JUDGMENT <NAME>, C.J.

1. This is an application for the issue of a writ of certiorari to quash the order of the Second Judge, <ORG>, Madras, sitting as the appellate authority made by him on 16th August 1949 in H. R. A. No. 1077 of 1949 setting aside the order of the Rent Controller dated 2nd August 1949 and directing eviction of the petitioner from the premises described as "Maharani Talkies".

2. By a registered deed dated 15th November 1948 executed by and between the petitioners and respondents 1 to 3, the respondents as lessors demised to the petitioners as lessees the cinema theatre known as "<ORG>", Madras, situated in Washerman pet. What was demised is thus described in the indenture:

''All the piece of ground with the new cinema theatre including the buildings and stall erected thereon known as 'Maharani Theatre' or 'Maharani Talkies' . . . together with all easements and appurtenances whatsoever thereunto belonging and also all the fixtures fittings, cinematographic talkie equipments, machinery, furniture, scenery and things in, upon and about the said theatre specified in the inventory hereunder."

The lease was for a term of five years commencing from 1st October 1948. The monthly rent and hire was fixed at Rs. 3200 and this sum is expressed to be made up as follows: (l) Rs.1600 being rent for the ground and superstructure, (2) Rs. 800 being hire of furniture, and (3) Rs. 800 being hire of talkie equipment, machinery, fittings and lessors' fixtures. The provisions off the lease deed which are material for the purpose of this application are contained in clause l Sub-Clauses (2) and (3), clause 25 and clause II Sub-clause (4) proviso..

"Clause I (2) : to pay the monthly reserved rent and-hire regularly each English calendar month's rent and hire being payable on or before the 10th of the respective succeeding month (whether demanded or not) irrespective of the question whether the necessary permission or licence from the municipal, police or other authority has or has not been applied for or obtained by the lessees and irrespective of the suspension or revocation temporarily or otherwise of the licence or permission and irrespective of the question whether the cinema or theatre is run or not.

(3) to pay to the lessors an advance of Rs. 21000 of which sum the lessees have already paid Rs. 10000 and the balance of Rs. 11000 being payable at or before the execution of these presents. The said advance shall not carry any Interest and shall be returnable to the lessees on the termination of the lease hereby created but subject to the lessees being complied with their covenants hereinafter contained. The lessors shall be at liberty to adjust the said advance towards the arrears of rent and hire if any remaining unpaid and towards damages losses, charges, costs and expenses recoverable both under this deed and in law.

Clause 25 : To yield up, subject to the exceptions and provisos hereunder mentioned, the demised premises together with the said fixtures, fittings, talkie equipment, machinery, furniture, scenery, articles and things and additions, alterations thereto and to the said buildings whether severable or otherwise and whether they are 'lessors' or 'lessees' fixtures or additions and also all affects which shall be brought upon the said premises in addition thereto or substitution thereof at the expiration or sooner determination of the said term in good and substantial repair and condition and with a full and working stock for the requirements of the cinema, and the theatre, belonging to the lessors, and otherwise in a fit, proper and working condition to be used for cinema and theatrical representations.

Clause II Sub-clause. (4) proviso (1) : If the rent hereby reserved (or any part thereof) shall remain unpaid for two tenancy months after the same becomes payable (whether legally or formally demanded or not) or if the lessees shall fail or neglect to perform or observe any of the covenants herein contained and on their part to be performed or observed other than clauses I (9) and (10) supra or if the lessees or either of them shall be adjudged insolvent, then and in any of the said eases, it shall be lawful for the lessors at any time thereafter to re-enter upon the demised premises or any part thereof in the name of the whole and thereupon the demise shall absolutely determine but without prejudice to the right of action of the lessors in respect of any breach of the lessees' covenants herein contained, and it shall be lawful for the lessors to make and effect such re-entry even without the consent of the lessees and without subjecting themselves to any action for trespass or otherwise and without recourse to legal proceedings."

On 30th April 1949, the petitioners, lessees, addressed a letter to the lessors enclosing a cheque for Rs. 3200 being the rent for the month of March 1949. The cheque however was postdated 6th May 1949. On 4th May 1949, the respondents returned the cheque and intimated that as the petitioners had defaulted in the payment of the rent due for the month of March 1949 they were applying for their eviction from the theatre. On the same day they filed an application before the Rent Controller, Madras, under Section 7 (2) (i), Madras Buildings (Lease and Rent Control) Act, 1946, praying for vacant possession of the said talkies (land and buildings). The allegations in the petition were that under the lease the monthly rent of Rs. 1600 for the ground and superstructures was payable on or before 10th of the respective succeeding month and that the lessees did not tender or pay to them the rent due for March 1949 till 30th April 1949 when they sent a post-dated cheque and by reason of the default made by the lessees they had become entitled to evict them from the land and buildings. The lessees pleaded that the application was unreasonable and contrary to the specific purport of the Act, that they were not statutory tenants but tenants governed by the express provisions of a registered lease and hence the application for eviction under Section 7 of the Act was not maintainable. They also pleaded that forfeiture of the lease for non-payment of the rent could be availed of only when the rent for a particular month remained unpaid for a period of two tenancy months after the same became payable and the rant for March had been tendered within the period fixed in the indenture of lease and therefore the provisions of the Act were not attracted. They also contended that a sum of Rs. 21,000 was in the hands of the lessors and it was obligatory on their part to adjust from the said advance the arrears of rent if any and they were therefore precluded from filing this application. We are not concerned with the other pleas raised in their counter statement.

3. The Additional Rent Controller dismissed the application on the ground that there was no default. It is not clear how and why he came to that conclusion. The main argument addressed on behalf of the lessees was that parties were aware of Madras Act XV [15] of 1946 and by this lease they had contracted out of the statute and therefore, the application was not maintainable. The Rent Controller was evidently not inclined to uphold this contention. There was an appeal by the lessors. The appellate authority approached the case from the standpoint that as eviction was claimed under the said Act, Madras Act XV [15] of 1946, and not under the general law in accordance with the agreement between the parties, the only question to be considered was whether there was a default within the meaning of Section 7 (2) (i) of the Act. As there was clearly such a default he found that the lessees were liable to be evicted. He overruled their plea that the arrears of rent should be adjusted from the advance of RS. 21,000. He therefore allowed the appeal and set aside the order of the Rent Controller, and passed an order for eviction. The petitioners are the lessees.

4. We may at the outset briefly dispose of one of the contentions pressed upon us by Mr, <NAME> for the petitioners, namely, that because a sum of Rs. 21,000 had been paid to the respondents and because under Clause 1 (3) the lessors were at liberty to adjust the said advance towards arrears of rent and hire if any remaining unpaid, it cannot be said that there had been a default in payment of the rent for March 1949. We think that this contention cannot prevail because the sum of Rs. 21,000 was not only security for the due payment of rent but also security for damage and loss and expenses which the lessors may sustain and incur on account of non-compliance of any of the covenants by the lessees. The advance is returnable to the lessees on the termination of the lease and presumably the adjustment either toward rent or towards damages or expenses is to be made also at the same time, namely, on the termination of the lease.

5. It was nest contended by Mr. <NAME> that though clause 1, Sub-clause (2) of the lease provided for the payment of the rent of each month before the 10th of the succeeding month, we should take into account the subsequent provision which provides for re-entry if the rent remains unpaid for two tenancy months after the same becomes payable. The result is that the time fixed in the agreement of tenancy must be deemed to be not the 10th of the succeeding month but 2 months thereafter -- so the argument ran. We think that the contention is very far-fetched. The time fixed in the agreement of tenancy for payment of the rent of any month is certainly the 10th of the succeeding month. The later provision deals with the right of the lessors to re-enter on the premises in a particular contingency. In fact this later provision itself alludes to rent remaining unpaid after the same had become payable. This contention cannot be accepted.

