Gupta & Ors Vs. Smt. Asha Devi Gupta & Ors  Insc 424 (1 September 2003)
& S.B. Sinha.
W I T
H CIVIL APPEAL NO.2810 OF 1979 AND CONTEMPT PETITION (C) 484 OF 1998 S.B.
SINHA, J :
constitutes a reasonable notice by an arbitrator is the question involved in
these appeals which arise out of a judgment and decree dated 1.3.1979 passed by
a Division Bench of the Calcutta High Court affirming an order passed by a
learned Single Judge setting aside an arbitration award.
basic fact of the matter is not in dispute. Two groups of persons - one Guptas
and another Sharmas - held several properties including three firms, six
limited companies, one trust and other movable and immovable assets. Both the
groups had 50% shares each.
family members of the Guptas and Sharmas Groups were interested in many or in
some of the businesses and the firms . The family tree of the Gupta Group is as
TABLE OF GUPTA GROUP I II III IV Dulichand (Deceased) Sita Ram (Died on
1.12.75) Balaprasad Shrilal (deceased) = Basanti =Anari
-------------------------- ----------------------------- -------------
--------------------- | | | | | | | | (1) | (2) (3) | | (1) (2) (3)
---------------------------------------------- | | -------------------------------------------
| | | | | | | | Motilal Brijmohan Sohanlal | | Kailash Vinod Arun =Kapuri =Padma
Gayatri | | =Pushpa =Manjula | | | As|hok | | | | | | | | | |
| | | | | | Rambabu Hari Pd. Prem Om Prakash Kamal | =Radha =Shankuntala =Asha
| | | | -------- ------------------------------------------------ | | | Niranjan
Banwari Ghanshyam =Kamla =Vidya =Renu Disputes and differences having arisen
between the two groups as also between the family members of the same group, an
agreement was entered into on or about 10.4.1975 for referring some of the
disputes to the arbitration of one Mr. B.J. Bhide. The material parts of said
agreement are as under :
The parties hereto hereby agree that all disputes differences between the
parties or their representatives concerning or relating to or touching the said
several firms, companies, assets moveable or immoveable or any act done by the
parties or in regard to their respective rights, duties and obligations of the
parties hereto or their enforcement which exist between the parties and also of
other disputes and differences that may hereafter arise between the parties and
be laid by the parties or either of them before he shall make his award are
hereby referred to the Award and final determination of Shri P.J. Bhide alias Purshottam
Jagannath Bide, son of Shri J.V. Bhide, residing at No.P-390 Keytolla Lane,
That the said Arbitrator shall have powers to have the accounts of the said
firms and/or companies and/or assets checked, inspected and/or audited by the
Chartered accountant or by any other person or persons.
That the said Arbitrator shall have powers to formulate and lay down his own
procedure for the conduct of arbitration proceedings according to law.
That the said Arbitrator shall have power to proceed ex parte in case the other
party fails after reasonable notice to attend before him.
That the said Arbitrator shall have powers to ask for any paper, documents
and/or information from any of the parties hereto and to draw adverse inference
for non-production thereof.
That the said Arbitrator shall be free to make use of information, documents, papers
received from any source whatsoever if he considers them relevant to the matter
and to this regard his decision will be final.
That the Arbitrator shall have powers to apply and employ his personal
knowledge in the matter under reference while giving his award.
That the Arbitrator shall have power to award cost and to ask for periodical
deposits towards his own fees and charges, audit charges and/or other charges
from the parties hereto in the manner he may think fit and proper.
That the said Arbitrator shall not be required to give any reasoning for his
determination and award.
That the said Arbitrator shall have powers to give directions for the running
of the business of the said firm and/or companies including the direction for
operation of Banking Account during the pendency of arbitration proceedings.
That the said Arbitrator shall have full power and control over all the assets,
properties, moveable or immoveable of the said firms and/or companies and shall
also have the powers to dispose of any of them at his discretion, for the good
and benefit of the said firm.
