{"id":108777,"date":"1988-08-25T00:00:00","date_gmt":"1988-08-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-orissa-ors-vs-lall-brothers-on-25-august-1988"},"modified":"2016-06-19T22:26:34","modified_gmt":"2016-06-19T16:56:34","slug":"state-of-orissa-ors-vs-lall-brothers-on-25-august-1988","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-orissa-ors-vs-lall-brothers-on-25-august-1988","title":{"rendered":"State Of Orissa &amp; Ors vs Lall Brothers on 25 August, 1988"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">State Of Orissa &amp; Ors vs Lall Brothers on 25 August, 1988<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1988 AIR 2018, \t\t  1988 SCR  Supl. (2) 579<\/div>\n<div class=\"doc_author\">Author: S Mukharji<\/div>\n<div class=\"doc_bench\">Bench: Mukharji, Sabyasachi (J)<\/div>\n<pre>           PETITIONER:\nSTATE OF ORISSA &amp; ORS.\n\n\tVs.\n\nRESPONDENT:\nLALL BROTHERS\n\nDATE OF JUDGMENT25\/08\/1988\n\nBENCH:\nMUKHARJI, SABYASACHI (J)\nBENCH:\nMUKHARJI, SABYASACHI (J)\nRANGNATHAN, S.\n\nCITATION:\n 1988 AIR 2018\t\t  1988 SCR  Supl. (2) 579\n 1988 SCC  (4) 153\t  JT 1988 (3)\t552\n 1988 SCALE  (2)542\n CITATOR INFO :\n RF\t    1989 SC 606\t (7)\n\n\nACT:\n    Arbitration\t Act  1940:  Sections 14,  17,\t30  and\t 33-\nUnreasoned  award-No  ground  to set  aside  award-Lump\t sum\naward-Not bad perse.\n\n\n\nHEADNOTE:\n    The respondent-firm was entrusted with the\tconstruction\nwork of a `Minor Irrigation Project' by the State of Orissa-\nPetitioner. The work was due to be completed on 3rd  August,\n1977  but  it was actually  on 31st  March?  1978.  Disputes\narose in regard to the payment for the work. The respondent-\ncontractor  raised  certain claims and gave notice  for\t the\nappointment  of an arbitrator according to the contract.  On\n22nd April, 1980, the Chief Engineer appointed an arbitrator\nbut, on an application by the respondent, the judge  removed\nhim and appointed another arbitrator.\n    Before  the arbitrator, the respondent filed  its  claim\nalong  with  some  documents and the  petitioner  filed\t its\ncounter\t statement. No further evidence was adduced  and  on\n23rd  June, 1982. the arbitrator gave a lump sum  award\t for\nRs. 14.67 lakhs with interest at 9% from 30th April, 1978.\n    On 11th July 1983, the Sub-Judge made the award rule  of\nthe  Court  with  the modification  that  the  interest\t was\ndirected  to  run  from 23rd June, 1982,  instead  of  30the\nApril, 1978.\n    The\t High Court allowed the appeal in part\tand  deleted\nthe  direction\tregarding  future interest  awarded  by\t the\narbitrator and modified by the Subordinate Judge.\n    In\tthe  appeal by special leave to this Court.  it\t waS\ncontended  on behalf of the State-petitioner that the  award\nin the instant case was an unreasoned award and a  lump such\namount was awarded without specifying the amount awarded  on\nparticular grounds.\n    Dismissing the special leave petition .\n\t\t\t\t\t\t  PG NO 579\n\t\t\t\t\t\t  PG NO 580\n    HELD: 1. The fact that there is an unreasoned award,  is\nno  ground to set aside an award. Lump sum award is not\t bad\nper se, as such. [583A]\n    In the instant case, the award contained the recitals to\nthe  effect that the arbitrator had gone through  the  claim\nstatement,  counterstatement and documents  produced  before\nhim and heard the representations made by the parties. There\nis no error of law apparent on the face of the award.  There\nwas  no misconduct on the part of the arbitrator or  in\t the\nconduct of the proceedings. [582G]\n    <a href=\"\/doc\/1553220\/\">Firm  Madanlal  Roshanlal Mahajan  v.  Hukumchand  Mills\nLtd.,  Indore,<\/a>\t[1967] 1 SCR 105; <a href=\"\/doc\/1840796\/\">Union of  India  v.  Bungo\nSteel Furniture Pvt. Ltd.,<\/a> [1967] 1 SCR 324 and Allen  Berry\nJUDGMENT:\n<\/pre>\n<p>282, referred to.\n<\/p>\n<p>    2.