Rajasthan High Court - Jodhpur
M/S Gopalram Gumaniram Choudhary vs State Of Rajasthan on 15 May, 2019
Equivalent citations: AIR 2019 (NOC) 511 (RAJ), AIRONLINE 2019 RAJ 360 2019 WLC(RAJ)(UC) 2 111, 2019 WLC(RAJ)(UC) 2 111
Author: Arun Bhansali
Bench: Arun Bhansali
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Arbitration Application No. 17/2018
M/s Gopalram Gumaniram Choudhary, Registered Partnership
firm situated at Barsinghsar House, Near Jain P.G. College,
Nokha Road, Gangashar, Bikaner
----Petitioner
Versus
1. State of Rajasthan, District Collector, Jodhpur.
2. Chief Engineer / Addl. Chief Engineer, I.G.N.P., Bikaner.
3. Executive Engineer, 24 Division, I.G.N.P., Phalodi.
4. T.K. Parmar, Sole Arbitrator, 5-C-2, Jai Narayan Vyas Colony,
Bikaner.
----Respondents
For Petitioner(s) : Mr. Pradeep Choudhary.
For Respondent(s) : Mr. Manish Tak, AGC
HON'BLE MR. JUSTICE ARUN BHANSALI
Order 15/05/2019 This application under Sections 14 & 15 of the Arbitration and Conciliation Act, 1996 ('the Act') has been filed by the applicant with a prayer for appointment of a substitute arbitrator as the appointed arbitrator's mandate has been terminated.
It is, inter-alia, indicated in the application that by order dated 13.11.2013 passed in S.B. Civil Misc. Arbitration Application No.19/2011, Mr. T.K. Parmar was appointed as arbitrator to resolve the dispute between the parties as referred in the notice dated 06.07.2009 and notices dated 01.07.2009. The arbitrator entered the reference by his letter dated 24.12.2013 calling upon the parties to file their claim / counter claim. It is claimed that the (Downloaded on 28/06/2019 at 04:14:11 AM) (2 of 7) [ARBAP-17/2018] applicant filed his claim within 15 days, however, the respondent department filed its response after 5-6 months.
It is alleged that the arbitrator appointed Personal Assistant (P.A.) of respondent No.2 i.e. Chief Engineer, IGNP, Bikaner for the purpose of providing secretarial assistance by his communication dated 02.04.2014 (Annex.4). Allegations have been made that during pendency of the proceedings, the arbitrator was informed about his bias towards the respondents on account of his operating from the office of the respondents, managing the record of arbitration in the computer system of the respondents and communication to PA/PS. The arbitrator assured about shifting his office, which was not done and raised bill of Rs.57,000/- for the secretarial assistance. The applicant by its communication dated 20.02.2018 (Annex.6) and reminder dated 28.02.2018 (Annex.7) expressed its dissatisfaction regarding the manner of working on the above stated grounds. The communications were responded by the arbitrator vide communication dated 24.07.2018, wherein it was indicated that as notices dated 20.02.2018 and 28.02.2018 were received under Sections 12(3) and 13(2)(3) of the Act, he has suspended the proceedings of arbitration. It was indicated that the arbitration fees amounting to Rs. 2,62,150/- has not been paid, which be paid and that the applicant herein can take steps before the High Court for appointment of another arbitrator. It is, inter-alia, claimed in the application that on account of conduct of arbitrator, he has apparently withdrawn from the office and therefore, another arbitrator be appointed.
A reply to the application has been filed by the respondents No.1 to 3, inter-alia, indicating that after appointment of arbitrator pursuant to the orders passed by this Court, after filing of claim, (Downloaded on 28/06/2019 at 04:14:11 AM) (3 of 7) [ARBAP-17/2018] documents, affidavits etc., the proceedings were at final stage. During pendency of the proceedings, the arbitrator raised fee bill amounting to Rs.2,61,650/- and the respondent has already paid a sum of Rs.1,51,900/- to the arbitrator as well as his P.A. and the respondents are in process of making payment of remaining fees, however, the applicant-firm did not pay anything during arbitration proceedings. It is also indicated that communication in this regard was also sent by the arbitrator to this Court by his letter dated 22.11.2018 and therefore, the demand made in the application is only an attempt to overreach the process of law.
