IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Arbitration Case No. 48 & 49 of 2011 Date of decision: 27.12.2011 1. Arbitration Case No. 48 of 2011 Tilak Raj Sharma son of Jagat Ram, resident of Jwalamukhi, Tehsil Dehra, District Kangra, H.P. .....Petitioner. Vs. 1. Oil & Natural Gas Commission, Tel Bhawan, Dehradun, Uttrakhand through its CMD. 2. Oil & Natural Gas Commission, (Project Transport Wing), Amb, Camp at Jwalamukhi, District Kangra, H.P., through Officer Incharge. 3. Regional Director, NRBC/ONGC, 18-A, Rail Head, LIC Building, Jammu (J&K). .....Respondents. 1. Arbitration Case No. 49 of 2011 Tilak Raj Sharma son of Jagat Ram, resident of Jwalamukhi, Tehsil Dehra, District Kangra, H.P. .....Petitioner. Vs. 1. Oil & Natural Gas Commission, Tel Bhawan, Dehradun, Uttrakhand through its CMD. 2. Oil & Natural Gas Commission, (Project Transport Wing), Amb, Camp at Jwalamukhi, District Kangra, H.P., through Officer Incharge. 3. Regional Director, NRBC/ONGC, 18-A, Rail Head, LIC Building, Jammu (J&K). .....Respondents. Application under Sections 14 & 15 of the Arbitration and Conciliation Act, 1996 for termination of the mandate of the arbitrator. Coram ...2... The Hon'ble Mr. Justice V.K. Sharma, J. 1 Whether approved for reporting? Yes. For the petitioner(s): Mr. Suneet Goel, Advocate. For the respondents: Mr. Anand Sharma, Advocate. V.K. Sharma, J. (Oral) Since both these applications under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (in short '1996 Act') are inter-connected and raise common questions of fact and law, these are being disposed of by a common judgment. 2. Admittedly, respondent No. 1-Commission was undertaking drilling operations at Jwalamukhi in District Kangra, Himachal Pradesh, for exploration of petroleum products. It was during the course of such operations that the said respondent granted contract to the petitioner for supply of 'drilling water' at the sight. During subsistence of such contract the petitioner was also allotted the work of supply of 'drinking water' by respondent No. 1-Commission. However, since certain disputes arose between the parties during execution of the aforesaid contracts, the petitioner moved this Court for appointment of an Arbitrator under Section 20 of the Arbitration Act, 1940 (in short '1940 Act'). Consequently, whereas the prayer of the petitioner for appointment of Arbitrator was granted by the learned single Judge in Civil Suit No. 56 of 1992, similar prayer for appointment of an Arbitrator was declined in Civil Suit No. 57 of 1992. Being aggrieved, both the parties carried the matter in appeal to a Devision Bench of this 1 Whether reporters of Local Papers may be allowed to see the judgment? Yes. ...3... Court in RFA No. 5 of 1994 with FAO No. 38 of 1994 which were disposed of vide order dated 22.05.2008, which is as under: “There are two separate appeals arising out of the judgments of the learned Single Judge. The learned Counsel for the parties have agreed that in both matters in dispute let the Arbitrator be appointed. We find that in the light of arbitration Clause in the agreement having entered into between the parties an employee of the ONGC would be Arbitrator. The parties agreed for the appointment of an Arbitrator of the rank of Superintending Engineer of ONGC or an Officer of the equivalent rank having engineering degree. The parties further agreed that total emolument/fee to be paid to the learned Arbitrator would be Rs. 20,000/-. It is further clarified that the learned Arbitrator would not be at liberty to increase the said free. Besides the said amount the learned Arbitrator would be entitled for actual secretarial allowances. Both the parties shall bear the expense equally. We hope and trust that the Arbitrator would decide the mattes expeditiously in the light of the Arbitration and Conciliation Act, 1996 (Act No. 26 of 1996). It is clarified that the learned Arbitrator will act independently and would not be influenced by any observation of the Court made during the pendency of the cases before this Court. The learned Arbitrator will start the proceedings as soon as the information is passed on to him about his appointment. With these observations, the impugned judgments are set aside and both the appeals stand finally disposed of.” 3. In terms of the aforesaid order dated 22.05.2008 the Arbitrator entered upon the arbitral reference. The petitioner set up two claims by way of Civil Suit No. 56 of 1992 and Civil Suit No. 57 of 1992. Vide order dated 26.08.2010 the Arbitrator, with consent of the parties, ordered to club both the suits and proceeded to frame issues therein vide order dated 27.08.2010 and posted the matter for admission and denial of documents. It appears that since both the cases were clubbed together, initially only one written statement was filed by respondent No. 1-Commission in Civil suit ...4... No. 57 of 1992. However, vide order dated 20.04.2011, the Arbitrator permitted respondent No. 1-Commission to file an alternate copy of written statement already filed in Civil Suit No. 57 of 1992 in the other Suit, being Civil suit No. 56 of 1992 with a view to straighten and complete the record, to which the petitioner did not raise any objection. 