*** *** ***
That the arbitrator shall have in his absolute discretion power to award the
dissolution of the various partnership firms and to name the date from which
such dissolution shall take effect. He may also provide for the mode of realisation
of the partnership assets and discharging the liabilities and discharging
either by award that the said be done by one of the partners or by the Receiver
to be named by the Arbitrator. He may also award which of either of the groups
shall be entitled to continue, carrying on business and upon what terms as to
the price, mode, payment, indemnity and otherwise. AND he may direct the
execution of the each of the parties hereto of all notices, deeds and documents
whatsoever necessary for giving full effect to his Award.
Each of the groups within fifteen days of this agreement shall deliver to
either of them and to the said Arbitrator a full and particular statement of
claim in writing of all his claims and all of the items thereof giving credits
for all payments, counter claims and deductions and leaving a margin of at
least 2 and ½ inches of each page and shall at the same time deliver all
contracts, documents and papers thereof that may be necessary to explain the
The same course shall be adopted and concerning in the set off or the counter
claim adduced by either of the parties against the demands of either of them.
The Arbitrator shall be at liberty to employ an Accountant to whose examination
he may submit such account connected with the matters hereby referred as she
shall think fit. AND the said Arbitrator may act upon any statement of accounts
given by such accountant without being obliged to verify the same.
The Arbitrator may have a legal assessor to sit with him and may act under the
advice of such assessor.
The Arbitrator shall be at liberty at any stage of the proceedings to state a
case for the opinion of counsel or Court upon any question arising in the
course of the reference and may act upon the opinion so taken.
The Arbitrator shall have power to cause such maps plans and measurements
valuations to be made and taken as he shall deem necessary or expedient and the
costs and expenses thereof shall be in the discretion of the arbitrator and he
may accept such valuation as correct and act in terms thereof.
Ten days' time shall be considered as reasonable time for the purpose of doing
or complying with any direction of the Arbitrator." The jurisdiction of
the Arbitrator was, thus, of wide import.
not in dispute that said Shri B.J. Bhide was a Chartered Accountant and a Tax
Consultant. He had been dealing with accounts and other matters for and on
behalf of the firms and the companies belonging to the parties. The parties
indisputably had great faith and confidence in him.
the pendency of the arbitration proceedings, certain disputes arose as regards
management, wherefor also intervention of the arbitrator was sought for.
Several correspondences passed between the arbitrator and the parties with
which we are not concerned at this juncture.
arbitrator gave two awards, which were as regards
of 50% cumulatively and
said division among the family members of the Guptas.
members of the Guptas Groups filed objections to the said awards including one Ghanshyamdas
Gupta. The said Ghanshyamdas Gupta at the relevant point of time was a resident
of Madras. The primary objections raised by
the objectors i.e. as regard validity of the awards purported to be
of Section 108 of the Companies Act,
made in favour of different persons including friends, relations and other
individuals who were not the parties to the agreement; and
the arbitrator erred in treating all the disputes in a composite award, were
learned Single Judge although did not set aside the said award on the ground of
misconduct on the part of the arbitrator but set aside the said award, inter alia,
on the ground of procedural irregularity holding that no reasonable notice was
given to the said Ghanshyamdas Gupta. Before the learned Single Judge, a
further contention was raised that the arbitrator committed illegality insofar
as he sought for a letter from the parties in anticipation that they would
accept his award. The learned Single Judge in this behalf was of the opinion :
the background of this case, this conduct of the arbitrator, seeking for such a
letter from the parties, in my opinion, makes the award vulnerable." The
appellants herein carried the matter in appeal before a Division Bench against
the said judgment. The Division Bench of the High Court upheld the findings of
the learned Single Judge that Ghanshyamdas Gupta had not been given a reasonable
notice amounting to violation of principles of natural justice. The Division
Bench also upheld the second finding of the learned Single Judge holding that
the comments of the learned Single Judge were clearly justified.
said findings the appeal was dismissed. Cross objections filed by the
respondent were also dismissed. Aggrieved thereby and dissatisfied therewith,
the appellants are before us.
proceeding to consider the rival contentions of counsel for the parties, we may
notice that Ghanshyamdas Gupta filed an Interlocutory Application in the year
1998 withdrawing his objections.
he engaged another counsel without obtaining a certificate of no objection from
his Advocate on Record for withdrawing the same. We may further place on record
that keeping in view the fact that the parties are relations and have a large
number of properties, this Court at one stage opined that the disputes and
differences amongst the parties should be amicably settled and for the said
purpose the matter was referred to Hon'ble Mr. Justice M.K. Mukherjee, a
retired Judge of this Court for conciliation. The learned Judge, however,
failed in his efforts in this behalf and submitted a report to that effect
before this Court in 2001.
