YASHWANT N SHAH Vs. UNIT TRUST OF INDIA

JUDGEMENT

(1.) BY the present petition the petitioner impugns award dated 14th May, 1999. By the said award the Arbitral Tribunal has partly allowed the claim of the respondent No. 1. It is contended on behalf of the petitioners that the award is liable to be set aside on the following grounds :-

(2.) THAT the Arbitral Tribunal was not constituted in terms of bye-laws 245/262 of the bye-laws in force. It is contended that in terms of the bye-laws before amendment the petitioner could appoint any member as an arbitrator on his behalf. It is contended that the petitioner was asked to restrict his choice amongst the 26 persons notified by the Stock Exchange. It is, therefore, contended that as the appointment was contrary to the aforesaid bye-laws the Arbitral Tribunal is illegally constituted and the award is liable to be set aside. In support of the contention that the arbitration proceedings have to be conducted strictly in terms of the agreement, reliance was placed on the judgment of a Single Judge of Jammu and Kashmir in the case of (Shahdad v. Moh. Abdullah Mir and others), A. I. R. 1967 Jammu and Kashmir 120, more particularly para. 21. The petitioner nominated his arbitrator. He has thereafter participated before the Arbitral Tribunal. It is only in the reply that he raised the contention that the constitution was improper. At the time when the tribunal had to be constituted, appointment by the arbitrator was in terms of bye-laws 245/262. The fact, however, remains that the person who was selected was a member of the Bombay Stock Exchange. He was one of the persons whom the petitioner could have appointed. The petitioner did not at the relevant time question the notice whereby he was called upon to nominate a member from amongst the list notified. The petitioner has participated in the proceedings. In that light of the matter it will be difficult at this stage to allow the said contention, more so as there is no allegation whatsoever against the conduct of the member as a member of the Arbitral Tribunal. Even if there be some irregularity it cannot be said to be an illegality which would warrant interference under section 34 of the Arbitration and Conciliation Act, 1996. In so far as Shahdab v. Moh. Abdullah Mir (supra) as earlier pointed out I have already held that the petitioner participated in the proceedings after nominating a member of the Stock Exchange. In that light of the matter the proposition as set out in the said judgment would not be attracted. That contention must, therefore, be rejected.

(3.) IT is secondly contended that the petitioner was called upon to lead negative evidence. It is contended that this would be contrary to section 28 of the Arbitration and Conciliation Act, 1996 as that would be against the substantive law of India. For that purpose learned Counsel relies on a judgment of the learned Single Judge of the Delhi High Court in the case of (M/s. Nagori and Company v. Indian Sugar Industries Export Corporation Ltd.), A. I. R. 1990 Delhi 125. That was a case where a party had sought damages. All that the learned Single Judge of the Delhi High Court has stated is the well settled proposition that the party claiming damages must also prove that he had taken steps to mitigate the damages. This follows from section 74 of the Contract Act. In the instant case the respondents had come to the Court on the contention that there were bad delivery of certain shares. The petitioner by his letter of June 4, 1997 before the Investors Grievance Redressal Committee had accepted that the claim made by SHCII is correct. In the context of this, the question of the petitioner being called upon to lead any negative evidence does not arise. The question whether there are any admissions and those admissions can be dealt with will be dealt with while answering the said contention. At any rate in so far as the present contention is concerned the petitioner himself had admitted the claim of the respondents. If the petitioner wanted to retract from the statement contained in his letter and the minutes recorded before the Investors Grievance Redressal Committee, the burden was on him to prove otherwise. This burden had not been discharged. That contention, therefore, must be rejected.