Roy Vs. Calcutta Metropolitan Development Authority & ANR  INSC 179
(20 July 1987)
SABYASACHI (J) MUKHARJI, SABYASACHI (J) OZA, G.L. (J)
1988 AIR 205 1987 SCR (2) 569 1987 SCC (4) 217 JT 1987 (3) 160 1987 SCALE
INFO : R 1988 SC2045 (2)
Act, 1940; s. 20--Arbitrator appointed by Court--Parties submitting to his
jurisdiction by filing claims, attending sittings--Challenge to appointment
24 of the arbitration agreement between the parties provided for reference of
all questions of dispute arising under the contract to the sole arbitration of
the Director/Unit Heads of the respondent Authority, not connected with the
particular work. All such officers having already expressed their opinion in
respect of the disputes that had arisen, the appellant apprehended that he may
not get justice or proper relief. He, therefore, moved an application under s.
20 of the Arbitration Act for appointment of an independent member of the bar
as arbitrator instead of the named officer of the respondent Authority.
Single Judge of the High Court held that the arbitrator named had disqualified
himself on the ground of bias and appointed an outside advocate as the sole
arbitrator on April 19, 1983. When arbitration proceedings commenced both the
parties submitted to his jurisdiction and filed their respective claims and
documents. Upto November 1985 the said arbitrator held 74 sittings which were
attended by the parties of both sides and their counsel. Respondent No. 1 had
moved three interlocutory applications. Both the parties got extension of
arbitration proceedings at least 4 times upto November 1985.
No. 1 challenged the validity of the order of appointment of arbitrator dated
April 19, 1983 in the year 1985, when another Single Judge took the view that
if the court was bound to enforce the particular agreement with which the
parties came to the court, the parties were not entitled to have any fresh opportunity
to appoint a new arbitrator as that would amount to a new agreement between the
parties. He further observed that no appointment can be made by the Court on
the ground of disqualification of the arbitrator without having proper
materials on record and without coming to a definite finding on this point.
Until then the Court did not have the jurisdiction to appoint 570 any new
arbitrator and had to follow the correct machinery.
order of the Single Judge dated December 8, 1986 set- ting aside the earlier
order dated April 19, 1983 was as- sailed in the appeal by special leave.
the appeal, this Court,
Long participation and acquiescence in arbitration proceedings preclude a party
from contending that the proceedings were without jurisdiction. The principle
is that a party shall not be allowed to blow hot and cold simultaneously.
[573F] Basically the principle of Waiver and estoppel is not only applicable
where the award had been made but also where a party challenges the proceedings
in which he participated.
the instant case, there was no demur but something which can be called
acquiescence on the part of the respondents or which precludes them from
challenging the participation.
Arbn. Jupiter General Insce. Co. Ltd. v. Corporation of Calcutta, A.I.R. 1956
Calcutta 470 at 472; Chowdhury Murtaza Hossein v. Mussumat Bibi Bechunnissa, 3
I.A. 209; N. Chel- lappan v. Secretary, Kerala State Electricity Board &
Anr.,  1 S.C.C. 289 and Russel on Arbitration, 18th Edn. p. 105, referred
Appellate Jurisdiction: Civil Appeal No. 1466 of 1987.
the Judgment and Order dated 8.12.1986 of the Calcutta High Court in Matter No.
1636 of 1985.
Sen, Shanker Kumar Ghosh and D.P. Mukherjee for the Appellant. S.N. Kacker and
G.S. Chatterjee for the Respondents.
Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. Special leave
granted. this is an application challenging the order of the learned single
judge dated the 8th December, 1986 of the High Court of Calcutta. By the
impugned judgment the said learned Judge has set aside the order dated the 19th
April, 1983 of another learned single judge on the ground, inter-alia, that the
first learned Judge, when she passed the order, acted with- out 571 jurisdiction.
