C. M. Nayar, J. ( 1 ) THE present petition has been filed under Sections 14 and 17 of the Indian Arbitration Act, 1940, for directing respondent no. 3 to file the award dated May 19, 1990, and the arbitration proceedings and to make the same Rule of the Court. ( 2 ) BRIEF facts of the case are that respondents 1 and 2 on behalf of the President of India had accepted the tender of the petitioner for the work of provision of hutted accommodation for officers and JCOs at Hissar. The tender was accepted vide letter dated July 28, 1982 for a total sum of Rs. 44,61,110. 88. The parties thereafter entered into a formal contract wherein the general terms and conditions of the notice of tender of Military Engineering Service were applicable and the said contract provided for reference of disputes to arbitration. Clause 70 may be reproduced as follows: "70 Arbitration - All disputes, between the parties to the contract ( other than those for which the decision of the C. W. E. or any other person is by the Contract expressed to be final and binding) shall, after written notice by either party to the Contract to the other of them, be REFERRED TO to the sole arbitration of an Engineer Officer to be appointed by the authority mentioned in the tender documents. Unless both parties agree in writing such references shall not take place until after the completion or alleged completion of the Works or termination or determination of the Contract under Condition Nos. 55,56 and 57 hereof. Provided that in the event of abandonment of the Works or-cancellation of the Contract under Condition Nos. 52, 53 or 54 hereof, such reference shall not take place until alternative arrangements have been finalised by the Government to get the Works completed by or through any other Contractor or Contractors or Agency or Agencies. Pro vided always that commencement or continuance of any arbitration proceedings hereunder or otherwise shall not in any manner militate against the Government s right of recovery from the contractor as provided in Condition 67 hereof. If the Arbitrator so appointed resigns his appointment or vacates his office or is unable, or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place.
If the Arbitrator so appointed resigns his appointment or vacates his office or is unable, or unwilling to act due to any reason whatsoever, the authority appointing him may appoint a new Arbitrator to act in his place. The Arbitrator shall be deemed to have entered on the reference on the date he issues notice to both the parties, asking them to submit to him their statement of the case and pleadings in defence. The arbitrator may proceed with arbitration ex parte, if either party, in spite of a notice from the arbitrator fails to take part in the proceedings. The Arbitrator may, from time to time with the consent of the parties, enlarge the time upto but not exceeding one year from the date of his entering on the reference, for making and publishing the award. The Arbitrator shall give his award within a period of six months from the date of his entering, on the reference or within the extended time as the case may be on all matters REFERRED TO to him and shall indicate his findings, along with sums awarded, separately on each individual item of dispute. The venue of Arbitration shall be such place or places as may be fixed by the Arbitrator in his sole discretion. The Award of the Arbitrator shall be final and binding on both , parties to the Contract. " ( 3 ) THE disputes arose between the parties and in pursuance to the arbitration clause, a request was made and respondent no. 3 was appointed as the sole arbitrator to adjudicate upon the disputes between the parties. The said arbitrator conducted the proceedings and pronounced and published the award dated May 19, 1990, of which a copy was sent to the petitioner. The arbitrator rendered his award and the same may be reproduced as follows: "i DO HEREBY make and publish this my final Award, in writing of and concerning the matters REFERRED TO to me. I AWARD and DIRECT THAT: i (a) Reference Claims of M/s Walaiti Ram Gupta The Union of India represented by Chief Engineer Chandigarh zone shall pay to M/s Walaiti Ram Gupta the amounts set out in the AWARD column of respective items shown against each:. , SL No. Description of claims, amount of claims Award of claim and findings, in brief Rs. 1. Additional expenditure for procurement of Rs. 78,000.
