BHAGWAN INDUSTRIES LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) JUDGMENT -

(2.) THIS is a petition under Sections 32 and 33 read with Section 35 of the Arbitration Act, seeking revocation of the arbitration agreement existing inter-se parties and for declaring the same as void and invalid.

(3.) THE sunn and substance of the case of the petitioner assailing the validity of the arbitration clause is that it confers unilateral power on the Director General of Supplies and Disposals to appoint any officer of the Law Ministry of the Union of India as the sole arbitrator and this is arbitrary, mala fide and against the principles of natural just'.ce. Such an employee of the Government acting as an arbitrator in its own cause is bound to carry bias in favour of his employer, and even otherwise cannot independently act without fear and favour, as his career itself depends upon the goodwill of the employer and is subject to the latter's constant vigil. THE exclusion of the petitioner in the choice of the arbitrator and the incumbence enjoined that if no officer of the Law Ministry is available for acting as an arbitrator, the arbitration clause would not be operative, amply brings out the one sided clause directed by the respondent, and this shows that they have confidence in their own employee only. THE petitioner had little choice to not agree to such a clause as it had to undertake contracts in the course of its business, and in the present state of set-up in the country in which large scale commercial and semi-commercial activities are embarked upon by the Government, the citizen has to willy-nilly agree to the dictates of such arbitrary clauses in order to earn his livel.hood and operate his business.