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1985 Supreme(Ori) 348

IN THE HIGH COURT OF ORISSA
P.C. Misra, J.
GOLAK CHANDRA ROY - APPELLANT
Versus
SECRETARY, IRRIGATION DEPARTMENT AND OTHERS - RESPONDENT
Misc. Appeal No. 542 of 1982
Decided On : 20-09-1985

Advocates Appeared:
Y. Das, J. Das, T. Hafiz, M.S. Haque and B.K. Mohanty, for the Appellant; Addl. Standing Counsel, for the Respondent

An Arbitrator is not bound to give reasons for his award and it is not open to the court to speculate as to what impelled the Arbitrator to arrive at his conclusion or to probe the mental process by which the Arbitrator reached his conclusion.

Headnote:

ARBITRATION ACT, 1940 - AWARD - SETTING ASIDE - ERROR OF LAW ON THE FACE OF THE AWARD - NON-REASONED AWARD - NON-INCORPORATION OF DOCUMENTS - NOT AN ERROR OF LAW ON THE FACE OF THE AWARD.

Fact of the Case:

The appellant-claimant was entrusted with the work of "Excavation of Surplus Channel of Kakalbaki M. I. Project with construction of Grade Walls and Energy Dissipation Blocks" under an agreement. A dispute arose between the parties and an Arbitrator was appointed. The Arbitrator passed an award in favor of the claimant for Rs. 5,55,550/- with interest at 9% per annum from 3.4.1979. The respondents filed an objection against the award, which was allowed by the trial court, setting aside the award.

Finding of the Court:

The court held that the Arbitrator was not obliged to give reasons for his award and that the mere fact that the awarded amount was in excess of the contractual amount did not vitiate the award. The court further held that it was not open to the court to speculate as to what impelled the Arbitrator to arrive at his conclusion or to probe the mental process by which the Arbitrator reached his conclusion. The court also held that the grievance as to the non-consideration of the documents by the Arbitrator was equally without any merit.

Issues: Whether the award was vitiated by the fact that it was a non-reasoned award and did not incorporate the documents.

Ratio Decidendi: An Arbitrator is not bound to give any reason for his award. The mere fact that the awarded amount is in excess of the contractual amount does not vitiate the award. It is not open to the court to speculate as to what impelled the Arbitrator to arrive at his conclusion or to probe the mental process by which the Arbitrator reached his conclusion. The grievance as to the non-consideration of the documents by the Arbitrator is equally without any merit.

Final Decision: The appeal was allowed, the impugned judgment was set aside, and the award was made a rule of the court.

JUDGMENT :

P.C. Misra, J. - This is an appeal u/s 39 of the Arbitration Act, 1940 against a judgment of the learned Subordinate Judge of Bhubaneswar in O. S. No. 231 of 1982 (I) by which the award of an Arbitrator has been set aside.

2. The appellant-claimant was entrusted with the work "Excavation of Surplus Channel of Kakalbaki M. I. Project with construction of Grade Walls and Energy Dissipation Blocks" under an agreement bearing No. 11 F-2 of 1977-78. The said agreement was executed between the claimant and the Executive Engineer. Minor Irrigation Division, Phulbani. A dispute within the meaning of Arbitration Act having arisen between the parties Shri B. S. Patnaik, Retired District Judge, was appointed as the Arbitrator.The Arbitrator entertained the claim petition and counter there to and after giving opportunities to the parties for substantiating their respective cases passed an award for Rs. 5,55,550/- in favour of the claimant appellant and further granted interest at the rate of 9 per cent per annum with effect from 3. 4. 1979 till the date of payment or the date of decree whichever is earlier. On receipt of the award the parties were noticed to file their objection against it, if any. The present respondents filed an objection which was registered as Misc. Case No 635 of 1982(A). The objection was mainly on the following grounds :

(i) There is error of law apparent on the face of the award.

(ii) The Arbicrator had no jurisdiction to entertain claims beyond the agreement.

(iii) The original agreement was for Rs. 3,16, 129/- which amount had already been received by the claimant. The exaggerated claim made by the claimant before the Arbitrator was without any basis and the Arbitrator has passed the impugned award without taking into consideration the agreement, measurement books and other documents filed by the respondents and without considering the submissions made on their behalf.

It has been also stated that passing of an unreasoned award by the Arbitrator in the aforesaid circumstances if an error or defect appearing on the face of the award.

3. The present appellant filed a counter in the aforesaid Misc. Case refuting all the objections taken against the award and prayed for making the award a rule of the Court.

4. The learred Subordinate Judge, after hearing the parties through their counsel, came to the conclusion that in the given circumstances the Arbitrator was not competent to give a lump sum and unreasoned award for such a huge amount which exceeds the contractual amount. He also held that an unreasoned award for a huge amount which does not incorporate the relevant documents and papers must be taken to be a case where the award has to be set aside as having errors on the face of it. Accordingly he allowed the aforesaid Misc. Case and set aside the award and disposed of the suit accordingly. It is against this judgment that the present appeal has been directed.

5. It has been held in a large number of decisions, specific reference to which is unnecessary, that an Arbitrator is not bound to give any reason for his award. The objection taken in this case against the award is that the amount awarded being in excess of the contractual amount the Arbitrator was obliged to give reasons in support of his award. It is not in dispute that the claim was in excess of the contractual amount. A contractor may be entitled to additional amounts in the event he is required to execute additional works or if there are justifications for being entitled to additional amounts depanding upon the facts of each case. Therefore, the mare fact that; the awarded amount is in excess of the contractual amount, that would not vitiate the award. As already stated, the Arbitrator is not obliged in law to pass a reasoned award and there is no reason to deviate from the said principle in case of an award which is in excess of the contractual amount. At any rate, non-mention of the reasons in support of the award and non-incorporation of the docu







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