G.B. Patnaik, J.@mdashThe claimant-contractor is the Appellant against the order of the Subordinate Judge setting aside an award of the arbitrator and dismissing the claimant''s application to make the award a rule of Court.
2. The Appellant-contractor entered into an agreement with the Chief Engineer, Dry Dock. 9,1. R. S. D. Area, Visakhapatanam, for construction of a twenty-bedded hospital and mess at Chilka by agreement No. CEDD/Chilka/3 of 1977-78. Disputes having arisen between the parties regarding execution of the contract, the same was referred to the sole arbitration of Shri B. K. Patra, a retired Judge of the Orissa High Court, who has in the meantime expired. The arbitrator considering the materials before him passed the award for a sum of Rs. 8,01.126.81 paise in favour of the claimant-contractor. The award was received in the Court of the Subordinate Judge on 2.1-1984 and on receipt of the notice from the Court, objection was filed on behalf of the Union of India under Sections 30 and 33 of the Arbitration Act. The objection in question was registered as Misc. Case No. 43 of 1984. The claimant-contractor, however, prayed for making the award a rule of Court. Both the application and the objection were disposed of by the impugned judgment by which the Subordinate Judge has set aside the award in question.
3. The validity of the a ward was challenged in the objection filed on behalf of the Respondents, inter alia, on the grounds that:
(a) the arbitrator tampered with the records and manipulated the order sheets dated 25-11-1983 10-12-1983 and 22-12-1983 and thereby misconducted the proceedings;
(b) the arbitrator signed the award after he was asked to stay his hands by the High Court;
(c) the arbitrator on being appointed as Lokpal and having taken oath as Lokpal on 17-11-1983 automatically ceased to continue as arbitrator;
(d) notwithstanding the prayer of the Respondents on 24-12-1983 requesting the arbitrator to stay his hands since the matter was being challenged in the High Court, the arbitrator purposely passed the award with undue haste which vitiates the award;
(e) the arbitrator did not apply his mind while allowing different claims of the contractor;
(f) the arbitrator did not file the award as required u/s 14 of the Arbitration Act and Rules 3 and 13 of the Arbitration Rules;
(g) the award being for more than Rs. 50,000/- the arbitrator was bound to pass a reasoned award as per the terms of the contract and the arbitrator not having given any reasons, the award is invalid; and (h) the term of the arbitrator expired on 27-8-1983 and thereafter he ceased to be an arbitrator and the award passed by the arbitrator after about four months of the date of expiry of the term is without jurisdiction.
4. Before the Subordinate Judge on behalf of the claimant-Contractor, an objection had been raised to the effect that the Respondents not having filed the objection within thirty days from the date of receipt of the notice, the objection cannot be considered and must be rejected in limine. The Respondents, it appears, had filed an application u/s 5 of the Limitation Act. From the order of the Subordinate Judge, it further appears that the Respondents appeared in Court an 4;-1-1984 and were allowed time till 2-2-1984 to file objection. On 2-2-1981, they were again allowed time till 5-3-1984, but they filed the objection an 24-2..1984. Relying upon the decision of the Court in, the case of Gangaram Chhapolia v. Chief Engineer, Orissa and Ors. AIR 1982 Ori 262, the learned, Subordinate Judge condoned the delay in filing the objection and Mr. Palit appearing for the claimant-contractor does not challenge the said conclusion of the learned Subordinate Judge.
5. The learned., Subordinate Judge rejected all the grounds taken in .the objection of the Respondents, but set aside the award only an the ground that withholding the passing of award for a long period without any valid reasons amounts to legal misconduct on the part of the arbitrator. Mr. Palit for the Appellant contends that the conclusion of toe Subordinate Judge with regard to the alleged legal misconduct an the part of the arbitrator is, based an error of record as well as on a thorough misconception of law and, therefore, cannot be sustained, whereas Mr. A. B. Misra, the learned, Standing Counsel for the Central Government supports the conclusion of the Subordinate Judge and contends that the team of the arbitrator having expired on 27-8-1983, he bad no jurisdiction to pass an award an 27-12-1983 and the award in question, therefore, is without jurisdiction.
