SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Audio Icon Pause Audio Icon
judgment-img

1969 Supreme(SC) 303

SUPREME COURT OF INDIA
[BEFORE K.S. HEGDE AND A. N. RAY, JJ.]
KANPUR NAGAR MAHAPALIKA
Versus
MESSRS NARAIN DAS HARIBANSH
Civil Appeal No. 1749 of 1966, decided on 20th August, 1969
J. P. Goyal and G. N. Wanchoo, Advocates for Appellant;
N. C. Chatterjee, Senior Advocate (Ganpat Rai, Advocate with him)

Advocates:
G.N.VANCHU, GANPAT RAI, J.P.GOYAL, N.C.CHATTERJI

Headnote:

Arbitration Act, 1940 - Section 34 - U. P. Act 2 of 1916 - Section 326 - Limitation Act - Arbitration agreement – High Court set aside the Award - Issue regarding refund of security deposit and interest - Respondent filed original suit against Municipal Board and claimed a sum of Rs. 60,802-4-9 representing claims on account of balance sum due according to final bills, interest on amount due, refund of security deposit and interest thereon - Suit was instituted in year 1946 - whether claim by contractor for money due on account of work done by him for Municipal Board was governed by Section 326 of U. P. Act prescribing six months as period of limitation or by period of limitation, for three years under Limitation Act - Held, It cannot be said on face of award that arbitrator has decided on any principle of construction which law does not countenance - It was open to arbitrator to decide on rival contentions of parties as to limitation - In doing so, it an arbitrator makes a mistake either in law or on fact and if such mistake does not appear on face of award, award will not be bad notwithstanding any mistake - High Court was correct in refusing to set aside award - Appeal dismissed.

Judgment

RAY, J.-This is an appeal from the judgment dated 3 May, 1962 passed by the High Court at Allahabad reversing the order of the Civil Judge setting aside an award.

2. The appellant was formerly known as Municipal Board, Kanpur and thereafter as Kanpur Nagar Mahapalika. The appellant in the former name of Municipal Board, Kanpur and the respondent entered into a contract in writing for construction of zone pumping stations and reservoirs at Kanpur. One of the clauses in the said agreement in writing contained an arbitration agreement between the parties.

3. The respondent filed original suit No. 45 of 1946 in the. Court of Civil aud Sessions Judge, Kanpur, against the Municipal Board, Kanpur and claimed a sum of Rs. 60,802-4-9 representing the claims on account of balance sum due according to the final bills, interest on the amount due, refund of security deposit and interest thereon. The suit was instituted in the year 1946. The Municipal Board, Kanpur, thereafter made an application under Section 34 of the Arbitration Act, 1940 for stay of the suit contending that the suit related to matter agreed to be referred to arbitration. On 9 August, 1952, the Court ordered stay of the proceedings. The plaintiff preferred an appeal against the order. By an order dated 4 November, 1957 the High Court at Allahabad directed that since the appeal was not pressed by the plaintiff the Court should proceed with the matter of reference. Thereafter on 17 May, 1958 the Court of Additional Civil Judge, Kanpur, sent the matter to Shri A. K. Roy, Superintending Engineer, who was appointed an arbitrator on the reference.

4. The arbitrator on 8 March, 1960 made an award in favour of the plaintiff respondent for the sum of Rs. 42,772-2-9 on account of final bill. a sum cf Rs. 9,705/- on account of refund of security deposit and interest on the security deposit.

5. The appellant thereafter made an application for setting aside the award on the ground that the arbitrator mis conducted himself in the proceedings by not properly considering and deciding that the claim of the plaintiff was barred by Section 326 of the U. P. Act 2 of 1916. The Additional Civil Judge, Kanpur, by judgment dated 31 May, 1960 set aside the award by holding that the arbitratoi wrongly decided the point of limitation and there by mis conducted himself. The High Court referred to two lines of decisions of the Allahbad High Court on the question as to whether the claim by the contractor for money due on account of the work done by him for the Municipal Board was governed by Section 326 of the U. P. Act prescribing six months as the period of limitation or by the period of limitation, for three years under the Limitation Act. The High Court came to the conclusion that if the arbitrator had decided it in favour of the plaintiff and did not accept the prescribed period of limitation under Section 326 of the Municipalities Act, it would not be an error of law apparent on the face of the Award.

6. Counsel for the appellant contended that the award in the present case was bad by reason of an error apparent on the face of the award. If an error of law appears on the face of the award it is a ground for remitting it or setting it aside. An exception arises where the parties choose specifically to refer a question of law to arbitration. This Court in the case of Messrs Alopi Parshad and Sons Ltd. v. Union of India{1962 SCR 793} pointed out the distinction between a general reference on the one hand and the specific reference on the other on any question of law.

7. In the present case, the award does not lay down any proposition of law on the question of limitation. The award does not put any construction on Section 326 of the Municipalities Act. Lord Dunedin in Champsay Bhara & Co. v. Jivraj Balloo Spinning and Weaving Co. Ltd.{(1923) AC 480} said "an error of law on the face of the award means.........that one can find in the award, or in a document actually incorporated thereto, as for i






Click Here to Read the rest of this document
1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
logo-black

An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers

Please visit our Training & Support
Center or Contact Us for assistance

qr

Scan Me!

India’s Legal research and Law Firm App, Download now!

For Daily Legal Updates, Join us on :

whatsapp-icon Back to top