Special Leave Petition Civil No 2545 of 1988
From the Judgment and Order dated 221988 of the Bombay High Court in Arbitration Petition No 234 of 1987
G Ramaswamy Additional Solicitor General KV Kini section Bharthari and PH Parekh for the Petitioner
KS Cooper D Karkali R Karanjawala and Mrs M Karanjawala for the Respondents
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
After hearing the parties fully we had by our order dated 10th March 1988 dismissed the special leave petition under Article 136 of the Constitution
We stated therein that we would indicate the reasons by a separate judgment later
We do so by this judgment
This is a petition for leave to appeal under Article 136 of the Constitution from the judgment and order of the learned Judge of the High Court of Bombay dated 2nd February 1988
By the impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent No 1 Shri KD Bali sole arbitrator under sections 5 and 11 of the hereinafter called the Act 
In order to appreciate the contentions raised it may be stated that the International Airport Authority of India which was the petitioner in the High Court and is the petitioner herein had invited tenders for the work of construction of terminal building of new international passenger complex Phase II at the Bombay Airport at 375 Sahar Bombay
Respondent No 2 Ms Mohinder Singh and Company a partnership firm having registered office at Delhi and carrying on business in Bombay submitted a tender and it was accepted for the value of Rs72631325
A formal agreement followed on 22nd January 1982
It is not necessary to refer to the clauses of the agreement for the present purposes
It may be reiterated however that there was provision in the agreement for settlement of disputes through appointment of sole arbitrator under clause 25 of the Conditions of Contract by the competent authority
Certain disputes arose in which the petitioner sought claims amounting to Rs85 lakhs
Respondent No 2 contractor approached the petitioner by letter dated 22nd February 1985 to refer the disputes with regard to claims amounting to Rs85 lakhs to the arbitration
One Shri KK Sud the Chief Engineer of the petitioner by his letter appointed respondent No 1 as the arbitrator and made the reference with regard to the claim of Rs 85 lakhs on 23rd February 1985
On 8th March 1985 it appears from the narration of the events in the judgment impugned that the arbitrator gave directions to the parties regarding submission of pleadings
Respondent No 2 filed pleadings within time but the petitioner filed its pleadings after a delay of two and a half months
On 17th March 1986 respondent No 2 addressed a letter to the Chief Engineer asking for reference of further disputes to the arbitration and accordingly on 16th May 1986 a second reference was made referring 11 further points of dispute
A third reference was sought by respondent No 2 on 22nd May 1986 in respect of seven more claims but the petitioner informed on June 12 1986 that the third reference was premature
It appears that in respect of the second and third references the assertion of the petitioner was that these disputes were not referable to the arbitrator
The arbitrator had directed the parties to submit their statements in respect of second reference and though respondent No 2 submitted its claim within the stipulated period the petitioner had again delayed doing so according to the learned Judge and according to the assertions of respondent No 2 for a period of three months
On 16th May 1986 the Chief Engineer made reference No 2 with regard to claims amounting to Rs117 crores to the arbitrator
On 23rd December 1986 the Chief Engineer of the petitioner made another reference being reference No 3 to the arbitrator with regard to claims amounting to Rs581 crore
The petitioner by its applications of 8th and 9th June 1987 expressed its objections to the references Nos 2 and 3 made by the Chief Engineer as according to the petitioner the said references were null and void as these were irregularly made
On 26th June 1987 the petitioner by its written submissions took preliminary objection before the arbitrator 376 to the said arbitration proceedings being lack of jurisdiction of the arbitrator on account of the fact that he was not validly appointed as far as references Nos 2 and 3 were concerned
The petitioner by its application dated 3rd August 1985 noted that respondent No 1 had not noted the minutes of the meeting dated 10th of June 1985 correctly
The petitioner by its application on 15th of June 1987 requested respondent No 1 not to proceed with the arbitration proceedings till its preliminary objections regarding jurisdictional aspects were decided and also made it clear that it was appearing under protest in the proceedings before him
The petitioner on 17th June 1987 made oral submissions before respondent No 1 with regard to its preliminary objections
Respondent No 1 directed the petitioner to submit the rest of its submission by way of written submissions
