TaxTMI 
TaxTMI 
2002 (1) TMI 1249
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....lefilms. d. Delivery of 50 shares of SBI. e. Delivery of 3,500 shares of ICICI and dividend thereof. 2. The respondent No. 3 appointed Mr. Justice T.R. Handa (Retd.) as the sole arbitrator to adjudicate upon these disputes. The arbitrator has given his award dated 12-3-2001 as per which the petitioner is called upon to pay a sum of Rs. 16 lakhs to the respondent No. 1. It is this award which is challenged by the petitioner by filing the instant petition under section 34 of the Arbitration and Conciliation Act, 1996 ('the Act'). 3. Before we proceed to take note of the nature of objections, it would be appropriate to scan through the records in order to find out as to how the proceedings were conducted by the arbitrator which led to passing of the impugned award. This exercise is undertaken because of the reason that the main thrust in this petition is on the procedure adopted by the arbitrator in rendering the award which according to the petitioner, is in conflict with some provisions of the Act. 4. Mr. Rajiv Gupta is the managing director of the petitioner company. He and the respondent No. 1 are real brother and sister. When the respondent No. 2 was appointed as t....
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....r parties- 1.Mr. B.K. Gupta. 2.Mr. Tarseem Aggarwal. 3.Mr. M.L. Aggarwal. 4.Mr. Surinder Soni. have been contacted by me and they all have agreed to come for hearing on 12-3-2001 at 4.30 PM in NSE. I hope you will give due consideration and help me get justice. Thanking you, Sincerely yours Sd Dr. Anju Gupta 17/2/ Shakti Nagar Date 7-3-20017211838, 7111932." 7. On 12-3-2001 out of the aforesaid four persons, three persons presented themselves before the arbitrator and Mr. Surinder Soni could not appear. When the proceedings started, the parties agreed as under : "12th March, 2001 Statement of Dr. Anju Gupta claimant and Sh. Rajiv Gupta for self and for respondent No. 1. Vide our statement dated 5-3-2001, we had agreed to be bound by the verdict of S/Shri B.K. Gupta, M.L. Aggarwal, Tarseem Aggarwal and Surinder Soni in who we have full confidence. Three of them S/Sh. B.K. Gupta, M.L. Aggarwal and Tarseem Aggarwal are present today but Sh. Surinder Soni could not come present today. We now agree that the award in this case may be made as per unanimous verdict of the three persons present, namely, S/Sh. B.K. Gupta, M.L. Aggarwal and Tarseem....
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....on contained in section 31 of the Act. He also relied upon the judgment of the Apex Court in the case of Skypak Carriers Ltd. v. Tata Chemicals Ltd. 2000 (5) SCC 294. 11. On the other hand, Mr. R.K. Aggarwal, the learned counsel appearing for the respondent No. 1 referred to the record of the proceedings before the arbitrator on the basis of which his plea was that keeping in view the relation between the parties, right from the word go, the parties intended to settle the dispute and not to adjudicate. Therefore, it was for this reason that the three persons, mutually acceptable to both the parties, were called upon to intervene who had thought it fit that the petitioner pays a sum of Rs. 16 lakhs with interest to the respondent No. 1. The award was, in these circumstances, in the nature of settlement and not result of any adjudication. The learned counsel referred to the provisions of the Act to demonstrate that one of the avowed objectives of the Act was to persuade the parties to settle the matter amicably and section 30 as the Act specifically provided for the same. 12. I have given my thoughtful consideration to the arguments advanced on either side. The petitioner being....
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.... manner in which the proceedings initiated which progressed and culminated in the impugned award leaves an impression that after the three persons had come to the conclusion that the petitioner should pay a sum of Rs. 16 lakhs to the respondent No. 1, it was agreed upon by the parties. 13. The underline theme in the new Act, i.e., persuading the parties to settle the matter amicably runs through the various provisions of the Act. It may be mentioned that in the Arbitration Act, 1940 the role of the arbitrator was only as an adjudicator and the arbitrator could not decide as 'amiable compositeur' or give any decision according to what was just or reasonable. As an adjudicator, he had to decide according to law. However, section 28(2) of the new Act recognized such a power with the arbitrator provided the parties have expressly authorised to do so. Keeping in view spirit of this provision on the very first day, the arbitrator expressed his desire that parties settle the matter amiably. The parties in fact agreed upon the same. In this manner, the parties had authorised the arbitrator to decide the matter amiable compositeur. The difference was that instead of asking the arbitrator....
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....he tone of amiable settlement set in from day one of the arbitration proceedings and the parties did not adopt adversarial stance. 17. Secondly, section 30 does not limit the settlement through mediation and conciliation but envisages 'other procedure as well'. Here other procedure is the 'verdict' (verdict used in loose sense and not in the sense of adjudication) of the three persons in whom both the parties had availed. They themselves decided the matter and gave their 'verdict' more as family members rather than adjudicators. 18. Thirdly, the award can be challenged on the grounds that are mentioned in section 34. None of the grounds raised by the petitioner comes within the four corners of section 34. Once, it is held that the procedure having been adopted was the procedure as agreed between the parties, and therefore, it did not amount to any delegation by the arbitrator of his adjudicatory powers and further that section 73 of the Act had no application in such matter, on merits, the only ground available to the petitioner under section 34 on which the petitioner could succeed was if the award was in conflict with the public policy of India. Far from it, the arbitral aw....