SABYASACHI MUKHARJI - (1.) AFTER hearing the parties fully we had by our order dated 10/03/1988 dismissed the special leave petition under Art. 136 of the Constitution. We stated therein that we would indicate the reasons by a separate judgment later. We do so by this judgment.
(2.) THIS is a petition for leave to appeal under Art. 136 of the Constitution from the judgment and order of the learned Judge of the High Court of Bombay dated 2nd Feb, 1988. By the impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent No. 1, Shri K.D. Bali, sole arbitrator under Ss. 5 and It of the Arbitration Act, 1940 (hereinafter called 'the Act'). In order to appreciate the contentions raised, it may be stated that the International Airport Authority of India which was the petitioner in the High Court and is the petitioner herein had invited tenders for the work of construction of terminal building of new international passenger complex (Phase II) at the Bombay Airport at Sahar, Bombay. Respondent No. 2, M/s. Mohinder Singh and Company, a partnership firm having registered office at Delhi and carrying on business in Bombay submitted a tender and it was accepted for the value of Rs. 7,26,31,325.00. A formal agreement followed on 22/01/1982. It is not necessary to refer to the clauses of the agreement for the present purposes. It may be reiterated, however, that there was provision in the agreement for settlement of disputes through appointment of sole arbitrator under Cl. 25 of the Conditions of Contract by the competent authority. Certain disputes arose in which the petitioner sought claims amounting to Rs. 85 lakhs. Respondent No. 2 contractor approached the petitioner by letter dated 22nd Feb, 1985 to refer the disputes with regard to claims amounting to Rs. 85 lakhs to the arbitration. One Shri K.K. Sud, the Chief Engineer of the petitioner by his letter appointed respondent No. 1 as the arbitrator and made the reference with regard to the claim of Rs. 85 lakhs on 23rd Feb, 1985. On 8/03/1985, it appears from the narration of the events in the judgment impugned that the arbitrator gave directions to the parties regarding submission of pleadings. Respondent No. 2 filed pleadings within time, but the petitioner filed its pleadings after a delay of two and a half months. On 17/03/1986 respondent No. 2 addressed a letter to the Chief Engineer asking for reference of further disputes to the arbitration and accordingly on 16/05/1986 a second reference was made referring 11 further points of dispute. A third reference was sought by respondent No. 2 on 22/05/1986 in respect of seven more claims but the petitioner informed on 12/06/1986 that the third reference was premature. It appears that in respect of the second and third references the assertion of the petitioner was that these disputes were not referable to the arbitrator. The arbitrator had directed the parties to submit their statements in respect of second reference and though respondent No. 2 submitted its claim within the stipulated period, the petitioner had again delayed doing so according to the learned Judge and according to the assertions of respondent No. 2 for a period of three months. On 16/05/1986 the Chief Engineer made reference No. 2 with regard to claims amounting to Rs. 1.17 crores to the arbitrator. On 23rd Dec, 1986 the Chief Engineer of the petitioner made another reference being reference No. 3 to the arbitrator with regard to claims amounting to Rs. 5.81 crores. The petitioner by its applications of 8th and 9/06/1987 expressed its objections to the references Nos. 2 and 3 made by the Chief Engineer as according to the petitioner the said references were null and void as these were irregularly made. On 26/06/1987 the petitioner by its written submissions took preliminary objection before the arbitrator to the said arbitration proceedings, being lack of jurisdiction of the arbitrator on account of the fact that he was not validly appointed as far as references Nos. 2 and 3 were concerned. The petitioner by its application dated 3/08/1985 noted that respondent No. 1 had not noted the minutes of the meeting dated 10th of June, 1985 correctly. The petitioner by its application on 15th of June, 1987 requested respondent No. 1 not to proceed with the arbitration proceedings till its preliminary objections regarding jurisdictional aspect were decided and also made it clear that it was appearing under protest in the proceedings before him. The petitioner on 17/06/1987 made oral submissions before respondent No. 1 with regard to its preliminary objections. Respondent No. 1 directed the petitioner to submit the rest of its submission by way of written submissions. The petitioner by its applications dated 22nd and 25/06/1987. respectively objected to respondent No. 1 directing it to make submissions by way of written submissions and thus hurrying up the proceedings. On 26/06/1987 the petitioner submitted written submissions to respondent No. 1 Respondent No. 1 by his order dated 27/06/1987 directed that further proceedings would be undertaken only after the extension of time. Respondent No. 2 applied for enlargement of time and the same was granted by the High Court. On 7/08/1987 application under S. 13(b) of the Act was made before the arbitrator with a request to state the matter before it as Special Case for the opinion of the Court. The arbitrator by his order dated 3/10/1987 rejected the said application of the petitioner and also rejected the preliminary objections of the petitioner at the same time. On 14/10/1987 the petitioner by its letter noted the fact that it has sent the minutes of the meeting with regard to the proceedings held on 28th and 29/09/1987 to the arbitrator as directed by him. In the said letter the petitioner also protested against the arbitrator's decision of changing the venue of the proceedings and also the inconvenient dates being fixed by him. The petitioner by its letter dated 11/10/1987 conveyed its concern to the arbitrator that he has been rushing through the proceedings. On 16/12/1987 the petitioner alleging apprehension that respondent No. 1 had formed his own opinion regarding the matters in issue (sic). The petitioner approached the High Court with the instant application. This application was rejected by the High Court. The learned Judge changed the date fixed for hearing of the application for extension of time by enlarging the time to make the award by 15/02/1988.