The petitioner by its applications dated 22nd and 25th June 1987 respectively objected to respondent No 1 directing it to make submissions by way of written submissions and thus hurrying up the proceedings
On 26th June 1987 the petitioner submitted written submissions to respondent No 1
Respondent No 1 by his order dated 27th June 1987 directed that further proceedings would be undertaken only after the extension of time
Respondent No 2 applied for enlargement of time and the same was granted by the High Court
On 7th August 1987 application under section 13b of the Act was made before the arbitrator with a request to state the matter before it as Special Case for the opinion of the Court
The arbitrator by his order dated 3rd October 1987 rejected the said application of the petitioner and also rejected the preliminary objections of the petitioner at the same time
On 14th October 1987 the petitioner by its letter noted the fact that it has sent the minutes of the meeting with regard to the proceedings held on 28th and 29th September 1987 to the arbitrator as directed by him
In the said letter the petitioner also protested against the arbitrator s decision of changing the venue of the proceedings and also the inconvenient dates being fixed by him
The petitioner by its letter dated 11th October 1987 conveyed its concern to the arbitrator that he has been rushing through the proceedings
On 16th December 1987 the petitioner alleging apprehension that respondent No 1 had formed his own opinion regarding the matters in issue
The petitioner approached the High Court with the instant application
This application was rejected by the High Court
The learned Judge changed the date fixed for hearing of the application for extension of time by enlarging the time to make the award by 15th February 1988
377 The main contention for the revocation of the authority of the arbitrator was about the alleged apprehension in the mind of the petitioner about bias of the sole arbitrator
The learned Judge of the High Court was unable to accept any ground for alleged apprehension
It is apparent as the learned Judge noted that respondent No 2 had complied with the directions of the arbitrator about the conduct of the proceedings but the petitioner went on seeking adjournments after adjournments
Respondent No 2 complained to the arbitrator on 4th May 1987 about the delaying tactics adopted by the petitioner and thereupon the arbitrator directed that the hearing would take place on 8th and 9th June 1987 and no further adjournment would be granted
After this direction was given by the arbitrator the petitioner addressed a letter dated 25th May 1987 to the arbitrator objecting to the jurisdiction in respect of the second and third references
The objections to the jurisdiction raised by the petitioner were that the claim made in the second and third references were barred by principles analogous to Order II Rule 2 of the Code of Civil Procedure the Chief Engineer had no authority to refer the disputes to the arbitration the claims made by respondent No 2 were beyond the stipulated period of 90 days and therefore were not arbitrable and the time for declaring the award having expired the Arbitrator could not continue with the arbitration proceedings
On 8th June 1987 as mentioned hereinbefore the learned advocate for the petitioner orally made submissions on the issue of jurisdiction and thereafter sought adjournment till June 9 1987 for filing written submissions
On 9th June 1987 apart from filing written submissions further oral arguments were advanced and thereafter an adjournment was sought beyond June 1987
This adjournment was sought because the time to declare the award was expiring by June 1987
The hearing was adjourned till June 17 1987 and again the petitioner s advocate argued on preliminary objections about jurisdiction
The arguments were advanced on the next adjourned dates that is June 26 and June 27 1987
It further appeared that as the time for making the award had expired and the petitioner did not consent to the extension of time respondent No 2 filed petition to the High Court of Bombay for extension of time on June 21 1987
Thereafter the petitioner made an application before the arbitrator under section 13b of the Act calling upon the arbitrator to state special case for the opinion of the High Court on certain alleged legal objections
In the meanwhile the petition for extension of time filed in the Bombay High Court was granted and the time for declaring the award was extended till January 15 1988
Thereafter the arbitrator fixed the hearing on September 28 1987 and the advocate for the petitioner again reiterated the preliminary objections to the jurisdiction of the arbitrator and 378 insisted upon the arbitrator passing an order on the application under section 13b of the Act
