Calcutta High Court
M/S. Sukla Trading Co vs Union Of India (E.Rly.) on 31 March, 2010
Equivalent citations: AIR 2010 (NOC) 749 (CAL.), 2010 AIHC (NOC) 900 (CAL.), AIRONLINE 2010 CAL 7
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
AC No. 16 of 1998
GA NO. 1835 OF 1998
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
M/S. SUKLA TRADING CO.
Versus
UNION OF INDIA (E.RLY.)
BEFORE:
The Hon'ble JUSTICE SANJIB BANERJEE
Date : 31st March, 2010.
Appearance:
Mr. Ramesh Chowdhruy, Adv.
Ms. Saswati Joarder, Adv.
..For the Petitioner.
The Court : The petitioner challenges the award on the ground
that it was made ex parte without affording the petitioner an
opportunity and made at a time when the arbitrator did not have any
jurisdiction to continue with the reference. Several judgments have
been cited by the petitioner, some relevant in the context and others
quite utterly irrelevant.
2
The respondent is not represented even at the second call.
There is, however, an affidavit which has been filed by the respondent to ward off the challenge to the award made by a departmental arbitrator.
The petitioner refers to the minutes of the fourth meeting held before the Arbitrator on December 5, 1996, a copy whereof appears at page 28 (Annexure-B) of the affidavit-in-opposition. The minutes record that advocate representing the railways was present and the claimant was also represented by advocate. Point 6 of the minutes records as follows:
"6.0 Both the parties agreed to extend the time for publication of award for another four months."
The petitioner says that by a letter of March 4, 1997 the petitioner brought it to the notice of the Arbitrator that the Arbitrator did not have any authority to continue with the reference since the time to make and publish the award was last extended on August 9, 1996 and not enlarged thereafter. There is, indeed, an assertion to such effect at the third paragraph of the letter dated March 4, 1997.
The letter of March 4, 1997 was replied to by the Arbitrator on March 5, 1997. The Arbitrator asserted that the immediate previous hearing was held on February 17, 1997 when no one represented the claimant and the matter had per force to be postponed. The 3 Arbitrator informed the claimant that the reference stood adjourned till March 17, 1997. The second paragraph of the Arbitrator's letter of March 5, 1997 read as follows:
"You are also informed that on the 4th Arbitration Meeting held on 05.12.96, when you were also present, consent was given during the Arbitration Meeting for extension of time for publication of Award for another four months from 05.12.96, i.e. upto 04.04.97. Hence, the undersigned does not require any more extension for publication of Award and in case nobody attends on 17.3.97, the undersigned will be free to publish the award on ex-party basis."
There is no denial by the petitioner of the receipt of the Arbitrator's letter of March 5, 1997. Whether or not what the Arbitrator had written in such letter was justified, the fact remains that shortly after March 5, 1997, the claimant was informed that the claimant had consented to the extension of the time to make and publish the award by a period of four months from December 5, 1996 and that the next date of the arbitral reference was fixed on March 17, 1997. The point that the petitioner makes that the letter was addressed to the claimant but the consent was alleged to have been given by advocate, is of no merit or consequence. Implicit in the Arbitrator's assertion was that consent had been given by the 4 claimant; and whether such consent was by the claimant in person or by duly authorised agent, is irrelevant.
To boot, the arbitrator had indicated to the claimant that the arbitrator would be constrained to proceed ex parte in the event the claimant went unrepresented on March 17, 1997.
There does not appear to have been any immediate steps taken by the claimant, the petitioner herein, despite receipt of such notice. The claimant apparently did not attend the reference on March 17, 1997 and an award was made shortly thereafter. A copy of the award dated March 21, 1997 appears as Annexure-F to the affidavit- in-opposition.
The fourth paragraph of the award records that the matter was examined by the arbitrator and the claimant was heard on December 5, 1996 and the railways were heard on March 17, 1997 when the claimant went unrepresented. The award also records that the arbitrator heard the parties and examined the papers and the proceedings were closed after the meeting of March 17, 1997.
At paragraphs 7.1 and 7.2 of the award the arbitrator considered the argument that had been made on behalf of the claimant, whether in course of any hearing or on the basis of the statement of claim, and proceeded to record reasons as to why the claims put forth were unmeritorious.
5In addition to the challenge to the award on the ground of the arbitrator lacking authority in making and publishing the award, the claimant has also questioned the basis of the reasons found in paragraphs 7.1 and 7.2 of the award. The claimant says that the premise which has been recited and the conclusion which follows the premise do not match. The petitioner has also referred to the description of the claim detailed at the fourth page of the award under paragraph 8. The claimant says that clause (e) of the description of claims clearly recorded an incentive that the petitioner had demanded for early lifting of the goods and the arbitrator's failure to consider the same or award any amount in respect thereof would amount to acting contrary to the terms of the contract.
