The main legal point established in the judgment is that the Arbitrator's failure to give a specific finding with regard to a full settlement between the parties can vitiate the award and render it unenforceable.

S.Jagadeesan,J

The appellant has filed this appeal against the judgment of the learned Judge dated 19.8.1996 in O.P.164 of 1995. The said O.P was filed by the respondent herein for setting aside the award of the Arbitrator, wherein the relief was granted in favour of the appellant.

2.The short facts necessary for the disposal of the appeal are:

The appellant entered into a contract with the respondent Board on 30.3.1989 for the construction of an office-cum-shopping complex at Thirumangalam, Chenai – 40 at a cost of Rs.1,05,84,106/-. As per the terms of the contract, the work was to be completed in 15 months i.e., on or before 19.6.1990. Admittedly the appellant did not complete the work within the stipulated time and the construction was completed only on 31.10.1991. On 24.3.1992 the appellant received a sum of Rs.5,48,916-15 in full settlement of all demands on account of the contract.

3.Subsequent to the receipt of the amount, the petitioner moved this court for the appointment of an Arbitrator to go into the enhanced claim made by the appellant. This court appointed an Arbitrator by order dated 7.1.1994 in Application No.4329 of 1993.

4.Subsequently the respondent herein filed Application No.1955 of 1994 to set aside the order dated 7.1.1994, appointing the Arbitrator on the ground that the appellant received the entire amount due under the contract and consequently there is no arbitral issue pending between the parties.

5.By order dated 6.4.1994 the learned Judge modified the order dated 7.1.1994 to the effect that the respondent herein can raise any other relevant point also before the Arbitrator and if the Arbitrator does not allow, it is open to the respondent to come to this court for clarification.

6.Impliedly the order dated 6.4.1994 gave liberty to the respondent to raise the issue of the full settlement accepted by the appellant herein, before the Arbitrator. However, the Arbitrator, without going into that question in detail, has passed an award, granting a sum of Rs.27,03,412/- in favour of the appellant.

7.The respondent filed the O.P for setting aside the said Award on the ground that the Arbitrator has failed to give a finding with regard to the issue of full settlement accepted by the appellant.

8.The learned Judge found that impliedly the Arbitrator gone into that question and decided the issue and found that the final bill signed by the appellant will not constitute a barrier to raise the enhanced claim. The learned Judge then proceeded to discuss the issue on merits and found that by virtue of the final bill signed by the appellant in full settlement of the claim a quietus had been given to the contract between the parties and as such it is not open to the appellant to raise any arbitral issue, much less with regard to the enhanced compensation and consequently set aside the award of the Arbitrator. Hence the present appeal.

9.It is the contention of the learned counsel for the appellant that the learned Judge modified the order of reference to the Arbitrator by giving liberty to the respondent to raise the issue of the full settlement before the Arbitrator. The respondent also raised the issue. The learned Judge, having found that there is no specific finding by the Arbitrator with regard to this particular issue, ought to have set aside the award and remanded the matter to the Arbitrator. The learned Judge in deciding the issue of the full settlement, had virtually assumed the role of the Arbitrator and as such the finding of the learned Judge is liable to be set aside. It is further contended that the failure on the part of the Arbitrator to decide the question raised before him would make the award invalid on the ground of non application of mind by the Arbitrator in respect of the vital issue.

10.On behalf of the respondent it is contended that though the Arbitrator has failed to consider the issue of full settlement raised by the respondent, the learned Judge had discussed the same in detail and