The main legal point established in the judgment is that the validity of the reference to arbitration, technical flaws in the award, and the determination of disputes were crucial in reaching the decision. The court emphasized the importance of parties' participation in arbitration proceedings without objection and addressed technical flaws in the award, including the absence of stamp duty and vagueness in the determination of disputes.

Thomas, J.

1. The award passed by an Arbitrator was made the rule of the court, and a decree was passed in terms of the award. The State of Kerala and the Superintending Engineer concerned, having failed to get the award set aside, filed this appeal.

2. Different questions, both of law and fact, were canvassed in this appeal including the very appointment of an Arbitrator to decide the disputes. When it was pointed out that the Government did not file any appeal against the order by which the disputes were referred to arbitration, learned Government Pleader made an endeavour to invoke the powers of this Court under Art.227 of the Constitution for quashing the appointment order.

3. Some facts, relevant for this appeal, are the following: Respondent was engaged to carry out the work for making approach road to Mamom bridge for which an agreement was executed by him in favour of the Governor of Kerala. The site was handed over to him on 14-9-84. The work should have been completed on or before 13-4-1986 which is the expiry of a period of 19 months of handing over the site. But the contract was terminated on 5-1-86 due to other reasons. Respondent raised the main dispute that the termination was unjust and illegal. He filed O.S. (Arbitration) No.342/86 in the Sub Court, Trivandrum, under S.20 of the Arbitration Act, 1940 (for short'the Act'). The suit was resisted mainly on the ground that there is no arbitration agreement. However, learned Sub Judge, on a finding that there is arbitration agreement, referred the disputes to arbitration. The court appointed a retired Superintending Engineer as Arbitrator from out of the names included in the panels suggested by both sides. The Arbitrator entered on reference on 30-12-1986 and passed the impugned award on 15-6-87. On the application made by the respondent in the lower court, the award was made the rule of the court directing the State to pay the awarded amount within two months failing which the amount will carry interest at the rate of 9% per annum from the date of decree.

4. The Arbitrator gave award by answering each of the claims made by the respondent in O.S. (Arb.) 342/86. The material portion of the award is the following: (The appellants herein are referred to as the respondents in the award):

"I hereby award and direct as follows:

Claim No.1. The respondents shall pay the Claimant an increase of 25% (Twenty five per cent) over agreed rates for all items of work done, excluding the cost of department materials, as compensation for loss and damages for works executed by the claimant and recorded for payment.

Claim No.2. The respondents shall pay the claimant for 25% (Twenty five per cent) of the earth work done as cutting and filling (the earth work done is quantified as Twenty three thousand seven hundred and nine cubic metres in the final bill), an additional rate of Rs.19/- (Rupees Nineteen only) per cubic meter as compensation for loss and damages, in addition to the award in Claim No.1.

Claim No.3(a) The fine of Rs.3,000/- (Rupees Three thousand only) imposed on the claimant shall be refunded.

(b) The security and retensions shall be released to the claimant and paid to the claimant. Claim No.4. Rejected.

Claim No.S. The rearrangement of the balance works shall NOT be at the RISK and COST of the claimant.

Claim No.6. The respondents shall pay interest except on security at 12% (Twelve per cent) per annum on the awarded amounts from 5-1-86 (Fifth January Nineteen Eighty six) to the date of decree.

Claim No.7. Rejected. Claim No.8. Rejected."

5. Learned Government Pleader vehemently contended first that the reference itself is a nullity inasmuch as the court has no jurisdiction in the absence of an arbitration agreement to refer the dispute for arbitration. He made an endeavour to convince us that it was on account of connivance between some of the departmental officials and this respondent that the reference order could not be challenged earlier. It is true that some cla