J. D. JAIN ( 1 ) THE plaintiff Bhai Sardar Singh and Sons (in short Contractor) was awarded the work "construction of types I, II and III Teachers Housing Complex at Lodhi Colony" pursuant to invitation of tenders. Originally, the contractor quoted rates at 46% above the CPWD schedule of rates 1967 subject to certain conditions but later on he submitted revised tender at 55. 55% instead of 46% above the CPWD schedule of rates 1967. This tender was duly accepted by the respondent-Committee vide resolution No. 18 dated 15th January, 1971. Subsequently, a formal agreement evidencing the contract was entered into between the parties on 22nd February, 1971. Certain disputes having arisen between the parties wish regard to the execution/implementation of the construction work, the same were referred by the respondent-Committee to the sole arbitration of Shri M. K. Nayyar respondent No. 2; who was Financial Advisor to Ministry of Home Affairs Govt. of India and ex-officio member of the respondent-Committee vide letter dated 24th of March, 1972. The Arbitrator entered upon reference and in due course the contractor submitted his statement of claim while the respondent filed a counter-statement of facts. Hearing before the arbitrator concluded on 22nd May, 1973 and the award was reserved. However, the contractor vide letter dated 5th June, 1973 followed by letter dated 3rd July, 1973 requested the arbitrator to inspect the site and see the work for himself in order to appraise the evidence in proper perspective and decide the claim of the contractor. However, it appears that the arbitrator passed no order on the same. Eventually, the arbitrator made and pronounced his award on 18th July, 1973. The contractor moved an application under Section 14 of the Arbitration Act (hereinafter referred to as the Act) for filing of the award. Accordingly, on the direction of the Court, the arbitrator filed the award. On notice of the same having been served on the parties, the contractor has filed objections to the award under Sections 30 and 33 of the Act, being I. A. No. 3060/73. ( 2 ) THE award has been assailed on various grounds. Accordingly, on the direction of the Court, the arbitrator filed the award. On notice of the same having been served on the parties, the contractor has filed objections to the award under Sections 30 and 33 of the Act, being I. A. No. 3060/73. ( 2 ) THE award has been assailed on various grounds. It is inter alia, contended that the award is liable to be set aside (1) as it suffers from an error apparent on its face (2) because the arbitrator has misconducted himself and the proceedings so as to vitiate the award and cause miscarriage of justice and (3) it has been improperly procured. ( 3 ) RESPONDENT-COMMITTEE has vehemently controverted the allegations made by the Contractor in the objection petition. Following issue was raised on l9th February, 1975. "whether award dated 18th July, 1973 made by the respondent is liable to be set aside for the reasons mentioned in para 12 of the application?" ( 4 ) VIDE order dated 28th November, 1978 the award in question was set aside by Chadha, J. on the short ground that the appointment of the arbitrator respondent No. 2 was invalid, inasmuch as he has not been appointed by the person agreed upon by the parties in the reference clause. So his Lordship directed the President of the respondent-Committee to make fresh appointment of the arbitrator within a month in accordance with the arbitration agreement between the parties and refer the disputes raised by the objector for determination in accordance with the law. Feeling aggrieved by the said order respondent-Committee went in appeal and the Division Bench comprising Rajinder Sachher and S. B. Wad, J. set aside the aforesaid order and remanded the case back for decision on other objections vide judgment dated 11th December, 1979. Hence, I proceed with the remaining grounds of attack against the award. ( 5 ) THE principal grievance of the petitioner-Contractor is that the contract was awarded to him at 55. 55% above the Delhi Schedule of rates 1967 as modified till date. His precise contention is that vide correction slip No. 2 dated 16th June, 1969 Delhi schedule of rates 1967 was increased by 6%. Hence, he was entitled to the rates as enhanced by the correction slip which stood incorporated in the Delhi schedule of rates plus 55. 55% above the Delhi Schedule of rates 1967 as modified till date. His precise contention is that vide correction slip No. 2 dated 16th June, 1969 Delhi schedule of rates 1967 was increased by 6%. Hence, he was entitled to the rates as enhanced by the correction slip which stood incorporated in the Delhi schedule of rates plus 55. 