IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA. Arb. Case No.14 of 2008 Date of Decision : February 24, 2009 Sham Mahajan ..Applicant. Versus: State of H.P. & another …Respondents. Coram: The Hon’ble Mr.Justice Sanjay Karol, Judge. Whether approved for reporting?1 No For the applicant : Mr. J. S. Bhogal, Sr. Advocate with Mr. Suneet Goel, Advocate For the respondents: Mr. R. K. Sharma, Sr. Addl. A. G. with Mr. Vivek Thakur, Addl. A.G. SANJAY KAROL, JIDGE (Oral) In the present petition the Contractor has assailed the award dated 8.2.2008 passed by Shri D. R. Chaudhary, Sole Arbitrator, Superintending Engineer, National Highway Circle, HPPWD, Shahpur in case titled as Shyam Mahajan v. State of H.P. & Anr. The award contains reasons. One of the grounds on which the award has been assailed is that there is a infraction of Section 34 of the Arbitration and Conciliation Act, 1996 inasmuch as no adequate opportunity of hearing has been afforded to the parties and more particularly to the applicant. 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 From the record of proceedings the admitted facts which emerge are as under:- From the record of the proceedings of the 1st hearing held on 10th May, 2006, it is evident that only Shri A. K. Gupta, Executive Engineer appeared and the Contractor failed to cause appearance. The matter was adjourned but however, no specific date was given. Intimation for holding of second hearing was duly given to the parties. On 10th July, 2006, 2nd hearing was held when both the parties appeared. A request was made for an adjournment by the Contractor on the ground that his counsel could not appear due to some personal difficulty. The request was not opposed and as such the matter was adjourned. It was also ordered that the intimation with regard to the next date of hearing would be sent separately. On 15th September, 2006, 3rd hearing took place when only Shri A. K. Gupta, Executive Engineer appeared. The matter however, was adjourned as the Contractor had telephonically informed the reason of his inability to appear, which was not opposed by the State and the matter was adjourned accordingly. It was also ordered that the intimation with regard to the next date of hearing would be sent separately. The record of proceedings of the 4th hearing held on 10th September, 2007 reveal that none appeared on behalf of the parties as prior intimation requesting for an adjournment had been sent by the Executive Engineer. The position remains 3 the same even with regard to the 5th hearing held on 30th October, 2007. The Arbitrator informed the parties for holding the 6th hearing for 13th November, 2007 but however, none appeared even on that date. Consequently vide letter dated 17th November, 2007, the Arbitrator fixed the 7th hearing to be held on 11th December, 2007 and directed the parties to appear, as this was the last opportunity being given to them. But however, before the said date the Executive Engineer vide letter dated 11th December, 2007 requested the Arbitrator for an adjournment for the following reasons:- “It is brought to your kind notice that restoration work of the damaged bridge over Balad Khud on NH-21A is in full swing. Keeping in view the urgency of the restoration work the undersigned has to be present at the site of the work. Also certain high officials are also scheduled to visit the site of the damaged bridge on 11.12.2007. Therefore, it would not be possible to attend the hearing in the above case fixed on 11.12.2007.” A telegram was also sent to the said effect. Copies of the letter and the telegram were also addressed to the Contractor who taking that the matter would be adjourned also did not cause appearance on 11th December, 2007 when the Arbitrator closed the proceedings. It is a matter of record that on the request of the State the matter was adjourned by the Arbitrator on 10th 4 September, 2007 i.e. 4th hearing and on 30th October, 2007 i.e. 5th hearing. The contractor had been specifically informed that the State would be requesting for an adjournment and in effect the concerned officials would not be appearing and requesting for an adjournment keeping in view the administrative exigencies. The contractor was to travel from Chandigarh and as such he did not appear before the Arbitrator on 11th December, 2007. A request was made on behalf of the State. The contractor had made only one request for an adjournment on 10th July, 2006 i.e. 2nd hearing. In the objection petition the Contractor specifically alleged that he was telephonically informed by the Executive Engineer about the request for an adjournment. This fact has not been specifically denied in the reply-affidavit. Keeping in view the overall circumstances, in my view, prejudice has been caused to the applicant inasmuch as he could not be heard before passing of the Award. It is not in dispute that the parties were to be heard orally and for that very reason and purpose intimation fixing the date of hearing was sent to the parties. Keeping in view the ratio of law laid down by the Apex Court in Oil & Natural Gas Corpn. Ltd. vs. Saw Pipes Ltd. {2003(5) SCC 705}, the award needs to be set-aside for not having afforded adequate opportunity to the applicant for presenting its case. The principles of natural justice have been violated causing serious prejudice as the award has been passed 5 in his absence. Hence, the award dated 8.2.2008 passed by Shri D. R. Chaudhary, Sole Arbitrator is set-aside on this ground. Mr. Bhogal fairly submits that the matter be re-heard by Shri D. R. Chaudhary, Sole Arbitrator and he shall not take more than two opportunities to present his case before him. The parties are directed to appear before the learned Arbitrator on 6th April, 2009. The record be sent back immediately. The learned Arbitrator shall afford three opportunities to the parties to present their case. He shall decide the matter based on the material already placed on record by the parties. With the aforesaid observations, the arbitration case is allowed. ( Sanjay Karol ), Judge. February 24, 2009. (rana)