6. The most important contention of Mr. <NAME> then remains and this has given us considerable difficulty. Neither side has been able to cite any direct authority or any authority which gives any material assistance in the decision of the question. The contention is this. The parties knew or must be deemed to have been aware of the provisions of Madras Act XV [15] of 1946. It was open to the parties to enter into a contract containing terms manifestly inconsistent with the provisions of the Act. There is nothing illegal in such a course. As regards matters expressly provided for in the contract between the parties, the terms of the contract relating thereto would prevail over the provisions of the statute in so far as they are inconsistent. Incidentally, the learned counsel also argued that the parties did not contemplate that the contract of lease which they were entering into was to be governed by the provisions of Madras Act, xv [15] of 1946. In fact having regard to the peculiar nature of the lease with which we are concerned, it was contended that the Act would not apply to it.

7. After giving the question our careful consideration we have come to the conclusion that the provisions of Madras Act, xv [15] of 1946 would not apply to the lease in question. In coming to this conclusion, we have been impressed by the fact that the lease was entered into long after the Act had come into force and it must be presumed that the parties knew of its provisions. This Act was primarily intended to prevent unreasonable eviction of tenants and to regulate the letting of residential and non-residential buildings and to control the rents of such buildings. Though most of the provisions of the Act are obviously thus intended to safeguard the rights of tenants, there are provisions which, so far as they go, are in favour of the landlord also. Now Section 7 (2) (i) is one of such provisions which gives a right to the landlord to pray for the eviction of the tenant on default of due pay. ment of rent, Under that provision in a case where the rent is payable every month, even default in payment of the rent for one month entitled the landlord to apply for eviction of the tenant. This provision certainly is made for the benefit of the landlord. It is a well established principle of law that "every one has a right to waive and to agree to waive, the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity, which may be dispensed with without infringing any public right or public policy." (<NAME>, 9th Edn. p. 389).

There is no express prohibition against contracting out of it. Though we realise that the Act wag passed in accordance with a general policy, we cannot say that that policy would be violated if a contract is entered into between a landlord and tenant giving the tenant larger rights and greater privileges than those conferred on him by the Act. In the present case though under Section 7 (2) (i) of the Act the landlord may be entitled to apply for eviction even when there was default in payment of a month's rent, the lease deed ex. pressly provides that it is only if the rent remains unpaid for two tenancy months after the same became payable that the landlord is entitled to re-enter upon the demised premises. In the absence of authority that it is not permissible for the parties to contract themselves out of the provisions of this Act we hold that they can agree to be governed by terms and conditions which may be inconsistent with some of the provisions of the Act. There is no provision in i the Act which has a material bearing on this aspect couched in imperative terms, as, for ex. ample, found in some enactments which declare that any action done in contravention of the enactment is void. Even assuming that a plausible argument can be raised that on the grounds of public policy the tenant should not be bound by any term inconsistent with the Act which is to his detriment, we see no offence to public policy in allowing a landlord to abridge his rights. Otherwise it comes to this, that an Act intended to prevent unreasonable eviction of tenants can be used for the perpetration of the very thing sought to be prevented.

8. Mr. <NAME> argued that there is no reference to the Act in the lease deed and, therefore, it cannot be said that they contracted out of it. Merely because there was no reference to it we cannot presume that the parties or their legal advisers who evidently prepared the lease were not aware of the Act. Though the learned advocate attempted to contend that it would be against public policy to permit the parties to contrast out of this statute, he did not make good this contention by either citation of authority or otherwise. In this connection we have found the judgment of <NAME> in <ORG>, v. <ORG>, 1940 1 ch. 638: (1940-2 ALL E. R. 601) very instructive, and applying the test laid down by the learned Judge in that case we cannot say that any ground of public policy compels us to hold that it was not open to the lessor to abridge his right to evict his lessee.

9 We have come to the conclusion that the lessors' application in this case is not maintainable on other grounds as well. In our opinion the lease in question is not governed by the provisions of Madras Act, XV [15] of 1946. That Act regulates only the letting of residential and non-residential buildings. In Section 2 building has been defined as to include the garden, grounds and out-houses appurtenant to the building and furniture supplied by the landlord for use in such building. In the case before us, there is no lease of a mere building or a building with compound and furniture of the sort covered by the definition. The lease is of land and building together with fixtures, fittings, cinematographic talkie equipments, machinery and other articles. The lessors, evidently aware of the composite nature of the demise, have prayed in their petition for eviction of the lessees from the land and buildings only. On behalf of the respondent, Mr. <NAME> relied strongly on the provision in the deed which splits up the monthly rent and hire of Rs. 3200 into Rs. 1600 being rent for the ground and superstructure, Rs. 800 being hire of furniture and Rs. 800 being hire of talkie equipments and machinery, fittings and lessors' fixtures. We have no hesitation in holding that this splitting is purely notional and nominal and intended probably for purposes relating to the municipal assessment and other extraneous considerations. When we asked Mr. <NAME> what would happen, in this case when there is an eviction of the lessees from the land and building, to the machinery and equipments, etc. and whether there was any provision in the deed relating to them, he confessed that there was no specific provision in the deed. Obviously they cannot be governed by Madras Act XV [15] of 1946 and so he said they must be governed by the general law of contract. He also conceded that if the lessees paid Rs. 1600 but defaulted in the payment of the balance which is due as hire, the lessors have no right to ask for eviction under the Rent Control Act. We think that the attempted division of the lease and separation of rights in regard to two classes of property is in the highest degree artificial, never contemplated by the parties. Here is a lease of a talkie house with everything that is necessary to run cinema shows. To split up such a composite lease as this into separate contracts of lease and hire is to destroy, it altogether. Mr. <NAME> argued that the furniture which was covered by the lease fell within the definition of Section. 2 of the Act. We do not agree. The observations of the learned Judges in App. No. 590 of 1945 (<NAME> and <NAME>) in dealing with the plant, machinery and other moveables which were demised along with a factory are very apposite in this connection:

"No doubt in one sense the buildings comprised in the lease deed contain articles supplied by the landlord; but we cannot agree that what was so supplied can be considered in any modern sense as being furniture."

Though in that case the learned Judges were dealing with the lease of a factory called <ORG>, which consisted of land and buildings including a bungalow used for residential purposes together "with plant, machinery and moveables contained therein, we think the principle of that decision would apply equally to the case before us in which there is a lease not merely of a building but of a cinema theatre with all necessary equipment for the exhibition, of films.

10. We, therefore, hold that the appellate authority had no jurisdiction to direct eviction of the petitioners under the provisions of Madras, Act, XV [15] of 1946. His order must be and is hereby quashed. There will be no order as to costs.


JUDGMENT <NAME>, J.

1. In these appeals by certificate just one question arises for decision and that question is whether <ORG> was justified in refusing extension of time to the appellants to clear sugar released for sale in the open market?

2. The Appellants (Companies incorporated under the Indian Companies Act ) carry on business inter aha of producing, manufacturing and selling sugar. They have their factories either in Uttar Pradesh or in Bihar. By a notification dated June 10, 1966 <ORG> in exercise of the powers conferred on it by <CITATION> of the Essential Commodities Act, 1955 (Act X of 1955) promulgated the Sugar (Control) Order, 1966. Clause 4 of that Order restricted the sale of sugar by producers. It reads:

No producer shall sell or agree to sell or otherwise dispose of sugar or deliver or agree to deliver sugar, or remove any sugar from the bonded godowns of the factory in which it is produced, except under and in accordance with a direction issued in writing by <ORG> or the Chief Director.

By Order dated November 16, 1967, the Sugar (Control) Order, 1966 was amended and the above mentioned Clause 4 was substituted by the following Clause:

<ORG> may direct that no producer shall sell or agree to sell or otherwise dispose of, or deliver or agree to deliver any land of sugar or remove any kind of sugar from the bond ed godowns of the factory in which it ft produced, except under and in accordance with a direction issued in writing by <ORG>.

On August 16, 1967, the Minister for Food and Agriculture announced the sugar policy for 1967-68. According to that policy quantity equal to 60 per cent of the production achieved in every factory from October 1, 1966 to September 30, 1967 will be procured from each of them at a fixed levy price. Factories will be free to sell the balance of their production at the free market price subject to releases sanctioned by the Gov eminent of India. A press note dated October 21, 1967, was issued announcing the above policy. By notification No. 1750/ESS.Com/Sugar dated November 20, 1967 the powers conferred by Clauses inter alia 4 and 5 of the Sugar (Control) Order 1966 are made exercisable by the Chief Director or Director in <ORG> and <ORG> Agriculture Community Deve Development and Co-operation (<ORG>).

