kvm
1
ARBPL1255.12
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION (L) NO. 1255 OF 2012
Prajapati Gunvant Keshavlal )
Having office at 14/21, Ground Floor,)
Mata Prasad Chawl, Galli No.1, )
Koldongari, Andheri (East), )
Mumbai 400 069. ) ..... Petitioner
Versus
1. Union of India through ig )
General Manager, Western Railway, )
Churchgate, Mumbai 400 020 )
2. The Chief Commercial Manager, )
Western Railway, Churchgate, )
Mumbai 400 020 ) ..... Respondents
Mr.Rohan Cama, a/w. Ms.Astha Tamhankar, i/b. Mr.Akash Singh for the
Petitioner.
Mr.Kevic Setalvad, Additional Solicitor General, a/w. Mr.Sumit Patni, i/b.
Mr.Suresh Kumar for the Respondents.
CORAM : R.D. DHANUKA, J.
DATE : 8st OCTOBER, 2012
JUDGMENT :
By consent of both the parties, arbitration petition was heard finally at the admission stage and is being disposed of by this order. This petition was heard at length by this Court on 8th October, 2012 and oral order was ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 2 ARBPL1255.12 pronounced in the court dismissing this arbitration petition and that reasons would be dictated separately. Reasons are now recorded.
2. By this petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (in short 'Arbitration Act, 1996'), the petitioner seeks to challenge an award dated 17th September, 2012 declared by the learned arbitrator rejecting a claim made by the petitioner.
Some of the relevant facts which are relevant for the purpose of deciding this petition are as under :-
3. The petitioner is engaged in business of loading and unloading goods, parcels, etc. from and to railway wagons.
4. On 11th June, 2009, the respondent issued Allotment-cum-Acceptance letter in favour of the petitioner in respect of the loading of 23 tonnes parcel space in the parcel van by the Train No. 12925 / 12926 from Bandra Terminus to Amritsar and back on regular basis for a period of three years. The total contract value was at Rs.20,10,42,972/-. It was agreed that the payment would be at Rs.1,90,924/- per trip. The contract commenced w.e.f. 16th June, 2009 and was valid upto 15th June, 2012.
::: Downloaded on - 09/06/2013 19:15:21 :::kvm 3 ARBPL1255.12
5. In the month of March, 2012, the petitioner entered into an agreement with the respondent w.e.f. 16th June, 2009 pursuant to the said letter of acceptance dated 16th June, 2009.
6. It is the case of the petitioner that as per the railway administration letters dated 17th April, 2012, 18th May, 2012, 29th May, 2012 and 9th December, 2011, it was recorded that the performance of the petitioner was satisfactory.
7. By a letter dated 2nd April, 2012, the petitioner informed the respondent that the petitioner was successfully completing three years of lease without any complaints and as per the lease policy dated 28th March, 2006, the petitioner should be given an opportunity for the extension for two more years at increase lease freight rate by 25% for the lease of VPH by Train No. 12925/26 Bandra Terminus - Amritsar.
8. By letter dated 16th April, 2012, the petitioner sent reminder to the respondent about extension of lease. By letter dated 15th June, 2012, the respondent informed the petitioner that competent authority had accorded sanction for temporary extension for a period of three months or till the finalization of new tender whichever was earlier for VPH on round trip basis by Train No. 12925/12926 Bandra Terminus - Amritsar at the rate of Rs.
2,38,655/- (current lease + 25%). The respondent requested the petitioner to ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 4 ARBPL1255.12 re-validate the bank guarantee submitted on 28th February, 2009 in favour of Senior DCM till 27th August, 2012 and also to furnish security deposit for the period of extended contract plus three months. The petitioner accepted the said extension on the condition setout therein.
9. On 22nd June, 2012, the respondent invited fresh tenders from the registered lease holders for leasing of parcel vans (VP) 23 tonnes capacity on round trip basis on payment of lumpsum rate for loading and unloading of parcels for a period of three years by various trains including Paschim Express (Train No. 12925/12926). It is common ground that the petitioner did not submit his bid in respect of the said tender invited by the respondent.
10. By letter dated 25th June, 2012 to the General Manager, after expiry of 10 days from the date of receipt of acceptance letter, the petitioner contended that the said temporary extension was against the clause 18.1 of the contract for VHP by the train Paschim Express and against Clause 13(E) of the lease policy of the railway dated 28th March, 2006. It is contended that the petitioner was entitled to further extension of two years. The petitioner requested for setting aside the tenders invited by the respondent and requested for grant of two years extension failing which appropriate civil proceedings would be filed against the respondent.