P. Gupta, learned senior counsel appearing on behalf of the appellants, has
raised a short question in support of these appeals. The learned counsel would
submit that the findings of the learned Single Judge as also the Division Bench
of the High Court that no reasonable notice was given to Ghanshyamdas Gupta by
the arbitrator in terms of the arbitration agreement suffers from manifest
error insofar as the entire fact situation obtaining in this case had not been
taken into consideration. The learned counsel would submit that the arbitrator
was required to submit his award by 30.6.1976. He had been holding arbitration
proceedings wherein Ghanshyamdas Gupta had participated from time to time and
all the parties having regard to the enormity of the disputes were directed to
remain present at Kolkata on 8.6.1976 so that the they may be heard and award
may be made on or before 30.6.1976, wherefor a notice was issued on 24.5.1976
to all the parties which is in the following terms :
Bhide & Co. 7, Waterloo
Accountants Calcutta-700 069 24.5.76 Shri Omprakash Gupta, Calcutta.
Sir, Re: Finalization of Arbitration Proceedings.
been desired by all that the arbitration proceedings should be completed at the
earliest, so that the necessary Award can be given by the middle of next month.
this connection, you are directed to furnish to me the following, at the earliest
Please submit to me a list of furniture, fixtures, fittings and other household
appliances in possession of yourself and/or other persons whom you represent
belonging to the firm and/or Limited Companies in which you are or the others
are partner and/or director.
state the year in which the same were purchased and the present market value
details may please be furnished in respect of car scooter or cycle, the year of
purchase, the make, the present condition thereof and the present market value
Kindly furnish to me full description of the buildings and land under the
occupation of a partner and/or his relatives in your Group and owned by the
Firm and/or company as mentioned in the Arbitration Agreement dated 28th June, 1975. Kindly also state what in your
opinion is the market value thereof with supporting evidence, if any. Also
state what is the Municipal rateable value of the said buildings and land.
regards plants, factories and branches owned by the said firms and limited
companies, kindly state what in your opinion is the net worth of each plant
factory and branch, i.e. value of all the assets at the factories which may
arise in future in respect of past dealings.
Regarding drawings made by the partners or their relatives, of your Group from
partnership firms and/or Limited Companies, as mentioned in the Arbitration
Agreement referred to above, kindly furnish details of datewise of the drawings
made after 1st January 1976 to-date, indicating the nature and purpose of such
withdrawal. Similar details may kindly be furnished in respect of credits
Drafts of resignation letters from the Directorship of Ltd. Companies and/or
partnership firms and/or from the office of Trusteeship are enclosed herewith.
Kindly complete therein the name and address of the Company and/or the name and
address of the partnership firm in which you or otherwise whom you represent
are Director and/or Partner and/or a Trustee and return to me the said
resignation letters duly signed by you and/or the others as the case may be,
leaving the date blank. If required, you can have copies made of these
resignation letters to cover all the persons represented by you in your Group.
ensure that these resignation letters reach me by 5th June, 1976. Arising out of this, I am arranging to send to you in a
day or two Transfer Deeds which should be signed by you or the other persons
whom you represent, at the place marked with an "X" in pencil and
witnessed by a known person and returned to me with the relevant shares scrip
of the concerned Limited Company.
next meeting in connection with the finalisation of the arbitration proceedings
will be held in Calcutta on 8th June, 1976. I have a mind to have continuous sittings upto 12th June, 1975 and declare the Award immediately
are therefore requested to make yourself available to Calcutta at the proposed meetings on and
from the 8th June 1976 without fail. Kindly bring with you
all the books of accounts upto-date part pertaining to the branches and/or
companies under your control.
trust the above programme will suit you and you will extend your whole-hearted
co- operation to expedite finalisation of the arbitration proceedings.
you, Yours faithfully, Sd/- P.J. Bhide & Co., Arbitrator.
