Karam Singh Lal Vs. Union of India & Ors.
EmailAppeal: (Arising out of SLP (C) No. 15850 of 2000)
Petitioner: Karam Singh Lal
Respondent: Union of India & Ors.
Apeal: (Arising out of SLP (C) No. 15850 of 2000)
Judges: S. RAJENDRA BABU & DORAISWAMY RAJU, JJ.
Date of Judgment: Sep 24, 2001
Head Note:
ARBITRATION
Arbitration Act, 1940
Section 30 – Non-speaking award – Interference by court – Award set aside on grounds that arbitrator misconstrued a clause of contract and awarded compensation thereby misconducted himself – Such interference, when permissible. Held that in a non-speaking award, court has to restrict to cases under section 30 only. Court cannot determined if conclusion is right or wrong.
Held:
In respect of a non-speaking award, the scope of interference is very limited. The court in dealing with an application to set aside such an award is not to consider whether the view of the arbitrator on the reference was justified or not. The arbitrator’s adjudication is generally considered binding between the parties, for he is a tribunal selected by them and the power of the court to set aside the award is restricted to cases set out in section 30 of the Arbitration Act. It is not open to the court to speculate where no reasons are given by the arbitrator as to what prompted him in reaching his conclusion. On the assumption that the arbitrator must have arrived at his conclusion by certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or not. It is not open to the court to attempt to prove into mental process by which the arbitrator reaches his conclusion where it is not disclosed by the terms of his award. (Para 4)
JUDGEMENT:
ORDER
1. Leave granted.
2. In respect of a contract entered into by the appellant and respondent nos. 1 and 2, certain disputes having arisen, the arbitration clause was invoked and the disputes were referred to Col. P.K. Garg for adjudication. He published an award on 13.6.1985. Thereafter, when the same was to be made a decree of the court, respondent nos. 1 and 2 contested the same in the court of the learned senior sub-judge and the learned senior sub-judge, by an order made on 9.4.1991, remitted the award to the sole arbitrator for reconsideration. Thereafter, the same was referred to another sole arbitrator Col. M.S. Sahota to adjudicate the said disputes. Col. M.S. Sahota re-examined the matters and gave his award on 3.2.1994 on various items including a sum of Rs. 916.26p. under claim no. 4 for unlawful recovery of compensation and another sum of Rs. 32,907/- under claim no. 5 as damages due to prolongation of the work on account of default on the part of the department, in respect of which certain objections were raised by the respondents when the said award was sought to be made the decree of the court. The learned civil judge (senior division), Amritsar who heard the objections, rejected the same and made the award the rule of the court. He also granted interest at the rate of 6% from the date of award till the realisation of the amount on the application moved by the appellant under section 29 of the Arbitration Act, 1940. The matter was carried in appeal by the respondents to the additional district judge, who partly allowed the same and set aside the award of arbitrator with reference to claim no. 5 amounting to Rs. 32,907/-. In reaching this conclusion, the learned additional district judge adverted to clause 11 of the contract. Thereafter, a revision petition was filed before the High Court of Punjab and Haryana which dismissed the revision petition on the ground that the arbitrator has mis-construed clause 11(c) of the contract which does not permit for grant of compensation and the arbitrator exceeded his jurisdiction and thereby mis-conducted himself. Hence, this appeal by special leave.
3. In the present case, the award made by the arbitrator is not a speaking award. The arbitrator, after setting out the preliminary information in regard to reference, stated that he heard and examined the matter and made the final award. He referred to the claim in the award that he has passed but no reasons were set out in the award.
4. In respect of a non-speaking award, the scope of interference is very limited. The court in dealing with an application to set aside such an award is not to consider whether the view of the arbitrator on the reference was justified or not. The arbitrator’s adjudication is generally considered binding between the parties, as he is a tribunal selected by them and the power of the court to set aside the award is restricted to cases set out in section 30 of the Arbitration Act. It is not open to the court to speculate, where no reasons are given by the arbitrator as to what prompted him in reaching his conclusion. On the assumption that the arbitrator must have arrived at his conclusion by certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or not. It is not open to the court to attempt to prove into mental process by which the arbitrator reaches his conclusion where it is not disclosed by the terms of his award.
