Civil Appeal No 1274 of 1988
From the Judgment and order dated 7101986 of the Bombay High Court in WP No 1143 of 1985
Masodkar and AK Gupta for the Appellant
VS Desai and AS Bhasme for the Respondents The Judgment of the Court was delivered by RANGANATHAN J
1
We grant special leave and proceed to dispose of the appeal after hearing both counsel 2
The point raised in the appeal is a very short one
The lands belonging to the petitioners were among those sought to be acquired under the Land Acquisition Act 1894 hereinafter referred to as the Act  by means of a notification under Section 4 issued on 22nd June 1982
This was followed up by a declaration under Section 6 dated 15th March 1983
The petitioners challenged both the notification and the 443 declaration in writ petition No 947 of 1983 before the High Court The notification under Section 4 was challenged on the ground of mala fides and the declaration under Section 6 on the short ground that the petitioners  objections had not been heard before the making of the declaration
When this writ petition came up for hearing a statement was made on behalf of the Government that the notification under Section 6 was being withdrawn
On this statement being made the writ petition was withdrawn and disposed of accordingly
Thereafter the petitioners were heard under Section 5 A of the Act and a fresh declaration under Section 6 was issued on 4th April 1985
The petitioners again filed a writ petition in the High Court being writ petition No 1143 of 1985 the judgment in which forms the subject matter of the present appeal
In this writ petition they again challenged the notification under Section 4 as vitiated by mala fides and non application of mind
The High Court has found no merit in this contention and rejected the same
We see no reason to interfere with this conclusion of the High Court
However another question was also raised by the petitioners namely that the withdrawal of the earlier declaration dated 1531983 had the automatic effect of also rendering the notification under Section 4 dated 2261982 ineffective and infructuous
On the strength of the decision of this Court in State vs Vishnu Prasad Sharma   it was contended that once a declaration under section 6 was issued the notification under Section 4 exhausted itself
It made no difference it was said that the notification issued under section 6 had been withdrawn
Reliance was also placed on the decision of the Bombay High Court in Ajit Singh vs State AIR 1972 Bombay 177 in support of this proposition
This contention however was rejected by the High Court and hence the present appeal
We are of opinion that the decision of the High Court is correct and should be upheld
The Bench has rightly pointed out that Ajit Singh s case supra had failed to take note of the decisions of this Court in Girdhari Lal Amrit Lal vs State  State vs Haider Bux  and State vs Bhogilal Keshavlal  and therefore does not represent the correct law
In Vishnu Prasad Sharma s case supra the question for consideration of this Court was whether there could be successive declarations in respect of various parcels of land covered by a notification under Section 41
Considering the scheme of the Act as it then stood 444 the Court held that the Act envisaged a single declaration under Section 6 in respect of a notification under Section 4 and that when once a declaration under Section 6 particularising the area in the locality specified in the notification under Section 41 is issued the remaining non particularised area stands automatically released
The Court also referred to the provisions of Section 48 of the Act in this context
The following observations appear in the judgment of Sarkar J  
It seems to me that if the correct interpretation is that only one declaration can be made under section 6 that also would exhaust the notification under section 4 that notification would no longer remain in force to justify successive declarations under section 6 in respect of different areas included in it
There is nothing in the Act to support the view that it is only a withdrawal under section 48 that puts a notification under section 4 completely out of the way
The effect of section 48 is to withdraw the acquisition proceedings
including the notification under section 4 with which it started We are concerned not with a withdrawal but with the force of a notification under section 4 having become exhausted  7
The High Court was correct in pointing out that the above observations were made in the context of a valid declaration under S 6 The Court held that once there is a valid declaration under section 6 the scope of the notification under S 4 will got exhausted This principle cannot clearly apply to a case where the declaration under S 6 proves to be invalid
ineffective or infructuous for some reason
It has been so held by this Court in a number of decisions
In Girdhari Lal Amrir Lal s case supra which was decided about a week earlier to Vishnu Prasad Sharma s case this Court held that
where a notification under section 6 is invalid the Government may treat it as ineffective and issue in its place a fresh notification under S 6 and that there is nothing in S 48 of the Act to preclude the Government from doing so This view has been repeated in State vs Haider Bux  and State vs Bhogilal Keshavlal  These decisions have clearly pointed out the distinction between a case where there is an effective declaration under section 6 which precludes the issue of further declarations in respect of other parts of the land covered by the notification under section 4 not covered by the declaration issued under S 6 and a case where for some reason the declaration under S 6 is invalid
