The Registrar, Indian Council Of ... vs K.S. Sidhu
2014 Latest Caselaw 126 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                       Date of decision: 8th January, 2014.

+                               RFA No.341/2013

      THE REGISTRAR, INDIAN COUNCIL
      OF ARBITRATION                           ..... Appellant
                   Through: Mr. Murari Kumar, Adv.

                                     Versus
      K.S. SIDHU                                          ..... Respondent
                          Through:     Dr. K.S. Sidhu, Sr. Adv. with Mr.
                                       Sunil Mittal & Ms. Maldeep Sidhu,
                                       Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and decree (dated 04.06.2013 of

the Court of Additional District Judge (ADJ)-1, New Delhi District,

Patiala House Courts, New Delhi in Suit No.11/2011 (ID

No.02403C0004482011) filed by the respondent) in favour of the

respondent / plaintiff and against the appellant / defendant for recovery of

Rs.5,02,500/- together with costs and interest, pendente lite and future at

10% per annum.

2. Notice of the appeal was issued and the Trial Court record

requisitioned. The respondent / plaintiff has filed cross objections. The

appeal and the cross objections were admitted for hearing and with the

consent of the counsels heard finally and judgment reserved.

3. The respondent / plaintiff on 22.01.2011 instituted the suit from

which this appeal arises for recovery of Rs.5,25,000/- from the appellant /

defendant with interest at the rate of 12% per annum with effect from

23.03.2007 and till the date of payment, pleading:

(i) that the respondent / plaintiff, a senior advocate was on

06.04.2005 appointed by the appellant / defendant as a

Presiding Arbitrator in two arbitration matters registered

with the appellant / defendant as AC No.1430/2005 and AC

No.1435/2005;

(ii) that the respondent / plaintiff performed his part as the

Presiding Arbitrator and in which arbitration proceedings

about 30 hearings spread over a period of nearly 30 months

during the years 2005 to 2007 were held;

(iii) that an interim award dated 23.03.2007 was made by the

respondent / plaintiff in the said arbitration proceedings;

(iv) that the then Registrar of the appellant / defendant felt

offended by the said interim award;

(v) that the respondent / plaintiff had vide the said interim

award terminated the arbitration proceedings holding the

claim as well as the counterclaim (being the two arbitration

cases supra) to be vitiated by fraud and collusion;

(vi) however the other two arbitrators did not accept the findings

of the respondent / plaintiff in the interim award aforesaid

and thus the arbitration proceedings had to be continued

further for recording oral evidence preparatory to the

making of the final award;

(vii) that after 23.03.2007, the Registrar of the appellant /

defendant began to obstruct the proceedings;

(viii) that by the month of August, 2007 the entire evidence in the

said arbitration cases had been recorded and the cases were

ripe for final arguments;

(ix) that when the arbitration proceedings were listed on

05.10.2007 for hearing final arguments, the respondent /

plaintiff received a written communication from the

Registrar of the appellant / defendant to the effect that the

appointment of the respondent / plaintiff as Presiding

Arbitrator was void ab initio and that the Arbitral Tribunal

will have to be reconstituted;

(x) the respondent / plaintiff vide his letter dated 07.10.2007

rejected the said communication of the Registrar of the

appellant / defendant and called for listing the arbitration

cases for hearing but which was not done;

(xi) the respondent / plaintiff filed a petition in this Court under

Article 226 of the Constitution of India being WP(C)

No.8738/2007 for declaration that the mandate of the

respondent / plaintiff as the Presiding Arbitrator continued;

however the said writ petition was dismissed on 07.04.2010

on technical grounds;

(xii) the respondent / plaintiff thereafter took the matter to

Supreme Court by filing a Special Leave Petition but the

same was also rejected on 19.11.2010;

(xiii) that the respondent / plaintiff was entitled to recover

travelling allowances under the Rules of the appellant /

defendant of Rs.22,500/- at the prescribed rate of Rs.750/-

per visit for attending 30 odd arbitration hearings;

(xiv) that after the respondent / plaintiff had been unsuccessful in

his challenge to termination of his appointment as Presiding

Arbitrator, all that was left for him was to recover his

arbitration fee and travelling expenses;

(xv) that the respondent / plaintiff thus vide the plaint in the suit

was terminating the contract of his appointment as the

Presiding Arbitrator and which contract the appellant /

defendant had refused to perform since October, 2007; and,

(xvi) that the respondent / plaintiff was entitled to recover

Rs.2,85,000/- and Rs.2,17,500/- totaling Rs.5,02,500/- by

way of arbitrator‟s fee and Rs.22,500/- by way of travelling

allowance, in all Rs.5,25,000/- under the Rules of the

appellant / defendant in the two arbitration cases aforesaid

together with interests thereon at 10% per annum with

effect from 23.03.2007 till the date of payment.