, SL No. Description of claims, amount of claims Award of claim and findings, in brief Rs. 1. Additional expenditure for procurement of Rs. 78,000. 00 bricks due to departments refusal to issue coal. . . Amount of claim :rs. l,50,000. 00 (Claim partly sustained) 2. Additional expenditure on account of Rs. 56,647. 50 department s refusal to issue MS flat/plate and 12 mm TOR Steel for fabrication of cleats/clamps. Amount of claim: Rs. 78,143. 24 (Claim partly sustained) NIL 3. Provision of fan books to required design not covered under the contract. Amount of claim :rs. l2,584. 25 (Claim not sustained) Walaiti Ram Gupta Vs. Union of India and Ors. 683 SL No. Description of claims, amount of claims Award of claim and findings, in brief Rs. 4. Reimbursement of additional expenditure Rs. 11,369. 02 on account of storm damages. Amount of claim : Rs. 50,000. 00 (Claim partly sustained) 5. Increase in depth of first manhole Rs. 2,023. 68 Amount of claim: Rs. 10,000. 00 (claim partly sustained) 6. Provision of bottle traps for wash hand NIL basins. Amount of claim: Rs. 19,475. 62 (claim not sustained) 7. Provision of Towel Rails NIL Amount of claim: Rs. 11,824. 35 (claim not sustained) 8. Provision of mirrors of larger sizes NIL Amount of claim: Rs. 21,437. 85 (claim not sustained) 9. Payment at enhanced rate for provision of Rs. 25,360. 00 messes in lieu of hutted accommodation for officers. Amount of claim: Rs. 2,51,000:00 (claim partly sustained) 10. On account of damages suffered due to NIL interference/obstructions by Military Personnel and damages by other agency. Amount of claim :rs. l,00,000. 00 (Claim not sustained) 11. Provision of keyed pointing in cement NIL mortar to external faces of brick work. Amount of claim :rs. 29,009. 97 (claim not sustained) SL No. Description of claims, amount of claims Award of claim and findings, in brief Rs. 12. Payment of enhanced rate of GI pipes and NIL fittings due to short length of pipes (Amount of claim: Rs. 51,438. 13 (claim not sustained) 13. Dubbing out on rough surface of one brick NIL and half brick and half brick walls. Amount of claim: Rs. l,03,049. 89 (claim not sustained) 14. Reimbursement of increase in minimum - NIL wages of labour. Amount of claim: Rs. 50,000. 00 (claim not sustained) 15. Provision of M. S. Clamps for fixing teak Rs. 7,171.
Dubbing out on rough surface of one brick NIL and half brick and half brick walls. Amount of claim: Rs. l,03,049. 89 (claim not sustained) 14. Reimbursement of increase in minimum - NIL wages of labour. Amount of claim: Rs. 50,000. 00 (claim not sustained) 15. Provision of M. S. Clamps for fixing teak Rs. 7,171. 87 wood buttons for wiring to pipes. Amount of claim :rs. 11,235. 94 (Claim partly sustained) 16. Provision of medium grade MS tubing for NIL purlins in lieu of light grade. Amount of claim: Rs. 1,27,253. 84 (Claim not sustained) 17. Finishing surfaces of RCC/pcc even and NIL smooth with 10mm plaster in CM (1:3 ). Amount of claim: Rs. 22,531. 48 (Claim not sustained) 18. Reimbursement of additional expenditure Rs. 13,309. 73 for filling up corrugations of AC sheets with cement mortar Amount of claim : Rs. 26,619. 46 (Claim partly sustained) 19. On account of damages suffered on Rs. 1,11,527. 77 account of breach of contract by the department including delay in handing over sites, delay in giving decisions, etc. Amount of claim: Rs. 2,50,000. 00 (Claim partly sustained) Sr. No. Description of claims, amount of claims Award of claim and findings, in brief Rs. 20. Additional expenditure due to shifting of NIL materials on account of changes in site. Amount of claim: Rs. 50,000. 00 (Claim not sustained) 21. Wrongful recovery for alleged technical Rs. 35,297. 49 examination of work. Amount of claim:rs. 40,255. 35 (Claim partly sustained) 22. Reimbursement of damages suffered on account NIL of delay in payment of final bill and release of Bank Guarantee Bond. Amount of claim: Rs. 29,187. 50 (Claim not sustained) 23. For interest. NIL a) Past interest on the amounts unduly withheld. b) Pendente lite interest from the date of reference of the disputes to the Arbitrator upto the date of award on the total amount awarded. c) Future interest on the total amount awarded from the date of award upto the payment of awarded amount or upto the date of court s decree whichever is earlier. Amount of claim:claimed at 18% (Claim not sustained) 24. Cost of reference to arbitration. NIL Amount of claim: Rs. 10,000.
