UNION OF INDIA v. S. T. S. SANDHU & CO. — 1986 DIGILAW 457 (ORI)

JUDGMENT Behera, J. - The Union of India is in appeal against the judgment and decree passed by the learned Subordinate Judge, Bhubaneswar, making the award passed by the Arbitrator in a dispute between the parties a rule of the Court. The claimant-respondent had been entrusted with the execution of the work "Construction of staff quarters at Bhubaneswar" in pursuance of an agreement between it and the Union of India. A dispute arose between the parties with regard to the execution of the work and as per the terms of the agreement, it was referred to the sole arbitration of Mr. S.K. Ahuja in the Ministry of Communication, P. & T., Civil Wing, New Delhi. After considering the materials and on hearing the parties, the Arbitrator passed an award in favour of the claimant-respondent for an amount exceeding Rs. 50,000/-. The agreement provided for giving a reasoned award in respect of an award exceeding Rs. 50,000/-. According to the appellant, the award was a non-speaking one and was not a reasoned award as was required to be given in pursuance of the agreement. The appellant put in an objection challenging the validity of the award under sections 30 and 33 of the Indian Arbitration Act (for short, 'the Act'). A miscellaneous Case was registered. This contention of the appellant was resisted by the respondent. As would appear from the impugned judgment and order passed by the learned Subordinate Judge, three questions were raised by the appellant. One related to the award passed by the Arbitrator which was not a reasoned one and another related to the award of interest while the third objection related to payment of higher wages to the labourers. At the hearing, the main contention was the one relating to passing of non-speaking award. Referring to the principles laid down in Goa, Daman and Diu Housing Board v. Ramakanta V.P. Dorvotkor ( AIR 1984 Bom. 120 ) and two unreported decisions of this Court in D. Brahma v. Executive Engineer, National Highway Division, Cuttack and another, (C.R. 388 of 1982) decided on June 21, 1982 and Gajendra Behera v. State of Orissa (Misc. Appeal No. 195 of 1982), decided on March 25, 1983, the learned Subordinate Judge has held that the Arbitrator was not obliged to give reasons for his findings and therefore, the award could not be called in questions on that account. Appeal No. 195 of 1982), decided on March 25, 1983, the learned Subordinate Judge has held that the Arbitrator was not obliged to give reasons for his findings and therefore, the award could not be called in questions on that account. The learned Subordinate Judge has held that in the absence of any specific clause in the agreement prohibiting award of interest, the Arbitrator did have jurisdiction to grant interest. This proposition of law, as found by the learned Subordinate Judge, cannot be assailed and has not been agitated before me. The learned Subordinate Judge has held, taking into consideration the view of the Patna High Court in The State of Bihar v. Thawardas Pherumal ( AIR 1964 Pat. 225 ), that enhanced wages can be awarded owing to increase of the wages of the labourers. This finding cannot be said to be illegal or unfounded. The learned Standing Counsel for the Central Government has strenuously urged that as the agreement provided for making a reasoned award in case the awarded amount exceeded Rs. 50,000/-, the award in question, which was an unreasoned one, could not be made a rule of the court. Mr. Indrajit Ray, the learned counsel for the claimant-respondent, is at one with the learned Standing Counsel for the Central Government with regard to the legal proposition and has submitted that the finding recorded by the learned trial Judge that even in spite of stipulation in the agreement to make a reasoned award in case the awarded amount exceeded Rs. 50,000/-, an unreasoned award can be passed, cannot be sustained. Mr. Ray has, however, contended that the award in question is a reasoned one and the Arbitrator has given reasons for his finings briefly and is not required to record reasons as is done by the presiding officer of a court. In this Connection, reliance has been placed by him on a decision of the Delhi High Court reported in E.M. and EM. Associates v. Delhi Development Authority. ( 1985 (9) DRJ 43 ). In this Connection, reliance has been placed by him on a decision of the Delhi High Court reported in E.M. and EM. Associates v. Delhi Development Authority. ( 1985 (9) DRJ 43 ). In view of the contentions and submissions made at the Bar, the only question for consideration is as to whether the award in question is a reasoned one and can, therefore, be made a rule of the court and as to whether for that reason the