* HIGH COURT OF DELHI : NEW DELHI
FAO No.255 of 2009 & CM No.11344/09
% Judgment reserved on:,18th August, 2009
Judgment delivered on: 24th August, 2009
Mr. Rakesh Gulati,
S/o Mr. Harbans Lal Gulati,
R/o 236, Gujranwala Town,
Opp. Orbit Plaza,
Part-III,
Delhi-110 009.
....Appellant
Through: Mr. Chetan Sharma, Sr. Adv.
with Mr. M.G. Vacher.
Versus
1. Mr. Tilak Raj Salooja,
S/o Late Sohan Lal Salooja,
2. Mrs. Janak Salooja
W/o Mr. Tilak Raj Salooja,
Both R/o House No.B-469,
Meera Bagh,
New Delhi-110 063. ...Respondents
Through: Nemo
Coram:
HON'BLE MR. JUSTICE V.B. GUPTA
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
FAO No.255/09 & CM No. 11344/09 Page 1 of 9
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
V.B.Gupta, J.
Present appeal has been filed against judgment
dated, 1st July, 2009, passed by Additional District Judge,
Delhi, vide which appellant’s petition under Section 34 of
Arbitration & Conciliation Act, 1996 (for short as ‘Act’),
against award dated 11th March, 2008, passed by sole
Arbitrator was dismissed.
2. Disputes arose between the parties on account of
non-payment of rent by the appellant. Accordingly,
respondents invoked the Arbitration clause and Mr. Vijay
Tandon, Advocate was appointed as sole Arbitrator, who
gave his award on 11th March, 2008.
3. Aggrieved by the award, appellant filed petition
before the trial court, which was dismissed vide impugned
judgment.
4. It is contented by learned counsel for appellant that
the appellant was deprived of his legitimate right to
FAO No.255/09 & CM No. 11344/09 Page 2 of 9
contest the case only on the ground that the fee of the
arbitrator was not given in time. The Arbitrator also
deprived the appellant of his opportunity to come in
witness box and cross-examine the witness of claimant.
5. It is also contended that when arbitrator refused to
give date to the appellant, he (appellant) moved an
application under Section 12 & 13 of the Act, stating that
he could not pay the fee due to circumstances stated in the
application and in case of non-payment of fee, the
arbitrator could pass an award and claim his fee from the
appellant, but, arbitrator instead of passing any order on
this application, passed the award, which is against law
and facts on record.
6. The appellant assailed the award before the trial
court on following grounds:-
(a) The petitioner was not given an appropriate
opportunity to defend his case.
(b) No evidence has been led by the petitioner to
prove his case.
(c) No intimation of the orders passed by arbitrator
on 8.2.2008 was given to the petitioner and even
the certified copy of the award was not given to
the petitioner on the ground that he did not pay
the fee of the arbitrator.
7. Section 34 of the Act read as under:-
FAO No.255/09 & CM No. 11344/09 Page 3 of 9
“34. Application for setting aside arbitral
ward-(1) Recourse to a court against an arbitral
award may be made only by an application for
setting aside such award in accordance with
sub-section (2) and sub Section (3)
(2) An arbitral award may be set aside by the
court only if-
(a) the party making the application furnishes
proof that-
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid
under the law to which the parties have
subjected it or, failing any indication
thereon, under the law for the time being
in force; or
(iii) the party making the application was not
given proper notice of the appointment of
an arbitrator or of the arbitral proceedings
or was otherwise unable to present his
case; or
(iv) the arbitral award deals with a dispute not
contemplated by or not falling within the
terms of the submission to arbitration, or
it contains decisions on matters beyond the
scope of the submission to arbitration;
Provided that, if the decisions on
matters submitted to arbitration can be
separated from those not so submitted,
only that part of the arbitral award which
contains decisions on matters not
submitted to arbitration may be set aside;
or
(v) the composition of the arbitral tribunal or
the arbitral procedure was not in
accordance with the agreement of the
parties, unless such agreement was in
conflict with a provision of this Part from
which the parties cannot derogate, or,
failing such agreement, was not in
accordance with this Part; or
(b) the court finds that-
FAO No.255/09 & CM No. 11344/09 Page 4 of 9
(i) the subject-matter of the dispute is not
capable of settlement by arbitration under
the law for the time being n force, or
(ii) the arbitral award is in conflict with the
public policy of India.
Explanation- Without prejudice to the generality of
sub-clause (ii), it is hereby declared, for the
avoidance of any doubt, that an award is in
conflict with the public policy of India if the
making of the award was induced or affected by
fraud or corruption or was in violation of section
75 or section 81.
(3) An application for setting aside may not be
made after three months have elapsed from the
date on which the party making that application
had received the arbitral award or , if a request
had been made under section 33, from the date
on which that request had been disposed of by
the arbitral tribunal;
Provided that if the court is satisfied that the
applicant was prevented by sufficient cause
from making the application within the said
period of three months it may entertain the
application with a further period of thirty days,
but not thereafter.
(4) On receipt of an application under sub-section
(1), the court may, where it is appropriate and it
is so requested by a party, adjourn the
proceedings for a period of time determined by
it in order to give the arbitral tribunal an
opportunity to resume the arbitral proceedings
or to take such other action as in the opinion of
arbitral tribunal will eliminate the grounds for
setting aside the arbitral award.”
