IMPORTANT POINT
The High Court was in manifest error in setting aside non-speaking award of the umpire which was made rule of the Court on the ground that umpire has misconducted himself.

Headnote:(Repealed) Arbitration Act, 1940 -Sections 30 and 33-Non-speaking award by Umpire appointed by Court -Made Rule of the Court-Set aside by High Court u/s 30(a) on ground that Arbitrator or Umpire has misconducted himself-Appeal against to Supreme Court-Whether High Court was right? (No)-Case law discussed-Appeal allowed.
       Held : This Court in Arosan Enterprises (supra) categorically stated that in the event of there being no reason in the award, question of interference of the Court would not arise at all. In the event however, there are reasons, interference would still be not available unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. This Court went on to record that in the event however, two views are possible on question of law, the court would not be justified in interfering with the award of the Arbitrator if the view taken recourse to is a possible view. The observations of Lord Dunedin in Champsey Bhara (supra) stands accepted and adopted by this Court in Bungo Steel Furniture (supra) to the effect that the Court had no jurisdiction to investigate into the merits of the case or to examine the documentary and oral evidence in the record for the purposes of finding out whether or not the Arbitrator has committed an error of law. The Court as a matter of fact, cannot substitute its own evaluation and come to the conclusion that the Arbitrator had acted contrary to the bargain between the parties. (Para 4)
       Presently in the contextual facts, there is no evidence on record that the umpire has overstepped his jurisdiction or has travelled beyond the agreement and it is in this perspective that the court ought not to have entertained the objection and set aside the award as passed by the chosen forum of the parties. The High Court thus was in manifest error in entertaining the appeal and setting aside the award. The order as passed by the High Court cannot be sustained and the law being well settled on the score should not have been misread and misapplied by the High Court. The appeal is allowed. The order of the 1st Sub-Divisional Judge, Bokaro stands restored. There shall however be no order as to costs. (Para 16)

JUDGMENT

Banerjee, J.-Leave granted.

2. The appeal pertains to the issue of interference of Court under Sections 30 and 33 of the repealed Arbitration Act, 1940. Undisputably, in the contextual facts, the award in question is a non-speaking award of a former Judge of the High Court at Patna who acted as an Umpire on appointment by the Court. The award was made a rule of court by a judgment dated 20.4.1995 rejecting the petition under Sections 30 and 33 of the Act of 1940. The High Court in appeal however set aside the award recording therein that the award is otherwise invalid in terms of clause (a) of Section 30 of the Act of 1940 and hence the petition for special leave to appeal to this Court.

3. Section 30 of the Act of 1940 was rather restrictive in its operation and the use of the expression "shall" in the main body of the section made it mandatory to the Court that the award of an Arbitrator shall not be set aside excepting for the reasons as mentioned therein namely:

(a) Arbitrator or Umpire has misconducted himself;

(b) The award has been made or passed after the supersession of the Arbitration or the proceedings becoming invalid;

These three specific provisions thus can only be taken recourse to in the matter of setting aside of award and the law is so well settled on this score, that we also do not feel it expedient to dilate on the issue excepting recording that since the parties chose their own arbitrators to adjudicate the disputes between them, the parties cannot object to such an adjudication or decision either upon the law or on the facts except however as envisaged in terms of Section 30 of the Act of 1940, since repealed and as noticed above.

4. Needless to record that there exists a long catena of cases through which the law seems to be rather well settled that the re-appraisal of evidence by the Court is not permissible. This Court in one of its latest decisions (Arosan Enterprises Ltd. v. Union of India and Anr.1) upon consideration of decision in Champsey Bhara & Co. v. Jivraj Balloo Spg. & Wvg. Co. Ltd.2 Union of India v. Bungo Steel Furniture (P) Ltd.3 N. Chellappan v. Secy. Kerala SEB and Anr.4; M/s. Sudarsan Trading Co. v. Government of Kerala and Anr.5; State of Rajasthan v. Puri Construction Co. Ltd. and Anr.6 as also in Olympus Superstructures (P) Ltd. v. Meena Vijay Khetan & Ors.7 has stated that re-appraised of evidence by the Court is not permissible and as a matter of fact, exercise of power to re-appraise the evidence is unknown to a proceeding under Section 30 of the Arbitration Act. This Court in Arosan Enterprises (supra) categorically stated that in the event of there being no reason in the award, question of interference of the court would not arise at all. In the event however, there are reasons; interference would still be not available unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. This Court went on to record that in the event however, two views are possible on question of law, the court would not be justified in interfering with the award of the Arbitrator if the view taken recourse to is a possible view. The observations of Lord Dunedin in Champsey Bhara (supra) stands accepted and adopted by this Court in Bungo Steel Furniture (supra) to the effect that the court had no jurisdiction to investigate into the merits of the case or to examine the documentary and oral evidence in the record for the purposes of finding out whether or not the Arbitrator has committed an error of law. The Court as a matter of fact, cannot substitute its own evaluation and come to the conclusion that the Arbitrator had acted contrary to the bargain between the parties.

5. Be it noted that the award of the Arbitrator is ordinarily final and conclusive unless a contra intention is disclosed in the agreement itself. This Court

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2001 Supreme(SC) 976

IMPORTANT POINTThe High Court was in manifest error in setting aside non-speaking award of the umpire which was made rule of the Court on the ground that umpire has misconducted himself.

Cases Referred (11)

IMPORTANT POINT
The High Court was in manifest error in setting aside non-speaking award of the umpire which was made rule of the Court on the ground that umpire has misconducted himself.