LexSOHAN LAL GUPTA (DEAD) THR. LRS. AND ORS. versus SMT ASHA DEVI GUPTA AND ORS.
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SOHAN LAL GUPTA (DEAD) THR. LRS. AND ORS. A v. SMT ASHA DEVI GUPTA AND ORS. SEPTEMBER I, 2003 [V.N. KHARE, CJ. AND S.B. SINHA, J.] B Arbitration Act, 1940 Arbitration proceedings-Reasonable opportunity-Held, every party entitled to reasonable opportunity-However, party does not have unfettered C right-Arbitrator has a right of managing the hearing and giving directions in pursuance thereof-Direction to remain present on particular date, time and place would be sufficient compliance of the requirement of law-Party has no absolute right to insist on being consulted-Matter within the discretion of arbitrator and court will intervene only in the event of positive D abuse-Party alleging violation of principles of natural justice claiming that no proper notice received-Held, party not only required to show that proper notice was not given but also to show that serious prejudice was caused thereby-Jn the facts and circumstances, held, reasonable opportunity of participation in arbitration proceedings was granted-Principles of E natural justice-Administrative Law. Two groups of persons-Group G and Group S held several properties in which both groups had 50% shares each. Disputes and differences having arisen between the two groups as also between family members of the same group, an agreement was entered into for referring some of the disputes to a Sole Arbitrator. The Arbitrator gave F two awards, one for division of 50% cumulatively and another for division among family members of G group. Seven members of G group including S filed objections to the said awards. Single Judge set aside the award, inter a/ia, on the ground that no reasonable notice was G given to S which amounted to violation of principles of natural justice and that conduct of the Arbitrator in seeking a letter from the parties in anticipation that they would accept his award makes the award vulnerable. Appeal filed by appellants was dismissed by the Division Bench. Hence, these appeals. H 249 250 SUPREME COURT REPORTS [2003) SUPP. 3 S.C.R. A Appellant contended that notice was issued to all the parties and a reasonable notice to S in the facts and circumstances of the case should be inferred; that S had appeared before the Arbitrator earlier on various dates; that interest of all objectors had sufficiently been represented before the arbitrator since other objectors participated in B the arbitration proceedings; and that the letter of the Arbitrator to the parties seeking a letter that they would not challenge the award did not vitiate the arbitration proceedings. Allowing the appeals, the Court C HELD : I. 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. For constituting a reasonable opportunity, the following conditions are required to be observed : (i) Each party must have notice that the hearing is to take place; (ii) Each D party must have a reasonable opportunity to be present at the hearing, together with his advisers and witnesses; (iii) Each party must have the opportunity to be present throughout the hearing; (iv) Each party must have a reasonable opportunity to present evidence and argument in support of his own case: (v) Each party must have a reasonable opportunity to test his opponent's case by cross-examining his witnesses, E presenting rebutting evidence and addressing oral agrument; (vi) The he11ring must, unless the contrary is expressly agreed, be the occasion on which the parties present the whole of their evidence and argument. [263-F, 265-8-F) F Montrose Cannel foods ltd v. Eric Wells (Merchants) ltd., (1965) 1 Lloyd's, Report 597; Henry Southern ltd v. Norwich Union Life Insurance Society, (1992) 31 E.G. 701 referred to. Russel on Arbitration 22nd Edition, Paragraph 5-053 referred to. G 2. 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. If the arbitrator is to manage the arbitration proceedings, he H would be entitled to give direction to the parties to be present on the S. L. GUPTA v. ASHA DEVI GUPTA 251 particular date, particular time and particular place which would be A sufficient compliance of the requirement oflaw. A party
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