Jammu & Kashmir High Court
Pronounced On: /04/202 vs Roshni Devi & Ors on 21 April, 2021
S. No. 502
HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
*******
MA No. 138/2007
IA No. 227/2007
Pronounced on: /04/2021
Union of India & Ors.
...Appellant(s)
Through: Mr. Sandeep Gupta, Advocate
Vs
Roshni Devi & Ors.
...Respondent(s)
Through: Mr. Anil Mahajan, Advocate
CORAM:
Hon'ble Mr. Justice Javed Iqbal Wani, Judge
ORDER
1. The appellants herein through the medium of instant appeal
challenge Judgment dated 31-05-2007 (for short impugned
Judgment) passed by the Court of Additional District Judge,
Jammu (for short court below) in case titled as "Smt. Roshni
Devi & Ors vs. Union of India & Ors."
Background facts:-
2. The background facts those stem out from the memo of appeal
as stated therein reveal that a contract bearing No. CEJK-11/83-
84 for providing the married accommodation to Officers at
Udhampur was allotted to a contractor namely "Vishnu Kumar
Gupta" (deceased predecessor in interest of the respondents
herein) by the appellants herein.
3. It is being stated that the deceased signed the final bill on 07-10-
1986 with a declaration that he had no further claims and that
subsequently the said final bill was paid to the deceased
contractor on 03-04-1987, where after receiving the same, the
deceased contractor intimated the department vide
communication dated 14-07-1988, a statement of unpaid items
of work with a claim appended to said communication which
communication is stated to have been acknowledged by the
appellants herein.
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4. It is being further state that the said claims were refused by the
appellants herein where upon the deceased contractor is stated to
have approached this Court while filing Arbitration Petition No.
302/1989 for appointment of an arbitrator under Section 20 of
the Arbitration Act (for short the Act) which is stated to have
been dismissed by this Court vide Judgment dated 30-07-1990
on the ground of limitation. The said Judgment is stated to have
been assailed by the deceased contractor in an appeal before the
Division Bench which appeal is stated to have been allowed vide
Judgment dated 31-03-1995 holding the Arbitration Petition
filed by the deceased contractor under Section 20 to be within
time.
5. It is being stated that as a consequence of the Judgment of the
Division Bench dated 31-03-1995, the Arbitration Petition got
revived and transferred subsequently to the Court of District
Judge, Jammu for adjudication.
6. It is being further stated that the Arbitration Petition came to be
allowed by the District Judge, Jammu vide order dated 17-03-
1997 directing the Engineer-in-chief, Army HQ to appoint an
arbitrator within one month who will enter upon the reference
and make an award within the statutory period of four months.
7. It is being further stated that the respondents herein filed a
petition for appointment of new arbitrator before the Court of
Additional District Judge, Jammu which came to be resisted by
the appellants herein on the ground that the arbitrator as per the
directions of the District Judge, Jammu dated 17-03-1997 was
appointed and delay was caused because of misrepresentation of
claim by enhancing/modifying the claims from 7.89 lacs to
14.12 lacs by the deceased contractor.
8. It is being further stated that the Learned Additional District
Judge, Jammu vide its Judgment dated 4-08-1997 disposed of
the said petition directing the parties to cause appearance before
the arbitrator on 16-08-1997 and that the arbitrator shall make
and publish the award within the statutory period of four
months.
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9. It is being further stated that in pursuance to order dated 17-03-
1997 passed by the District Judge, Jammu, the Engineer-in-chief
vide letter dated 10-06-1997 appointed one Brig. G. R. Sud as an
arbitrator who entered upon the reference and the parties
submitted their claims and pleadings before him. The said
Arbitrator is however stated to have resigned during the
pendency of the arbitration proceedings vide his letter dated 28-
11-1997 owing to his superannuation, whereafter it is being
stated that one Brig.T. K. Mittal came to be appointed as a new
arbitrator by the competent authority vide letter dated 10-03-
1998.
10. It is being further stated that 21 claims were preferred by the
deceased contractor totaling 7.89 lacs on 14-07-1988 which
however, came to be subsequently enhanced by his alleged
partner and attorney to 32 claims amounting to 14.12 lacs on 12-
04-1997, after almost nine years, the first claim were submitted.
11. It is being next stated that the new arbitrator Brigadier. T. K.
Mittal entered upon the reference on 25-03-1998 asking the
parties to forward their confirmation of earlier submission of
their claims before the previous arbitrator. The arbitrator is
stated to have directed the parties on 26-05-1998 to comply with
the order dated 25-03-1998 and is stated to have fixed the
hearing of the case on 15-07-1998 in the office of Chief
Engineer, Udhampur Zone, Udhampur.