6. To appreciate, the correctness of the rival submissions, it is necessary, to examine the order-sheet of the arbitrator as well as the law on the subject. The order dated 8-10-1983 is quoted hereinbelow in extenso:
Both parties are present. But due to same difficulties both parties want till tomorrow. Call on at 10 A. M. on 9-10-1983 for hearing. Bothparties have filed a consent memo agreeing for extension of time for submission of the award till 27 -12-1983.
The counsel appearing for the claimant and also the counsel for the Union of India have given their signatures on the left-hand margin of the order-sheet in token of the fact that the order in question was passed in their presence. The question, therefore, arises for consideration is as to whether time for submission of an award can be extended by consent of parties or not, The learned Standing Counsel for the Union Government relying on the decision of the Supreme Court in the case of
The correctness of the rival submissions has to be examined with reference to Section 28 of the Arbitration Act which is the only provision in the Act providing for extension of time to make an award. Section 28 undoubtedly,confers power on the Court to enlarge the time for making of an award and such power has to be exercised after taking all the circumstances into consideration. Sub-section (2) of Section 28, however, makes it clear that when parties agree for an enlargement of the time after the arbitrator has entered on reference then the arbitrator has the power to enlarge it in accordance with mutual agreement or consent of the parties. Sub-section (2) does not require the power to enlarge the time with consent of the parties being specified in the arbitration agreement itself, Even when there is no such stipulation in the arbitration agreement, the arbitrator would be entitled to enlarge the time if after he has entered on the reference, the parties consent to such enlargement. In my opinion, this matter no longer remains res integra. The scope arid ambit of Section 28 of the Act has been considered fully by the Supreme Court in the case of
In our view, therefore, Section 28 (2) does not provide that the Arbitration agreement, alone should stipulate that the Arbitrator may extend the time on a subsequent agreement between the parties. Even in a case where there is no such stipulation in the original agreement, the arbitrator is entitled to enlarge the time if after entering on the reference the parties to the arbitration consent to such enlargement. In the present case, the enlargement of time for making the award was on the request and mutual consent of the parties during arbitration and, therefore, the award made within the extended time must be deemed to be valid to This decision has been taken note of in the subsequent decision of the Court in Hardyal''s case2 on which the learned Standing Counsel places reliance and in my opinion, in the later decision, the Supreme Court has not taken any contrary view. It has been held in the latter case:
Sub-section (1) of Section 28 is very wide and confers full discretion on the Court to enlarge time for making the award at any time. The discretion under Sub-section (1) of Section 28 should, however, be exercised judiciously. Sub-section (2) of Section 28 also makes it evident that the Court alone has the power to extend time. It further provides that a clause in the arbitration agreement giving the arbitrator power to enlarge time shall be void and of no effect except when all the parties consent to such enlargement. It is not open to arbitrators at their own pleasure without consent of the parties to the agreement to enlarge time for making the award.
(Underlinings are mine)
my opinion, the aforesaid observations of the Supreme Court instead of supporting the contention of Mr. Misra the learned Standing Counsel for the Union Government, go against his submission and clearly indicate that though an arbitrator cannot enlarge time for making the award on his own pleasure, but he can do so with consent of the parties to the agreement. As I have discussed earlier, the parties through their counsel agreed on 8-10-1983 to extend time for submission of award till 27-12-1983 and in that view of the matter, the .arbitrator was fully justified in extending the time and an award passed before 27 -12-1983 cannot be said to be a nullity as contended by the learned Standing Counsel for the Union Government. The contention of Mr. Misra the learned Standing Counsel, on this score must, therefore, be rejected.
The learned Subordinate Judge did not set aside the award on the ground of lack of jurisdiction of the arbitrator to enlarge the time for making the award, hut on the other hand, he was of the view that though the hearing of the proceeding was concluded on 14-4-1983. yet the arbitrator withheld the passing of the award for a long period without any valid reason. which amounts to legal misconduct on the part of the arbitrator and on that conclusion he set aside the award in question. From the order-sheet of the arbitrator it does not appear that the hearing of the proceeding was concluded on 14-4-1983. On the other hand the order-sheet indicates that the hearing of the case continued on 15-4-1983, 16-4-1983, 17-4-1983 and on ]7-4-1983, the matter stood adjourned to 14-5-1983. On 14-5-1983, the case could not be taken up as the counsel for the Contractor was absent and the matter was adjourned to 31-7-1983, but on that date as the arbitrator had some personal engagement, the case could not be taken up and on the suggestion of both parties, the case stood adjourned to 26-8-1983. On 26-8-1983. the case also could not be taken up and on the request of the Union Government the case was adjourned to 17-9-1983. On 17-9-1983. further hearing was continued and the matter was again posted to 18-9-1983 and it is on 18-9-1983. arguments for the claimant were concluded and the case was adjourned to 8-10-1983 for arguments of Respondent-Union of India and on 8-10-1983, the matter was adjourned to 9-10-1983 on which date arguments on behalf of the Respondents were heard and the matter, stood adjourned to 18-10.1983. The case could not be taken up on 18-10-1983 on the request of the Advocate for the Union of India and was adjourned to. 25-11-1983, but on that date; the counsel for the claimant as well as for the Respondents prayed for time, as a result of which the case was adjourned to 10-12-1983. On 10-12-1983, the counsel for the Union Government prayed for time till 22-12-1983 and on 22-12-1983, on behalf of the Union certain documents were filed and the arbitrator passed order that the award would be filed on 26-12-1983. The matter was again posted to 26-12-1983. In this view of the matter the basis of the Subordinate Judge that the arbitrator unduly withheld the passing of the award though arguments were concluded on 14-4-1983 must be held to be non-existent and consequently, the ultimate conclusion that the arbitrator committed legal misconduct cannot be sustained. The said conclusion of the learned Subordinate Judge is, therefore set aside.
7. Mr. Misra, the learned Standing Counsel for the Respondents, then urges that even if the conclusion of the Subordinate Judge on the ground of arbitrator committing legal misconduct is set aside yet the Respondents are entitled to urge that the a ward is liable to be set aside on other grounds urged by the Respondents which have been rejected by the Subordinate Judge. In other words, according to him the Respondentsare entitled to support the order of .the Subordinate Judge that was passed in their favour on grounds which have been rejected by the Subordinate Judge.. Mr. Palit for the Appellant does not challenge the aforesaid proposition. In fact, the aforesaid submission of the learned Standing Counsel is in consonance with the provision contained in Order 41, Rule 22, Code of Civil Procedure. It has, therefore, to be examined as to whether the award is question can beset aside on any other grounds urged by the learned Standing -Counsel and the order of the Subordinate Judge rejecting the said objection whether is sustainable in law or not.
8. Before examining the grounds on which it is urged that the award is liable to be set aside, it would be profitable to note the scope and ambit of the power of a Court to set aside an award. Admittedly, the award in the present case is an unreasoned and non-speaking one. When the Court deals with an award, it has not to consider whether the view of the arbitrator on the evidence is justified or not. The arbitrator''s adjudication is generally considered binding between the parties as he is tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases as set out in Section 30 of the Act. It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled him to arrive at his conclusion. It is equally not open to the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of his award. See
9. According to Mr. Misra, the learned Standing Counsel for the Union, Clause 25 of the Agreement provides that an arbitrator must give a reasoned award in case the amount of award exceeds Rs. 50,000/-. In view of the amount under the award in the present case, which is more than Rs. 8 lakhs, the arbitrator misconducted himself in not giving the reasons for the award and, therefore, the award is liable to be set aside. Mr. Palit for the claimant, however, contends that the Arbitration Act nowhere casts an obligation on an arbitrator to give reasons for his award and if an arbitrator does not give reasons, it cannot be said that he has misconducted the proceeding nor the award can be set aside on that score. Mr. Palit further contends that once an arbitrator is not appointed in accordance with the terms of the agreement and on an application being made, the Court appoints an arbitrator, either u/s 8 or u/s 20, the arbitration clause of the agreement no longer exists and, therefore, such arbitrator appointed by the Court cannot be compelled to give reasons for the award even if the claim exceeds Rs. 50,0001-. Besides, according to Mr. Palit, the contract not having been formed a part of the award, it is not open for the Court to look to the document for any purpose whatsoever, Mr. Misra, the learned Counsel for the Union of India, places reliance on the decision of the Bombay High Court in the case of
