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TMI Blog2003 (8) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... per month for the year 1997. The petitioner constructed godown measuring 40 × 100 ft. with asbestos roof. She also constructed an office room with dimensions 20 × 40ft. with RCC roof. Subsequently, the licence was granted for yet another period of seven years from 15-7-1997 to 14-7-2004 on yearly licence fee of Rs. 1,88,100 (monthly licence fee comes to Rs. 15,675). Accordingly, a deed of licence was executed on 9-8-1996. In this case, we are not concerned with other details. Under Clause 19 of the deed of licence, any dispute regarding contract arising out of the licence has to be referred to the Chairman of Airports Authority of India. In case the Chairman is not willing to act as arbitrator, the dispute has to be referred to a person nominated by the Chairman and the award of the arbitrator is final and binding. 3. In 1999, there was a demand to pay increased licence fee. The petitioner approached this Court challenging the demand. The writ petition being W.P. No. 23592 of 1999 was dismissed by a learned single Judge of this Court on 8-6-2000. The petitioner's writ appeal being W.A. No. 706 of 2000 was also dismissed on 17-8-2000. The petitioner's attempt to seek sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng this Court to vacate the interim order dated 10-11-2002. As the submissions for the purpose of interlocutory application and the main writ petition are the same, the matter was heard finally on 4-8-2003 and is being disposed of at the interlocutory stage with the consent of both the counsels. 6. In the elaborate counter-affidavit filed by the second respondent, it is stated that though the first respondent initially granted 30 days for filing statement of facts, the said period was extended by granting additional time of 21 days so as to file claim petition. Pursuant to the communication dated 17-9-2002 extending time, the second respondent filed a claim petition with necessary documents within the additional time granted. It is also contended that the arbitrator is well within his power to grant additional time for filing claim statement/petition. Strong reliance is placed on section 23 read with section 25 of the Arbitration Act in support of the case. It is also contended that section 25(a) is not mandatory and whenever a party initiating arbitral proceedings fails to file statement of facts, the same does not result in termination of proceedings. 7. Learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties or under the procedure is not successful, the arbitral tribunal shall continue the arbitral proceedings and make the award. Such award can be challenged in accordance with section 34 of the Act. Chapter VI of the Arbitration Act deals with jurisdiction of arbitral tribunal. Section 17 empowers arbitrator to pass interlocutory orders as a measure of protection in respect of the subject-matter of the dispute. Section 16 of the Act reads as under : "16. Competence of arbitral tribunal to rule on its jurisdiction.--(1) The arbitral Tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement and/or that purpose-- (a )an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b)a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. (2) A plea that the arbitral Tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rohibition, Quo Warranto and Certiorari for the enforcement of any of the Fundamental Rights contained in part III of the Constitution but also for any other purpose. 15. Under article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But, the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order of proceedings are wholly without jurisdiction or the vires of an Act is challenged. ..." (p. 26) Further, I am of the considered opinion that when the special enactment empowers an authority to adjudicate questions of jurisdiction and questions of exercise of jurisdiction, that is to say, error of jurisdiction and error within the jurisdiction, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements. (2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit. (3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it. 25. Default of a party.--Unless otherwise agreed by the parties, where, without showing sufficient cause,-- (a )the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral Tribunal shall terminate the proceedings; (b)the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party or within the period of time determined by the arbitral tribunal, the proceedings have to be terminated. Further, section 25 opens with a phrase "unless otherwise agreed by the parties, where, without showing sufficient cause.....". 