3. In exercise of the powers conferred by Clause 5 of the Sugar (Control) Order, 1966 read with aforesaid notification dated 20th November 1966, Respondent No. 2, the Director issued release Orders dated December 23, 1967 whereby he permitted the appellants to sell the quantity of sugar mentioned in each one of those Orders in the open market. Those Orders were received by the appellants on the 27th December, 1967. Thereunder they were required to dispose of sugar released for sale in the open market on or before January 22, 1968. Immediately after receiving the Order, the ap pellants entered into contracts with the dealers for the sale of sugar. They also applied for railway wagons for transport of that sugar to the States outside their own. Most of the Sugar released for open sale was removed from their go downs within the time prescribed but each of the appellants was not able to put into open market a fraction of the sugar released for sale in the open market as the railway wagons were not made available to them in time due to some difficulty or other on the part of the <ORG>.

4. It is satisfactorily proved that the appellants have taken every possible step dispose, of the sugar released for sale a the open market immediately after they received the release Orders. If they have not been able to dispose of some portion of the sugar released, it is not due to any fault of theirs It is entirely due to circumstances beyond their control.

5. It is admitted by the respondents that a decision had. been taken to give the producers 30 days time for disposal of the sugar released for sale in the open market. It is proved that in the case of the appellants only 26 days had been given for the disposal of that sugar.

6. It must be remembered that right to trade is a guaranteed freedom. That right can be restricted only by law, considered by the <ORG> as reasonable in the circumstances. Not only the law restricting the freedom should be reasonable, the Orders made on the basis of that law should also be reasonable. It is clear that the sugar released for sale in the open market will have to bo ordinarily sent out of the States in which they are produced. For doing so, the concerned producers will have to enter into contracts with dealers at far off places. Thereafter the sugar will have to be transported to places of disposal mainly through railways. Taking all the circumstances into consideration, we do not think that the period of 30 days given for disposal of the sugar is in any manner generous. That being so, we are clearly of the opinion that the 28 days time given to the appellants for the disposal of the sugar cannot be considered as reasonable. We think that the second respondent unreasonably rejected the apAppellants request to extend the time for the disposal of the sugar released for sale in the open market. He appears to have acted mechanically.

7. For the reasons mentioned above we allow these appeals and direct the respondents (in accordance with the Orders made in these appeals on June 6, 1969) to release to the appellants an equivalent quantity of sugar for free sale out of the appellants quota of levy sugar for the season 1968-69 in lieu of the sugar that they had to surrender from out of the quota released to them for sale in the open market for the year 1967-68. The appellants are entitled to their costs both in this <ORG> as well as in the High <ORG>.


PETITIONER: MR. R.D. HATTANGADI Vs. RESPONDENT: M/S PEST CONTROL (INDIA) PVT. LTD. & ORS DATE OF JUDGMENT06/01/1995 BENCH: SINGH N.P. (J) BENCH: SINGH N.P. (J) AHMADI A.M. (CJ) CITATION: 1995 AIR 755 1995 SCC (1) 551 JT 1995 (1) 304 1995 SCALE (1)79 ACT: HEADNOTE: JUDGMENT:

1. The appellant met with an accident while travelling in an Ambassador car (Registration No. MEQ 4583) on 20-51980 at about 8.30 A.M. near village Sirur on Karwar-Mangalore Road (National Highway No. 17) within the State of Karnataka. There was a head on collision between the car in which the appellant was travelling and the Motor Lorry (Registration No. MYS 7218). Because of the said collision, the driver of the car in which the appellant was travelling was thrown out and died on the spot, whereas the appellant was trapped between the dashboard and the seat. Mr. <NAME> who was also travelling with the appellant in the car was thrown on the road. The impact was so severe that the front left side of the door of the car was jammed and could not be opened. Seeing the accident, the villagers gathered and broke open the left side of the car with the help of crow bar and the appellant was taken out. The appellant was removed to <ORG> where he was treated as indoor patient from 20.5.1980 to 27.5.1980. When the relations of the appellant reached the hospital, a decision was taken to remove the appellant to Bombay and accordingly on 27.5.1980 he was brought to Bombay and was admitted in <ORG>. The appellant remained in the said hospital as indoor patient from 27.5.1980 to 2.8.1980. Because of the accident, the appellant suffered serious injuries resulting into 100% disability and a paraplegia below the waist.

2. The car was owned by <ORG>, respondent No. 1 and was insured with <ORG>, respondent No.2. The motor lorry was owned by one <NAME> respondent No.3 and was insured by <ORG>, respondent No.4. According to the appellant, the driver of the car in which the appellant was sitting as well as the driver of the lorry which was coming from the opposite side, both were being driven in a rash and negligent manner which resulted into a head on collision. On 11. 10. 1980 the ap- pellant gave notice to <ORG> and other parties who were liable to pay compensation and called upon them to pay compensation of Rs.4,00,000/-. Since there was no response, on 13.11.1980 the appellant filed the claim petition under Section 110-A of the Motor Vehicles Act, 1939 (hereinafter referred to as the 'Act'). Initially, the appellant made a claim for compensation amounting to Rs.4,00,000/-, but on 16.4.1984 he claimed Rs.35,00,000/- as the compensation from the respondents and claim petition was amended. The age of the appellant at the time of accident was 52 years.

3. The appellant was a practicing advocate before the accident. He was also a Judge of <ORG> for some time until he resigned in the year 1964. The appellant used to appear in the various courts including <ORG> and <ORG>. Because of the accident, the appellant became disabled and he was unable to resume his practice.

4. The claim made on behalf of the appellant was resisted by the respondents to the said petition on different grounds. The owner of the lorry resisted his liability to pay any amount of compensation on the ground that although he was the owner of the said lorry but since it was insured with respondent No.4, the insurance company was liable to pay compensation, if any, to the appellant. <ORG>, who were the owner of the car resisted the claim made on behalf of the appellant asserting that the driver of the said car was driving the car very cautiously and carefully and the accident took place entirely due to the negligence on the part of the driver of the motor lorry. In any case, according to the said respondent, the compensation claimed on behalf of the ap- pellant was excessive, imaginary and speculative in nature, which according to the said respondent was an attempt to make "a fortune out of misfortune". Respondent No.2, <ORG>, with whom the car in question was insured took a plea that their liability was limited to the requirements as per law and terms and conditions of the insurance policy issued by them in favour of Respondent No.

1. <ORG>, who had insured the motor lorry of Respondent No.3, their stand was also the same that they were bound by the terms and conditions of the insurance policy.

5. <ORG> on consideration of the materials on record and the evidence adduced on behalf of the parties passed on Award directing respondent Nos. 1 and 2 to pay jointly and severally to the appellant compensation of Rs.26,25,992/- together with interest at the rate of 12% per annum from the date of the application i.e. 13.11.1980 till payment and costs of the said application within three months. The Tribunal was also of the view that respondent No.4 the insurer of the motor lorry belonging to respondent No.3 was liable to pay the compensation to the extent of Rs.50,000/- and interest thereon and proportionate costs. In the award a direction was given to Respondent No.2, the insurer of the car to pay all the compensation along with interest and costs on behalf of respondent No. 1.

6. Against the Award aforesaid, two appeals were filed before <ORG>, one on behalf of the appellant for enhancement of the compensation awarded by the <ORG> and the other on behalf of <ORG>, respondent No. 1 and <ORG>, respondent No.2 questioning the validity and correctness of the award in question. <ORG> by the impugned judg- ment modified the award of the <ORG> and reduced the compensation from Rs.26,25,992/- to Rs.8,57,352/-. <ORG> has also reduced the rate of interest from 12% per annum to the rate of 6% per annum. The award against the insurer of the lorry-respondent No.4 was affirmed and direction was given to make payment with interest at the rate of 6% and the proportionate costs. It was further directed that if the respondents failed and neglected to pay the amount in full or part, such defaulted amount shall carry 12% interest per annum from the date of default till its realisation. On the aforesaid finding the appeal filed on behalf of the appellant was dismissed, whereas the appeal filed on behalf of Respondent Nos. 1 and 2 was allowed by <ORG> in part.