It is true that in the present case there was no occasion for the High Court in the earlier writ petition to pronounce the declaration 445 dated 1531983 to be invalid
But the validity of the declaration had been challenged on the ground that the petitioners had not been heard under section 5A an irregularity which ex facie rendered the declaration invalid
The State Government obviously acknowledged this and withdrew the declaration on its own instead of obtaining a judgment to that effect from the Court
In principle there is no distinction between a case where a declaration under section 6 is declared invalid by the Court and a case in which the Government itself withdraws the declaration under section 6 when some obvious illegality is pointed out
The point in issue in this appeal is thus directly governed by the three earlier decisions of this Court and the High Court was fully justified in dismissing the writ petition on this ground
Before concluding we must refer to one circumstance which was brought to our notice by learned counsel for the petitioners and which has also been noticed in the judgment of the High Court
It appears that between the date of withdrawal of the earlier writ petition namely 23rd August 1983 and the issue of the second declaration under section 6 namely 441985 the Government had issued a fresh notification under section 4 for the acquisition of certain lands
The lands in the two notifications under section 4 do not completely overlap but it appears that some fields are common in both
No declaration under section 6 appears to have been issued in furtherance of the second notification under section 4 when the High Court heard the matter
Learned counsel for the petitioners points out that at least in respect of such of the lands comprised in the section 4 notification dated 2261982 as are also covered by the subsequent notification under section 4 it is legitimate to infer that the State Government has superseded the earlier notification by the latter one
This contention is clearly well founded
We would therefore like to make it clear that in respect of the lands covered by the first notification under section 4 which are also covered by or comprised in the second notification under section 4 further proceedings regarding acquisition should be taken in accordance with law only in pursuance of the latter notification and the proceedings initiated in respect of such lands by the first notification dated 2261982 should be deemed to have been superseded
With the above clarification we affirm the order of the High Court had dismiss this appeal
In the circumstances however we make no order to costs
GN Appeal dismissed


Summary:
 This petition for special leave was against the judgment and order of the High Court of Bombay rejecting the application for revocation of the authority of the respondent No 1 the sole arbitrator under sections 5 and 11 of the  The Act 
The petitioner invited tenders for the construction of the terminal building of a new international passenger complex Phase II at the Bombay Airport
The respondent No 2 a partnership firm submitted a tender which was accepted and a formal agreement followed with a provision in the agreement for settlement of disputes through a sole arbitrator appointed 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
The respondent No 2 the contractor approached the petitioner to refer the disputes to arbitration
The Chief Engineer of the petitioner appointed respondent No 1 as the arbitrator and made a reference with regard to the claim of Rs85 lakhs
The respondent No 2 asked the Chief Engineer to refer further disputes to the arbitrator and accordingly on 16th May 1986 a second reference was made with regard to 11 further points of dispute with claims amounting to Rs117 crores
On 23rd December 1986 the Chief Engineer made reference No 3 to the Arbitrator with regard to claim amounting to Rs581 crore
Thereafter by applications of 8th and 9th June 1987 the petitioner expressed objections to the references Nos 2 and 3 made by the Chief Engineer contending that the references were null and void being irregularly made and took preliminary objections before the arbitrator to the arbitration proceedings being lack of jurisdiction of the arbitrator on the ground that he was not validly appointed so far as references Nos 2 and 3 were concerned
On 7th 371 August 1987 the petitioner made an application before the arbitrator under section 13b of the Act with the request to state the matter before him for the opinion of the Court as special case
The arbitrator by his order dt
3rd October 1987 rejected the said application and the preliminary objections of the petitioner
Thereafter the petitioner alleging that the arbitrator had formed his own opinion regarding the matters in issue filed an appliction before the High Court for the revocation of the authority of the arbitrator on the ground of apprehension in the petitioner s mind about bias of the arbitrator
The High Court by its judgment and order dt
2nd February 1988 rejected the application of the petitioner
The petitioner then moved this Court for relief by special leave
Dismissing the petition for special leave the Court  HELD It was necessary to reiterate first what are the parameters by which an appointed arbitrator can be removed on the appliction of a party
It is well settled that there must be purity in the administration of justice as well as quasi justice involved in the adjudicatory process before the arbitrator
Once the arbitrator enters on an arbitration he 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 a 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 the arbitrator must not do anything which is not in itself fair and impartial