4. The appellant / defendant failed to appear in response to the

summons of the suit and was on 28.02.2011 proceeded against ex parte.

The respondent / plaintiff led ex parte evidence.

5. The learned ADJ vide judgment and decree dated 05.08.2011

dismissed the suit for two reasons; firstly, of the suit claim being barred

by time and secondly, on the ground that the deposition of the respondent

/ plaintiff was silent about the basis of his claim and there was no

evidence corroborating his claim and no dates had been given on which

the respondent / plaintiff conducted the arbitration proceedings and there

was no evidence of the agreed rate of fee.

6. The respondent / plaintiff challenged the dismissal of his suit by

filing RFA No.526/2011 in this Court. The said appeal came up first

before this Court on 24.10.2011 when the counsel for the respondent /

plaintiff made an oral prayer for leading of additional evidence to show

the number of hearings attended by the respondent / plaintiff as the

Arbitrator and schedule of fee payable to the Arbitrator for a sitting. This

Court, without issuing any notice to the appellant / defendant for the

reason of the appellant / defendant being ex parte in the suit, allowed the

said request of the respondent / plaintiff and granted to the respondent /

plaintiff three opportunities to lead evidence with respect to the dates of

hearing on which he attended the proceedings as Arbitrator and also the

schedule of fee so as to crystallize the amount which the respondent /

plaintiff claimed to be payable. As far as the issue of limitation was

concerned, though it was held that the cause of action for the suit for

recovery would arise only on the refusal of the appellant / defendant to

make the payment but while allowing the appeal and remanding the

matter to the Trial Court to enable the respondent / plaintiff to avail three

opportunities to lead additional evidence, it was observed that the Trial

Court will hear and dispose of the suit in accordance with law, including

on the issue of limitation. It was further directed that the Trial Court will

issue a fresh notice to the appellant / defendant before proceeding further

in the suit.

7. On remand, the Trial court issued notice to the appellant /

defendant and in response whereto the counsel for the appellant /

defendant appeared on 12.12.2011 before the Trial Court. The counsel

for the respondent / plaintiff, though before the High Court in appeal had

sought opportunity to lead additional evidence, on 12.12.2011 stated that

no further evidence was required to be adduced and only the arguments

with reappraisal of evidence already on record were required to be heard.

On such submission, the suit was posted for arguments. Arguments were

heard on 27.01.2012 and the suit adjourned to 02.02.2012 for

clarification. On 02.02.2012, the counsel for the respondent / plaintiff

filed an application for leading additional evidence and notice thereof was

issued to the appellant / defendant. The appellant / defendant filed reply

to the said application which was on 03.07.2012 allowed. The appellant /

defendant on the same date also filed an application under Order 9 Rule 7

of the CPC.

8. The Trial Court, vide order dated 15.01.2013 dismissed the

application of the appellant / defendant under Order 9 Rule 7 of the CPC

on the ground of the same being barred by laches inasmuch as though the

appellant / defendant pursuant to notice issued to it on remand of the suit

had appeared on 12.12.2011 but the application was filed only on

03.07.2012 and without any application for condonation of delay.

9. The suit was thereafter adjourned for cross-examination of the

respondent / plaintiff by the counsel for the appellant / defendant qua

additional evidence led by the respondent / plaintiff and thereafter for

final arguments.

10. The learned ADJ has vide the impugned judgment decreed the suit,

finding / observing / holding:

(I) "the matter having been remanded back, there was no

requirement for any further evidence apart from what

already existed. The matter has therefore been argued out

by both the parties.";

(II) that the counsel for the respondent / plaintiff had "pointed

out" that no separate fee was payable for every date and it

was a composite amount payable on the claim;

accordingly a fixed amount of Rs.2,85,000/- and

Rs.2,75,000/- was the fee recoverable by the respondent /

plaintiff in both the cases;

(III) that the counsel for the appellant / defendant had opposed

the claim on the ground of limitation;

(IV) that there was no categorical refusal by the appellant /

defendant of the demand of the respondent / plaintiff; in

such circumstances and in the light of the observations of

the High Court in the judgment in RFA, the right to claim

damages and compensation would arise on acceptance of

the termination of the contract which as per the respondent

/ plaintiff was by filing of the suit.

