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2001(1) Supreme 584
SUPREME COURT OF INDIA
(From Orissa High Court)
S. Rajendra Babu & Shivaraj V. Patil, JJ.
Paradip Port Trust & Ors. etc. -Appellants
versus
Unique Builders etc. -Respondents
Civil Appeal No. 3683 of 1996
With
Civil Appeal No. 4144 of 1996
Decided on 30-1-2001
Counsel for the Parties :
For the Appearing Parties : Govind Das, Sr. Advocate, Ms. T. Harshvardhan, Ms. Sweta Verma, S.B. Upadhyay, Raj Kumar Mehta and Ms. M. Sarada, Advocate
Generally an award passed by the arbitrator is considered binding between the parties for the reason that the parties select the arbitrator and powers of the court to set aside the award are restricted to cases set out in Section 30 of the Act. It is not open to the courts to guess or speculate reasons for the award, when it is non-reasoned. Courts cannot attempt to investigate the mental process by which the arbitrator arrived at conclusion where it is not visible from the award. The jurisdiction of Courts including the High Courts is not independent of the statute. The arbitrator s award is final both on facts as well as law. There is no appeal from his verdict. However, an award can be set aside only in situations specified in Sections 30 and 33 of the Act. (Para 11)
In the instant case the contents of this award also clearly indicate that fair and sufficient opportunity was given to the parties by the Arbitrator. This again shows that there was no violation of principle of natural justice in passing the award. The clause relating to the arbitration extracted above, is wide enough to cover all disputes or differences of opinion between the parties as to their respective rights and obligations or as to the true intent and meaning of those presents or any articles or conditions thereof (except the matter regarding which the decision has been specifically provided for in the terms and conditions). The claims made in the statement by the Company, in our view, are clearly covered and they fall within the scope of arbitration clause. The learned counsel, referring to the claim Nos. 2 and 7 urged that these claims were outside the terms of agreement. The Company made a claim for Rs. 12,93,260/- against various heads and the Arbitrator granted Rs. 8,61,315/- with interest as stated in the award. It is an award made in lump sum. It is not possible to say whether the Arbitrator awarded any amount under claim Nos. 2 and 7 when the award was made only for Rs. 8,61,315/- as against the total claim of Rs. 12,93,260/-. It is not possible to read mental process of the Arbitrator as to how he came to the conclusion in passing the award for lump sum amount. Further the award passed by the Arbitrator cannot be set aside assuming that another view is possible. Thus we are unable to agree with the contention of the learned counsel that the award passed by the Arbitrator was beyond the scope of either the arbitration clause or the terms of the contract or it was in excess or opposed to the terms of reference. In view of what is stated above, it is not possible to take a view that the award passed by the Arbitrator was arbitrary or unsustainable. It is not a case where the arbitrator has acted arbitrarily, irrationally, capriciously or independently of the contract. It is difficult for us to take a view that there has been a deliberate departure or conscious disregard of the contract to say that the arbitrator misconducted himself. The other clauses contained in the same paragraph, if applied to the facts of the case on hand, support the Company. (Paras 8, 10 & 16)
(ii) Arbitration Act, 1940-Award -Interest-Pendente lite interest-Denial on ground no claim made nor any argument advanced-Future interest from decree, however, cannot be denied. (Para 18)
JUDGMENT
Shivaraj V. Patil, J.-These two appeals are directed against the order dated 25.8.1992 passed by the High Court of Orissa in Miscellaneous Appeal No.228/1987. For convenience, we will refer to Paradip Port Trust as the Trust and Unique Builders as the Company .
2. The Trust entered into an agreement with the company on 31.3.1981 for sale of scrap. Certain disputes arose between the parties. Pursuant to the arbitration clause contained in the said agreement they came to be referred to an arbitrator. Shri B.P. Das, Advocate, was appointed as Arbitrator; he entered into reference and after conducting the proceedings passed the award on 1.6.1985 to the effect that the Company was entitled to receive a sum of Rs.8,51,315/- together with the interest @ 18% per annum from 28.9.1992 from the Trust. The parties did not lead any oral evidence before the Arbitrator and relied only on the correspondence between them. The award passed by the Arbitrator did not contain any reasons and is a non-speaking one. The Court of Subordinate Judge, Jagatsinghpur, on receipt of the award, issued notices to the parties. The Trust filed objections challenging the award on various grounds. The court after considering the objections under Sections 30 and 33 of the Arbitration Act, 1940 (for short the Act ) upheld them and set aside the award. Aggrieved by the same, the Company filed the Miscellaneous Appeal before the High Court. The High Court allowed the appeal and made the award a rule of the court subject to the modification as to the award of interest as indicated in the order. Hence the Trust has filed this Civil Appeal No. 3683/1996 challenging the same in this court. The Company has filed Civil Appeal No. 4144/1996 to the extent it was denied interest.
3. Shri Gobind Das, learned senior counsel for the Trust urged that (1) the High Court was not right in reversing the order of the learned Subordinate Judge when the award had been passed in violation of principles of natural justice inasmuch as certain documents were received without notice to the Trust, after the closing of the proceedings before the Arbitrator and thereafter the award was passed; (2) The award passed by the Arbitrator was beyond the scope of the arbitration agreement, as it could not be made in respect of certain claims, the High court was not right in upholding the award; (3) although recording of reasons in the award could not be insisted and on that account itself, award could not be vitiated, yet no award could be passed arbitrarily.
4. Per contra, Shri Raj Kumar Mehta, learned counsel for the Company made submissions supporting the impugned order upholding the award. He added that the impugned judgment of the High Court is based on the well-settled principles of justice in the light of the law laid down by this Court. He urged that there was no justification for the High Court to deny pendente lite and future interest.
5. We have considered the submissions made by the learned counsel for the parties carefully. In para 11 of the impugned judgment, the High Court has recorded thus :-
"11. some arguments were advanced by the learned counsel for the respondents that the arbitrator has violated the principles of natural justice as he accepted some documents after closing the argument and the respondents were not given any opportunity thereafter either to explain the said document or adduce fresh evidence in relation thereto. This argument was abandoned after perusal of the order-sheet of the arbitrator which shows that at each stage adequate opportunity was given to both parties. Thus the award in hand cannot be set aside on any of the grounds relied on by the learned court below."
6. The learned senior counsel for the Trust was not in a position to say that the statement made in the above paragraph is incorrect. If that be so, his contention that the arbitrator passed the award in violation of the principles of natural justice, cannot b
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