::: Downloaded on - 09/06/2013 19:15:21 :::kvm 5 ARBPL1255.12
11. By a letter dated 2nd July, 2012, the respondent invited attention of the petitioner that temporary extension was granted by the respondent to the petitioner by letter dated 15th June, 2012 for a period of three months or till finalization of new tender whichever was earlier and the same was accepted/acknowledged by the petitioner on the same day. The respondent pointed out that clause 18.1of the agreement and para 'E' of CPLP (policy) pertaining to the extension in the agreement is only an enabling clause to extend contracts in cases of exigencies mutually agreed by both the parties. It was not mandatory or right of the leaseholder to claim extension for two years.
It was stated that in the larger interest of the railway administration, tenders were being called after three years so that administration could test the market and explore maximum revenue earning through finalizing contracts by floating open tenders. It was pointed out that the tenders were already invited and would be open for the subject train on 17th July, 2012.
12. The petitioner filed Arbitration Petition (Lodging No.851 of 2012) in this Court under Section 9 of the Arbitration Act, 1996. On 10th July, 2012, this Court disposed of the said petition. By consent of parties, the General Manager, Western Railway was directed to appoint an arbitrator within the period of one week from the date of the said order to decide the disputes raised by the petitioner as regards the contract dated 16th June, 2009 and directed that said petition under Section 9 of the Arbitration Act, 1996 filed by the petitioner ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 6 ARBPL1255.12 shall be treated as petition under Section 17 of the Act and shall be disposed of by the arbitrator within a period of two weeks from the date of his appointment. This court directed parties to appear before the arbitrator on 20th July, 2012 at 12 noon to enable the learned arbitrator to pass appropriate directions in the matter. All rights and contentions of the parties were kept open.
13. By letter dated 12th / 13th July, 2012, the Deputy General Manager (G), Western Railway appointed Smt.Bela Meena, Deputy CCM (PM) as the sole arbitrator pursuant to the order dated 10th July, 2012 passed by this court to resolve the disputes between the petitioner and the respondent. It is mentioned that the disputes to be resolved was of extension of lease of VPH by train No. 12925/12926 for two more years from the date 16th June, 2012 to 15th June, 2014.
14. On 27th July, 2012 the learned arbitrator made an interim order under Section 17 of the Arbitration Act, 1996. After considering the submissions of the petitioner that the issuance of advertisement for fresh tender by the respondent was contrary to the clause 18.1 of the contract agreement, the learned arbitrator passed the following order :-
" I have examined the issue and found that Respondents are at a liberty to call for fresh tenders at the end of the contractual term to avoid ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 7 ARBPL1255.12 the revenue loss. The fresh tender has been opened on 17.7.202 and offers higher than the Reserve Price have been received, but the same are yet to be finalized by the Respondents. The Respondents have also given a temporary extension for the running lease contract operated by the Claimant for a period of three months and as such there will be a committed earning to Railways and no loss for the said extended period to the government exchequer.
As the Hon'ble High Court of Bombay has directed that the present Petition filed by the Claimant under section 9 of the Arbitration and Concilliation Act, 1996 ("the Act") shall be treated by the learned Arbitrator as a Petition under Section 17 of the Act and shall be disposed of by him within a period of two weeks from the date of his appointment, to avoid casing prejudice to either parties, and having considered all aspects, I am of the opinion that the interest of justice would meet to both the parties by following directions :
The Respondents are free to invite fresh tender and finalize the same, however allotment of which would be subject to final award in the present Arbitration. The Operation of lease in VPH by train 12925/26 ex BDTS-ASR by the Petitioner permitted by Respondents vide their letter No.C128/12/VPH/Tender 17.10.08(2925/2926) Vol I dated 15.06.2012 will continue till disposal of Arbitration. "
15. The petitioner did not challenge the said interim order which granted liberty to the respondent to invite fresh tenders and to finalise the same with a rider that allotment of the contract would be subject to final award in the present arbitration.