There was an arbitration agreement. Clause 25 of the said Agreement, inter
alia, was as follows:
where otherwise provided in the contract all questions of disputes relating to
the granting of specifications, designs, drawings and instructions here in before
mentioned and as to the quality of workmanship and materials used in the work
or as to any question claims, rights, matters, or things whatsoever in any way
arising out of or relating to the contract, designs, drawings, specifications,
estimates, instructions orders or these conditions or otherwise concerning the
work or execution or failure to execute the same where arising during the
progress of the work or after completion or abandonment thereof was to be
referred to sole arbitration of the Director/Unit Head, C.M.D.A. not connected
with the particular work as may be appointed by the authority. The award of the
arbitrator shall be final, conclusive and binding on all the parties to the
contract." On that basis the appellant had moved an application for
removal of the named arbitrator before the first learned Judge which came up
for hearing on 19th April, 1983 and this was by filing of an application under
Section 20 of the Arbitration Act for an order for filing the arbitration
agreement, for appointment of an arbitrator and for other consequential
reliefs. By the order, dated 19.4.83 the said learned Judge has recorded the
facts of this case and further recorded that by virtue of the Clause 25 of the
agreement the appellant herein and prayed for appointment of an arbitrator for
determination of the dispute that had arisen which had been set out in
paragraph 15 of the petition.
as according to the appellant the directors of all the units of Calcutta
Metropolitan Development Authority had already expressed their opinion in
respect of the disputes that had arisen between the appellant and the
respondent and inasmuch as by the Central Tender Committee, the directors were
members. Under the circumstances the appellant apprehended that the appellant
might not get justice or proper relief under such circumstances. There was
reasonable basis of the apprehension against the unnamed arbitrator, and it was
urged that instead of appointing any officer of the respondent as arbitrator an
independent member of the Bar be appointed as arbitrator. The learned Judge
passed such order on 19th April, 1983 while recording these facts as alleged by
the petitioner. These appear to have been reasons for appointing Sri Amitav
Guha as the arbitrator in this case in terms of prayer (c) of the said
The learned judge in the impugned order has observed that the Court was bound
to enforce the particular agreement with which the parties came to the Court,
and the parties were not entitled to have any fresh opportunity to appoint a
new arbitrator as that would amount to a new agreement between the parties.
This position is good in so far as it goes. But that does not solve the problem
in all situations.
learned Judge also observed that no appointment can be made by the Court on the
ground of disqualification of the arbitrator without having proper materials on
record and without coming to a definite finding on this point. The learned
Judge further observed that the Court either should have given effect to the
agreed machinery for appointment of the arbitrator or it could have appointed
afresh after coming to a clear finding that all directors of the Unit of
C.M.D.A. were biased against the appellant herein as well as they had rendered
themselves disqualified from being appointed as arbitrators. Until all of them
were found disqualified, the Court did not have the jurisdiction to appoint any
new one and had to follow the correct machinery.
appears that the first learned Judge has in fact held that the arbitrator named
had disqualified himself on the ground of bias and on that basis, appointed an
outside Advocate, Shri Amitav Guha as the arbitrator. If the respondents were
not satisfied they could have moved an appeal against the order; instead respondents
participated in the arbitration proceedings and acquiesced in such appointment.
order was made on 19.4.83 appointing Shri Amitav Guha an advocate of the
Calcutta High Court as sole Arbitrator. The arbitrator appointed, started
arbitration proceedings in which both the parties submitted to his jurisdiction
and filed their respective claims and other documents in support thereof. It
appears from the List of Dates submitted before us that respondent No. 1 moved
three interlocutory applications at different points of time which were,
however, disposed of with orders in favour of the appellant. Both parties got
extention of the arbitration proceedings even by Hon'ble Mrs. Justice Pratibha
Bonnerjea at least 14 times and the last extention was granted upto November,
1985 by Justice Mrs. Bonnerjea. In the meantime the said Arbitrator had held 74
sittings which were attended by the parties of both sides and their counsel. A
large amount of time and money, same at the cost of public have been spent on these.
the year 1985 the respondent No. 1 challenged the validity of the order of
appointment of arbitrator passed by first learned judge Where she acted on the
basis of the findings mentioned hereinbefore.
a party be permitted to do that? In Arbn. Jupiter General 573 INSC. Co. Ltd. v.
