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1989 Supreme(SC) 96

SUPREME COURT OF INDIA
SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.
M/s. Sudarsan Trading Co., Appellant
Versus
The Govt. of Kerala and another, Respondents.
Civil Appeals Nos. 840-842 of 1989
Decided on 14-2-1989.
Advocates appeared
Mr. K. K. Venugopal, Sr. Advocate, Mr. Shiv Pujan Singh and Miss Niranjana Advocates with him, for Appellant; Mr. G. Vishwanath Iyer, Sr. Advocate and Mr. K. R. Nambiar Advocate with him, for Respondents.

Advocates:
G.VISHVANATHA IYER, K.K.VENUGOPAL, K.R.NAMBIAR, Niranjana Singh, SHIV PUJAN SINGH

Headnote:

Manitoba Arbitration Act – Incorporated - Arbitration - Contractors -Appeals arise from judgment and order of High Court by impugned judgment and order allowed appeals of respondent Govt. of Kerala against judgment and decree passed by principal Sub-Judge, Trivandrum, in C.P. (Arbitration) Cases by which learned Sub-Judge had upheld awards by arbitrator on ground that it was not open to court to sit in appeal over decision of the arbitrator and court could not adjudicate upon justification for conclusions arrived at by arbitrator unless such awards were result of corruption, fraud or when there were errors apparent on face of award learned Sub-judge further held that there was no error apparent on face of record and there was no allegation of corruption or fraud – Held, Plaintiff the fair value of work done and materials provided at fair contractors prices judgment provided further that sums to be debited and credited were to be determined by two appraisers, and that any matter upon which they differed was to be referred to a named umpire whose decision thereon was to be final and that Manitoba Arbitration Act should not apply defendants moved to set aside or vary an award words "all loss" there was jurisdiction to award to plaintiff not only sums actually expended but also a sum estimated as being necessary to make good defects and that extrinsic evidence was not admissible to show that sum allowed to defendants as set-off had been reduced in respect of defective work for which they had also been debited – Question on interpretation of contract aforesaid view of matter we are of opinion that High Court was in error be stated that if on a view taken of a contract decision of arbitrator on certain amounts awarded is a possible view though perhaps not only correct award cannot be examined by the court in manner done by High Court in instant case – Appeals allowed.

JUDGMENT

SABYASACHI MUKHARJI, J. :— Leave granted.

2. These appeals arise from the judgment and order of the High Court of Kerala, dated 5th May, 1988. The High Court by the impugned judgment and order in M.F.A. Nos. 72, 346 and 380 of 1983 allowed the appeals of the respondent the Govt. of Kerala, against the judgment and decree dated 25th September, 1982 passed by the principal Sub-Judge, Trivandrum, in C.P. (Arbitration) Cases Nos. 184,185 and 186 of 1982 by which the learned Sub-Judge had upheld the awards by the arbitrator on the ground that it was not open to the court to sit in appeal over the decision of the arbitrator and the court could not adjudicate upon the justification for the conclusions arrived at by the arbitrator unless such awards were the result of corruption, fraud or when there were errors apparent on the face of the award. The learned Sub-judge further held that there was no error apparent on the face of the record and there was no allegation of corruption or fraud. The High Court reversed the said decision.

3. The questions involved in these appeals are : how should the court examine an award to find out whether it was a speaking award or not; and if it be a non-speaking award, how and to what extent the court could go to determine whether there was any error apparent on the face of the award to be liable for interference by the court. The other question that arises in this case is, to what extent can the court examine the contract in question though not incorporated or referred to in the award.

4. It may be noted that on 23rd December, 1976 the agreement No. 25/SESPC/1976-77 was entered into between the appellant and the respondent herein for construction of masonry dam across Siruvani river. Certain disputes arose between the appellant and the respondent. These disputes were referred to the arbitrator named in the agreement. The arbitrator passed the awards dated 12th, 15th and 23rd April, 1982 which were filed before the sub-judge and the appellant prayed for passing of decree in terms of the awards. The respondents filed petitions seeking to set aside the awards. The learned Judge refused to set aside the awards and passed decrees in terms of the awards. The Trial Court held that there was no merit in the contention regarding limitation; and that the claims under the award were not barred by limitation. It was further held by the learned Trial Judge that the arbitrator had not incorporated in the award any material for his conclusion nor had he incorporated the terms of contract between the parties. Under such circumstances the award could not beset aside, especially when there was no error apparent on the face and that there was nothing to show that the arbitrator had mis-conducted the proceedings or that the award had been improperly procured. So the objection to the passing of the award was turned down.

5. Aggrieved thereby, the respondent filed appeals before the High Court. The High Court by the impugned judgment dated 5-5-1988 set aside the awards and the decree of the Trial Court on the ground that there were errors of law apparent on the face of the awards. It is contended that the High Court in the circumstances of this case and in view of the settled principles of law, exceeded its jurisdiction by acting in the manner it purported to do. It is, therefore, necessary to refer to the award to determine how has the arbitrator proceeded and what actually the arbitrator has decided. The arbitrator has noted in the first award that the dispute related to the work of Siruvani Drinking Water Supply Project - Construction of an Intake Tower and allied structures; and observed that an estimate amounting to Rs. 17.45 lakhs was sanctioned for the work and it was entrusted on contract to the claimant appellant herein, on tenders. The value of the work arranged on contract was Rs. 14.45 lakhs as per the departmental estimate which the appellant undertook, as understood by the arbitrator, to carry out works





































































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