The arbitrator rejected the preliminary objections by his order dated 3rd October 1987 and also the application for stating special case to the High Court under section 13b of the Act
The Petitioner s advocate thereupon sought adjournment of the hearing and accordingly hearing was adjourned on several dates
Ultimately the arbitrator fixed the hearings on 30th October 1987 and 31st October 1987
The hearing was postponed to 2nd November 1987 and on that day the petitioner s advocate remained absent
Thereafter the hearing proceeded on 6th November and 11th November 1987 as well as on 13th 18th and 19th November 1987
Respondent No 2 concluded arguments while the arguments on behalf of the petitioner were advanced on December 3 1987
The arguments further proceeded on December 8 and 9 1987
Thereafter on December 17 1987 the present petition was filed for revocation of the appointment of respondent No 1 as the sole arbitrator
In our opinion the above narration gives a glimpse how a party can try to prolong a proceeding
Several points were taken in support of the application for revocation
It was sought to be urged that the petitioner had lost confidence in the sole arbitrator and was apprehensive that the arbitrator was biased against the petitioner
It is necessary to reiterate before proceeding further what are the parameters by which an appointed arbitrator on the application of a party can be removed
It is well settled that there must be purity in the administration of justice as well as in administration of quasi justice as are involved in the adjudicatory process before the arbitrators
It is well said that once the arbitrator enters in an arbitration the arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness
It is not a question of the effect which misconduct on his part had in fact upon the result of the proceeding but of what effect it might possibly have produced
It is not enough to show that even if there was misconduct on his part the award was unaffected by it and was in reality just arbitrator must not do anything which is not in itself fair and impartial
See Russell on Arbitration 18th Edition page 378 and observations of Justice Boyd in Re Brien and Brien at p 89
Lord O Brien in The King De Vesci vs The Justices of Queen s Country observed as follows By bias I understand a real likelihood of an operative prejudice whether conscious or unconscious
There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias
I do not think that their 379 vague suspicions of whimsical capricious and unreasonable people should be made a standard to regulate our action here
It might be a different matter if suspicion rested on reasonable grounds was reasonably generated and but certainly mere flimsy grounds elusively generated and morbid suspicions should not be permitted to form a ground of decision
 Emphasis supplied See The Queen vs Rand and others  Ramnath vs Collector Darbhanga ILR 34 Pat 254 The Queen vs Meyer and others and Eckersley and others vs The Mersey Docks and Harbour Board In the words of Lord O Brien LCJ there must be a real likelihood of bias
It is well settled that there must be a real likelihood of bias and not mere suspicion of bias before the proceedings can be quashed on the ground that the person conducting the proceedings is disqualified by interest
See in this connection Gullapalli Nageswara Rao vs The State of Andhra Pradesh  and Mineral Development Ltd vs State of Bihar Recently this Court in a slightly different context in Ranjit Thakur vs Union of India and others AIR 1987 SC 2386 had occasion to consider the test of bias of the Judge
But there must be reasonableness of the apprehension of bias in the mind of the party
The purity of administration requires that the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party
But we agree with the learned Judge of the High Court that it is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased
The apprehension must be judged from a healthy reasonable and average point of view and not on mere apprehension of any whimsical person
While on this point we reiterate that learned counsel appearing for the petitioner in his submissions made a strong plea that his client was hurt and had apprehension because the arbitrator being the appointee of his client was not acceding to the request of his client which the petitioner considered to be reasonable
We have heard this submission with certain amount of discomfiture because it cannot be and we hope it should never be in a judicial or a quasi judicial proceeding a party who is a party to the appointment could seek the removal of an appointed authority or arbitrator on the ground that appointee being his nominee had not acceded to his 380 prayer about the conduct of the proceeding
It will be a sad day in the administration of justice if such be the state of law
Fortunately it is not so
Vague suspicions of whimsical capricious and unreasonable people are not our standard to regulate our vision
It is the reasonableness and the apprehension of an average honest man that must be taken note of
