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Navjot Kaur & Anr vs Fiitjee Limited on 18 October, 2022

Author: Neena Bansal Krishna

Bench: Neena Bansal Krishna

                          $~5
                          *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                          +     O.M.P.(T) 3/2021 and I.As. 15350/2021 and 14632/2022
                                NAVJOT KAUR & ANR.                                 ..... Petitioner
                                                  Through: Mr. Divyakant Lahoti, Ms. Vindhya
                                                              Mehra,     Ms.    Vadhur         Jhavar,
                                                              Advocates.
                                                  versus
                                FIITJEE LIMITED                                    ..... Respondent
                                                  Through: Appearance not given.
                                CORAM:
                                HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
                                                  ORDER

% 18.10.2022

1. A Petition under Section 14 read with Section 15 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) has been filed seeking the termination of the mandate of the sole Arbitrator who may be substituted with an independent and impartial sole Arbitrator.

2. It is submitted in the petition that the petitioner no. 1 who is a qualified person and is holding a degree in post-graduation, joined the respondent's Institute as a Professor. A Service Contract dated 04.06.2008 was duly executed between the parties. The petitioner no. 2, Mr. Dilraj Singh, her husband stood as a surety for her. After successful completion of probation period, she was confirmed as an Associate Professor A1. During the course of her employment, the respondent retained a part of the petitioner no. 1's salary under the pretext that the same shall be adjusted at the time of full and final payment.

3. It is asserted that respondent was irregular in payment of monthly salary between the year 2017-2018. The petitioner no. 1 in accordance to Clause 16(b) of the Rules, submitted her six months Notice for resignation Signature Not Verified Digitally Signed By:PRIYANKA ANEJA Signing Date:27.10.2022 11:17:10 vide e-mail dated 27.11.2018. On completion of her Notice period, she returned the Identity Card as per Service Rules policy. She also requested the respondent to acknowledge her resignation vide e-mail dated 31.05.2019 which was duly accepted and acknowledged by the respondent vide its return e-mail date 31.05.2019. However, after the resignation, she did not receive the pending arrears of salary and her full and final dues were not settled by the respondent. She sent several letters through e-mail claiming her full and final payments but the respondent failed to do so but kept on giving false assurances.

4. Eventually, in terms of the Clause 36A of the Rules according to which the disputes between the parties were referable to Arbitration, the petitioner sent a Notice dated 20.05.2020 seeking her full and final dues in response to which the respondent vide Letter dated 22.05.2020 invoked Arbitration and unilaterally appointed Shri. S.P. Dubey as the sole Arbitrator.

5. The learned sole Arbitrator entered into Arbitration and gave a vague, false and incomplete declaration that there exist no circumstances giving rise to justifiable doubt as to his independence and impartiality. The said Letter of the sole Arbitrator was not accompanied by the declaration under 6 th Schedule read with Section 12 of the Arbitration and Conciliation Act, 1996. The petitioner no. 1 filed her Statement of Claim before the learned sole Arbitrator which was taken on record. Thereafter, the learned sole Arbitrator vide Order dated 18.07.2020 directed both the parties to deposit 50% of the Arbitration Fees as per the Fourth Schedule of the Arbitration and Conciliation Act, 1996.

6. However, even though respondent had not indicated that it would be Signature Not Verified Digitally Signed By:PRIYANKA ANEJA Signing Date:27.10.2022 11:17:10 filing a Counter Claim, the sole Arbitrator recorded that claim if any by the first party, may also be filed before the next date of hearing. Furthermore, the sole Arbitrator erred in recording the title of the case as "M/s. Fiit Jee Limited vs. Ms. Navjot kaur and another, ignoring the fact that the petitioner was the claimant in the Arbitration proceedings.

7. In the meanwhile, petitioner no. 1 also initiated the proceedings before the Office of the Deputy Chief Labour Commissioner claiming gratuity under the Payment of Gratuity Act, 1972. It is asserted that the sole Arbitrator held the proceedings on 12.09.2020. The petitioner made a payment of their share of Arbitration Fee, i.e, Rs. 22,500/-. The respondent also filed its reply/Statement of Defence but the respondent did not place on record any of the alleged fabricated bills nor did they place on record the Notice sent by the Income Tax Department. An application was filed on behalf of the petitioner for rejection of the Counter Claim as being barred by the limitation. The proceedings had continued before the learned Arbitrator.

