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CASE NO.: Appeal (civil)  2809 of 1979

PETITIONER: Sohan Lal Gupta (Dead) Thr. L.Rs. & Ors.                

RESPONDENT: Vs. Smt. Asha Devi Gupta & Ors.                         

DATE OF JUDGMENT: 01/09/2003

BENCH: CJI & S.B. Sinha.

JUDGMENT: J U D G M E N T

W I T H

CIVIL APPEAL  NO.2810 OF 1979 AND   CONTEMPT PETITION (C) 484 OF 1998  

S.B. SINHA, J :   

       What 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.   

       The 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.   The 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 under :

                                                 GENEOLOGICAL TABLE OF GUPTA GROUP

    I                                   II                                     III                       IV  Dulichand (Deceased)            Sita Ram (Died on 1.12.75)      Balaprasad              Shri lal (deceased)                                                                       = Basanti         =Ana ri --------------------------              -----------------------------           ------------ -               ---------------------         |                                       |                     |                        |         |                                       |                     |                        |         (1)       |                (2)                         (3)           |                      |        (1)                        (2)                        (3)       ----------------------------------------------                |                     |       -------------------------------------------    |                 |              |           |                     |      |               |                   |    Motilal         Brijmohan       Sohanlal                |                     | Kailash      Vinod           Arun

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=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 :

"1.     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, Calcutta-29.

2.      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.

3.      That the said Arbitrator shall have powers to  formulate and lay down his own procedure for the  conduct of arbitration proceedings according to law.

4.      That the said Arbitrator shall have power to proceed  ex parte in case the other party fails after  reasonable notice to attend before him.

5.      That the said Arbitrator shall have powers to ask for

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any paper, documents and/or information from any of  the parties hereto and to draw adverse inference for  non-production thereof.

6.      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.

7.      That the Arbitrator shall have powers to apply and  employ his personal knowledge in the matter under  reference while giving his award.

8.      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.

9.      That the said Arbitrator shall not be required to  give any reasoning for his determination and award.

10.     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.

11.     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.

12.            ***              ***             ***           

13.     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.

14.     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 said  Account

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16.     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.

17.     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.

18.     The Arbitrator may have a legal assessor to sit with  him and may act under the advice of such assessor.

19.     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.

20.     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.

***             ***             ***

38.     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.  

       It is 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.          During 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.  

       The arbitrator gave two awards, which were as regards (1)  division of 50% cumulatively and (2) the said division among the family  members of the Guptas.   

Seven 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 (1) violative of Section 108 of the Companies  Act, (2) awards made in favour of different persons including friends,  relations and other individuals who were not the parties to the  agreement; and (3) that the arbitrator erred in treating all the  disputes in a composite award, were rejected.         The learned Single Judge although did not set aside the said  award on the ground of misconduct on the part of the arbitrator but set

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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 :

"...In 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.   

On the 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.  

Before 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.   However, 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.

Mr. Bhasker 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 :

"P.J. Bhide & Co.               7, Waterloo Street, Chartered Accountants   Calcutta-700 069                                                 24.5.76 Shri Omprakash Gupta,            Calcutta.

Dear Sir,

               Re: Finalization of  Arbitration

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Proceedings.

       It has 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.

       In this connection, you are directed to furnish   to  me the following, at the earliest :-

1.      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.   Also state the year in which the same were  purchased and the present market value thereof.   Similar 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 thereof.

2.      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.

3.      As 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.

4.      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 therein.

5.      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.  

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Please 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.

The 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 thereafter.

       You 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.

       I trust the above programme will suit you  and you will extend your whole-hearted co- operation to expedite finalisation of the  arbitration proceedings.

       Thanking you,

                       Yours faithfully,                         Sd/- P.J. Bhide & Co.,                                 Arbitrator. Enclo: 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 :

       "C.No.88                        INDIAN POSTS AND                                          TELEGRAPHS DEPARTMENT.

                               TELEGRAM         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 ATTEND.

                               ARBITRATOR BHIDE

131     547  SANSARMAYA  24 157"

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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  arbitrator.

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 19.6.1976.  

Mr. 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.

Mr. Parijat 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 Gupta.   

Mr. Bijan 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 respondents.  

There 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].

What 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 : "5-053  A reasonable opportunity of putting

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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 his case.   Failure 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.          5-054 Qualification of the right.  The need to  allow a party a reasonable opportunity to  present his case can give rise to difficulties.   To 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 :

"5-057  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   :

1.      Each party must have notice that the hearing is to take  place. 2.      Each party must have a reasonable opportunity to be  present at the hearing, together with his advisers and  witnesses. 3.      Each party must have the opportunity to be present  throughout the hearing

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4.      Each party must have a reasonable opportunity to present  evidence and argument in support of his own case. 5.      Each party must have a reasonable opportunity to test  his opponent’s case by cross-examining his witnesses,  presenting rebutting evidence and addressing oral  argument. 6.      The hearing must, unless the contrary is expressly  agreed, be the occasion on which the parties present the  whole of their evidence and argument.

The 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 meeting.   

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.  

Can it 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.   

The 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.   Submissions must have been made by the parties themselves.   Ghanshyamdas Gupta does not say that he had difficulty in appearing on  15.6.1976 or any subsequent date and he had asked for adjournment.   Even otherwise, 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)].    If a 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]. In D.L. Miller (supra) the law is stated in the following terms :

"The 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.   They are discussed and agitated in an atmosphere of  complete unreality and divorced from the facts of  each case.

       Somehow 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

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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 :

"...Natural 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.   Unnatural 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 617].    

       In Anand 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 situation.   

       In 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.

       In 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.

       In Aligarh Muslim University and Others vs. Mansoor Ali Khan  [(2000) 7 SCC 529], it was held :

       "The principle that in addition to breach of  natural justice, prejudice must also be proved has

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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.   It was observed, quoting Wade’s Administrative Law  (5th Edn., pp.472-75), as follows :

"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...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 :

"...In 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 waived.           In ’Administrative Law’, 8th Edn., by William Wade and Christopher  Forsyth at page 491, it has been stated :  

"...At 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

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frontiers.

       On the 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 :                  "The 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 given.   Reference 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.   

I.A. 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 :

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"That 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.         Keeping 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.   

       In view of the aforementioned, no orders are passed on I.A. Nos.  1 and 19.

       Furthermore, 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 law.         Keeping 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.   

       So far 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.

OTHER INTERLOCUTORY APPLICATIONS :

Several interlocutory applications have been filed, some of which  are required to be dealt with.

I.A. No.15 in C.A. No.2809 of 1979  :

       I.A. 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 20.1.2003.  

       The said auction was being held at the instance of Bank of Baroda  in terms of a recovery certificate issued by the  Debt Recovery

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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 is vacated.

I.A. No.17 in C.A. No.2809 of 1979 :

       An 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.

I.A. No.3 in C.A. No.2809 of 1979    Contempt Petition No. 484 of 1998 :          Applications 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.          Keeping 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.

       We may, however, observe that an appropriate proceeding may be  initiated by the parties concerned before the executing court, if any  occasion arises therefor.

I.A. No..... in C.A. No.2809 of 1979 for substitution of L.Rs. of  Deceased Respondent No.5 :

       The I.A. is allowed.  

I.A. No. No....in C.A. Nos. 2809-10 of 1979 for withdrawal of V/A on  behalf of Appellant Nos. 9 and 10 :

       No orders are necessary to be passed.  

       For the reasons aforementioned, the impugned judgment cannot be  sustained  which is set aside accordingly.  These appeals are allowed.  Award 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.  However, in the facts and circumstances of the case, there shall be no  order as to costs.