Gujarat High Court
Harendra Madanjit Desai vs Prakash Devendra Kapadia & 2 on 1 May, 2017
Author: Rajesh H.Shukla
Bench: Rajesh H.Shukla
C/FA/7575/1999 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
FIRST APPEAL NO. 7575 of 1999
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of
the judgment ?
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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HARENDRA MADANJIT DESAI....Appellant(s)
Versus
PRAKASH DEVENDRA KAPADIA & 2....Defendant(s)
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Appearance:
MR. JAL SOLI UNWALLA, ADVOCATE with MR ADIL R MIRZA, ADVOCATE
for the Appellant(s) No. 1
SHRI S.H.SANJANWALA, SENIOR ADVOCATE with MR DILIP L KANOJIYA,
ADVOCATE for the Defendant(s) No. 1
MR RS SANJANWALA, SENIOR ADVOCATE for the Defendant(s) No. 2 - 3.4
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CORAM: HONOURABLE MR.JUSTICE RAJESH H.SHUKLA
Date : 1/05/2017
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ORAL JUDGMENT
1. The present Appeal is filed under Section 39(1)(vi) of the Arbitration Act, 1940 by the Appellant / Original Applicant being aggrieved with the impugned judgment and order in Miscellaneous (Arbitration) Application No. 65 of 1995 by the learned Civil Judge (SD), Valsad dated 24.8.1999 where the award made by the Umpire Exh. 69 is made rule of the court.
2. The background of the facts briefly summarized are as follows. The arbitration petition came to be filed by the Appellant, who is the owner of the land in question and who had entered into an exchange agreement dated 28.3.1988 with the Respondents / Original Opponents, who are the developers and builders. The possession of the land was agreed to be given for development and construction as agreed and accepted on the first floor, second floor and it was agreed as per the exchange agreement to deliver the possession of the constructed area and two flats within the stipulated period. However, as the Respondent - Developer had failed to fulfill the terms and conditions as per the exchange agreement, the arbitration application came to be filed which has been decided by the court below after examining the rival submissions which is the subject matter of challenge in the present Page 2 of 21 HC-NIC Page 2 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT First Appeal.
3. Heard learned Counsel Shri Jal Soli Unwalla appearing with learned Advocate Shri Adil R. Mirza for the Appellant and learned Senior Counsel Shri S.H.Sanjanwala appearing with learned Advocate Shri Dilip Kanojiya for the Respondents.
4. Learned Counsel Shri Jal Soli Unwala for the Appellant referred to the papers at length including the arbitration application and submitted that the arbitration agreement only provided that who may be appointed as an Arbitrator with consent of the parties. Learned Advocate Shri Jal Soli Unwala submitted that it was agreed that the Advocate or the Architect may be appointed and therefore the condition of such arbitration agreement would govern the arbitration proceedings and it would be final. However, this arbitration agreement does not clearly specify regarding the Umpire to be appointed and there is nowhere any mention of appointment of the Umpire. Learned Counsel Shri Unwala therefore submitted that the arbitration award signed and submitted by Shri D.M.Desai in the capacity as Umpire is contrary to the arbitration clause and agreement and there could not have been made a rule of the court and therefore it deserves to be quashed and set aside.