17. Section 25(a ) of the Arbitration Act empowers the arbitrator to terminate the proceedings only when the party fails to show sufficient cause for not filing the statement of facts within the period as stipulated under section 23(1) of the Act. If, in a given case, the parties have agreed on the procedure to be followed by the arbitral Tribunal including time schedule under section 19(2) and such procedure enables the arbitrator to condone the delay in filing the statement of facts for sufficient cause, section 25(a) has no application. In yet another given case, where the party has not agreed to a procedure to be followed by the arbitral tribunal, but, under sub-section (3) of section 19 read with section 23(1), the arbitral tribunal has laid down the procedure for the arbitral proceedings including the power to permit the parties to file statement of facts or claim petition beyond the period agreed, section 25(a) has no application. In eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst respondent who is arbitrator issued a communication dated 31-7-2002 commencing the arbitration proceedings. The said communication, in my considered opinion, contained the procedure prescribed by him under section 19(3) read with section 23(1). The arbitrator also prescribed time schedule for filing statement of facts, for filing counter statement for filing rejoinder to the counter statement, and for conclusion of arbitral proceedings. The communication, no doubt, does not lay down any rule that in case of delay it is open to the arbitrator to condone the delay and accept the statement of facts or counter statement. But one thing is clear. When the arbitrator himself prescribed procedure and the parties did not agree for any procedure which is followed by the arbitral tribunal, was it proper to the arbitrator to suo motu extend the time for filing the statement of facts by the second respondent? This can be appreciated by referring to the impugned order dated 17-9-2002 by the first respondent which reads as under: "In the above case, the claimant was directed by reference Ref. No. AAI/NAD/SR/GM(F)/HY/2002-ARB dated 31-7-2002, to file the statement of facts within 30 days from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eadings, it can certainly be a situation where unfairness would be meted to the other party, if the proceedings are not terminated. 21. It is axiomatic that in the conduct of proceedings, the arbitral tribunal has to follow the procedure contemplated under the statute and it should also act having regard to the principles of fairness and natural justice. In every arbitration, there are implied rules of procedure. An arbitrator should be impartial and give a reasonable opportunity to each party to present his case. Even in the matter of imposing limits as to time, the arbitrator is competent to allow some gratitude to the party having regard to the principles of fairness. In the treatise by Russel on Arbitration, 21st edition (Sweet & Maxwell) at page 193, para 5.056, the following passage appears. Limits, A party is required to comply with procedural orders and directions from the tribunal, including those imposing limits as to time and content of submissions and evidence. On the other hand, if the tribunal's directions in this regard can be said to be unfair or to operate unfairly against one of the parties, that party may have a genuine ground of complaint. In practice the trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated under section 25(a) for the reason that parties have not filed the pleadings within the time stipulated by the arbitrator, the same would violate the principles enunciated in sub-section (2) of section 28 of the Act. The said sub-section lays down that "the arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorized it to do so. The phrase 'ex aequo et bono' connotes that the issues in the arbitral proceedings can be decided on the basis of what is fair and right (See Oxford Companion to Law by David M. Walker 1980, p. 444). An arbitrator has to act as amiable compositeur and unite the parties together, though he cannot ignore the rules of substantive law as applicable to decide the dispute. If the parties consent for arbitration and the reference is conducted, the principles of fairness cannot be forgotten. That is precisely the purport of sub-section (2) of section 28. Therefore, the submission of the learned counsel for the petitioner is misconceived. 22. In the event the arbitrator extends time for filing statement of facts and proceeds further and passes an award whether the award is vitiated? I am afraid, I can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion would be mandatory or directory. If an object of the enactment is defeated by holding the same directory, it should be construed as mandatory whereas if by holding it mandatory serious general inconvenience will be created to innocent persons of general public without much furthering the object of enactment, the same should be construed as directory but all the same, it would not mean that the language used would be ignored altogether. Effect must be given to all the provisions harmoniously to suppress public mischief and to promote public justice." In the same decision, it was observed as under: Where the language of statute creates a duty, the special remedy is prescribed for non-performance of the duty. In Craies on Statute Law (7th Edn.), it is stated that the court will, as a general rule, presume that the appropriate remedy by common law or mandamus for action was intended to apply. General rule of law is that where a general obligation is created by statute and statutory remedy is provided for violation, statutory remedy is mandatory. The scope and language of the statute and consideration of policy at times may, however, create exception showing that the Legislature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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