\tAn  award is conclusjve as a  judgment\tbetween\t the<br \/>\nparties and the court is entitled to set aside an award only<br \/>\nif  the\t arbitrator has misconducted himself,  or  where  an<br \/>\naward has been inproperly procured, or is otherwise  invalid<br \/>\nunder Sections 30 and 35 of the Arbitration Act 1940. [583B]\n<\/p>\n<p>    3. An award may be set aside by the Court on the  ground<br \/>\nof  error  on  the face of the award, but an  award  is\t not<br \/>\ninvalid\t merely\t  because  by a\t process  of  inference\t and<br \/>\nargument  it  may be demonstrated  that the  arbitrator\t has<br \/>\ncommitted some mistake in arriving at his conclusion [583C]\n<\/p>\n<p>    4.\tIt is not open to the Court to speculate,  where  no<br \/>\nreasons\t are given by the arbitrator, its to  what  impelled<br \/>\nhim to arrive at his conclusions. [593D]<br \/>\n    Champsey  Bhara  &amp;\tCo.  V.\t Jivraj\t Balloo\t Spinning  &amp;<br \/>\nweaving co. Ltd., L. R. 50 <a href=\"\/doc\/899911\/\">I.A. Jivarajbhai Ujamshi Sheth  &amp;<br \/>\nOrs. v. Chintamanrao Balaji &amp; Ors.<\/a> [1964] 5 SCR 480 referred<br \/>\nto.\n<\/p>\n<p>    5. If  a question of law  was not specifically  referred<br \/>\nto the arbirator his decision is not final. [583F]<br \/>\n    <a href=\"\/doc\/1815803\/\">Continental\t Construction  Co. Ltd. v. State  of  Madhya<br \/>\nPradesh,<\/a> [1988] 3 SCC 82 distinguished.\n<\/p>\n<p>&amp;<br \/>\n    CIVIL  APPELLATE JURISDICTION : Special  Leave  petition<br \/>\n(civil) No. 7396 of 1987.\n<\/p>\n<p>\t\t\t\t\t\t  PG NO 581<br \/>\n    From  the  Judgment\t and Order dated 8.4.  1997  of\t the<br \/>\nOrissa High Court in M. A. No. 378 of 1983.\n<\/p>\n<p>    M.K.  Banerjee, Solicitor General, R.K. Mehta  and\tMiss<br \/>\nMona Mehta for the Petitioners.\n<\/p>\n<p>    G.L. Sanghi, A.P. Jena and Vinoo Bhagat for the Respondent<br \/>\n    The Judgment of the Court was delivered by<br \/>\n    SABYASACHI MUKHARJI, J. This is an application for leave<br \/>\nto  appeal  under Article 136 of the Constitution  from\t the<br \/>\ndecision and judgment of the High Court of Orissa, dated 8th<br \/>\nApril, 1987. By the  judgment the High Court had allowed the<br \/>\nappeal\tin part and modified the award so far as it  related<br \/>\nto  the payment of interest in the awarded  amount.  Another<br \/>\nappeal\tchallenging the validity of the award was,  however,<br \/>\ndismissed.\n<\/p>\n<p>    In\tor about 1975-76 the respondent was  entrusted\twith<br \/>\nthe  work of &#8220;Construction of balance work of earth  dam  of<br \/>\nKoska Minor Irrigation Project&#8221; vide an agreement No. 207 F-\n<\/p>\n<p>2.  The\t said work was due to be completed  on\t3rd  August,<br \/>\n1977 but it was actually completed on 31st  March, 1978. The<br \/>\nestimated  of  value  of the work was  Rs.25,06,299.  It  is<br \/>\nstated that the contractor, respondent herein, had  executed<br \/>\nonly 18 out of 33 items of work beside one extra item and he<br \/>\nwas paid a sum of Rs.23.63.122 for the work done.  According<br \/>\nto,  the  petitioner  no  further amount  was  due  to,\t the<br \/>\ncontractor, the respondent.\n<\/p>\n<p>    Final  bill was prepared on 12th February, 1980  and  it<br \/>\nwas    unconditionally\t accepted   be\t  the\t respondent-<br \/>\ncontractor. This  contention, however,\twas  sought  to\t  be<br \/>\ndisputed before us by the respondent contractor by producing<br \/>\ncertain bill stated to be the final bill which was `accepted<br \/>\nunder protest &#8216;. It is, however, not necessary for us to  go<br \/>\ninto this question at this stage.\n<\/p>\n<p>    On or about 16th April, 1980, the  respondent-contractor<br \/>\nraised certain claims and gave notice far appointment of  an<br \/>\narbitrator according to the contract.  On 22nd April,  1980,<br \/>\nthe Chief Engineer appointed Shri N.K. Mishra as arbitrator.<br \/>\nHowever.   on\tthe  application  of  the   respondent\t the<br \/>\nsubordinate  Judge  removed  Shri N.K.\tMishra\tand  instead<br \/>\nappointed  Shri\t P.C.  De  as  the  arbitrator.\t Before\t the<br \/>\narbitrator  the\t respondent filed its claim along with\tsome<br \/>\ndocuments and the petitioner filed his counter statement. It<br \/>\nis  stated on behalf of the State that no  further  evidence<br \/>\n\t\t\t\t\t\t  PG NO 582<br \/>\nwas  adduced by\t the respondent but the petitioner  produced<br \/>\nthe  measurement  books. The petitioner\t contended  that  no<br \/>\namount was due. The respondent disputed that.