STATE v. BENGAL BUILDERS — 1988 DIGILAW 414 (CAL)

PRABIR KUMAR MAJUMDAR, J. ( 1 ) THIS is an application for setting aside an award dated Feb. 10, 1988 made and published by Mr. P. C. . Majumdar, the Sole Arbitrator. There is also a prayer for condonation of delay under S. 5 of the Limitation Act in making this application for setting aside the award. ( 2 ) THE learned arbitrator made an award for a sum of Rs. 5,05,000/- in favour of the respondent, Bengal Builders. The learned arbitrator also made an award for interest at 9% per annum on the said sum of Rs. 5,05,000/- for the period from the date of entering upon the reference by the learned arbitrator, i. e. April 27, 1987, till the date of payment or decree by the competent court, whichever is earlier. The learned arbitrator made the said award for Rs. 5,05,000/- in full and fianl settlement of all the claims and counter-claims of the parties, which had been referred to the arbitrator. ( 3 ) THE material portion of the impugned award is as follows : -"firstly That I award and direct the respondent, the State of West Bengal, shall pay to the claimant M/s. Bengal Builders in the present case, a sum of Rs. 5,05,000. 00/- (Rupees Five Lakhs and five thousand) only in full and final settlement of all the claims and counter-claims of the Parties which have been referred to me. All the claims and counter-claims of the Parties are merged into and extinguished by the said sum of Rs. 5,05,000. 00/- (Rupees Five Lakhs and Five Thousand) only. SECONDLY That I award and direct the respondent, State of West Bengal, shall pay to the claimant M/s. Bengal Builders, interest on the said sum of Rs. 5,05,000. 00/- (Rupees Five Laks and Five Thousand) only at the rate of 9 (Nine) Per Cent per annum from date of entering into reference by me, i. e. 27th. April 1987, till the date of payment or decree by the competent Court, whichever is earlier. " ( 4 ) ONE Debasis Das on behalf of the State-respondent by an affidavit affirmed on April 8, 1988 has stated that the notice for filing of the award dt. Feb. 10, 1988 was received by the respondent on Feb. 24, 1988. The Notice of Motion was taken out on March 31, 1988. " ( 4 ) ONE Debasis Das on behalf of the State-respondent by an affidavit affirmed on April 8, 1988 has stated that the notice for filing of the award dt. Feb. 10, 1988 was received by the respondent on Feb. 24, 1988. The Notice of Motion was taken out on March 31, 1988. According to the period prescribed by the laws of limitation, the Notice of Motion should have been taken out by March 24, 1988. So there has been a delay for a few more days. By way of an explanation the said Debasis Das has stated in his said affidavit that the said notice was addressed to the Executive Engineer, Irrigation and Waterways Directorate, Teesta Barrage Division No. I at his office at Oodlabari, District Jalpaiguri. According to the said deponent, as the notice was received at the end of the financial year it was not possible for the respondent to take action on the said notice. He has further stated that after arranging for some urgent matters the said notice was duly forwarded to the Advocate-on-record for the State of West Bengal with instruction to draw and file a petition for setting aside the said award. As stated earlier, the Notice of Motion was taken out on March 31, 1988. ( 5 ) MR. P. K. Bose, learned Counsel appearing for the petitioner, submits that this should be taken as a sufficient ground for condonation of delay which was for about seven days. The learned Counsel for the respondent, however, submits that just that the notice was received at the close of the financial year is not itself a good ground for condonation of the delay. Considering the circumstances stated in the said affidavit and that the delay was for about 6/7 day's, I condone the delay. ( 6 ) NOW, I shall deal with the merits of the case. The petitioner has challenged the award on the grounds stated in the petition. The principal ground is that the claims of the claimant had not been proved before the learned arbitrator and the learned arbitrator in making the said impugned award mis-conducted himself and the proceedings. ( 6 ) NOW, I shall deal with the merits of the case. The petitioner has challenged the award on the grounds stated in the petition. The principal ground is that the claims of the claimant had not been proved before the learned arbitrator and the learned arbitrator in making the said impugned award mis-conducted himself and the proceedings. The other ground is that the learned arbitrator mis-conducted himself and the proceedings in making the award in favour of the claimant in spite of the fact that the claimant refused to take over possession of the site of the work and/or to commence the work for which its was accepted. There is also a ground of challenge that the impugned award as made and published by the learned arbitrator did not conform to the submissions of the petitioner made through Counter-Statement Additional Counter-Statement and the oral submissions made on behalf of the petitioner. The petitioner has also challenged the award by contending that