(3.) THE main contention for the revocation of the authority of the arbitrator was about the alleged apprehension in the mind of the petitioner about bias of the sole arbitrator. THE learned Judge of the High Court was unable to accept any ground for alleged apprehension. It is apparent as the learned Judge noted that respondent No. 2 had complied with the directions of the arbitrator about the conduct of the proceedings but the petitioner went on seeking adjournments after adjournments. Respondent No. 2 complained to the arbitrator on 4/05/1987 about the delaying tactics adopted by the petitioner and thereupon the arbitrator directed that the hearing would take place on 8th and 9th June, 1987 and no further adjournment would be granted. After this direction was given by the arbitrator, the petitioner addressed a letter dated 25/05/1987 to the arbitrator objecting to the jurisdiction in respect of the second and third references. THE objections to the jurisdiction raised by the petitioner were that the claim made in the second and third references were barred by principles analogous to Order 11, Rule 2 of the Code of Civil Procedure, the Chief Engineer had no authority to refer the disputes to the arbitration, the claims made by respondent No. 2 were beyond the stipulated period of 90 days and therefore were not arbitrable and the time for declaring the award having expired, the Arbitrator could not continue with the arbitration proceedings. On 8/06/1987 as mentioned hereinbefore the learned advocate for the petitioner orally made submissions on the issue of jurisdiction and thereafter sought adjournment till 9/06/1987 for filing written submissions. On 9/06/1987 apart from filing written submissions further oral arguments were advanced and thereafter an adjournment was sought beyond June, 1987. This adjournment was sought because the time to declare the award was expiring by June, 1987. THE hearing was adjourned till 17/06/1987 and again the petitioner's advocate argued on preliminary objections about jurisdiction. THE arguments were advanced on the next adjourned dates, that is, June 26 and June 27, 1987. It further appeared that as the time for making the award had expired and the petitioner did not consent to the extension of time, respondent No. 2 filed petition to the High Court of Bombay for extension of time on 21/06/1987. THEreafter the petitioner made an application before the arbitrator under Section 13(b) of the Act calling upon the arbitrator to state special case for the opinion of the High Court on certain alleged legal objections. In the meanwhile the petition for extension of time filed in the Bombay High Court was granted and the time for declaring the award was extended till 15/01/1988. THEreafter the arbitrator fixed the hearing on 28/09/1987 and the advocate for the petitioner again reiterated the preliminary objections to the jurisdiction of the arbitrator and insisted upon the arbitrator, passing an order on the application under Section 13(b) of the Act. THE arbitrator rejected the preliminary objections by his order dated 3/10/1987 and also the application for stating special case to the High Court under Section 13(b) of the Act. THE petitioner's advocate thereupon sought adjournment of the hearing and accordingly hearing was adjourned on several dates. Ultimately, the arbitrator fixed the hearings on 30/10/1987 and 31/10/1987. THE hearing was postponed to 2/11/1987 and on that day the petitioner's advocate remained absent. THEreafter the hearing proceeded on 6th November and 11th November, 1987 as well as on 13th, 18th and 19th November, 1987. Respondent No. 2 concluded arguments, while the arguments on behalf of the petitioner were advanced. on 3/12/1987. THE arguments further proceeded on December 8 and 9, 1987. THEreafter on 17/12/1987 the present petition was filed for revocation of the appointment of respondent No. 1 as the sole arbitrator. In our opinion. the above narration gives a glimpse how it party can try to prolong a proceeding.;