JUDGMENT

MOHAN, J.:—The facts in brief leading to this civil appeal are as follows:

The appellant is a member of the Delhi Hindustani Mercantile Association. By a claim petition dated 11-8-1979, the appellant had claimed a sum of Rs.4,51,246.50 under various heads of accounts including commission from the first respondent upto the period of 30-6-1979. The claim related to transactions which took place between appellant and first respondent. In turn, the first respondent was also a member of Delhi Hindustani Mercantile Association. It also made a counter claim against the appellant. As per the rules of the association, the dispute was referred to an Arbitrator.

2. By an order dated 20-11-1981, the learned single Judge of Delhi High Court directed in terms of the concession made on behalf of the Association and the sole Arbitrator, a reasoned award shall be passed by the Arbitrator.

3. The sole Arbitrator (Mohan Lal) entered upon the reference. On 19-7-1983, by a reasoned award, he awarded a sum of Rs.1,97,891.81 in favour of the appellant against the first respondent. This amount was also to carry interest @18 per annum from the date of the award till the date of payment. Aggrieved by this award the first respondent preferred an appeal as per Rule 37, Regulation 7 of Delhi Hindustani Mercantile Association Rules and Regulations (hereinafter referred to as the Rules). The appeal was heard by the Tribunal. By an order dated 24-2-1984, the Tribunal confirmed the award of the Arbitrator without assigning any reasons.

4. Against this order, the appellant preferred Suit No.498-A/84 for making the award a rule of the Court. The first respondent filed objections against the Award. Inter alia, it was urged by it that the award was not a reasoned award. A learned single Judge of the High Court of Delhi by an order dated 5-4-1990 allowed the objections and set-aside the award of the appellate Tribunal and remitted the award to Tribunal for re-consideration and for giving reasons for the Award within four months from the date of the judgment.

5. Assailing the correctness of this judgment, the appellant preferred Appeal FAO (OS) 113/90 before the High Court. The said appeal was dismissed in limine by the impugned order dated 17-7-1990.

6. The learned counsel for the appellant would argue that in so far as the award dated 19-7-1983 is concerned it is a reasoned award. That is enough compliance with law. Generally speaking, when the appellate Tribunal merely confirms that reasoned award, it is not necessary again to give reasons. Therefore, the High Court erred in setting aside the order of the appellate Tribunal on the ground that no reasons were given in that order. The principle of merger will not apply to the present proceedings where the parties had consented to a reasoned award by the sole Arbitrator. In any event, the High Court erred in requiring reasons to be given even at the appellate stage overlooking the fact that the Award dated 19-7-1983 is a reasoned award.

7. In opposition to this, the learned counsel for the respondent would urge that in law as laid down in Commercial Arbitration by Mustill and Boyd, Second Edition at pages 364-65 when the appellate Tribunal has made an award either confirming or reversing the original award, it is the award of the Tribunal which defines the rights of the parties.

8. The appellate award once made completely replaces the original award. Therefore, a party is entitled to know the reasons as to why the appellate authority has come to such a conclusion. Once the award of the sole Arbitrator was subject to an appeal, the award of the appellate authority supersedes the original award and it is only that award which exists in law. Such an award must contain reasons for its decision. This Court in Indian Oil Corporation v. Indian Carbon Ltd., (1988) 3 SCR 426: (AIR 1988 SC 1340), has stressed the requirement of the Arbitrator to give reasons in the Award.

9. The first respondent filed O.M.P. No. 37 of 1980