4. It was against the foregoing background that the petitioner moved an application to the Arbitrator under Sections 12 and 13 of the 1996 Act to lay a challenge against the aforesaid order dated 20.04.2011 of the Arbitrator, which was disposed of vide order dated 24.06.2011 holding that since the copy of written statement was permitted to be filed in the other suit only with a view to straighten and complete the record, there was no lawful ground for any challenge against the said order. 5. Now the petitioner has moved the present application under Sections 14 and 15 of the 1996 Act with a prayer to terminate the mandate of the Arbitrator on the ground of his failure/impossibility to act. 6. I have heard the learned counsel for the parties and perused the record. 7. It is contended on behalf of the petitioner that in the facts and circumstances of the case, the act and conduct of the Arbitrator in permitting respondent No. 1-Commission to file written statement in violation of the provisions of the 1996 Act is such that the same smacks of bias and prejudice against him and ...5... thus his mandate is liable to be terminated. Per contra, it is submitted by the respondents that there is nothing even remotely to suggest that the Arbitrator has in any manner acted in a biased and prejudiced manner against the petitioner so as to render his mandate liable for termination. 8. It goes without saying that the mandate of 1996 Act is to ensure that there is least interference by the courts in the matters connected with Arbitration and Conciliation under the said Act and further that the proceedings are conducted as expeditiously as possible so as to instill the sense of confidence in the concerned parties that it makes sense to do business in this country and the commercial matters are not bogged down in the courts for years together. 9. The record reveals that the aforesaid contracts were awarded in favour of the petitioner in the year 1988. We are already in the fag end of 2011. A period of about 23 years has elapsed in the interregnum. The claims are yet to be adjudicated upon by the Arbitrator and are still at the stage when even the petitioner/claimant is to lead evidence. It is not a very happy situation. 10. Now while adverting to the challenge against the mandate of the Arbitrator, it would be seen that the aforesaid order dated 20.04.2011, which stands extracted in order Annexure P-5 dated 24.06.2011 at page 29 of the paper-book and reads as under, is self-explanatory and the bare perusal of the same would go to ...6... show that an alternate copy of written statement filed by respondent No. 1-Commission was permitted to be placed by the Arbitrator on the records of the Civil Suit No. 56 of 1992 only to complete and straighten the records. This by no stretch of imagination can be said to give an inkling to the petitioner to even remotely infer that the Arbitrator was disfavourably disposed of towards him or was actuated out of bias or prejudice: “Proceedings Dt. 20-04-2011 Present 1. Shri Tilk Raj Sharma – Claimant with Shri D.R. Sharma Advocate (Claimant) 2. Shri L.M.S. Chouhan – Respondent with Shri Anand Sharma Advocate (Respondent) “the respondent has filed written statement in CS 56/92 & CS 57/92 along with affidavits on behalf of respondent in evidence in the respondent is permitted to file the same today. The copies has been supplied to the other party & have no objection. The issues were framed on 27/8/2010 on the basis of pleading of the parties, on the basis of written statements filed today along with affidavit in evidence by respondent & claimant. No further issue is required to be framed or arises as discussed with the parties to the litigation. The claimant has also filed a list of witnesses for examination in these arbitration proceedings. The claimant may take further action to get the summons issued from the Hon'ble High Court at Shimla in accordance with law for the next date of hearing which is fixed on 24-06-2011 for summoning witnesses at Sr. No. 1 to 5 & on 25-06-2011 for remaining all at Jwalamukhi (Himachal Pradesh). Sd. (Sole Arbitrator) Mahanand Thakur” 11. In view of the above, it shall be in the interest of both the parties to proceed in the matter with due dispatch and co- operate with the Arbitrator to conclude the proceedings as expeditiously as possible in accordance with law. Hopefully the ...7... proceedings would be concluded by the end of 2012. 12. Respondent No. 1-Commission through counsel is directed to communicate this order to the Arbitrator forthwith. On receipt of copy of the order the Arbitrator shall fix the next date of hearing in the proceedings under intimation and in consultation with the parties as early as possible. 13. Let a duly authenticated copy of this order be supplied to Mr. Anand Sharma, Advocate, learned counsel for the respondents so that the same is communicated to the Arbitrator at the earliest. 14. Both the cases stand disposed of in the above terms. Pending OMP(s), if any, shall also stand disposed of accordingly. Copy dasti (V.K. Sharma) Judge 27th December, 2011 (virender) V.K. Sharma, J.