INDER SAIN MITTAL versus HOUSING BOARD HARYANA AND ORS.

Citation: [2002] 2 S.C.R. 5 · Decided: 21-02-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

_, 
... 
INDER SAIN MITT AL 
A 
v. 
HOUSING BOARD HARYANA AND ORS. 
FEBRUARY 21, 2002 
[M.B. SHAH AND B.N. AGRAWAL, JJ.] 
B 
Arbitration Act, J 940: 
Sections 30 and J 4(2)-Dispute between parties-Appointment of 
Arbitrator-Appointed Arbitrator transferred-However, he continued with C 
the proceedings and passed an award-Parties participated in arbitration 
proceedings without any protest-Party against whom award passed filed 
objection that award not binding as only the successor of appointed Arbitrator 
should have taken over the proceedings and passed award-Right to objection 
whether merits consideration-Held, such a case is not in disregard of any D 
provisions of law but breach of agreement-Thus by their conduct parties 
would be deemed to have waived their right to challenge validity of proceedings 
and the award. 
Respondent-Housing Board filed civil suits against the appellant-
Contractor. Court appointed Superintending Engineer as Arbitrator for E 
settlement of disputes. Arbitration proceedings commenced. Arbitrator was 
transferred, but still he continued with the arbitration proceedings and later 
on passed an award. Executive Engineer representing the Board, though 
conscious of the transfer of the Arbitrator, continued to attend the arbitration 
pr6ceedings with his counsel, and even filed affidavit in support of the claim F 
of the Board and adduced evidence. Thereafter, appellant-Contractor filed 
applications for making award rule of the Court. Respondent-Board objected 
on the ground that as the appointed Arbitrator was transferred, he had no 
authority and jurisdiction to further continue with the arbitration proceedings. 
Trial Court rejected the objections and directed the award to be made rule 
of the Court. Appellate Court upheld the order. However, High Court set G 
aside the order. Hence the present appeal. 
Appellants contended that by its conduct in participating in the 
arbitration proceedings, the Board had acquiesced to the continuance of the 
Arbitrator after his transfer and so it was not open to it to challenge the same. H 
5 
A 
B 
6 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. 
Respondent contended that the Arbitrator could not have continued 
with the arbitration proceedings and given the award after his transfer and 
only the successor could have continued from that stage and rendered the 
award. 
Allowing the appeal, the Court 
HELD: 1.1. Where the ground of objection under Section 30 of the 
Arbitration Act, 1940 to the reference made, with or without intervention of 
the Court, arbitration proceedings and the award flows from lawful 
agreement between the parties and is raised at the initial stage, Court may 
\.... 
C set it right at the initial stage or even subsequently in case the party objecting 
has not participated in the proceedings or participated under protest. But if 
a party acquiesced to the invalidity by his conduct by participating in the 
proceedings and taking a chance therein cannot be allowed to turn round after 
the award goes against him and is estopped from challenging validity or 
1 
otherwise of reference, arbitration proceedings and/or award inasmuch as 
D right of such a party to take objection is defeated. 
1.2. Where ground is based upon breach of mandatory provision of law, 
\.. 
a party cannot be estopped from raising the same in his objection to the award 
even after he participated in the arbitration proceedings in view of the well-
E settled maxim that there is no estoppel against statute, if, however, basis for 
ground of attack is violation of such a provision of law which is not mandatory 
but directory and raised at the initial stage, the illegality in appropriate case 
may be set right, but in such an eventuality if a party participated in the 
proceedings without any protest, he would be precluded from raising the point 
in the objection after making of the award. 
F 
2. In the instant case, it cannot be said that continuance of the 
proceed!ngs and rendering of awards therein by the Arbitrator after his 
transfer was in disregard of any provision of law much less mandatory one 
but, at the highest, in breach of agreement. Therefore, by their conduct by 
G participating in the arbitration proceedings without any protest the parties 
would be deemed to have waived their right to challenge validity of the 
proceedings and the awards, Consequently, the objections taken to this effect 
did not merit any consideration. 
N. Chellappan v. Secretary, K

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