UNION OF INDIA Vs. RANJAN BROTHERS

JUDGEMENT

(1.) This appeal under Section 39(6) of the Arbitration Act by the Union of India is directed against the order dated the 16th of August, 1965, passed by the 1st Subordinate Judge, Muzaffarpur, in Title Suit No. 134 of 1961. By the impugned order the learned Subordinate Judge has set aside an award dated the 4th of July, 1962, given by Mr. O. P. Mittal, the Superintending Engineer (Aviation). Ministry of Works, Housing and Supply, New Delhi, in a dispute between the Union of India and Messrs. S. Ranjan and Brothers.

(2.) The following facts, which appear from the order under appeal, are not in dispute. Messrs. S. Ranjan and Brothers entered into a contract on the 8th of September. 1958, with the Executive Engineer, Aviation Division Central P. W. D., Muzaffarpur, in regard to the development of aerodrome at Muzaffarpur. Messrs. S. Ranjan and Brothers preferred a claim of Rs. 76,000/ - relating to some items of work on the 20th of September, 1960, to the arbitrator, Mr. O. P. Mittal, according to Clause 25 of the agreement. The arbitrator did not submit the award on the ground that four months had expired and directed the parties to get the time to give the award extended by a Court of competent jurisdiction. A petition under Section 20 of the Arbitration Act was filed on the 5th of October, 1961, by Messrs. S. Ranjan and Brothers in which a prayer was made to issue notice to the Union of India (the defendant) to show cause why the agreement for referring the matter to arbitration should not be filed in court. The defendant filed a petition on the 19th of March, 1962, in which the defendant made it clear that it had no objection in filing the agreement and in fact it filed the agreement along with the petition and prayed that the arbitration be ratified and time be extended for submission of the award by the arbitrator. The learned Subordinate Judge by his order dated the 19th of April, 1962, directed the agreement to be sent to the arbitrator as prayed for. He further gave a direction to the arbitrator to submit the award by the 19th of July, 1962. The arbitrator subsequently applied for extension of time which was allowed. It appears that on the 31st of August, 1962, the plaintiff (S. Ranjan and Brothers) filed an objection to the award though the award itself had not been received in the Court. The award was ultimately received on the 1st of December, 1962. On the 7th of February, 1963, the defendant filed a petition by way of reply to the objections filed by the plaintiff against the award. It appears that on the prayer of the defendant, Sri O. P. Mittal, the arbitrator, was subsequently examined on commission by means of interrogatories. The Pleader Commissioner submitted his report on the 12th of May 1964. Thereafter the objection filed by the plaintiff was heard by the learned Subordinate Judge.

(3.) The arbitration proceedings and the award were challenged in the objection petition on several grounds. One of the grounds taken was that the arbitrator was not absolutely disinterested and impartial as he had connection with the defendant being its employee. The learned Subordinate Judge overruled that objection. While considering the question, however, the learned Subordinate Judge observed as follows: