The main legal point established in the judgment is the limited scope of interference with arbitral awards under the Arbitration Act, 1940, and the Court's role in interpreting and modifying aspects such as interest rates.

JUDGMENT :

Kaushal Jayendra Thaker, J.

1. Heard Sri S.K. Mehrotra, learned Standing Counsel for the State. None appeared for the respondents even in the revised call.

2. This appeal, at the behest of the State, has been filed against the judgment and order dated 22.11.1988 passed by Civil Judge, Bijnor in original Suit No. 222 of 1986. The appeal challenges the arbitral award as well as confirmation of the same by the Court below.

3. The parties are referred to as State/Appellant and Contractor/Respondent.

4. The facts for the purpose of our decision as they are culled out from the record that parties entered into the contract but there were certain disputes regarding certain items and the matter was referred to the Arbitrator who passed the award in favour of the present respondents. Objections were raised by the appellant herein with several contentions that were dealt with by the first Court and rejected the objections and made the award Rule of the Court vide order dated 22.11.1988 which is challenged before this Court. The record was missed and the appellant was directed to reconstruct the same which has been reconstructed. Rest of the documents are filed along with the memo of appeal.

5. It is submitted that the contracted rate for work was Rs. 8.49 per cubic metre and not Rs. 18 per cubic meter as awarded by the Arbitrator.

6. It is submitted that the diesel was supplied by the Department despite that the Arbitrator has awarded the amount for diesel and though the work was performed at Roorkee and payment was made at Haridwar, the Court below had no jurisdiction to pass orders. The District Bijnor where the Collectorate is situated had no jurisdiction to decide this matter as the contract was entered into at Rorkee. The award was made at Aligarh.

7. The Apex Court in FCI Versus Joginderpal Mohinderpal, (1989) 2 SCC 347 has held that the objection against an arbitral award can be raised only if it falls within the parameters fixed by the provisions of Section 14, and 33 of the Act, 1940. If the award satisfies that it is based on equity, fair play, principles of natural justice and established practice and procedure then the award should not be interfered. In proceedings of arbitration there must be adherence to justice, equity, law and fair play in action. The proceedings must adhere to the principles of natural justice and must be in consonance with such practice and procedure which will lead to a proper resolution of the dispute and create confidence of the people for whose benefit these processes are resorted to FCI Versus Joginderpal Mohinderpal (supra).

8. Sections 30 and 33 of the Act, 1940 read as follows :

“Section 30. Grounds for setting aside award.- An award shall not be set aside except on one or more of the following grounds, namely:-

(a) that an arbitrator or umpire has misconducted himself or the proceedings

(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under section 35;

(c) that an award has been improperly procured or is other-wise invalid.”

“33. Arbitration agreement or award to be contested by application.-Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.”

9. The judicial review of an award has been circumscribed by Apex Court in FCI Versus Joginderpal Mohinderpal (supra) wherein it has been held that arbitration as a mode for settlement of disputes between the parties, has a tradition in India. It has a social purpose to be fulfilled today,. It has a great urgency today when t