KALINGA OTTO P Vs. CHARANJIT KOCHHAR

JUDGEMENT

(1.) THE facts giving rise to this revision application, in brief, are as follows: the petitioner who entered into a contract with the Hindusthan Steel Ltd. , rourkela, for making certain constructions in connection with the extension of the latter's coke-oven plant engaged the opp. party as a sub-contractor to carry out certain works concerning the contract. In or about April, 1966, the work was completed and the parties agreed by correspondence to refer their disputes to two arbitrators, one to be nominated by each. Accordingly, Shri B, Das and Shri A. K. Sen were nominated as arbitrators by the petitioner and opposite party respectively. The two arbitrators by their letter dated 15-12-67 informed the parties that they had appointed Shri N. C. Deb as umpire and entered on the reference. At the first meeting of the arbitrators held on 23-2-68, it was decided that issues involved in the reference would be disposed of by them without participation of the umpire and the points on which they failed to agree would be referred to the umpire. On 25-11-68, an application was filed before the learned subordinate Judge, Sundergarh for extension of time to make the award who by bis order dated 7-1-69 extended the time till 6-3-69. On 1-2-69, Shri B. Das, arbitrator nominated by the petitioner wrote to the umpire requesting him to make an award as they, the arbitrators had failed to agree. He sent copies of this letter by way of information to the parties as well as the joint arbitrator Shri A. K. Sen. On the basis of this letter, the umpire purported to assume jurisdiction and proceeded with the arbitration proceeding. The umpire by his letter dated 20-3-69 addressed to the parties requested them to obtain extension of four month's time from the Court and informed them that only on receipt of such extension order action would be initiated by him. On 27-3-69, however, he gave notice to the parties fixing 11-4-69 at 3. 00 p. m. for hearing of the proceeding. The opposite party wrote a letter on 3-4-69 to the umpire asking for an adjournment of the date of sitting pending receipt of opinion from his solicitors, but this was rejected by his letter dated 4-4-69. The representative and solicitor of the opposite party attended the sitting on 11-4-69 under protest. The umpire did not record their protest at the commencement of the minutes of the proceedings of that day and also arbitrarily purported to enhance his fee per sitting from Rs. 300/- to Rupees 1,500/- in spite of objection by the representative of the opposite party, while the petitioner's representative agreed to the same. The solicitors of the opposite party wrote a letter on 12-4-69 to the umpire questioning his right to assume jurisdiction and complaining about the manner in which the date for the sitting was fixed, the meeting was conducted and the minutes recorded. The umpire sent a reply to this letter on 26-4-69 wherein he denied the allegations and stated that the reply was without prejudice to further action which he might decide to take in view of the scurrilous mis-statements, grave distortion of facts and highly defamatory allegations made. On these allegations, an application was filed by the opposite party under Section 5 of the Arbitration Act for grant of leave to revoke the authority of the umpire. The revocation was sought on the ground that the umpire had inherent lack of jurisdiction to enter on the reference and that he misconducted himself and the proceedings in a manner which has created reasonable apprehension in the mind of the opposite party that the umpire will be biased.

(2.) THE learned Subordinate Judge allowed the application and granted leave as prayed for on the following findings: (1) The umpire had inherent lack of jurisdiction to enter on the reference as both the arbitrators had not referred the dispute to him; (2) the umpire assumed authority to enter on the reference before the arbitrators had allowed the statutory period to expire without making an award; (3) the umpire misconducted himself by refusing to grant an adjournment of the date of sitting (4) by attending the proceedings on 11-4-69, the opposite party was not estopped or precluded from questioning the jurisdiction of the umpire and (5) there are reasonable grounds for apprehension in the mind of the opposite party that the umpire will be biased in view of his conduct exhibited in fixing the date of sitting, refusing an adjournment, conduct of the meeting and the reply sent by him on 26-4-69. It is this order which is under challenge in the present revision.

(3.) POINTS Nos. 4 and 5:-- Section 5 of the Arbitration Act does not enumerate or indicate the grounds or circumstances on which the Court will grant leave for revoking the authority of an arbitrator or umpire. It is well-settled that the Court may grant leave if it is satisfied that there is reasonable ground for apprehension in the mind of the applicant that the arbitrator or umpire will be biased. In the decision reported in AIR 1966 SC 3036, Amarchand Lalitkumar v. Ambica Jute mills Ltd.), while dealing with the difference between an application under Sec. 5 of the Arbitration Act and one under Section 34, it was observed: "it is true that on an application under Section 5 it is not necessary to show that the arbitrator is in fact biased and it is enough to show that there is a reasonable ground for apprehension that the arbitrator will be biased. But the reasonable ground must be established to the satisfaction of the Court to which an application for leave to revoke the authority of an appointed arbitrator is made. " this being the principle to be borne in mind while considering an application under section 5, it is to be seen whether in the circumstances established in this case there are grounds for reasonable apprehension in the mind of the applicant that the umpire will be biased, and whether this Court has jurisdiction under Section 115, C. P. C. to interfere with the conclusion of the Court below. According to Mr. Mahanti, the finding of the Court below that there are reasonable grounds for apprehension is erroneous. In short, the grounds for apprehension of bias put forth by the opposite party in his application under Section 5 are: (1) Assumption of jurisdiction by the umpire contrary to law; (2) though in the letter at Annexure b dated 20-3-69 the umpire informed the parties that action would be initiated by him only after receipt of order of extension by the Court, by his subsequent letter at Annexure C/l dated 27-3-69 he fixed the date of sitting as 11-4-69 without any reference to his previous letter; (3) rejection of the prayer for an adjournment of the date of sitting, though opposite party prayed for an adjournment on the ground that he was awaiting his solicitor's opinion about the , competency of the umpire to proceed; (4) the arbitrary enhancement of the daily sitting fee by the umpire from Rs. 300/-to Rs. 1,500/- which was agreed to by the present petitioner and not accepted by the opposite party; (5) the manner of recording his protest in the minutes while participating at the sitting held on 11-4-69 and (6) tone of the letter of the umpire dated 26-4-69. The Court below was satisfied by some of these circumstances as affording grounds for reasonable apprehension in the mind of the opposite party that the umpire will be biased. What is contended by Mr. Mohanti is that the Court below came to a wrong conclusion, and therefore, passed the impugned order. The point is whether such an order is open to interference in revision on the ground that the conclusion is erroneous. It is not disputed that the court below, had jurisdiction to deal with the application and arrive at its finding on an appreciation of the materials before it. The legal position is well settled that the High Court in exercise of its revisional powers under Section 115, C. P. C cannot correct errors of fact, however gross or even errors of law unless the said errors have relation to the jurisdiction of the court to try the dispute. In this case, it is not and cannot be contended that the court below exercised a jurisdiction not vested in it or failed to exercise a jurisdiction so vested. So also, it is not open to petitioner to contend that in arriving at the finding, the court below acted in exercise of its jurisdiction illegally or with material irregularity. Therefore, the impugned order is not open to interference in revision on the ground that the finding of the court below is erroneous. Thus, I find no merit in the contentions advanced on behalf of the petitioner.