::: Downloaded on - 09/06/2013 19:15:21 :::kvm 8 ARBPL1255.12
16. On 23rd August, 2012, the petitioner filed statement of claim before the learned arbitrator making six claims including claim for extension of lease of VPH by Train No. 12925-12926 for two years from the date of 16th June, 2012 to 15th June, 2014. The respondent filed written statement opposing the said claims. The arbitration meeting was thereafter held on 23rd August, 2012. The learned arbitrator recorded that it was mutually agreed by the parties that mode of arbitration proceedings would not be oral and shall be conducted on the basis of documents only. The next date of the hearing was fixed on 30th August, 2012. The minutes of the said meeting was served upon both the parties by the learned arbitrator and has been accepted by the parties by acknowledging the same.
17. On 30th August, 2012 in the arbitration meeting, it has been recorded by the learned arbitrator that as regards framing of issues, it has been decided by the sole arbitrator that the only claim falling under the purview of sole arbitrator was the extension of lease of VPH by Train No. 12925/26 for two more years from the date 16th June, 2012 to 15th June, 2014 was the only issue made admissible and the same had been advised to the parties. The learned arbitrator fixed the next date of hearing of 5th September, 2012.
18. On 5th September, 2012, by consent of both the parties, it was decided that evidence would be filed by the petitioner on 7th September, 2012 and the ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 9 ARBPL1255.12 respondent had agreed to cross examine the witness on the same day. The next date of the meeting was fixed on 7th September, 2012.
19. On 7th September, 2012, the petitioner submitted that due to some casualty in the family of his advocate, his advocate had to leave for Benaras and the petitioner therefore was unable to file evidence on the date of hearing.
The petitioner, however, requested the learned arbitrator to permit the brother of the petitioner Mr.Hasmukh Prajapati to depose in the further arbitration proceedings. The respondent submitted their no objection to the said request made by the petitioner. The learned arbitrator accepted the request of the petitioner and adjourned the matter to 10th September, 2012. The learned arbitrator recorded the statement of the respondent that new tender for the train in question had been finalised and requested the learned arbitrator to expedite the arbitration proceedings. The learned arbitrator directed the respondent to submit the copy of the allotment letter and acceptance letter on record.
20. On 10th September, 2012, the arbitration meeting was attended by the brother of the petitioner pursuant to the liberty asked for by the petitioner in the meeting held on 7th September, 2012 and granted by the learned arbitrator, alongwith the representative of the petitioner's advocate. The petitioner submitted a request in writing for one week to file evidence on the same ground. The learned arbitrator adjourned the meeting on 13th September, 2012.
::: Downloaded on - 09/06/2013 19:15:21 :::kvm 10 ARBPL1255.12
21. On 13th September, 2012, the petitioner attended the meeting alongwith his counsel. The learned counsel made submission that certain stages of proceedings of arbitration as per Code of Civil Procedure were yet to be complied with by the learned arbitrator. In the minutes of the said meeting, the learned arbitrator recorded what transpired in some of the earlier meetings about the procedure followed by both parties and recorded in the minutes of the meeting duly endorsed by the petitioner as well the respondent. The learned arbitrator recorded that though in the hearing held on 5th September, 2012 it had been clearly mentioned that by mutual consent, it has been decided that the evidence will be filed on 7th September, 2012, the petitioner once again by his application dated 10th September, 2012 requested for one week time to file affidavit. The learned counsel appearing for the petitioner accepted the fault of the petitioner that the petitioner was raising an issue of formal framing of issues and admissibility of documents at a delayed stage wherein they had earlier submitted a request for filing of evidence. The learned arbitrator advised the claimant through his counsel to go through all the record sheets with emphasis on the record sheet of 30th August, 2012 wherein framing and admissibility of issues had already been discussed. The learned arbitrator once again permitted the respondent to submit his say on the admissibility of documents by 05.00 p.m. on 13th September, 2012 and directed the claimant to submit draft issues at 05.00 p.m. on 14th September, 2012. The learned arbitrator however conveyed categorically that the only issue was "Extension ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 11 ARBPL1255.12 of lease of VPH by Train No. 12925/12926 for two more years from 16th June, 2012 i.e. upto 15th June, 2014". The learned arbitrator rejected the application of the petitioner for amendment of statement of claim on the ground that such reference had already been discussed in the meeting held on 30th August, 2012.