The petitioner has referred first to a judgment reported at AIR 1991 Cal 224 for the opinion therein that if the arbitrator could not demonstrate that the parties before him had agreed that the time to make and publish the award stood extended and if the award was made at a time beyond the agreed period, the award may be susceptible on the ground of bias. Such decision is clearly distinguishable on facts. In the present case the minutes of the fourth meeting recorded on December 5, 1996 that the parties consented to the time for making and publishing the award being extended by a period of four months from such date. Prior to the 6 award being made the arbitrator had addressed a letter on March 5, 1997 to allay the apprehension that was expressed in the petitioner's letter of March 4, 1997. There is no basis on which the principle enunciated in the reported decision can be made applicable in the instant case.
The next judgment brought by the petitioner is reported at AIR 1988 Cal 402 where it was held that the arbitrator did not have the authority to suo motu enlarge the time for making and publishing the award and in the event an arbitrator extended the time to make and publish the award beyond the agreed extension on his own accord, the award would be void. Again, in view of the facts recorded above, the proposition clearly does not apply.
In the judgment reported at 2000 (9) SCC 552 the Supreme Court held that an award could not be contrary to the contract since the arbitration clause is contained in the contract and the contract itself gives the jurisdiction to the arbitrator to adjudicate upon the disputes. There is no relevance of the principle in the present case. The arbitrator here was generous since the arbitrator proceeded to assess the merits of the matter despite the petitioner having abandoned the reference and despite the petitioner not having shown up at the meeting of March 17, 1997 notwithstanding having received prior notice therefor.
7
In the judgment reported at 1994 (5) SCC 570 that the petitioner has next cited, the law laid down is that an award against a person who is not a party to the reference but participating under protest may be challenged and the challenge would not be barred by the principles of acquiescence, waiver or estoppel. One cannot appreciate how such decision would apply to the facts of the present case since the petitioner was made aware of the hearing on March 17, 1997, the petitioner chose not to attend the hearing on such date and has subsequently sought to question the award on the ground that the arbitrator lacked jurisdiction to make and publish the award.
The petitioner has also relied on a judgment reported at AIR 1983 Delhi 413 for the rule that an arbitrator should make a party aware that the arbitrator would proceed ex parte against him. As would appear from the letter of March 5, 1997 extracted hereinabove, the last line of the second paragraph of such letter clearly gave notice to the petitioner that the arbitrator would proceed ex parte if the petitioner did not attend the reference on March 17, 1997. Even going by the test laid down by the Delhi High Court, the arbitrator's conduct cannot be faulted.
In the next judgment which the petitioner cites, reported at AIR 1955 Cal 354, this Court had held that it would amount to legal 8 misconduct on the part of the arbitrator if the arbitrator failed to give notice to a party against whom the arbitrator intended to proceed ex parte. The arbitrator in this case, as seen above, did give such notice to the petitioner.
The petitioner has placed a judgment reported at AIR 1991 Cal
3. The subject-matter of such judgment was an ex parte award that was made on the first effective date of hearing in the reference. A Division Bench of this Court found that there was sufficient cause for which the claimant had been unable to be present on such date. The Division Bench also recorded that there was enough time left for the arbitrator to make and publish the award and frowned upon the claim being rejected upon the claimant's failure to be represented on the first effective date. In the present case, the petitioner did not attend the hearing that was scheduled on February 17, 1997. It is not necessary to go into the question as to whether the petitioner here had due notice of such sitting since the petitioner was admittedly aware of the subsequent sitting of March 17, 1997 for which due notice was issued by the arbitrator by the letter of March 5, 1997 and the petitioner was informed that in the petitioner's absence the arbitrator would proceed ex parte.
The final decision cited by the petitioner, reported at 1996 (3) SCC 568, is for the proposition that the mere presence of a party or 9 his tacit acquiescence would not confer jurisdiction on the arbitrator if the arbitrator did not otherwise have the authority to entertain a particular matter. The facts in that case were that the arbitrator enlarged the scope of the reference and sought to adjudicate upon disputes which were not covered by the arbitration agreement. The Supreme Court held that the fact that the party challenging the award had participated in the reference would not preclude such party from canvassing such challenge at a subsequent stage. In the present case, the principle does not apply. The arbitrator here did not seek to enlarge the scope of the reference. The arbitrator gave notice to the petitioner that the petitioner had consented to the time for making and publishing the award being enlarged and the arbitrator informed the petitioner of the subsequent date of hearing and called upon the petitioner to be represented thereat or else the arbitrator would proceed ex parte. It would also appear from the date fixed for the subsequent hearing as informed by the arbitrator in the letter of March 5, 1997, that the time of four months from December 5, 1996 was drawing to a close. The arbitrator was left with no option but to conclude the reference in such circumstances.
As to the petitioner questioning the basis of the assessment at paragraphs 7.1 and 7.2 of the award, the grounds urged are not of misconduct or of non-application of mind but grounds that would be 10 available in an appeal but not in proceedings of the present nature where the Court has a limited supervisory rule.
There is no merit in the grounds urged by the petitioner. The award appears to be in order and the petitioner's claim was justifiably rejected by the arbitrator.
G.A.No.1835 of 1998 and A.C.No.16 of 1998 are disposed of without any order as to costs.
Urgent certified photocopies of this order, if applied for, shall be given to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.) Kc./A/s.