10. But the question still remains to be considered is as to where by agreement of parties, an arbitrator is required to give reasons where the claim exceeds more than Rs. 50,000/-. can an arbitrator ignore that express covenant in the agreement and pass an award in disregard of the said provision and further if he does so, whether the award can be set aside on the ground of legal misconduct of the arbitrator. The Subordinate Judge in paragraph 12 of the impugned judgment has noted that admittedly Clause 25 of the Arbitration agreement provided for a reasoned award by the arbitrator, in case the amount of award exceeded Rs. 50,000/-. The learned Counsel for the claimant-contractor does not challenge the aforesaid position. He, however, reiterates that since the Act does not require reasons to be recorded the arbitrator can overlook the provisions of the agreement and may not give reasons for the award even if it exceeds more than Rs. 50,000/-. In my considered opinion, an arbitrator who is himself a creature of the contract cannot ignore the express covenant in the contract. The duty of an arbitrator is to enforce the terms of the contract. In M/s; Alopi Prashad''s ease4, where in a contract for supply of ghee, a specific rate had been agreed to between the parties, but the contractor claimed at a higher rate and the arbitrator also awarded a higher sum on account of additional expenses incurred by the contractor, the Supreme Court set aside the award by observing:
... Granting that the Agents had incurred this additional expenditure under the head ''establishment and contingencies when the contract expressly stipulated for payment of charges at rates specified therein, we fail to appreciate, on what ground, the arbitrators could ignore the express covenants between the parties, and award to the Agents amounts which the Union of India had not agreed to pay to the agents...
In Goa, Daman & Diu Housing Board''s case8, on which the learned Standing Counsel for the Union Government places reliance, it was observed after quoting Clause 25 of the agreement, "The said clause, therefore, casts an obligation on an Arbitrator to give reasons for his award in cases where the claim was Rs. 50,000/- and above. In cases of claim being below Rs. 50,000/- there was no such obligation. In this case, it was not disputed that all the claims of the Respondent were above Rs. 50,000/- and, therefore, the Arbitrator who derived his jurisdiction only under the said Clause 25, was bound to give reasons for his award.
The Court then observed:
.... Under the Circumstances, if the Arbitrator were to fail to give reasons for his award in such cases, it would be a misconduct on his part. In this case as pointed out above the Arbitrator not having given reasons for his award, although every claim was above Rs. 50.000/- which he was under an obligation to do under Clause 25 of the agreement, he ''was guilty of misconduct and the award was liable to be vitiated on that ground.....
The aforesaid observations of the Bombay High Court apply fully to the facts and circumstances of the present case and I respectfully agree with the observations of their Lordships of the Bombay High Court. In the Supreme Court case on which Mr. Palit relies Bungo Steel Furniture (Pvt.) Ltd.''s case9, there was no such obligation on the arbitrator in the contract itself and since there was no provision in the Act requiring the arbitrator to give reasons, it was observed by their Lordships that an award cannot be said to be bad on'' account of no reasons being given by the arbitrator.
As has been stated earlier an arbitrator assumes jurisdiction on account of an agreement between the parties and he owes his existence to the agreement itself. If the very agreement provides that in case the claim exceeds Rs. 50,000/-. the arbitrator must give reasons, the arbitrator cannot do away with the obligation on the ground that the Arbitration Act does not require him to give reasons. No doubt, the proceedings before the Arbitrator are regulated by the provisions of the Arbitration Act. But the Arbitration Act nowhere prohibits the parties from agreeing that in case of an arbitration in certain contingency, an arbitrator may be required to give reasons for his award. I am unable to persuade myself to agree with the submission of Mr. Palit that merely because an arbitrator is appointed by the Court in exercise of powers u/s 8 or 20 of the Arbitration Act, the arbitration clause in the agreement perishes. The Court appoints an arbitrator on being satisfied that a dispute exists between the parties and further that the agreement still subsists. It cannot, therefore, be contended by any stretch of imagination that Clause 25 which was the arbitration clause of the agreement and which also stipulated that an arbitrator must record reasons in case the claim exceeded Rs. 50.000/-, cannot be said to have been extinguished on the ground that the arbitrator had not been appointed in accordance with that clause. Mr. Palit''s contention on this score must, therefore, be rejected. In the context of the arbitrator''s duty to enforce the terms of the contract and in the context of the allegation that though parties had agreed that in case of a claim of more than Rs. 50,000/-, the arbitrator must record reasons for the award, yet the arbitrator ignored the said express provision of the contract. It would be open for the Court to look to the contract to find out whether in fact there was any such provision or not. An Arbitrator cannot be permitted to do away with all the requirements of the different provisions of the contract and nor the Court can be prevented from scrutinising the same with reference to the contract on the plea that the contract does not form a part of the award. I would, therefore, reject the said contention of Mr. Palit appearing for the claimant-contractor.
