PARSHOTAM LAL Vs. STATE

JUDGEMENT

(1.) ORDER of this Court passed in Arbitration Application No. 244 of 1988 dated 5-11-1988 appointing the Chief Conservator of Forests J. and K. Govt. as the, Arbitrator is sought to be reviewed by means of this petition mainly on the ground of alleged prejudice as detailed in the petition. It is submitted that the Chief Conservator (Arbitrator) of Forests directed the DFO, Forest Division, Reasi to get the criminal case registered against the petitioners regarding the matters, the subject-matter of the dispute referred to him vide the order sought to be reviewed. The DFO on the directions of the Chief Conservator of Forests is alleged to have lodged a report with the Police Station Reasi vide his No. 3096-98 dated 12-11-1988 on the basis of which FIR No. 176 of 1988 was registered against the petitioner. The petitioner submits that under the circumstances of the case he does not expect to get fair justice from the Arbitrator appointed by the Court. In the alternative it is prayed that the appointment of the Chief Conservator of Forest as an Arbitrator be set aside under S.11 of the Arbitration Act.

(2.) IN the objections filed on behalf of the respondents it is submitted that the review petition on the facts stated by the petitioner is not maintainable. The lodging of the FIR at the instance of the arbitrator has not been denied. It is however only as Head of the Department in lodging the FIR and not as an Arbitrator. It is further submitted that the respondent No. 4 is bound by norms of law, equity and judicial conscience and he has not yet commenced the proceedings. The apprehension expressed by the petitioners are alleged to be misconceived and without any basis.

(3.) IT is settled proposition of law that where parties to a contract voluntary incorporated as one of its terms a clause which obliges one or the other of them to refer the disputes to an agreed arbitrator by them, a mandate is imposed upon then which is inescapable and has to be given effect to. However to this general principle there is an exception for taking action under S.11 of the Arbitration Act or if it is proved that the person named or specified as the arbitrator is biased towards one of the parties or has overtly or covertly involved himself in the subject-matter of the contract from the time of its inception and during the course of its working so as to give an impression to a reasonable person that a reference to him of the dispute would be futile and in the ultimate analysis would not be means to secure justice to the complaining party, then the Court can in appropriate cases appoint a new arbitrator other than the one named by the parties. This Court has also inherent power in appropriate cases to remove an arbitrator when the bias attributed such an arbitrator is evident from the facts and circumstances of the case. Actual bias through overt acts is not necessary for the removal of an arbitrator so appointed by the Court. IT was held in State of Orissa v. Modern Construction Co., reported in AIR 1972 Orissa 219 that even if the grounds mentioned in S.11 of the Arbitration Act are not strictly in existence, the Court in exercise of its inherent power can remove an arbitrator as the Court cannot plead helplessness and has to meet the situation in exercise of its inherent powers which are vested in it for doing justice between litigant to uphold fair play in judicial proceedings. Relying upon the judgment of the Supreme Court reported in AIR 1962 SC 527, Orissa High Court held (Para 5) :