M/S. Pandit Munshi & Associates ... vs Union Of India & Anr.
2014 Latest Caselaw 4992 Del

* IN THE HIGH COURT OF DELHI AT NEW DELHI
+                            O.M.P. 971/2013
%                                     Judgement Reserved on: 19.09.2014
                                      Judgement pronounced on: 01.10.2014

M/S PANDIT MUNSHI & ASSOCIATES LTD                         ..... Petitioner
                             Through:      Mr.Sandeep Sharma, Advocate.

                             versus

UNION OF INDIA & ANR                                           ..... Respondents
                   Through:                None.

CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA

JUDGMENT

In the beginning, it is essential to enlist the few essential facts in this

case:-

1. In this case, the agreement is of the year 1995-1996. The petitioner

invoked the arbitration clause on 7th August, 1998. He moved AA No.

359/1999 for appointment of an Arbitrator which was disposed of vide order

dated 18th August, 2000 and Dr.Y.P.C. Dangey was appointed as the sole

Arbitrator. Dr. Y.P.C. Dangey resigned from the post of an Arbitrator vide

his letter dated 21st June, 2001. Thereafter, Sh.A.K. Bhatnagar was

appointed as the arbitrator vide letter dated 10th September, 2001. On 12th

June, 2006, Sh.A.K. Bhatnagar also resigned as an arbitrator and thereafter

Sh. Divakar Garg was appointed as an Arbitrator.

2. Since the learned arbitrator was taking undue time in giving its

findings, the petitioner filed the OMP No. 419/2009 under Section 14 of the

Arbitration and Conciliation Act (hereinafter referred to as 'the Act') or

termination of the mandate of the arbitrator and the order was passed in

favour of the petitioner wherein this court expressed the hope that the

learned Arbitrator would dispose of the matter at the earliest.

3. Thereafter, the petitioner filed an OMP No. 354/2010 .Vide order

dated 9th December, 2010 of this court, the mandate of the Arbitrator Mr.

A.K. Bhatnagar was terminated. Thereafter, the petitioner filed another

arbitration application No. 185/2011 whereby vide order dated 12th

September, 2011, Sh. G.C. Gupta, Engineer-in-Chief(Retd), UPPWD was

appointed as an Arbitrator. Sh.G.C. Gupta, an Arbitrator resigned and the

petitioner filed another application bearing IA No. 22212/2014 and vide

order dated 8th January, 2013, Sh. S.C. Vasudev, Engineer, Former

Addl.DG, CPWD was appointed as an Arbitrator.

4. Sh.S.C. Vasudev, learned Arbitrator passed an order dated 18th May,

2013 under Section 32 (2)(c) of the Act and sent the copy to the Registrar

General of this court. The said matter was thereafter listed on 2nd July, 2013

before this court and this court issued notices to the parties and listed the

matter for 2nd August, 2013. On 2nd August, 2013, there was no

representation on behalf of the petitioner and since no further order was

required to be passed, the petition was consigned to record room.

5. It is also noted in this proceeding that the counsel for the petitioner

had written a letter to the Arbitrator Sh. S.C. Vasudev wherein the complaint

had been made that he had been demanding very high fee which the

petitioner was unable to pay. Thereafter, the petitioner had moved an IA

No. 13966/2013 in those proceedings for appointment of an Arbitrator

which was dismissed by this court on the ground that the application cannot

be entertained in these proceedings.

6. It is this order of the Arbitrator (dated 18.05.2013) that has been

challenged by present petition under Section 34 of the Act.

7. It is submitted that the said award is against the law and facts of the

case and the Arbitrator has not appreciated the proceedings and the fact that

only 2-3 hearings were required and that the arbitrator was more interested

in his fee than adjudication of the dispute and thus the award is erroneous

and also perverse and that the Arbitrator ought to have passed an award

instead of closing proceeding and has relied on the findings of this court in

the case tilted as Jogdhran & Sons Vs. Union of India 1982 RLR (Note 3)

(complete citation & case law not provided to this court).