5. Learned Counsel Shri Unwala also referred to the papers and Page 3 of 21 HC-NIC Page 3 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT submitted that the court below has failed to appreciate that there are orders passed in the Application Exh.55 that when the objection for appointment of Shri Shaileshbhai T. Chauhan as a Arbitrator was raised, the court passed the order for appointment of new Arbitrator Shri D.M.Desai. Learned Counsel Shri Unwala therefore strenuously submitted that it would mean that Shri D.M.Desai was appointed as Arbitrator and could not have submitted any award in his capacity as Umpire and therefore the order passed by the court below deserves to be quashed and set aside. Learned Counsel Shri Unwala also referred to Exh.43 and submitted that the court below has failed to appreciate that Shri Desai has been appointed as the third Arbitrator by the court which is evident from the order below Exh.53. He pointedly referred to paragraph 2 where it is clearly mentioned, "begha mali", meaning thereby "jointly" and again it refers, "tamam lavado ve", meaning thereby "jointly". Learned Counsel Shri Unwala therefore submitted that the award made by Shri Desai as Umpire is exceeding the jurisdiction and the court below has committed an error in making it the rule of the court. Learned Counsel Shri Unwala referred to the papers and particularly Exh.59 and Exh.60 of the paper book, which are the applications, and submitted that these applications were jointly submitted by the Arbitrator, and Page 4 of 21 HC-NIC Page 4 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT Shri D.M.Desai has signed it as Arbitrator. Therefore he could not have assumed as an Umpire. Learned Counsel Shri Unwala referred to the order Exh.43 and submitted that it refers to the conditions and procedure when Shri Shaileshbhai T. Chauhan resigned, he was replaced by Shri D.M. Desai. In other words, the application and / or order below Exh.43 speaks of the appointment as Arbitrator. There is no mention of any Umpire. Learned Counsel Shri Unwala pointedly referred to the agreements as well as application Exh.55 in Arbitration Application No.65 of 1995 and also the copy of the notice by the court to emphasize that the court had asked to submit the joint report. Learned Counsel Shri Unwala also referred to the Arbitration Application (Lavad Case No. 65 of 1995) before the learned Civil Judge (SD), Valsad and submitted that the reference is made to Exh.43 regarding the joint award. He therefore strenuously submitted that the joint award of the Arbitrator was required to be made and there is no question of any appointment as Umpire. Learned Counsel Shri Unwala referred to Exh.59 and submitted that the application before the court was also signed by the parties and their respective arbitrators which would imply that there is no Umpire. Learned Counsel Shri Unwala also referred to the Arbitration Application (Lavad Case No. 65 of 1995) before the learned Civil Judge (SD) at Valsad and submitted Page 5 of 21 HC-NIC Page 5 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT that the order is very clear that the appointment was made as an Arbitrator and not as an Umpire. Learned Counsel Shri Unwala submitted that by this Shri Shaileshbhai T. Chauhan was appointed as third Arbitrator. Learned Counsel Shri Unwala referred to and relied upon the judgment of the Hon'ble Apex Court in case of Ethiopian Airlines v. Stic Travels (P) Ltd. reported in (2001) 7 SCC 454 and submitted that the conduct of the parties would indicate an intention that the third Arbitrator was appointed to function as an Arbitrator or not merely an Umpire. Learned Counsel Shri Unwala referred to the observations made in paragraph 23 to 28 of the judgment to support his contention. Learned Counsel Shri Unwala emphasized that as observed in paragraph 25 the intention has to be gathered from the papers and the documents like the agreement, which would spell out their intention. Learned Counsel Shri Unwala emphasized the observations made in paragraph 25:
"It is because of this that sub-Section (2) refers to "the award of the majority shall" and further the words "unless the arbitration agreement otherwise provides" give significant focus on intent of the contracting parties which is the foundation of arbitration proceedings."
Learned Counsel Shri Unwala submitted that similarly in the facts of the case, when the agreement of the parties provide that the Page 6 of 21 HC-NIC Page 6 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT dispute would be decided by three Arbitrators by majority, which clearly refer to the words, "court appointed Arbitrator", would mean as Arbitrator and any submission made to the contrary would be contrary to the intention of the parties reflected from the agreement.
6. Learned Senior Counsel Shri S.H.Sanjanwala appearing with learned Advocate Shri Dilip Kanojiya for the Respondents referred to the papers and submitted that the word "third Arbitrator" would mean the Umpire. He referred to the papers and also the written submissions and submitted that the trial court appointed one Shri Girdharbhai M. Solanki and Shri Vipul Kapadia as the Arbitrators and further appointed Shri Shaileshbhai T. Chauhan as the Umpire. However, as there was a disagreement between the Arbitrators, they gave a separate award and informed the court about the same. Learned Counsel Shri S.H.Sanjanwala submitted that it is in these circumstances, the Umpire Shri Shaileshbhai T. Chauhan would have given the award. However, as he resigned, the Court appointed Shri D.M.Desai in place of Shri Shaileshbhai T. Chauhan, meaning thereby, Shri D.M.Desai was appointed as an Umpire. Learned Senior Counsel Shri S.H.Sanjanwala therefore submitted that the Umpire after giving full opportunity to both the sides gave the award, which cannot now be questioned. In support Page 7 of 21 HC-NIC Page 7 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT of his submission, learned Senior Counsel Shri S.H.Sanjalwala referred to and relied upon the judgment of the Hon'ble Apex Court in case of Reserve Bank of India v. S.S. Investments and ors. reported in AIR 1992 SC 1932. Learned Senior Counsel Shri S.H.Sanjanwala submitted that even the trial court has observed that the Umpire has applied for extension and the the Umpire has submitted the award.