22. On 13th September, 2012 at 05.00 p.m., the respondent admitted some of the documents submitted by the petitioner and denied the remaining documents. On 14th September, 2012, the learned arbitrator recorded that issue was framed during the hearing on 30th August, 2012 and was conveyed to the petitioner. It was recorded that the petitioner had agreed to file evidence on 7th September, 2012 during the hearing held on 5th September, 2012 and since the advocate of the petitioner was not able to appear for hearing on 7th September, 2012, time for filing evidence was granted till 10th September, 2012. On 10th September, 2012, further time was granted on the request of the petitioner to file evidence on 13th September, 2012. On 13th September, 2012, inspite of filing evidence, the petitioner raised issue about admissibility of documents and framing of issues. As regards framing of issues, the learned arbitrator once again conveyed the issue to the parties. It was recorded that already three opportunities were granted to the petitioner for filing evidence. The learned arbitrator directed the petitioner to avoid any further delaying tactics and co-
operate with the arbitrator for conducting hearing. The learned arbitrator gave last opportunity to file evidence in the meeting supposed to be held on 15th ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 12 ARBPL1255.12 September, 2012.
23. On 13th September, 2012, the petitioner mentioned Arbitration Petition No. 785 of 2012 before this Court. After hearing the learned counsel appearing for the parties, this Court modified the order dated 10th July, 2012 by consent.
The operative part of the said order reads as under :-
(a) The dispute as regards the extension of lease for VPH by Train No.12925/26 for two more years i.e. from 16th June, 2012 to 15th June, 2014 shall be treated as one independent reference and decided by the sole Arbitrator i.e. Ms.Bela Meena, Deputy Chief Commercial Engineer (PM). Needless to add that the arbitration proceedings shall be conducted by following the provisions laid down under the Arbitration and Conciliation Act,1996.
(b) As regards the other disputes raised/proposed to be raised by the Petitioner regarding the Contract dated 16-06-2009, the same shall be referred to another Arbitrator by the General Manager, Western Railways, within two weeks from today.
The said reference shall be an independent reference, which shall be decided by the Arbitrator so appointed by following the provisions laid down under the Arbitration and Conciliation Act, 1996. The Arbitrator shall endeavour to pass his award within a period of six months from today.
24. On 14th September, 2012, the respondent conveyed the decision of the Deputy CMM (PM) to the petitioner that leasing contract in question would be continued till the disposal of the pending arbitration case. On 15th September, 2012, neither the petitioner nor his advocate was present and failed to ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 13 ARBPL1255.12 communicate any sufficient reasons for their failure to appear for hearing on 15th September, 2012. The learned arbitrator after going through the records, the documents submitted by the parties was convinced that there was enough evidence before the arbitrator to proceed with the arbitral award, concluded the hearing and adjourned the proceeding to 17th September, 2012 for making arbitral award.
25. On 17th September, 2012, the petitioner through his advocate to the learned arbitrator contended that on 13th September, 2012, neither the issues were farmed nor settled and therefore there was no question of leading evidence on 15th September, 2012 . The petitioner contended that the learned arbitrator was not following the principle of natural justice. The petitioner requested the learned arbitrator to fix a date for framing of issues. On 17th September, 2012 by another letter the petitioner made certain allegations against the arbitrator and requested the respondent to change the learned arbitrator and to refer the further claims referred therein and other claims to a different arbitrator. The petitioner referred to the order passed by this court on 13th September, 2012.
26. On 17th September, 2012, the learned arbitrator declared an award rejecting the claim for extension of lease made by the petitioner.
::: Downloaded on - 09/06/2013 19:15:21 :::kvm 14 ARBPL1255.12
27. Being aggrieved by the said impugned award dated 17th September, 2012, the petitioner has filed this petition under Section 34 of the Arbitration Act, 1996. The petitioner also filed petition under Section 9 of the Arbitration Act, 1996 (Lodging No. 1254 of 2012) interalia praying for a direction to the respondent to continue order dated 27th July, 2012 passed by the learned arbitrator.
28. Clause 18.1 of the agreement reads thus :-
18.1 Extension of lease is permissible only in case of long term lease of 3 years wherein the same can be extended only once, by 2 more years at a lease rate of 25% more than the lumpsum leased freight rate subject to satisfactory performance by the leaseholder, without any penalty for overloading or violation of any provision of the contract.
29. Clause (E) of the lease policy framed by the Government of India, Ministry of Railway (Railway Board) lease policy No.12/06 which is applicable to the facts of this case is extracted below :-
(E) Extension of Lease :
1. Extension of lease is permissible only in case of long term lease of 3 years.
2. In case of Long Term Lease, on expiry of the contract period, the same can be extended only once, by 2 more years at a lease rate of 25% more than the lumpsum leased freight rate.::: Downloaded on - 09/06/2013 19:15:21 :::
kvm 15 ARBPL1255.12
3. Such extension will be subject to satisfactory performance by the lease holder, without any penalty for overloading or violation of any provision of the contract.
