Ashoka Kraft Paper Mills LLP v. Raj Kumar Aggarwal & Anr.

13. On 05th October, 2019, the petitioner filed two applications for recall of the order dated 28th September, 2019. The learned Arbitrator found no ground to recall of the order dated 28th September, 2019 including imposition of the cost whereupon the petitioner paid the cost imposed and partly cross-examined respondent no.1 and the case was adjourned for remaining cross-examination on 30th October, 2019.

14. On 30th October, 2019, the petitioner again sought adjournment on the ground that petitioner had filed two applications, one in ARB.A. (COMM.) 25 of 2019 and second, in disposed of O.M.P. (I) (COMM.) 450 of 2019 and, a petition was being filed under Section 12 to 16 of the Arbitration and Conciliation Act. The learned Arbitrator declined to adjourn on the aforesaid ground. However, the main counsel for the petitioner Mr. Anil Gupta, Adv. was not present to conduct the cross-examination, the proceedings were consequently adjourned to 13th November, 2019.

15. Learned counsel for the petitioner urged at the time of the hearing that the learned Arbitrator is acting in a biased and partial manner and is conducting the proceedings with undue haste; imposing heavy costs and making the payment of cost as condition precedent, threatening to proceed ex-parte; to close the right of the petitioner to cross-examine the witness and therefore, the Arbitrator has become de jure and de facto unable to perform his functions. It was submitted that the learned Arbitrator passed the order dated 19th July, 2019 under Section 17 of the Arbitration and Conciliation Act without recording or dealing with the submissions of the petitioner. It was further submitted that the respondents filed an application on 05th August, 2019 for stay of the meeting scheduled to be held on 06th August, 2019 in which the learned Arbitrator passed a restraint order on 05th August, 2019 without affording a reasonable opportunity to the petitioner. It was submitted that the petitioner has lost confidence in the Arbitral Tribunal as the learned Arbitrator is conducting the proceedings in a biased manner and therefore, the petitioner filed an application under Section 16 of the Arbitration and Conciliation Act seeking his recusal from the arbitration. It was further submitted that on 25th September, 2019, a request for adjournment was made on the ground that the parties were mediating before Delhi High Court Mediation and Conciliation Centre but the learned Arbitrator did not adjourn the matter and examined the respondents. On 28th September, 2019, the learned Arbitrator again declined the request for adjournment and imposed cost of Rs.50,000/- on the petitioner and Rs.15,000/- towards the secretarial expenses of three hearings and further observed that the right to cross-examine shall be closed if the witness was not examined on the next date. The petitioner filed an application for waiver of the cost which was dismissed by a non-speaking order. It was further submitted that the learned Arbitrator orally observed that the petitioner would not get anything from him.

16. Learned counsel for the respondents urged at the time of the hearing that the learned Arbitrator was conducting the proceedings fairly. It was submitted that the petitioner is deliberately delaying the arbitration proceedings and has raised false accusations of bias. It is submitted that the petitioner is time and again seeking adjournments on one pretext or the other with a view to delay and defeat the arbitration proceedings. Without prejudice, it was submitted that the petition was not maintainable and liable to be dismissed. Reliance was placed on Progressive Career Academy Pvt. Ltd. v. FITT JEE Ltd., 180 (2011) DLT 714 and Shri Pinaki Das Gupta v. Publicis (India) Communications, 115 (2004) DLT 345. In Progressive Career Academy Pvt. Ltd. (supra), the removal of the Arbitrator was sought on the ground that he was biased. The Division Bench of this Court held that the Arbitration and Conciliation Act does not postulate judicial interference in the ongoing arbitration proceedings on the ground of bias or impartiality till the award was published. The Division Bench examined the entire law on the subject as well as the conflicting judgments. The relevant portion for the said judgment is reproduced hereunder: “1. The question in this bunch of Appeals concerns the legal proprietary of judicial directions for the removal of an arbitrator even before the publishing of an Award. Several judgments of our esteemed Single Benches have been cited before us, a perusal of which manifests the existence of a polarity of opinion. On one side of the watershed is the view that assertions as to the de jure or de facto incompetence of the Arbitral Tribunal must immediately be addressed by the Court, and in deserving cases remedied, whilst on the other side is the contrary view that the statutorily provided procedure postulates an immediate remonstration but a deferred assailment of the Award, inter alia on this ground, by way of an invocation of Section 34 of the Arbitration & Conciliation Act, 1996 (A&C Act for short). xxx xxx xxx