c) Future interest on the total amount awarded from the date of award upto the payment of awarded amount or upto the date of court s decree whichever is earlier. Amount of claim:claimed at 18% (Claim not sustained) 24. Cost of reference to arbitration. NIL Amount of claim: Rs. 10,000. 00 (Claim not sustained) (b) Reference claim of Union of Indiasubmitted by Chief Engineer Chandigarh zone The Claimant, M/s Walaiti Ram Gupta shall pay to the Union of India represented by Chief Engineer Chandigarh zone the amounts set-out in the AWARD Column of respective items shown against each: SL no. Description of claims, amount of claims and Award of claim findings, in brief Rs. 1. Cost of Reference. NIL Amount of claim: Rs. 10,000. 00 (Claim not sustained) 2. . Union of India shall pay to M/s Walaiti Ram Gupta aninterest on the amount due @ 15% P. A. from the date of award upto the date of actual payment or the date of court decree whichever is earlier, if the amount is not paid within 60 days from the date of award. "the learned counsel for the petitioner on perusal of the award has not questioned the fact that the arbitrator has given a non-speaking award. It is argued that such a course of action was permissible in terms of arbitration clause and it was not obligatory on the arbitrator to state any reasons. He has merely recorded his findings and awarded certain figures for each claim and the same is permissible in law. Reference is made to the judgment of the Supreme Court in M/s Sndarsan Trading Co. v. The Government of Kemla and another AIR 1989 Supreme Court 890. The following portion from paragraph 29 of the judgment (at page 900) may be reproduced as follows: "in absence of any reasons for making the award, it is not open to the court to interfere with the award. Furthermore, in any event, reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding. forum must be conceded the power of appraisement of the evidence.
Furthermore, in any event, reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter which the court questions and considers. If the parties have selected their own forum, the deciding. forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a judge on the evidence before the arbitrator. See the observations of this Court in Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar (1987) 4 SCC 497 : ( AIR 1987 SC 2316 )" ( 5 ) THE learned counsel then has REFERRED TO to the judgment of the Supreme Court in Raipur Development Authority etc. etc. u. M/s Chokhamal Contractors etc. AIR 1990 Supreme Court 1426. Paragraph 19 of the judgment may be reproduced as under: "it is now well-settled that an award can neither be remitted nor set aside merely on the ground that it does not contain reasons in support of the conclusion or decisions reached in it except where the arbitration agreement or the deed of submission requires him to give reasons. The arbitrator or umpire is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agreement or in the deed of submission he is required to give such reasons and if the arbitrator or umpire chooses to give reasons in support of his decision it is open to the court to set aside the award if it finds that an error of law has been committed by the arbitrator or umpire on the face of the record on going through such reasons. The arbitrator or umpire shall have to give reasons also where the court has directed in any order such as the one made under Section 20 or Section 21 or Section 34 of the Act that reasons should be given or where the statute which governs an arbitration requires him to do so. " ( 6 ) SIMILAR reliance is placed on the judgment of the Supreme Court in Hindustan Construction Co. Ltd v. State of ]ammu and Kashmir AIR 1992 Supreme Court 2192.
" ( 6 ) SIMILAR reliance is placed on the judgment of the Supreme Court in Hindustan Construction Co. Ltd v. State of ]ammu and Kashmir AIR 1992 Supreme Court 2192. ( 7 ) THERE is no doubt that the Hon ble Supreme Court has settled the law that "the award can neither be remitted nor set aside merely on the ground that it does not contain reasons in support of the conclusion or decisions reached in it except where the arbitration agreement or the deed of submission requires him to give any reasons". This case, however, raises the question of interpretation of the following paragraph in clause 70, which deals with arbitration: "the arbitrator shall give his award within a period of six months from the date of his entering on the reference or within the extended time as the case may be on all matters REFERRED TO to him and shall indicate his. findings, along with sums awarded, separately on each individual item of dispute. "in the present case, the arbitrator has complied with the provision to the extent that he has awarded the sum separately for each item of dispute. The only question which now arises is about the interpretation of the word "finding" and whether this will cover the situation that the agree- ment requires him to give reasons. The learned counsel for the petitioner has contended that the arbitrator has given a non-speaking award, but having incorporated the words, such as, "claim partly sustained" and "claim not sustained" will amount to giving his finding on each claim and, therefore, no fault can be found with the award. She has REFERRED TO me to the subsequent amendment made in the relevant clause, which clarified that the arbitrator shall give reasons for the award meaning thereby that it was not obligatory on the part of the arbitrator to give reasons prior to the date of amendment. The relevant portion of this communication as contained in the letter dated March 19, 1991, addressed to Chief of Army Staff, New Delhi by Under Secretary to the Government of India, Ministry of Defence, may be reproduced as under: "i am directed to convey the sanction of the Government to the following amendments to the General Conditions of the Contracts IAFW-2249: Amendment No. Page no.
