P L D 1975 Lahore 1427 (PLP)

Such application should be decided on merits by giving reasons thereto. Aboobaker Latif v. Reception Committee of the 48th Indian National Congress and another A 1 R 1937 Born. 410 and Messrs M. A. Aziz & Sons v. Lt.‑Col. M. Daud Khan and another P L D 1968 Lah. 847 ref. Ch. Khurshid Ahmad for Petitioner. M. D. Beg Asstt. A.‑G. for Respondent. Date of hearing : 4th March 1975. Mr. I. I. Siddique, Project Director, Survey and Planning Designs Direc torate, Public Health Engineering Department, Lahore was appointed by the learned trial Court as Arbitrator on 15‑7‑1969. An application under section 11 of the Arbitration Act, for his removal, was made by the respondents, copy of which has been filed along with the civil revision, mainly on the ground that he had misconducted himself as well as the proceedings. It was alleged that he was interested in the matter for the petitioner and for that reason misconducted the proceedings by accelerating the date of hearing from 18th April 1970 to 16th of April 1970, and insisted for the payment of the dues to the petitioner by the respondents as according to him the petitioner's case was genuine one. It was also alleged that some of the letters on the record were tempered with. The more serious allegation with regard to misconduct was that the petitioner Abdul Humid Butt was seen, according to the information of the respondents, in the office of the Arbitrator. In order to support the allegations, affidavit of Sh. Ijaz Abmad, Executive Engineer was submitted by the respondents. It is admitted that the allegations as contained in the affidavit were controverted by the petitioner by means of his own affidavit.

2. The impugned order dated 10th of July 1970, passed by the learned trial Court accepting the application of the respondents, shows that while entertaining the application, the Arbitrator was directed not to announce the ‑award, which was admittedly sent by him later on in a sealed covet to the Court. It was opened by the Court on 27th of May 1970, and its contents were made known to the parties. The order in question further shows that the learned trial Court was of the view that even after the receipt of the award by it the same would be subject to the decision to be made in the application.

3. It is admitted that no evidence except the affidavits of the parties was examined nor any issue in this regard was framed. The affidavit submitted by the Executive Engineer has been relied upon for the removal of the Arbitrator on account of the alleged misconduct. 1t has also been observed in the order that since the respondents have no confidence in him, therefore, his continuance as such would not be desirable and proper. It is significant to notice that even no report or comments with regard to the .allegations made against him were called for from the Arbitrator himself, and as such he was condemned unheard.

4. It has been argued by the learned counsel for the respondents that since C. P. C. and Evidence Act as such are not applicable to the proceedings under the Arbitration Act, therefore, it was not necessary for the trial Court to frame any issue or record evidence with regard to the allegations made by the respondents. According to him it was also not necessary to hear the Arbitrator himself as to whether he had misconducted himself or the proceedings or not. I am afraid contentions of the learned counsel have no force, in the circumstances of the case.

