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1998 DIGILAW 448 (KER)

STATE OF KERALA v. M. KUTTAN NAIR

1998-09-17

D.SREEDEVI, P.A.MOHAMMAD

body1998
JUDGMENT P. C. Mohammed, J. - This appeal is directed against the award passed by the Sub-Court. Thiruvenanthapuram in O.P. (Arbitration) No. 255 of 1987. The State of Kerala and the Superintending Engineer are the appellant before us. The claimant is the respondent in the appeal. 2. The respondent filed an application before the Court below to pass a decree in terms of the award. The award was passed by the Chief Engineer (Arbitration), who was appointed as Arbitrator to adjudicate the dispute between the parties. The Court below by the order dated 30th November, 1990 accepted the award and a decree was accordingly passed in terms of the award. It is against the said order this appeal has been filed. 3. Certain disputes and differences arose between the appellants and the respondent in respect of a contract work, "construction of a cartable bridge in Kulathupuzha-Templekadavu by conversion of the foot bridge (balance works)" under a contract agreement. The Arbitrator passed the award on 20th May, 1987. It is the admitted case, that the arbitrator was authorised to pass a non-speaking award. Accordingly, an amount of Rs. 59,038.65 was awarded with interest at 12%. 4. The learned Counsel for the appellants contended that the Arbitrator while passing the impugned award acted without jurisdiction and at any rate he had exceeded the jurisdiction conferred on him. There is no dispute on the proposition that even in a non-speaking award if the Arbitrator has acted without jurisdiction or exceeded his jurisdiction, the aggrieved party can challenge the correctness of the award. In such circumstances, the Court is bound to decide the legality of the award within the premise of Section 30 of the Arbitration Act. Under the above section, an award can be set aside on the ground that the Arbitrator or umpire has misconducted himself or the proceeding, or that the award has been improperly procured. The words 'misconducted himself or the proceeding' contained in Section 30(a) of the Act envisages cases of misconduct, which may be personal or regarding the proceeding. It has also been laid down that the Court cannot set aside a non-speaking award, unless error of law is apparent on the face of the award or in a document incorporated therein. The words 'misconducted himself or the proceeding' contained in Section 30(a) of the Act envisages cases of misconduct, which may be personal or regarding the proceeding. It has also been laid down that the Court cannot set aside a non-speaking award, unless error of law is apparent on the face of the award or in a document incorporated therein. However, the counsel for the appellants, placing reliance on the decision of a Full Bench of this Court in State v. Jolly ((1992) 1 Ker LT 240 = 1992(1) Arb. LR 313), submitted that a non-speaking award could be set aside if the Arbitrator has exceeded his jurisdiction. The question therefore to be considered is whether the Arbitrator has exceeded his jurisdiction. 5. A Division Bench of this Court has laid down as to how the jurisdiction can be conferred on an Arbitrator in Joseph Vilangadan v. F.A.C.T. ((1998) 1 Ker LT 18), The Division Bench said : "No doubt the jurisdiction of the Arbitrator is depended on the wording of the submission or the reference order. The award as such is not bad when there is jurisdiction but when the Arbitrator exceeds it the award becomes bad proprio vigore. Evidence does not confer jurisdiction but legal authority does. In the case of an award it is the terms of reference under the Act that confer jurisdiction. That necessarily means each sentence in the reference order requires to be examined with utmost care and caution, for it concerns the jurisdiction." Therefore, it has become necessary to find out how the jurisdiction has been conferred on the arbitrator to deal with the award. The respondent in this case filed application under Sections 5, 8, 11 and 20 of the Act before the Principal Sub-Judge, Thiruvananthapuram for appointing an Arbitrator to decide the dispute between the parties. The Sub-Court, Thiruvananthapuram by judgment dated 4th February, 1985 appointed the Chief Engineer (Arbitration) as the Arbitrator to decide the dispute between the parties in terms of the reference. The Sub-Court, Thiruvananthapuram by judgment dated 4th February, 1985 appointed the Chief Engineer (Arbitration) as the Arbitrator to decide the dispute between the parties in terms of the reference. The Subordinate Judge, after hearing both parties, passed the following terms of references : (1) Is the plaintiff entitled to enhancement of rate at least by 80 per cent more over and above the agreed rate for all works done after 19-5-1980, the date of originally fixed for completion of the work; and (2) What if any is the relief entitled to by the plaintiff from the defendant in this regard. By the above reference order, jurisdiction has been conferred on the Arbitrator to decide the question, whether the respondent is entitled to enhancement of rate at least by 80 per cent more over and above the agreed rate for all works done after 19-5-1980. Inasmuch as jurisdiction has been conferred on the Arbitrator to decide the question by the judgment of the Sub-Court, the Arbitrator passed the award under Claim (a), that the respondent (appellant) shall pay an amount of Rs. 28,710/- to the claimant under the said claim. The dispute has been raised by the appellant only with regard to the award of this claim and we need not examine the other claims awarded by the Arbitrator. It was pointed out that the Arbitrator had no jurisdiction to award such an amount under Claim (a) and it was alleged that he had exceeded his jurisdiction in doing so. We cannot agree to this submission because the jurisdiction to decide whether the claimant is entitled to get such an enhanced rate has been specifically conferred on the Arbitrator by the judgment of the Sub-Court, which has become final and conclusive. Then the question is as to how the said award has been given by the arbitrator. As we have already observed, the Arbitrator has been authorised to pass a non-speaking award and it is for him to decide the amount to which the respondent is entitled to as compensation. In this context, we must refer to what has been stated by the Supreme Court in M/s Sudarshan Trading Co. v. Govt. of Kerala (AIR 1987 SC 890 = 1989(2) Arb. LR 6). In this context, we must refer to what has been stated by the Supreme Court in M/s Sudarshan Trading Co. v. Govt. of Kerala (AIR 1987 SC 890 = 1989(2) Arb. LR 6). "The Arbitrator is the sole Judge of the quality as well as the quantity of evidence and it will into be for the Court to take upon itself the task of being a Judge on the evidence before the arbitrator." Therefore, it is not proper for this Court to evaluate the evidence available before the Arbitrator and decide what would be the quantum of compensation that could be awarded to the respondent. 6. When jurisdiction has been conferred by the Court specifically authorising the arbitrator to decide the question, whether the respondent is entitled to have 80 per cent of the amount over and above the agreed amount, the efficacy of the agreement between the parties with regard to the agreed rate has been attenuated. If that agreement was holding the field, there was no opportunity for the Sub Judge to direct the arbitrator to decide that question. When the court, considering the terms of the agreement, passed a reference order, either the arbitrator or this Court can go behind the terms of reference and decide whether the arbitrator has exceeded his jurisdiction. 7. In this context, it would be worthwhile to observe that this Court can rely only on the documents incorporated in the award. If the contract is not incorporated in the non-speaking award it is not permissible to look outside award and refer to the terms of the contract as observed by the Full Bench in State v. Jolly (supra). In view of the reasons aforesaid, we do not find any justifiable grounds to interfere with the judgment passed by the Court below. 8. The learned Counsel for the appellants also raised a contention with regard to the award of interest. That position has now been concluded by the judgment of a Division Bench of this Court in P. I. Varghese v. Kerala Automobiles Ltd. (AIR 1998 Kerala 275 = 1998(2) Arb. LR 434). In the result, the M.F.A. is dismissed. No order as to costs. Appeal dismissed.