the learned arbitrator is not competent to award interest as has been awarded by him by the said impugned award. ( 7 ) MR. P. K. Bose, learned Counsel for the petitioner, has referred to a decision of the Delhi High Court in the case of Bombay Ammonia Pvt. Ltd. v. Union of India, AIR 1987 Del 148 , to contend that the learned arbitrator had not applied his mind to the case presented before him and also that he did not call for the necessary documents which were necessary for a decision in the matter. It may be noted that in the petition there is no averment that the learned arbitrator failed to call for the necessary documents. By this decision cited by Mr. Bose, the Delhi High Court has observed that the award made without considering the vital document is liable to be set aside. In my opinion, this decision has no application to the case before me. Here, there is no allegation by the petitioner that the learned arbitrator did not take into account any particular document. There is also no allegation that the petitioner called upon the learned arbitrator to direct the claimant respondent to disclose and produce certain document which might be necessary for the purpose of adjudication of the disputes by the learned arbitrator. ( 8 ) MR. There is also no allegation that the petitioner called upon the learned arbitrator to direct the claimant respondent to disclose and produce certain document which might be necessary for the purpose of adjudication of the disputes by the learned arbitrator. ( 8 ) MR. Bose has also argued that the impugned award is not a reasoned award and as the recent trend has been that the award should contain reasons, on that ground the award should be set aside for its being a non-speaking award. ( 9 ) MR. Bose has also challenged the competence of the learned arbitrator to award interest for the period from the date of his entering upon the reference till the date of payment of the decree, whichever is earlier. Mr. Bose submits that this part of his submission is fully covered by several decisions of the Supreme Court the first one being Abadhuta Jana's case, (1988) 1 SCC 418 , Mr. Bose submits that in any event this part of the award should be deleted. ( 10 ) MR. Bhaskar Gupta, learned Counsel for the respondent has submitted that up till now the law is well settled that the arbitrator is not required to indicate reasons in his award and the award without reasons is not had per se. Mr. Gupta submits that the award can be set aside only on the ground of misconduct or on the error of law apparent on the face of the award. It is the argument of Mr. Gupta that in the present case, looking at the impugned award one cannot find any error of law apparent on the face of the award, It is also the submission of Mr. Gupta that the petitioner has also failed to make out its case as to the misconduct of the learned arbitrator. Mr. Gupta has cited a recent decision of the Supreme Court in the case of State of Orissa v. Dandasi Sahu, AIR 1988 SC 1791 . There, the Supreme Court has observed that the law as it stands is that the award without reasons is not bad per se. Mr. Gupta has cited a recent decision of the Supreme Court in the case of State of Orissa v. Dandasi Sahu, AIR 1988 SC 1791 . There, the Supreme Court has observed that the law as it stands is that the award without reasons is not bad per se. It has also been observed by the Supreme Court that it is well settled that when the parties choose their own Arbitrator to be the judge in dispute between them, they cannot, when the award is good on the face of it object to the decision either upon law or on facts. According to the Supreme Court, when the arbitrator commits a mistake either in law or in fact in determining the matters referred to him, where such mistake does not appear on the face of the award and/or the documents appended to or incorporated so as to form part of it the award will neither be remitted nor set aside. ( 11 ) MR. Gupta has also cited another latest decision of the Supreme Court in the case of Neelkantan and Bros. v. Superintending Engineer, National Highway, Salem, AIR 1988 SC 2045 , where the Supreme Court has observed that where the arbitrator gives no reason for the award and there was no legal proposition which was the basis of the award, far less a legal proposition which was erroneous, the Court could not review, in such circumstances, the award and correct any mistake in the adjudication by the Arbitrator. ( 12 ) MR. Gupta has also referred to another recent decision of the Supreme Court in State of Orissa v. M/s. Lall Brothers, AIR 1988 SC 2018 . The Supreme Court in this case has held that an award is conclusive as a judgment between the parties and the Court is entitled to set aside an award only if the arbitrator has mis-conducted himself in the proceedings or when the award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid or where the award has been improperly procured or is otherwise invalid. ( 13 ) MR. Gupta has also argued that the Delhi High Court decision cited by the learned Counsel for the petitioner is not applicable at all to the present case. ( 13 ) MR. Gupta