Draft of resignation Letters for completion and signatures and return by
5.6.1976." When Shri Ghanshyamdas Gupta did not reach Kolkata pursuant to
the said circular letter, a telegram was sent to him on 12.6.1976 asking him to
attend the meeting on 15..6.1976. The said telegram reads thus :
INDIAN POSTS AND TELEGRAPHS DEPARTMENT.
88/13 GHANSHYAMDAS HARANATHRAIKA CARE SANSARMAYA MADRAS X 1905 547 CALCUTTA 12
45 REMYLET 24TH MAY STOP YOU HAVE NEITHER REACHED HERE NOR REPLIED MY LETTER
STOP RETURN IMMDTLY ENCLOSURE TO MY LETTER DULY SIGNED STOP MEETING FIXED 15TH
AFTERNOON 7 WATERLOO ST. PROCEEDING CONTINUE EX PARTE IF YOU DON'T A. DON'T
BHIDE 131 547 SANSARMAYA 24 157" The learned counsel drew our attention to
the minutes of the meetings maintained in the arbitration proceedings and
submitted that even if the minutes produced before the High Court by the
respondents are taken to be correct; from a perusal thereof it would appear
that Ghanshyamdas Gupta appeared before the arbitrator on 27.11.1975 at 11
a.m., 27.1.1976 and 28.1.1976 both in the first session as also in the second
session and on 29.1.1976 at 1.30 p.m. and 4 p.m. It was pointed out that apart
from Ghanshyamdas Gupta, objections were filed by Asha Devi w/o Prem Kumar
Gupta, Om Prakash Gupta, Kamal Kumar Gupta, Prem Kumar Gupta, Ram Babu Gupta
and Smt. Radha Rani. Our attention has been drawn to the fact that as Om Prakash
Gupta, Ram Babu Gupta and Kamal Kumar Gupta were present in the meeting dating
15.6.1976 on various dates in the arbitration proceedings and, thus, the
interest of all the objectors had sufficiently been represented before the
learned counsel would contend that even if the decision of the Calcutta High
Court in [D.L.Miller and Co., Ltd. vs. Daluram Goganmull - AIR 1956 Calcutta
361] is taken to its logical conclusion, a reasonable notice in the facts and
circumstances of this case should be inferred. It was further submitted that Rambabu
Gupta, Kamal Kumar Gupta and Brij Mohan Gupta attended the meeting also on
Gupta would urge that the purported letter of the Arbitrator to the parties
asking them to send a letter to him stating that they would not challenge the
award would not vitiate the arbitration proceedings.
Sinha, learned counsel appearing on behalf of Respondent Nos. 22 to 32, Mr.
Vijay Kumar Sharma, appearing in person and Mr. Gourab Banerji, appearing on
behalf of some members of the Sharma Group, supported the contentions of Mr. Bhasker
Kumar Ghosh, learned counsel appearing on behalf of the respondents, however,
drew our attention to the objections raised before the learned Single Judge of
the Calcutta High Court and submitted that in the peculiar facts and
circumstances of this case, the Court should not only consider the same de novo
but also must take into consideration the subsequent events. According to the
learned counsel, as the cross-objections filed by the objector-respondents were
dismissed by the Division Bench without assigning any reason therefor, this
Court in the interest of justice should consider the same on its own merits,
although no appeal thereagainst or any cross-objection has been filed by the
cannot be any dispute with regard to the proposition of law that the parties
would be entitled to a reasonable opportunity of putting their case. [See
Montrose Cannel Foods Ltd. v. Eric Wells (Merchants) Ltd. [(1965) 1 Lloyd's
Report 597]. A reasonable opportunity would mean that a party must be given an
opportunity to explain his arguments before the Tribunal and to adduce evidence
in support of his case. However, under the old Act, an oral hearing would only
be permitted if a party requested one, unless there was some agreement to the
contrary [See Henry Southeran Ltd. vs. Norwich Union Life Insurance Society
(1992) 31 E.G. 70].
would constitute a reasonable opportunity of putting case as also qualification
of the right has been stated in 'Russell on Arbitration', 22nd Edition,
paragraphs 5-053 and 5-054 which are in the following terms :
A reasonable opportunity of putting case. Each party must be given a reasonable
opportunity to present his own case. This means he must be given an opportunity
to explain his arguments to the tribunal and to adduce evidence in support of
to comply with this requirement may render the award subject to challenge under
section 68 of the Arbitration Act 1996. It is also a ground for refusing
enforcement of the resulting award under the New York Convention.