Submissions have been made that during arbitration proceedings, the applicant-firm did not raise any objection regarding appointment of Mr. Girish Chandra as Secretarial Assistant. Allegations made in communications dated 20.02.2018 (Annex.6) and 28.02.2018 (Annex.7) have been denied. The entire emphasis in the reply has been that the respondent has paid part of its share of fees, whereas the applicant has not paid anything and therefore, the applicant was not entitled for the relief as claimed in the application.
Rejoinder to the reply has been filed, inter-alia, indicating that the averment made in the communication dated 22.03.2018 by the arbitrator addressed to this Court are baseless and the contentions raised in the application have been reiterated.
Learned counsel appearing for the applicant reiterated the submissions made in the application. It was submitted that specific allegations were made by the applicant qua the functioning of the arbitrator vide Annexure-6 & 7, whereby notices under Section 12(3) and 13(2)(3) of the Act were given to the arbitrator. The arbitrator instead of deciding or refuting the same, (Downloaded on 28/06/2019 at 04:14:11 AM) (4 of 7) [ARBAP-17/2018] only by communication dated 24.07.2018 (Annex.8), demanded his fees and informed that he has suspended the proceedings in the arbitration.
Submissions have also been made that the arbitrator appears to have addressed a letter dated 22.03.2018 (Annex.R/3) to this Court, wherein though allegations have been made against the applicant, the allegations made by the applicant in the letter have not been refuted and again submissions have been made that the due fees of arbitrator may be ordered to be paid, which clearly indicates admission on part of the arbitrator pertaining to the allegations made in the applications and therefore, the application be allowed and a substitute arbitrator be appointed.
Learned counsel appearing for the respondent made submissions retreating the averments made in the reply, wherein also the emphasis has been regarding payment of fees to the arbitrator and protecting the same, in case a substitute arbitrator is appointed.
I have considered the submissions made by learned counsel for the parties and have perused the material available on record.
A perusal of the record indicates that the arbitrator was appointed on 13.11.2013, he entered reference by communication dated 24.12.2013 and on 02.04.2014, he appointed one Mr. Girish Chandra for secretarial assistance. Thereafter, it appears that the proceedings were conducted before the arbitrator at leisure. Whereafter, bills dated 02.11.2017 (Annex.5) were raised by the arbitrator for the four claims raised by the applicant, which appears to have triggered the action on part of the applicant, whereby notices under Section 12(3) and 13(2)(3) of the Act were issued to the arbitrator, inter-alia, raising doubts as to his (Downloaded on 28/06/2019 at 04:14:11 AM) (5 of 7) [ARBAP-17/2018] impartiality on account of the fact that office of the arbitrator was being operated from the office of Chief Engineer, the Secretary of the Chief Engineer was working as secretarial assistance, the record was being kept in the office of the Chief Engineer and the proceedings of the arbitration were being stored in the computer system of the department, which objections were reiterated by communication dated 28.02.2018.