Corporation of Calcutta, (A.I.R. 1956 Calcutta 470 at 472) P.B. Mukherji, J. as
the learned Chief Justice then was observed:
is necessary to state at the outset that Courts do not favour this kind of
contention and conduct of an applicant who participates in arbitration
proceedings without protest and fully avails of the entire arbitration
proceedings and then when he sees that the award has gone against him he comes
forward to challenge the whole of the arbitration proceedings and without
jurisdiction on the ground of a known disability of a party. That view of the
Court is ably stated by the Editor of the 15th Edition of Russell on the Law of
Arbitration at page 295 in the following terms:
a party may by reason of some disability be legally incapable of submitting
matters to arbitration that fact is not one that can be raised as a ground for
disputing the award by other parties to a reference who were aware of the
disability. If one of the parties is incapable the objection should be taken to
the submission. A party will not be permitted to lie by & join in the
submission and then if it suits its purpose attack the award on the ground. The
presumption in the absence of proof to the contrary will be that the party
complaining was aware of the disability when the submission was made.'"
Mr. Kacker submitted that this principle could be invoked only in a situation
where the challenge is made only after the making of an award, and not before.
We are unable to accept this differentiation. The principle is that a party
shall not be allowed to blow hot and cold simultaneously. Long participation
and acquiescence in the proceeding preclude such a party from contending that
the proceedings were without jurisdiction.
on Arbitration, 18th Edition, page 105 explains the position as follows:
the parties to the reference either agree beforehand to the method of
appointment, or afterwards acquiescence in the appointment made, with full
knowledge of all the circum- stances, they will be precluded from objecting to
such appointment as invalidating subsequent proceedings.
Attending and taking part in the proceedings with full knowledge of the
relevant, fact will amount to such acquiescence." The Judicial Committee
in decision in Chowdhury Murtaza Hossein v. Mussumat Bibi Bechunnissa, (31.A.
209) observed at page 220:
the whole, therefore, their Lordships think that the appellant, having a clear
knowledge of the circumstances on which he might have founded an objection to
the arbitrators proceedings to make their awards, did submit to the arbitration
going on; that he allowed the arbitrators to deal with the case as is stood
before them, taking his chance of the decision being more or less favourable to
himself; and that is too late for him, after the award has been made, and on
the application to file the award, to insist on this objection to the filing of
the award." Relying on the aforesaid observations this Court in N.
Chellappan v. Secretary, Kerala State Electricity Board and Another,  1
S.C.C. 289, acted upon the principle that acquiescence defeated the right of
the applicant at a later stage. In that case the facts were similar. It was
held by conduct there was acquiscence. Even in a case where initial order was
not passed by consent of the parties a party by participation and acquiescence
can preclude future challenges.
the grounds of appeal no prejudice has been indicated by the appointment of the
S.N. Kacker, learned counsel for the respondents drew our attention to the fact
that the decision in the Chowdhuri Murtaza Hossein's case was where the party
challenged the appointment of the receiver after the award was made. He also
submits that in this case the respondents herein had challenged the order of
appointment of the arbitrator on 19.4.83 and not after the arbitrator had made
the award. We are unable to accept this distinction. Basically the principle of
waiver and estoppel is not only applicable where the award had been made but
also where a party to the proceeding challenges the proceedings in which he
participated. In the facts of this case, there was no demur but something which
can be called acquiescence on the part of the respondents which precludes them
from challenging the participation.
In that view of the matter, we are of the opinion that the judgment and
impugned order cannot be sustained. In the premises the appeal is allowed. The
order and judgment of the High Court dated the 8th December, 1986 are set
arbitration proceedings will go on before the Arbitrator appointed by order
dated 19th April, 1983. Time for making the award is extended for four months
from today. For further extention of time the party may apply to the High Court
appeal is disposed of accordingly. The parties will bear their respective