judgment and decree passed by the learned Subordinate Judge can be sustained although not for the reasons recorded by the learned Subordinate Judge. When an award given by the Arbitrator is filed in the court and it is challenged on the ground of its incompleteness, the court has to bear in mind certain basic positions. Unless the reference to arbitration specifically so requires, the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. The legal position is clear that unless so specifically required, an award need not formally express the decision of the arbitrator on each matter of difference. Unless the contrary appears, the court will presume that the award disposes finally of all matters indifference. When an award is made depraemissis that is, of the concerning all the matters in dispute referred to the arbitrator, the presumption is that the arbitrator intended to dispose of finally all the matters in difference and the award would be held final, if by any intendment, it can be made so. (Smt. Santa Sila Devi and another v. Dhirendra Nath San and others) ( AIR 1963 SC 1677 ). It has been a settled principle of law that an award being a decision of an arbitrator, whether a lawyer or a layman, chosen by the parties and entrusted with the power to decide a dispute submitted to him, is not ordinarily liable to be challenged on the ground that the award is erroneous. It is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement between the parties. It is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement between the parties. Being the decision of a domestic tribunal chosen by the parties, the civil courts, entrusted with the power to facilitate arbitration, cannot exercise appellate powers over the decision of an arbitrator, wrong or right, the decision is binding, if it is reached fairly after giving adequate opportunity to the parties to place their materials in accordance with the arbitration agreement. It is now firmly established that an award is bad on the ground of error of law on the face of record, when in the award itself or in a document actually incorporated in it, there is found some legal proposition which is the basis of the award and which is erroneous. In the instant case, no error of law has been alleged except that in spite of a provision made in the agreement for passing a reasoned award if it is one for a sum exceeding Rs. 50,000/-, the Arbitrator has not passed a reasoned award and accordingly, it is vitiated by a error of law. It is not a case where an one-sentence consolidated lump-sum award has been passed by an arbitrator by stating that he has passed the award upon hearing the parties and considering the materials produced by them. Here a case in which no other person than an officer in the Ministry of Communication had been appointed to be the Arbitrator. Differences has arisen between the claimant and the Union of India out of an agreement in writing for the concerned work. The Arbitrator had been appointed to settle and adjudicate the dispute. After due notices to the parties and after hearing them and considering the materials placed by both the sides, the Arbitrator has recorded thus : "* * * * NOW THEREFORE, I, the said S.K. Ahuja, Sole Arbitrator after hearing the parties at length, examining and carefully considering the evidence adduced and the arguments advanced by them DO HEREBY MAKE AND PUBLISH MY AWARD AS FOLLOWS; ISSUES FINDINGS Claim No. 1. - Partly justified to the extent of Rs. 13,512.20. Claim No. 2. - Fully justified for Rs. 500.00. Claim No. 3. - From the arguments advanced by the parties. It was an admitted fact that during the progress of work, the minimum labour wages were enhanced by the Govt. statutory order on 25-4-1973. - Partly justified to the extent of Rs. 13,512.20. Claim No. 2. - Fully justified for Rs. 500.00. Claim No. 3. - From the arguments advanced by the parties. It was an admitted fact that during the progress of work, the minimum labour wages were enhanced by the Govt. statutory order on 25-4-1973. There had been no complaint received either from the labourer employed and the Labour Enforcement Officer from the department in regard to payment not being made at enhanced rates in accordance with the above government statutory orders. Since the revised labour wages due to Govt. statutory order has bound claimant to make extra expenditure, under the principle of the natural justice and equity, the right to prefer claim within the limitation period under the provision of Clause 10C of the contract, cannot be absolved in want of procedural formalities, as such a part amount of the claim amounting to Rs. 54,943/- based on the analysis and detailed break up filed by the Claimant is considered justified. The claim pertaining to