Qualification of the right. The need to allow a party a reasonable opportunity
to present his case can give rise to difficulties.
what extent can the tribunal intervene where, for example, a party's
submissions or evidence is needlessly long, repetitive, focuses on irrelevant
issues or is sought to be made over an extended period of time? What if a party
ignores procedural deadlines imposed by the tribunal but maintains he still has
points to put before it in support of his case? Inevitably each situation has
to be dealt with in its own context but the following general considerations
should be taken into account." There cannot, therefore, be any doubt that
a party does not have an unfettered right. The arbitrator can not only ask a
party to comply with procedural orders and directions including those imposing
limits as to time and content of submissions and evidence but also the
arbitrator has a right of managing the hearing. In 'Russell on Arbitration',
22nd Edition the law is stated thus :
Managing the hearing. Similarly, a tribunal cannot be expected to sit through
extended oral hearings listening to long-winded submissions on irrelevant
matters. The tribunal is entitled, and under section 33 is obliged and
encouraged, to avoid the unnecessary delay and expense that would be caused by
such an approach. The tribunal should take a grip on the proceedings and
indicate to the parties those areas on which it particularly wishes to be
addressed and those which it does not consider relevant to the real issues in
dispute. If a party fails to heed such guidance, the tribunal might seek to
focus the proceedings by allocating the remaining hearing time between the
parties. This the tribunal is entitled to do, provided it will allow a
reasonable time for both parties to put forward their argument and evidence."
For constituting a reasonable opportunity, the following conditions are
required to be observed :
Each party must have notice that the hearing is to take place.
Each party must have a reasonable opportunity to be present at the hearing,
together with his advisers and witnesses.
Each party must have the opportunity to be present throughout the hearing
Each party must have a reasonable opportunity to present evidence and argument
in support of his own case.
Each party must have a reasonable opportunity to test his opponent's case by
cross-examining his witnesses, presenting rebutting evidence and addressing
hearing must, unless the contrary is expressly agreed, be the occasion on which
the parties present the whole of their evidence and argument.
objectors do not say that Ghanshyamdas Gupta has an interest adverse to or
independent of them. Ghanshyamdas Gupta himself has not stated as to whether
his interests were not safeguarded by other co- sharers who were present in the
minutes of the meeting referred to hereinbefore clearly show that not only he
had notice of arbitration proceedings but also took active part therein days
after days. The circular letter dated 12.5.1976 was issued by the arbitrator so
as to give a notice of caution that the arbitration proceedings shall be held
and continued at Kolkata.
be said having regard to the magnitude of the problem and the number of parties
involved, the extent of the properties in dispute and the disputes not only
between the two groups but also some members of the same group that the
arbitrator was not entitled to take recourse thereto ? If the arbitrator is to
manage the arbitration proceedings, in our opinion, he would be entitled to
give direction to the parties to be present on the particular date, particular
time and particular place which would be sufficient compliance of the
requirements of law. Ghanshyamdas Gupta does not say that he did not receive
the circular letter dated 12.5.1976. He did not make out a case that the said
dates did not suit him. As despite receiving the said circular letter from the
arbitrator, he did not choose to make himself available on 8.6.1976 at his own,
the arbitrator sent him a telegram dated 12.7.1976. The said telegram was sent
ex abundanti cautela.
arbitrator, as appears from the minutes of the meeting, proceeded only on the
documentary evidences. No party appears to have presented oral evidence. Thus,
the question of cross-examination the witnesses appearing on behalf of the
other parties did not arise.
must have been made by the parties themselves.
Gupta does not say that he had difficulty in appearing on 15.6.1976 or any
subsequent date and he had asked for adjournment.
a party has no absolute right to insist on his convenience being consulted in
every respect. The matter is within the discretion of the arbitrator and the
Court will intervene only in the event of positive abuse. [See Montrose Cannel
Foods Ltd. (supra)].
party, after being given proper notice, chooses not to appear, then the
proceedings may properly continue in his absence. [See British Oil and Cake
Mills Ltd. vs. Horace Battin & Co. Ltd. (1922) 13 LI L Rep. 443].
