West Bengal Central Co-operative Land Development Bank Limited v. Dilip Kumar Mandal
1993-02-26
Anandamoy Bhattacharjee, Sunil Kumar Guin
body1993
DigiLaw.ai
JUDGMENT Sunil Kumar Guin, J.: This appeal is directed against the order passed by the learned Single Judge of this Court on 1.8.90 in Award Case No. 12 of 1990 whereby he refused to condone the delay in filing the application for setting aside the award, refused to set aside the said award and dismissed the application. 2. It appears that the learned Judge of this Court sitting singly on an application filed by the Dilip Kumar Mondal passed an order on 16.7.87 in matter no. 2448 of 1987 whereby he appointed the arbitrator with a direction upon him to make and publish his award within four months from the date of his entering upon the reference. Time to submit award was extended from time to time and ultimately on 10.1.90 the arbitrator passed an award for a sum of Rs. 2,55,000/- in favour of the present respondent. The notice of such award appears to have been served upon the present appellant on 24.1.90 and the instant application for setting aside the award appears to have been filed by the appellant on 2.3.90. Thereafter by order dated 28.8.90 the learned Judge passed a decree on award and the present appellant appears to have prayed for an instalment in paying the decretal dues and its prayer was allowed. Subsequently by order dated 13.11.90 the said order as to payment of a decretal dues by instalment was modified. The appellant in its application under section 30 of the Arbitration Act prayed for setting aside the award. The present respondent resisted it. The learned Judge, however, after hearing both sides refused to set aside the, award and also refused to condone the delay in filing the application for setting aside the award. 3. Being aggrieved the appellant has filed the instant appeal challenging the legality and propriety of the order passed by the learned Judge. 4. It may be pointed out here that by order dated 8.2.91 this Court already condoned the delay in filing the application for setting aside the award. As such we are no longer required to see whether or not the application for setting aside the award is barred by limitation. Mr. Ghose appearing for the appellant has submitted that in the arbitration agreement there is clause to the effect that in all cases where a total amount of the award exceeds Rs.
As such we are no longer required to see whether or not the application for setting aside the award is barred by limitation. Mr. Ghose appearing for the appellant has submitted that in the arbitration agreement there is clause to the effect that in all cases where a total amount of the award exceeds Rs. 50,000/-, the arbitration shall give reason for the award, that the arbitrator in the instant case has not given any reason whatsoever for the award and that omission to give reason in the circumstances amounts to misconduct on the part of the arbitrator rendering the award liable to be set aside. So he has argued that a learned judge was not justified in dismissing the instant application and should have set aside the award. 5. Mrs. Mukherjee appearing for the respondent, on the other hand, has argued that as the appellant has accepted the decree and prayed for instalments in paying the decreetal dues and as it has already derived benefits under the decree, it can no longer challenge the decree and that instant appeal is not maintainable. She has also argued that omission to give reason for the award is at best an illegality of the award within the meaning of section 16 of the Arbitration Act and not a misconduct within the meaning of section 30 of the said Act. 6. First let us consider whether the instant appeal is maintainable or not. In the instant case decree was not passed on admission or on consent. The appellant filed an application for setting aside the award which was contested by the respondent. After the said application had been dismissed, the learned Judge passed decree on such award by his order dated 28.8.90. On the same day the present appellant appears to have prayed for instalment in payment of the decreetal dues and its prayer was granted. Such instalment was granted after the decree was passed. Had it been a decree on admission or consent, the question would have been otherwise. But here the instalment was prayed for after the decree was passed. Moreover the instant appeal is not against the decree. But it is against the order of dismissal of the application whereby the present appellant prayed for setting aside the award. As such we are of the opinion that the instant appeal is maintainable. 7.
But here the instalment was prayed for after the decree was passed. Moreover the instant appeal is not against the decree. But it is against the order of dismissal of the application whereby the present appellant prayed for setting aside the award. As such we are of the opinion that the instant appeal is maintainable. 7. It is not disputed that the arbitration agreement contains clause to the effect that in all cases where a total amount of the award exceeds Rs. 50,000/- the arbitrator shall give reason for the award. It is also not disputed that the arbitrator did not give any reason for the award that he made. So undoubtedly this award is in violation of the arbitration clause whereby he was required to give reason for the award. Now the question arises whether such omission to give reason for the award amounts to misconduct on the part of the arbitrator within the meaning of section 30 of the Arbitration Act as has been contended on behalf of the appellant or whether such omission amounts to an illegality apparent upon the face of the award within the meaning of section 16 said Act as has been contended on behalf of the respondent. In this connection both sides have referred to and relied upon the decision of the Supreme Court in the case of Raipur Development Authority etc. vs. M/s. Chokhamal Contractors and others reported in AIR 1990 Supreme Court 1426. In that case the Five Judge Bench of the Supreme Court has held as follows:- "In the result we hold that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support except where the arbitration agreement or the deed of submission or the order made by the Court such as the one under Section 20 or Section 21 or Section 34 of the Act or the statute governing the arbitration requires that the arbitrator or the umpire should give reasons for the award." 8. So from the above decision it is clear that mere omission to give reason for the award will not render the award liable to be remitted or set aside.
So from the above decision it is clear that mere omission to give reason for the award will not render the award liable to be remitted or set aside. But where the arbitration agreement or the deed of submission or the order of the Court or the statute requires the arbitrator to give reasons for the award the case world be otherwise. In such case omission may render the award liable to be remitted or set aside as the circumstances of each case may warrant. In the instant case undoubtedly the arbitrator did not give any reason for the award. But there is nothing to show that the award has been procured improperly or that the arbitrator was biased or unfair or that he has not heard the parties. In such circumstances we are not inclined to hold that omission to give reason for the award amounts to misconduct on the part of the arbitrator in the matter of making the award. Now let us consider whether such omission amounts to an illegality apparent on the face of the award. Mr. Chose has argued that for the purpose of section 16 (1) (c) of the Arbitration Act, the objection as to illegality of the award must be apparent on the face of it and that we are not even entitled to look into the arbitration agreement in deciding whether there is an illegality on the face of the award. However, we are not impressed by this argument. The document containing the arbitration agreement is a most important and basic document which has given rise to the instant proceedings. It has given jurisdiction to the Court to refer the matter to the arbitrator and it has given jurisdiction to the arbitrator to decide and adjudicate upon the matter in dispute. Further it is not at all disputed by any of the parties that there is a clause in the arbitration agreement that in all cases where the total amount of the award exceeds Rs. 50,000/-, the arbitrator shall give reasons for the award and that the arbitrator has not given any reason for the award. That the arbitrator has not given any reason for the award is very much apparent from the award itself and that such an omission being violative of the terms of the arbitration agreement is an illegality within the meaning of section 16(1)(c) of the Arbitration Act.
That the arbitrator has not given any reason for the award is very much apparent from the award itself and that such an omission being violative of the terms of the arbitration agreement is an illegality within the meaning of section 16(1)(c) of the Arbitration Act. That being so, we hold that the said omission to give reason for the award is an illegality apparent on the face of the award and that as such the award shall be remitted to the arbitrator for giving reasons. 9. Accordingly we allow the appeal and set aside the order appealed against. Let the award be remitted to the arbitrator for giving the reasons for the award. He shall resubmit the award after giving reasons within three months from the date of service of notice upon him in this regard. We make no order as to cost. A. M. Bhattacharjee, J.: I agree. Appeal allowed with direction upon the arbitrator.