H. LSHWARLAL AND SONS Vs. HUKUM CHAND MILLS

JUDGEMENT

(1.) IT is not in dispute that when the petitioner did not give its consent for the appointment of the sole arbitrator, the respondent filed an application under section 8 of the Arbitration Act before the Court. A notice of the petition was issued to the non -applicant, whereupon on 18.11.1989 a telegram was received by the Court wherein the petitioner sought time of three weeks for submitting its reply but no reply was submitted and the case was fixed for 21.12.1987 and 21.1.1988. The petitioner did not appear either personally or through its counsel.

(2.) THE case was, therefore, fixed for 18.2.1988. On that date also the petitioner did not make its appearance. The application for revocation was based before the lower Court on the ground that as there was no dispute between the parties the Court had no jurisdiction to appoint arbitrator under section 8 of the Act. Shri Vora is a Director of the non -applicant Mills. Therefore, he is inclined to favour the non -applicant. The application has not been filed under clause 20 of the relevant agreement. As such, the appointment of the single arbitrator is against the terms of the agreement. In any case Shri Vora being a person interested in the non -applicant, he should not have been appointed as an arbitrator. It was argued before the lower Court that there is serious dispute between the parties.

(3.) THEREFORE , the Court was left with no option but to come to a conclusion that the opposite party is not interested in contesting the petition and the appointment of the sale arbitrator. As regards the fact that Shri Vora is a director of the company, this itself cannot be a ground for holding that he would be unfair in a corporate body. If an officer of the body is appointed an arbitrator then an inference cannot be drawn only on this ground alone. The party is always free to challange the award when filed in the Court to bring before the Court the circumstances showing the bias or unfairness of the arbitrator. A Division Bench of this Court in the case of Ramsahai v. Harishandra (AIR 1963 M P 143) ha!; held that if a party is unable to seek revocation, it can still, get the award itself set aside on the ground of misconduct of the arbitrator. It has further been held that if the arbitrator had personal disqualifications and such disqualification was known to the party at the time of the reference, then at a later stage the order of appointment cannot be revoked on the ground of personal disqualification. The Supreme Court in the case of Uttar Pradesh Cooperative Federation Ltd. v. Sunder Bros., Delhi (AIR 1967 SC 249), has held that party's apprehension about fairness of the arbitrator cannot be a ground for staying the proceedings of the arbitration.