7. Learned Senior Counsel Shri S.H.Sanjanwala submitted that the award was given as a Umpire. He emphasized that once there is a disagreement, the Arbitrator or the Umpire should submit the award. In support of this contention, he has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Reserve Bank of India v. S.S. Investments and ors. (supra). Learned Senior Counsel Shri S.H.Sanjanwala also referred to and relied upon the another judgment of the Hon'ble Apex Court in case of Prasun Roy v. The Calcutta Metropolitan Development Authority and another, reported in AIR 1988 SC 205 as well as the judgment of the Hon'ble Apex Court in case of M/s Hind Builders v. Union of India reported in AIR 1990 SC 1340. Learned Senior Counsel Shri Sanjanwala referred to all the aforesaid judgments to emphasize about the scope of interference Page 8 of 21 HC-NIC Page 8 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT with the award. He submitted that even if the two views are possible and the Arbitrator or the Umpire acting upon such clause has given an award, the court would not interfere. Learned Senior Counsel Shri Sanjanwala also referred to the background of the facts and submitted that the court below, relying upon the decision of the Hon'ble Apex Court has rightly come to the conclusion. Learned Senior Counsel Shri Sanjanwala emphasized that in view of the aforesaid judgment of the Hon'ble Apex Court in case of M/s Hind Builders v. Union of India (supra), it is not open for the court in appeal to disturb the award. He emphasized that similar view has also been reiterated in another judgment of the Hon'ble Apex Court in case of M/s. Sudarsan Trading Co. v. The Govt. of Kerala and another reported in 1989 SC 890 as well as the judgment of the Hon'ble Apex Court in case of B.V.Radha Krishna v. Sponge Iron India Limited reported in AIR 1997 SC 1324 and also the judgment of the Hon'ble Apex Court in case of Hindustan Construction Company Limited v. Governor of Orissa and others reported in (1995) 3 SCC 8.
8. Learned Senior Counsel Shri Sanjanwala submitted that the award of the Arbitrator therefore could be examined only on the ground mentioned in Section 30 of the Arbitration Act 1940. Learned Senior Counsel Shri Sanjanwala also submitted that it is required to Page 9 of 21 HC-NIC Page 9 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT be appreciated that once the parties have participated in the arbitration proceedings, it is not open to challenge the appointment or the award subsequently. In support of his contention, he has referred to and relied upon the judgment of the Hon'ble Apex Court in case of Prasun Roy v. The Calcutta Metropolitan Development Authority and another (supra).
9. Learned Senior Counsel Shri Sanjanwala referred to the papers and submitted that there is a clinching evidence that even the Appellant himself had known that Shri D.M.Desai was working as an Umpire. Learned Senior Counsel Shri Sanjanwala referred to the papers and submitted that in response to the application made by Satkar Traders regarding appointment as a common Architect, it was observed as under:
"આઆઆઆઆઆઆઆઆઆ આ આઆઆઆ આઆઆઆઆ આઆઆઆઆઆઆઆ આઆઆ આઆઆઆઆ આઆઆઆઆઆ. આઆઆઆઆ આઆઆઆઆ આઆઆઆઆઆઆઆઆ આઆઆ આઆઆઆઆ આઆઆઆ આઆઆઆ આઆઆઆઆઆઆ આઆ આઆઆઆ આઆઆ આઆઆ આઆઆ આઆઆ આઆ આઆઆઆઆઆઆ આઆઆઆ આઆઆઆઆ આઆઆઆઆઆ આઆઆઆઆઆ આઆઆઆઆઆઆ આઆઆઆઆઆ આઆઆઆઆ આઆઆ આઆઆઆઆઆઆઆ આઆઆઆઆઆ આઆઆઆ. આઆઆઆઆ આઆઆઆઆઆઆઆ આઆઆ આઆઆઆ આઆઆઆઆઆઆઆ આઆઆઆઆઆઆ આઆઆઆઆઆઆ આ આઆઆ આઆઆઆઆઆ આઆઆઆ આઆઆ આઆઆઆઆઆઆઆ આઆ આઆઆઆઆઆ આઆઆઆઆઆ આઆઆઆઆઆઆઆ આઆ આઆઆઆ આઆઆઆઆ આઆઆઆ આઆ Page 10 of 21 HC-NIC Page 10 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT આઆઆઆઆઆ."