D.L. Miller (supra) the law is stated in the following terms :
doctrine of Arbitrators' legal misconduct has been so over-worked in recent
years that across the whole branch of case law on this point one finds the
blazing trial of principles of natural justice.
are discussed and agitated in an atmosphere of complete unreality and divorced
from the facts of each case.
the obvious point is missed in most of such cases that when the parties agree
to go to arbitration they stipulate not so much for vague principles of natural
justice as for concrete principles of contractual justice according to the
contracts of the parties and their specific stipulations. Where the contract of
arbitration itself prescribes a private procedure of its own, then so long as
such agreed private procedure is not against the laws and the statutes of the
land, then such agreed procedure must prevail over the notions and principles
of natural justice." The principles of natural justice, it is trite,
cannot be put in a straight jacket formula. In a given case the party should
not only be required to show that he did not have a proper notice resulting in
violation of principles of natural justice but also to show that he was
seriously prejudiced thereby. In The Chairman, Board of Mining Examination and
Chief Inspector of Mines and Another vs. Ramjee [(1977) 2 SCC 256], this Court held
justice is no unruly horse, no lurking land mine, nor a judicial cure-all. If
fairness is shown by the decision-maker to the man proceeded against, the form,
features and the fundamentals of such essential processual propriety being
conditioned by the facts and circumstances of each situation, no breach of
natural justice can be complained of.
expansion of natural justice, without reference to the administrative realities
and other factors of a given case, can be exasperating. We can neither be
finical nor fanatical but should be flexible yet firm in this jurisdiction. No
man shall be hit below the belt - that is the conscience of the matter."
[See also Union of India and Others vs. Anand Kumar Pandey and Others - (1994)
5 SCC 663], and R.S. Dass etc. vs. Union of India and Others [1986 (Supp.) SCC
Kumar Pandey's case (supra), this Court again reiterated that the rules of natural
justice cannot be put in a straight jacket and applicability thereof would
depend upon the facts and circumstances relating to each particular given
M.C. Mehta vs. Union of India and Others [(1999) 6 SCC 237], this Court held
that in a case of natural justice upon admitted or indisputable factual
position, only one conclusion is possible, a writ of certiorari may be issued.
State of U.P.vs. Harendra Arora and Another [(2001) 6 SCC 392], this Court
followed, inter alia, Managing Director, ECIL vs. B. Karunakar [(1993) 4 SCC
727] and State Bank of Patiala vs. S.K. Sharma [(1996) 3 SCC 364] and held that
an order passed in a disciplinary proceeding cannot ipso facto be quashed
merely because a copy of the enquiry report has not been furnished to the
delinquent officer, but he is obliged to show that by non-furnishing of such a
report he has been prejudiced, would apply even to cases where there is
requirement of furnishing a copy of enquiry report under the statutory rules.
Muslim University and Others vs. Mansoor Ali Khan [(2000) 7 SCC 529], it was held
principle that in addition to breach of natural justice, prejudice must also be
proved has been developed in several cases. In K.L. Tripathi v. State Bank of
India Sabyasachi Mukharji, J. (as he then was) also laid down the principle
that not mere violation of natural justice but de facto prejudice (other than
non-issue of notice) had to be proved.
observed, quoting Wade's Administrative Law (5th Edn., pp.472-75), as follows :
is not possible to lay down rigid rules as to when the principles of natural
justice are to apply, nor as to their scope and extent...There must also have
been some real prejudice to the complainant; there is no such thing as a merely
technical infringement of natural justice. The requirements of natural justice
must depend on the facts and circumstances of the case, the nature of the
inquiry, the rules under which the tribunal is acting, the subject-matter to be
dealt with, and so forth." Since then, this Court has consistently applied
the principle of prejudice in several cases. The above ruling and various other
rulings taking the same view have been exhaustively referred to in State Bank
of Patiala vs. S.K. Sharma. In that case, the
principle of "prejudice" has been further elaborated. The same
principle has been reiterated again in Rajendra Singh vs. State of M.P."