4. In case of expiry of contract period and non- finalization of new contract due to administrative delays, temporary extension can be permitted by the CCM only once, for a period of 3 months.
30. The learned counsel appearing for the petitioner made the following submissions :-
(a) The learned arbitrator has proceeded ex-
parte against the petitioner and has not given equal opportunity to the petitioner to represent his case, to file affidavit of evidence, an opportunity of being heard, by not framing issues, by discriminating and not treating both the parties equally.
(b) The arbitrator was totally biased.
(c) The learned arbitrator who was Deputy
CCM (PM) was junior in rank to the Chief
Commissioner Manager, Western Railway whose order refusing to grant extension of lease was being subject mater of the arbitration and thus the learned ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 16 ARBPL1255.12 arbitrator in ordinary course would not have acted impartially while deciding the claims made by the petitioner.
(d) The learned arbitrator was making unwarranted comments against the petitioner during the course of the hearing.
(e) The learned arbitrator placed reliance of the judgment of the Supreme Court in case of Mallikarjun vs. Gulbarga University1 and in case of Indian Oil Corporation Limited and others vs. Raja Transport Private Ltd.2 in support of his plea which are not applicable.
(f) The learned arbitrator did not consider Claim Nos. 2 to 6 though referred to the learned arbitrator and were made in the statement of claim and dealt with by the respondent in written statement. The learned arbitrator has thus not decided in accordance with the disputes referred to her by the parties.
1 (2004) 1 SCC 372 2 (2009) 8 SCC 520 ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 17 ARBPL1255.12
(g) The learned arbitrator has not considered the matter on merits and not followed the judgments of Delhi High Court, Calcutta High Court and Patna High Court in similar matters which were forming part of the record before the arbitrator.
(h) It is submitted that the Bombay High Court judgment in case of M/s.Airwide Express Cargo vs. Union of India delivered on 3rd December, 2010 in Writ Petition (L) No. 2604 of 2010 was not relied upon by the parties. The judgment of the Bombay High Court in case of M/s.Airwide Express Cargo was in the writ petition and not in the arbitration matter. Power of this court under Article 226 of the Constitution of India was considered in the said judgment. The said judgment was thus distinguishable in the facts of this case.
(i) The learned counsel for the petitioner also placed reliance on the judgment of Calcutta High Court in case of M/s.S.G.Traders and another vs. Union of India & Ors. in Writ Petition No. ::: Downloaded on - 09/06/2013 19:15:21 ::: kvm 18 ARBPL1255.12 23926(W) of 2007 and in support of his plea that the Calcutta High Court after following the judgment of Delhi High Court and Patna High Court had directed the railway to extend the lease agreement by a period of two years after interpreting the similar clause which is the subject matter of this proceedings.
(j) The learned counsel also placed reliance on the order passed by this Court in Writ Petition Nos.
1266 of 2010 and (L) No. 2810 of 2010.
31. The learned Additional Solicitor General appearing on behalf of the respondent on the other hand made following submissions :-
(a) The petitioner had no vested right provided under the contract nor under any law to get extension of contract for any period. Under Clause 18.1 of the contract, the respondent has been given a discretionary power to grant extension and the same is enabling power. The said power does not confer any right in the contractor to seek extension of lease. Comprehensive partial lease policy of 2006 which is admittedly applicable to the contract ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 19 ARBPL1255.12 in question provides that in case of expiry of contract period and non finalization of the new contract due to administrative delay, temporary extension can be permitted by the CCM only once for a period of three months.
(b) It is submitted that the respondent have already invited fresh tenders and have already issued letter of acceptance. According to the policy, till such period when finalization of new contract is pending and is delayed due to any administrative reasons, with a view to protect the revenue of the respondent, such temporary extensions are permitted at the discretion of the respondent for a limited period of three months on conditions. It is submitted that such provision is thus not mandatory.