Accordingly, the suit was decreed.

11. The counsel for the appellant / defendant has argued:

(a) that the termination by the appellant / defendant of the

appointment of the respondent / plaintiff as Presiding

Arbitrator, though was challenged by the respondent /

plaintiff but without any success; the termination by the

appellant / defendant was thus held to be valid;

(b) that the contract of appointment of the respondent /

plaintiff as Presiding Arbitrator was void ab initio being

contrary to the rules of the appellant / defendant.

12. The respondent / plaintiff appearing in person has argued:

(aa) that the appointment of Arbitrators including the Presiding

Arbitrator is under the Agreement of the parties and the

appellant / defendant is only a facilitator / an agent of the

parties to the Agreement. Attention is invited to the cross-

objections preferred by the respondent / plaintiff where it is

inter alia stated that the loss suffered by the respondent /

plaintiff as a consequence of the tortuous and fraudulent

conduct of the appellant / defendant arose from the special

circumstances relating to the respondent / plaintiff being

the Presiding Arbitrator in a three member quasi-judicial

Tribunal; the appellant / defendant had full knowledge of

the circumstances; that the appellant / defendant knew that

the respondent / plaintiff would be fighting shy from taking

recourse to a demeaning action of suing for recovery of

money;

(bb) that the respondent / plaintiff has been treated shabbily by

the Registrar of the appellant / defendant;

(cc) that though the respondent / plaintiff had preferred the SLP

against the dismissal of his writ petition by this Court but

withdrew the same on the advice of the Supreme Court and

for this special reason limitation should not be allowed to

come in the way;

(dd) that the suit claim is within time under Section 39 of the

Indian Contract Act, 1872 read with Article 55 of the

Limitation Act, 1963;

(ee) that the limitation would commence from the date when

the respondent / plaintiff accepted the breach of the

contract by the appellant / defendant and which was only

on institution of the suit;

(ff) however the respondent / plaintiff is entitled to interest on

the amounts claimed from the date of the interim award

and which has not been granted by the learned Trial Court;

(gg) that this Court in judgment dated 24.10.2011 in RFA

No.526/2011 earlier preferred by the respondent / plaintiff,

after setting aside the finding of the Trial Court in the

judgment dated 05.08.2011 of the suit claim being barred

by limitation, ought to have decreed the suit and erred in

remanding the suit for adjudication and in keeping the

issue of limitation also open;

(hh) that the Trial Court in the impugned judgment has not

considered the arguments contained in the written

submissions filed by the respondent / plaintiff before the

Trial Court and a copy of which was handed over in this

Court during the course of hearing.

13. The counsel for the appellant / defendant in rejoinder has argued:

      (i)         that the present is not a case of breach;



       (ii)        that the contract of appointment of the respondent /

plaintiff as Presiding Arbitrator came to an end as per the

rules of the appellant / defendant;

(iii) Reliance is placed on Ahmadsahab Abdul Mulla Vs.

Bibijan (2009) 5 SCC 462 (Paras No.11&12), J.P. Bansal

Vs. State of Rajasthan (2003) 5 SCC 134, Sukhmander

Singh Vs. State of Punjab (1999) 9 SCC 55 and on Food

Corporation of India Vs. Babulal Agarwal (2004) 2 SCC

14. I have considered the rival submissions.

15. I may at the outset state that this Court in this proceeding is not

sitting in appeal, neither over the judgment dated 07.04.2010 of this Court

of dismissal of W.P.(C) No.8738/2007 supra filed by the respondent /

plaintiff nor over the judgment dated 24.10.2011 in RFA No.526/2011

earlier preferred by the respondent / plaintiff and both of which

judgments have been severally criticized by the respondent / plaintiff

during his arguments and both the said judgments have admittedly

attained finality and being inter parties bind the respondent / plaintiff.