16. On a reading of Section 13(5), the legislative intent becomes amply clear that Parliament did not want to clothe the Courts with the power to annul an Arbitral Tribunal on the ground of bias at an intermediate stage. The Act enjoins the immediate articulation of a challenge to the authority of an arbitrator on the ground of bias before the Tribunal itself, and thereafter ordains that the adjudication of this challenge must be raised as an objection under Section 34 of the Act… xxx xxx xxx

22. Having arrived at the conclusion that curial interference is not possible at the pre-Award stage on the allegations of bias or impartiality of the Arbitral Tribunal on the one hand, and our understanding that the Appeals are not maintainable on the other hand, is any further relief to be granted? We think it expedient to abjure from passing any further orders for several reasons including – firstly, the reality that arbitration proceedings would inevitably have already come to an end in those instances where the arbitrator had been removed by orders of the Court, and secondly the availability of redress under Article 136 of the Constitution of India. All pending applications stand disposed of. The Referral Order is answered by reiterating that the statute does not postulate judicial interference in arbitral proceedings till the Award is published, whereupon Objections can be raised also on the platform of the alleged bias of the Tribunal. This challenge is possible provided the grievance is articulated in consonance with Section 13 of the A&C Act.”

17. Learned counsel for the petitioner urged at the time of the hearing that the petition was maintainable and the petitioner can seek the removal of the arbitrator on the ground of bias. Reliance was placed on V.K. Dewan & Company v. Delhi Jal Board, (2010) 15 SCC 717, State of Arunachal Pradesh v. Subhash Projects & Marketing Ltd., 2007 (1) Arb.LR 564 (Gauhati) (DB), West Haryana Highways v. NHAI, 2017 (4) Arb.LR 86 (Delhi), OPBK Construction v. Punjab Small Indus, 2008 (3) Arb.LR 189 (P&H) and S.K.F. India Ltd. v. M.G.P. Associates, 2009 (4) Arb.LR 534 (Madras). Findings

18. Two questions arise for consideration in this matter. First, whether the petition for removal of the arbitrator at the pre-award stage is maintainable and second, whether the petitioner has made out a case of bias for removal of the arbitrator.

19. Even though this Court is of the prima facie opinion that the present petition in the present form is not maintainable, this Court has considered the present petition on merits i.e. on the issue of bias.

20. The record reveals that the learned Arbitrator is proceeding with the matter expeditiously whereas the petitioner has been repeatedly seeking adjournments one after another, without any reasonable justification. After the framing of issues on 06th August, 2019, the petitioner sought adjournments on various dates such as 31st August, 2019, 14th September, 2019, 25th September, 2019, 28th September, 2019 and 30th October, 2019. The petitioner also raised objection to the venue of the arbitration proceedings.

21. Section 29A(1) provides for conclusion of domestic arbitration within one year from the date of completion of pleadings, which is extendable upto six months with the consent of the parties. Therefore, expeditious conclusion of arbitration proceedings hardly needs to be emphasized. Hence, there is no infirmity in the learned Arbitrator expeditiously proceeding with the matter.

22. The learned Arbitrator has passed two interim orders dated 19th July, 2019 and 05th August, 2019 and the petitioner appears to have formed a view that the Arbitrator may finally decide the matter against them. The interim orders passed by the learned Arbitrator were on the basis of the material at that stage. The final outcome of the arbitration proceedings would depend upon the evidence to be led by both the parties. Every adverse order passed against a litigant is injurious to the losing party but that does not give him the right to attack the adverse order by attributing a bias.

23. In Commissioner of Income Tax v. M.H. Patel, 2017 SCC OnLine Bom 8881, the Division Bench of Bombay High Court extensively examined the law relating to the allegations of bias made by the litigants. The Division Bench examined the relevant judgments in this regard. The Division Bench held that the increasing trend of seeking recusal has to be deprecated, discouraged and must be nipped in the bud. Relevant portion of the said judgment is reproduced hereunder: “1. When this Income Tax Appeal as also the Criminal Writ Petition was on our Board on 4th September, 2017, and on prior dates, the respondent – party-in-person raised a specific objection. That objection is as follows.

2. He submits that he has no faith in the impartiality or integrity of one of us (S.C. Dharmadhikari, J.) and he has specifically requested the Hon'ble The Chief Justice to assign this matter to a Bench, other than the one presided over by Justice S.C. Dharmadhikari. He would, therefore, submit that this written objection being on record, at least one of us should recuse himself from hearing the cases any further.