In the D. Brahma''s case9 (supra) on which the learned Subordinate Judge has placed reliance also there was no corresponding provision in the contract requiring an arbitrator to give reasons for the award in case the claim exceeds Rs,50.000/-. Therefore, the said decision can have no application to the present case.
In a Ramanath Agarwala v. Messrs. Goenka & Co. and Ors. AIR 1973 Cal. 153 (F.B.), it was held ;
The position, therefore, is that the arbitration agreement lays down a particular method by which the disputes are to be decided. The arbitrators have not complied with that method - the method of looking into the account books of Messrs. Goenka and Co. and Goenka and Co. (Sales) Ltd. in order to find out the amounts due. In other words, they have not carried out the mandate given to them under the agreement to refer the disputes between the parties to their arbitration. On these facts, we have to hold that they have misconducted themselves and the award has to be set aside.
In the said decision their Lordships have quoted from the Halsbury''s Laws of England and it is profitable to extract the said quotation:
"In the conduct of arbitration proceedings, it is well-settled, the arbitrator or Umpire must conform to any directions which may be contained in the agreement of the reference itself."
In other words, failure of the arbitrator to strictly carry out the mandate in the agreement of reference has been held to be invalidable the award itself. The claim in the present case being more than Rs. 50.000/- and as has been stated in the judgment of the Subordinate Judge that the agreement being to the effect that an arbitrator is bound to give reasons where the claim exceeds Rs. 50,000/- and no reasons having been given it must be held that the arbitrator did not conform to the express covenants contained in the arbitration agreement and thereby committed legal misconduct for which the award in question is liable to be set aside. On this score, therefore, the contention of Mr. Misra, the learned Counsel for the Respondent-Union of India, must be upheld. I would, therefore, reverse the finding of the Subordinate Judge on this aspect and hold that the award in the present case is liable to be set aside on account of the aforesaid legal misconduct of the arbitrator.
11. Mr. Misra, the learned Counsel for the Union of India, then urges that in view of the finding of the Subordinate Judge that the arbitrator tampered with the records and manipulated the order-sheets dated 25-11-1983, 10-12-1983 and 22-12-1983, it must be held that the arbitrator misconducted himself and, therefore, the award is vitiated on that score. The learned Subordinate Judge looking at the order-sheets of those dates came to the conclusion that after the orders were passed, uno fee is charged for the sitting" was subsequently added and the Subordinate Judge found that the same was typed in a different ink from the rest of the order-sheet and according to the Subordinate Judge, the arbitrator became conscious of the fact that in view of his elevation as Lokpal it was not proper for him to charge fees as an arbitrator and, therefore, he added the sentence. But the learned Subordinate Judge came to the ultimate conclusion that though subsequent addition in the order-sheet was irregular yet- it did not amount to misconduct, inasmuch as the arbitrator did not act in a manner prejudicial to the interests of either party and accordingly rejected the submission of the Union Government on this score. Mr. Misra for the Union Government contends that an interpolation of the order-sheet by making some addition behind the back of the parties creates a suspicion in the mind of everybody that the arbitrator wanted to somehow retain the jurisdiction over the dispute and in the event the proceeding would be vitiated on account of his appointment as Lokpal, he purposely interpolated the records by adding the sentence "no fee is charged for this sitting" and this would undoubtedly constitute legal misconduct and the award cannot be sustained. Mr. Palit, on the other hand, contends that it is not open for a Court to look at the order-sheet since the order-sheet does not form a part of the award. I am unable to accept the contention of Mr. Palit. When an allegation is made that an arbitrator has interpolated on different dates in the order-sheet, it would be the bounden duty of the Court to look to the order-sheet of those dates to find out if there has been an interpolation or not. Recently, in the case of State of Orissa and Ors. v. Sri Khemohand Agarwala 63 (987) C.L.T. 34, a learned Single Judge of this Court has held that where an award is challenged on the ground of no evidence, it would be ''permissible for the Court to look to the evidence to have a prima facie view as to whether in fact there was any evidence or not, though the Court cannot adjudge the sufficiency of the evidence. Where an allegation of interpolation of the order-sheet is made, there cannot be any other way than to find out as to whether the allegation has any substance or not and in my view, the Court would be entitled fully to look to the order sheet.