16. I may further clarify that though Rule 1A of Order 43 of the CPC

permits challenge to non-appealable orders, as an order of dismissal of

the application under Order 9 Rule 7 of the CPC is, in appeal against the

decree but the appellant / defendant has neither in the memorandum of

appeal challenged the order dated 15.01.2013 supra of the Trial Court of

dismissal of the application of the appellant / defendant under Order 9

Rule 7 of the CPC nor raised any argument with respect thereto.

17. The only questions thus to be considered are, whether the finding

of the learned ADJ in the impugned judgment of the suit claim being

within time is correct or not and if the suit claim is found to be within

time, whether the appellant / plaintiff has proved his entitlement thereto.

18. The learned ADJ in the earlier judgment dated 05.08.2011 held the

suit claim to be barred by time observing as under:

"13. Notwithstanding the above, the claim pertains to the fees to be paid for hearings up to March 2007 when the plaintiff's appointment was sought to be terminated. The present suit has been filed on 24.01.2011. The claim of the plaintiff is clearly beyond the period of limitation. The plaintiff's demand for reimbursement of his TA bill had been rejected in May 2007 itself. The plaintiff had some meetings till October 2007, though there is nothing to show that they were in respect of arbitration hearings. Even then the claim is time barred. I am

unable to appreciate the arguments advanced by the plaintiff that the limitation would continue to run as it was the defendant who had terminated the contract. The present suit is a simple money suit claiming recovery of professional fees for each and every hearing. Under such circumstances, the claim, if any, had to be made against the defendant within the period prescribed under law. This is apart from the fact that there is no cogent evidence on record testifying in respect of the actual dates of hearing or the fees applicable for each arbitration proceedings for this Court to adjudicate upon the quantum of amount to which the plaintiff may have been entitled to, had his claim been within time."

19. This Court, vide judgment dated 24.10.2011 in RFA No.526/2011

preferred against the aforesaid judgment observed as under on the aspect

of limitation:

"3. So far as the issue of limitation is concerned, in my opinion, the impugned judgment is incorrect and liable to be set aside because the hearings were admittedly held upto March, 2007 and the suit was filed on 24.1.2011. The cause of action in a suit for recovery such as the present only arises on the refusal of the respondent/defendant to make the payment. I do not find that the impugned judgment refers to a date as per which the cause of action will begin so as to claim the amount in terms of Article 113 of the Limitation Act, 1963. Thus the finding that the suit was barred by limitation is set aside with the direction to the Trial Court to re-examine the issue.

4. Accordingly, the appeal is allowed. The appellant is allowed three opportunities to lead additional evidence as stated above. The Trial Court will hear and dispose of the suit in accordance with law, including on the issue of limitation."

20. It would thus be seen that though this Court set aside the finding

aforesaid of the learned ADJ of the suit claim being barred by time but

nevertheless directed the Trial Court to re-examine the issue and decide

the suit afresh including on the issue of limitation. Thus the observations

of this Court on the aspect of limitation in the judgment dated 24.10.2011

were not intended to be final and conclusive. Rather, it appears that since

the respondent / plaintiff sought time to lead additional evidence in the

suit and which request was acceded to by this Court, the findings of the

Trial Court on the aspect of limitation were set aside only to enable

reconsideration of the matter.

21. The Trial Court in the impugned judgment in the second round has

not given any finding of its own to hold the claim to be within time

though the same learned ADJ on an earlier occasion in the judgment

dated 05.08.2011 had held the suit claim to be barred by time.

Notwithstanding the directions to the Trial Court while remanding the

matter, to re-examine the issue of limitation, the Trial Court has been

influenced solely by the observations in the remand order and which

observations as aforesaid were not conclusive.

22. I am unable to find on the Trial Court record the letter of

termination of appointment of the respondent / plaintiff as Presiding

Arbitrator. No reference thereto is to be found in the examination-in-

chief of the respondent / plaintiff also. However a perusal of the

judgment dated 07.04.2010 of dismissal of W.P.(C) No.8738/2007

preferred by the respondent / plaintiff discloses the said communication

to be dated 04.10.2007 and stating that the appointment of the respondent

/ plaintiff as Presiding Arbitrator was void ab initio, perhaps owing to

the respondent / plaintiff being overage on the date of appointment [Rule

13 of the Rules of Arbitration (as amended on 1 st January, 2005) of the

appellant / defendant provides that persons who have attained the age of

more than 80 years would automatically cease to be members of Panel of

Arbitrators. This Court while dismissing the writ petition, held the same

to be wholly misconceived. It was held that the respondent / plaintiff was

one of the members of a Arbitral Tribunal and could not be an aggrieved

party, if on account of operation of law he ceased to function as a

member of the Arbitral Tribunal and particularly when neither of the

parties to the arbitration were aggrieved from the respondent / plaintiff so

ceasing to be the Presiding Arbitrator was upheld by this Court.