55% but the respondent Committee did not take into consideration the aforesaid increase of 6% over the Delhi Schedule of rates 1967 even though it had come into force before 22nd February, 1971 when the agreement for execution to the construction work was executed between the parties. It was pointed out that the said amendment was in force even before the resolution of the respondent-Committee accepting the tender of the plaintiff was passed on 15th January, 1971. Thus according to him the real controversy between the parties centered round the rates at which payment was to be made to the petitioner-Contractor but the arbitrator having ignored this fundamental term of the contract has committed grave error and breach of duty cast on him to apply his mind to the terms and conditions of the contract. It is pointed out that the award is infact contradictory because while deciding claim No. 2 under annexure III which pertains to "claims admitted partly", the arbitrator has based his decision on the Delhi schedule of rates 1967 but the same has not been made the basis in deciding other claims. In short, therefore, the submission of the learned counsel for the contractor is that the decision of the arbitrator is not in conformity with the rights and liabilities of the parties as embodied in the resolution of the respondent-Committee and the agreement dated 22nd of February, 1971. ( 6 ) A glance through the award in question would show that the arbitrator has, after generally referring to the contract between them in relation thereto, proceeded to give his decision on various items of disputes. Of course, he has, inter alia, recited that he had gone through and considered all the evidence, oral and documentary, produced and filed by the parties and considered the arguments addressed by them. However, he has not given any reasons in support of the findings on various claims raised by the Contractor against the respondent-Committee. It is evidently a non-speaking award. However, he has not given any reasons in support of the findings on various claims raised by the Contractor against the respondent-Committee. It is evidently a non-speaking award. It does not incorporate either any document on which reliance was placed by the parties before him or any piece of evidence adduced before him. Further no reasons have been assigned for arriving at the conclusions incorporated in the award. ( 7 ) AS observed by Lord Dunedin in Champsey Bhara and Company v. Jivraj Balloo Spinning and Weaving Company Ltd. , AIR 1923 PC 66, "an error in law on the face of the award means, in their Lordships view, that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in a narrative a reference is made to a contention of one party that opens the door to seeing first what that contention is, and then going to the contract on which the parties rights depend to see if that contention is sound. " ( 8 ) APPLYING this criterion it is impossible to say from what is apparent on the face of the award what mistake if any the arbitrator has made. He has not tied himself down to any legal proposition which when examined would appear to be unsound. Further, as stated above, he has not incorporated any document or evidence in the award and as such it is not open to this Court to probe the mental process by which the arbitrator has arrived at his conclusion. Surely the Court has no jurisdiction to investigate into merits of the case and to examine and re-appraise documentary or oral evidence on the record for the purpose of finding out whether or not the arbitrator has committed an error of law or of fact. Observed Supreme Court in Allen Berry and Co. Private Ltd. v. Union of India, AIR 1971 SC 696 (at p. 699) "as the parties choose their own arbitrator, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts. Observed Supreme Court in Allen Berry and Co. Private Ltd. v. Union of India, AIR 1971 SC 696 (at p. 699) "as the parties choose their own arbitrator, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts. Therefore, even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake. Mere reference to the contract in the award is not to be held as incorporating it. " ( 9 ) IN this view of the matter, therefore, th,e award in question cannot be said to suffer from the taint of an error of lawapparent on its face so as to vitiate it. This ground of attack, there fore, is devoid of any merit. ( 10 ) THE next ground of attack is that the arbitrator has misconducted himself and the proceedings while making the award, inasmuch as he did not at all consider the most material document viz. , the contract between the parties which governs the rights and liabilities of the parties. In particular, it is averred that the Delhi schedule of rates 1967 stood modified from time to time and, therefore, the petitioner-Contractor was entitled to the rates for the work had been effected up till the date of the contract viz. , 22nd of Feb. , 1971. In this context, he has invited my attention to correction slip No. 2 to the Delhi Schedule of Rates 1967 which was issued by the Central Public Works Department under circular dated 16th June, 1969. Its perusal would show that an ad hoc increase of 6% was made applicable on all the rates of schedule items (excluding basic rates) of the Delhi Schedule of Rates 1967 due to the said increase. Thus the argument advanced by the learned counsel for the petitioner-Contractor precisely is that besides the printed Delhi Schedule of Rates 1967 he was also entitled to the ad hoc increase allowed vide correction slip No. 2 dated 16th June, 1969 plus 55. 