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1984 DIGILAW 331 (ORI)

STATE OF ORISSA v. BIRENDRA KUMAR PATHAK

1984-12-12

B.K.BEHERA

body1984
JUDGMENT Behera, J. - The State of Orissa is in appeal against a non-speaking award of an Arbitrator for an amount of Rs. 7,75,000/- with future interest at the rate of six per cent per annum from October 1, 1980 out of a total claim amounting to over Rs. 20 lakhs made by the contractor - respondent who had been entrusted with the work "Construction of Kasunpur M.I.P. (Balance Head Work)" and had entered into an agreement with the Executive Engineer Cuttack Minor Irrigation Division, as per agreement No. 97/F2 of 1976-77, The dispute had arisen in the course of execution of the said work for which in Miscellaneous Case No. 329 of 1980 (A), the learned Subordinate Judge Bhubaneswar, appointed Mr. G. S. Patnaik, the Chairman of the Arbitration Tribunal at Bhubaneswar, as the sole arbitrator. Objection had been raised by the appellant under sections 30 and 33 of the Indian Arbitration Act (for short, the 'Act') for setting aside the award. The learned Subordinate Judge, after hearing the parties, ruled out the objections with reference to the principles laid down in State of Orissa v. Rama Chandra Sahu 61 (1981) C.L.T. 333, and Unit Officer M/s. N.P.C.C. Ltd. v. Madhusudan Deb Barma and others A.I.R. 1979 Gauhati 62 and made the award a rule of the court and passed a decree accordingly. It has been urged on behalf of the appellant that the arbitrator had misconducted himself by not holding a local inspection, had no jurisdiction to make an award for additional works beyond the agreement which were not arbitrable and had no jurisdiction to allow interest. The learned counsel for the respondent has submitted that none of these three contentions can prevail and the non-speaking and unreasoned award cannot be called in question. As has been submitted on behalf of the respondent, to take a decision as to whether a local inspection was necessary for the proper adjudication of the dispute was within the jurisdiction of the arbitrator and if no local inspection had been made, it could not reasonably be said that the arbitrator had misconducted himself. That apart, the submission raised on behalf of the respondent supported by an affidavit sworn in by the respondent in this Court is that no oral or written application had been before the arbitrator on behalf of the appellant for a local inspection. That apart, the submission raised on behalf of the respondent supported by an affidavit sworn in by the respondent in this Court is that no oral or written application had been before the arbitrator on behalf of the appellant for a local inspection. This ground raised in this appeal cannot, therefore, prevail. It may be kept in mind that the arbitrator has given a lump sum award without giving reasons therefor which is permissible under the law (51 (1981) CLT 333 (supra) and State of Orissa v. M/s. Patel Engineering Co. Ltd. 54 (1982) CLT 6). The award is for an amount of Rs. 7,75,000/- as against the claim exceeding Rs. 20 lakhs. As held by this Court in State of Orissa v. M/s. J. N. Choudhury, AIR 1982 Orissa 275, the jurisdiction of a court in respect of setting aside an award is limited to the grounds enumerated in section 30 of the Act. The award is not a reasoned one and it is a non-speaking award. The details of the claims cannot be called in question with reference to the materials placed before the arbitrator, Law is well settled that the arbitrator is not bound to give reasons and can make an unreasoned lump sum award. It is only when an erroneous legal proposition from the basis of the award that the award can be said to be erroneous. The court is not to sit in appeal over the conclusion of the arbitrator by re-examining and re-appraising the evidence considered by the arbitrator. The arbitrator can entertain and decide the dispute regarding additional and extra work taken up by the claimant. The award of an arbitrator cannot be set aside unless there is an error of law apparent on the face of the record. The award is the decision of a domestic tribunal chosen by the parties and is final and conclusive unless a contrary intention is disclosed by the agreement. Wrong or right, the award is binding, if it be reached fairly after giving adequate opportunity the parties their cases, Union of India v. A.I., Rallia Ram. A.I.R. 1963 S.C. 1685. This principle has been followed by this Court in Union of India v. M/S Builder Union 52 (1981) C.L.T. 369. A Division Bench of this Court has held in State of Orissa v. Gokulachand Kanago 52 (1981) CLT 416. A.I.R. 1963 S.C. 1685. This principle has been followed by this Court in Union of India v. M/S Builder Union 52 (1981) C.L.T. 369. A Division Bench of this Court has held in State of Orissa v. Gokulachand Kanago 52 (1981) CLT 416. In which a number of decisions of the Privy Council, Supreme Court