In the aforesaid light if the alleged grounds of apprehension of bias are examined we find no substance in them
It may be mentioned that the arbitrator was appointed by the Chief Engineer of the petitioner who is in the service of the petitioner
The learned Judge had examined the five circumstances advanced before him
The first was that the arbitrator did not record the minutes of the meetings after September 29 1987
The learned Judge found that there was no merit in this complaint
After 29th September 1987 the petitioner s advocate orally made submissions that the arbitrator had no jurisdiction to entertain the dispute
The advocate for the petitioner also desired to file written arguments and the arbitrator did not object to the same
In spite of it the petitioner insisted that the arbitrator should record the minutes setting out the entire oral arguments advanced on behalf of the petitioner
This in our opinion was not a reasonable request to make and the arbitrator had rightly declined to do so
This is no basis of any reasonable apprehension of bias
The next circumstance urged was that the preliminary objections raised by the petitioner were rejected without a speaking order
It was not necessary for the arbitrator to record a long reasoned order on the preliminary objections and indeed the law does not demand writing such a long order
In any case it will be open to the petitioner to file any petition in the Court under section 33 of the Act if the petitioner felt that the arbitrator had no jurisdiction to entertain the reference but the petitioner did not choose to adopt that course and proceeded to argue for a considerable length of time the issue of jurisdiction before the arbitrator
The arbitrator was not bound to give a reasoned order at every stage of the proceedings
The arbitration proceedings would then never come to an end
It was not in dispute that the terms of reference required the arbitrator to give reasons for the award to be declared
It would be therefore always open for the petitioner to challenge the award to be declared by the arbitrator including on the ground of jurisdiction
The learned Single Judge of the High Court has so held and we are in agreement with him on this point
381 The third circumstances was that the petitioner had filed application under section 13b of the Act calling upon the arbitrator to state a special case for the opinion of the Court on the question of law and the failure of the arbitrator to raise this question of law was indicative of the bias
We are unable to accept this argument
Section 13b confers power on the arbitrator to state special case but it does not make it obligatory on the part of the arbitrator to state a special case as soon as the party desires to do so
In the instant case the petitioner itself agitated issue of jurisdiction before the arbitrator and by its conduct submitted the question of jurisdiction and other questions of law for determination of the arbitrator
Once having done so it was not proper for the petitioner to ask the arbitrator to state a special case
This in our opinion is no ground for bias
The fourth ground was that the first reference where the claim involved was Rs85 lakhs was heard for a considerable time while the arguments in respect of second and third references which covered the claim of Rs117 crores and Rs581 crores were concluded by respondent No 2 within one and one fourth of a day
The length of the time taken is no indication either of speeding up or of any abuse of the proceedings
We agree with the learned Judge that there is no rule which requires that the length of argument should depend upon the magnitude of the claim made
The other point sought to be urged by the petitioner was that the venue of the arbitration was changed from conference room at Santacruz Airport Bombay to the conference room at Indian Merchants Chambers at Churchgate Bombay
It is the claim of the petitioner that this change of venue was without the consent of the petitioner
It appears from the affidavit filed before the High Court that the venue was changed because of disturbance at the conference room at Santacruz and this fact was known to the petitioner all along
Change of venue in no manner would indicate that the arbitrator was prejudiced against the petitioner and no prayer was made to the arbitrator not to change the venue
This is solely a fallacious ground to make out a case of alleged bias
The other ground was that the petitioner and respondent No 2 used to share the costs of the air ticket of the arbitrator from Delhi to Bombay and back
It was submitted that since 9th June 1987 the petitioner has not paid for the ticket and also not provided for residential accommodation at Santacruz Airport
It was further submitted that respondent No 2 must be providing the air ticket and also hotel accommodation to the arbitrator and the receipt of these facilities was enough according to the petitioner to 382 establish that the arbitration was likely to be biased