10.Learned Senior Counsel Shri Sanjanwala strenuously submitted that no objection was taken that Shri D.M.Desai cannot give an award as Umpire and it is only after it has been made a rule of the court, such contentions are sought to be raised. Learned Senior Counsel Shri Sanjanwala submitted that the Umpire Shri D.M.Desai has written in the award which is self-explanatory that Shri Girdharbhai M. Solanki and Shri V.S. Kapadia has referred the matter in difference for final determination. He referred to the application Exh. 53/16 produced at page 128 of the paper book and submitted that he has clearly stated about the difference of Arbitrator and final determination by him. In other words, learned Senior Counsel Shri Sanjanwala submitted that it would mean an Umpire and not an Arbitrator. Learned Senior Counsel Shri Sanjanwala therefore submitted that the present Appeal may not be entertained.
11.In view of the rival submissions, it is required to be considered whether the present First Appeal filed by the Appellant deserve consideration on the ground that the court below has committed an error in making the award as 'rule of the court' treating the award as that of the Umpire.
12.As could be seen from the background of the facts, the Page 11 of 21 HC-NIC Page 11 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT appointment of Shri Desai in place of Shri Solanki clearly suggest that it was an appointment as a Arbitrator. The Applications particularly Exh.59 and Exh.60 clearly suggest that Shri D.M.Desai has signed as a Arbitrator. Exh. 46 itself clearly suggest that the parties by consent had accepted third Arbitrator appointed by the court and the order also clearly suggest that the award was to be given jointly by the Arbitrators. It nowhere refers to or mention the word 'Umpire'. In fact as rightly submitted, the appointment of Shri Shailesh T. Chauhan was as a third Arbitrator which is specifically mentioned and Shri D.M.Desai has been appointed in his place. Therefore, the appointment of Shri D.M.Desai would be as third Arbitrator and not as an Umpire as sought to be canvassed by learned Senior Counsel Shri Sanjanwala. Further the record particularly the application Exh.55 and the endorsement as well as the order and the Application Exh.59 clearly suggest that the appointment of Shri Desai was as a third Arbitrator and not as an Umpire. Even subsequently, the Applications Exh. 61 and Exh. 66 which are the Applications made for extension of time by Shri D.M.Dsasi, clearly mention that he has been appointed by the court as a Arbitrator and the Application also refers "Court Appointed Arbitrator" and not an "Umpire". Therefore Shri Desai himself has made an application before the court as "third Arbitrator" or "the Page 12 of 21 HC-NIC Page 12 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT court appointed Arbitrator" when submits the award as an Umpire would certainly raise the issue as regards the scope of his functioning as an Arbitrator and / or Umpire. Both the learned Counsels have referred to the papers at length. However, it is well accepted that while deciding such an issue whether the third person appointed as a Arbitrator is a third Arbitrator or is an Umpire, has to be gathered from the record, and the intention of the parties has to be gathered from the material. The judgment of the Hon'ble Apex Court in case of Ethiopian Airlines v. Stic Travels (P) Ltd. (supra) clearly focused on this aspect that when originally two Arbitrators are nominated and they are permitted to appoint the Umpire, the intention of the parties is clear. It has also been observed that there is a distinction between the role of Umpire and the Chairman as explained. It has been observed that the function of the Umpire only comes into play when there is a difference between the two Arbitrators. When there is no difference, the Umpire does not play any role. On the other hand the Chairman or the third Arbitrator has to chair every meeting of the Tribunal, and in order to gather the intention, the totality of the facts and circumstances has to be examined and the intention has to be culled out from the arbitration clause and the material and evidence. Section 10 of the Act contemplates about two different situations.