and this court have been referred to as to what would amount to an error of law on the face of the award. An error of law on the face of the award means that one 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 one can then say is erroneous. The court has no jurisdiction to investigate into the merits of the case and to examine the oral and documentary evidence on the record for the purpose of finding out whether the arbitrator has committed an error of taw. In this connection, reference may be made to the principles laid down in N. Chellappan v. Secretary, Kerala State Electricity Board and another AIR 1975 SC 230 , State of Orissa v. U.N. Samantaray AIR 1979 Orissa 39, Executive Engineer, Deburi Expressway Division v. Hemalata Singh and other AIR 1980 Orissa 76, State of Orissa v. Shri B.N. Agarwala 52 (1981) CLT 37 and Executive Engineer, R.E. Division v. J.C. Budharaj 52 (1981) CLT 260. When the award is a non-speaking one and the reference is of a general nature and no document has been incorporated as part of the award, the court cannot review the question referring to the documents filed before the arbitrator. The disputes as to construction of a contract and as to the interpretation of the arbitration clause are within the jurisdiction of the arbitrator. The arbitrator does have jurisdiction to make an award for additional works connected with the work taken up by the claimant (51 (1981) CLT 333 (supra), 52 (1981) CLT 369 (supra), 52 (1981) CLT 416 (supra) and AIR 1982 Orissa 275 (supra)). In the instant case, no reasons have been assigned and a lump sum amount is payable to the respondent, as found by the arbitrator. In the instant case, no reasons have been assigned and a lump sum amount is payable to the respondent, as found by the arbitrator. It may be stated at the cost of repetition that the award is in respect of a little over one-third of the total claim. In such a case, the award is not available to be separated and a portion of it cannot be found to be bad. It would not be possible to say that some items of work in respect of which no claim could be laid had also been included in the award. With reference to the principles laid down in Firm Madanlal Roshanlal Maharajan v. Hukudchand Mills Ltd. AIR 1967 SC 1030 . Allen Berry & Co. v. Union of India AIR 1971 SC 696 and (supra), and AIR 1975 (Supreme Court 230 (supra) it has been held by this Court in 54 (182) CLT 6 supra) that it is open to the arbitration to grant a lump sum award for coach claim. His award both on facts and in law is final and there is no appeal from his verdict. The court cannot review his award and correct any mistake in his adjudication, unless an objection to the legality of the award is apparent on the face of it. Even when an arbitrator commits a mistake either in law or on fact determinate the matters referred to him and such mistake does not appear on the face of the award or in a document attached to or incorporated in it so as to form part of it, the award cannot be set aside notwithstanding the mistake. For the aforesaid reasons, the award in question cannot be challenged as bad in law on the ground that certain additional works beyond the scope of the agreement had been taken into consideration while giving the lump sum award. Coming to the question of grant of interest, it has been held by this Court with reference to a number of decisions of the Supreme Court that unless the agreement prohibits the grant of interest, the arbitrator does have jurisdiction to make an award in respect of it. State of Orissa and another v. Govinda, Choudhury 34 (1971) CIT 937. Coming to the question of grant of interest, it has been held by this Court with reference to a number of decisions of the Supreme Court that unless the agreement prohibits the grant of interest, the arbitrator does have jurisdiction to make an award in respect of it. State of Orissa and another v. Govinda, Choudhury 34 (1971) CIT 937. Executive Engineer, Rural Engineering Organisation, Khurda v. D.N. Senapat AIR 1980 Orissa 74, 51 (1981) CLT 333 (supra) State of Orissa through Chief Engineer, Roads & Buildings Bhubaneswar and another v. M/s. Consolidated Construction Company (Engineers & Contractors) and another 52 (1981) CLT 63, 52 (1981) CLT 369 (supra), 52 (1981) CLT 416 (supra), 54 (1982) CLS 6 (supra), AIR 1982 Orissa 275 (supra) and State of Orissa v. Purusottam Pradhan AIR 1983 Orissa 287. The learned counsel for the respondent has however submitted at the hearing of this appeal that the respondent would claim interest from the date of the award, i.e. from March 18, 1981 and not prior to it. The decree needs modification in view of this submission made on behalf of the respondent. In the result, the judgment and decree are modified to the extent that interest shall be payable to the respondent from the date of the award. The parties are to bear their own costs of this appeal. The appeal is accordingly disposed of.