7. During the last few decades ques-

tion of payment of compensation for accidents has assumed great importance, which is co-related with the accidents which have touched a new height not only in India but in different parts of the world. Initially, the theory of payment of compensation was primarily linked with tort compensation only if the injury or damage was caused by someone's fault, of late the injury or damage being caused by someone's fault is being read as because of someone's negligence or carelessness. That is why any damage caused by negligent conduct is generally actionable irrespective of the kind of activity out of which the damage arose. Even in an action based on the tort, the applicant has to show that the defendant was negligent i.e. there was a failure on his part to take that degree of care which was reasonable in the circumstances of the case. There has never been any doubt that those using the highways are under a duty to be careful and the legal position today is quite plain that any person using the road as a motorist will be liable, if by his action he negligently causes physical injuries to anybody else.

8. The <ORG> as well as <ORG> has examined the evidence adduced on behalf of the parties and have recorded clear findings that at the relevant time the car and the lorry were being driven in a rash and negligent manner. Reference has been made to the evidence adduced on that question. The fact that the front left side of the car was entangled with the front middle of the lorry speaks about the rashness on the part of the drivers of the two vehicles. The <ORG> has also pointed out from the materials on record that the motor car had gone to the wrong side of the road at the time of the accident. <ORG> after referring to the order of the <ORG> said that after going through the evidence of the witnesses and the circumstances placed, it was of the opinion that the <ORG> was right in holding that there was composite negligence on the part of the drivers of both the vehicles and because of such negligence the appellant had sustained such serious inju- ries. <ORG> also said that in view of composite negligence, the appellant was entitled for damages from the owners of both the vehicles and consequently the insurers of the two vehicles shall also be liable subject to the terms and conditions of the insurance policies. The <ORG> as well as <ORG> were satisfied that because of the accident aforesaid, the appellant had become paraplegic and it was not easy to assess the exact compensation which is payable' to him.

9. Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which is capable of being calculated in terms of money-, whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations. In order to appreciate two concepts pecuniary damages may, include expenses incurred by the claimant : (i) medical attendance; (ii) loss of earning of profit upto the date of trial; (iii) other material loss. So far non-pecu- niary damages are concerned, they may include (i) damages for mental and physical shock, pain suffering, already suffered or likely to be suffered in future; (ii damages to compensate for the loss of amenities of life which may include a va-

riety of matters i.e. on account of injury the claimant may not be able to walk, run or sit; (iii) damages for the loss of expectation of life, i.e. on account of injury the normal longevity of the person concerned is shortened; (iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.

10. It cannot be disputed that because of the accident the appellant who was an active practicing lawyer has become paraplegic on account of the injuries sustained by him. It is really difficult in this background to assess the exact amount of compensation for the pain and agony suffered by the appellant and for having become a life long handicapped. No amount of compensation can restore the physical frame of the appellant. That is why it has been said by courts that whenever any amount is determined as the compensation payable for any injury suffered during an accident, the object is to compensate such injury "so far as money can compensate" because it is impossible to equate the money with the human sufferings or personal deprivations. Money cannot renew a broken and shattered physical frame.

11. In the case <NAME> v. <NAME> 1965(1) All E.R.563 it was said:

"Although you cannot give a man so gravely injured much for his "lost years", you can, however, compensate him for his loss during his shortened span, that is, during his expected "years of survival ". You can compensate him for his loss of earnings during that time, and for the cost of treatment , nursing and attendance. But how can you compensate him for being rendered a helpless invalid? He may, owing to brain injury, be rendered unconscious for the rest of his days, or, owing to back injury, be unable to rise from his bed. He has lost everything that makes life worth- while. Money is no good to him. Yet judges and juries have to do the best they can and give him what they think is fair. No wonder they find it well nigh insoluble. They are being asked to calculate the incalculable. The figure is bound to be for the most part a conventional sum. The judges have worked out a pattern, and they keep it in line with the changes in the value of money. "

12. In its very nature whenever a <ORG> or a <ORG> is required to fix the amount of compensation in cases of acci- dent, it involves some guess work, some hypothetical consideration, some amount of sympathy linked with the nature of the disability caused. But all the aforesaid el- ements have to be viewed with objective standards.

13. This Court in the case of <CITATION> , AIR 1970 SC 376 in connection with the Fatal Accidents Act has observed:

"In assessing damages, the Court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable."

14. In Halsbury's Laws of England, 4th Edition, Vol.12 regarding non-pecuniary loss at page 446 it has been said:-

"Non-pecuniary loss: the Pattern. Damages awarded for pain and suffering and loss of amenity constitute a conventional sum which is taken to be the sum which society deems @ fairness being interpreted by the courts in the light of previous decisions. Thus there has been evolved a set of conventional principles providing a provisional guide to the com- parative severity of different injuries, and indicating a bracket of damages into which a particular injury will currently fall. The particular circumstances of the plaintiff, including his age and any unusual deprivation he may suffer, is reflected in the actual amount of the award.

The fall in the value of money leads to a continuing reassessment of these awards and to periodic reassessments of damages at certain key points in the pattern where the disability is readily identifiable and not subject to large variations in individual cases."

15.We are informed that during the pendency of the appeal before <ORG> on basis of interim directions Rs.3 lakhs and Rs.9 lakhs, in total Rs.12 lakhs have been directed to be deposited. However, in the final decision, <ORG> was of the opinion that the appellant was entitled to Rs.8,57,352/- only as the compensation.

16.During the hearing of the appeal a chart was circulated showing the amounts claimed on behalf of the appellant under different heads and the amounts allowed or rejected by <ORG>, under those heads. So far, the amount mentioned against Sl.No. 1 is concerned, <ORG> has allowed the whole claim of Rs.47,652/- and there is no dispute on that account. Against Sl.Nos. 2 to 6 the appellant had claimed Rs.37,688/- for Ayurvedic treatment against which an amount of Rs.4,000/- has been allowed by <ORG>. According to us, this part of the judgment of <ORG> does not require any interference. Against Sl.No.7 the appellant has claimed for Fowler's Bed, Rs.21,000/- for the present and Rs.21,000/ for the future which has not been allowed. Same is the position in respect of electric wheel chair against Sl.No.8 which has been claimed at the rate of Rs.50,000/- for the present and Rs.50,000/ for the future which has been rejected by <ORG>. According to us, when admittedly because of the injuries suffered during the accident, the appellant has become paraplegic, the aforesaid amounts should have been allowed by <ORG>. Accordingly, we allow the said claim for Rs. 1,42,000/- under Sl.Nos. 7 and 8. So far claim, for Air Inflated Bed at Sl.No.9 is concerned, the appellant has claimed Rs.5,000/- for the present and Rs.5,000/- for the future. <ORG> has allowed only Rs.5,000/for the present. According to us, the remaining amount of Rs. 5,000/- also should have been allowed by <ORG>. Coming to the claim for Home Attendants against Sl.No.9A. the appellant has claimed Rs.55,450/- for the present and Rs.1,87,200/- for the future. <ORG> has allowed Rs.36,000/- and Rs.72,000/- respectively. We feel that there was no occasion for <ORG> to be so mathematical on this question. Under the circumstances prevailing in the society in respect of Home Attendants, <ORG> should have allowed the amount as claimed by the appellant.We accordingly allow the same. For Drugs and Tablets (Allopathic), claim has been made for Rs.9,000/- for the present and Rs. 18,000/- for the future. <ORG> has allowed Rs.5,400/-and Rs.10,800/-respectively under that head as detailed against SI.NO. 10. The claim under this head appears to be reasonable and should have been allowed, we allow the same. Against SI.No.11 the appellant has claimed for Ayurvedic treatment Rs.7,800/- for the present and Rs.37,440/- for the future. <ORG> has allowed Rs.7,200/- and Rs. 12,000/- respectively. According to us this part does not require any interference. Under Sl.No. 12 (i) <ORG> Dressing Charges for the present and future have been claimed respectively at Rs.72,900/ - and Rs.1,29,600/- against which <ORG> has allowed Rs.20,000/and Rs.10,000/- respectively. In normal course for <ORG> the claim for Rs.72,900/ - for the present and Rs. 1,29,600/- for the future appears to be exorbitant. <ORG> has rightly directed payment of Rs.20,000/- and Rs.10,000/-. As such this part of the finding of <ORG> does not require interference. Under Sl.No. 12 (ii) claim has been made for Cathetarisation charges at Rs. 1,29,600/- for the present and Rs.2,59,200/- for the future. <ORG> has allowed Rs.10,000/- and Rs.5,000/- respectively. We are of the opinion that the amount awarded by <ORG> under this head does not require any interference. So far the order of <ORG> in respect of bladder wash charges and enima charges is concerned, it also does not require any interference. Under Sl.No.13 Rs.20,100/- has been claimed as charges for consulting Surgeons for the present and Rs. 14,400/- has been claimed for the future. <ORG> has allowed Rs. 5,000/- for the present and the same amount for future. We feel that this part of the finding of <ORG> does not require any interference. For Physiotherapy under SI.No. 14, Rs.34,200/ - has been claimed for the present and Rs.1,87,200/- for the future. <ORG> has allowed Rs.12,000/- for the present and Rs. 12,000/- for the future. It is well known that for victims of road accidents, Physiotherapy is one of the ac- knowledged mode of treatment which requires to be pursued for a long duration. <ORG> should have allowed Rs.34,200/- as claimed by the appellant for the present and at least Rs. 50,000/- for the future. However we allow the same. In respect of loss of earnings under Sl.No.15 claim has been made for Rs. 1,80,000/-, <ORG> has allowed Rs. 1,44,000/- <ORG> should have allowed the whole claim. We allow the same. For loss of future earnings, claim has been made at Rs.3,60,000/-. <ORG> has allowed Rs. 1,62,000/in respect of loss of future earnings. This part of the award does not require any interference because an amount of Rs. 1,62,000/- can be held to be a reasonable amount to be awarded taking all facts and circumstances in respect of the future earnings of the appellant.