55% increase on the said rates. Thus the argument advanced by the learned counsel for the petitioner-Contractor precisely is that besides the printed Delhi Schedule of Rates 1967 he was also entitled to the ad hoc increase allowed vide correction slip No. 2 dated 16th June, 1969 plus 55. 55% increase on the said rates. However, the ad hoc increase of 6% was ignored and denied by the respondent to the petitioner-Contractor and the arbitrator failed to take notice of this fact because he did not bother to read even the terms and conditions of the contract and resolution No. 18 dated 15th January, 1971 vide which the petitioner Contractor was awarded the contract in question at the rates quoted by him viz. , 55. 55% above the Delhi Schedule of Rates 1967. In the said resolution there is no specific mention of 6% ad hoc increase permitted over the schedule items incorporated in Delhi Schedule of Rates 1967 but the argument put forth is that this was implicit in the expression "delhi Schedule of Rates 1967" which naturally meant the rates as stood on the date of the contract. Thus according to him he has been wrongfully denied the ad hoc increase and the arbitrator failed to notice this glaring injustice while making the award ( 11 ) INTERROGATORIES were issued in this case for examination of the arbitrator at the instance of the petitioner contractor. Accordingly, the arbitrator, Shri M. K. Nayyar was examined at Madras on commission on 26th November, 1976. In reply to interrogatory No. 4 which specifically bears on this aspect of the matter, the arbitrator replied that the contract in dispute and resolution No. 18 dated 15th January, 1971 of New Delhi Municipal Committee had not been shown to him. Interrogatory No. 15 put to him runs as follows : "please state whether the original or copy of the agreement/contract the basis of arbitration is on record (if the witness state that it is not on record then he should be put a further question i. e. if the agreement/contract is not on record then please state on what basis you made the award?)"in reply he stated that the agreement/ contract had not been produced before him and he had made the award on the basis of the submissions made before him by the respective parties and the documents that were shown to him during the arbitration proceedings. ( 12 ) IT is thus manifestly clear that the learned arbitrator did not peruse the agreement/contract which constituted the very foundation of the rights and liabilities of the parties before he made the award. It is interesting to note that in reply to cross-interrogatory No. 24 which is reproduced below he meekly replied in the affirmative. Cross-interrogatory No. 24 Is it a fact that you based your award in respect of claims for work done in terms of the contract after studying the Arbitration Agreement itself and wherever there was disagreement between the parties regarding the interpretation of and/or the scope of the agreement you had invariably given ample opportunity to both parties to place their interpretations and arguments before you and had formed an independent view of the meaning and contents of the terms of the contract concerned. ( 13 ) HOWEVER, having regarding to the admitted position that the contract/ agreement between the parties under which the construction work was awarded to the petitioner-contractor was not produced before the arbitrator, this reply is absolutely meaningless and the fact remains that the arbitrator did not go through the contract/agreement in question at all before giving the award. It may be pertinent to add here that the entire record of arbitration proceedings was sent to the Local Commissioner along with the interrogatories as would appear from the office letter dated 23rd August, 1976 addressed to the Registrar, Small Cause Court, Madras. Evidently, therefore, the arbitrator would have laid his hand upon the contract/agreement in question, had the same or its copy been produced before him. ( 14 ) HAVING regard to the foregoing circumstances there is no escape from the conclusion that the arbitrator made the award without reading and applying his mind even to the terms and conditions of the contract which was a document of vital importance, being the very foundation of the rights and the liabilities of the parties. He is, therefore, guilty of breach/neglect of duty and responsibility which may well have resulted in miscarriage of justice. It is well settled that an arbitrator must observe the fundamental principles of justice, though ordinarily, he is free from fetters of adjective law and technical rules of evidence. It is significant to note that on his own showing the arbitrator who had been a Financial Advisor to many a Ministry, Govt. It is well settled that an arbitrator must observe the fundamental principles of justice, though ordinarily, he is free from fetters of adjective law and technical rules of evidence. It is significant to note that on his own showing the arbitrator who had been a Financial Advisor to many a Ministry, Govt. of India, had occasion to deal with a number of civil engineering works for the purpose of financial sanction and he had even acted as a sole arbitrator in disputes arising out of various civil engineering contracts. Further, according to him, as