GURU NANAK FOUNDATION Vs. RATTAN SINGH AND SONS

JUDGEMENT

(1.) INTERMINABLE, time consuming, complex and expensive court procedures impelled jurists to search for an alternative forum, less formal, more effective and speedy for resolution of disputes avoiding procedural claptrap and this led them to ARBITRATION AND CONCILIATION ACT, 1940 ('Act' for short). However, the way in which the proceedings under the Act are conducted and without an exception challenged in Courts, has made lawyers laugh and legal philosophers weep. Experience shows and law reports bear ample testimony that the proceedings under the Act have become highly technical accompanied by unending prolixity, at every stage providing a legal trap to the unwary. Informal forum chosen by the parties for expeditious disposal of their disputes has by the decisions of the Courts been clothed with 'legalese' of unforeseeable complexity. This case amply demonstrates the same.

(2.) A contract dated 4/04/1972 for construction of a building was entered into between the appellant and the 1st respondent. Clause 47 of this contract incorporated an arbitration agreement between the parties. The differences and disputes having arisen between the parties to the contract, the 1st respondent moved an application numbered as Suit No. 400 (A) of 1974 in the Delhi High Court under S. 20 of the Act seeking a direction calling upon the appellant to file the arbitration agreement in the court and for a further direction to refer the disputes and the differences covered by the arbitration agreement to the arbitrator to be appointed by the Court. By the order dated 14/08/1974 the High Court appointed the 2nd respondent Shri M. L. Nanda, retired Chief Engineer, CPWD as the sole arbitrator to examine the differences and the disputes between the parties and to make an award in respect of them. When the reference was pending before the arbitrator, a petition No. OMP 133 of 1975 was moved by the appellant in Delhi High Court seeking directions purporting to be under Ss. 5 and 11 of the Act for the removal of the 2nd respondent as arbitrator. This petition made by the appellant failed as per the order dated Dec. 23, 1975. The appellant having been aggrieved by the dismissal of the petition moved a Special Leave Petition (Civil) No. 882 of 1976 in this court questioning the correctness of the dismissal of the petition for removal of the arbitrator. The special leave, petition came up before a bench of this court. Special leave to appeal was grated and Civil Appeal No. 17 of 1977, arising out of the special leave petition was heard by a three-Judge Bench of the Court. Khanna, J. speaking for the Court made an order dated 5/01/1977 wherein by the consent of the parties the 2nd respondent Shri M. L. Nanda was removed as arbitrator and the 3rd respondent Shri C. P. Malik retired Chief Engineer, CPWD was appointed as the sole arbitrator to settle the disputes between the parties. Usual direction for the remuneration of the arbitrator was made. The 3rd respondent was directed to commence the arbitration proceedings within 15 days from the date of the order of the court and to dispose of the same as expeditiously as possible.

(3.) After hearing both the parties, this court made the following order. As it has some impact on the outcome of this petition, it is reproduced in extenso :