KAYES CONSTRUCTIONS Vs. UNION OF INDIA

JUDGEMENT

(1.) O.P.No.21 of 1989 filed by the plaintiff under Sec.20 of the Indian Arbitration on the file of Sub-court, Madurai was transferred to the file of this Court for determination as per order dated 3.8.1990 made in Application No.2228 of 1990.

(2.) THE plaintiff is an Engineering Contractor undertaking civil works in Railways. respondent railway administration called for limited tenders in their letter dated 5.11.1987 for the work of 'Madras-Gudur Section Bridge No.237 at Km.122/ 11,113/12 proposed Reconstruction of Down Line in New alignment with 20x 12.19 m. 1x9.98 m. and 1 x 7.39 girders.'THE plaintiff is one of the contractors submitted his tender on 30.11.1987 as per tender conditions, which was finally accepted by the defendant by their letter 29.1.1988 in No.W/148/V/M/222. THE plaintiff accepted the contract as desired by respondent. THE plaintiff again accepted the award of tender as per letter dated 12.4.1988 sent by the railway administration. THE agreement bearing No.4/CE/88, dated 10.6.1988 executed by the plaintiff and the defendant. According to the plaintiff he was always diligent and was doing the work and that in the course of the work he found that the soil conditions were quite different and were not anticipated. THE bore chart given along with the tender not indicate the presence of pebbles or mica. THE variations in the soil conditions resulted disproportionate consumption of consumables like wire ropes, diesel and other times costed abnormal wear and tear of the winches, engines and high rate of labour was necessitated. THE plaintiff was also asked to purchase M.S.plates which rate had increased abnormally more than 22%. THE plaintiff found that the work could not be done as per tender and hence he wrote a letter to the Chief Engineer, Southern Railways Madras 15.11.1988 to take notice of these things and allow extra rates. THE plaintiff made several representations to the respondent but they did not settle the matter and that the plaintiff his letter dated 16.2.1989 requested the railway administration to appoint a pre-arbitration committee in accordance with the departmental circular. As a result of the impracticable nature of the work and the attitude of the railway administration the progress of the was affected and the plaintiff was put to heavy loss. Since the attitude of the railway administration was such that they were not going to appoint a pre arbitration committee appoint an arbitrator as per the terms of the agreement dated 10.6.1988, it has become necessary for the plaintiff to approach the court to compel the defendant to file the agreement in this Court and also appointment of an arbitrator to settle the disputes between the parties. THE plaintiff has reserved his right to file his claim as and when the arbitrator is appointed. THE therefore prayed: 1. to direct the defendant to file the agreement entered into between them. 2. since the defendant has not appointed a pre-arbitration committee or an arbitrator, appoint an arbitrator by this Court to settle the disputes and pass an award, and

(3.) MR. Krishnaswamy stated that the arbitrator being a quasi-judicial tribunal circumstances which exist may tend to create a bias in his mind, he should not act arbitrator in the matter concerned and the bias in the arbitrator may be a personal bias bias arising from his situation with reference to the parties or the subject matter dispute before him, A reasonable apprehension has arisen in the minds of the plaintiff is not likely to get justice at the hands of the departmental arbitrator, even though agreed for appointing such departmental men as arbitrators. According to MR.Krishnaswamy that the mind of an arbitrator must always be impartial and pure and the moment one that the arbitrator is likely to be vitiated by personal considerations, he ceases to be to act as such. According to the clause in the present agreement, the department nominate two arbitrators as envisaged under Clauses 63 and 64 of the general conditions the contract. In any case, the arbitrator being a Government or Departmental Officer looks to the Government or Department for his future career prospects and this brings unconscious" element of self-interest into action. One cannot ignore the supreme reality human nature. Such an officer will end to support the decision either given by himself given by his organisation. The maxim that "no man is to be a judge in his own extends to cases where he may have prejudged the issue or in which he is interested. maxim should be held sacred by all. Thus, according to MR.Krishnaswamy, such an envisaged under Clauses 63 and 64 disqualifies himself to sit as an arbitrator. MR.Krishnaswamy cited Andhra Pradesh State Road Transport Corporation v. Satya Transport, A.I.R.1965 S.C. 1303, where the Supreme Court has observed that is necessary for a contractor to establish the existence of an actual bias in the arbitrator is enough if by virtue of his situation with the subject matter or with the Government inference of a bias or the probability of a bias is established to vitiate his qualification as arbitrator. He also cited Amarchand v. Ambica Jute Mills, A.I.R. 1966 S.C. 1036: S.C.R. 963, where the Supreme Court observed, "It is true that on an application under Sec.5, it is not necessary to show that the arbitrator in fact biased and it is enough to show that there is a reasonable ground for apprehension that the arbitrator will be biased.".