VARSHA MANHARLAL MEHTA Vs. INDUSTRIAL DISTRIBUTORS

JUDGEMENT

(1.) THIS is a petition under Section 11 of the Indian Arbitration Act praying for (a) setting aside the appointment of the Arbitrator (the 2nd respondent herein is the sole Arbitrator, and (b) grant of suf?ficient time to the petitioner to make fresh appointment of some other Arbitrator to commence and complete the reference "from the stage the same was left before the 2nd respondent"

(2.) THE facts giving rise to this Arbitration petition are as follows. There were two suits in this Court and since the plaintiff in one suit is the defendant in another suit, I will refer to the parties by their names in order to avoid confusion. Summary Suit No. 2901 of 1987 was filed by Industrial Distributors (respon?dent No. 1 in this petition ). That suit was against Smt. Varsha Manharlal Mohta (pre?sent petitioner) as defendant No. 1 propriet?ress of M/s. Manish Agency, and Manharlal S. Mohta (respondent No. 3 in this petition) as defendant No. 2. Manharlal Mohta is the husband of Smt. Varsha Mohta. In that Sum?mary suit a claim was made for Rs. 19. 61 lacs and odd on account of the goods sold and delivered to Varsha M. Mohta. It may be stated at the outset that it was not denied that the goods of the value of Rs. 19. 61 Lacs and odd (being principal plus interest) were sold and supplied to Varsha Mohta. Suit No. 3587 of 1987 was filed by Varsha Mohta against Industrial Distributors claiming a sum of Rs. 37. 17 lacs and odd on account of certain discounts claimed in respect of the goods sold and delivered by Industrial Distributors to Varsha Mohta. Summons for judgment No. 687 of 1987 was taken out in summary Suit No. 3901 of 1987. At that stage, however, consent terms were filed between the parties and copy of the same is at page 28 of the Affidavit-in-reply filed in this petition. It would help us to reproduce the entire consent Terms here and they read as follows :?-

(3.) ON 13/02/1988 the arbitrator called the first meeting before him when both the parties appeared through their respective advocates. The arbitrator gave preliminary directions and his fee was fixed by consent of parties at Rs. 750. 00 per hour or part thereof and the fee of his clerk was fixed at Rs. 75. 00 ?per hour or part thereof. It was agreed that the fees would be paid by the parties in equal share. Thereafter the arbitrator proceeded with the arbitration and held about 37 arbitration meetings. Smt. Varsha Manharlal Mehta took several adjournments. The arbi?trator recorded the evidence of Shri Manhar?lal S. Mehta given by him on behalf of Smt. Varsha Manharlal Mehta and documents were also tendered on their behalf. After the evidence of Smt. Varsha H. Mehta and Shri Manharlal S. Mehta was over, evidence was led by M/s. Industrial Distributors. They led the evidence of their partner-Accountant on 5/02/1990. Again at the request of Smt. Varsha Mehta and Shri Manharlal Mehta, the adjournment was granted by consent to 21/02/1990. On 2 1/02/1990 Shri Manharlal Mehta in?formed the arbitrator that he and his wife had discharged their advocates M/s. L. C. Lolat and Co. and applied for time for appointment of another advocate to proceed with the arbi?tration proceedings. For this reason the arbitration could not proceed until 6/04/1990. On 6/04/1990, M/s. I Industrial Distributors examined their handwriting expert Shri Haresh Gajjar. It appears that the arbitrator was quite liberal in the matter of permitting Smt. Varsha Mehta and Shri Manharlal Mehta to cross-examine the handwriting expert Shri Haresh Gajjar as he was first allowed to be cross-examined by Anil Kumar Mathur, the handwriting expert engaged by Smt. Varsha Mehta and her husband, and then the arbitrator allowed the counsel of Smt. Varsha Mehta and her husband to cross-examine Shri Haresh Gaj?jar. Notes of evidence running altogether into 65 pages had been recorded by the arbitrator. He spent about 55 hours. Both the parties were represented by their respective advo?cates and counsel at the arbitrator's meetings. On 18/08/1990 Shri Haresh Gajjar's cross-examination was continued and at that time the advocate on behalf of the Mehtas requested the arbitrator to accept their clients' share of arbitration fee at the end of each arbitration meeting. Till this stage the arbi?trator used to take his arbitration fee for certain hours at a time in advance. However, this time also the arbitrator conceded to the request of the advocate on behalf of the Mehtas. Thereafter on 21/08/1990 the advocate on behalf of the Mehtas wrote a letter to the arbitrator and for the first time requested him to reduce his arbitration fee. It was stated in the said letter that if the fees were not reduced by the arbitrator then the Court would be moved for change of arbitrator. The arbitrator refused to reduce his fees. It will be noticed that during all this time no grievance of any misconduct against the arbitrator was made by any of the parties. On 25/08/1990 there was a meeting for the arbitration and at that time the counsel for the Mehtas applied for three weeks' adjournment for moving the Court for change of arbitrator. It may be pointed out that this was the stop which the Mehtas had expressed in their letter dated 21/08/1990 stating that this would be done if the arbitrator refused to reduce his fees. The impression given was that if the arbitrator agreed to reduce his fees, the Mehtas would have no objection to proceed with the arbitration to its conclusion. The next stop that is necessary to be mentioned is that the present petition was filed on 8/11/1990 for the reliefs as stated above.