High Court Of Orissa
S. Acharya, J.
EXECUTIVE ENGINEER, RURAL ENGINEERING ORGANISATION, KHURDA - Appellant
Versus
D.N.SENAPATI - Respondent
Misc. Appeal 69 Of 1978
Decided On : 02/23/1979
ARBITRATION ACT, 1940 - SECTION 30 - AWARD - SETTING ASIDE - GROUNDS - ERROR OF LAW OR FACT - JURISDICTION OF COURT - INTEREST ON AWARD - DISCRETION OF COURT.
Fact of the Case:
The appellant challenged an arbitration award on the grounds that the assessment of an item of claim was not made in accordance with the agreement between the parties and that the arbitrator erred in awarding interest from a specific date to another.
Finding of the Court:
1. The court found that the arbitrator did not provide any reasons for the assessment of the amount awarded for the disputed item and that there was no error apparent on the face of the award. 2. The court held that the arbitrator had the jurisdiction to award interest from the date of the award till the due date of payment, as there was no clause in the agreement prohibiting the award of interest. 3. The court set aside the lower court's decision to reject the arbitrator's award of Rs. 5,000 for another item of claim, as the award was not based on any reasoning and no error was apparent on its face.
Issues: 1. Whether the arbitrator erred in assessing the amount awarded for a specific item of claim without providing any reasons. 2. Whether the arbitrator had the jurisdiction to award interest from a specific date to another. 3. Whether the lower court erred in rejecting the arbitrator's award of Rs. 5,000 for another item of claim.
Ratio Decidendi: 1. The court held that it had no jurisdiction to enter into the merits of the case or examine the documents and oral evidence placed before the arbitrator, which did not form a part of the award, to determine whether the arbitrator committed any error of law or fact. 2. The court relied on previous decisions to establish that the arbitrator had the jurisdiction to award interest from the date of the award till the due date of payment, unless there was a specific clause in the agreement prohibiting the award of interest. 3. The court held that the lower court erred in rejecting the arbitrator's award of Rs. 5,000 for another item of claim, as the award was not based on any reasoning and no error was apparent on its face.
Final Decision: 1. The court dismissed the appellant's appeal challenging the arbitrator's award. 2. The court allowed the respondent's cross-objection to the extent of setting aside the lower court's decision to reject the arbitrator's award of Rs. 5,000 for another item of claim. 3. The court directed the appellant to pay the decretal amount within three months from the date of the judgment, with interest at the rate of 6% per annum from the date of the judgment till the date of realization if the amount was not paid within the specified time.
S. ACHARYA, J.
( 1 ) THE appellant in this appeal filed a petition in the court below u/s 30 of the arbitration Act to set aside the award dated 10-8-1977 in its entirety on several grounds stated in that petition. That petition has been partly rejected by the court below. Hence this appeal.
( 2 ) THE award in question was given by the Superintending Engineer, Balimela dam Circle, Chitrakonda, Koraput. Respondent No. 1 made an application before the court below under Section 17 of the Arbitration Act to pass a judgment and decree in accordance with the said award. At that stage the appellant filed the petition u/s 30 of the Arbitration Act. In that petition the appellant objected to the assessment made in respect of item No. 1 of the claim (item No. 1 of the award) on the ground that the assessment in respect of that item of claim had not been made in accordance with Clause (3) of the agreement between the parties, The agreement does not form a part of the award. Clause (3) of the agreement, on which the above objection is based, is neither quoted not the provisions of the same have been mentioned in detail in the award. The Arbitrator in one portion of his award has merely stated in short the respective cases of the parties and the claim made by the respondent in respect of the different items and the manner in which he disposed of this matter. After stating all that, he has given his award on the different items in the Appendix portion of his award. In respect of item No. 1 of the claim he has again narrated some facts regarding this item, and at last he has merely stated that on being convinced he awarded an amount of Rupees 1,41,100. 96 paise on that item. Ha has not given any reason for awarding the aforesaid amount in respect of that item of claim. The learned Standing Counsel appearing for the appellant id not able to make out from the award itself any error either of fact or of law in respect of the said assessment. It is the settled position of law that the court has no jurisdiction to enter into the merits of the case or to examine the documents and oral evidence placed before the Arbitrator, which do not form a part of the award, for the purpose of finding out whether or not the arbitrator has committed any error, either of law or of fact, in awarding an amount in respect of a particular item of claim. From the award it is not possible to say that the amount awarded by the Arbitrator in respect of this item of claim is contrary to the agreement between the parties, on hearing the counsel appearing for both the parties I find that no legally permissible ground for interfering with the award in respect of this item of claim is made out. Accordingly, the court below was justified in not interfering with the award of the Arbitrator in respect of this item,
( 3 ) IT is urged on behalf of the appellant that the Arbitrator was not legally justified in awarding interest from 1-8-1973 to 31-7-1977 on the amount of the award. It is now well settled by A series of decisions of this Court and of the supreme Court that unless there is specific clause in the agreement prohibiting award of interest, the Arbitrator has jurisdiction to award interest from the date of the award till the due date of payment. (See AIR 1972 SC 1507; 1967 SCD 937; AIR 1967 SC 1032; (1974) 2 Cut WR 917 and (1978) 45 Cut LT 443), in this case, the Arbitrator after assessing the amounts in respect of the claim under items 1 and 6 has awarded interest @ 9 per cent per annum for the period 1-8-1973 to 31-7-1977. He has of course not stated the reasons as to why he granted interest only for the aforesaid period. From the appendix it appears that the work in question was actually completed on 31-5-1973. So possibly 2-8-1973 was the due date of payment of the amount due on the work executed by respondent No. 1. The Arbitrator was appointed on 30-9-1975 and the award was passed on 10-8-1977. The Arbitrator for some reason or other has not granted any future int
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