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1988 DIGILAW 23 (MP)

STATE OF MADHYA PRADESH v. M. B. GHARPURE ENGINEERS AND CONTRACTORS

1988-01-14

A.C.QURESHI, P.D.MULYE

body1988
JUDGMENT P. D. Mulye, J. - This appeal filed by the State under Section 39 of the Arbitration Act, is directed against the judgment and decree dated 12-3-1979 delivered by the district Judge, Jhabaa in C.S. No. 2-B of 79, whereby the award given by the Arbitrators dated 18-10-1978, in favour of the respondent, for a sum of Rs. 1,11,375 plus cost and interest, at the rate of 6 per cent per annum from 12-3-1979 till realisation, has been made the Rule of the Court on the ground that the award given by the Arbitrators is 'otherwise invalid' as contemplated by Section 30(c) of the Arbitration Act. The facts giving rise to this appeal, which are no longer in dispute, may be stated, in brief, thus : A contract was entered into between the appellant and the respondent, who is a contractor, for construction of high level bridge across Pat River, in Kilometre No. 11/4 of Mahanagar, Madrani Road, on the basis of the acceptance of Respondent's tender for Rs. 16,28,500 as per the terms and conditions agreed to between the parties. This work was to be completed within twelve working months excluding the non-working rainy season period between 16th June to 15th October. Accordingly work order was issued to the respondent dated 14-1-1977 on the basis of which the respondent commenced the work. In the tenders invited by the appellant it was disclosed that high level flood of the said river was 99 metres. However, on 28-6-1977 on account of heavy rains the flood level increased by 2.9 metres more with the result that the respondent suffered damages, the details of which were given by the respondent to the appellant who did not accept the same. Therefore, according to the provisions of Section 17 of the Arbitration Act. Shri T. K. Shrinivasan, retired Chief Engineer, M.P., P.W.D. and Shri R. G. Phadke, Superintending Engineer M.P. PWD were appointed as Arbitrators, who after going through the record and hearing the parties gave an award of Rs. 1,22,375 in favour of the respondent as mentioned above. Therefore, according to the provisions of Section 17 of the Arbitration Act. Shri T. K. Shrinivasan, retired Chief Engineer, M.P., P.W.D. and Shri R. G. Phadke, Superintending Engineer M.P. PWD were appointed as Arbitrators, who after going through the record and hearing the parties gave an award of Rs. 1,22,375 in favour of the respondent as mentioned above. The appellant on 2-1-1979 submitted their objection to the said award before the lower Court on the ground that it was stipulated in the contract that no construction work shall be carried out by the contractor between 16th June and 15th October and consequently on account of the heavy floods on 28-6-1977, even though the respondent may have suffered damages, the respondent is not entitled to claim any compensation on that account as the appellant could not be held liable and thus the award given by the Arbitrators is illegal and excessive. The respondent contested the said objections by his reply dated 12-1-1979. On the basis of the objections raised by the appellant to award, the learned trial court framed the following issues : TEXT IN MARATHI Thus, as stated above the learned Trial Court passed a decree in terms of the award by making it a Rule of the Court. Hence this appeal. It may be noted at the outset that from para 11 of the impugned judgment of the learned trial Court it was not disputed that the present controversy is covered by the terms and conditions of the agreement as the only grievance raised by the appellant before the lower Court was that as between 16th June and 15th October the respondent was not expected to do any work, the award is illegal which submission was not accepted by the trial Court. Further it is also not in dispute that on 28-6-1977 the flood level rose 2.9 metres more than the highest flood level of 99 metres as disclosed to the respondent Contractor. The learned lower Court also found that there was no bar for the respondent to carry any work between 16-6-1977 and 15-10-1977. The learned trial Court, therefore, rejected all the objections raised on behalf of the appellants. The learned lower Court also found that there was no bar for the respondent to carry any work between 16-6-1977 and 15-10-1977. The learned trial Court, therefore, rejected all the objections raised on behalf of the appellants. The learned counsel for the appellant submitted that the learned trial Court has committed an error in posing the decree it terms of the award by making its Rule of the Court as the award is otherwise invalid as the Arbitrators who had perused the notice inviting tenders have ignored condition No. 7 thereof which is as follows : "All materials brought and left upon the ground by the contractor's or his/their orders for the purposes of forming part of the works are to be considered to be the property of the Governor of Madhya Pradesh and the same are not to be removed or taken away by the contractor(s) or any other person without the special licence and consent in writing of the E.E. but the Governor of Madhya Pradesh is not to be in any way answerable for any loss or damage which may happen to or in any respect of any such work or materials either by the same being lost or stolen or injured by water or otherwise." Admittedly this point is being raised for the first time in this Court. No such objection was raised or argued before the lower Court. The learned counsel for the respondent, therefore, submitted that the appellant cannot be allowed to take and urge this point for the first time in this manner as that was never their grievence