17. The claim under SI.No. 16 for pain and suffering and for loss of amenities of life under Sl.No.17 , are claims for Non-Pecuniary Loss. The appellant has claimed lump-sum amount of Rs.3,00,000/- each under the two heads. <ORG> has allowed Rs. 1,00,000/- against the claims of Rs.6,00,000/-. When compensation is to be awarded for pain and suffering and loss of amenity of life, the special circumstances of the claimant have to be taken into account including his age, the unusual deprivation he has suffered, the effect thereof on his future life. The amount of compensation for non-pecuniary loss is not easy to determine but the award must reflect that different circumstances have been taken into consideration. According to us, as the appellant was an Advocate having good practice in different courts and as because of the accident he has been crippled and can move only on wheel chair, <ORG> should have allowed an amount of Rs. 1,50,000/- in respect of claim for pain and suffering and Rs. 1,50,000/-

in respect of loss of amenities of life. We direct payment of Rs.3,00,000/-(Rupees three lakhs only) against the claim of Rs.6,00,000/- under the heads 'Pain and Suffering' and 'Loss of amenities of life'.

18. So far the direction of <ORG> regarding payment of interest at the rate of 6% over the total amount held to be payable to the appellant is concerned, it has to be modified. <ORG> should have clarified that the interest shall not be payable over the amount directed to be paid to the appellant in respect of future expenditures under different heads. It need not be pointed out that interest is to be paid over the amount which has become payable on the date of award and not which is to be paid for expenditures to be incurred in future. As such we direct that appellant shall not be entitled to interest over such amount.

19. The appeals of the appellant are allowed to the extent indicated above. No costs.

<ORG>

v.

<NAME>.

Special Leave Petition (C) No.4586 of 1989

20. This Special Leave petition has been filed on behalf of <ORG> and <ORG>. against the same judgment of <ORG>. As the Civil Appeal Nos. 1799-1800 of 1989 have been allowed in part and the amount of compensation awarded to the victim by <ORG> has been enhanced, this Special Leave Petition has to be dismissed and it is accordingly dismissed. No costs.