the increase in the price of material is not found justified. Claim No. 4 - Simple interest @ 9% is awarded on Rs. 68,955.20 w.e.f. 2.1.1982 till the date of actual payment or the decree whichsoever is earlier." Both parties shall bear their respective costs arbitration. In view of the foregoing, I award that the Respondent do pay a sum of Rs. 68,955.20 (Rupees Sixty Eight Thousand Nine Hundred Fifty Five paise twenty) only to the Claimant plus simple interest @ 9% as stated under Claim No. 4. * * * * True it is that reasons in details have not been assigned for each one of the items of claim, but it cannot be said, in view of what has been stated in the award, that it is not a reasoned one. If and when an arbitrator is required to give reasons for the award, he is not supposed to record reasons for each one of the items claimed by giving detailed justification therefore. An arbitrator's duty is not to be equated with that of the presiding officer of a court dealing with a civil dispute in which parties go to trial and lead oral and documentary evidence and ultimately a reasoned judgment is passed giving specific findings with reasons for the conclusions. An arbitrator's duty is not to be equated with that of the presiding officer of a court dealing with a civil dispute in which parties go to trial and lead oral and documentary evidence and ultimately a reasoned judgment is passed giving specific findings with reasons for the conclusions. In the case on hand, the arbitrator has given reasons for the award, although briefly and not item by item. The findings of facts recorded by the Arbitrator in the award do not suffer from any error of law apparent on the face of the record. All that the agreement required was that the award would be a reasoned one. This, however, does not change the general law relating to arbitration proceedings. The Arbitrator's award both on the questions of fact and law is final and there can be no appeal from his verdict. It is not a case where the Arbitrator has ignored the objections put in by the appellant. The questions referred to him have been decided on their merits. No legal or factual mistake has been committed by the Arbitrator. The Arbitrator is not supposed to write a detailed judgment. In this connection, reference may be made to a decision of the Delhi High Court in Delhi Development Authority v. M/s. AI Karma (22 (1932) DLT 113), (supra). A Division Bench of the Delhi High Court had observed : "... the arbitrator by terms of the arbitration clause is required to give reasons for the award. He is not to write a detailed judgment as we judges do in courts. The requirement of reasons meets the elementary demand of the parties to be told 'the reason why' for a particular conclusion arrived at by the arbitrator. For the arbitrator it is an act of self-discipline. But to say that the court will be entitled to examine the reasonableness of the reasons' is to allow the concept of reasons to run wild. The theory is a disguised attempt to turn questions of fact into questions of law with a view to having them retried by the court, with the result that all the objects sought to be attained by means of arbitration-decision by the tribunal chosen by the parties, and finality and quickness and cheapness would be defeated by protracted proceedings in the courts, as has happened in this case before the single Judge and before us. There is a danger of attempts being made to reopen issues of fact which are concluded by the arbitrator's findings. Held further that reasons are not insufficient merely because they fail to deal with every point raised before the arbitrator at the hearing. No universal generalisation can be made. Everything depends on the subject-matter. In deciding a controversy the arbitrator works in an environment which is quite different from that of the Judge. He is not bound by the technical rules of evidence. The ropes and pulleys' that he uses in the arbitral process are different from the foot rules and set squares that we use in the judicial process. From the arbitrator what is wanted is 'a practical decision on the disputed issues'." As the award passed by the Arbitrator in the instant case is a reasoned one and is in consonance with the terms of the agreement, the award cannot be called in question and the Arbitrator cannot be said to be guilty of any misconduct. The objection raised by the appellant in this behalf cannot prevail. I would accordingly uphold the decision of the learned Subordinate Judge making the award a rule of the court although for reasons different from those recorded in the judgment. In the result, the appeal fails as dismissed leaving the parties to this appoint bear their own costs in the circumstances case. Appeal dismissed.