8. Supreme Court in Grid Corporation of Orissa
Ltd.& Anr. V . Balasore Technical School, JT 1999(2)
SC 480 held that;
FAO No.255/09 & CM No. 11344/09 Page 5 of 9
“The award of the Arbitrator is ordinarily final
and conclusive as long as the Arbitrator has
acted within its authority and according to the
principle of fair play. An Arbitrator’s
adjudication is generally considered binding
between the parties for he is a Tribunal selected
by the parties and the power of the court to set
aside the award is restricted to cases set out in
Section 30 of the Arbitration Act. It is not open
to the Court to speculate where no reasons are
given by the Arbitrator, as to what impelled him
to arrive at his conclusion. If the dispute is
within the scope of the arbitration clause it is no
part of the province of the court to enter into the
merits of the dispute. If the award goes beyond
the reference or there is an error apparent on
the face of the award it would certainly be open
to the court to interfere with such an award.”
9. Keeping in view the law laid down in Grid
Corporation (Supra), it is to be seen as to whether
Arbitrator has acted within its authority and according to
principle of fair play.
10. As per impugned judgment, it is apparent that
appellant himself was negligent in conducting the
proceedings before Arbitrator, though Arbitrator gave him
various opportunities to lead evidence and to prove his
case.
11. Relevant findings of the trial court are as under:-
FAO No.255/09 & CM No. 11344/09 Page 6 of 9
“13. I have considered the above stated
submissions and I am of the opinion that as
regards the fairness of Sh. Vijay Tandon,
Advocate, I do not find any material on record in
support of contentions of the petitioner. The
arbitral proceedings would show that the
petitioner had been adopting frustrating tactics
and Sh. M. G. Vacher, Advocate though started
appearing on behalf of petitioner but he did not
even file his Vakalatnama. On 20.11.2007, the
arbitrator kept on waiting till 3.15pm but
respondent did not file written statement and
counter claim despite last several opportunities.
Therefore, the arbitrator was constrained to
close the opportunity to file WS and counter
claim vide order dated 20.11.2007. On
12.12.2007 Sh. M. G. Vacher, Advocate
appeared on behalf of respondent and filed WS
and counter claim. On 17.12.2007 the arbitrator
recalled his order of proceeding ex-parte
accepted the WS and counter claim. The
evidence on affidavit was taken but Sh. M. G.
Vacher, Advocate did not file his Vakalatnama.
On 11.1.2008 Sh. S. B. Patnayak, Advocate for
lessee (i.e. the present petitioner) appeared but
Vakalatnama was also again not filed. On
17.12.2007 a cost of Rs.2000/-was imposed upon
the petitioner. The cost was also not paid by
him. One more opportunity was given to the
petitioner for compliance of the cost etc.
14. On 22.1.2008, Sh. M. G. Vacher, Advocate
filed his Vakalatnama and sought an application
for compliance of the payment of cost. Matter
was fixed for 28.1.2008. The arbitrator waited
up to 3.50 pm for the lessee but none appeared
for him or the condition of payment of cost and
arbitral fees were complied with. Therefore, the
arbitrator published the award on 11.3.2008.
15. The entire proceedings would show that the
petitioner had not cooperated with the
arbitrator and though the arbitrator has shown aFAO No.255/09 & CM No. 11344/09 Page 7 of 9
lot of patience and given latitude, which was
more than required, the petitioner kept on
flouting the compliance of the order of
arbitrator. However, throughout the arbitration
proceedings, not even a single allegation about
the unfairness or the misconduct of the
arbitrator has been leveled. Further-more even
before this court, the petitioner has not been
able to show as to how the sole arbitrator was
unfair or biased.
16. There is no allegation that any party to the
agreement was under any capacity or with the
arbitration agreement was not valid. Nor it is
alleged that the arbitral award was beyond the
terms of the agreement. The award is also
challenged on the ground that possession of the
arbitral tribunal was not in accordance with the
agreement. There is nothing in this matter to
show that the dispute is not capable of
settlement under the law.
17. Nothing has been brought on record by the
petitioner to show that the award was induced
or affected by fraud or corruption or was in
violation of section 75 or Section 81 of the Act.
18. Therefore it cannot be said that the
arbitral is in conflict with the public policy of
India.”
12. Thus, the appellant was given sufficient opportunity
to file his written statement as well as counter claim, which
after a loss of hiccups, he did. Thereafter, he did not take
part in proceedings for which no justified cause has been
shown by him. So, it cannot be said that appellant was
unable to present his case before the arbitrator. The
FAO No.255/09 & CM No. 11344/09 Page 8 of 9
Arbitrator in the present case has acted within its authority
and according to the principle of fair play.
13. Under these circumstances, there is no infirmity or
illegality in the impugned judgment. Thus, there is no merit
in this appeal and same is accordingly, dismissed.
CM No. 11344/09
15. Since, the appeal has been dismissed, the present
application for stay also stand dismissed.
16. No order as to costs.
August 24, 2009 V.B.GUPTA, J.
bhatti
FAO No.255/09 & CM No. 11344/09 Page 9 of 9