M. A. No. 87 of 1998 ( R) With M. A. No. 62 of 1998 ---------- Against the judgment and order dated 22.12.1997 passed by Sri Sheo Murat Ram, Sub- Judge-II, Bermo at Tenughat in Arbitration Case No. 13 of 1980. ---------- Satrughan Prasad Singh..................Appellant ( M. A. No. 87/98 ( R) -Versus- 1. M/s. Damodar Valley Corporation. 2. Chairman. 3. Shri S. K Ghosh. 4. Shri J.P.Yadav. 5. Md. Azam. ...........Respondents. 1. M/s. Damodar Valley Corporation....Appellants ( M.A. No. 62/98( R) 2. The Deputy Secretary. 3. Sr. Divisional Engineer. 4. Chairman. 5. Sri J. P. Yadav. -Versus- Satrughan Prasad Singh........................Plaintiff -- For the Appellants : Mr. A. K. Sahani,Adv. ( M.A.No.87/98) For the Respondents-DVC : M/s. S.K.Ughal & T.Kabiraj, Advs. --- For the Appellants-DVC : M/s. S.K.Ughal and T.Kabiraj (M.A.No.62/98) For the Plaintiff : Mr. A.K.Sahani, Adv. --- PRESENT HON'BLE MR. JUSTICE PRADEEP KUMAR RESERVED ON 17.4.2010 PRONOUNCED ON 5 /5 /2010 Pradeep Kumar,J, The Miscellaneous appeal no. 87 of 1998, which has been preferred by appellant, Satrughan Prasad Singh and second Miscellaneous Appeal No. 62 of 1998, which has been preferred by the appellants M/s. Damodar Valley Corporation & others. The opposite party-Company against whom the claim was preferred by the appellant, Satrughan Prasad Singh. 2. Both the appeals have been filed against the judgment and order dated 22.12.1997 passed by Sri Sheo Murat Ram, Sub-Judge-II, Bermo at Tenughat in Arbitration Case No. 13 of 1980, by which judgment the learned Subordinate Judge in the objection petition filed under Section 30 of the Arbitration Act by the appellant, Satrughan Prasad Singh was dismissed and the Court while dismissing the application found the application filed by the D.V.C challenging the exaggerated amount given by the Arbitrator correct and reduced the same to the original claim of Rs. 62,361/-. 3. It is submitted by the learned counsel for the appellant, Satrughan Prasad Singh that the award is bad since no reasons have been given, but the trial court without considering the same, confirmed the award, but illegally amended the award from Rs. 5,12,000/- to Rs.62,361/-, which was beyond his power. Learned counsel for the -2- appellant has relied in a judgment reported in (2009)10 S.C.C. page 259 in the case of Som Datt Builders-Vs.-State of Kerala. 4. On the other hand, learned counsel for the respondent- DVC, who have preferred counter appeal submitted that the respondents challenged the award on the ground that the Arbitrator has traveled beyond the reference in awarding Rs. 5,12,000/-, which was never claimed by the applicant and as such the learned trial court has rightly amended the award. 5. After hearing learned counsel for the parties and going through the record, I find that the appellant-opposite party.1-Company i.e Damodar Valley Corporation, which is a statutory body established by an act of Parliament (Act no. XIV of 1948) and other appellants-opposite parties are its officers ( in M.A.No. 62 of 1998), invited a tender for remodelling of permanent shop and store building for conversion into a canteen at CTPC. The appellants-opposite parties after due procedure, issued order in favour of the plaintiff-Contractor, Satrughan Prasad Singh for the said construction work vide its letter dated 18.4.1975. Subsequently, just after two months of the issuance of the said order, because the Damodar Valley Corporation Management to decide to abandon the said work-programme of the said site. The appellants-D.V.C. informed the plaintiff-contractor, Shri Satrughan Prasad Singh by its letter dated 11.6.1975, which is marked as Annexure-'3' to the memo of appeal. It is further stated that the information given to the plaintiff-contractor was, in accordance with the terms of agreement as per Clause 12 of the agreement, which is marked as Annexure-'4' filed with the memo of appeal of the appellant-DVC wherein it was written that if the work is abandoned and notice is given in writing in time, the Contractor shall have no claim to any payment or compensation. However, the Contractor on receipt of the letter, in reply, sent a letter claiming a compensation of Rs. 10,321/- by its letter dated 14.8.1975, which is marked as Annexure-5 to the memo of appeal. 6. Since, the work had not started and the Contractor had only deposited the security money amounting to Rs. 676/-, the same was refunded to the contractor by letter dated 6th June, 1978. Thereafter, the final measurement was done made by the contractor and as per the measurement made by the Contractor, a bill was raised for the amount of Rs. 2762.61 paise. Subsequently, the plaintiff-Contractor filed a case before Sub-Judge, Bermo at Tenughat being Arbitration Title Suit No. 13 of 1980 wherein with consent of the parties, Sri Kameshwar Mishra, Advocate was appointed as an Arbitrator and the matter was referred to -3- him for arbitration and it appears that he submitted the award dated 6.10.97
, which was challenged by both the parties.