Particulars 7 24 Condition 70, sub-para 9 1987 Print Delete the description added at the end of sub-para 9 vide amendment No. 4 (1987 Print) and insert as under: The arbitrator shall give reasons for the award in each and every case irrespective of the value of claims or counter-claims. " ( 8 ) THE learned counsel then has REFERRED TO me to the legal glossary, as published by the Government of India (1979 Edition) which defines the word "finding" as follows: "the conclusion of a judicial proceeding in respect of an issue, action or a trial; judicial verdict the result of a judicial inquiry, the result of the deliberations of a jury or a court. "it was, accordingly, argued that the interpretation of the words "claims sustained or partly sustained" would amount to giving findings and the arbitrator was not obliged to do anything more than that. ( 9 ) THE learned counsel appearing for respondents I and 2, on the other hand, has contended that the word "finding" would imply that the arbitrator was obliged to give reasons and in the absence of reasons, the award cannot be sustained. She has REFERRED TO me to the definition of the word "finding" in Mitra s Legal and Commercial Dictionary, Fifth Edition, which reads as follows at pages 314-315:- "finding. The word finding covers material questions which arise in a particular case for decision by the authority having the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the parties. Afinding can be only that which is necessary for the disposal of an appeal in respect of an assessment of a particular year. Daffadar Bhagat Singh v. In come-tax Officer AIR 1969 SC 340 : (1969) 1 SCJ 499; Bhanji Bhagwandas v. Income-tax Commissioner AIR 1968 SC 139 " Reliance is also placed on the judgment of the "supreme Court in M/s Daffadar Bhagat Singh and Sons v. Income-tax Officer, A Ward, Ferozepure AIR 1969 Supreme Court 340 where the expression "finding" as incorporated in the second proviso to Section 34 (3), Income-tax Act,, 1922 has been explained.
The Court approved the earlier judgments as reported in Income-tax Officer A Ward, sitapur v. M/s Murlidhar Bhagwan Das, Respondent; Hungerford Investment Trust Ltd (In liquidation), Intervener AIR 1965 Supreme Court 342 that "the expressions "finding" and "direction" in. the second proviso to Section 34 (3) mean respectively a finding necessary for giving relief in respect of the assessment for the year in question and a direction which the appellate or revisional authority, as the case may be, was empowered to give under the section mentioned in that proviso. A "finding" therefore could only be that which was necessary for the disposal of an appeal in respect of an assessment of a particular year. The word "finding" only covers material questions which arise in a particular case for the decision by the authority hearing the case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing" ( 10 ) I have carefully considered the respective contentions of learned counsel for both the parties and perused the record. The arbitrator in the present case has, admittedly, given a non-speaking award and the only findings which he has recorded are with regard to the amounts held payable on the basis of the claim partly sustained. The word "finding" in the clause would not, in my opinion, mean that the arbitrator is not obliged to give any reasons. The finding will atleast cover material questions, which arise in a particular claim for the decision of the arbitrator and such questions have to be dealt with howsoever briefly, by the arbitrator and in the present case, it cannot be said that the arbitration agreement required him to give no reasons which may be in the form of findings. The subsequent amendment on which reliance is placed by the counsel for the petitioner that since the arbitrator was now obliged to give reasons, it should be presumed that the unamended clause required him to give non reasons, cannot be accepted. The amendment seems to be of a clarificatory nature and it can only be said that the arbitrator was obliged to give some findings to sustain the claims or counter. claims of the parties.
The amendment seems to be of a clarificatory nature and it can only be said that the arbitrator was obliged to give some findings to sustain the claims or counter. claims of the parties. ( 11 ) THE dictionary meaning of the word "finding", as REFERRED TO to in Mitra s Dictionary, also clearly states that the word "finding" covers a material question which arise in a particular case for decision by the Authority and the same is necessary for passing the final order. In the present case,, the arbitrator has chosen to partly accept certain claims of the petitioners and to reject the other claims and no finding or findings have been recorded, whatsoever. He has obviously misconstrued the relevant clause of the contract. There is no indication of any basis even of the amounts which have been awarded in favour of the petitioner from a bare reading of the award. The circumstances of the present case would, therefore, justify that the award is remitted to the arbitrator for recording his findings in the light of what has been observed in this judgment i. e. to give his finding on the material questions Which have arisen in the case after providing opportunity to both the parties. ( 12 ) THE learned counsel for the petitioner has expressed her apprehension that the arbitrator, respondent no. 3 herein, has since retired and respondents I and 2 will. now raise objection that he cannot act in the case. It is made clear that respondents shall not raise any such objection and the same shall not be entertained on the plea that the arbitrator has retired and he has ceased to act in the matter. The arbitrator shall give his award within a period of four months from the date of receipt of this order. The petition is disposed of in the above terms. No order as to costs.