It is said that the petitioner made these allegations because the petitioner declined to contribute for the costs of the air ticket and providing for the accommodation
The petitioner obstructed at all stages of the proceedings of arbitration what the arbitrator did he did openly to the knowledge of the respondents
As the learned Judge has rightly pointed out the petitioner after 9th June 1987 seems to have decided that the arbitrator should not proceed to hear the reference and in order to frustrate the arbitration proceedings started raising all sorts of frivolous and unsustainable contentions
Having failed and realised that respondent No 1 was not willing to submit to the dictates of the petitioner the petitioner declined to contribute for the air ticket and providing for accommodation
No party should be allowed to throw out the arbitration proceeding by such tactics and if the arbitrator has not surrendered to pressure in our opinion the arbitrator cannot be faulted on that score nor the proceedings of the arbitrator be allowed to be defeated by such method
There was another ground sought to be made before us that there was a loss of confidence
We find no reasonable ground for such loss of confidence
Every fancy of a party cannot be a ground for removal of the arbitrator
It was alleged that there were counter claims made by the respondents
These counter claims have not yet been dealt with by the arbitrator
Our attention was drawn to page 188 of Volume II of the paper book where a counter claim had been referred to
It appears that the petitioner has separately treated these counter claims
These counter claims have not yet been considered by the arbitrator
That is no ground for any apprehension of bias
An affidavit was filed before us that on 6th March 1988 a letter was served indicating the dates for hearing as 7th to 10th March 1988
It appears that the matter was adjourned thereafter but by merely making an application for adjournment and refusing to attend the arbitration proceeding a party cannot forestall arbitration proceeding
We are in agreement with the learned Judge of the High Court expressing unhappiness as to the manner in which attempts had been made to delay the proceeding
There is a great deal of legitimate protest at the delay in judicial and quasi judicial proceeding
As a matter of fact delay in litigation in courts has reached such proportion that people are losing faith in the adjudicatory process
Having given our anxious consideration to the grounds alleged in this application 383 we find no ground to conclude that there could be any ground for reasonable apprehension in the mind of the petitioner for revocation of the authority of the arbitrator appointed by the petitioner itself
While endorsing and fully maintaining the integrity of the principle justice should not only be done but should manifestly be seen to be done  it is important to remember that the principle should not be led to the erroneous impression that justice should appear to be done that it should in fact be done
See the observations of Slade J in R vs Cambore Justices Ex parte Pearce at 855
We are satisfied from the facts mentioned hereinbefore that there is no reasonable ground of any suspicion in the mind of the reasonable man of bias of the arbitrator
Instances of cases where bias can be found in Commercial Arbitration by Mustill and Boyd 1982 Edn
The conduct of the present arbitrator does not fall within the examples given and the principles enunciated therein
The petition for leave to appeal therefore fails and it is accordingly dismissed
SL Appeal dismissed


Summary:
 Respondents 1 to 3 were prosecuted for an offence punishable under section 111 read with section 135 of the Customs Act 1969 on the basis of recovery of primary gold from their house
Respondent No 3 was convicted and respondents Nos 1  2 were acquitted
Later the same persons were sought to be prosecuted under section 85 of the Gold Control Act 1968 relying on the find of the primary gold from the very same premises at the time and on the occasion of the same raid at the house of the said respondents which had given rise to the prosecution under the Customs Act as stated above
The respondents 1 to 3 contended that the new trial was barred
The trial Magistrate accepted this plea and ordered the prosecution to be dropped
The Sessions Judge confirmed the order of the trial court
The High Court affirmed the decision of the Courts below holding that the trial was barred by virtue of section 403 1 of the Code of Criminal Procedure 1898 Cr PC
The State then approached this Court by this appeal
Allowing the appeal in part the Court  HELD The ingredients required to be established in respect of an offence under the Customs Act are altogether different from the ones required to be established for an offence under the Gold Control Act