In U.P. Awas Evam Vikas Parishad vs. Gyan Devi (Dead) by LRs. and Others (1995)
2 SCC 326], the Constitution Bench observed :
other words the right conferred under Section 50(2) of the L.A. Act carries
with it the right to be given adequate notice by the Collector as well as the
reference court before whom the acquisition proceedings are pending of the date
on which the matter of determination of the amount of compensation will be
taken up. Service of such a notice, being necessary for effectuating the right
conferred on the local authority under Section 50(2) of the L.A. Act, can,
therefore, be regarded as an integral part of the said right and the failure to
give such a notice would result in denial of the said right unless it can be
shown that the local authority had knowledge about the pendency of the
acquisition proceedings before the Collector or the reference court and has not
suffered any prejudice on account of failure to give such notice." In
Graphite India Ltd. and Another vs. Durgapur Project Ltd. and Others [1999) 7
SCC 645], it has been held that the principles of natural justice can be
'Administrative Law', 8th Edn., by William Wade and Christopher Forsyth at page
491, it has been stated :
the other end of the spectrum of power, public authorities themselves are now
given the benefit of natural justice, as illustrated at the end of this
section. Basically the principle is confined by no frontiers.
other hand it must be a flexible principle. The judges, anxious as always to
preserve some freedom of manoeuvre, emphasise that 'it is not possible to lay
down rigid rules as to when the principles of natural justice are to apply: nor
as to their scope and extent. Everything depends on the subject-matter'. Their
application, resting as it does upon statutory implication, must always be in
conformity with the scheme of the Act and with the subject-matter of the case.
'In the application of the concept of fair play there must be real
flexibility'. There must also have been some real prejudice to the complainant:
there is no such thing as a merely technical infringement of natural justice."
In Khaitan (India) Ltd. & Ors. vs. Union of India & Ors. [Cal LT 1999
(2) HC 478], one of us said :
concept of principles of natural justice has undergone a radical change. It is
not in every case, that the High Courts would entertain a writ application only
on the ground that violation of principles of natural justice has been alleged.
The apex court, in State Bank of Patiala & Others vs. S. K. Sharma reported
in 1996 (3) SCC 364 has clearly held that a person complaining about the
violation of the principles of natural justice must show causation of a
prejudice against him by reason of such violation. The apex court has held that
the principles of natural justice, may be said to have been violated which
require an intervention when no hearing, no opportunity or no notice has been
in this connection may also be made to Managing Director, E.C.I.L. v. B. Karmarkar,
reported in AIR 1994 SC 1076. The question as to the effect of non-grant of
enough opportunity to the learned counsel for the appellant by the Commission
to meet the allegations made in the supplementary affidavit requires
investigation. As to what extent the appellant has suffered would be a question
which would fall for a decision of a High Court. Where such a disputed question
arises, in the considered opinion of this Court, a writ application will not be
entertained only because violation of natural justice has been alleged and more
so, in a case of this nature where such a contention can also be raised before
the Highest Court of India. A distinction has to be borne in mind between a
forum of appeal which is presided by an Administrative Body and the apex court
as an appellate court." The principles of natural justice, it is trite,
must not be stretched too far.
Nos. 1 and 19 in C.A. Nos. 2809-10 of 1979 Ghanshyamdas Gupta on or about
30.8.1998 filed an application withdrawing his objections for setting aside the
award; having regard to the various developments which took place since the
passing of the award. The prayer made in the said application reads as under :
the objections raised on behalf of Shri Ghanshyam Das Gupta, the respondent
No.7 herein may be allowed to be withdrawn in respect of Awards dated 29th
June, 1976 and 30th June, 1976 passed by Sole Arbitrator Shri P.J. Bhide and
the said Awards be made the rule of the Court;" Thus, the fact remains
that unequivocally Ghanshyamdas Gupta had withdrawn his objections. He now
seeks to resile therefrom by filing an application i.e. I.A. No.19 of 2003
wherein he has prayed for discharge of his advocate.
in view the statements made by Ghanshyamdas Gupta in the said interim
application, we are of the opinion that at this stage, he cannot be permitted
to change his advocate, particularly in view of the fact that he stuck to his
earlier stand for several years.
view of the aforementioned, no orders are passed on I.A. Nos. 1 and 19.
