LUCKY HOME CO OPERATIVE GROUP HOUSING LIMITED Vs. SHANTI DEVELOPERS AND PROMOTERS INDIA PRIVATE LIMITED

JUDGEMENT

(1.) THIS is a petition filed on behalf of M/s. Lucky Home Co-operative Group Housing Society (hereinafter referred to as 'the petitioner society') under Sections 5. 8. I 1, 12 and 31 of the Arbitration Act. 1940 against M/s. Shanti Developers & Promoters (India) Private Limited (hereinafter referred to as 'the contractor') and Shri A. Sankaran. the arbitrator and in this petition it has been prayed that the authority of the arbitrator be revoked and another arbitrator, preferably a retired judge of this Court he appointed for adjudication of the claims and counter claims of the parties. Alongwith the aforesaid petition, die petitioner society had also filed an application bearing IA No. 9548/92 and after hearing the learned counsel for the parties on 31st July, 1992, it was directed that the arbitrator would not make and publish the award and lie would proceed with the matter and the petitioner society may also participate in such proceedings. Notice of this petition was given to the respondents and a detailed reply has been filed on behalf of the contractor wherein averments and allegations made by the petitioner society have been controverted. The petitioner society has filed a rejoinder also.

(2.) BRIEFLY stated, the facts of the case are that respondent No.2. who was a retired Additional Director General of Works, was appointed as the sole arbitrator in terms of orders dated 18th February. 1991 passed by a learned Judge of this Court in Suit No.749/ 91 for adjudication of the disputes between the parties. The fee of the arbitrator was fixed atRs.10,000.00 tohepaid by the parties equally. In terms of the orders of the same date passed in IA 1045/91, Mr. S.P. Kapil, retired Chief Enginner of

(3.) THE learned counsel also drew my attention to THE observations made by THE arbitrator on 20th April, 1992 tliat, "die claimants shall get award of several lakhs of rupees, THEy should pay Rs.300.00 more on behalf of THE respondents." He submitted that from THEse observations it was found that THE arbitrator was biased against THE petitioner society. He furTHEr submitted that regarding THEse observations THE petitioner society had filed three affidavits including THE affidavit of THEir counsel before THE arbitrator. He. THErefore, contended that such an observation amounted to misconduct on THE part of THE arbitrator. In support of this submission THE learned counsel placed reliance on a judgment of Jammu & Kashmir High Court in THE case of M/s. Mohinder Singh and Co. vs. The Union of India and oTHErs, AIR 1972 J&K 63. He furTHEr submitted that bias need not be established but existence of circumstance which is likely to bias THE arbitrator is enough for revoking tlie authority of THE arbitrator. In support of this submission he placed relaince on a judgment of Kerala High Court in THE case of Koshy vs. K.S.E. Board, AIR 1984 Kerala 23. Learned counsel also referred to Russell on Arbitration Twentieth Edition at pages 143, 146, 152, 153. 155 and 157. The learned counsel also referred to page 1 10 of THE said book and submitted that if a party discovers misconduct on THE part of THE arbitrator after his appointment, such aparty could approach THE court for revocation of his authority before THE award was made. THE learned counsel alos submitted that THE arbitrator was bound to follow and apply THE law and if he does not, he can be set right by THE Court. He furTHEr submitted that since THE arbitrator lias rejected THE application filed on behalf of THE petitioner society to summon its witnesses, his authority should be revoked by this Court. In support of this contention he relied on a judgment of THE Supreme Court in Thawards Pherumaland anoTHEr vs. Union of India, AIR 1955 SC 468.