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Section 10(1) of the Act refer to the two Arbitrators appointed by the parties who may appoint the Umpire whereas Section 10(2) of the Act provide that where the reference is made for three Arbitrators to be appointed otherwise than what is stated in sub- Section (1) and the "award of the majority shall prevail" would suggest that it is the appointment of the third person as Arbitrator and not as Umpire. It is in this context, a useful reference can be made to the observations made in paragraph 25 and 26 of the judgment in case of Ethiopian Airlines v. Stic Travels (P) Ltd. (supra). It has been observed emphasizing the word "award of majority shall prevail". Thus, when such words are used, the functions are clearly spelled out from the agreement that the parties intended their dispute to be decided by three Arbitrators by majority. Therefore, if it is an appointment under Section 10(1) of the Arbitration Act, then it could be construed as an appointment of the third person as an Umpire. Section 10(1) provides that reference shall be made to three Arbitrators, one to be appointed by each party and third by two appointed Arbitrators, then it will have the effect as if it is provided for the appointment of an Umpire. However, when the appointment is made under Section 10 (2) of the Arbitration Act, which has a reference to the "award of the majority shall prevail", then the appointment of the third person by Page 14 of 21 HC-NIC Page 14 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT the court is a third Arbitrator. Thus, the appointment is made suggesting the indication in the arbitration clause or the agreement as well as appointment of the third person as a Arbitrator with a clear suggestion that the "award of majority shall prevail" or "the majority shall decide" would imply that the third person has to act as an Arbitrator and not the Umpire. This signifies distinction between the role of a person appointed as third Arbitrator and / or the Umpire, which has been dealt with and discussed in the aforesaid judgment of the Hon'ble Apex Court in case of Ethiopian Airlines v. Stic Travels (P) Ltd. In case of third Arbitrator he has to actively participate in the proceedings and the decision would be by majority which will prevail. On the other hand, if he is an Umpire, he would assume his role only when there is difference of opinion between the two Arbitrators where he has to decide. Therefore, the role as a Umpire is to resolve and consider the rival opinions of the two Arbitrators of different parties and give the findings while resolving the dispute. On the other hand, the third Arbitrator who has to work as an Arbitrator would participate in the proceedings and the Arbitrator shall decide the issues / reference by majority.
13.In the facts of the present case, therefore, as rightly submitted by learned Counsel Shri Unwala that the agreement between the Page 15 of 21 HC-NIC Page 15 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT parties clearly provide that the "dispute would be decided by three Arbitrators by majority", such words would imply that the court appointed Arbitrator would be the Chairman and the third Arbitrator would be an Arbitrator, then only the issue could be decided by majority. Therefore the submissions made by learned Senior Counsel Shri Sanjanwala for the Respondent that the third Arbitrator appointed by the trial court has to be an Umpire, and as there was disagreement between the two Arbitrators, he could give a separate award as Umpire, would itself signify his role as an Umpire. It is not the case herein apparent from the record. The emphasis made by learned Senior Counsel Shri Sanjanwala referring to the judgment of the Hon'ble Apex Court in case of Reserve Bank of India v. S.S. Investments and ors. (supra) has to be read in the context and background of the facts. In the case before the Hon'ble Apex Court, the extension was applied by the person as Umpire whereas in the facts of the present case it is very evident that the court appointed Arbitrator Shri D.M.Desai himself had made an application for extension as a court appointed Arbitrator or the third Arbitrator and not as an Umpire and the submissions made by learned Senior Counsel Shri Sanjanwala that once there is a disagreement the court appointed Arbitrator could submit his award as Umpire disregarding the statutory provisions Page 16 of 21 HC-NIC Page 16 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT of Arbitration Act wiping out the distinction between the third Arbitrator and the Umpire.
14.The another facet of the submission made by learned Senior Counsel Shri Sanjanwala with much emphasis about the scope of interference with the award of the Umpire or the Arbitrator has to be considered with reference to a specific clause in the arbitration agreement and the attending circumstances which are revealed from the background of the material on record. There is no quarrel with the proposition as regards the scope of interference with the award of the Arbitrator and it is also well settled that if the two views are possible, the court would not interfere or substitute its own view. However, in the facts of the case, it is not merely a conclusion arrived at on the basis of material which would attract the limitation for the purpose of disturbing such award and the scope of interference with the award of the Arbitrator. The provisions of Section 30 of the Arbitration Act provide for the grounds for setting aside the award as stated in detail. Similarly, Section 33 of the Arbitration Act provide that any person claiming under him may challenge the validity of arbitration agreement or an award applying to the court having jurisdiction and the court may pass appropriate orders. Therefore, the moot question is whether any of the ground provided in Section 30 of the Page 17 of 21 HC-NIC Page 17 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT Arbitration Act are made out. The provisions of Section 30 of the Arbitration Act makes it clear that the award of the Arbitrator has misconducted himself or the proceedings would justify such interference with the award. Therefore, it the Arbitrator has exceeded the jurisdiction or misdirected, meaning thereby, acted contrary to the statutory provisions or the terms of the agreement and has failed to look at the relevant provisions, it would call for the interference. In the facts of the case, this clause would squarely apply. Moreover, as observed by the Hon'ble Apex Court in a judgment in case of T.N.Electricity Board v. M/s. Bridge Tunnel Constructions and others reported in AIR 1997 SC 1376, there is no embargo on the power of the Court to admit the contract into evidence and look into the evidence to decide whether the Arbitrator or Umpire has exceeded the jurisdiction. There is a distinction between the dispute as to the jurisdiction of the Arbitrator and the dispute as to the manner in which the jurisdiction could be exercised. Thus, if the Arbitrator has exercised the jurisdiction vested in him with regard to the subject matter of arbitration, the limitation qua the scope of interference may be attracted. However, when there is an issue of jurisdiction, which would fall under Section 30 of the Arbitration Act, the court would be justified in interfering with the award.