7. Since, both the parties challenged the award and filed their
objections under Section 30 of the Arbitration Act, 1940. It is important to
note that while passing the award the learned Arbitrator gave a findings,
which are as under:
” I Kameshwar Mishra, Advocate, Bermo at
Tenughat, sole Arbitrator issued notices upon the parties.
Both the parties took part in the hearing.
I have gone through the reference made before
me. Heard both the parties on each and every matter
under reference, examined and considered all the
statements and documents placed before me.
Whereas I, (Kameshwar Mishra, sole Arbitrator)
do hereby make and publish this final award in writing
with regard to the matter referred to me as under: which
shall meet the ends of justice.
a) The defendant/opposite party/objector-DVC
shall pay a lump sum rupees 5,12,000/- to the plaintiff-
The defendants/opposite party shall pay simple
interest @ 12% per annum from 25.2.1980 the date of
institution of the case till actual payment to the
8. The first objection, which has been raised by the claimant-
appellant is that the award was not a speaking award. In that respect it is
now important to consider as to whether Arbitrator is required in law to
give a reasoned award or not?
9. In the case of Jivarajbhai Ujamshi Sheth & ors.-Vs.-Chintamanrao
Balaji & ors. reported in A.I.R.1965 Supreme Court 214, observed as follows:
” It is not open to the court to speculate, where no reasons are given by
the arbitrator, as to what impelled the arbitrator to arrive at his
conclusion. On the assumption that the arbitrator must have arrived at
his conclusion by a certain process of reasoning; the court cannot
proceed to determine whether the conclusion is right or wrong. It is not
open to the Court to attempt to probe the mental process by which the
arbitrator has reached his conclusion where it is not disclosed by the
terms of his award.
10. In the case of Bijendra Nath Srivastava(Dead)-Vs.-Vijaynath
Srivastava through L.Rs.,-Vs.-Mayank Srivastava & ors. reported in A.I.R.
1994 Supreme Court 2562, it was observed in para 46 that it was permissible to
arbitrator to settle the consolidated lump sum award.
11. In that view of the matter, in my opinion, the Arbitrator was not required
to give any reasoning for coming to the finding as to how he has allowed a sum
of Rs. 5,12,000/- in favour of the claimant-contractor. The learned trial
court also while discussing the law on the point referred to various
judgments of the Hon’ble Supreme Court in paras 14 and 15 and after
considering the aforesaid judgments, the learned trial court came to the
following conclusions in para 16 of its judgment that “from the
propositions of law enunciated in the decision referred to supra it is
manifestly clear that the Arbitrator is the sole and final judge of the
dispute between the parties referred to him and his award is final,
conclusive and binding between them. It is also obligatory on the part of
the Arbitrator to give a reasons for the conclusion arrived at by him. The
Court has got limited scope to interfere with the award. The award of an
Arbitrator can only be set aside on the grounds enunciated under Section
13 of the Arbitration Act”.
Section 30 of the Arbitration Act as follows:
“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 superceding the arbitration or after arbitration
proceedings have become invalid under Section 35; (c) that
an award has been improperly procured or its otherwise
12. As far as the appellant’s case was objection is concerned,
the trial court rightly itself allowed the same as the arbitrator was not
required to give any reason for passing the award.
13. However, considering the objection made by the DVC,
which confined their submissions to ground no.-C ‘that an award has been
improperly procured since the Arbitrator has traveled beyond the terms of
reference by allowing lump sum Rs. 5,12,000/- whereas total claim made
by the claimant was Rs. 62,351/- only with interest @ 12% without
assigning reason for arriving at such conclusion and subsequently
amended the same Rs. 62,361/-‘.
14. In view of the legal position, as discussed above, arrived by
this Court as also by the trial court the learned Sub-Judge had no power to
amend the award, if the arbitrator has not mis-conducted himself or the
proceeding then either the trial court should confirm the award of Rs.
5,12,000/- or he should have set aside the entire award for going beyond
the reference. Since, the matters were referred with consent of the parties
and it also appears that after the main claim the claimant had filed
amendment of the claim and by order dated 7.12.1993 passed in Title
(Arbitration) Suit No. 13 of 1980 the learned Subordinate Judge with
consent of both the parties referred the amendment also to the Arbitrator.
In that view of the matter, the Arbitrator after considering both
amendment and the original clam in his discretion passed the final award
of Rs. 5,12,000/-, which has been confirmed that one hand by the learned
Subordinate Judge-II by the impugned order and also amended, is bad in
15. Accordingly, the award of Rs. 5,12,000/- as passed by the
Arbitrator is confirmed since the arbitrator was within his jurisdiction to
pass the award in favour of the appellant-contractor. The second part by
which this award has been amended to Rs. 62,361/- is set aside.
16. In view of the above finding that miscellaneous appeal no.
87 of 1998 is allowed and the appeal filed by the D.V.C.-appellants in
miscellaneous appeal no. 62/98 is dismissed. In view of the aforesaid
order the award is made rule of the court and a decree be prepared in terms
of the modified award.
(Pradeep Kumar, J.)
Jharkhand High Court, Ranchi
The 5th May 2010