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Neither should be sacrificed nor inflated, as to prolong or trample a just and fair adjudication.: Supreme Court

A pragmatic and common-sense approach would invariably check any discord between the desire for expeditious disposal and adequacy of opportunity to establish one’s case as upheld by the Hon’ble Supreme Court through the learned bench led by Justice Sanjiv Khanna in the case of M/S. Narinder Singh and Sons v. Union of India (CIVIL APPEAL NO. 6734 OF 2021).

The brief facts of the case are that M/s. Narinder Singh and Sons, vide letter dated 27th January 1993 was awarded tender by the respondent namely, Divisional Superintendent Engineer-II, Northern Railway, Punjab, for additional washing line to accommodate 26 coaches at Jammu Tawi Railway Station. Disputes arose when the respondent terminated the contract vide letter dated 03rd April 1996 due to stated non-performance and repeated lapses by the appellant. The appellant invoked the arbitration clause as per the contract agreement and in response, the General Manager, Northern Railways satisfied with the existence of the disputes, appointed an arbitrator. The appellant approached the District Court for termination of the mandate of the appointed arbitrator and substitution with an independent Arbitrator. The District Judge, Gurdaspur appointed Mr. Justice A.L. Bahri (Retd.) as the sole arbitrator. The respondent filed a Civil Revision Petition before the High Court against the order of the District Judge, Gurdaspur, which set aside the order of the appointment on the ground that the appointment of the arbitrator could only be done by the Chief Justice or any other Judge nominated by him. Finally, in the proceedings before the Chief Justice of the Punjab and Haryana High Court at Chandigarh, Mr. Justice A.L. Bahri (Retd.) was again appointed as the arbitrator. The learned arbitrator, thereupon, pronounced an ex parte award against the respondent on 27th November 2010. Resultantly, the respondent had filed objections under Section 34 of the Arbitration and Conciliation Act, 1996 before the Additional District Judge, Gurdaspur, which were dismissed. However, the respondent succeeded in its appeal before the Punjab and Haryana High Court at Chandigarh, which, vide impugned judgment dated 24th October 2017, accepted and set aside the award primarily on the ground that the arbitrator had violated principles of natural justice and had proceeded with great haste and hurry. On the question whether the Court could remand the disputes to the Arbitrator, the impugned judgment holds that the court remand was impermissible, but the parties were at liberty to approach the arbitrator for fresh adjudication or avail any other remedy permitted by law, while stating that the period spent in the arbitration proceedings and the resultant litigation should be excluded in terms of Section 43(4) of the Act.

During the course of hearing before the Hon’ble Court, Mr. Ashish Verma, learned counsel for the appellant, and Mr. Sanjay Jain, learned Additional Solicitor General appearing for the respondent, have agreed that the Court may appoint an arbitrator for adjudication of the disputes, which prayer we accept.

After the perusal of the facts and arguments by the respective parties, the Hon’ble Court held, “In the context of the present case, we agree with the High Court that there was unnecessary haste and hurry by the arbitrator, especially when the respondent had filed the affidavit by way of evidence on 21st October 2010. We hereby appoint Mr. Justice S.N. Aggarwal, a retired Judge of the Punjab and Haryana High Court, as the arbitrator to adjudicate and decide the said disputes. We hope and trust that the parties would cooperate with the learned arbitrator now appointed to ensure expeditious disposal. We also clarify that the question of award of interest, preference and pendente lite, is left open to be decided by the arbitrator, without being bound by the findings of the High Court in the impugned order.”

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Judgment reviewed by Vandana Ragwani

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