5. In the present case, when the basis upon which the arbitrator reaches his conclusion is not stated but awards the two items, to which we have referred to is difficult to discern particularly when the claim is for a sum of Rs. 81,365/- and the award made is only to the extent of Rs. 32,907/-, we cannot find the reasons for the same.
6. In that view of the matter, we think the High Court and the additional district judge did not appreciate the matter in the proper perspective and interfered with the award which was made the rule of the court by the learned civil judge (senior division). Therefore, the orders made by the High Court and that of the learned additional district judge are set aside and the order made by the learned civil judge (senior division) is restored.
7. The appeal is allowed accordingly. No costs.
1. Leave granted.
2. In respect of a contract entered into by the appellant and respondent nos. 1 and 2, certain disputes having arisen, the arbitration clause was invoked and the disputes were referred to Col. P.K. Garg for adjudication. He published an award on 13.6.1985. Thereafter, when the same was to be made a decree of the court, respondent nos. 1 and 2 contested the same in the court of the learned senior sub-judge and the learned senior sub-judge, by an order made on 9.4.1991, remitted the award to the sole arbitrator for reconsideration. Thereafter, the same was referred to another sole arbitrator Col. M.S. Sahota to adjudicate the said disputes. Col. M.S. Sahota re-examined the matters and gave his award on 3.2.1994 on various items including a sum of Rs. 916.26p. under claim no. 4 for unlawful recovery of compensation and another sum of Rs. 32,907/- under claim no. 5 as damages due to prolongation of the work on account of default on the part of the department, in respect of which certain objections were raised by the respondents when the said award was sought to be made the decree of the court. The learned civil judge (senior division), Amritsar who heard the objections, rejected the same and made the award the rule of the court. He also granted interest at the rate of 6% from the date of award till the realisation of the amount on the application moved by the appellant under section 29 of the Arbitration Act, 1940. The matter was carried in appeal by the respondents to the additional district judge, who partly allowed the same and set aside the award of arbitrator with reference to claim no. 5 amounting to Rs. 32,907/-. In reaching this conclusion, the learned additional district judge adverted to clause 11 of the contract. Thereafter, a revision petition was filed before the High Court of Punjab and Haryana which dismissed the revision petition on the ground that the arbitrator has mis-construed clause 11(c) of the contract which does not permit for grant of compensation and the arbitrator exceeded his jurisdiction and thereby mis-conducted himself. Hence, this appeal by special leave.
3. In the present case, the award made by the arbitrator is not a speaking award. The arbitrator, after setting out the preliminary information in regard to reference, stated that he heard and examined the matter and made the final award. He referred to the claim in the award that he has passed but no reasons were set out in the award.
4. In respect of a non-speaking award, the scope of interference is very limited. The court in dealing with an application to set aside such an award is not to consider whether the view of the arbitrator on the reference was justified or not. The arbitrator’s adjudication is generally considered binding between the parties, as he is a tribunal selected by them and the power of the court to set aside the award is restricted to cases set out in section 30 of the Arbitration Act. It is not open to the court to speculate, where no reasons are given by the arbitrator as to what prompted him in reaching his conclusion. On the assumption that the arbitrator must have arrived at his conclusion by certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or not. It is not open to the court to attempt to prove into mental process by which the arbitrator reaches his conclusion where it is not disclosed by the terms of his award.
5. In the present case, when the basis upon which the arbitrator reaches his conclusion is not stated but awards the two items, to which we have referred to is difficult to discern particularly when the claim is for a sum of Rs. 81,365/- and the award made is only to the extent of Rs. 32,907/-, we cannot find the reasons for the same.
6. In that view of the matter, we think the High Court and the additional district judge did not appreciate the matter in the proper perspective and interfered with the award which was made the rule of the court by the learned civil judge (senior division). Therefore, the orders made by the High Court and that of the learned additional district judge are set aside and the order made by the learned civil judge (senior division) is restored.
7. The appeal is allowed accordingly. No costs.