before the lower Court. The learned Government Advocate Shri Kulshreshta relying upon this clause submitted that the Arbitrators have committed an illegality in awarding damages to the respondent. The learned counsel, therefore, submitted that when according to the award the arbitrators had perused and gone through all documents and had also deliberations before giving the award the impugned award is deemed to be a speaking award and in support of his submission the learned counsel placed reliance on the decision reported in Continental Construction Co. (P) Ltd. v. State of M.P. ( 1986 MPLJ 56 ). On the other hand Shri G. M. Chaphekar counsel for the respondent submitted that the authority cited by the learned counsel for the appellant is distinguishable on facts. (P) Ltd. v. State of M.P. ( 1986 MPLJ 56 ). On the other hand Shri G. M. Chaphekar counsel for the respondent submitted that the authority cited by the learned counsel for the appellant is distinguishable on facts. The learned counsel relying on the decisions Union of India v. Bango Steel Furnitore, ( AIR 1967 SC 1032 ) Kanpur Nagar Mahapalika v. Messrs Narain Das Haribansh ( 1969 (2) SCC 620 ), Hindustan Steel Works Construction Ltd. v. C. Rajasekhar Rao ( 1987 (4) SCC 93 ), Municipal Corporation of Delhi v. M/s. Jagan Nath Ashok Jimar and another ( 1987 (4) SCC 497 ), Dandasi Sahu v. State of Orissa. (AIR 1987 Orissa 274) and M/s. Tarapore and Company v. Cochin Ship Yard Ltd. ( AIR 1984 SC 1072 ) submitted that in all these decisions it has been consistently held that award can be set aside on ground of error of law on face of the award only when any award or any document incorporated with it, there is found some legal proposition which is basis of award and which is erroneous. The learned counsel, therefore, submitted that a bare look at the award would indicate that they have awarded damages on the basis of a non-speaking order without giving any reason as after hearing the parties they thought it proper to award damages on various counts as mentioned in the award. We may quote the following observations of the Supreme Court in the latest decision reported in 1987 (Vol. 4) SCC 93 :- "It is only in a speaking award that the court can look in the reasoning of the award. It is not open to the Court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. In the present case the award of the Umpire was not a speaking award. The Umpire had not spoken his mind indicating why he had done what he had done : he had narrated only how he came to make the award. In absence of any reasons for making the award, it is not a speaking award at all. In the present case the award of the Umpire was not a speaking award. The Umpire had not spoken his mind indicating why he had done what he had done : he had narrated only how he came to make the award. In absence of any reasons for making the award, it is not a speaking award at all. In the absence of any legal propositions which was unsubstainable or improper in the award, the award was not open to inference by the court." This decision is also based on the Judicial committee's decision in Champsey Bhara and Co. v. Jivraj Belloo Spinning and Weaving Co. Ltd. (50 IC 324) in which the point of law as settled is clarified as under : "an error of law on the fact of the award means, that one could find in the award or a document actually incorporated thereto as for instance a note appended by the arbitrator staling the reasons for the judgment, some legal proposition which is the basis of the award and which one could then say was erroneous. It did not mean that if in a narrative a reference was made to a contention of the party, that opened the door to seeing first what that contention was, and then going to contract on which the parties' right depended to see if that contention was sound". It has been further reiterated by this Court in the aforesaid decision : "that in dealing with an application to set aside an award the court had not to consider whether the view of the arbitrator on the evidence was justified. The arbitrator's adjudication was generally considered binding between the parties, for he was the tribunal selected by the parties and the power of the court to set aside the award was restricted to cafes set out in Section 30 of the Arbitration Act. It is not open to the court to attempt to probe the mental process by which the arbitrator had reached his conclusion where it is not disclosed by the terms of his award." Thus after hearing the learned counsel and after going through the re not persuaded to agree with the submission made by the learned counsel for the appellant that the award given by the Arbitrators is otherwise invalid. On carefully going through the award, we carefully satisfied that the same is not speaking award and consequently in view of the decision on which the learned counsel for the respondent has place reliance, we do not find any valid ground to set aside the judgement and decree passed by the learned trial Court on the basis of the award which has been made a Rule of the Court. The authority cited by the learned Counsel for the appellant does not help him in the present case, thought the learned Counsel for the appellant did not dispute the fact that the award is not a speaking order, even though he tried to contend that impliedly an inference has to be drawn as a speaking award especially when the Arbitrators have mentioned in the award that they have gone through all the documents and had also del liberation. But, in our opinion, mere mentioning of these facts by itself would not constitute in the decision referred to above. In the result we see no merit in this appeal, which is dismissed with costs. Counsel's fee according to schedule. (Appeal dismissed).