1997 Supreme(SC) 965

1997(7) Supreme 219
SUPREME COURT OF INDIA
(From Patna High Court)
S.B. Majmudar & M. Jagannadha Rao, JJ.
State of Bihar & Ors. -Appellants
versus
Hanuman Mal Jain -Respondent
Civil Appeal Nos. 4749-4750 of 1997
(Arising out of S.L.P (C) Nos. 17016-17017 of 1996)
Decided on 17.7.1997
Counsel for the Parties :
For the Appellants : S.B. Sanyal, Sr. Advocate and A.K. Jha, Advocate.
For the Respondent : T.C. Ray, Sr. Advocate, Bikas Kumar Gupta, and D.P. Mukherjee, Advocates.

Headnote:(i) Constitution of India-Art. 136 -Arbitration Act, 1940-Section 30 -Arbitration Award-Made rules of Court-Challenged on ground that Clause 11 of Agreement between parties was not complied with by plaintiff, contractor-Clause 11 as extracted by the Court has been reproduced without second proviso which is a part thereof-Evidence on record that arbitrator was alive to question of applicability of entire clause 11 including second proviso- Arbitrator while passing non speaking awards had considered all statements, evidences and arguments-No patent error on part of arbitrator in not considering question of limitation as mentioned in second proviso to Clause 11.

       Held : This objection on the face of it shows that according to the defendants the arbitrator had wrongly allowed the claims which were time barred as per Clause 11. Thus the objection was not on the ground of absence of jurisdiction of the arbitrator but on merits meaning thereby that the arbitrator wrongly held the claim to be within time. This obviously was in the domain of the jurisdiction of arbitrator and even if he had decided wrongly the question of limitation it could not be made a subject-matter of objection under Section 30 of the Act against a non-speaking award. Nor would it show any misconduct on his part. The Court obviously could not sit as a Court of Appeal against the decision rendered by the arbitrator on this ground. Much more so when the awards were non-speaking awards. (Para 7)

       Further held that the claims have been adjudicated after going through all the documents and arguments by both the parties. Consequently it must be held that even though the learned Trial Judge as well as the High Court had not noticed the second proviso to Clause 11 of the Agreement both the parties had joined issue on the point before the arbitrator and the arbitrator having considered all the relevant contentions of the parties on this aspect had passed the impugned awards which even according to the defendants were passed on consideration of Clause 11 as a whole but only fault sought to be found by the defendants against the awards was that the arbitrator had wrongly treated the claims not be time barred. That question would squarely get connected with the second proviso to Clause 11 to which we have made a reference earlier and not dehors it. (Para 7)

       (ii) Arbitration - Award -made rule of Court-Validity challenged on ground that award of interest by arbitrator was without jurisdiction as it was contrary to tender notice clause 2.32-Whether claim of interest was barred by clause 2.32?-Held, No-Neither Trial Judge nor High Court considered this issue-These being old claims, to avoid unnecessary protraction of litigation, controversy decided by this Court.

       Held that it was the case of the plaintiff before the arbitrator that his claims were unreasonably delayed by the Executive Engineer before considering the same. It is this contention which is accepted by the arbitrator by passing the impugned awards though in a non-speaking manner. Therefore, it is not possible to agree with the contention of learned senior counsel for the appellants that the claim for interest was barred by clause 2.32 of the Tender Terms. If the contention of the plaintiff before the arbitrator was that his claims were unduly delayed they would obviously rule out the applicability of the said clause as that would not amount to unavoidable delay on the part of Executive Engineer in making the final payment. On the contrary it would be avoidable delay which would take out the claims from the fetters of Clause 2.32, even assuming that Shri Sanyal, learned senior counsel for the appellants is right in his submission that the said clause would cover all money claims pertaining to the amounts which may not be lying with the department and still would be within the sweep of the first part of the said clause. The defendants joined issue on the question whether any interest could have been awarded against the defendants by the arbitrator. Implicit in this contention would be the moot question whether there was any unavoidable delay on the part of the Executive Engineer in making the final payment which according to the plaintiff fell short of his claim and it is this contention which, as noted by the arbitrator in the Minutes was pressed for consideration of the arbitrator. He ultimately came to his own conclusion regarding the same by rejecting this contention on merits by non-speaking awards. It is, therefore, not possible to agree with the learned senior counsel for the appellants that applicability of Clause 2.32 of the terms of tender was not kept in view by the arbitrator and consequently his awards suffered from any patent error of law. We have to undertake this exercise on the facts of the present cases as neither the learned Trial Judge nor the High Court had come to the grip of this issue and in order to avoid unnecessary protraction of litigation we thought it fit, as noted earlier, after hearing the parties to decide this controversy. (Para 10)