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High Court Of Madhya Pradesh
C. P. Sen and Faizanuddin, JJ.
STATE OF MADHYA PRADESH - Appellant
Versus
SATYAPAL WASSON - Respondents
Misc. Appeal 188 Of 1972
Decided On : 01/03/1979
Under section 30 of the Arbitration Act an award shall not be set aside except on one or more of the following grounds namely:- (a) that an arbitrator or umpire has mis-conducted 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, and (c) that award has been improperly procured or is otherwise invalid.
It is settled law that an arbitrator need not give a reasoned award and the award cannot be set aside because it is vague or cryptic. In dealing with an application under section 30 the Court is not sitting in appeal over the decision of the arbitrator. It is not open to the Court to speculate when no reasons are given by arbitrator as to what impelled the arbitrator to arrive at his conclusion. But if the arbitrator does record reasons for his conclusion then it is open to the Court to examine whether the arbitrator has proceeded contrary to law and the Court is entitled to interfere if there is error apparent on the face of the award itself.
Though the Court is not entitled to go beyond the award and find out what could have been the reasons for giving such an award, but if some document is appended to the award or is incorporated in it so as to form part of it, then it will be open to the Court to look into those documents. The test is, does the arbitrator come to a finding on the wooding of the contract? If he does, he can be said to have impliedly incorporated the contract or a clause in it which ever be the case. AIR 1960 SC 588, AIR 1965 SC 214, AIR 1967 SC 378, AIR 1970 SC 753 and AIR 1971 SC 696, referred to. [Para 4
An arbitrator is not bound by the technical rules of procedure, which the Courts are required to follow specially when substantial justice has been done. The arbitrator is not, however, entitled to adopt the procedure of a special nature, unless all parties affected by it agree to the adoption of such procedure, An arbitrator, though ordinarily free from the fetters of adjective law, must nevertheless observe the fundamental principle of justice, that is, the principle of natural justice has to be followed. [Para 5
Where the arbitrator fails to arbitrate on the main dispute, the award has to be set aside. AIR 1977 SC 2014 & AIR 1968 Raj. 99 referred to. [Para 6
(1) Arbitration Act, 1940-S. 30-award-when may be set aside-arbitrator need not give reasons for the award-reasons given by arbitrator-when may by examined by the Court.
Under section 30 of the Arbitration Act 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, and (c) that award has been improperly procured or is otherwise invalid.
It is settled law that an arbitrator need not give a reasoned award and the award cannot be set aside because it is vague or cryptic. In dealing with an application under section 30 the Court is not sitting in appeal over the decision of the arbitrator. It is not open to the Court to speculate when no reasons are given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion. But if the arbitrator does record reasons for his conclusion then it is open to the Court to examine whether the arbitrator has proceeded contrary to law and the Court is entitled to interfere if there is error apparent on the face of the award.
Though the Court is not entitled to go beyond the award and find out what could have been the reasons for giving such an award, but if some document is appended to the a ward or is incorporated in it so as to form part of it then it will be open to the Court to look into those documents. The test is, does the arbitrator come to a finding on the wording or the contract. If he does, he can be said to have impliedly incorporated the contract or a clause in it whichever be the case. AIR 1971 SC 696, AIR 1970 SC 753, AIR 1967 SC 378, AIR 1965 SC 214 and AIR 1960 SC 588 referred to. [Para 4]
(2) Arbitration Act, 1940-S. 30-arbitration-procedure-rules of evidence and principles of natural justice.
An arbitrator is not bound by the technical rules of procedure, which the Courts are required to follow specially when substantial justice has been done. The arbitrator is not, however, entitled to adopt the procedure of a special nature, unless all parties affected by it agree to the adoption of such procedure. An arbitrator, though ordinarily free from the fetters of adjective law, must nevertheless observe the fundamental principle of justice, that is, the principle of natural justice has to be followed. An arbitrator is not bound by the technical and strict rules of evidence, but he must not disregard the rules of evidence which are founded on fundamental principles of justice and public policy. [Para 5]
(3) Arbitration Act, 1940-S. 30-arbitrator-failing to give award on main issue - award is liable to be set aside.
