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2006 DIGILAW 885 (KAR)

BHARAT CONDUCTORS PRIVATE LIMITED, BANGALORE v. KARNATAKA ELECTRICITY BOARD (PRESENTLY KPTC LIMITED), BANGALORE

2006-11-06

C.R.KUMARASWAMY, G.GOPALA GOWDA

body2006
JUDGMENT These two miscellaneous first appeals arise out of a common order dated 15-12-2000 passed in Arbitration Case No. 40 of 1994. By that order, the Court rejected the petition filed by the Arbitrator under Section 14 of the Arbitration Act of 1940 (now repealed) and remitted back the matter to the Arbitrator for redetermination. While the appellant in the first appeal is aggrieved by the rejection of the petition of the appellant by the Arbitrator, the appellant in the second appeal is aggrieved by the remand order. 2. Mr. Chandranath Ariga, learned Counsel for the appellant in the first appeal relied upon the decision in Smt. Santa Sila Devi and Another v Dhirendra Nath Sen and Others1 and contended that the finding of the learned Judge of the Civil Court that non-consideration of issues 14, 15 and 16 by the Arbitrator and passing the award amounts to "misconduct" under Section 30 of the Arbitration Act, is wholly untenable in law. On this ground alone, according to the learned Counsel, the order under challenge is liable to be set aside. The Counsel further relied upon Hindustan Construction Company Limited v State of Jammu and Kashmir2, wherein misconduct is explained. Another decision relied upon by the Counsel is Kundale and Associates v Konkan Hotels (Private) Limited:3, wherein it is held that the award cannot be set aside merely on the ground that it contain no reasons. Therefore, the learned Counsel submitted that the award of the Arbitrator should not have been set aside by the Civil Court in the instant case. 3. Learned Counsel Mr. Abhinav R. for the appellant in the second appeal supported the findings recorded by the Civil Court at para 8 of the order holding that issues 14, 15 and 16 goes to the root of the matter and non-considering and answering them amounts to non-consideration of the case. Consequently, the real dispute is not determined and therefore it amounts to misconduct in terms of Section 30 of the Act. It is submitted that after passing the award, the Arbitrator has become functus officio and therefore question of remanding the matter to him for fresh consideration does not arise. Consequently, the real dispute is not determined and therefore it amounts to misconduct in terms of Section 30 of the Act. It is submitted that after passing the award, the Arbitrator has become functus officio and therefore question of remanding the matter to him for fresh consideration does not arise. The learned Counsel for KPTCL-appellant has placed reliance upon a passage from Markand's Law relating to Arbitration and Conciliation, 2001, IV Edition, page 654, para 51 in support of the contention that award must be a speaking one which must contain reasons unless it is agreed upon by the parties to the effect that the award need not be a speaking one which is as under: "51. "Speaking Award" "Reasoned award" - meaning of: when one carefully considers the two expressions, "reasoned award" and "speaking award", one finds that both the expressions are not wholly similar and identical, but speak of same meaning as well as the consequences. "Speaking award" is a general expression, which only means that the award should speak, which in effect and substance means that it should contain the reasons as to why the Arbitrator has returned a particular finding and as to why, if at all, he has awarded a particular sum of money in favour of a party and against another. The Arbitrator, or the award, if one may say so, should speak, which means that it should contain reasons. Both therefore, are not only same, similar and identical expressions, but in effect and substance have same meaning. Russel states: "A reasoned award is one in which the Tribunal sets out the reasons for its decision and these reasons form part of the award itself A reasoned award is also sometimes referred to as a 'speaking award' or a 'motivated award"'. No particular form is required for a reasoned award. when giving a reasoned award the Tribunal need not set out what, on its view of the evidence, did or did not happen, and explain succinctly why, in the light of what happened, the Tribunal has reached its decision and what that decision is. It should set out the facts and general reasoning so as to enable the parties to understand them and why particular points were decisive. It should set out the facts and general reasoning so as to enable the parties to understand them and why particular points were decisive. It should also indicate the Tribunal's finding and reasoning on issues argued before it though not considered decisive, so as to enable the parties and the Court to consider the position with respect to appeal