The Executive Engineer, Civil Works (T) Division, Haryana State Electricity Board vs M.K. Jain, Govt. Contractor and Others

G.R. Majithia, J.—This revision petition is directed against the order of the trial Judge dated March 7, 1989, whereby the authority of the arbitrator was revoked on the ground that the arbitrator did not complete the arbitration proceedings within four months.

The facts:

Shri M. K. Jain, Government Contractor, Jind, respondent No. 1 (for short, the contractor) entered into a contract with the Haryana State Electricity Board, petitioner (for short, the Board) for the annual maintenance of Vidyut Nagar Hissar in 1983-84 and written agreement was duly executed between the parties. The contractor was not made full payment for the work executed by him. The contractor served a notice dated March 29, 1986 through registered A. D. post on the arbitrator to give his award within four months from the receipt of the notice, but the arbitrator did not settle the dispute within the period specified. The arbitrator is an employee of the Board/and is under the influence of his employer. The arbitrator did not render the award necessitating the initiation of proceedings under Sections 3/5/8/11 and 20 read with Schedule Rule 3 of the Arbitration Act, 1940 (for short, the Act) for appointment of a new arbitrator.

The Board denied the allegations made in the petition and asserted that the petition is premature. It was also averred that a sum of Rs 55,000/- was paid to the contractor on January 31, 1984 at the time of starting of the work, it was also stated that the arbitrator had conducted six ..meetings on different dates during the statutory period of four months.

On the pleadings of the parties, the learned trial Judge framed the following issues :--

(1) Whether the arbitrator is liable to be removed on the grounds allege ? OPR

(2) Whether this Court has no territorial jurisdiction to decide the petition ill dispute ? OPR

(3) Relief.

Under issue No. 1, the learned trial Judge found that earlier the Superintending Engineer was the arbitrator and thereafter the Additional Chief Engineer conducted the proceedings on September 9, 1986 contrary to the agreement and these circumstances, clearly show that the arbitrator failed to use all reasonable dispatch in entering upon and proceeding with the reference and-making an award at the earliest. After answering issue No. 1 in favour of the contractor, the learned trial Judge appointed Shri N. S. Bhatti, Superintendent Engineer, Electricity (OP) Circle, Chandigarh Administration, Chandigarh as an arbitrator in place of the arbitrator named in the agreement.

The entire approach of the learned Single Judge is unjust and erroneous. The contractor entered into an agreement with the Board and there is a specific covenant that the Superintendent Engineer will act as an arbitrator in the event of a dispute arising between the contracting parties It is not open to the contractor to allege that the Darned arbitrator is an employee of the Board and is likely to be influenced by the employer. u/s 5 of the Act the authority of the appointed arbitrator can be revoked by the parties with the leave of the'' Court. Before the Court exercises its discretion to give leave to revoke an arbitrator''s authority, it should be satisfied that a substantial miscarriage of justice will take place in the event of its refusal. In considering the exercise by the Court of the power of revocation, it must not be forgotten that arbitration is a particular method for the settlement of disputes. The parties while referring in a dispute to arbitration ought to know that in referring a dispute to arbitration, they take arbitrator for better or worse, and that his decision is final both as to fact and law. The Court should exercise its discretion Cautiously and sparingly and not too conscious of the fact that the party should not be relieved from a tribunal they have chosen because they fear that the arbitrator''s decision may go against them. The grounds on which the leave to revoke may be given have been put under five heads :-

Excess or refusal of jurisdiction by arbitrator.

Misconduct of arbitrator.

Disqualification of arbitrator.

Charge of fraud.

Exceptional cases.

None of the grounds stands proved in the instant case.

It was brought to my notice that the Superintending Engineer was assigned the duties of an Additional Chief Engineer and in fact the Superintending Engineer was conducting the arbitration proceedings. The arbitrator did conduct the proceedings and it Cannot be suggested that proceedings were conducted contrary to the agreement.

The learned trial Judge has revoked the authority of the arbitrator named in the agreement on wholly unjust grounds. Resultantly, the decision under issue No. 1 is reversed; As a consequence, the appointment, of Shri N. S. Bhatti, Superintending Engineer, electricity (OP) Circle, Chandigarh Administration'', Chandigarh is also set aside. If any proceedings had been conducted by Shri Bhatti these are also rescinded, The arbitrator named in the agreement will enter into reference on the date when he receives a copy of the judgment passed today. The parties through their counsel are directed to appear before the arbitrator -Superintending Engineer, Haryana State Electricity Board, Hissar Circle, Hissar on December 18, 1989, on which date the arbitrator will be deemed to have entered on the reference and he will dispose of the reference and render the award within four months thereafter.

The revision petition is allowed and the parties are left to bear their own cos.