TEEN MOORTI FINANCIERS Vs. NANAK CHAND

JUDGEMENT

(1.) This revision has been filed against an appellate order passed under Sec tion 39 of the Arbitration Act. The parties had entered into an agreement to refer the dispute to the arbitration of Sri J. P. Verma, He gave an award in favour of the Teen Murti Financiers. They filed an application under Sec. 14 of the Arbitration Act for making the award the Rule of the Court. Objections were filed by the other side in cluding an objection that the arbitrator had miscomputed himself. An issue in respect of the misconduct was framed. In the trial Court the objectors gave no particulars of the misconduct they alleged and the trial Court dealing with the issue of misconduct observed:

(2.) Once a misconduct is pleaded by a party he has got to give the particulars thereof. The objection contained only a vague statement to the effect that the arbitra tor has misconducted himself. In the af fidavits filed by the objectors also no parti culars were given. In proceedings before the trial Court, too, nothing was pointed out. Whether the arbitrator had misconduc ted in accepting the fee from one of the parties will depend upon facts relating to the payment of fee. An arbitrator cannot be said to commit a misconduct only because he accepts a fee from one of the parties. The agreement does not contain any provi sion for payment of fee, but still the arbi trator can demand fee and refuse to work without fee being paid to him. The view of the Court below that as there was no agreement between the parties for the pay ment of fee, the arbitrator could not demand or accept a fee is erroneous in law. There is no warrant for such a view. The appli cant in addition had urged before the ap pellate Court that there was an agreement by the parties to pay the fee. That too would have necessitated further evidence. In the case "Teja Singh v. Union of India", (AIR 1955 All 666) a Division Bench of this Court took the view that the law does not contemplate that an arbitrator must proceed with the arbitration proceedings without pay ment of his fees in case he wanted them to be paid before acting in the arbitration pro ceedings. The view taken by the Court below is contrary to the view expressed in this case and is based on a wrong interpretation of Sec. 14 and Sec. 38 of the Arbitration Act. In the circumstances mentioned above there was no justification for the appellate Court to permit a new ground to be raised in appeal about misconduct when no parti culars had been given in the trial Court and the matter depended also upon proof of facts. The Court below must, in these cir cumstances, be held to have acted illegally in exercise of its jurisdiction in permitting such a ground to be raised in appeal and allowing the appeal on the basis of that ground.

(3.) The appellate Court has not con sidered any other point and from the judg ment it appears that at the hearing of the appeal counsel for the appellant pressed the appeal only on the ground of this supposed misconduct of the arbitrator. The objectors, according to the finding of the appellate Court, had never appeared before the arbitra tor. In these circumstances if the fee was paid by the applicants only, the receipt of such payment by the arbitrator could not amount to misconduct.