S.B.SINHA, J. - (1.) WHAT constitutes a reasonable notice by an arbitrator is the question involved in these appeals which arise out of a judgment and decree dated 1.3.1979 passed by a Division Bench of the Calcutta High Court affirming an order passed by a learned single judge setting aside an arbitration award.
(2.) THE basic fact of the matter is not in dispute. Two groups of persons - one Guptas and another Sharmas - held several properties including three firms, six limited companies, one trust and other movable and immovable assets. Both the groups had 50% shares each. THE family members of the Guptas and Sharmas Groups were interested in many or in some of the businesses and the firms . THE family tree of the Gupta Group is as under: JUDGEMENT_524_JT7_2003Image1.jpg Disputes and differences having arisen between the two groups as also between the family members of the same group, an agreement was entered into on or about 10.4.1975 for referring some of the disputes to the arbitration of one Mr. B. J. Bhide. The material parts of said agreement are as under: " 1. The parties hereto hereby agree that all disputes differences between the parties or their representatives concerning or relating to or touching the said several firms, companies, assets moveable or immoveable or any act done by the parties or in regard to their respective rights, duties and obligations of the parties hereto or their enforcement which exist between the parties and also of other disputes and differences that may hereafter arise between the parties and be laid by the parties or either of them before he shall make his award are hereby referred to the award and final determination of Shri P.J. Bhide alias Purshottam Jagannath Bhide, son of Shri J.V. Bhide, residing at no. P-390 Keytolla Lane, Calcutta-29. 2. That the said Arbitrator shall have powers to have the accounts of the said firms and/or companies and/or assets checked, inspected and/or audited by the chartered accountant or by any other person or persons. 3. That the said Arbitrator shall have powers to formulate and lay down his own procedure for the conduct of arbitration proceedings according to law. 4. That the said Arbitrator shall have power to proceed ex parte in case the other party fails after reasonable notice to attend before him. 5. That the said Arbitrator shall have powers to ask for any paper, documents and/ or information from any of the parties hereto and to draw adverse inference for non-production thereof. 6. That the said Arbitrator shall be free to make use of information, documents, papers received from any source whatsoever if he considers them relevant to the matter and to this regard his decision will be final. 7. That the Arbitrator shall have powers to apply and employ his personal knowledge in the matter under reference while giving his award. 8. That the Arbitrator shall have power to award cost and to ask for periodical deposits towards his own fees and charges, audit charges and/or other charges from the parties hereto in the manner he may think fit and proper. 9. That the said Arbitrator shall not be required to give any reasoning for his determination and award. 10. That the said Arbitrator shall have powers to give directions for the running of the business of the said firm and/or companies including the direction for operation of banking account during the pendency of arbitration proceedings. 11. That the said Arbitrator shall have full power and control over all the assets, properties, moveable or immoveable of the said firms and/or companies and shall also have the powers to dispose of any of them at his discretion, for the good and benefit of the said firm. 13. That the Arbitrator shall have in his absolute discretion power to award the dissolution of the various partnership firms and to name the date from which such dissolution shall take effect. He may also provide for the mode of realisation of the partnership assets and discharging the liabilities and discharging either by award that the said be done by one of the partners or by the receiver to be named by the Arbitrator. He may also award which of either of the groups shall be entitled to continue, carrying on business and upon what terms as to the price, mode, payment, indemnity and otherwise. And he may direct the execution of each of the parties hereto of all notices, deeds and documents whatsoever necessary for giving full effect to his award. 14. Each of the groups within fifteen days of this agreement shall deliver to either of them and to the said arbitrator a full and particular statement of claim in writing of all his claims and all of the items thereof giving credits for all payments, counter claims and deductions and leaving a margin of at least 2 and inches of each page and shall at the same time deliver all contracts, documents and papers thereof that may be necessary to explain the said account. 16. The same course shall be adopted and concerning in the set off or the counter claim adduced by either of the parties against the demands of either of them. 17. The Arbitrator shall be at liberty to employ an accountant to whose examination he may submit such account connected with the matters hereby referred as he shall think fit. And the said Arbitrator may act upon any statement of accounts given by such accountant without being obliged to verify the same. 18. The Arbitrator may have a legal assessor to sit with him and may act under the advice of such assessor. 19. The Arbitrator shall be at liberty at any stage of the proceedings to state a case for the opinion of counsel or court upon any question arising in the course of the reference and may act upon the opinion so taken. 20. The Arbitrator shall have power to cause such maps plans and measurements valuations to be made and taken as he shall deem necessary or expedient and the costs and expenses thereof shall be in the discretion of the Arbitrator and he may accept such valuation as correct and act in terms thereof. 38. Ten days' time shall be considered as reasonable time for the purpose of doing or complying with any direction of the Arbitrator." The jurisdiction of the Arbitrator was, thus, of wide import.
(3.) IT is not in dispute that said Shri B.J. Bhide was a chartered accountant and a tax consultant. He had been dealing with accounts and other matters for and on behalf of the firms and the companies belonging to the parties. The parties indisputably had great faith and confidence in him. During the pendency of the arbitration proceedings, certain disputes arose as regards management, wherefor also intervention of the Arbitrator was sought for. Several correspondences passed between the Arbitrator and the parties with which we are not concerned at this juncture.;