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SUPREME COURT OF INDIA
SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.
Gujarat Water Supply and Sewerage Board, Appellant
Versus
Unique Erectors (Gujarat) (P) Ltd., and another, Respondents.
Civil Appeals Nos. 418-19 of 1989 (Arising out of SLPs (Civil) Nos. 7112-13 of 1988)
Decided on 24-1-1989.
Advocates appeared
Mr. V. B. Patel, Mr. D. Patel, Mr. T. H. Pandey and Mr. R.P. Kapur, Advocates, for Appellant; Mr. Atul Setalwad and Mr. Soli, J. Sorabjee, Senior Advocates, Mr. N.J. Mehta, Mr. P. Shah, Mr. S. K. Sharma, Mr. S. Sharma and Mr. P.H. Parekh, Advocates, for Respondents.
Constitution of India – Article 136 – Indian Arbitration Act, 1940 – Section 29 – Interest Act, 1978 – Section 3 – Miscellaneous- Arbitrator- Commenced- Appreciate questions involved facts have to be emphasized State Government of Gujarat undertook a scheme known as Bhavnagar City Water Scheme was divided into two Gravity Main. Raising Main was divided into two sections welded pipeline respondent State Government and Petitioner Board requesting for reference of alleged disputes to the arbitrator under Clause 30 of agreement respondent gave notice calling upon petitioner to concur in appointment of one withdrew respondent filed a Civil Miscellaneous Application for appointment of sole arbitrato – Held, Whether of commencement of the arbitration proceedings should be taken as reference or on which the arbitrator entered upon reference calculation of interest proceedings commenced and the arbitrator entered upon reference Having regard to and circumstances of case, it is necessary also necessary to consider whether date of award should be taken as the date of its making or its publication award was was published and, therefore, the latter date would be taken as the date of the award – Order accordingly.
Key Points: - The arbitrator was required to decide which disputes were arbitrable under clause 30; the court considered whether the date of reference or the date of entering upon reference should govern interest calculations (!) (!) - The award’s interest calculation involved periods before and during arbitration, and the Court modified the interest awarded, determining that interest pendente lite and post-award interest should be handled per the Balimela and Abhudatta Jena decisions; it fixed dates for commencement of arbitration and publication of the award to compute interest (!) (!) (!) (!) (!) - The Court held that it is not obligatory for arbitrators to provide detailed grounds; a speaking award is not required, but the award must be intelligible and reflect the arbitrator’s mind; non-speaking awards are not per se invalid (!) (!) - The High Court and this Court rejected the contention that the award was invalid for not expressly stating arbitrability, concluding the arbitrator had considered arbitrability and decided on the disputes on the merits within the consent terms (!) (!) - The award partially affirmed and partially modified the arbitrator’s order, disallowing interest from 22-8-1984 to the date of the award and limiting interest to a specified rate and period, with post-award interest continued to be payable (!)
JUDGMENT
SABYASACHI MUKHARJI, J.:— This is an application for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Gujarat dated 29th April 1988 (reported in AIR 1988 Guj 233).
2. To appreciate the questions involved herein, a few facts have to be emphasized. In 1978, the State Government of Gujarat undertook a scheme known as Bhavnagar City Water Suppjy Scheme. The Scheme was divided into two parts : (1) Raising Main; and (ii) Gravity Main. Raising Main was divided into two sections, namely, 10.1kms. and 7.4 kms. steel welded pipeline. On or about 15/16th December, 1978, the State Government issued letter of approval to the bargain between the parties on certain terms.
3. On 12th January, 1979, two contracts were awarded to the respondent No. 1 for Rs. 1,29,39,691/- and Rs. 94,30,435/- which provided the date of completion as February 1979 and the 3rd week of September, 1980 respectively. On 29th March, 1981 the respondent No. 1 filed the Civil Suit No. 588 of 1981 in the City Civil Court with regard to measurements recorded by the Deputy Engineer and alleged underpayments. On 4th June, 1981, the respondent No. 1 gave notice to the State Government and the petitioner Board requesting for reference of the alleged disputes to the arbitrator under Clause 30 of the agreement. On or about 8th July, 1981 the respondent No. 1 gave notice under Section 8 of the Arbitration Act, 1940 (hereinafter called the Act) calling upon the petitioner to concur in the appointment of one Shri G. G. Vaidhya. On 21st July, 1981, he withdrew the Civil Suit No. 588 of 1981. On 6th August, 1981, the respondent No. 1 filed a Civil Miscellaneous Application No. 231 of 1981 in the Court of Civil Judge, (SD), Ahmedabad for appointment of the said Shri G. G. Vaidhya as the sole arbitrator. On 7th November, 1981, the petitioner filed reply contesting the arbitrability of the various claims made in the application and inter alia contending that the application was not maintainable. On or about 15th December, 1981 the learned Civil Judge appointed Shri G. G. Vaidhya as the sole arbitrator with a direction that he should first decide as to which disputes fell within the purview of clause 30 of the agreement. On 5th may, 1982, Shri Vaidhya gave an interim award holding that the claims at S. Nos. 10(g) and 10(l) only were not arbitrable and further that the other claims were arbitrable. A petition was filed in the High Court which was dismissed and then there was an application to this Court under Article 136of the Constitution which was disposed of by consent on 30th November, 1983. The said order inter alia provided that the parties had agreed to settle the matter amicably and one Shri Mohanbhai D. Patel, Retired Secretary, Public Works Department, Gujarat and at that time Sitting Member of the petitioner Board was appointed as the sole arbitrator in place of Shri Vaidhya to decide all disputes between the parties relating to the following works :
"(i) providing, fabricating, laying and jointing 1000 mm. dia. 10,000 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam - Agreement No. 5/2-1 of 1978-79.
(ii) providing, fabricating, laying and jointing 1000 mm. dia 7,400 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. 8-2/2 of 1978-79."
4. It was further provided that all disputes concerning the said two works in question should be referred to the sole arbitrator and the Board would also be entitled to put counter-claims before him. The consent terms also provided the following terms :
"That the arbitration proceedings shall be strated de novo meaning thereby that the earlier appointment and proceedings before the Sole Arbitrator Shri G. G. Vaidhya shall be inoperative and void.
That the Board shall have a right to agitate all points both in fact and in law before the Sole Arbitrator as per the terms and conditio
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