8. The petitioner has claimed that during the course of the proceedings, she has came to know that the sole Arbitrator had been appointed as an Arbitrator in other arbitrations for the respondent. The learned sole Arbitrator has also admitted his association with the Respondent Company to the extent that he has been receiving the payments after the deduction of TDS.

9. It is claimed that no proper disclosures have been made under Section 12 by the learned Arbitrator. It is further submitted that due to Covid-19 pandemic, the application has been filed by the petitioner seeking virtual hearing of the proceedings on 10.04.2021. However, instead of adjudicating on the request of the petitioner, the learned sole Arbitrator conducted the Signature Not Verified Digitally Signed By:PRIYANKA ANEJA Signing Date:27.10.2022 11:17:10 hearing physically, ignoring the severity of the situation and passed Orders and reserved the matter for Orders on the application.

10. It is claimed that after the lockdown was suspended, the learned sole Arbitrator in a pre-determined and biased manner, decided the application filed by the petitioner seeking rejection of the Counter Claim on 07.08.2021.

11. It is asserted that CM(M) 585/2021 was preferred by the petitioner against the impugned Order and had also prayed for termination of mandate of the sole Arbitrator. The CM(M) 585/2021 was dismissed as withdrawn on 02.09.2021.

12. It is claimed that the sole Arbitrator has acted in a biased and in an unfair manner and has not given proper disclosure under Section 12 read with Schedule 6 of the Act.

13. The termination of the sole Arbitrator has thus been sought on the ground of unilateral appointment of the Arbitrator by the respondent and non-disclosure of the requisite information under Section 12 of the Act. It is thus, submitted that the mandate of the sole Arbitrator be terminated and an independent Arbitrator may be substituted under Section 15 of the Arbitration and Conciliation Act, 1996.

14. The respondent in its reply has taken a preliminary objection that the present petition is malicious and an attempt to derail the arbitration proceedings. Moreover, the value of the claim is Rs. 4,00,000/- and of the Counter Claim is Rs. 15,00,000/-. The joint valuation of the Claim and the Counter Claim is much below the pecuniary jurisdiction of this Court. It is also asserted that without prejudice, the grounds on which the substitution is sought, stands waived by the conduct of the petitioner who has already participated in the proceedings despite knowing her rights to take objections.

Moreover, the allegations made against the Arbitrator are baseless and whimsical. On merits, the averments made in the petition are denied.

15. Submissions heard.

16. The substitution of the learned Arbitrator is sought on the ground that no proper disclosures/statements have been made and that the learned sole Arbitrator has been an Arbitrator in various other arbitrations and has been receiving money from the respondent. There is no specific denial of the same by the respondent in its reply. The other ground on which the substitution of the sole Arbitrator has been sought is that the conduct of the sole Arbitrator has not been free of bias.

17. The learned counsel for the respondent has submitted that without prejudice and without any reflection on the merit, the application may be allowed. The learned sole Arbitrator may be substituted.

18. Considering the submissions made that the ground agitated in the petition, the application is allowed.

19. In light of the facts and submissions made, Mr. Annirudh Sharma, Advocate,(Mobile No. 9999080715) is hereby appointed as the independent Arbitrator to adjudicate the disputes between the parties.

20. The parties are at liberty to raise their respective objections before the Arbitrator.

21. The fees of the learned Arbitrator would be fixed in accordance with the IV Schedule to A&C Act, 1996 or as consented by the parties.

22. This is subject to the Arbitrator making necessary disclosure as under

Section 12(1) of A&C Act, 1996 and not being ineligible under Section 12(5) of the A&C Act, 1996.

23. Learned counsels for the parties are directed to contact the learned Signature Not Verified Digitally Signed By:PRIYANKA ANEJA Signing Date:27.10.2022 11:17:10 Arbitrator within one week of being communicated a copy of this Order to them by the Registry of this Court.

24. The petition is accordingly disposed of in the above terms.

NEENA BANSAL KRISHNA, J OCTOBER 18, 2022/PA Signature Not Verified Digitally Signed By:PRIYANKA ANEJA Signing Date:27.10.2022 11:17:10