Case: Satyendra Kumar Vs. Hind Constructions Limited

The appellant and the petitioner entered into an agreement with the respondent company, the Hind Constructions, Ltd., by which he agreed to act as a sub-contractor in respect of a contract which the respondents had taken. That agreement was entered into on 5th January 1948. In respect of the payment to be made under the agreement there were disputes between the petitioner and the respondent company and the disputes were referred to the arbitration of Dr. Pandya on 8th January, 1949. Dr. Pandya was the general manager and an ex-officio director of the Hind Constructions Ltd. Dr. Pandya directed that an interim payment of Rs. 40, 000 should be made to the petitioner on 11th January 1949 and on 13th January, 1949, he made his award. By this award he directed a further sum of Rs. 10,000 to be paid to the petitioner. The present petition to set aside the award was filed on 23rd April, 1949.

Court's reasoning:
An interesting argument has been advanced before us by Mr. Desai as to what is the nature of the interest which a Judge is bound to disclose, which, if not disclosed, would result in the judgment of the Judge being set aside. It is unnecessary to launch upon that inquiry in this case, because, as I have just pointed out, the case of an arbitrator stands on a higher footing and whatever the nature of the interest may be which a Judge is bound to disclose, as far as an arbitrator is concerned, he must disclose all facts, all circumstances which are likely to influence his judgment or bias his mind. There are two judgments of the Calcutta High Court on which reliance was being placed. One is Mahomed Wahiduddin v. Hakiman, 29 Cal 278. That was a case where the arbitrator was an am-muktear of one of the parties, and the other party revoked the arbitration, and after the revocation the arbitrator proceeded to make the award, and the Calcutta High Court held that the fact that the arbitrator had acted for a long period of time as an am-muktear even without remuneration was sufficient to entitle the other party to revoke the reference. But there was another fact to which the High Court attached greater importance, and that was that the arbitrator was indebted to one of the parties and the judgment of the High Court points out that the fact of this indebtedness if it had not been disclosed to the other party would be a good reason for invalidating the award on account of judicial misconduct. Therefore, a distinction seems to have been drawn in this case between what would be sufficient to justify the revocation of a reference and the invalidation of the award on account of judicial misconduct. The High Court had no doubt that failure to disclose indebtedness to one of the parties on the part of the arbitrator was clearly judicial misconduct which would result in the award being set aside. With regard to the first, the learned Judges expressed no opinion as according to them that was sufficient to entitle the party to revoke the reference.