a member of New Delhi Municipal Committee, he had dealt with the questions concerning engineering tenders and contracts. He was also well conversant with the pro forma of agreement prescribed by the New Delhi Municipal Committee for civil and electrical engineering contract. Hence, with this background and experience of such contracts it should have spontaneously occurred to him that a perusal of the contract or at least resolution dated 15th January, 1971 of the New Delhi Municipal Committee, copyof which is on the record, was absolutely essential for a fair and proper adjudication of the disputes. As observed by the Supreme Court in K. P. Poulose v. State of Kerala, AIR 1976 SC 1259 (at p. 1261) "misconduct under Section 30 (a) has not a connotation of moral lapse. It comprises legal misconduct which is complete if the Arbitrator on the face of the award arrives at an inconsistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. " ( 15 ) IN that case, two important documents which were very material to the decision of the disputes before the arbitrator were not produced by the parties, especially the concerned department and as such the arbitrator had no opportunity to consider the same. However, an argument was advanced on behalf of the Government that those documents had not even been marked by the arbitrator and as such there was no foundation for the grievance. This contention was repelled by their Lordships with the observation that "in the background of the controversy in this case even if the Department did not produce these documents before the Arbitrator it was incumbent upon him to get hold of all the relevant documents including Exts. This contention was repelled by their Lordships with the observation that "in the background of the controversy in this case even if the Department did not produce these documents before the Arbitrator it was incumbent upon him to get hold of all the relevant documents including Exts. P. 11 and P. 16 for the purpose of a just decision. " So the arbitrator was held to have misconducted the proceedings and the award was set aside, inter alia, on that ground. This authority to my mind applies on all fours to the facts of the instant case. ( 16 ) THE learned counsel for the respondent has canvassed with some fervour that the award in the aforesaid case was a speaking one and therefore, an inference of miscarriage of justice due to non-production of material documents could be available but that is not so in the instant case and there being no error of law apparent on the face of the award, the Court is precluded from looking at the evidence on which the arbitrator has based his award. However, I am not at all impressed by this argument, although it looks specious on its face. It is not the law that a non-speaking award is not at all vulnerable in the absence of an error apparent on its face because the Court is precluded from looking into the material on the record and finding out for itself if the award is duly supported by legal evidence on record or that it is otherwise to accordance with law. Surely, it is always open to the Court to set aside an, award where it finds that the arbitrator] has misconducted himself or the proceedings as contemplated by Section 30 of the Act irrespective of whether it Is a speaking award or not. There is no reason why the objector cannot prove by evidence aliunde the factum of misconduct on the part of the arbitrator. This is precisely what has transpired in the instant case, inasmuch as it has come on record through the mouth of the arbitrator himself that he did not have the contract which was the foundation of the mutual rights and obligations of the parties before him and he did not go through the same before delivering his award. This is precisely what has transpired in the instant case, inasmuch as it has come on record through the mouth of the arbitrator himself that he did not have the contract which was the foundation of the mutual rights and obligations of the parties before him and he did not go through the same before delivering his award. This will surely warrant an inference that the arbitrator is guilty of judicial misconduct in neglecting his duty and responsibility to look at and consider all material documents. Reference in this context may also be made with advantage to Mehta Teja Singh and Co. v. Union of India, AIR 1977 Delhi 231, in which the arbitrator did not pass any order for the production of the technical examiner s report on the basis of which recovery of overpayment was being claimed by the Union of India, even though the contractor had strenuously and repeatedly applied for summoning the same. The arbitrator paid little attention to the question of its production, fundamental though it was. In these circumstances the learned Judge (Avadh Behari, J.) observed "to my mind the technical examiner s report was a vital document. In order to arrive at a just and fair decision it was incumbent on the arbitrator to order its production. It was a material document. Without the report it was not possible to resolve the controversy between the department and the contractor. " Argument was also advanced before his Lordship that there