(c) The Learned Solicitor General placed reliance on the judgment of this court delivered on 3rd December, 2010 in case of M/s.Airwide Express Cargo vs. Union of India, through ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 20 ARBPL1255.12 General Manager, Western Railway & Anr in Writ Petition (L) No.2604 of 2010, judgment of Madras High Court in case of Green Express Division of Green Carriers and Contractors (Delhi) Pvt. Ltd. vs. The Chief Traffic Manager decided on 12th November, 2010 in Writ Petition No. 9734 and 12239 of 2010. Reliance is also placed on the other judgments of this court forming part of the record in which identical provisions have been considered and in all such cases contractors were allowed to continue for a temporary period till tenders invited by the respondents were finalised. It is submitted that all these judgments delivered by the Bombay High Court were binding on the learned arbitrator as also parties.
(d) The learned Arbitrator has given sufficient opportunity of producing documents, hearing and adducing oral evidence to both the parties. Issues were framed on 30th August, 2012 which fact was recorded in the Minutes of Meeting conducted by ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 21 ARBPL1255.12 the learned Arbitrator. The minutes were served upon both the parties at the same time and duly acknowledged by both the parties.
(e) The petitioner, after obtaining extension of contract under application made under Section 17 of the Arbitration Act 1996 was delaying the arbitration proceeding on one or other frivolous ground.
(f) In view of the order dated 13th September 2012 passed by this Court thereby modifying its order dated 10th July 2012 and restricting the reference of dispute as regards extension of lease for two more years and referred to the learned Arbitrator Mrs Bela Meena, the only issue regarding extension of lease was the subject matter of reference which was forming part of claim No.1 filed by the petitioner. The learned Arbitrator thus, was not required to consider claim Nos.2 to 6 in the same award. The petitioner was free to take appropriate steps for appointment of another ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 22 ARBPL1255.12 Arbitrator for referring claim Nos.2 to 6 and all other claims in respect of the disputes that had arisen, if any, according to the petitioner. The learned Arbitrator was thus, justified in deciding only one claim in view of the order dated 13th September 2012 passed by this Court. It is submitted that the respondents have no objection if claim Nos.2 to 6 are referred to another Arbitrator as directed by this Court by order dated 13th September 2012 in accordance with the provisions of law and the contract entered into between the parties.
(g) The petitioner has never raised any issue of bias against the learned Arbitrator at any point of time in any of the correspondence and/or submissions made before the learned Arbitrator.
The petitioner also did not raise any issue about competency of the learned Arbitrator to act as Arbitrator, she being junior to the Chief Commercial Manager, Western Railway and whose order refusing the grant of extension of contract ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 23 ARBPL1255.12 was being the subject matter of the arbitral proceeding. It is submitted that by an order dated 13th September 2012, this Court by consent of both the parties had modified its earlier order dated 10th July 2012 and had referred the dispute as regards the extension of lease to Mrs Bela Meena, Deputy Chief Commercial Manager. The petitioner, therefore could not challenge the appointment of the learned Arbitrator across the bar that she being the junior in rank and could not have acted as an Arbitrator when order passed by the Chief Commercial Manager was in issue before her. It is submitted that none of these grounds are even raised in the present petition and therefore cannot be allowed to be agitated across the bar for the first time.
(h) By letter dated 15th June 2012, the respondent had granted extension of lease period for a period of 3 months or till finalization of lease tender whichever was earlier on payment of correct lease rent plus 25%. It is submitted that ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 24 ARBPL1255.12 petitioner accepted such extension for a period of 3 months and thus waived his right to challenge the said extension. It is submitted that even interim order passed by the learned Arbitrator on 27th July 2012 was also operative for a limited period till disposal of the arbitral proceeding, granting liberty to the respondents to invite fresh tenders and finalize the same, with a rider that the allotment being made subject to final award in the arbitral proceedings. Even this interim award permitting the respondent to invite fresh tenders and to finalize the same has been accepted and not challenged by the petitioner. It is submitted that the petitioner did not bid for the same work, knowing fully well that the price of the bid which would be received by the respondents would be obviously much higher amount than the price for which contract was awarded to the petitioner.
(i) The petitioner deliberately failed to remain present in the meeting held on 15th September, 2012. The learned Arbitrator was justified in ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 25 ARBPL1255.12 closing the hearing and in declaring an award on 17th September 2012 after considering the pleadings, documents made available on record and the judgment of this court. The petitioner thus cannot make any grievance of non compliance of principles of natural justice. The petitioner having remained absent deliberately without any prior intimation or without giving intimation and without sufficient reasons cannot be permitted to challenge the award on the ground that no opportunity was given to make submissions or to file affidavit by the learned Arbitrator. The petitioner has waived his right to challenge the jurisdiction of the learned Arbitrator.
