D. K. Kaput ( 1 ) PETITIONER s tender far doing certain work was accepted. On his failure to begin work he was asked to do so and also sign contract documents within 10 days by letter dt. 22. 6. 72, Before the expiry of 10 days the contract was determined on 30,6. 72. Petitioner gave to respondent details of 4 claims and asked for reference of same to arbitrator which was done on 6. 9. 73. Respondent presented its counter claim before the arbitrator. The latter gave a non-speaking award. Petitioner Challenged its validity in High Court. After giving above facts, judgment para 3 A onwards is : ( 2 ) THE arbitrator s award is challenged on the ground that the arbitrator has gone beyond the scope of the reference and misconducted the proceedings. It is claimed that before the arbitrator, four claims of the objector were put forward and a counter-claim was made by the Northern Railway which has also been adjudicated upon, although not referred to arbitration. It is claimed that the award is vitiated because it goes beyond the scope of the reference and this fact can be ascertained from a consideration of the award. ( 3 ) THE award shows that a sum of Rs. 15. 000. 00 has been awarded to the objector in full and final settelement of the disputes referred. The award gives no reasons at all, and it is difficult to make out which of the claims of the objector have been allowed and which have been disallowed. Also, it is not possible to determine whether any part of the counterclaim has been allowed. The arbitration proceedings have also come before the Court, which show that a number of documents were filed and there was also a statement of claim and a counter-claim of facts. In this counterclaim of facts, two points have been taken on behalf of the Northern Railway. Firstly, a sum of Rs. 1. 57. 772. 00 has been claimed as additional expenditure by the respondent for getting the work done by some one else.
In this counterclaim of facts, two points have been taken on behalf of the Northern Railway. Firstly, a sum of Rs. 1. 57. 772. 00 has been claimed as additional expenditure by the respondent for getting the work done by some one else. It was also claimed that on account of the failure of the claimant to start the execution of work up to 30th June, 1972, in spite of repeated assurances, the contract was determined, and fresh agencies for executing the work were appointed after determining the contract of the claimant, Secondly, it was stated in the counterclaim as an additional plea that in case any amount was granted to the claimant, income-tax at the rate of two per cent on the amount awarded should be deducted under Section 94-C of the Indian Finance Act, 1972, Significantly, it is. mentioned in the award as follows : "from the amount awarded at (i) above, the Railway may recover income-tax at 2% of the amount awarded as required under the Indian Finance Act, 1972. "thus, it seems that the award has mentioned the subject-matter of the counter-claim and has disallowed this amount by permitting a deduction of this amount by the Railway authorities, on a consideration of the counter-claim. ( 4 ) THE contention of the learned counsel for the objector concerning the invalidity of the award is as follows ; It is submitted that the refund of earnest money amounting to Rs, 20,000. 00 was one of the claims made by the objector which had to be allowed in full, as the contract was determined by the Chief Engineer without waiting for the expiry of the period of ten days fixed by a notice issued by him on 22nd June, 1972. It is asserted that the notice calling upon the objector to start work and to sign the formal contract was issued on 22nd June, 1972, and the determination of the contract took place on 30th June, 1972. Thus, it is claimed that the forfeiture of the earnest money was patently invalid and this amount had to be allowed to the claimant. It is also submitted that some of the other claims of the claimant had to be allowed. I am not going to examine the validity or otherwise of the claims of the objector, because that is outside the scope of this Court s jurisdiction.
It is also submitted that some of the other claims of the claimant had to be allowed. I am not going to examine the validity or otherwise of the claims of the objector, because that is outside the scope of this Court s jurisdiction. The question to be considered is whether the arbitrator has misconducted the proceedings or gone beyond the scope of the reference. This question has to be decided on a consideration of the questions which were considered by the arbitrator. The award is a non-speaking award and normally, it would be difficult to ascertain as to what are the questions which the arbirator has considered. It the arbitrator had said nothing about what was referred to him and merely said that a sum was awarded as stated to one of the parties, the objector could hardly press the present objections. However, the arbitrator has in the award made the following observations as a preamble. He has stated : "and whereas the said disputes and differences were referred to me, Suresh Chandra, at present employed as Deputy Chief Engineer (Planning ). Northern Railway, Headquarter a Office, Baroda House, New Delhi. AND WHEREAS the said disputes and differences are contained in the statement of facts and the counter statement of facts received from both the parties, as well as the additional papers produced and/or cited before me during the hearing on 14-1-1974. After having heard on the above date and duly considered all arguments and documentary evidence of the parties concerning the said disputes and differences, and having considered all the matters submitted to me in connection with the aforesaid disputes and differences do award and direct as follows : (i) That the contractor M/s G. S. Atwal and Co, (GUA) H-35, Green Park Extension, New Delhi-16 be paid "by the Union of India (Northern Railway) a sum of Rs. 15. 000. 00 (Rupees Fifteen thousand only) in full and final settlement of all the claims referred to me. "it is urged by learned counsel for the respon- dent that as this award is in settlement of the claims referred to the arbitrator, it follows: that it is the reference made by the General Manager which was decided and not any other dispute. He submits on this basis that the arbitrator has not exceeded the scope of the reference and not adjudicated upon any other matter.
He submits on this basis that the arbitrator has not exceeded the scope of the reference and not adjudicated upon any other matter. On the other hand, the learned counsel for the objector contends that it is clear from the award that the disputes and differences which have been considered by the arbitrator are the disputes and differences set out in the statement of facts and in the counter-statement of facts. In fact he says, that there is no reference in the award to the terms or scope of the matters which were referred to arbitration by the General Manager. I am inclined to agree with the counsel of the objector in view of the language used by the arbitrator. The arbitrator need not have said that the disputes and differences are contained in the statement of facts and counter-statements of facts , if he meant to say that the disputes and differences were set out in the General Manager s order of reference. The arbitrator having said in so many words that he has decided the disputes and differences which were set out in the statement of facts and counter-statement, it would follow that the arbitrator must also have decided the counter-claim. The amount of the counterclaim is Rs. 1. 57. . 772. 00. It, therefore, follows that the arbitrator has taken this claim into consideration while computing the amount awarded to the objector, and hence it can be inferred that the award might have been for a larger amount if the counter-claim had been left out of consideration. ( 5 ) IT is a great pity that an arbitration of this type, should be decided without caring to mention the exact differences or disputes which have been decided by the arbitrator. It is true that an arbitrator need not give any reasons while giving his award, but this lack of detail or lack of reasoning need not be carried to the stage of unintelligibility so as to debar the Court from determining what exactly were the disputes and differences decided by the arbitrator. The objector had submitted several disputes to the arbitrator and in the counter- statement of facts two matters were submitted by the respondent. The arbitrator could easily have said which of the disputes or claims were being decided by him, and to what extent he was allowing the individual claims.
The objector had submitted several disputes to the arbitrator and in the counter- statement of facts two matters were submitted by the respondent. The arbitrator could easily have said which of the disputes or claims were being decided by him, and to what extent he was allowing the individual claims. By giving a lump sum award, he has deprived the Court of an opportunity of finding out which of the claims had been allowed, and which of the claims had been disallowed, and whether any claim outside the scope of the reference to arbitration had been omitted from the decision for that reason. A complete lack of detail makes me come to the conclusion that the award cannot be upheld as it appears that the arbitrator has apparently decided matters outside the scope of the reference.