23. Once the appointment of respondent / plaintiff as Presiding

Arbitrator has been held to be void ab initio, the claim of the respondent /

plaintiff cannot be for contractual arbitration fee but can only be for

compensation within the meaning of Section 65 of the Contract Act, 1872

which provides that when a contract is discovered to be void, the person

who has received advantage thereunder is bound to restore it or to make

compensation to the person from whom he received it. The respondent /

plaintiff undoubtedly was made to work as a Presiding Arbitrator and to

render the „interim award‟ and is thus entitled to be compensated therefor.

The claim of the respondent / plaintiff can also be considered under

Section 70 of the Contract Act, 1872 which provides that where a person

lawfully does anything for another person, not intending to do so

gratuitously and such other person enjoys the benefit thereof, the latter is

bound to make compensation to the former in respect of the things so

done.

24. The next question which arises is as to what would be the period of

limitation for claiming such compensation under Sections 65 or 70 of the

Contract Act.

25. The Schedule to the Limitation Act, 1963, under Article 7 provides

limitation of three years for a suit for wages, commencing from the date

when the wages accrued due; under Article 18 provides limitation of

three years for a suit for the price of work done by the plaintiff for the

defendant at his request, where no time has been fixed for payment,

commencing from the date when the work is done; under Article 27

provides limitation of three years for a suit for compensation for breach

of a promise to do anything upon the happening of a specified

contingency commencing from the date when the time specified arrives

or the contingency happens.

26. The aforesaid are some of the Articles of the Schedule which may

throw some light, though neither of the said Articles nor any other Article

in the Schedule provides specifically for a suit for compensation under

Sections 65 or 70 supra of the Contract Act. The only purport of citing

the aforesaid Articles is to show that limitation for claims akin to the

claim of the respondent / plaintiff is of three years commencing from the

date when the payment became due or when the contract becomes void

and not from the date when the payment pursuant to demand is refused.

In the absence of any specific Article dealing with a suit for the claim as

under Sections 65 and 70 of the Contract Act, the limitation thereof will

be governed by the residuary Article 113, also providing for a limitation

of three years commencing from the date when the right to sue accrues.

27. The right to sue according to the respondent / plaintiff also accrued

on the date of termination by the appellant / defendant of the appointment

of the respondent / plaintiff as Presiding Arbitrator i.e. on 04.10.2007.

This is evident from the respondent / plaintiff making a claim for interest

from the said date and in fact from prior thereto i.e. from the date of the

interim award. If the respondent / plaintiff was correct in his contention,

that the cause of action accrued only when payment was refused, the

question of demanding any interest on the amount claimed, for the period

prior thereto would not arise. The suit admittedly has been filed beyond

three years therefrom.

28. The respondent / plaintiff however seeks to bring the suit within

limitation, by referring to Section 39 of the Contract Act and to Article 55

of the Schedule to the Limitation Act. Section 39 of the Contract Act

provides that when a party to a contract has refused to perform his

promise in its entirety, the promisee may put an end to the contract,

unless he has signified his acquiescence in its continuance. I fail to see as

to how the said provision can be attracted. The present is not a case of the

appellant / defendant refusing to perform its contract in its entirety but

rather of terminating the contract as void ab initio. The question of the

contract of appointment as Presiding Arbitrator continuing thereafter thus

does not arise. As far as Article 55 is concerned, the same provides

limitation of three years for a suit for compensation for breach of any

contract commencing from the date when the contract is broken or where

there are successive breaches, when the breach in respect of which the

suit is instituted occurs or where the breach is continuing when it ceases.