32. I have heard the learned counsel and have given my anxious consideration to the rival submissions made by the learned counsel.
33. Order dated 13th September, 2012 passed by this Court indicates that the said order was passed by consent and order dated 10th July, 2012 was modified. The learned Arbitrator was appointed to adjudicate upon the dispute as regards the extension of lease for two more years. It was provided that it ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 26 ARBPL1255.12 shall be treated as independent reference and to be decided by Mrs Bela Meena, Dy. Chief Commercial Manager. In my view, it is thus clear that only one claim which was referred to the learned Arbitrator by consent has been rightly decided by her in the impugned award. Claim Nos.2 to 6 made by the petitioner thus were rightly not decided by the learned Arbitrator. The order dated 13th September 2012 indicates that all other disputes raised/proposed to be raised regarding the contract dated 16th June 2009 shall be referred to another Arbitrator by the General Manager, Western Railway within two weeks from the date of the said order and the said reference shall be independent reference. The petitioner has not taken any steps to get another Arbitrator appointed in respect of such dispute raised/proposed to be raised including Clause Nos.2 to 6.
34. Perusal of the record as well as grounds raised in the petition indicate that no allegation of bias and/or about her alleged incapacity to act as an Arbitrator she being junior in rank to the Chief Commercial Manager has been raised at any point of time in the correspondence with the respondent, with the arbitrator or even in this petition.
35. The petitioner has also not filed any application under Section 12 and 13 of the Arbitration Act 1996 before the learned Arbitrator challenging her appointment on any of these grounds or impugning bias against the learned ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 27 ARBPL1255.12 Arbitrator. On the contrary, appointment of the learned Arbitrator was by consent of parties as is apparent from the order dated 13th September, 2012 passed by this Court. The petitioner not having raised any such pleading of bias and/or jurisdiction of the learned Arbitrator before the learned Arbitrator or even in the present proceeding, cannot be allowed to agitate such issues for the first time across the bar.
36. The next question arise for consideration of this Court is whether the learned Arbitrator was right in refusing to grant relief to the petitioner seeking an extension of lease for further period of two years. Perusal of Clause 18.1 of the contract indicates that grant of extension of lease by the respondents is not mandatory but is discretionary. Clause18.1 read with para (E) of the Comprehensive Parcel Leasing Policy 2006 which is applicable to the facts of this case clearly indicates that in case of expiry of contract period and non finalization of lease contract due to administrative delays, temporary extension can be permitted by the Chief Commercial Manager only once, for a period of 3 months. In my view from the perusal of the said policy, it is clear that though the respondents in appropriate cases can grant temporary extension for a period of 3 months if any administrative delay is occasioned in finalization of lease contract so as to protect the revenue of respondents, in my under Cl.18.1 read with para (E) of the Comprehensive Parcel Leasing Policy 2006, no right of any nature whatsoever is vested in favour of the contractor for seeking ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 28 ARBPL1255.12 extension of lease as a matter of right. The said provision is enabling provision and gives discretion to the respondents to grant extension for a period of 3 months and that also only once due to administrative delay in finalization of lease contract. Whether such discretion to grant temporary extension till the lease contract is finalized or not, shall be exercised or not exclusively vests with the respondents. The findings of the learned Arbitrator thus, in my view, cannot be faulted with and does not require any interference.
37. This Court in number of writ petitions had occasion to consider the identical clauses in the contract and the policy. The Division Bench of this Court in case of M/s. Airwide Express Cargo (supra) after considering Clause 20.1 which is in para materia with Clause18.1, considering the policy of the Ministry of Railways which was under consideration in this matter after following the earlier orders passed by the Division Bench of this Court dated 13th April 2010 and 28th October 2010 has held in para 8 as under :
8. ... The rate which has been accepted by the Western Railway of Rs.2,32,560/- per round trip is almost double the rate which was quoted by the Petitioner and accepted for the contract which was entered into in 2006. The Petitioner has had the benefit of not only the period of the original contract of 2006-09 but as a result of the interim order of status quo that was passed by the City Civil Court, the Petitioner continued thereafter, at the same rate until 25 November 2010. There is no vested right to extension or renewal of the contract. Having regard to all these circumstance, we do not consider that it would be either ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 29 ARBPL1255.12 appropriate or proper for this Court in the exercise of the writ jurisdiction to direct that the contract of the Petitioner should be continued on the same terms and conditions. Whether the existing parcel van which was allotted to the Petitioner should be continued or discontinued and if it is continued whether it should be at existing rates, is a matter which is not within the jurisdiction of this Court under Article 226 of the Constitution.
