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Madhya Pradesh High Court
A. P. SEN,M. L. MALIK
Shivlal Prasad - Appellant
Versus
Union of India - Respondent
Decided On : 09/06/1974
ARBITRATION - Award - Filing - Completeness - Presumption - Arbitrators not bound to give separate award for each claim - Lump sum award permissible - Non-filing of minutes of proceedings and depositions does not vitiate award - Arbitrator's integrity and rectitude - Presumption - Bias - Well-founded apprehension required - Stamp Act - Unstamped award - Certification by Court - Effect - Extension of time for making award - Mutual agreement of parties after lapse of prescribed time - Validity - Advocate's fee - Filing of award and consequent proceedings treated as suit - Taxation of Advocate's fee.
Fact of the Case:
Appellant, a Railway contractor, entered into a contract with the South Eastern Railway for various works in connection with the Bhilai Marshalling Yard. Disputes arose on certain claims preferred by the appellant against the Railway Administration, which were referred to arbitration. The arbitrators gave a consolidated award in favor of the appellant for Rs. 24,160/-. The appellant moved the District Judge, Bilaspur, for getting the award filed. The arbitrators filed the award, and the appellant raised various grounds under Section 30 of the Arbitration Act for setting it aside. The District Judge rejected all the grounds.
Finding of the Court:
1. The arbitrators were not bound to give a separate award for each claim. They could give a lump sum award. 2. The award must be presumed to be complete and final. 3. Mere omission to file the depositions and other documents does not affect the validity of the filing of the award. 4. The appellant's insinuation against the arbitrators of showing undue favor to the Railway Administration is baseless. 5. An award not being on a stamp paper can be acted upon if certified by the Court that proper duty and penalty have been levied. 6. The time for making the award can be extended by mutual agreement of the parties after the lapse of the prescribed time, as the arbitrators have the jurisdiction to enlarge the time in accordance with the mutual agreement or consent of the parties. 7. The filing of an award and all proceedings consequent thereon have to be treated as a suit and not as a miscellaneous proceeding, and the matter of Advocate's fee would, therefore, be governed as if a suit for setting aside an award of the value of Rs. 24,160/- were disposed of.
Issues: 1. Whether the arbitrators were bound to give a separate award for each claim. 2. Whether the award was incomplete and not final. 3. Whether the non-filing of the minutes of proceedings and depositions vitiated the award. 4. Whether the arbitrators showed undue favor to the Railway Administration. 5. Whether an award not being on a stamp paper could be acted upon. 6. Whether the time for making the award could be extended by mutual agreement of the parties after the lapse of the prescribed time. 7. Whether the filing of an award and consequent proceedings should be treated as a suit or a miscellaneous proceeding for the purpose of taxation of Advocate's fee.
Ratio Decidendi: 1. The basic principles to be borne in mind when a challenge on the ground of incompleteness of the award or legal misconduct on that ground is made are: (a) A Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal; (b) unless the reference to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award; (c) unless the contrary appears the Court will presume that the award disposes finally of all the matters in difference; and (d) where an award is made de praemissis (that is, of and concerning all the matters in dispute referred to the arbitrator), the presumption is, that the arbitrator intended to dispose finally of all the matters in difference; and his award will be held final, if by any intendment it can be made so. 2. An arbitrator is not bound to give a separate award for each claim but can give a lump sum award. 3. The award must be presumed to be complete and final. 4. Mere omission to file the depositions and other documents does not affect the validity of the filing of the award. 5. An award not being on a stamp paper can be acted upon if certified by the Court that proper duty and penalty have been levied. 6. The time for making the award can be extended by mutual agreement of the parties after the lapse of the prescribed time, as the arbitrators have the jurisdiction to enlarge the time in accordance with the mutual agreement or consent of the parties. 7. The filing of an award and all proceedings consequent thereon have to be treated as a suit and not as a miscellaneous proceeding, and the matter of Advocate's fee would, therefore, be governed as if a suit for setting aside an award of the value of Rs. 24,160/- were disposed of.
Final Decision: Appeal dismissed. Appellant to pay respondents' costs of the appeal. Counsel's fee fixed at Rs. 900/-.
MALIK, J. : - The appellant is a Railway contractor. He entered into a contract with the South Eastern Railway for the performance of various works in connection with the Bhilai Marshalling Yard. Disputes having arisen on certain claims preferred by the appellant against the Railway Administration, they were referred to the arbitration of Shri S. K. Mitra, Deputy Chief Accounts Officer and Shri R. P. Basu Choudhury, Engineer-incharge (Bridge). Relevant extract from the letter of reference addressed from the Office of the General Manager, may usefully be reproduced here :
".................. All disputes and differences between the parties to the aforesaid contract except disputes relating to matter specifically taken out of the purview of the Arbitration Clause contained in the aforesaid Agreement are referable to arbitration. Under the aforesaid Agreement, the General Manager is the person empowered to nominate and appoint arbitrator for deciding the disputes and differences between the parties to the aforesaid Contract as are referable to arbitration.
2. The General Manager has accordingly nominated and appointed you as Arbitrators in the above matter. You are, therefore, requested to enter into reference and pronounce your decision and publish your Award on the items of Claims/disputes as specified below. You are also requested before entering into reference, to nominate an Umpire to whom the case will be referred in the event of any difference between yourselves (i. e. the two Arbitrators) : items of claims :
Items of claims :
1. Lead @ Rs. 20/- per % 0 cft. on the quantity of 1,30,000 cft. of earthwork - Work Order No. SP/L.
Rs. 2,600/-
2. Lead on moorum for a distance of more than half a mile @ Rs. 20/- per % 0 cft. on the quantity of 1,20,000 cft. Rs. 2,040/- and such ten claims.
Rs. 2,040/-
Rs. 2,00,370/-
Interest at 1% P. M. from 1-11-1962 to 30-4-1966 Rs. 83,315.04
Total amount
Grand total
Rs. 2,83,685.04
The arbitrators gave a consolidated award for Rs. 24,160/- in favour of the appellant on 16-3-1968.
3. On 8-4-1968, the appellant moved the Court of the District Judge, Bilaspur, for getting the award filed. The arbitrators filed the award and the appellant raised various grounds under Section 30 of the Arbitration Act for setting it aside. The District Judge has rejected all those grounds by his order dated the 24th February, 1970. Aggrieved by the order, the appellant has come to this Court in appeal.
4. The appellant's first contention before us is that the reference specifically required the arbitrators to give their award on each item of claim separately. The arbitrators. instead of pronouncing their decision on each item, gave a consolidated award, which was in fact and law a neglect of duty and shirking of responsibility, amounting to legal misconduct. (Reliance is placed on Union of India v. Firm J. P. Sharma and Sons, AIR 1968 Raj 99).
5. In our reading of the letter of reference (which has been quoted), we find nothing mentioned therein which required the arbitrators to give their award itemwise. Unless the reference so specifically required, the arbitrators were not bound to deal with each claim separately. All the disputes and differences were referrable to the arbitrators, and; therefore, all the disputes were mentioned in the letter of reference and the arbitrators were asked to make their award. If the parties to the reference wanted decision itemwise, they should have so required
of the arbitrators in express terms.
6. The basic principles to be borne in mind, when a challenge on the ground of incompleteness of the award a legal misconduct on that ground, is made, are enunciated by the Supreme Court in Smt. Santa Sila Devi v. Dhirendra Nath Sen, AIR 1963 SC 1677, thus :
"(1) A Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal; (2) unless the reference to arbitration specifically so requires the arbitrator is not bound t
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