Prajapati Gunvant Keshavlal vs Union Of India Through Ig
2012 Latest Caselaw 132 Bom

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                                                                                   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

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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.

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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

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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.

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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

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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

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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.

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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

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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.

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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

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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

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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

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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.

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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.

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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

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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

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(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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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.)