount of submission to those proceedings by the petitioner would validate them. Moreover, it was open to the petitioner to go through the arbitration proceedings and challenge the award at a later stage under Section 30 of the Act,

11. Lastly, it was contended by Shri Paul on behalf of the State that the award given by an Arbitrator can be challenged only on one of the three grounds mentioned in Section 30 of the Arbitration Act, and since the present contention does not fall within any of thethree grounds, the award of the Arbitrator cannot be challenged on this ground. I find that even this contention is devoid of merits, because the third ground on which an award can be challenged under Section 30 of the Act is that the award has been improperly procured or is otherwise invalid. In this case, the award Is found to be invalid because all the proceedings taken by the Arbitrator are void ab initio in view of the fact that these proceedings were imposed upon the Arbitrator against his will.

12. Under these circumstances, I accept this petition and hold that the award given by the Arbitrator should be set aside on the ground that it is invalid. This petition is accordingly allowed without any order as to costs. It need not, however, be stated that it will be open to the Chief Engineer, if he is so advised, to make an appointment of any other Arbitrator.

13. Since the application succeeds on the above stated ground, and since it is likely that the dispute may be referred to some other Arbitrator, I find it would not be prudent or necessary to express any opinion on the rest of the issues framed in tha matter.

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