Arbitration – Agreement between appellant and respondentState – Appointment of an officer of the State department, as arbitrator in terms of arbitration clause in the agreement – Whether his mandate to continue the arbitration proceedings came to an end on his retirement – Whether continuance of arbitration proceedings by him after retirement can be said to be a misconduct – Held: Considering the arbitration clause in the agreement, once a departmental officer was appointed as an arbitrator, he continued to be the sole arbitrator till the arbitration proceedings were concluded unless he incurred disqualification under provisions of the Arbitration Act, 1940; and it cannot be said that his mandate to continue with the arbitration proceedings came to an end on his retirement – The Civil Judge, in an arbitration suit filed by appellant u/s.28 of the Arbitration Act, had extended the time to the arbitrator to complete the arbitration proceedings and granted further period of 30 days which was after his retirement and after specifically overruling/rejecting the objections raised by respondents that after retirement, he cannot continue with the arbitration proceedings – Once the Arbitrator continued with the arbitration proceedings and passed award (in favour of appellantclaimant) within the extended period of time, it cannot be said that he misconducted himself by continuing with the arbitration proceedings – Arbitration Act, 1940 – ss.28 and 30/33. Allowing the appeal, the Court
HELD: 1.1. In the present case, the agreement contains an arbitration Clause as per Clause 52 of the agreement. In view of the same, the only qualification for appointment as an arbitrator is that he should be the officer of the rank of the Superintending Engineer or higher. Once such an officer is appointed as an Arbitrator, he continues to be the Sole Arbitrator till the arbitration proceedings are concluded unless he incurs the disqualification under the provisions of the Indian Arbitration Act, 1940. Even after his retirement, the arbitration proceedings have to be continued by the same Arbitrator. Clause 52 of the agreement does not provide at all that on the retirement of such an officer, who is appointed as a Sole Arbitrator, he shall not continue as a Sole Arbitrator and/or the mandate to continue with the arbitration proceedings will come to an end. [Para 11][215H; 216-D-F]
1.2. The Sole Arbitrator, who at the relevant time was the Chief Engineer and was qualified to become the Sole Arbitrator was even nominated and/or appointed by the Chief Engineer as per clause 52. Therefore, considering the Clause 52 of the agreement, it cannot be said that his mandate to continue with the arbitration proceedings would come to an end on his retirement. [Para 13][217-B-C]
2. Even the observations made by the High Court in the impugned judgment and order that the Sole Arbitrator misconducted himself by continuing with the arbitration proceedings after his retirement is also not tenable at law. In the present case, the Civil Judge (Senior Division), Roorkee extended the time to the Sole Arbitrator to complete the arbitration proceedings and granted further period of 30 days which was after his retirement and after specifically overruling/rejecting the objections raised by the respondents that after retirement, he cannot continue with the arbitration proceedings. Therefore, once the Sole Arbitrator continued with the arbitration proceedings and passed the award within the extended period of time, it cannot be said that he has misconducted himself as he continued with the arbitration proceedings. [Para 16][217-H; 218-A-C]
3. The impugned judgment passed by the High Court quashing and setting aside the award (passed by the Sole Arbitrator) as well as the order passed by the Civil Judge making the award, Rule of the Court deserves to be quashed and set aside. [Para 17][218-C-D]
Himalayan Construction Co. v. Executive Engineer, Irrigation Division, J&K and Anr., (2001) 9 SCC 359 – relied on.
Prasun Roy v. Calcutta Metropolitan Development Authority and Anr., (1987) 4 SCC 217 : [1987] 3 SCR
569 ; N. Chellappan v. Secretary, Kerala State Electricity Board and Anr., (1975) 1 SCC 289 : [1975]
2 SCR 811 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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