PETITIONER: INTERNATIONAL AIRPORT AUTHORITY OF INDIA Vs. RESPONDENT: K.D. BALI & ANOTHER DATE OF JUDGMENT29/03/1988 BENCH: <NAME>, <NAME> (J) BENCH: <NAME>, <NAME> (J) <NAME>, S. CITATION: 1988 AIR 1099 1988 SCR (3) 370 1988 SCC (2) 360 JT 1988 (2) 1 1988 SCALE (1)631 CITATOR INFO : R 1988 SC2232 (13) D 1991 SC 933 (11) ACT: Arbitration Act , 1940-Whether a party to arbitration proceedings can seek revocation of authority of the arbitrator appointed under sections 5 and 11-Of -on apprehension in the mind of such a party about bias of the arbitrator-Determination of the question. HEADNOTE: % This petition for special leave was against the judgment and order of <ORG>, rejecting the application for revocation of the authority of the respondent No. 1, the sole arbitrator under sections 5 and 11 of the Arbitration Act, 1940 (' The Act '). The petitioner invited tenders for the construction of the terminal building of a new international passenger complex (Phase II) at the Bombay Airport. The respondent No. 2, a partnership firm, submitted a tender which was accepted and a formal agreement followed, with a provision in the agreement for settlement of disputes through a sole arbitrator appointed under clause 25 of the conditions of contract by the competent authority. Certain disputes arose in which the petitioner sought claims amounting to Rs.85 lakhs. The respondent No. 2-the contractor-approached the petitioner to refer the disputes to arbitration. The Chief Engineer of the petitioner appointed respondent No. 1 as the arbitrator and made a reference with regard to the claim of Rs.85 lakhs. The respondent No. 2 asked the Chief Engineer to refer further disputes to the arbitrator and, accordingly, on 16th May, 1986, a second reference was made with regard to 11 further points of dispute with claims amounting to Rs.1.17 crores. On 23rd December, 1986, the Chief Engineer made reference No. 3 to the Arbitrator with regard to claim amounting to Rs.5.81 crore. Thereafter, by applications of 8th and 9th June, 1987, the petitioner expressed objections to the references Nos. 2 and 3 made by the Chief Engineer contending that the references were null and void, being irregularly made, and took preliminary objections before the arbitrator to the arbitration proceedings, being lack of jurisdiction of the arbitrator on the ground that he was not validly appointed so far as references Nos. 2 and 3 were concerned. On 7th 371 August, 1987, the petitioner made an application before the arbitrator under section 13(b) of the Act with the request to state the matter before him for the opinion of the <ORG> as special case. The arbitrator by his order dt. 3rd October, 1987, rejected the said application and the preliminary objections of the petitioner. Thereafter, the petitioner alleging that the arbitrator had formed his own opinion regarding the matters in issue, filed an appliction before the High <ORG> for the revocation of the authority of the arbitrator on the ground of apprehension in the petitioner's mind about bias of the arbitrator. The High <ORG> by its judgment and order dt. 2nd February, 1988, rejected the application of the petitioner. The petitioner then moved this <ORG> for relief by special leave. Dismissing the petition for special leave, the <ORG>, ^ HELD: It was necessary to reiterate first what are the parameters by which an appointed arbitrator can be removed on the appliction of a party. It is well-settled that there must be purity in the administration of justice as well as quasi-justice involved in the adjudicatory process before the arbitrator. Once the arbitrator enters on an arbitration, he must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness. It is not a question of the effect which a misconduct on his part had in fact upon the result of the proceeding, but of what effect it might possibly have produced. It is not enough to show that even if there was misconduct on his part, the award was unaffected by it and was in reality just; the arbitrator must not do anything which is not in itself fair and impartial. In the words of Lord <NAME>, <ORG>, there must be a real likelihood of bias and not a mere suspicion of bias before proceedings can be quashed on the ground that the person conducting the proceedings is disqualified by interest. The purity of administration requires that the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party, but it is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased, as held by the High <ORG>. The apprehension must be judged from a healthy, reasonable and average point of view and not on a mere apprehension of any whimsical person. It cannot be and should never be in a judicial or quasi-judicial proceeding that a party who is a party to the appointment could seek the removal of an appointed authority or an arbitrator on the ground that the appointee being his nominee had not acceded to his prayer about conduct of the proceedings. It is the reasonableness and apprehension 372 of an average honest man that must be taken note of. There was no substance found in the alleged grounds of apprehension of bias, examined in this light. [378D-G; 379D- H; 380A-B] The High <ORG> had examined five circumstances advanced before it. The first was that the arbitrator did not record the minutes of the meetings after September 29, 1987. The petitioner insisted that the arbitrator should record the minutes setting out the entire oral arguments advanced on behalf of the petitioner. This was not a reasonable request and the arbitrator rightly declined to do that. This was no basis of any reasonable apprehension of bias. [380C-E] The next circumstance urged was that the preliminary objections raised by the petitioner were rejected without a speaking order. It was not necessary for the arbitrator to record a long reasoned order on the preliminary objections, and indeed the law does not demand writing such a long order. In any case, it would be open to the petitioner to file a petition under section 33 of the Act if the petitioner felt that the arbitrator had no jurisdiction to entertain the reference. It would be open to the petitioner to challenge the award to be declared by the arbitrator, including on ground of jurisdiction. [380E-H] The third circumstance was that the petitioner had filed an application under section 13(b) of the Act calling upon the arbitrator to state a special case for the opinion of the <ORG> and the failure of the arbitrator to raise the question of law was indicative of bias. This argument could not be accepted. Section 13(b) confers power on the arbitrator to state a special case but it does not make it obligatory on the part of the arbitrator to state a special case as soon as the party desires it. In this case, the petitioner itself agitated the issue of jurisdiction and other questions of law before the arbitrator. Once having done so, it was not proper for the petitioner to ask the arbitrator to state a special case. This was no ground for bias. [381A-C] The fourth ground was that the first reference, involving a claim for Rs.85 lakhs, was heard for a considerable time, while the arguments in respect of the second and third references covering claims of Rs.1.17 crores and Rs.5.81 crores were concluded by the respondent No. 2 within one and one-fourth of a day. The length of the time taken is no indication of either speeding up or any abuse of the proceedings. The <ORG> agreed with the High <ORG> that there is no rule which requires that the length of the argument should depend upon the magnitude of the claim made. [381D] 373 The other point urged by the petitioner was that the venue of arbitration was changed and this change was without the consent of the petitioner. Change of venue would in no manner indicate that the arbitrator was prejudiced against the petitioner. This was solely a fallacious ground to make out a case of alleged bias. [381E-G] The other ground was that as, since 9th June, 1987, the petitioner had not paid for the air-ticket of the arbitrator from Delhi to Bombay and for his residential accommodation, the respondent No. 2 must be providing for the air-ticket and the hotel accommodation for the arbitrator, and the arbitration was likely to be biased. As rightly pointed out by the High <ORG>, the petitioner, after the 9th June, 1987, seemed to have decided that the arbitrator should not proceed with the reference and in order to frustrate the arbitration proceedings, started raising all sorts of frivolous and unsustainable contentions. Having realised that the arbitrator was not willing to submit to its dictates, the petitioner declined to contribute for the air- ticket, etc. No party should be allowed to throw out the arbitration proceedings by such tactics, and if the arbitrator did not surrender to the pressure, he could not be faulted nor could the proceedings of the arbitrator be allowed to be defeated by such a method. [381G-H; 382B-D] Another ground made was that there was a loss of confidence. There was no reasonable ground for such a loss of confidence. Every fancy of a party cannot be a ground for removal of the arbitrator. [382D] The <ORG> was in agreement with the learned Judge of the High <ORG> expressing unhappiness over the manner in which attempts had been made to delay the proceedings. [382G] The <ORG> found no ground to conclude that there could be any ground for reasonable apprehension in the mind of the petitioner for revocation of the authority of the arbitrator appointed by the petitioner itself. While endorsing and fully maintaining the integrity of the principle 'justice should not only be done, but should manifestly be seen to be done', it is important to remember that the principle should not be led to the erroneous impression that justice should appear to be done than it should in fact be done. There was no reasonable ground of any suspicion of bias of the arbitrator. The conduct of the arbitrator did not fall within the examples given and principles enunciated in the instances of cases where bias could be found in the Commercial Arbitration by <NAME> and <NAME>, 1982, Edn. [383A-C] 374 Russell on Arbitration, 18th Edition, page 378, Re Brion and Brien,  2 I.R. 83, 89; The King (De Vesci) v. The Justices of Queen's Country,  2 I.R. 285; The Queen v. <ORG>.,  1 Q.B. 230; <CITATION> 34 Pat. 254; The Queen v. <ORG>,  1 Q.B. 173; Ekersley and <ORG>. v. <ORG>,  2 Q.B. 667; <CITATION> ,  1 SCR 580; <CITATION> ,  2 SCR 609; <CITATION> ., A.I.R. 1987 SC 2386 and R.V. Camborne Justices Ex parte Pearce,  2 All. E.R. 850, 855 referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 2545 of 1988.

From the Judgment and Order dated 2.2.1988 of <ORG> in Arbitration Petition No. 234 of 1987.

<NAME>, Additional Solicitor General, <NAME>, <NAME> and <NAME> for the Petitioner.

<NAME>, <NAME>, <NAME> and Mrs. <NAME> for the Respondents.

The Judgment of the Court was delivered by <NAME>, J. After hearing the parties fully we had by our order dated 10th March, 1988 dismissed the special leave petition under Article 136 of the Constitution. We stated therein that we would indicate the reasons by a separate judgment later. We do so by this judgment.

This is a petition for leave to appeal under Article 136 of the Constitution from the judgment and order of the learned Judge of <ORG> dated 2nd February, 1988. By the impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent No. 1, <NAME>, sole arbitrator under sections 5 and 11 of the Arbitration Act, 1940 (hereinafter called 'the Act'). In order to appreciate the contentions raised, it may be stated that <ORG> which was the petitioner in <ORG> and is the petitioner herein had invited tenders for the work of construction of terminal building of new international passenger complex (Phase II) at the Bombay Airport at Sahar, Bombay. Respondent No. 2, M/s. Mohinder Singh and Company, a partnership firm having registered office at Delhi and carrying on business in Bombay submitted a tender and it was accepted for the value of Rs.7,26,31,325. A formal agreement followed on 22nd January, 1982. It is not necessary to refer to the clauses of the agreement for the present purposes. It may be reiterated, however, that there was provision in the agreement for settlement of disputes through appointment of sole arbitrator under clause 25 of the Conditions of Contract by the competent authority. Certain disputes arose in which the petitioner sought claims amounting to Rs.85 lakhs. Respondent No. 2 contractor approached the petitioner by letter dated 22nd February, 1985 to refer the disputes with regard to claims amounting to Rs.85 lakhs to the arbitration. One Shri K.K. Sud, the Chief Engineer of the petitioner by his letter appointed respondent No. 1 as the arbitrator and made the reference with regard to the claim of Rs. 85 lakhs on 23rd February, 1985. On 8th March, 1985, it appears from the narration of the events in the judgment impugned that the arbitrator gave directions to the parties regarding submission of pleadings. Respondent No. 2 filed pleadings within time, but the petitioner filed its pleadings after a delay of two and a half months. On 17th March, 1986 respondent No. 2 addressed a letter to the Chief Engineer asking for reference of further disputes to the arbitration and accordingly on 16th May, 1986 a second reference was made referring 11 further points of dispute. A third reference was sought by respondent No. 2 on 22nd May, 1986 in respect of seven more claims but the petitioner informed on June 12, 1986 that the third reference was premature. It appears that in respect of the second and third references the assertion of the petitioner was that these disputes were not referable to the arbitrator. The arbitrator had directed the parties to submit their statements in respect of second reference and though respondent No. 2 submitted its claim within the stipulated period, the petitioner had again delayed doing so according to the learned Judge and according to the assertions of respondent No. 2 for a period of three months. On 16th May, 1986 the Chief Engineer made reference No. 2 with regard to claims amounting to Rs.1.17 crores to the arbitrator. On 23rd December, 1986 the Chief Engineer of the petitioner made another reference being reference No. 3 to the arbitrator with regard to claims amounting to Rs.5.81 crore. The petitioner by its applications of 8th and 9th June, 1987 expressed its objections to the references Nos. 2 and 3 made by the Chief Engineer as according to the petitioner the said references were null and void as these were irregularly made. On 26th June, 1987 the petitioner by its written submissions took preliminary objection before the arbitrator to the said arbitration proceedings, being lack of jurisdiction of the arbitrator on account of the fact that he was not validly appointed as far as references Nos. 2 and 3 were concerned. The petitioner by its application dated 3rd August, 1985 noted that respondent No. 1 had not noted the minutes of the meeting dated 10th of June, 1985 correctly. The petitioner by its application on 15th of June, 1987 requested respondent No. 1 not to proceed with the arbitration proceedings till its preliminary objections regarding jurisdictional aspects were decided and also made it clear that it was appearing under protest in the proceedings before him. The petitioner on 17th June, 1987 made oral submissions before respondent No. 1 with regard to its preliminary objections. Respondent No. 1 directed the petitioner to submit the rest of its submission by way of written submissions. The petitioner by its applications dated 22nd and 25th June, 1987, respectively objected to respondent No. 1 directing it to make submissions by way of written submissions and thus hurrying up the proceedings. On 26th June, 1987 the petitioner submitted written submissions to respondent No. 1. Respondent No. 1 by his order dated 27th June, 1987 directed that further proceedings would be undertaken only after the extension of time. Respondent No. 2 applied for enlargement of time and the same was granted by <ORG>. On 7th August, 1987 application under section 13(b) of the Act was made before the arbitrator with a request to state the matter before it as Special Case for the opinion of the <ORG>.