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15.While submitting the report as Umpire the third Arbitrator appointed by the court i.e. Shri Desai has exceeded the jurisdiction in assuming the role of Umpire which was not assigned. As discussed above, when he himself has made an application to the court for extension, it is referred to as an "Arbitrator" by him. Moreover, the application and order of his appointment by the court leaves no doubt that his appointment was as a third Arbitrator appointed by the court. As stated above, there is a distinction between the role of the third Arbitrator and the Umpire. Therefore, the agreement which would suggest about the intention of the parties has clearly provided that the dispute would be decided by three Arbitrators by majority. [emphasis supplied] Therefore, this word cannot be brushed aside to read and substitute the clause as "it would be decided by the Umpire". Further, when the court appointed Arbitrator Shri Desai has assumed the role as Umpire, he has totally misdirected. Not only that, but, as the law provide the appointment of the Arbitrator or the Umpire as provided under Section 10(1) and 10 (2) which again suggest about the appointment of the Umpire as different and distinct from the third Arbitrator.
16.In view of the award, which has been made the rule of the court as a Umpire, deserve to be set aside. The other aspects with reference Page 19 of 21 HC-NIC Page 19 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT to further details as regards non-consideration of the relevant issues by the third Arbitrator for which the grounds have been raised in the Appeal are not required to be dealt with elaborately. Moreover the submissions made by learned Senior Counsel Shri Sanjanwala referring to the judgment of the Hon'ble Apex Court in case of Hindustan Construction Company Limited v. Governor of Orissa and others (supra) as well as the judgment in case of M/s Hind Builders v. Union of India (supra) and other judgments to emphasize about the scope of interference with the award would not be applicable in the facts of the case. In the aforesaid judgment of the Hon'ble Apex Court in case of Hindustan Construction Company Limited v. Governor of Orissa and others the issue was totally different with regard to the aspect of interference with the award given by the Tribunal and re-appreciation of the evidence by the High Court, which is not an issue involved in the present case.
17.Similarly the another judgment of the Hon'ble Apex Court in case of M/s Hind Builders v. Union of India (supra) again referring to the scope has made the observations that even if two views are possible and the Arbitrator acting upon a particular interpretation would not justify the interference. However, in the facts of the case, as discussed herein above, it goes to the root of the matter for Page 20 of 21 HC-NIC Page 20 of 21 Created On Wed Aug 16 10:32:33 IST 2017 C/FA/7575/1999 JUDGMENT the purpose of deciding whether the award submitted by the Umpire could be accepted as valid when the record clearly suggest that the appointment of the "court appointed Arbitrator" was as a third Arbitrator, meaning thereby the award was to be given by the majority and not in the capacity as Umpire which would make the award unacceptable beyond the scope and therefore deserve to be quashed and set aside.
18.Therefore, having regard to the rival submissions and background of the facts as well as the provisions of the Arbitration Act, the present First Appeal preferred by the Appellant deserve to be allowed. The impugned judgment and order in Misc. (Arbitration) Application No. 65 of 1995 by the learned Civil Judge (SD) Valsad dated 24.8.1999 making the award by the Umpire as the rule of the court is hereby quashed and set aside.
(RAJESH H.SHUKLA, J.) JNW Page 21 of 21 HC-NIC Page 21 of 21 Created On Wed Aug 16 10:32:33 IST 2017