When the arbitrator fails to arbitrate on the main dispute which was referred to him, the award is liable to be set aside. AIR 1977 SC 2014 relied on. [Para 6]
( 1 ) THE State has preferred this appeal under Section 39 of the Arbitration Act, 1940, against the judgment and decree of the District Judge setting aside the award given by the Arbitrator under Section 30 of the Act.
( 2 ) THE respondent is a contractor and his tender for construction of Hasdeo project Main Canal, excavation and forming embankment from R. D. 12301 M. to R. D. 12720 M. and R. D. 13921 M. to R. D. 14160 M. Group No. IV for an amount of Rs. 1,38697. 60p. /- was accepted by the superintending Engineer, hasdeo Project, Circle Korba, and the acceptance was conveyed to the respondent on 17-3-1969. It appears that before execution of the contract some dispute arose between the parties regarding interpretation of the rate for item No. 11 of the tender and the superintending Engineer wanted to put his own interpretation by way of clarification but the same was not accepted by the respondent. So on 21-5-69 a written contract was executed by the parties on the basis of the tender accepted without adding any clarification, Clause 29 of the contract provided that the decision of the Superintending Engineer would be final, conclusive and binding on the parties in respect of all disputes arising out of the contract. Items Nos. 4, 5 and 6 were for excavation work in different soils and for disposal within 60 meters. Item No. 9 provided for a lead for disposal beyond 60 meters upto 210 meters on extra payment of Rs. 80/- per 10 cubic meters. Item No. 10 provided for a lead for disposal beyond 210 meters upto 0. 5 Kilo- ' meter on extra payment of Rs. 80/- per 10 cubic meters and item No. 11 provided for a lead for disposal beyond 0. 5 kilometer upto 2 kilometer on extra payment of Rs. 4/- per 10 cubic meters, According to the respondent, for payment of Item No. 11 the amount has to be calculated by adding the rate provided for items Nos. 4, 5 and 6 and added to items Nos. 9 and 10, while the department insisted that item No. 11 was an independent and a separate item and only Rs. 4/- has to be added to the rata provided for items Nos. 4, 5 and 6 in case the lead was from 0. 5 kilometer to 2 kilometers. The respondent put up his claim but the same was not accepted by the Superintending Engineer. A reference was, therefore, made to the sole Arbitrator i. e. the Superintending engineer, for deciding the dispute. The respondent then submitted his claim for Rs. 3,23,734. 92p. in respect of the following 3 items; Claim No. 1 for Rs. 2,81,120/- towards additional payment due towards item No. 11, claim No. 2 for Rs. 16,259. 92p. towards interest at 12 per cent per annum and claim No. 3 for Rs. 26,355/- for additional expenses incurred for re-excavating dump material from the site as the dumping area was not made available. The claim was opposed by the State stating that for item No. 11 the respondent was responsible for quoting a very low rate ie. Rs. 4/- per 10 cubic meter, in addition to the rate provided for items Nos. 4, 5 and 6, towards the lead. The respondent, therefore, cannot be paid anything extra. The respondent is also not entitled to any isterest or extra payment for re-excavating the dump material. The rate for items Nos. 9 and 10 cannot be added together for calculating the rate for item No. 11. The Arbitrator after framing issues recorded evidence of the parties. The respondent was permitted to cross-examine the witnesses of the opposite party. On 3-12-1970 the arbitrator gave his award of Rupees 30,000/- for claim No. 1 and Rs. 1500/-for claim No. 3 while disallowing the claim No. 2 for interest.
( 3 ) THE respondent then moved an application on 2-1-71 under Section 14 (2) of the Act for filing of the award by the Arbitrator. The award was then filed by the arbitrator and notice was given to the respondent about filing on 15-3-71. He then filed his objection under Section 30/33 of the Act on 12-4-71 contending that the award is vitiated on the following grounds (i) The Superintending engineer having alr
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