In the words of Lord O Brien LCJ there must be a real likelihood of bias and not a mere suspicion of bias before proceedings can be quashed on the ground that the person conducting the proceedings is disqualified by interest
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 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 as held by the High Court
The apprehension must be judged from a healthy reasonable and average point of view and not on a mere apprehension of any whimsical person
It cannot be and should never be in a judicial or quasi judicial proceeding that a party who is a party to the appointment could seek the removal of an appointed authority or an arbitrator on the ground that the appointee being his nominee had not acceded to his prayer about conduct of the proceedings
It is the reasonableness and apprehension 372 of an average honest man that must be taken note of
There was no substance found in the alleged grounds of apprehension of bias examined in this light
378D G 379D H 380A B The High Court had examined five circumstances advanced before it
The first was that the arbitrator did not record the minutes of the meetings after September 29 1987
The petitioner insisted that the arbitrator should record the minutes setting out the entire oral arguments advanced on behalf of the petitioner
This was not a reasonable request and the arbitrator rightly declined to do that
This was no basis of any reasonable apprehension of bias
380C E 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 would be open to the petitioner to file a petition under section 33 of the Act if the petitioner felt that the arbitrator had no jurisdiction to entertain the reference
It would be open to the petitioner to challenge the award to be declared by the arbitrator including on ground of jurisdiction
380E H The third circumstance was that the petitioner had filed an application under section 13b of the Act calling upon the arbitrator to state a special case for the opinion of the Court and the failure of the arbitrator to raise the question of law was indicative of bias
This argument could not be accepted
Section 13b confers power on the arbitrator to state a 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 it
In this case the petitioner itself agitated the issue of jurisdiction and other questions of law before the arbitrator
Once having done so it was not proper for the petitioner to ask the arbitrator to state a special case
This was no ground for bias
381A C The fourth ground was that the first reference involving a claim for Rs85 lakhs was heard for a considerable time while the arguments in respect of the second and third references covering claims of Rs117 crores and Rs581 crores were concluded by the respondent No 2 within one and one fourth of a day
The length of the time taken is no indication of either speeding up or any abuse of the proceedings
The Court agreed with the High Court that there is no rule which requires that the length of the argument should depend upon the magnitude of the claim made
381D 373 The other point urged by the petitioner was that the venue of arbitration was changed and this change was without the consent of the petitioner
Change of venue would in no manner indicate that the arbitrator was prejudiced against the petitioner
This was solely a fallacious ground to make out a case of alleged bias
381E G The other ground was that as since 9th June 1987 the petitioner had not paid for the air ticket of the arbitrator from Delhi to Bombay and for his residential accommodation the respondent No 2 must be providing for the air ticket and the hotel accommodation for the arbitrator and the arbitration was likely to be biased
As rightly pointed out by the High Court the petitioner after the 9th June 1987 seemed to have decided that the arbitrator should not proceed with the reference and in order to frustrate the arbitration proceedings started raising all sorts of frivolous and unsustainable contentions
Having realised that the arbitrator was not willing to submit to its dictates the petitioner declined to contribute for the air ticket etc
No party should be allowed to throw out the arbitration proceedings by such tactics and if the arbitrator did not surrender to the pressure he could not be faulted nor could the proceedings of the arbitrator be allowed to be defeated by such a method
381G H 382B D Another ground made was that there was a loss of confidence
There was no reasonable ground for such a loss of confidence
Every fancy of a party cannot be a ground for removal of the arbitrator
382D The Court was in agreement with the learned Judge of the High Court expressing unhappiness over the manner in which attempts had been made to delay the proceedings
382G The Court found 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 than it should in fact be done
There was no reasonable ground of any suspicion of bias of the arbitrator
The conduct of the arbitrator did not fall within the examples given and principles enunciated in the instances of cases where bias could be found in the Commercial Arbitration by Mustill and Boyd 1982 Edn
383A C 374 Russell on Arbitration 18th Edition page 378 Re Brion and Brien  89 The King De Vesci vs The Justices of Queen s Country  The Queen vs Rand  Ors 1986 1 QB 230 Ramnath vs Collector Darbhanga ILR 34 Pat 254 The Queen vs Meyer and Ors  Ekersley and Ors
vs The Messey Docks and Harbour Board  Gallapalli Nageswara Rao vs The State of Andhra Pradesh   Mineral Development Ltd vs State of Bihar  Ranjit Thakur vs Union of India  Ors  and RV Camborne Justices Ex parte Pearce  855 referred to