was no error apparent on the face of the record and therefore, the award could not be assailed. However, repelling this argument his Lordship observed that "in my opinion it is not so much a case of apparent error as of legal misconduct. Therefore, these rulings have no application to the facts of this case. The error in the award has resulted because of legal misconduct Error there is but it has its origin in misconduct such as to justify setting aside the award. " I am in respectful agreement with the foregoing observations of my learned brother and I may also add that once it is established that the arbitrator has failed to consider the most material evidence in this case the question of prejudice or miscarriage of justice as such is immaterial. " I am in respectful agreement with the foregoing observations of my learned brother and I may also add that once it is established that the arbitrator has failed to consider the most material evidence in this case the question of prejudice or miscarriage of justice as such is immaterial. ( 17 ) IN Annamunthodo v. Oilfields Workers Trade Union (1961) 3 All ER 621 (PC), Lord Denning said (at p. 625) that "counsel for the respondent union did suggest that a man could not complain of a failure of natural justice unless he could show that he had been prejudiced by it. Their Lordships cannot accept this suggestion. If a domestic tribunal fails to act in accordance with natural justice, the person affected by their decision can always seek redress in the Courts. It is a prejudice to any man to be denied justice. " Thus to use the time hallowed phrase "the justice should not only be done but also be seen to be done. " Hence non-observance at natural justice is itself prejudice to any man and proof of prejudice independently of proof of denial of natural justice is unnecessary. Thus the award is liable to be set aside on this short ground. ( 18 ) CORRELATED to this contention is another grievance of the petitioner-Contractor that vide letters dated 5th June, 1973 and 3rd July, 1973 the petitioner made a request to the arbitrator to inspect the spot and see the work in order to appreciateand decide the claim of the petitioner in proper perspective. He also prayed for a clarificanory hearing with respect to the joint measurement and verification of cutting holes, etc. , and to place further facts before the arbitrator. However, the arbitrator passed no order and gave no opportunity and thus deprived the objector-contractor of full hearing before making the award. From a perusal of letter dated 5th June, 1973 of the petitioner, it would appear that the petitioner did request the arbitrator for site inspection for appreciation of the nature of disputes between the parties and permit him to place on the record certain documents marked A, B, C and D, giving some more information. From a perusal of letter dated 5th June, 1973 of the petitioner, it would appear that the petitioner did request the arbitrator for site inspection for appreciation of the nature of disputes between the parties and permit him to place on the record certain documents marked A, B, C and D, giving some more information. This was followed by reminder dated 3rd July, 1973 in which it was stated that Bhai Sardar Singh a partner in the petitioner firm had personally contacted Shri S. C. Dhal M. E. (Pandc) for joint measurement and verification of cutting hole and extra staging but there was no co-operation available from the respondent. As regards their claim for extra shuttering and staging the petitioner reiterated their request for site inspection. However, it appears that the arbitrator did not pass any order thereon. The short answer given by the arbitrator is that he did not inspect the spot as he did not consider it necessary. He asserts that he had afforded all reasonable opportunity to both the parties to present their respective cases in the course of the arbitration proceedings and the hearing before him concluded on 22nd May, 1973. So according to him the question of passing any order on the said letters would not have arisen even if the letters had been received by him. However, he had no recollection whether the letters had been actually received by him. Since both these letters are on the record of arbitration proceedings it can be well presumed, that they must have been received by the arbitrator in due course. However, it was discretionary with the arbitrator to accede to the request or not. He was not bound to do so after the hearing was over. All the same, propriety demanded that he should have informed the petitioner-Contractor about his reluctance to inspect the site for whatever reason he was disinclined to do so. Any how this itself is not tantamount to misconduct on the part of the arbitrator in the legal sense. ( 19 ) THE learned counsel for the petitioner-Contractor has then invited my attention to certain circumstances appearing on the record in order to countenance the plea that the award has been improperly procured. In the first instance, he has urged that on his own admission the arbitrator required the petitioner claimant to supply stamp paper of the value of Rs. 114. In the first instance, he has urged that on his own admission the arbitrator required the petitioner claimant to supply stamp paper of the value of Rs. 114. 