3. We have perused the written note put on record by the respondent appearing in person. We have very sympathetically and patiently heard him even on his objection that the Bench presided over by one of us should not take up the matter. It is unfortunate that we have to pass an order and when a party-in-person or any other litigant insists on a recusal and in this manner. In the case of Subrata Roy Sahara vs. Union of India & Ors. reported in AIR 2014 SC 3241, the Hon'ble Supreme Court of India speaking through Justice J.S. Khehar has held, after approving the view taken by the High Court of Delhi, that a party cannot insist on a Judge recusing himself. This is a new trend emerging when Judges are challenged in the manner that has been repeatedly noted by the Hon'ble Supreme Court. A mere inconvenient question or a query and which is raised during the course of appreciation and appraisal of the legal and factual issues in a matter at hand and particularly in the nature of appeal should not result in a litigant being taken aback or, if taken aback, responding in this manner. His Lordship held as under:-

11. In fact, the observations of the High Court of Delhi and those of this Court reflected, exactly how it felt, when learned counsel addressed the Court, at the commencement of the hearing. If it was learned counsel’s posturing antics, aimed at bench-hunting or bench-hopping (or should we say, benchavoiding), we would not allow that. Affronts, jibes and carefully and consciously planned snubs could not deter us, from discharging our onerous responsibility. We could at any time, during the course of hearing, walk out and make way, for another Bench to decide the matter, if ever we felt that, that would be the righteous course to follow. Whether or not, it would be better for another Bench to hear this case, will emerge from the conclusions, we will draw, in the course of the present determination. … … … …

14. One of the reasons for retaining the instant petition for hearing with ourselves was, that we had heard eminent Senior Counsel engaged by the two companies exclusively for over three weeks during the summer vacation of 2012. We had been taken through thousands of pages of pleadings. We had the occasion to watch the demeanour and defences adopted by the two companies and the contemnors from time to time, from close quarters. Writing the judgment, had occupied the entire remaining period of the summer vacation of 2012, as also, about two months of further time. The judgment dated 31.8.2012 runs into 269 printed pages. Both of us had rendered separate judgments, concurring with one another, on each aspect of the matter. During the course of writing the judgment, we had the occasion to minutely examine numerous communications, exchanged between the rival parties. That too had resulted in a different kind of understanding, about the controversy. For any other Bench to understand the nuances of the controversy determined through our order dated 31.8.2012, would require prolonged hearing of the matter. Months of time, just in the same manner as we had taken while passing the order dated 31.8.2012, would have to be spent again. Possibly the submissions made by the learned counsel seeking our recusal, was consciously aimed at the above objective. Was this the reason for the theatrics, of some of the learned Senior Counsel? Difficult to say for sure. But deep within, don’t we all understand? It was also for the sake of saving precious time of this Court, that we decided to bear the brunt and the rhetoric, of some of the learned Senior Counsel representing the petitioner. We are therefore satisfied, that it would not be better, for another Bench to hear this case. II Must judicial orders be obeyed at all costs? Can a judicial order be disregarded, if the person concerned feels, that the order is wholly illegal and void?”

4. The Hon'ble Supreme Court of India has clarified that when a Judge takes oath of office and in terms, prescribed by the constitution, implicit in that is there is no ill will, much less any enmity and when a Judge is supposed to decide a case impartially, he has to be strict. Such strictness is demanded by the very office to which a person is appointed as a Judge. Eventually, it is a constitutional office and the institution of judiciary is above all. The law is applicable to all, rich or poor, men or women. Thus, to all citizens cutting across their religion, caste, creed, race and sex. Therefore, it is the constitution and the laws, which a Judge is obliged to uphold and while upholding them, he has to invite the wrath of litigants and advocates frequently.

5. The trend, which is now increasing, of Judges being called upon to recuse themselves, therefore, has to be deprecated and discouraged. It must be nipped in the bud. His Lordship the Hon'ble Mr. Justice Khehar once again pronounced in The Recusal order in NJAC case Supreme Court Advocates-on-Record Association and another vs. Union of India Writ Petition (Civil) No.13 of 2015, decided on October 16, 2015, that:- “... … … … A Judge may recuse at his own, from a case entrusted to him by the Chief Justice. That would be a matter of his own choosing. But recusal at the asking of a litigating party, unless justified, must never be acceded to. For that would give the impression, of the Judge had been scared out of the case, just by the force of the objection. A Judge before he assumes his office, takes an oath to discharge his duties without fear or favour. He would breach his oath of office, if he accepts a prayer for recusal, unless justified. It is my duty to discharge my responsibility with absolute earnestness and sincerity. It is my duty to abide by my oath of office, to uphold the Constitution and the laws. My decision to continue to be part of the Bench, flows from the oath which I took, at the time of my elevation to this Court.”