38. The Madras High Court in case of Green Express Division of Green Carriers and Contractors (Delhi) Pvt. Ltd. (supra) has distinguished the judgment of the Delhi High Court and Patna High Court relied upon by the petitioner. The Madras High Court has construed the expression "can" used in Clause 18.1 and Clause E of Freight Marketing Circular No.12 of 2006 and in para 45 has held thus :
45. In these writ petitions, as already stated above, there is no public good or benefit of others are involved. It is purely a matter of contract and commercial transaction. Therefore, one should look into the actual words used in the contract/agreement. Hence, there is no warrant for reading "can" as "shall" or "must". Thus the Petitioners are not entitled to automatic extension of lease period. Issue No.2 is answered accordingly.
39. In my view, the learned Arbitrator was bound to follow the law laid down by this Court in various judgments and has declared the award in accordance with the law and contract. In my view there is no infirmity in the impugned award and thus no interference is warranted with the impugned award.
::: Downloaded on - 09/06/2013 19:15:22 :::kvm 30 ARBPL1255.12
40. The record produced by the parties also indicates that the learned Arbitrator had given sufficient opportunity to both the parties to file evidence, issues, to plea and argue their respective cases, by granting sufficient adjournments. From the record it is clear that the conduct of the petitioner is totally blameworthy. After obtaining interim order under section 17 of the Arbitration Act, the petitioner was bent upon to delay the arbitral proceedings on one or the other ground obviously for the reason that temporary extension of contract granted by the learned Arbitrator would operate till the proceedings disposed of at a lower rate. The petitioner did not even submit his bid in respect of the tenders invited by the respondents for the same work. The learned additional Solicitor General was right in his submission that these delay tactics played by the petitioner were to continue the benefit of the lower rate being paid to the respondents by the petitioner as against the bid for higher amount that was received by the respondents for the same work. In my view, the only issue required to be decided by the learned Arbitrator was as to whether petitioner was entitled to be granted the extension of lease for a further period of two years under Cl.18.1 read with para E of the 2006 policy which did not require any oral evidence, framing of any additional issues though issues was already framed by the learned Arbitrator in this case. The learned Arbitrator thus, has rightly decided the said issue by interpreting the terms of contract and the policy and after following the judgments delivered by this Court. In my view, there was no violation of principles of justice committed ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 31 ARBPL1255.12 by the learned Arbitrator.
41. Perusal of minutes of meeting submitted by the petitioner himself indicates that sufficient opportunity was given to the petitioner. In my view, no prejudice was caused to the petitioner due to shorter adjournments granted by the learned Arbitrator to submit issues, affidavit of evidence or for arguments.
In my view, the learned Arbitrator is justified in granting shorter adjournments in view of the facts that respondents had already invited the tenders as far back in July 2012 and letter of acceptance was being issued. Any further delay in conclusion of the arbitral proceedings was causing a loss and prejudice to the respondents and in favour of the petitioner. The entire issue was to be decided on interpretation of the terms and conditions of contract and the policy. If by granting shorter adjournments ultimately if the parties have not suffered any injustice or if no prejudice is caused, in my view it cannot be considered as violation of principles of natural justice. The petitioner has failed to demonstrate any substantial prejudice caused to the petitioner by not submitting affidavit of evidence or number of issues not having framed by the learned Arbitrator as demanded by the petitioner. The issue required to be decided by the learned Arbitrator was limited issue which could be decided based on the interpretation of the documents submitted by the parties and in line of principles laid down by this Court in various judgments. In my view thus there is no substance in any of the grounds raised in the petition. The ::: Downloaded on - 09/06/2013 19:15:22 ::: kvm 32 ARBPL1255.12 learned Arbitrator has interpreted the terms of contract and has followed the interpretation of this court in various judgments. The Judgments delivered by this Court are binding not only on the parties but also on the learned Arbitrator.
The learned Arbitrator has acted in accordance with law and thus this Court cannot interfere with the said award.
42. Resultantly, Arbitration Petition (L) No.1255 is rejected. There shall be no order as to costs.
(R.D. DHANUKA, J.) ::: Downloaded on - 09/06/2013 19:15:22 :::