Judgment Satyeshwar Roy and Abhiram Singh, JJ. 1. The appellant and respondent entered into a contract by which the appellant, a partnership firm, agreed to construct some buildings for the respondent. The contract was reduced into writing and signed by both the parties and was numbered as CA No. CECZ/ran /10 of 71-72. During the execution of the contract disputes between the parties with regard to the execution of the contract arose. In terms of clause 70 of the agreement, the disputes were referred to a sole Arbitrate. Arbitrator gave his award by which he allowed some of the claims of the appellant and rejected some. The award was filed in court. The respondent filed objection to the award and that was registered as title Suit No.84 of 1977. The court below after hearing the parties set aside the award with regard to some of the claims and confirmed it with regard to others. The appellant contractor has challenged the validity of the judgment of the court below in this appeal. 2. There is no dispute with regard to the fact, narrated above. Mr. Sinha learned counsel appearing on behalf of the appellant submitted that the court below had to jurisdiction to set aside part of the award and in doing so it acted like an appellate court. According to him, the claim was made on the allegation that there had been breach of contract by the respondent and the Arbitrator was the allegation entitled to allow the claims so made by the appellant. H also urged that even he also urge that even if the claim was said to have arisen out of the contact, since the Arbitrator was required to interpret the terms of the contract it was a question of law and the court below could not have set aside part of the award on the ground that it differed with the conclusion arrived by the Arbitrator. Mr. Shambhu Prasad, learned counsel appearing for the respondent submitted that for the purpose of ascertaining whether the appellant was entitled to some of the claims, the arbitrator was required to look into the contract and as there was no provision on the basis of which some of the claims of the appellant could have been allowed, the award of the Arbitrator in respect of those claims was beyond his jurisdiction. The court below, Mr.
The court below, Mr. Prasad Urged was, Therefore, Within its jurisdiction to therefore with the award. 3. From the award, which is part of the Paper Book. We find that the appellant made a number of claims under different heads. It sub-divided claim under each head. In this appeal we are concerned with claims converted by claim No.1, that is, compensation for loss due to breach of contract by respondent and claim No.2 reimbursement of extra expenditure incurred due to increase in the wage of labour Claim No.1 was sub-divided into three heads and in this case we are concerned with item No (i) and (iii) namely additional overhead expenditure and extra expenditure due to increase in cost of material during the extended period. The court below set aside the award with regard to these claims and confirmed the award with regard to other claims. We may notice that the Arbirator in his award did not give any reason for either allowing or disallowing either whole or in part the claims made by the appellant. We may also notice that the Arbirator did not make the contract document or any other paper part of the award. 4. The court below in its judgment held that in view of clause 11 (c) and 63 of the general conditions of contract, the award given by the Arbitrator with regard to the claims subject-matter of this appeal, amounted to legal misconduct it also held that by allowing the claims the Arbitrator committed errors apparent on the face of the record. 5. The Supreme Court in Firm Madanlal Romania Mahajan V/s. Hukun. Chand Mills Ltd. (AIR 1967 Supreme Court (1930) observed that ; "his award on both fact and law is final. 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 loamy the award is apparent on the face of it. . . " in Union of India. . . V/s. . .
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 loamy the award is apparent on the face of it. . . " in Union of India. . . V/s. . . Bungo Steel Furniture Private Ltd. (AIR 1967 supreme Court 1032), the Supreme Court observed : "but it is well settled that the court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out whether or not the Arbitrator has committed an error of law and that the award of the Arbitrator can be set aside on the ground of error of law on the face of the award only when in the award or in a document incorporated with it, as for instance a note appended by the arbitrator stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous. " We have already noticed that the Arbitrator neither incorporated in his award the contract-document not gave any reason nor appended to the award any note stating the reasons for the decision. 6 The question, that was raised before the court below and which has also been retreated by the learned counsel for the parties, was the interpretation of the contract-document and other documents and also whether the appellant was entitled to any amount on account of breach of contract by the respondent. Parties chose their forum and referred the disputes to the Arbitrator. For giving the award it was necessary for the Arbitrator to interpret the contract-document and to look into the evidence brought on record by the parties. The interpretation of the contract-document on the basis of which both the parties took their stands with regard to their respective cases, was a question of law. In the case of M/s. Tampore and Company V/s. Cochin Shipyard Ltd. , (AIR 1984 Supreme Court 1072) it was held that where a question of construction of a document is the very point referred for arbitration then the decision of the Arbitrator upon that point cannot be set aside by the court only because the court would itself have come to different conclusion.
From the perusal of the judgment of the court below, it appears that it constructed some of the clauses of the contract-document and came to a finding that in view of those clauses, namely, clause : 10 (c) and clause 63, the Arbitrator could not have awarded compensation to the appellant with regard to its claim No.1 (i), 1 (III)and clause No.2. In view of the law enunciated by the Supreme Court, in our opinion, the court below had no jurisdiction to interfere with the award of the arbitrator. This aspect of the case can be viewed from another angle. The respondent in its defence to the claim of the appellant stated before the Arbitrator that the arbitrator had no jurisdiction to entertain the claims. That was the stand taken in the order of reference also. The question of jurisdiction of Arbitrator was subject-matter of reference. In Mis. Tarapora and Co. , the Supreme Court observed". If the parties agree to refer the specific question whether the dispute raised is covered by the Arbitration agreement, it becomes a specific question of the Arbitrator on specific question referred to him for decision even if it appears erroneous to the court is binding on the parties. " 7. Mr. Prasad in support of his contention that the court below was entitled to took into the contract document relied on a decision in M/s Metro electric Co. V/s. Delhi Development Authority and others, (AIR 1976 Delhi 195 ). The contention of Mr. Prasad no doubt is supported to some extent by this decision. But, from the perusal of the judgment we find that at the request of the parties the High Court looked into the entire evidence recorded by the arbitrator and also the documents produced before him for deciding the various points raised in the controversy. With respect, in view of the law laid down by the Supreme Court, we record our inability to agree with that decision. In the case of Ms On Prakash Baldev Krishna V/s. Union of India. (AIR 1984 Delhi 342), the general conditions of the contract were the same as in this appeal. After noticing a large number of cases, a Bench of Delhi High Court held that "the question of construction of contract, generally speaking is a question of law.
In the case of Ms On Prakash Baldev Krishna V/s. Union of India. (AIR 1984 Delhi 342), the general conditions of the contract were the same as in this appeal. After noticing a large number of cases, a Bench of Delhi High Court held that "the question of construction of contract, generally speaking is a question of law. An erroneous decision by the Arbitrator on a question of law does not vitiate the award unless the error appears on the face of the award. " We have already noticed what the Supreme Court has meant by "error of law apparent on the face of the record. " In view of the law, laid down by the Supreme Court, in our opinion, the court below should not have interpreted with part of the award given by the arbitrator as there was no error of law on the face of the record which give jurisdiction to the court below to interfere with the same. 8. The court below in paragraph 18 of the judgment observed that the arbitrator also committed a legal misconduct without giving any reason for coming to that conclusion. Mr. Prasad also during the course of hearing could not state anything from which it can be held that the Arbitrator either misconduct himself or the proceeding. The finding of the court below that the arbitrator committed legal misconduct also therefore, cannot be sustained. 9. In the result, the appeal is allowed, the judgment by the court below with regard to claim No.1 (i) 1 (iii) and 2 is set aside. The decree be in terms of award. In the circumstances of the case, there shall, however, be no order as to costs. Appeal allowed.