In respect of the former the prosecution has to establish that there was a prohibition against the import into Indian sea waters of goods which were found to be in the possession of the offender
In respect of the offence under the Gold Control Act it is required to be established that the offender was in possession of primary gold
In regard to the latter offence it is not necessary to establish that there is any prohibition against the import of gold
Mere possession of gold of purity not less than 9 carats in any unfinished or semi finished form would be an offence under the Gold Control Act
454F H 455A 451 The respondents were tried and acquitted for the offence under the Customs Act in connection with the possession of gold
Their trial would be barred by section 4031 of the Code of Criminal Procedure provided they are sought to be prosecuted on the same facts for any offence for which a different charge from the one made against them might have been made under Section 236 and for which they might have been convicted under Section 237 Criminal Procedure Code
455D E In order to establish their plea of bar under Section 4031 the respondents have to establish that 1 there must have been a doubt  as to whether the offence under the Customs Act  could be proved or whether the offence under the Gold Control Act  would be proved and 2 that in the context of this doubt an alternative charge could have been framed under Section 236
456C On a true interpretation of Section 236 it would appear that the Section would be attracted where the offence would fall either under one or the other of the two alternative charges
It would not be attracted if an offence could fall under both of the alternative charges
What is contemplated by section 236 is framing of an alternative charge where on the facts of the case an offence would fall under one of the two alternative charges but the act would not constitute an offence under both the charges
This point is made clear by the illustrations to Section 236
In this case the respondents could be found guilty of both the offences in the context of the possession of gold
If it is established that there was a prohibition against the import of gold and that the respondents were found in possession of gold which they knew or had reason to believe was liable to be confiscated they would be guilty of that offence
They would also be guilty of an offence under the Gold Control Act provided the gold was of a purity of at least 9 carats
They would have violated the provisions of both  the Customs Act and the Gold Control Act if the aforesaid ingredients were established
It is not as if in case they were found guilty of an offence under the Customs Act they could not have been found guilty under the Gold Control Act or vice versa
Upon being found guilty of both the offences the Court may impose a concurrent sentence in respect of both the offences or the sentences could be ordered to run consecutively
There was therefore no question of the framing of an alternative charge one under the Customs Act and the other under the Gold Control Act
If the ingredients of both the offences are satisfied the same act of possession of gold would constitute an offence both under the Customs Act and also under Gold Control Act
It could not therefore be said that they 452 could have been tried on the same facts for an alternative charge in the context of section 236 Cr
PC at the time of the former proceedings
The submission urged in the context of Section 4031 could not succeed
456C H 457D F A separate charge could have been framed in respect of the distinct offence under the Gold Control Act
The conclusions reached by the Court brought the matter squarely within the parameters of the law settled by this Court in the State of Bombay vs section L Apte  Anr 1961 3 SCR 107
459A B Section 4031 does not come to the rescue of the respondents 1 to 3 section 4032 of the Code clearly concludes the matter against them
The High Court was in error in holding that the subsequent trial was barred
The appeal was accepted on this point and the decision of the Courts below and the High Court was reversed
That 20 years has elapsed since the date of the seizure was no ground for not proceeding further with the matter as the offence in question was a serious economic offence which undermines the entire economy of the Nation
But the Sessions Judge had quashed the proceedings not only on this ground but also on the basis of certain factual findings which counsel for the appellant himself found difficult to assail at this juncture
The operative order of the High Court could not therefore be disturbed in the peculiar facts and circumstances of the case
The finding of the lower courts and the High Court was reversed on the question of maintainability of the subsequent prosecution but no further order could be passed in the circumstances
460A F Maqbool Hussain vs State of Bombay  Ors
etc 1953 SCR Vol
IV P 730 State of Bombay vs SL Apte  Anr 1961 3 SCR p 107 referred to