It also appears that the arbitrator instead of dealing with the communications written by the applicant under Section 12 of the Act as required by Section 13(3) of the Act, sent a communication to this Court dated 22.03.2018 filed as Annex.R/3. It is surprising that though the letter dated 22.03.2018 has not been endorsed either to the applicant or to the respondents, the respondents have filed copy of the said communication sent to this Court, wherein certain allegations have been made regarding the partner of the applicant-firm and that the fees in the matter were due. However, quite surprisingly, the allegations, which were made in the application under Section 12 of the Act for alleging lack of impartiality were not denied and interestingly the following prayer was made :-
"vr% fuosnu gS fd ,l-ch- flfoy felysfu;l vkfcZVsª'ku ,Iyhds'ku ua- 19@2011 ds Øe esa izkFkhZ QeZ }kjk fdlh vU; dks ,dy e/;LFk fu;qDr djkus dk izkFkZuk&i= izLrqr fd;s tkus ls ij izkFkhZ QeZ ls eq>s o lsØsVsfj;y vflLVs.V gsrq esjs fu;qDr futh lfpo dks ns; e/;LFkrk 'kqYd dk lank; fn;s tkus ds mijkUr gh izkFkhZ QeZ dh lquokbZ dj dksbZ vkns'k ikfjr fd;k tkosA izkFkhZ QeZ dks tkjh fd;s x;s e/;LFkrk 'kqYd foi=ksa dh Nk;k izfr;ka Hkh ekuuh; U;k;ky; ds voyksdukFkZ izLrqr gSA"
The above prayer in the communication said to have been sent to this Court and the fact that the factual allegations made by the applicant in its communications (Annex.6 & 7) have not been denied clearly makes out a case of the arbitrator having withdrawn (Downloaded on 28/06/2019 at 04:14:11 AM) (6 of 7) [ARBAP-17/2018] from his office subject of-course to payment of his fees. The factual allegations made by the applicant, have not been refuted by the respondent-State and therefore, the same also amounts to respondents having agreed to challenge as envisaged by provisions of Section 13(3) of the Act.
From the above fact situation, it is apparent that despite the arbitration having advanced to a particular stage, where its claimed that only final arguments were to be addressed, on the arbitrator demanding fees the applicant raised objections qua impartiality of the arbitrator for the reasons indicated in Annex.-6 & 7, the arbitrator, without denying the allegations made in the application, made counter allegations against the partner of the firm and emphasised payment of his fees and the respondents also did not deny the grounds of challenge but emphasised the fact that it has paid part of fees to the arbitrator, clearly indicates that though the mandate of the arbitrator, appears to have been terminated on account of virtual withdrawal from the office and non-denial of the allegations made in the application under Section 12 of the Act by the applicant, while appointing a substitute arbitrator, directions need to be passed for ensuring a smooth conduct of the proceedings before the arbitrator and ensure that the due fees of the arbitrator are paid by the applicant.
In view of the above discussion, it is apparent that the arbitrator appointed by the order dated 13.11.2013 in S.B. Civil Misc. Arbitration Application No.19/2011 has withdrawn from the office by not deciding the challenge laid by the applicant under Section 12 of the Act, suspending the arbitration proceedings, not refuting the allegations made in the application under Section 12 (Downloaded on 28/06/2019 at 04:14:11 AM) (7 of 7) [ARBAP-17/2018] and the respondent also not contesting the allegations made, the mandate of the arbitrator stands terminated and a substitute arbitrator deserves to be appointed.
Consequently, the application is allowed. The mandate of arbitrator respondent No.4 shall stand terminated and Mr. Choth Mal Chaudhary, Chief Engineer (Retd.), Water Resources Department, R/o Karni Nagar, Gandhi Colony, Bikaner (Mobile No.9414430150) is appointed as substitute arbitrator. The arbitrator shall proceed in accordance with the provisions of Section 15(3) of the Act, to adjudicate the dispute between the parties as referred in notice dated 06.07.2009 and notices dated 01.07.2009 as referred to in the order dated 13.11.2013 passed in S.B. Civil Misc. Arbitration Application No.19/2011. The arbitrator shall decide the dispute as per the Manual of Procedure for Alternative Dispute Resolution, 2009, as amended upto date. The above appointment is subject to necessary disclosure being made under Section 12 of the Act.
It is further directed that it would be required of the applicant herein to pay its share of fees to the arbitrator, as soon as the arbitrator enters the reference, which would be a pre- condition for the arbitrator to proceed with the matter. The respondent-State shall also pay its share of fees in accordance with law.
(ARUN BHANSALI),J Rmathur/-
(Downloaded on 28/06/2019 at 04:14:11 AM) Powered by TCPDF (www.tcpdf.org)