6. A view has already been taken by our Court also and in a reported decision in the case of Ganesh Ramkisan Bairagi vs. Parwatabai Tukaram Appa Landge & Ors. reported in 2016 (4) ABR 699, Hon'ble Mr. Justice R.K. Deshpande had this to observe and hold:-

18. Recusal to take the matters to be conducted by some lawyers, is a matter of Judge's own choosing and it cannot be at the dictates of the lawyers. What a Judge has to see is that he performs his duty of deciding the matters before him without fear or favour, affection or ill will. He has to keep in mind the principle that the justice should not only be done, but it must appear to have been done. The decision of recusal to take the matters of lawyers, depends upon the Judge's personal relations or intimacy with such lawyers, and his own conscience to decide a case by observing the oath which he has taken while occupying the position as a Judge. Ultimately, a Judge is also a human being and the Judges come from different strata of the Society, having their own views, ideas, angle or perception, based on the varied individual experience in life, which may or may not match with each others or with some lawyers or litigants. However, this cannot be a reason to avoid conducting the matters listed before such a Judge or the Judges. Once the constitutional authority of a Judge or the Judges to adjudicate the matters is accepted, it cannot be lowered down by asking him or them to recuse to hear and decide the matter.

19. To prevent a Judge or the Judges from performing his or their duties in this fashion causes distraction of attention in the judicial proceedings, which amounts to interference in the course of justice. Merely because a lawyer, litigant or public at large feels that the approach adopted or a decision is wrong, the authority or the force of the decision does not get eroded. A wrong decision in the matter is equally enforceable like a correct decision. If the Constitution and the laws provide a remedy to get such decision corrected in a higher forum, such a remedy can be availed. Even a wrong decision becomes final, binding and enforceable like a correct decision, if there is no remedy available. The lawyers, litigants or public at large cannot run away from such decision and they have to be cautioned about the authority of the Courts.”

7. We respectfully concur with the views expressed by the learned single Judge of this Court as they accord with the principle laid down by the Hon'ble Supreme Court.

8 We have noted from the record that this is not the first time the respondent has made such a request. The respondent was also a party litigant before the Income Tax Appellate Tribunal at Mumbai. With great pain and anguish the Tribunal has held that the respondent made an application and in which allegations were made of lack of faith and trust even in Members of the Tribunal. Some of them had to recuse themselves from the proceedings. The proceedings, therefore, dragged endlessly. Sometimes we must remind ourselves that such ploys or tactics are adopted by litigants so as to delay the obvious. If the delay is to their benefit, then, they can go to any extent so as not to invite an adverse order or anything contrary to their interest. It is that perception which is entertained by the litigants and that is how for a favourable verdict, they resort to every tactic in the book or even impermissible in law or unknown to fairness, equity and justice. The Hon'ble Supreme Court has referred to them extensively in the foregoing paragraphs which we have reproduced from the judgment.

9. In such circumstances we do not think that the litigant who is appearing in person before us can be given an opportunity to dictate to the Court and to any judicial officer as to who should be the Judge / presiding Judge to whom his cases should be assigned and who should preside over any Division Bench. It is the prerogative of the Hon'ble the Chief Justice and it is he/she who decides how the judicial work should be assigned. Once the Chief Justice assigns judicial work to a Bench, then, it is not unless there is a power exercised otherwise, open to a litigant to call upon the Judges to recuse themselves from judicial work in this manner.

10. Pertinently, the respondent party-in-person has not stated anything by which one can conclude that there is a reasonable apprehension of bias and prejudice. This party-in-person has had no occasion in the past to argue any of the cases in person before one of us (S.C. Dharmadhikari, J.). Yet, he makes a request and as above. This has, therefore, taken us by surprise. The allegations of bias and apprehension of injustice having no basis, but vague and general statements being made in the application, all the more we are disinclined to grant the request. The request for recusal is, therefore, refused.”

24. This Court respectfully concurs with the views expressed by the Division Bench of the Bombay High Court. As noted by the Division Bench of the Bombay High Court, there is a tendency to seek recusal from the matter when the wavelength does not match with the Judge/Arbitrator or the litigant does not find comfort in conducting the matter or for some such reasons. This is an insult personally to a Judge/Arbitrator. Such acts amount to interference in the justice delivery system. If the litigants are given right to seek removal of the Arbitrator on these grounds, it would erode the confidence of common man in justice delivery system. No system can tolerate such practice and same has to be curbed and deprecated.

25. Having gone through the record of the arbitration proceedings, this Court is satisfied that the allegations of bias by the petitioner are unfounded. None of the aspersions casted by the counsel for the petitioner justify the allegations of bias. The prayer for removal of the Arbitrator is rejected.

26. The petitioner is dismissed. J. R. MIDHA (JUDGE) DECEMBER 24, 2019 ds