12. It is being next stated that on 02-06-1998, notices were sent by
the Arbitrator notifying that in case either party fails to attend
hearing, he shall proceed with reference ex-parte.
13. It is being further stated that the Arbitrator on 24-06-1998
intimated the parties that the venue of hearing is changed from
Udhampur to New Delhi. The said venue of hearing is stated to
have got changed on the request of the deceased contractor. The
hearing of the case is stated to have been fixed on 15-07-1998
and 16-07-1998. It is being stated that the Arbitrator finally
passed the award on 24-07-1998.
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14. It is being further stated that the respondents herein filed a
petition for appointment of an independent arbitrator before the
Court of Additional District Judge, Jammu on 24-12-1997 which
came to be dismissed on 21-10-1998 with the direction to the
Arbitrator to comply with order dated 04-08-1997.
15. It is being further stated that the respondents herein aggrieved of
the award dated 24-07-1998 filed a petition under Section 30/33
of the Act for setting aside of the same before the Court of
Additional District Judge, Jammu in response to which the
appellants here in are stated to have filed objections. Issues are
stated to have been struck therein the said petition and the Court
of Additional District Judge, Jammu is stated to have passed the
Judgment dated 31-05-2007 being impugned in the instant
appeal.
Grounds of challenge: -
The impugned Judgment is being challenged inter-alia
amongst others on the ground that the same is against the facts of
the case and law on the point inasmuch as that the findings of the
Court below are misplaced in so far, the Court below held the
arbitrator to have misconducted himself while passing the award.
The Court below is also stated to have proceeded on surmises and
conjectures while holding that the award is antedated. The
Arbitrator is stated to have neither misconducted himself nor in
the proceedings. The Court below is stated to have passed the
impugned Judgment on findings being misplaced, erroneous and
contrary to the record. The arbitrator is stated to have given ample
opportunities to the claimants/respondents herein for appearing
and arguing the case. The court below is stated to have overlooked
order XVII Rule 2 of Code of Civil Procedure inasmuch as
Section 41 (a) of the Arbitration Act. The arbitrator is stated to
have fully complied with the principles of natural justice while
adjudicating the dispute. The findings of the court below in this
regard are stated to be erroneous, contrary and misplaced.
16. Heard learned counsel for the parties and perused the
record.
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17. Learned counsel for the appellants while making submissions
reiterated the contentions raised and grounds urged in the memo
of appeal whereas learned counsel for the respondents resisted
and controverted the contentions raised and grounds urged by
the counsel for the appellants.
18. Before proceeding to advert to the controversy involved in the
appeal, perusal and examination of record becomes imperative.
19. Perusal of the record reveals that upon award of the contract in
question to the deceased contractor, dispute seemingly arose
with respect to the payment of bill in respect of the contract
work which initially related to 21 claims submitted by the
deceased contractor amounting to Rs. 7.89 lacs and subsequently
to 34 claims submitted by legal representative and attorney
holder of the deceased contractor amounting to Rs. 14.12 lacs.
20. Perusal of the record further reveals that for resolution of said
disputes a petition under Section 20 of the Act came to be filed
before the court of District Judge, Jammu, by the deceased
contractor in view of clause 7 of the general conditions of
contract resulting into passing of an order dated 17-03-1997 by
the said court directing Engineer-in-chief, Army HQ New Delhi
to appoint an arbitrator within one month who shall enter upon
the reference and make an award within four months and submit
the same before the said court.
21. Further perusal of the record reveals that pursuant to order dated
17-03-1997 Brig. G. R. Sud came to be appointed as an
arbitrator by the Engineer-in-chief vide letter dated 10-06-1997
and after entering upon reference, during the pendency of the
arbitration proceedings the said arbitrator superannuated and
consequently submitted his resignation vide letter dated 28-11-
1997 resulting into appointment of another arbitrator namely
Brig. T. K. Mittal by the Engineer-in-chief vide letter dated 10-
03-1998 which letter had been accompanied with the statement
of claims and counter claims of the parties. The said arbitrator
after entering upon the reference has further directed the parties
to submit their claims and counter claims latest by 25-04-1998.
