TaxTMI 
TaxTMI 
2019 (7) TMI 1234
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent No.1 herein had assailed the order dated 06.11.2006 passed by the Principal District Judge, Nagpur in MCA No. 538/2006 in the proceedings under Sec. 34 of the Act, 1996. 2. The brief facts are that the respondent No.1 herein owns a cold storage at Nagpur. Sri Suresh Wadhwani manages the same. The appellants herein who are the sons of Sri Bhaiyalal Jain are engaged in business as commission agents for agricultural products. In that regard they had utilised the services of cold storage during the year 2004 for keeping 50 bags of 'Shingada' which is an agricultural product. According to the appellants herein the respondent No. 1 had failed to store the goods in an appropriate manner which had caused damage to the same. The appellan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ming it as inconsequential, the learned Arbitrator proceeded with the matter in the absence of the appellants herein and passed the award dated 08.08.2006 directing the appellants herein to pay the claim amount as ordered. The learned Arbitrator also imposed a cost of Rs. 43,000/on the appellants. It is in that light the appellants claiming to be aggrieved filed the petition under Sec. 34 of the Act, 1996 before the District Judge, Nagpur raising objection to the award, more particularly with regard to the conduct of the learned Arbitrator. The learned District Judge while appreciating the same was of the opinion that the learned Arbitrator had in fact acted as a counsel for Sri Suresh, a partner of respondent No. 1, which fact was not disc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Court in this petition. 5. Having heard the learned counsel for the parties at length, it is noticed that issues arising herein for consideration at the threshold is with regard to the existence or otherwise of the Arbitration clause governing the parties and more particularly with regard to the conduct of the Arbitrator. It is only if the said two hurdles placed at the threshold is crossed, the question of considering the merits of the claim and the correctness or otherwise of the award passed by the learned Arbitrator would arise for consideration. 6. On the issue relating to the validity of arbitration clause, the learned counsel for the appellants would contend that the clause relied upon by the respondent No.1 to raise the claim ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s filed the vakalat in Mesne Profit Case No.7/2004 to which Sri Prakash, one of the partners of the respondent No.1 herein was a party. Though it is sought to be made out that the said Sri Prakash has nothing to do with respondent No.1, as pointed out by the learned counsel for the appellants, the supporting affidavit for making the solemn affirmation in respect of the First Appeal No.180 of 2007 filed under Section 37(1)(b) of the Act, 1996 relating to this very proceeding is made by the said Sri Prakash. Thus, it is clear that Sri S.T. Madnani, learned Arbitrator had acted as a counsel in another case for one of the parties to the dispute in the instant case. In that circumstance it is also not a case where the learned Arbitrator had proc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n arbitrator, he shall disclose in writing any circumstance likely to give rise to justifiable doubts as to his independence or impartiality." If the above provision is kept in view, though technically as on 27.02.2004 when the storage receipt was drawn out and the Arbitration Clause came into existence there was no circumstance for disclosure of the present nature, it is seen that he has immediately thereafter, on 29.03.2004 filed the vakalat for one of the parties. Thus, as on 03.06.2006 when the claim was lodged before the learned Arbitrator both the events of, he being appointed as an Arbitrator and also as a counsel in another case had existed, which was well within the knowledge of Sri. S.T. Madnani and in that circumstance, it was....