Looking at the order-sheet of the arbitrator of the three dates in question, I entirely agree with the conclusion of the Subordinate Judge that the learned arbitrator inserted "No fee is charged for this sitting" on the order sheet of 25-11-1983 and 10-12-1983 which is apparent from the difference in the types letters. The question which crops up for consideration is as to whether the award can be said to be vitiated on that score or not. Interpolation of an order-sheet whether it is a quasi-judicial or an administrative proceeding, is a serious matter irrespective of the fact as to the consequences of such interpolation. Clause (c) of Section 30 of the Arbitration Act stipulates that an award can be set aside on the ground that it has been improperly procured or is otherwise invalid. The expression "is otherwise invalid" contemplates an objection to the award on the ground of invalidity from any cause whatsoever. It covers a much wider field to challenge an award It is one of the cardinal principles that an arbitrator must act fairly and impartially. If the arbitrator functions in a manner not befitting his role, an award in such an event may be invalid on the ground of being "otherwise invalid", though a case of misconduct is not clearly made out. It is in this context that the alleged interpolations made by the arbitrator on 25-11-1983 and 10-12-1983 a re to be adjudged. The arbitrator in the present case was a retired Judge of this Court. He was appointed as a Lokpal and he assumed the said office on 17-11-1983. The Union Government was taking a plea that since u/s 4 of the Orissa Lokpal and Lokayuktas Act, 1970 (Orissa Act 1 of 1971), a Lokpal cannot hold any office of profit, the arbitrator ceases to continue as'' an arbitrator from the date he assumes office of Lokpal. The Union Government had carried the matter in a writ petition to this Court. At the moment, I am not concerned with the susceptibility of that contention on merits, But in the present case, the conclusion becomes irresistible that just to get over the provision of Section 4 of the Orissa Lokpal and Lokayuktas Act, the Arbitrator inserted in the order sheets of those dates to the effect that "no fee is charged for this sitting" just to prove that he was not holding any office of profit on those dates. It is not expected of a person of the stature of the arbitrator, retired Judge of this Court to make such insertions in the order-sheets behind the back of the parties to give an impression to any party that the arbitrator is bent upon retaining jurisdiction over the dispute at any cost. It is not expected of a man who throughout his career as a Judge must not have passed any order behind the back of the parties and must not have made any alterations in the order-sheet subsequently, to make such an alteration as in the present one irrespective of the fact that such alteration would not prejudice either of the parties. Such conduct of the arbitrator in my view, raises an inference that he was not acting fairly and did not function in a manner befitting his role which renders the award invalid within the expression "otherwise invalid" occurring in Section 30 (c) of the Arbitration Act. The alleged interpolations assume greater dimension and significance in the context of the challenge by the Union that the arbitrator ceases to continue as arbitrator with effect from the date he assumes the'' charge as Lokpal. Accordingly, disagreeing with the conclusion of the learned Subordinate Judge on this score, I must hold that the award is otherwise invalid on account of the interpolations made by the arbitrator on 25-11-1983 and 10-12-1983 since in my opinion, the arbitrator has acted in a manner not befitting his role and, at any rate, has not acted fairly. The award of the arbitrator, therefore, must be set aside on this ground.