5. A misconduct on the part of Arbitrator may be erroneous breach ‑of duty which may cause miscarriage of justice, it can also be described as mishandling of arbitration which may result in the substantial miscarriage of justice. Misconduct is a question of fact in each case and has to be' ascertained from the facts of the entire proceedings before the arbitrator. It really lies in the conduct of the arbitration proceedings, and the onus of proof lies on the party who alleges it. Reference in this regard can be made to Aboobaker Latif v. Reception Committee of the 48th Indian Nation Congress and another (AIR 1937 Bom 410). It is the duty of the Court to decide while dealing with the allegations with regard to misconduct as to how and in what manner the misconduct has been committed. The allegations as made in the present case relate to undue favour and interest shown to the petitioner by the Arbitrator and his close association with the ,petitioner. The learned trial Court in its impugned order has not found while referring to the arbitration proceedings whether any of the allegations find support therefrom. It has merely relied upon the affidavit submitted by the Executive Engineer and has held that since the same cannot be ignored therefore, the allegation of misconduct has been proved against the Arbitrator. I am afraid misconduct being a serious charge has been dealt with lightly and in a summary manner. The observation of the trial Court that since the application under section 11 of the Arbitration Act can be treated as a transfer application, therefore, the same can be‑disposed of summarily is not warranted by law as well as the facts of the case. As mentioned above, misconduct being a question of fact has to be ascertained from the arbitration proceedings as well as the attending circumstances. How in such circumstances an application under section 1 of the Arbitration Act containing serious charge of misconduct can be disposed of in a summary manner without recording any evidence and without associating tree t arbitrator with the necessary proceedings. It has been argued on behalf of the respondents that since Evidence Act is not applicable to the arbitration proceedings, therefore, the trial Court was not obliged under the law to record any evidence in order to come to the conclusion that the allegation of misconduct was correct or not. It is true that the Evidence Act as such is not applicable to such proceedings, but that does not mean that the rules of evidence founded on fundamental principles of justice and public policy can be disregarded while deciding such matters. How can such a serious allegation be decided in the absence of the person against whom it has been levelled and without affording any opportunity to the parties to adduce evidence for or against the allegations. The allegations as referred to above relate to questions of fact and as such they cannot be resolved by relying upon the affidavit of one of the parties when particularly it has not been shown to the impugned order as to why so much weight should be given to the affidavit of the Executive Engineer and why and under what circumstances the affidavit of the other party should be disregarded.

6. The view that such application should be decided on merits by giving reasons thereto gets support from Messrs M. A. Aziz & Sons v Lt: Col. M. Daud Khan and another (PLD 1968 Lah 847). In that case the petitioners before the High Court had moved an application under section 1 I of the Arbitration Act for the removal of the Arbitrator on the ground of misconduct. The said application was decided summarily by holding that the appointment of the Arbitrator was properly made under the Arbitration Agreement. between the parties. It was held that the application for the removal of the Arbitrator could be dismissed by the Court only if it came to the, conclusion after examination of the evidence that the allegations of mis conduct were false. It was further observed that instead of examining and deciding the allegations, the learned trial Court summarily dismissed the application. The impugned order as such was set aside and the case was remanded to the trial Court for fresh decision.

7. According to section 11 of the Arbitration Act Court can remove an arbitrator on the application of any of the parties to the reference who is guilty of unreasonable delay in entering on and proceeding with the reference and making an award. Subsection (2) further provides that the Court can remove an arbitrator who has misconducted himself or the proceedings. As discussed above, the application submitted by the respon dents relates mainly to the misconduct of the arbitrator and the proceedings. This provision is similar to the provision as contained in section 30‑A of the Act by invoking which an award can be set aside if it is, proved that the arbitrator has misconducted himself or the proceedings. It means that while dealing with such serious allegation against an arbitrator for his removal, some care and prudence has to be shown as is necessary for deciding a matter under section 30 of the Act.

8. It has been argued by the learned counsel for the petitioner that no order under section I1 of the Act can be passed in the present case as the arbitrator had made his award before the application for his removal was decided and as such according to the learned counsel the said application had become infructuons. It has been argued that subsection (1) of section 11 of the Act envisages three stages i.e. if an arbitrator is guilty of unreasonable delay in entering on and then proceeding with the reference and thereafter making an award, he can be removed by the Court. It is contended that question of unreasonable delay in entering on or proceeding with the matter paled into in significance after the award was made. On the contrary it has been contended that since the learned trial Court while issuing notice to the other party in the application under section 11 of the Act, made it clear that the award to be made by the arbitrator would be subject to the decision to be made in the application, therefore, making of the award was of no consequence. This aspect of the case has not been dealt with by the learned trial Court and since the case is being remitted to the trial Court for fresh decision, therefore, it will decide this aspect as well.

9. In view of the above discussion, civil revision is accepted and the impugned order dated 10.7‑1970, passed by the learned trial Court is hereby set aside. There will, however, be no order as to costs. The case is remitted to the learned District Judge, Lahore, for in turn to be entrusted to the competent Court for fresh decision, in accordance with law, after hearing the parties. x. B. A. Petition accepted.