Case Note & Summary
The petition invoked Section 14(2) of the Arbitration and Conciliation Act, 1996, seeking substitution of the sole arbitrator on the ground that she lacked independence and impartiality. The dispute arose in arbitration proceedings concerning a Technology Services Agreement dated October 22, 2020. The petitioner alleged that the arbitrator had acted as an advocate for the respondents by personally visiting the office of the Stamp Authorities to explain the law under the Maharashtra Stamp Act, 1958; that she computed an unquantified interest rate to determine her fees; and that she continued proceedings despite the instrument being inadequately stamped and impounded. The arbitrator had earlier, by order dated June 28, 2024, impounded the instrument, authenticated a copy, and directed the respondents to approach the Stamp Authorities for stamping. When the authorities insisted on the original, the arbitrator visited them on August 27, 2024, and eventually the original was stamped and returned. The petitioner characterised the visit as evidence of bias. The court analysed the scope of Section 14(2) and observed that the jurisdiction was limited to de jure or de facto inability, not a general review of impartiality. It then examined the provisions of Chapter III and IV of the Maharashtra Stamp Act, 1958, particularly Sections 3,31,32,33,34,35,37,39,41 and 58. The court held that an arbitral tribunal, being a person authorised to receive evidence, has a statutory duty to impound under-stamped instruments and may send an authenticated copy to the Collector. The authenticated copy itself is chargeable with full stamp duty under the proviso to Section 3. Therefore, the insistence of the Stamp Authorities on the original instrument was untenable, and the arbitrator was justified in being apprehensive about parting with the original. The court found that the arbitrator's reading of the law was accurate and her conduct impeccable, noting that an ad hoc tribunal does not have the administrative assistance of a court registry. The court rejected the insinuation of bias arising from the visit. The extracted portion does not contain the final operative order, but the court had no hesitation in rejecting the bias allegation.
Headnote
A) Arbitration - Termination of Mandate - Section 14(2) of Arbitration and Conciliation Act, 1996 - Court's jurisdiction to substitute arbitrator limited to de jure or de facto inability, not general review of impartiality - The petitioner alleged bias and violation of Stamp Act; Court initially opined that review of impartiality is not amenable to Section 14, which examines de facto or de jure inability only - Held that the court must assess whether a case of de jure or de facto inability is made out (Paras 1-3,19). B) Stamp Duty - Impounding and Adjudication - Sections 3, 31, 32, 33, 34, 35, 37, 39, 41, 58 of Maharashtra Stamp Act, 1958 - Arbitral tribunal is person authorized to receive evidence and has duty to impound under-stamped instruments; authenticated copy is chargeable with full stamp duty under proviso to Section 3; tribunal may send authenticated copy to Collector - The arbitrator impounded the instrument, authenticated copy, directed stamping, and Stamp Authorities initially insisted on original; Court held that authenticated copy is the relevant instrument for adjudication and the arbitrator's approach was lawful (Paras 8-16). C) Arbitration - Arbitrator Bias/Impartiality - Maharashtra Stamp Act, 1958 - Arbitrator's personal visit to Stamp Authorities to explain legal process does not demonstrate bias but discharges statutory and administrative duty - The petitioner argued the arbitrator acted as advocate for respondents; Court found the arbitrator's reading of law accurate and conduct impeccable, noting ad hoc tribunal lacks registry assistance - Held that the insinuation of bias was rejected (Paras 6-7,17-19). D) Stamp Duty - Procedure for Under-stamped Instruments - Sections 33, 37, 39, 41 of Maharashtra Stamp Act, 1958 - Stamp Authorities cannot insist on original instrument; authenticated copy is sufficient for adjudication and stamping - The arbitrator was justified in being apprehensive about parting with original instrument; forwarding original with covering letter was not improper - Held that stamp authority's insistence on original was untenable (Paras 6,20).
Issue of Consideration
Whether a case has been made out to hold that the Learned Sole Arbitrator has become de jure or de facto unable to perform her functions under Section 14(2) of the Arbitration and Conciliation Act, 1996, based on allegations of bias and violation of the Maharashtra Stamp Act, 1958.
Final Decision
Court rejected the insinuation that the Learned Arbitrator was biased based on the visit to the Stamp Authorities, holding that the arbitrator's reading of the law was accurate and her conduct impeccable; the final operative order is not available in the extracted text.
Law Points
- Arbitral tribunal has statutory duty to impound under-stamped instruments under Section 33 of Maharashtra Stamp Act
- 1958
- Authenticated copy of instrument chargeable with full stamp duty under proviso to Section 3
- Stamp Authorities cannot insist on original instrument
- Arbitrator's visit to Stamp Authorities to explain law is discharge of statutory duty
- not bias
- Section 14(2) of Arbitration and Conciliation Act
- 1996 limited to de jure/de facto inability