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22. Further perusal of the record reveals that after the resignation of
the first arbitrator Brig. G. R. Sud, another petition had been
filed by the claimants in the Court of Additional District Judge,
Jammu for appointment of arbitrator which came to be decided
on 21-10-1998 by the said court directing the second arbitrator
Brig. T. K. Mittal to comply with the court order dated 04-08-
1997 passed in file No. 3/Misc. of the Court of Additional
District Judge, Jammu wherein it had been directed that it would
be well within the rights of the parties to add or modify their
claims and counter claims before the arbitrator of course
restricting it to the matter in controversy i.e., with regard to
contract CEJK-11/83-84 and that it would be well within the
competence of the parties or their counsel to raise the
controversy regarding the additional claims of the petitioner.
23. Perusal of the record further reveals that arbitrator passed an
award on 24th July, 1998 which came to be challenged by the
claimants/respondents herein before the court below inter-alia on
multiple grounds fundamentally on the ground that the arbitrator
misconducted himself and the proceedings inasmuch as failed to
adhere to the orders of this Court dated 21-10-1998 and that no
opportunity of hearing was granted to the deceased
contractor/claimants/respondents herein, by the arbitrator.
24. Further perusal of the record reveals that the court below struck
four issues in the proceedings supra wherein the fundamental
and moot point being as to whether the arbitrator has
misconducted himself and in the proceedings.
25. Further perusal of the record reveals that while considering the
matter set up before it by the parties, the court below noticed
following facts;
"Brig. T. K. Mittal, after entering upon the
reference, fixed the date of hearing on 15-07-
1998 in the office of Chief Engineer, Udhampur
Zone vide letter dated 02-06-1998. Thereafter,
he sent telegram dated 24-06-1998 to both the
sides changing the place of venue from
Udhampur to Delhi and as also informing them
the dates of holding the hearing. In reply the
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claimants sent him a letter averring therein that
their counsel is not available on the said dates
and he would be available in the 1st to 3rd week
of August preferably at New Delhi vide letter
dated 02-06-1998.
Letter dated 11-06-1998 sent by Commander
Works Engineer (authorized person) to the
Arbitrator reveals that said Commander had
made a representation that the hearing fixed at
Udhampur is more suitable at Udhampur and
the date of hearing may be altered and fixed
after 14th July, 1998.
Vide letter dated 29-06-1998 claimants
requested the arbitrator to decide the issues put
before him in their correspondence and again
requested him to adjourn the arbitration
proceedings to 3rd week of August on the ground
of non-availability of their advocate due to
illness in the family.
Thereafter the Chief Engineer through
telegrams dated 3rd July informed the arbitrator
that it is not possible due to administrative
reasons for him to leave the station and their
legal counsel is not available on 15th /16th July,
1998. The hearing be postponed and fixed at
Udhampur or Jammu on any suitable date
between 20th July to August 10th and the other
party has also been informed about the same.
In reply the arbitrator disallowed the request
of the postponing of hearing of the case vide
telegram.
The telegram sent by the Union of India were
confirmed by letter dated 11-07-1998.
Thereafter the Union of India vide letter dated
13th July, 1998 sent communication to the
arbitrator that they will attend the hearing fixed
for 15th/16th July, 1998 in Delhi. This letter was
filed before the arbitrator on 15-07-1998 and
the copy was sent to the objector thereafter as
nobody appeared for the objectors before the
arbitrator on the dates so fixed.
The record of attendance in the office of
Arbitrator of 15th and 16th July, 1998 reveals
that nobody appeared for the Contractor. The
telegram sent by claimants to the arbitrator
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seeking adjournment of the hearing and also
informing him that they are unable to attend the
hearing on 15-07-1998 and as also to resolve
the three issues raised by them is also on record
and the Post Offices stamp shows it to be 11-07-
1998.
However, the Award makes it clear that the
Arbitrator considered the stand/arguments of
the Contractor and thereafter gave his decisions
on the claim. However, he did not consider the
additional claims sought to be raised by the
claimants and did not adhere to the court orders
dated 04-08-1997 and 21-10-1998 and no
pleadings were filed before the arbitrator by
either party."
26. Having regard to the aforesaid factual position in general and the
supra in particular as noticed by the court below not being
denied by either of the parties, this court intends to deal with the
fundamental and primary issue as to whether the arbitrator
denied an opportunity of hearing to the claimants/respondents
herein resulting into passing of the ex-parte award and in the
process thus mis-conducted himself and in the proceedings
27. The date of hearing fixed by the arbitrator on 15 th and 16th July,
1998 seemingly have been effective dates of hearing fixed by
the arbitrator and thus the parties ought to have been given a fair
and reasonable opportunity to represent their respective case, by
the arbitrator. However, as has been noticed in the preceding
paras upon perusal of the record, the arbitrator has proceeded to
conclude the proceedings in absence of the
claimants/respondents herein overlooking the facts that an
adjournment motion much earlier the dates fixed had been laid
not only by the claimants/respondents herein but also by the
appellants as well though initially sought adjournment qua the
dates fixed by the arbitrator viz 15th and 16th July, 1998 with an
intimation to the claimants/respondents herein as well yet
participated in the proceedings in pursuance to a subsequent
motion/letter addressed to the arbitrator though with an
intimation to the claimants/respondents herein on 15 th August,
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1998 i.e., the date of hearing fixed by the arbitrator. The
claimants/respondents herein admittedly had not been present
either themselves or through their counsel before the arbitrator
on the said dates.
