MOHINDER SINGH & CO Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner had taken a contract for the construction of Samba -Battal Link Road in the year 1967 for Rs. 78,83,287.00 and an agreement No, I/EE -Jammu of 1967 -68 was executed by the petitioner and the respondent No. 2, Executive Engineer, Madhopur Central Construction Division, C. P. W. D.: Madhopur. Certain disputes arose between the parties to this contract and one Shri T. B. Bhonsale, Supdtg. Engineer C. P. W. D. was appointed sole arbitrator for that dispute in terms of Clause 25 of the agreement. That gentleman gave his award and in pursuance of that award a decree for Rupees 11,52,792.13 was passed by my learned brother Jaswant Singh, J. on 27 -5 -1970 in favour of the petitioner against the Union of India. Further disputes arose between the parties, and the Chief Engineer vide his letter No. 24/55/68 -A&C II (App -92/70) dated 13 -8 -1970 appointed Shri V. V. Vaze as the Arbitrator to decide the further disputes between the Union of India and the petitioner. The petitioner also on 23 -7 -1970 moved an application under Section 20 of the Arbitration Act for reference of certain claims of his to an Arbitrator. Notice of that application was given to the other side and by my order dated 4th September 1970. I referred the dispute, subject -matter of the petitioners claim to the same Arbitrator Mr. Vaze. The case of Union of India, which had been referred to Mr. Vaze by the Chief Engineer for arbitration was numbered by him as ARB/VVV/34 and the case of the petitioner referred to him by me was linked by the Arbitrator with the previous case namely ARB/VVV/34. Some proceedings were held by the learned Arbitrator and he numbered the latter case as ARB/VVV/38. Later on two applications were made before me, one on behalf of the Union of India on 4 -1 -1971 for the extension of four months time to the Arbitrator for making the award and another on behalf of the petitioner under Sections 5 and 12 (2) of the Arbitration Act on 28 -12 -1970. Objections were filed by the Union of India to the application of the petitioner and the petitioner stated that his application under Sections 5 and 12 of the Arbitration Act, above referred to may be treated as reply to the application for extension of time made on behalf of the respondents. It is just and proper that both these applications should be disposed of by the same order. The agreement out of which both these disputes arise is the same. The parties claim certain reliefs in terms of the same agreement. Both the disputes have been referred to the same Arbitrator, therefore, if no extension is given to the Arbitrator that will ipso facto result in the removal of the Arbitrator. If however, extension is granted to the Arbitrator to make his award, then the application of the petitioner under Sections 5 and 12 of the Arbitration Act has to be considered on its merits.

(2.) THE extension application simply states that the Arbitrator has not been able to complete the Arbitration proceedings and give his award. The application for the revocation of the authority of the Arbitrator and for his removal and for the appointment of a new Arbitrator is a long one and the summary of its contents, so far as they are relevant to the present dispute, may be given as under: - The petition starts with mentioning that the petitioner got the Samba -Batal Link Road, contract for a sum of Rupees 78,83,287.00. Then it partly quotes the Arbitration clause No. 25 of the agreement which will be discussed in extenso in this judgment. Then it mention the dispute between the petitioner and the Executive Engineer resulting in the appointment of Shri T. B. Bhonsale as the Arbitrator and his award for Rupees 11,52,792.13 which was made the rule of the Court on 27 -5 -1970 after great litigation between the parties. The petitioner further states that after the award of Mr. Bhonsale, the officers of the C. P. W. D. were not happy and they managed a letter No. 21011(4)/69 -W dated 27 -12 -1969 from the Ministry of Health and Family Planning Works Housing and Urban Development (Works Div.) to all the Arbitrators and the Chief Engineer to record their reasons in case the amount of the award was in excess of Rs. 50,000.00. Shri V. V. Vaze was a Deputy Secretary in theMinistry of the respondent No. 1 who was appointed as full time arbitrator in the Ministry of Works, Housing and Urban Development. According to the petitioner this directive was to fetter the powers and the independent judgment of the Arbitrator. As the petitioner put some claims, the C. P. W.D to forestall the petitioner got Mr. Vaze appointed as a sole arbitrator by the Chief Engineer vide his office letter No. 24/55/68 -A and C II (App -92/70) dated 13.08.1970. The case was registered by Mr. Vaze as ARB/VVV/34 and the petitioners case when referred to the Arbitrator was registered by him as ARB/ VVV/38. During the hearing of the arbitration proceedings at Srinagar Arbitrator observed "this case has come very notorious in the Department which created apprehension in the mind of the petitioner that the propaganda carried on by the respondents had been conveyed to the Arbitrator. The petitioner conveyed his apprehension to the Arbitrator by means of his letter dated 20 -11 -1970 who returned it with the remark that the letter was irrelevant. The Arbitrator has agreed to give reasons for his award also which fact has been recorded by the Arbitrator in his proceedings dated 21 -12 -1970. Formerly there were four Engineers who worked as Arbitrators in such disputes and the intention was to have a trained person as an Arbitrator. Mr. Vaze had no technical knowledge of the subject and he "showed complete lack of elementary knowledge and understanding of the contract in question and the various items of work thereunder and consequently was not in a position to appreciate the various technical points involved in consideration of the disputed matters." The petitioner has apprehensions that he will not get justice at the hands of the Arbitrator. It is, therefore, prayed that the court may grant leave to the petitioner to revoke the authority of the Arbitrator, remove him for misconduct committed by him and appoint any other person having technical and engineering qualifications and experience etc., as an Arbitrator, The grounds for such a request are contained in paragraph No. 13 but the contents of these grounds are covered by the above summary.

(3.) ELABORATE arguments were heard by me in this case and I have given my consideration to the facts of the case and considered all the circumstances. The points that call for decision may be put as follows: - (1) Whether I should grant extension of time to Mr. Vaze to continue proceedings and give an award. (2) Whether I should grant leave to petitioner to revoke the Arbitrators |authority. (3) Whether I should remove the Arbitrator Mr. Vaze. (4) Whether a new Arbitrator should be appointed. (5) If so, who should be the new Arbitrator and who is competent to appoint him. I shall now take up the points argued and refer to relevant portions of the record and the law on the subject.