Union Of India vs M/S Woodspot
2009 Latest Caselaw 3981 Del

            * IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                        Date of Reserve: 17.8.2009
                                               Date of Order: 25th September, 2009

CS (OS) No. 1780A/1998 & IA No. 7397/2000
%                                                                    25.09.2009

       Union of India                         ... Petitioner/Plaintiff
                                   Through: Nemo

               Versus


       M/s Woodspot                           ... Respondent/Defendant
                                   Through: Mr. Shiv Khorana, Advocate


JUSTICE SHIV NARAYAN DHINGRA

1. Whether reporters of local papers may be allowed to see the
judgment?

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

The Objector has filed the objections in this case against an award

dated 18.6.1998 passed by the learned Arbitrator Mr. S.B.Sharan whereby he

allowed the claims of petitioner/UOI for sum of Rs.2,50,350/- on account of risk

purchase loss against the respondent/contractor with interest @ 12% p.a. from

11.10.1979 till realization.

2. A perusal of record would show that the matter was pending before

several Arbitrators one after another and lastly when the matter was pending

before Mr. R.N.Mshra, Sole Arbitrator he passed an order on 1st March, 1985

observing that the four months extension granted by the parties had already

expired and in the circumstances either both parties agree for further extension

of time so that the case could be proceeded further or one of the parties brings

extension from the Court of competent jurisdiction. Since, in this case the

Objector/applicant had not agreed for extension of time, the Arbitrator observed

that he could not continue with the proceedings and let the party interested in the

proceedings bring extension from the Court of competent jurisdiction, till then the

proceedings were adjourned sine die. After passing of this order Mr. R.N.Misra,

who was working as Additional Legal Advisor, got superannuated and therefore

could not remain as Arbitrator in this case. Union of India then appointed Mr.

S.B.Sharan as the Arbitrator in place of Mr. R.N.Misra on 6.3.1998 i.e. after

about 13 years of case having been adjourned sine die, without there being any

extension granted by the Court. Mr. S.B.Sharan on taking up as Arbitrator

asked Union of India to publish a notice in leading newspaper for appearance of

the respondent and after publication of notice in newspaper, he (Arbitrator)

proceeded ex parte against the respondent/Objector and passed the award.

3. In the objections, the Objector stated that the different Arbitrators

appointed by the Union of India did not have jurisdiction to proceed with the case

because the reference to the Arbitrator was made some time in 1980 and the

Arbitrators continued for such long a time without a consent from the Objector for

extension of time. It was submitted that the Objector had been continuously

appearing before different Arbitrators till the proceedings were adjourned sine

die. Thereafter, non-Objector filed an application under Section 28 of the

Arbitration Act, 1940 before the High Court of Delhi which was registered as

OMP No. 366/1985. The Objector filed objections to the extension of time and

also placed on record the letter of resignation of Mr. R.N.Misra as Sole Arbitrator.

The petition filed before High Court was dismissed as having become infructuous

on 14.9.1998. Thus, there was no extension granted by the High Court. It is

stated that Mr. S.B.Sharan took over as Arbitrator after more than 10 years of

resignation of Mr. R.N.Misra, without there being any extension from the Court

for conducting arbitration proceedings. He proceeded against the respondent ex

parte on the basis of newspaper publication and passed an award without

jurisdiction thus, the award was bad in law and not tenable.

4. A perusal of record would show that Mr. S.B.Sharan was appointed

after 10 years of resignation of Mr. R.N.Misra. Mr. Misra's order of adjourning

the matter sine die had not been set aside by any Court neither any extension of

time for passing award was granted by this Court. It is clear that Mr. R.N.Misra

had become functus officio in this case as no extension of time was granted by

the High Court nor both the parties had agreed for granting extension for passing

the award. Mr. S,B.Sharan could not have acted as Arbitrator in place of an

Arbitrator, who himself had become functus officio, and passed an award.

Moreover, in this case the Objector while contesting the earlier petition in High

Court had given his address of Dehradun and copy of this affidavit was given to

Union of India. Union of India instead of serving the Objector and informing the

Arbitrator Mr. S.B.Sharan about the new address of the Objector, got the

publication made in newspaper and thereafter the Objector was proceeded ex

parte.

5. I find that the award passed by the Arbitrator in this case is not

tenable and without jurisdiction as the Arbitrator had become functus officio some

time in 1983. The award is otherwise not tenable as it has been passed without

notice to the Objector whose address was available with Union of India but he

was not served through ordinary process. I, therefore, set aside the award dated

18.6.1998 passed by the Arbitrator.

September 25, 2009                                SHIV NARAYAN DHINGRA, J.
vn