in this case Ghanshyamdas Gupta expressly relinquished his right by filing an
application stating that he would withdraw his objection. Such relinquishment
in a given case can also be inferred from the conduct of the party. The defence
which was otherwise available to Ghanshyamdas Gupta would not be available to
others who took part in the proceedings. They cannot take benefit of the plea
taken by Ghanshyamdas Gupta. Each party complaining violation of natural
justice will have to prove the misconduct of the arbitrator tribunal in denial
of justice to them. The appellant must show that he was otherwise unable to
present his case which would mean that the matters were outside his control and
not because of his own failure to take advantage of an opportunity duly
accorded to him. [See Minmetals Germany GmbH v. Ferco Steel Ltd. [(1999) 1 All
ER (Comm) 315]. This Court's decision in Renusagar Power Co. Ltd. vs. General
Electric Co. [AIR 1994 SC 860] is also a pointer to the said proposition of
in view the facts and circumstances of this case, we are of the opinion that Ghanshyamdas
Gupta cannot be said to have been refused a fair opportunity of participation
in the arbitration proceedings.
as the other ground is concerned, which found favour of the High Court, namely,
that the arbitrator had asked the parties to issue a letter to him that his
award shall not be questioned would render the award a nullity inasmuch the
same was not acted upon and in fact no letter was issued. The arbitrator must
have done so keeping in view the peculiar nature of the disputes and to see
that all the disputes come to an end.
interlocutory applications have been filed, some of which are required to be
No.15 in C.A. No.2809 of 1979 :
No. 15 has been filed at the instance of one of the parties herein for staying
the auction of the properties belonging to M/s Omrao Industrial Corporation
Private Limited, Kanpur and Oil Corporation of India Private Limited, Kanpur.
The auction of the properties was stayed by this Court by an order dated
said auction was being held at the instance of Bank of Baroda in terms of a
recovery certificate issued by the Debt Recovery Tribunal. The said proceeding
was initiated by the Bank for enforcement of an equitable mortgage as also of
guarantee. The dispute by and between a third party and a company has nothing
to do with the question as to whether an award made by the arbitrator should be
set aside or not. Whatever be the little connection, the same cannot be
permitted to be agitated in this appeal. The parties must take recourse to such
remedies which are available to them in law. The interim order dated 20.01.2003
No.17 in C.A. No.2809 of 1979 :
application has also been filed for appointment of a receiver by the legal
heirs of Respondent Nos.12 to 15. Having regard to the fact that as a limited
question arises for our consideration in these appeals, it may not be proper
for us to pass any order on the said application. If any necessity arises,
parties can file appropriate application for initiating appropriate proceedings
before the appropriate forum.
No.3 in C.A. No.2809 of 1979 Contempt Petition
No. 484 of 1998 :
have been filed for initiating proceedings for contempt of this Court for
alleged violation of this Court's orders dated 21.9.1979, 16.8.1982 and
20.10.1982. According to the applicant, Appellant nos.2 and 9 and Respondent
Nos.1 to 4, 7, 19, 22 and 28 have violated the said orders by surrendering the
tenancy rights purported to be in violation of order dated 16.8.1982. It is
further alleged that several other appellants and respondents have similarly
violated the interim orders passed by this Court. No order appears to have been
passed on the contempt petition. A direction was merely issued that this matter
may be considered at the time of final hearing.
in view the fact that the appeal remained pending for a long time, it is not
advisable that this Court now adjudicate upon the factual disputes. We, thus,
do not intend to pass any order on the said applications.
may, however, observe that an appropriate proceeding may be initiated by the
parties concerned before the executing court, if any occasion arises therefor.
No..... in C.A. No.2809 of 1979 for substitution of L.Rs. of Deceased
Respondent No.5 :
I.A. is allowed.
No. No....in C.A. Nos. 2809-10 of 1979 for withdrawal of V/A on behalf of
Appellant Nos. 9 and 10 :
orders are necessary to be passed.
the reasons aforementioned, the impugned judgment cannot be sustained which is
set aside accordingly. These appeals are allowed.
given by the arbitrator is made rule of the court. Any transaction in regard to
property covered by the award shall be subject to this decision. The Executing Court would look into these matters.
in the facts and circumstances of the case, there shall be no order as to