The arbitrator by his order dated 3rd October, 1987 rejected the said application of the petitioner and also rejected the preliminary objections of the petitioner at the same time. On 14th October, 1987 the petitioner by its letter noted the fact that it has sent the minutes of the meeting with regard to the proceedings held on 28th and 29th September, 1987 to the arbitrator as directed by him. In the said letter the petitioner also protested against the arbitrator's decision of changing the venue of the proceedings and also the inconvenient dates being fixed by him. The petitioner by its letter dated 11th October, 1987 conveyed its concern to the arbitrator that he has been rushing through the proceedings. On 16th December, 1987 the petitioner alleging apprehension that respondent No. 1 had formed his own opinion regarding the matters in issue. The petitioner approached <ORG> with the instant application. This application was rejected by <ORG>. The learned Judge changed the date fixed for hearing of the application for extension of time by enlarging the time to make the award by 15th February, 1988.

The main contention for the revocation of the authority of the arbitrator was about the alleged apprehension in the mind of the petitioner about bias of the sole arbitrator. The learned Judge of <ORG> was unable to accept any ground for alleged apprehension. It is apparent as the learned Judge noted that respondent No. 2 had complied with the directions of the arbitrator about the conduct of the proceedings but the petitioner went on seeking adjournments after adjournments. Respondent No. 2 complained to the arbitrator on 4th May, 1987 about the delaying tactics adopted by the petitioner and thereupon the arbitrator directed that the hearing would take place on 8th and 9th June, 1987 and no further adjournment would be granted. After this direction was given by the arbitrator, the petitioner addressed a letter dated 25th May, 1987 to the arbitrator objecting to the jurisdiction in respect of the second and third references. The objections to the jurisdiction raised by the petitioner were, that the claim made in the second and third references were barred by principles analogous to Order II Rule 2 of the Code of Civil Procedure, the Chief Engineer had no authority to refer the disputes to the arbitration, the claims made by respondent No. 2 were beyond the stipulated period of 90 days and therefore were not arbitrable and the time for declaring the award having expired, the Arbitrator could not continue with the arbitration proceedings. On 8th June, 1987 as mentioned hereinbefore the learned advocate for the petitioner orally made submissions on the issue of jurisdiction and thereafter sought adjournment till June 9, 1987 for filing written submissions. On 9th June, 1987 apart from filing written submissions further oral arguments were advanced and thereafter an adjournment was sought beyond June 1987. This adjournment was sought because the time to declare the award was expiring by June, 1987. The hearing was adjourned till June 17, 1987 and again the petitioner's advocate argued on preliminary objections about jurisdiction. The arguments were advanced on the next adjourned dates, that is, June 26 and June 27, 1987. It further appeared that as the time for making the award had expired and the petitioner did not consent to the extension of time, respondent No. 2 filed petition to <ORG> of Bombay for extension of time on June 21, 1987. Thereafter the petitioner made an application before the arbitrator under section 13(b) of the Act calling upon the arbitrator to state special case for the opinion of <ORG> on certain alleged legal objections. In the meanwhile the petition for extension of time filed in <ORG> was granted and the time for declaring the award was extended till January 15, 1988. Thereafter the arbitrator fixed the hearing on September 28, 1987 and the advocate for the petitioner again reiterated the preliminary objections to the jurisdiction of the arbitrator and insisted upon the arbitrator, passing an order on the application under section 13(b) of the Act. The arbitrator rejected the preliminary objections by his order dated 3rd October, 1987 and also the application for stating special case to <ORG> under section 13(b) of the Act. The Petitioner's advocate thereupon sought adjournment of the hearing and accordingly hearing was adjourned on several dates. Ultimately, the arbitrator fixed the hearings on 30th October, 1987 and 31st October, 1987. The hearing was postponed to 2nd November, 1987 and on that day the petitioner's advocate remained absent. Thereafter the hearing proceeded on 6th November and 11th November, 1987 as well as on 13th, 18th and 19th November, 1987. Respondent No. 2 concluded arguments, while the arguments on behalf of the petitioner were advanced on December 3, 1987. The arguments further proceeded on December 8 and 9, 1987. Thereafter on December 17, 1987 the present petition was filed for revocation of the appointment of respondent No. 1 as the sole arbitrator. In our opinion, the above narration gives a glimpse how a party can try to prolong a proceeding.

Several points were taken in support of the application for revocation. It was sought to be urged that the petitioner had lost confidence in the sole arbitrator and was apprehensive that the arbitrator was biased against the petitioner. It is necessary to reiterate before proceeding further what are the parameters by which an appointed arbitrator on the application of a party can be removed. It is well settled that there must be purity in the administration of justice as well as in administration of quasi-justice as are involved in the adjudicatory process before the arbitrators. It is well said that once the arbitrator enters in an arbitration, the arbitrator must not be guilty of any act which can possibly be construed as indicative of partiality or unfairness. It is not a question of the effect which misconduct on his part had in fact upon the result of the proceeding, but of what effect it might possibly have produced. It is not enough to show that, even if there was misconduct on his part, the award was unaffected by it, and was in reality just; arbitrator must not do anything which is not in itself fair and impartial. See Russell on Arbitration, 18th Edition page 378 and observations of Justice <NAME> in Re Brien and Brien, [1910] 2 I.R. 83 at p. 89. Lord <NAME> in The King (De Vesci) v. The Justices of Queen's Country, [1908] 2 I.R. 285 observed as follows:

"By bias I understand a real likelihood of an operative prejudice, whether conscious or unconscious. There must in my opinion be reasonable evidence to satisfy us that there was a real likelihood of bias. I do not think that their vague suspicions of whimsical capricious and unreasonable people should be made a standard to regulate our action here. It might be a different matter if suspicion rested on reasonable grounds was reasonably generated and but certainly mere flimsy grounds elusively generated and morbid suspicions should not be permitted to form a ground of decision."

(Emphasis supplied) See The Queen v. <NAME> and others, [1866] 1 Q.B. 230; <CITATION> . 34 Pat. 254; The Queen v. <NAME> and others,  1 Q.B. 173 and <ORG> v. <ORG>,  2 Q.B. 667.