12. Mr. Misra, the learned Standing Counsel for the Union Government, also contends that Section 4 of the Orissa Lokpal and Lokayuktas Act prohibits a Lokpal from holding any office of profit and, therefore, au arbitrator who was continuing as an arbitrator must be held to have ceased to have jurisdiction over the dispute. I am unable to agree with the contention of Mr. Misra on this score. The arbitrator is appointed to decide a dispute in view of an agreement between the parties and the proceeding before the arbitration is regulated by the provisions of the Arbitration Act. There is no provision in the Arbitration Act which says that an arbitrator automatically ceases to have jurisdiction to decide the dispute pending before him on account of some embargo on him in any other Act. Even under the Orissa Lokpal and Lokayuktas Act, Section 4 prohibits a Lokpal from holding any office of profit. In other words, a person holding an office of profit may be disqualified for being appointed as a Lokpal but it cannot be construed to mean that he ceases to hold any other office which he was holding prior to the date of his appointment as Lokpal. If the post of an arbitrator is construed to be one of office of profit, then the appointment of the arbitrator as Lokpal may be nullified but not that his continuance as an arbitrator would ipso facto cease. In my view, therefore, the Subordinate Judge was fully justified in rejecting the aforesaid submission of the Union Government.
13. Another contention which has also been seriously pressed before me is that on 24-12-1983. the arbitrator was informed in writing by the counsel appearing for the Respondent Union Government, not to pass an award since the Union wants to move the High Court in that aspect. In fact, the Union Government did move this Court in O.J.C. Nos. 2866 and 2867 of 1983 which came up for admission on 31-12-1983 and an order of stay was passed, but the arbitrator pad signed the award earlier to that date. According to Mr. Misra, the arbitrator passed the award with unusual haste even on being informed about the fact that parties are moving the High Court just to frustrate an order of stay which may be eventually passed. According to Mr. Misra, such unusual conduct of the arbitrator must be held to be a legal misconduct. I am, however, not in a position to agree with the learned Counsel, Mr. Misra. An intimation by a party that he intends to move the higher forum would not be sufficient for an arbitrator to stay his hands. In the present case, the time for submission of the award was to expire on 27-12-1983. It is not disputed that the counsel for the Union Government did intimate the arbitrator that the Union Government was moving the High Court in the matter and requested him to stay his hands. But such a request was made only on 26-12-1983 at 5.00 p. m. by filing a memo to that effect, as would appear from the order-sheet of the arbitrator. The arbitrator had been appointed as Lokpal on 17-11-1983. If at ail the Union Government was serious to challenge the continuance of the arbitrator on the ground that be is ineligible to continue as an arbitrator on account of his appointment as Lokpal then there is no reason as to why they waited till the last day and filed a memo only on 26-12-1983. On the other hand, the learned Standing Counsel for the Union Government participated in the proceeding on 10-12-1983 and 22-12-1983 subsequent to the appointment of the arbitrator as a Lokpal. In the circumstances, the arbitrator was fully justified in rejecting the memo and passing the award since the time for submission of the award was expiring on 27-12-1983. In fact, on 22-12-1983, the arbitrator had declared that he would pass the award on 26-12-1983. It cannot be said that the arbitrator passed the award to overreach the Court and to frustrate an eventual order of stay from the Court. The mere expression of a desire to move a Court of law by one of the parties does not oblige the arbitrator to keep the award pending till the matter goes to the Court and the Court passes an order. There is nothing in the arbitration law which automatically stays the hands of the arbitrator on the expression of desire by one of the parties that he is moving the Court either to revoke the reference or to set aside any order passed by the arbitrator. In this view of the matter, and in the facts and circumstances of the present case, I am unable to hold that there was any misconduct on the part of the arbitrator by passing the aware without waiting for an order from the Court, merely because the counsel for the Union Government had filed a memo that he was moving the Court in this regard particularly when the parties knew that the time for submission of the award would expire on 27-12-1983 and the arbitrator had been appointed as Lokpal on 14-11-1983 and parties including the Union Government had appeared before the arbitrator on dates subsequent thereto. The contention of Mr. Misra, in this regard, therefore, is rejected.
14. In the ultimate result, therefore, though I have set aside the ground on which the Subordinate Judge has interfered with the award, yet the award in question has to be set aside on the ground of legal misconduct of the arbitrator and this appeal must fail. Accordingly, the appeal is dismissed, but there would be no order as to costs.