has also argued that the Delhi High Court decision cited by the learned Counsel for the petitioner is not applicable at all to the present case. He submits that it will appear from the recital part of the impugned award that the learned arbitrator had considered and weighed the several statements, tender documents and other papers which were submitted before the learned arbitrator by the parties and had also heard the parties and their learned Counsel and had duly considered and weighed their respective submissions. Therefore, it cannot be said, according to the learned Counsel for the respondent, that the learned arbitrator did not consider any necessary document nor did call for any relevant documents for adjudication upon the disputes referred to the learned arbitrator. ( 14 ) ON the question of interest, Mr. Gupta has argued that the Supreme Court by the later decisions starting from Abadhuta Jana's case, (1988) 1 SCC 418 , has held that in the case of private arbitration the arbitrator is not competent to award interest pendente lite. Mr. Gupta submits that it will be clear from the decision in Abadhuta Jana's case, (1988) 1 SCC 418 (supra), that the question before the Supreme Court was that whether the arbitrator was competent to award pendente lite interest. But the Supreme Court in the said decision or in any later decisions did not consider the question whether the arbitrator could also award future interest. Therefore, according to Mr. Gupta, the award relating to pendente lite interest may be modified or deleted, but the arbitrator was competent to award future interest, i. e. from the date of the award to date of the decree. ( 15 ) I have considered the respective submissions of the parties. It is now well settled proposition of law that the arbitrator is not required to indicate reasons in his award and it is also the settled law that the award cannot be interferred with by the Court in an application for setting aside the award unless there is an error apparent on the face of the award or in any document appended to or incorporated so as to form part of it. I also do not find any legal proposition of law as the basis of the impugned award which can be said to be erroneous. I also do not find any legal proposition of law as the basis of the impugned award which can be said to be erroneous. As I have indicated earlier, the decision of Delhi High Court cited by Mr. Bose has no application to the present case. Mr. Bose has also cited a decision of Himachal Pradesh High Court on the point whether the award should be a reasoned award or not, which is reported in AIR 1987 Him Pra 54. There, the reference to arbitration was under S. 72 of Himachal Pradesh Cooperative Societies Act, 1969. Therefore, this is a statutory arbitration and, to my mind, it has no application to the present case. In any event, it is now the law under the Arbitration Act that the Award need not be a reasoned award unless there is a mandate from the parties to the arbitration that the arbitrator should indicate reasons in the Award. As has been observed by the Supreme Court in State of Orissa v. Lall Brothers, AIR 1988 SC 2018 (supra), an award may be set aside by the Court on the ground of error on the face of the award, but an award is not invalid merely because by a process of inference and agreement it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. ( 16 ) ON the question of interest, I accept the argument of Mr. Gupta that according to the later decisions of the Supreme Court, the arbitrator is not-competent to award any pendente lite interest unless the reference is made under S. 21 of the Arbitration Act. But up till now there has been no decision of the Supreme Court that the arbitrator cannot award any future interest, i. e. from the date of the award till the date of realisation or decree, whichever is earlier. The Supreme Court in the several earlier decisions which have not yet been overruled by any later decision of the Supreme Court, has indicated that the arbitrator has power to grant interest from the date of award to the date of decree as the provisions of S. 34 of the Civil P. C. apply in terms to the arbitration proceedings. See AIR 1967 SC 1030 , AIR 1967 SC 1032 . See AIR 1967 SC 1030 , AIR 1967 SC 1032 . ( 17 ) I, therefore, hold that there is no ground for interference with the impugned award, except to the part relating to the grant of pendente lite interest. As the law stands today, the arbitrator is not competent to grant pendente lite interest, but there is nothing to prevent the arbitrator from awarding interest from the date of the award till the date of realisation or the decree to be passed by the Court, whichever is earlier. ( 18 ) I, therefore, uphold the impugned award dt/- Feb. 10, 1988 with this modification that there will be interest @ 9% per annum on the awarded sum of Rs. 5,05,000. 00/- from the date of the award, i. e. , 10th Feb. 1988 till the date of payment or the decree, whichever is earlier. ( 19 ) THIS application for setting aside the award fails and the same is hereby dismissed. ( 20 ) THERE will be no order as to costs. Application dismissed.