8. I have heard the arguments of the learned counsel for the petitioner at

this stage.

9. From the above noted facts, it is apparent that the petitioner has been

moving this court for appointments/change of Arbitrators quite frequently

and the arbitrators for some reason or the other were withdrawing

themselves by submitting their resignations.

10. In this background, the order of the learned arbitrator dated 18th May,

2013 whereby the learned arbitrator has in paragraph 2, while terminating

the arbitral proceedings, has opined that the conduct of the claimant shows

that he was not interested to pursue the case at all, is to be judged.

11. It is apparent that there is no determination of the claims of the parties

vide this order. It is simply the termination of the arbitral proceedings.

Section 32 of the Act deals with the termination of the arbitral proceedings.

It is stated that the arbitral proceedings can be terminated by arbitrator either

by final award or by an order under Sub-Section 2 of Section 32 of the Act.

It is apparent that there is no final award and the arbitral proceedings have

been terminated by the Arbitrator under Sub-Section 2 of Section 32.

Sub-Section 2 of Section 32 reads as under:-

"(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where--

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of the proceedings, or

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible."

From the bare reading of this Section clearly states that the learned

Arbitrator is within its jurisdiction to terminate the proceedings before him

at any time.

12. The sole question is whether this termination of the arbitral

proceedings under Section 32(2)(c) is an award which can be challenged

under Section 34 of the Act. Although, the expression 'award' is not

defined anywhere in the Act, however, since the award is considered a

decree in view of Section 35 of the Arbitration & Conciliation Act, it is

apparent that an award is an order which determines the rights of the parties

by finally determining the particular claim or issue in the arbitral

proceedings.

13. Section 32 also clearly stipulates that the arbitral proceedings can be

terminated in two ways, either by passing a final award or for the reasons

under Sub-Section 2 of Section 32 by the arbitrator. So, termination of the

arbitral proceedings could be in two ways either by final award or under

Section 32(2) of the Act. The very fact that there are two ways of the

termination of the arbitral proceedings clearly stipulates that the other way

of termination i.e. whereby there is no determination of issue or claim in

arbitral proceedings, cannot be termed as an award.

14. The conduct of petitioner itself shows that he himself did not consider

the order of Arbitrator dated 18.05.2013 as an award. Undisputed facts

show that learned arbitrator had sent a copy of this order to the Registry of

this court and this court had dealt with this order dated 18 th May, 2013 and

had issued the notice to the petitioner as well and the court accepted the

termination of the proceedings by the arbitrator under Section 32 (2)(c) of

the Act. It is also noteworthy that thereafter the petitioner had moved an

application with IA No. 13966/13 under Section 151 CPC for the

appointment of an arbitrator, on termination of the mandate by Sh. S.C.

Vasudeva, Arbitrator. He, therefore, had accepted that the termination of the

proceedings under Section 32(2)(c) by the arbitrator is not an award and that

is why, by way of IA No. 13966/13 made a request for appointment of

another Arbitrator.

15. The order dated 18.05.2013 of Arbitrator is not an award, so it cannot

be challenged by way of objections under Section 34 of the Act.

16. The petitioner has relied on the case titled ATV Projects India Ltd. vs.

Indian Oil Corporation Ltd. & Anr. 2013 (5) R.A.J. 715(Del), but the same

has no relevance on the facts of this case.

17. Strangely, petitioner despite being aware of this fact (he filed IA No.

13966/13 for appointment of new arbitrator), moved the court under Section

34 of the Act.

18. I, therefore, dismiss the present petition, being devoid of any merit, in

limine, and impose a cost of Rs. 25,000/- to be deposited with Delhi High

Court Staff Welfare fund within two weeks from the date of this order.

DEEPA SHARMA (JUDGE) OCTOBER 01, 2014 sapna