In the words of Lord <NAME>, <ORG> there must be a real likelihood of bias. It is well settled that there must be a real likelihood of bias and not mere suspicion of bias before the proceedings can be quashed on the ground that the person conducting the proceedings is disqualified by interest. See in this connection <CITATION> ,  1 SCR 580 and <CITATION> ,  2 SCR 609. Recently this <ORG> in a slightly different context in <CITATION> , A.I.R. 1987 S.C. 2386 had occasion to consider the test of bias of the Judge. But there must be reasonableness of the apprehension of bias in the mind of the party. The purity of administration requires that the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party. But we agree with the learned Judge of the High <ORG> that it is equally true that it is not every suspicion felt by a party which must lead to the conclusion that the authority hearing the proceedings is biased. The apprehension must be judged from a healthy, reasonable and average point of view and not on mere apprehension of any whimsical person. While on this point we reiterate that learned counsel appearing for the petitioner in his submissions made a strong plea that his client was hurt and had apprehension because the arbitrator being the appointee of his client was not acceding to the request of his client which the petitioner considered to be reasonable. We have heard this submission with certain amount of discomfiture because it cannot be and we hope it should never be in a judicial or a quasi-judicial proceeding a party who is a party to the appointment could seek the removal of an appointed authority or arbitrator on the ground that appointee being his nominee had not acceded to his prayer about the conduct of the proceeding. It will be a sad day in the administration of justice if such be the state of law. Fortunately, it is not so. Vague suspicions of whimsical, capricious and unreasonable people are not our standard to regulate our vision. It is the reasonableness and the apprehension of an average honest man that must be taken note of. In the aforesaid light, if the alleged grounds of apprehension of bias are examined, we find no substance in them. It may be mentioned that the arbitrator was appointed by the Chief Engineer of the petitioner, who is in the service of the petitioner.

The learned Judge had examined the five circumstances advanced before him. The first was that the arbitrator did not record the minutes of the meetings after September 29, 1987. The learned Judge found that there was no merit in this complaint. After 29th September, 1987 the petitioner's advocate orally made submissions that the arbitrator had no jurisdiction to entertain the dispute. The advocate for the petitioner also desired to file written arguments and the arbitrator did not object to the same. In spite of it, the petitioner insisted that the arbitrator should record the minutes setting out the entire oral arguments advanced on behalf of the petitioner. This in our opinion was not a reasonable request to make and the arbitrator had rightly declined to do so. This is no basis of any reasonable apprehension of bias.

The next circumstance urged was that the preliminary objections raised by the petitioner were rejected without a speaking order. It was not necessary for the arbitrator to record a long reasoned order on the preliminary objections and indeed the law does not demand writing such a long order. In any case, it will be open to the petitioner to file any petition in the <ORG> under section 33 of the Act, if the petitioner felt that the arbitrator had no jurisdiction to entertain the reference, but the petitioner did not choose to adopt that course and proceeded to argue for a considerable length of time, the issue of jurisdiction before the arbitrator. The arbitrator was not bound to give a reasoned order at every stage of the proceedings. The arbitration proceedings would then never come to an end. It was not in dispute that the terms of reference required the arbitrator to give reasons for the award to be declared. It would be, therefore, always open for the petitioner to challenge the award to be declared by the arbitrator including on the ground of jurisdiction. The learned Single Judge of the High <ORG> has so held and we are in agreement with him on this point.

The third circumstances was that the petitioner had filed application under section 13(b) of the Act calling upon the arbitrator to state a special case for the opinion of the <ORG> on the question of law and the failure of the arbitrator to raise this question of law was indicative of the bias. We are unable to accept this argument. Section 13(b) confers power on the arbitrator to state special case but it does not make it obligatory on the part of the arbitrator to state a special case as soon as the party desires to do so. In the instant case the petitioner itself agitated issue of jurisdiction before the arbitrator and by its conduct submitted the question of jurisdiction and other questions of law for determination of the arbitrator. Once having done so, it was not proper for the petitioner to ask the arbitrator to state a special case. This, in our opinion, is no ground for bias.

The fourth ground was that the first reference, where the claim involved was Rs.85 lakhs, was heard for a considerable time, while the arguments in respect of second and third references, which covered the claim of Rs.1.17 crores and Rs.5.81 crores were concluded by respondent No. 2 within one and one fourth of a day. The length of the time taken is no indication either of speeding up or of any abuse of the proceedings. We agree with the learned Judge that there is no rule which requires that the length of argument should depend upon the magnitude of the claim made.

The other point sought to be urged by the petitioner was that the venue of the arbitration was changed from conference room at Santacruz Airport, Bombay, to the conference room at <ORG> at Churchgate, Bombay. It is the claim of the petitioner that this change of venue was without the consent of the petitioner. It appears from the affidavit filed before <ORG> that the venue was changed because of disturbance at the conference room at Santacruz and this fact was known to the petitioner all along. Change of venue in no manner would indicate that the arbitrator was prejudiced against the petitioner and no prayer was made to the arbitrator not to change the venue. This is solely a fallacious ground to make out a case of alleged bias. The other ground was that the petitioner and respondent No. 2 used to share the costs of the air ticket of the arbitrator from Delhi to Bombay and back. It was submitted that since 9th June, 1987 the petitioner has not paid for the ticket and also not provided for residential accommodation at Santacruz Airport. It was further submitted that respondent No. 2 must be providing the air-ticket and also hotel accommodation to the arbitrator and the receipt of these facilities was enough, according to the petitioner, to establish that the arbitration was likely to be biased. It is said that the petitioner made these allegations because the petitioner declined to contribute for the costs of the air-ticket and providing for the accommodation. The petitioner obstructed at all stages of the proceedings of arbitration, what the arbitrator did he did openly to the knowledge of the respondents. As the learned Judge has rightly pointed out the petitioner after 9th June, 1987 seems to have decided that the arbitrator should not proceed to hear the reference and in order to frustrate the arbitration proceedings started raising all sorts of frivolous and unsustainable contentions. Having failed and realised that respondent No. 1 was not willing to submit to the dictates of the petitioner, the petitioner declined to contribute for the air-ticket and providing for accommodation. No party should be allowed to throw out the arbitration proceeding by such tactics and if the arbitrator has not surrendered to pressure in our opinion, the arbitrator cannot be faulted on that score nor the proceedings of the arbitrator be allowed to be defeated by such method.

There was another ground sought to be made before us that there was a loss of confidence. We find no reasonable ground for such loss of confidence. Every fancy of a party cannot be a ground for removal of the arbitrator. It was alleged that there were counter claims made by the respondents. These counter claims have not yet been dealt with by the arbitrator. Our attention was drawn to page 188 of Volume II of the paper book where a counter claim had been referred to. It appears that the petitioner has separately treated these counter claims. These counter claims have not yet been considered by the arbitrator. That is no ground for any apprehension of bias. An affidavit was filed before us that on 6th March, 1988 a letter was served indicating the dates for hearing as 7th to 10th March, 1988.

It appears that the matter was adjourned thereafter but by merely making an application for adjournment and refusing to attend the arbitration proceeding, a party cannot forestall arbitration proceeding.

We are in agreement with the learned Judge of <ORG> expressing unhappiness as to the manner in which attempts had been made to delay the proceeding. There is a great deal of legitimate protest at the delay in judicial and quasi-judicial proceeding. As a matter of fact delay in litigation in courts has reached such proportion that people are losing faith in the adjudicatory process. Having given our anxious consideration to the grounds alleged in this application, we find no ground to conclude that there could be any ground for reasonable apprehension in the mind of the petitioner for revocation of the authority of the arbitrator appointed by the petitioner itself. While endorsing and fully maintaining the integrity of the principle 'justice should not only be done, but should manifestly be seen to be done', it is important to remember that the principle should not be led to the erroneous impression that justice should appear to be done that it should in fact be done. See the observations of <NAME>, J. in R. v. Cambore Justices Ex parte Pearce, [1954] 2 All. E.R. 850 at 855. We are satisfied from the facts mentioned hereinbefore that there is no reasonable ground of any suspicion in the mind of the reasonable man of bias of the arbitrator. Instances of cases where bias can be found in Commercial Arbitration by Mustill and Boyd, 1982 Edn. The conduct of the present arbitrator does not fall within the examples given and the principles enunciated therein.

The petition for leave to appeal, therefore, fails and it is accordingly dismissed.

S.L. Appeal dismissed.