1981 Supreme(Ori) 62

Orissa High Court
P. K. MOHANTI, J.
Union of India - Appellant
Versus
M/s. Builders Union - Respondents
Misc. Appeal No.36 of 1981
Decided On : 29 July 1981

1. An arbitrator has jurisdiction to award interest if the dispute is referred to him and the agreement does not prohibit it. 2. Additional work can be considered part of the principal work, and the arbitration clause applies to disputes relating to such extra work. 3. The arbitrator is not required to refer to evidence or record reasons for allowing or disallowing claims, and the mere absence of such references does not invalidate the award. 4. A cross-objection regarding interest from the date of the decree is not maintainable in an appeal under Section 39 of the Arbitration Act.

Headnote:

ARBITRATION - AWARD - INTEREST - JURISDICTION OF ARBITRATOR - DISPUTE REFERRED - EVIDENCE - CROSS-OBJECTION - MAINTAINABILITY.

Fact of the Case:

The appellant challenged the award of the arbitrator on the grounds of limitation, lack of jurisdiction to award interest, failure to disclose disputes arbitrated, inclusion of claims beyond the agreement's scope, and lack of evidence to support the findings. The respondent filed a cross-objection against the court's refusal to award interest from the date of the decree.

Finding of the Court:

1. The delay in filing the objection was due to the appellant being misled by the court's notice, and sufficient cause existed for condonation of delay under Section 5 of the Limitation Act. 2. The arbitrator had jurisdiction to award interest as the dispute was referred to him and the agreement did not prohibit it. 3. The arbitrator examined the claims and counterclaims of the parties and gave them an opportunity to support their cases, fulfilling the requirement of examining the existence of a dispute. 4. Additional work can be considered part of the principal work, and the arbitration clause applies to disputes relating to such extra work. 5. The arbitrator is not required to refer to evidence or record reasons for allowing or disallowing claims, and the mere absence of such references does not invalidate the award. 6. The cross-objection regarding interest from the date of the decree is not maintainable in an appeal under Section 39 of the Arbitration Act.

Issues: 1. Whether the delay in filing the objection was due to sufficient cause and should be condoned under Section 5 of the Limitation Act. 2. Whether the arbitrator had jurisdiction to award interest in the absence of a specific clause prohibiting it in the agreement. 3. Whether the arbitrator examined the existence of a dispute between the parties before making the award. 4. Whether the claim for additional work was beyond the purview of the agreement and not arbitrable. 5. Whether the arbitrator's failure to refer to evidence or record reasons for allowing or disallowing claims invalidated the award. 6. Whether the cross-objection regarding interest from the date of the decree was maintainable in an appeal under Section 39 of the Arbitration Act.

Ratio Decidendi: 1. The court found that the appellant was misled by the court's notice, which resulted in the delay in filing the objection. This constituted sufficient cause for condonation of delay under Section 5 of the Limitation Act. 2. The court held that the arbitrator had jurisdiction to award interest as the dispute was referred to him and the agreement did not prohibit it. The court relied on previous decisions of the Supreme Court and this Court establishing the arbitrator's authority to award interest in such circumstances. 3. The court found that the arbitrator had examined the claims and counterclaims of the parties and gave them an opportunity to support their cases, fulfilling the requirement of examining the existence of a dispute. 4. The court held that additional work can be considered part of the principal work, and the arbitration clause applies to disputes relating to such extra work. 5. The court held that the arbitrator is not required to refer to evidence or record reasons for allowing or disallowing claims, and the mere absence of such references does not invalidate the award. 6. The court held that the cross-objection regarding interest from the date of the decree was not maintainable in an appeal under Section 39 of the Arbitration Act, as it related to an order that could not be agitated by means of an appeal.

Final Decision: 1. The court reversed the order of the court below on the question of limitation and dismissed the appeal on merits. 2. The cross-objection was dismissed as not maintainable.