on all the issues before the Tribunal. When dealing with controversial matters, it is helpful for the Tribunal to set out only its view of what occurred, but also to make it clear that it has considered any alternative version and has rejected it Even if several reasons lead to the same result, the Tribunal should still set them out.. The Tribunal is not expected to recite at great length communications exchanged or submissions made by the parties, nor to analyse the law and the authorities. It is sufficient that the Tribunal should explain what its findings are and how it reached its conclusions". The Counsel repudiated the submissions made by Mr. Ariga and submitted that. the Arbitrator on 17-7-1992 held that issues 14, 15 and 16 would be decided after recording evidence. Having held so, it was his duty to consider the said issues and he should have recorded a finding thereon. The Counsel submits that as rightly pointed out by the learned Civil judge, failure to do so amounts to misconduct and therefore the said finding do not warrant interference by this Court. 4. With reference to the rival legal contentions, we consider whether the impugned order of the Civil Court warrant interference. Our answer is in the negative for the following reasons.- (i) The reliance placed upon the decision of the Supreme Court is inapplicable to the fact situation. It is not the ground that each issue is not separately considered to hold that the award suffers from misconduct under Section 30 of the Act. It is :'Lisa not the contention or ground urged by the KPTCL either before the Civil Court or before this Court. Therefore, the reliance placed upon the decisions is misplaced. (ij) Now, we will consider whether the award can be a non-speaking one. In this regard, learned Counsel for the KPTCL has rightly relied upon the commentary extracted earlier. The said commentary was based upon the decision of Jammu and Kashmir in Om Prakash Nargotra v Union of India 1. Therefore, the reliance placed upon the decisions is misplaced. (ij) Now, we will consider whether the award can be a non-speaking one. In this regard, learned Counsel for the KPTCL has rightly relied upon the commentary extracted earlier. The said commentary was based upon the decision of Jammu and Kashmir in Om Prakash Nargotra v Union of India 1. In our view, having regard to the power conferred upon the Arbitrator under the Act, he is required to determine the rights of the parties and such determination shall be made by applying his mind to the facts and the evidence on record when the claim is disputed. This view is clear from Section 16(1)(a) of the repealed Act, which reads as under: "16. Power to remit award.-(1) The Court may from time to time remit the award or any matter referred to arbitration to the Arbitrators or umpire for reconsideration upon such terms as it thinks fit.- (a) where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matters referred". In the above clause, there is a phrase "undetermined or determined" and it has got relevance to accept the submission of the learned Counsel for the claimants that the award need not be a speaking award. Determination means, to arrive at a conclusion on the basis of the material placed on record and recording of a finding. This is what, which is stated in the extracted portion as above in this judgment from Markand's Law relating to Arbitration and Conciliation. Therefore, the reliance placed upon the two decisions by the learned Counsel for the claimant/appellant are not applicable, particularly having regard to the fact that the parties have not agreed to settle the claim but the Arbitrator settled the claim. In such circumstances, non-speaking award cannot be allowed to sustain in law. (iii) A reading of the award of the Arbitrator indicates that neither it is a speaking nor reasoned award. A reasoned award always speaks but the award in question does not speak except allowing the claim. Therefore, we concur with the decision of the Civil Court and rightly it has set aside the award and remanded the matter for fresh consideration. A reasoned award always speaks but the award in question does not speak except allowing the claim. Therefore, we concur with the decision of the Civil Court and rightly it has set aside the award and remanded the matter for fresh consideration. (iv) In view of Section 16 of the Act, the submission made by the learned Counsel for the KPTCL that after passing the award, the Arbitrator become functus offcio, cannot be accepted. This position is well-settled in Rikhabdass v Ballabhdas1. 5. For the reasons stated above, both appeals must fail and the same are dismissed. 6. We direct the Arbitrator to resolve the dispute between the parties within three months from the date of receipt of a copy of this judgment. All the factual and legal contentions are kept open to be considered by the Arbitrator.