The argument of the respondent / plaintiff is that in the present case the

breach continued till the time the respondent / plaintiff was challenging

the termination and till he filed the suit for recovery of his dues, accepting

such termination. The said argument suffers from a fallacy. The

compensation to which the respondent / plaintiff is entitled under

Sections 65 or 70 supra, is not for breach by the appellant / defendant of

the contract of appointment of respondent / plaintiff as Presiding

Arbitrator but for the advantage received by the appellant / defendant

from the appointment of the respondent / plaintiff as the Presiding

Arbitrator and which appointment was subsequently discovered to be

void ab initio for the reason of being in violation of the Rules of the

appellant / defendant. Moreover, the breach even if assumed on the part

of the appellant / defendant by terminating the contract was not such as

can be said to be continuing till the time respondent / plaintiff chose to

accept the same.

29. The cause of action for recovering compensation under Sections 65

or 70 of the Contract Act undoubtedly accrued to the respondent /

plaintiff when the contract of appointment of the respondent / plaintiff as

Presiding Arbitrator was discovered to be ab initio void for the reason of

the respondent / plaintiff on the date of appointment being overage. The

mere fact that the respondent / plaintiff unsuccessfully challenged such

termination would not extend the period of limitation which has begun to

run on the date of termination. The respondent / plaintiff in his written

submissions supra has referred to S.V. Harihara Iyer Vs. Mathew

George AIR 1965 Ker. 187 and to State of Kerala Vs. Cochin Chemical

Refineries Ltd. AIR 1968 SC 1361 but I am, in view taken above, unable

to find the same applicable.

30. Thus, whichever way one looks at, the suit claim of the respondent

/ plaintiff cannot be said to be within time.

31. Though the observations in the judgment dated 24.10.2011 in

earlier RFA No.526/2011 suggests that the cause of action would arise

only on the refusal of the appellant / defendant to make payment but the

same were as aforesaid not final and concluding and I am unable to find

any support therefor in law. A person entitled to recovery of money

cannot set at naught the limitation provided therefor by not making a

demand. If it were to be held that the starting point of limitation provided

of three years is the refusal pursuant to demand, it would give a handle to

the claimant to govern the limitation and the defendant can never be

certain of the time after which no claim can be made against it, defeating

the purpose of the law of limitation. None of the Articles aforesaid of the

Schedule to the Limitation Act provide for the date of commencement of

the period of limitation from the date of refusal of demand. Wherever the

legislature felt that limitation should commence from the date of refusal,

it has provided so. Reference in this regard can be made to Articles

22,39,40 and 45 of the Schedule to the Limitation Act.

32. I am also at loss as to how the learned ADJ has arrived at a finding

of the respondent / plaintiff having proved entitlement to the arbitration

fee. There is no basis disclosed therefor except the contention of the

respondent / plaintiff which has been accepted. The learned ADJ lost

sight of the fact that on an earlier occasion the claim had been dismissed

for this reason also and the respondent / plaintiff in the RFA No.

526/2011 earlier preferred by him conceded so and sought an opportunity

to lead additional evidence to prove the basis of his claim; though such

additional evidence was permitted, albeit in the absence of the appellant /

defendant (though the decree of dismissal of suit against whom in my

view could not have been set aside without notice) but the respondent /

plaintiff on remand made a statement that no additional evidence was

required to be led. On such submission, the suit should immediately have

been dismissed again. Subsequently, permission for adducing additional

evidence was applied for and granted but a perusal of the affidavit dated

09.02.2012 by way of additional evidence also does not show the

respondent / plaintiff to have proved the basis for his claim for arbitration

fee of Rs.2,85,000/- and Rs.2,17,500/- for the two cases. The learned

ADJ, in the impugned judgment has in fact not referred thereto. The

respondent / plaintiff also on 26.07.2013 when the appeal first came up

before this Court, could not even tell whether the additional evidence had

been led or not, as is evident from the order of that day.

33. A perusal of the Rules of Arbitration (as amended on 01.01.2005)

on Trial Court record shows Rule 31 to be providing for the Arbitrators

fee to be fixed on the basis of amount in dispute. The respondent /

plaintiff in the plaint has mentioned claim in one of the cases was for

recovery of Rs.1,30,57,783.44. There is no pleading in the plaint of the

value of the claim in the other case. Similarly in the evidence led by the

respondent / plaintiff in the first round, there was no mention thereof. In

the additional evidence led by the respondent / plaintiff however the

respondent / plaintiff has stated that one of the claims was for recovery of

Rs.7,78,90,281.87 and the other was for recovery of Rs.3,85,64,405/-.

There is thus an apparent inconsistency in the pleading and evidence.

Not only so, the respondent / plaintiff has nowhere deposed as to how

much fee he was entitled to as per the Rules.

