An Ex Parte Award in Arbitration Is Invalid: Jammu and Kashmir High Court

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A petition was filed by the appellants through the medium of instant appeal challenging the judgment dated 31.05.2007 passed by the Court of Additional District Judge, Jammu in the case of Roshni Devi vs. Union of India and Ors.

Facts

A contract bearing No. LEJK-11/83-84 for providing the married accommodation to the officers at Udaipur was allotted to a contractor named Vishnu Kumar Gupta (deceased predecessor in interest of the respondents).

On 07.10.1986, the deceased signed the final bill with a declaration that he had no further change and the said final bill was paid to the deceased contractor on 03.04.1987. On 14.07.1988, the deceased intimated the department, the statement of unpaid items of work. According to the facts, the appellants herein were aware of the statement. The claims were refused by the appellants after whom the deceased contractor filed Arbitration Petition No. 302/1989 in Court. The petition demanded the appointment of an arbitrator under Section 20 of The Arbitration Act.

On 17.03.1997, District Judge Jammu allowed the petition directing the Engineer-in-chief Army HQ to appoint an arbitrator within one month. A letter dated 10.06.1997 appointed Brig. G R Sud as an arbitrator. The parties submitted their claims and pleadings before him. Lately, the arbitrator resigned and a new one came named Brig. T K Mittal.

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On 14.07.1988, the deceased stated that 21 claims were preferred by him totalling 7.89 lakh. But by 12.04.1977, it increased to 32 claims amounting to 14.12 lakh. On 25.03.1998, the arbitrator asked the parties to forward their confirmation of earlier submission of their claims and also stated to have fixed the hearing of the case on 15.07.1998 in the office of chief engineering Udhampur zone, Udhampur. Notices were sent by the arbitrator notifying that in case either party fails to attend the hearing shall proceed with reference ex parte.

On 24.06.1998, the arbitrator finally passed the award. The respondent filed a petition under Section 30/33 of the act before the Court of Additional District Judge Jammu. On 31.05.2007, the Court impugned the petition in the instant appeal.

Arguments before the Court 

Learned counsel for the appellants while making submissions reiterated the contentions raised and grounds urged in the memo of appeal whereas learned counsel for the respondents resisted and controverted the contentions raised and grounds urged by the counsel for the appellants.

Court’s observation 

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The Court observed that all the records and documents were submitted. The Court intended to deal with the fundamental and primary issues as to whether the arbitrator denied an opportunity of hearing to the claimants/respondents herein resulting in the passing of the ex parte award. The question of the right of an arbitrator to proceed ex parte has relied upon the case Juggilal Kamlapat appellants vs. General Fiber Dealers Ltd. Respondents. A further reference to the judgment of the Apex Court passed in the case titled Food Corporation of India vs. Joginder Pal Mohinder Pal and Anr. was taken.

Court’s decision 

The Court held that the arbitrator had failed to provide a reasonable opportunity of hearing to the claimants/respondent. The arbitrator had misconducted and thus rightly set aside the award and passed the impugned Order within the parameters and principles of law occupying the field. Thus, the Court held the appeal entailed dismissal and judgment dated 30.15.2007 was passed by the Court.

Click here to read the judgement.


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