Union of India v. M/s Woodspot

1. Whether reporters of local papers may be allowed to see the judgment?

2. To be referred to the reporter or not?

3. Whether judgment should be reported in Digest?

JUDGMENT

The Objector has filed the objections in this case against an award dated 18.6.1998 passed by the learned Arbitrator Mr. S.B.Sharan whereby he allowed the claims of petitioner/UOI for sum of Rs.2,50,350/- on account of risk purchase loss against the respondent/contractor with interest @ 12% p.a. from 11.10.1979 till realization. 2009:DHC:4077

2. A perusal of record would show that the matter was pending before several Arbitrators one after another and lastly when the matter was pending before Mr. R.N.Mshra, Sole Arbitrator he passed an order on 1st March, 1985 observing that the four months extension granted by the parties had already expired and in the circumstances either both parties agree for further extension of time so that the case could be proceeded further or one of the parties brings extension from the Court of competent jurisdiction. Since, in this case the Objector/applicant had not agreed for extension of time, the Arbitrator observed that he could not continue with the proceedings and let the party interested in the proceedings bring extension from the Court of competent jurisdiction, till then the proceedings were adjourned sine die. After passing of this order Mr. R.N.Misra, who was working as Additional Legal Advisor, got superannuated and therefore could not remain as Arbitrator in this case. Union of India then appointed Mr. S.B.Sharan as the Arbitrator in place of Mr. R.N.Misra on 6.3.1998 i.e. after about 13 years of case having been adjourned sine die, without there being any extension granted by the Court. Mr. S.B.Sharan on taking up as Arbitrator asked Union of India to publish a notice in leading newspaper for appearance of the respondent and after publication of notice in newspaper, he (Arbitrator) proceeded ex parte against the respondent/Objector and passed the award.

3. In the objections, the Objector stated that the different Arbitrators appointed by the Union of India did not have jurisdiction to proceed with the case because the reference to the Arbitrator was made some time in 1980 and the Arbitrators continued for such long a time without a consent from the Objector for extension of time. It was submitted that the Objector had been continuously appearing before different Arbitrators till the proceedings were adjourned sine die. Thereafter, non-Objector filed an application under Section 28 of the Arbitration Act, 1940 before the High Court of Delhi which was registered as OMP No. 366/1985. The Objector filed objections to the extension of time and also placed on record the letter of resignation of Mr. R.N.Misra as Sole Arbitrator. The petition filed before High Court was dismissed as having become infructuous on 14.9.1998. Thus, there was no extension granted by the High Court. It is stated that Mr. S.B.Sharan took over as Arbitrator after more than 10 years of resignation of Mr. R.N.Misra, without there being any extension from the Court for conducting arbitration proceedings. He proceeded against the respondent ex parte on the basis of newspaper publication and passed an award without jurisdiction thus, the award was bad in law and not tenable.

4. A perusal of record would show that Mr. S.B.Sharan was appointed after 10 years of resignation of Mr. R.N.Misra. Mr. Misra’s order of adjourning the matter sine die had not been set aside by any Court neither any extension of time for passing award was granted by this Court. It is clear that Mr. R.N.Misra had become functus officio in this case as no extension of time was granted by the High Court nor both the parties had agreed for granting extension for passing the award. Mr. S,B.Sharan could not have acted as Arbitrator in place of an Arbitrator, who himself had become functus officio, and passed an award. Moreover, in this case the Objector while contesting the earlier petition in High Court had given his address of Dehradun and copy of this affidavit was given to Union of India. Union of India instead of serving the Objector and informing the Arbitrator Mr. S.B.Sharan about the new address of the Objector, got the publication made in newspaper and thereafter the Objector was proceeded ex parte.

5. I find that the award passed by the Arbitrator in this case is not tenable and without jurisdiction as the Arbitrator had become functus officio some time in 1983. The award is otherwise not tenable as it has been passed without notice to the Objector whose address was available with Union of India but he was not served through ordinary process. I, therefore, set aside the award dated 18.6.1998 passed by the Arbitrator. September 25, 2009 SHIV NARAYAN DHINGRA, J. vn