34. However even if the same were to be ignored, the fee provided for

claims between Rs.1,00,00,000/- and Rs.5,00,00,000/- is Rs.1,50,000/-

plus Rs.22,500/- per crore or part thereof subject to a ceiling of

Rs.2,40,000/-. The fee for the claim of Rs.3,85,64,405/- would thus be

Rs.2,40,000/-. Similarly, the fee provided for claims between

Rs.5,00,00,000/- and Rs.10,00,00,000/- is Rs.2,40,000/- plus Rs.15,000/-

per crore or part thereof subject to a ceiling of Rs.3,15,000/-. The fee for

the claim of Rs.7,78,90,281.87 would thus be Rs.3,15,000/-. The same

does not tally with the claims made by the respondent / plaintiff and there

is no explanation whatsoever.

35. I am therefore of the view that the respondent / plaintiff has also

failed to prove the basis of his claim.

36. As far as the claim of the respondent / plaintiff for travelling

allowance is concerned, the respondent / plaintiff himself has proved as

Ex.PW1/9 his bill dated 09.05.2007 therefor and as Ex.PW1/10, the letter

dated 31.05.2007 of the appellant / defendant intimating the respondent /

plaintiff that the claimant had not deposited the costs of arbitration on the

basis of the revised rules effective from 01.01.2005 and therefore it is not

possible to pay the conveyance allowance on the basis of Rs.750/- per

hearing. It is thus clear that not only was the said claim rejected more

than three years prior to the institution of the suit but also that there is no

basis therefor. Though Rule 32 deals with "other expenses" but the

language thereof is "The arbitrator may be paid......."

37. There is another interesting aspect of the matter. The rules provide

for the fee of arbitration to be borne by the parties to the arbitration and

not by the appellant / defendant. The respondent / plaintiff himself in his

plaint has argued that the appellant / defendant is merely a facilitator and

an agent of the parties to the arbitration agreement. The appellant /

defendant cannot be made liable for any fee of the arbitrators unless the

same has been paid to the appellant / defendant by the parties to the

arbitration.

38. Interestingly, it is not the case of the respondent / plaintiff that the

fee has been so received by the appellant / defendant. The respondent /

plaintiff also did not chose to implead the parties to the arbitration as

defendants to the suit. Rule 78 of the appellant / defendant provides that

the appellant / defendant and its officers shall not be liable for any act or

omission in whatsoever capacity they may have acted in connection or in

relation to arbitration under the Rules. In my opinion, the claim of the

respondent / plaintiff against the appellant / defendant is in any case for

this reason misconceived.

39. Resultantly, the appeal succeeds and the cross-objections are

dismissed. The impugned judgment and decree is set aside and the suit

filed by the respondent / plaintiff is dismissed. No costs.

Decree sheet be drawn up.

40. Having held so, I must observe that though the claim of the

respondent / plaintiff has been dismissed for reasons aforesaid, there can

be no denying the fact that the respondent / plaintiff has been wronged

and despite being a senior respectable member of the legal fraternity, has

indeed been treated shabbily. The blame therefor squarely rests on the

appellant / defendant. The appellant / defendant, by appointing the

respondent / plaintiff as the Presiding Arbitrator, made him conduct the

arbitration proceedings. The respondent / plaintiff was not conducting

the said proceedings gratuitously. The appellant / defendant, even if an

agent of the parties to arbitration, was responsible for collecting the

arbitration fee from parties to arbitration and to pay the same to the

respondent / plaintiff. It appears that the respondent / plaintiff has not

been paid anything for his services. Such conduct is not expected from a

body as the appellant / defendant, which is itself closely linked to the

legal fraternity and associated with the Chamber of Industry. I therefore

implore upon the appellant / defendant to, notwithstanding the verdict

aforesaid, compensate the respondent / plaintiff for his services,

admittedly rendered. For this purpose, a copy of this judgment be sent to

the Governing Body of the appellant / defendant who are requested to

within one month, taking note of the fact that their own goodwill and

reputation and fairness is at stake, take a decision to suitably compensate

the respondent / plaintiff. A copy of this judgment be also sent to the

President of Federation of Indian Chamber of Commerce & Industry

(FICCI) for appropriate action.

RAJIV SAHAI ENDLAW, J JANUARY 08, 2014 „gsr‟