00 after having approximately worked out the total amount to be awarded to the claimant and he calculated the appropriate amount of stamp required for the award. Thus the point sought to be made out is that the arbitrator was contemplating to award an amount of Rupees 1,43,000. 00 approximately when he called upon the petitioner-Contractor to supply the stamp paper worth Rs. 114. 00. However, he somehow changed his mind subsequently; probably under the influence of the respondent, New Delhi Municipal Committee and awarded an amount to him for which stamp worth Rs. 50. 55 paise only would have been sufficient. An insinuation is thus made that the award has been improperly procured and this inference is further countenanced by the circumstance that the Secretary of the New Delhi Municipal Committee signed the award on each page. A cursory glance at the award in question would show that the Secretary of the respondent has signed each page of the award ostensibly as a witness. I am not aware of any rule, procedure or requirement of law under which an award needs to be attested by a witness especially by one who is a party to the arbitration proceedings. Though the circumstance of the Secretary, New Delhi Municipal Committee signing the award as a witness may per se appear rather innocuous but coupled with the foregoing fact that the arbitrator had asked for stamp paper of the value of Rs. 114. 00 after having worked out the approximate amount which he was contemplating to award to the petitioner-Contractor suspicion looms large that he may have changed his mind under some kind of pressure of persuasion. It is true that the arbitrator being himself a member of the New Delhi Municipal Committee occupied a position of status. All the same having regard to the above mentioned circumstances the possibility of his having taken into confidence and consulting the Secretary of the New Delhi Municipal Committee before pronouncing/making the award cannot be altogether ruled out. In this view of the matter, therefore, conduct of the arbitrator cannot be said to be absolutely above board. All the same having regard to the above mentioned circumstances the possibility of his having taken into confidence and consulting the Secretary of the New Delhi Municipal Committee before pronouncing/making the award cannot be altogether ruled out. In this view of the matter, therefore, conduct of the arbitrator cannot be said to be absolutely above board. It is somewhat intriguing that the arbitrator allowed the Secretary to sign each page of the award although it is difficult to spell out precisely what actually happened in this case. ( 20 ) AN insinuation has also been made by the petitioner-contractor that the arbitrator was keeping in touch with and consulting Mr. Bindal an Assistant Engineer in respondent-Committee, who used to visit Home Ministry where office of the arbitrator was then housed. Thus It is sought to be inferred that in all probability the arbitrator was influenced by Shri Bindal in arriving at the decision before making the Award. The arbitrator has denied having known any one by the name of Mr. Bindal in the New Delhi Municipal Committee, Engineering Department. He also denied having sought any assistance whatsoever from anybody in making the award. It may be, as pointed out by the learned counsel for the respondent-Committee, that Shri Bindal had been visiting the Home Ministry in connection with his official duties as Junior Engineer in the respondent-Committee but that would not warrant an inference that he would have influenced a person of the rank of the arbitrator in this regard. After all the arbitrator was Financial Advisor to the Ministry of Home Affairs at the relevant time and it does not appeal to the reason that he could be influenced by an official of the rank of a Junior Engineer while making the award. Anyway having regard to the highly suspicious circumstances adverted to above by no stretch of reasoning the award can be held to incorporate an honest and independent decision of the arbitrator. It bears repetition that the arbitrator must not only be impartial and straightforward but he also must act in a very fair and above-board manner. ( 21 ) TO sum up, therefore, the award in question cannot be sustained for the reasons given above. It is accordingly, set aside. It bears repetition that the arbitrator must not only be impartial and straightforward but he also must act in a very fair and above-board manner. ( 21 ) TO sum up, therefore, the award in question cannot be sustained for the reasons given above. It is accordingly, set aside. Since Shri M. K. Nayyar has retired from service, the respondent Committee is directed to appoint another arbitrator in accordance with the reference clause for fresh decision of all the disputes between the parties. The arbitrator shall afford proper opportunity to both the parties to be heard and adduce their evidence before making his award. The appointment shall be made within three months from today. However, the parties are left to bear their own costs.