28. Herein it would be advantageous and appropriate to refer to a
Division Bench Judgment of the High Court of Calcutta titled as
"Juggilal Kamlapat Appellants vs. General Fibre Dealers, Ltd.
Respondents" reported in AIR 1955 Calcutta 354 wherein
following has been noticed and observed:
"the question as to the right of an arbitrator
to proceed ex-parte and the effect of his
doing so when he does not issue a notice
that he would proceed in the absence of any
party who would fail to attend on the date of
hearing has been discussed in "Russell on
Arbitration". In the fifteenth edition of the
book, the discussion is to be found at pages
144 and 145. It appears from the four
decisions to which I have already referred
and the statement of law in Russell that the
procedural rule applicable to arbitration
proceedings is more tolerant than the rule
followed in Courts of Law. Broadly stated,
the principles which govern the matter are
the following. If a party to an arbitration
agreement fails to appear at one of the
sittings, the arbitrator cannot not or, at least
ought not to, proceed ex-parte against him
at that sitting. Wherein such a case it does
not appear that the non-appearance was
anything but accidental or casual, the
arbitrator ought ordinarily to proceed in the
ordinary way, fixing another date of
hearing and awaiting the future behavior of
the defaulting party. If, on the other hand,
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it appears that the defaulting party had
absented himself with a view to preventing
justice or defeating the object of the
reference, the arbitrator should issue a
notice that he intends at specified time and
place to proceed with the reference and that
if the party concerned does not attend, he
would proceed in his absence. But if after
making such peremptory appointment
issuing such a notice the arbitrator does not
in fact proceed ex-parte on the day fixed,
but fixes another subsequent date, he
cannot not proceed ex-parte on such
subsequent date, unless he issued a similar
notice in respect of that date as well. If he
issues a similar notice and the party
concerned does not appear, an award made
ex-parte will be in order. But, if he does not
issue such a notice on the second occasion
but nevertheless proceeds ex-parte, the
award will be liable to be set aside in spite of
a notice of peremptory hearing having been
given in respect of the earlier date, subject
however to the condition that prejudice was
caused to the party against whom the ex-
parte order was made."
29. A further reference to the Judgment of the Apex Court passed in
case titled as "Food Corporation of India vs. Joginder pal
Mohinder pal & Anr." reported in 1989 (Vol. 2) SCC 347
would as well be advantageous being relevant and germane
herein wherein following has been noticed;
"We should make the law of arbitration
simple, less technical and more responsible
to the actual realities of the situation, but
must be responsive to the canons of justice
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and fair play and make the Arbitrator
adhere to such process and norms which
will create confidence, not only by doing
justice between the parties, but by creating
a sense that justice appears to have been
done."
30. In the light of the aforesaid facts, circumstances inasmuch as the
legal position supra this court agrees with the view taken by the
court below in impugned Judgment and is of the considered
opinion that the arbitrator has failed to provide a reasonable
opportunity of hearing to the claimants/respondents herein while
conducting arbitration proceedings in question culminating into
passing of award dated 24-07-1998 and in the process thus
having misconducted himself and the proceedings.
31. The court below having noticed all these facts has rightly drawn
the conclusions in the impugned Judgment that the arbitrator has
misconducted and has thus rightly set aside the award and
passed the impugned order within the para-meters and principles
of law occupying the field.
32. The other grounds of challenge urged in the appeal in hand by
the appellant in view of aforesaid analysis need not to be dealt
with or deliberated upon, in that, same as such pales into
insignificance.
33. Viewed thus, what has been observed, analyzed and considered
herein above, the appeal entails dismissal and is accordingly
dismissed as a result whereof the Judgment dated 31-05-2007
passed by the court below is upheld.
(Javed Iqbal Wani)
Judge
Srinagar.
21.04.2021
"Sakeena"
Whether the order is speaking Yes/No
Whether the order is reportable Yes/No
SAKEENA MOLVI
I attest to the accuracy and
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22.04.2021 00:27