<br \/>\n    The arbitrator on behalf of the claim statement and some<br \/>\ndocument filed by the respondent-contractor, gave a lump sum<br \/>\naward for Rs. 14,67,000 plus interest at 9% from 30.4. 1978.<br \/>\nThe award was given on 23rd June, 1982. On 11th July,  1983,<br \/>\nthe  learned  Subordinate judge made the award rule  of\t the<br \/>\nCourt  with the modification that the interest was  directed<br \/>\nto run from 23.6.1982 instead of 30.4. 1978. The High  Court<br \/>\nallowed\t the  appeal  in  part\tand  deleted  the  direction<br \/>\nregarding  future  interest awarded by\tthe  arbitrator\t and<br \/>\nmodified by the learned Subordinate Judge. In appeal it\t was<br \/>\ncontended before the High Court for the said judgment by the<br \/>\nSubordinate  Judge that the following objections were  taken<br \/>\nagainst the award, namely:\n<\/p>\n<p>    &#8220;(i) that there is an error of law apparent on the\tface<br \/>\nof the award ;\n<\/p>\n<p>    (ii)  that\tthe arbitrator has misconducted\t himself  by<br \/>\ngiving a lump sure award without examining, each item of the<br \/>\nclaims,\n<\/p>\n<p>    (iii)  that the claimant having accepted the final\tbill<br \/>\nunconditionally\t deposit, the contract between\tthe  parties<br \/>\nstood closed and, therefore, the arbitration clause was\t not<br \/>\noperative  and the arbitrator appointed had no\tjurisdiction<br \/>\nto adjudicated upon the disputes ;\n<\/p>\n<p>    (iv) that the award of interest is without jurisdiction&#8221;.<br \/>\n    Except  the documents on record, neither of the  parties<br \/>\nadduced\t any evidence. It was urged before us that the\tHigh<br \/>\nCourt did not accept challenge to the award but modified the<br \/>\norder of interest as indicated before. The award in question<br \/>\ncontained the recitals to the effect that the arbitrator had<br \/>\ngone  through  the claim statement,  counter  statement\t and<br \/>\ndocuments produced before him and heard the  representations<br \/>\nmade  by the parties. There is no error of law\tapparent  on<br \/>\nthe  face of the award. There was no misconduct an the\tpart<br \/>\nof  the arbitrator or in the conduct of the proceedings.  It<br \/>\nwas  contended before us that this is an award which was  an<br \/>\nunreasoned  and\t a  lump  of   amount  was  awarded  without<br \/>\nspecifying the amount awarded on particular grounds.\n<\/p>\n<p>\t\t\t\t\t\t  PG NO 583<br \/>\n    In our opinion, the High Court was right in refusing  to<br \/>\naccept the challenge to the award. The fact that there is an<br \/>\nunreasoned  award, is no ground to set aside an award.\tLump<br \/>\nsum award is not bad per se. as such. An award is conclusive<br \/>\nas a judgment between the parties and the court is  entitled<br \/>\nto   set  aside\t an  award  only  if  the   arbitrator\t has<br \/>\nmisconducted  himself in the proceedings or when  the  award<br \/>\nhas  been  made\t after the issue of an order  by  the  Court<br \/>\nsuperseding the arbitration or after arbitration proceedings<br \/>\nhave become invalid under section 35 of the Arbitration\t Act<br \/>\nor  where  an  award  has been\timproperly  procured  or  is<br \/>\notherwise invalid under section 30 of the Act. An award\t may<br \/>\nbe set aside by the Court on the ground of error on the face<br \/>\nof the award, but an award is not invalid merely because  by<br \/>\na process of inference and agrument it\tmay be\tdemonstrated<br \/>\nthat  the arbitrator has committed some mistake in  arriving<br \/>\nat his conclusion.\n<\/p>\n<p>    It\tis  not\t open to the Court to  speculate,  where  no<br \/>\nreasons\t are given by the arbitrator, as to  what  impellied<br \/>\nhim to arrive at his conclusions. See in this connection the<br \/>\nobservations  of the Judicial Committee in Champsey Bhara  &amp;<br \/>\nCo.  v. Jivraj Balloo Spinning &amp; Weaving Co. Ltd.,  L.R.  50<br \/>\nI.A.  324 and of this Court in <a href=\"\/doc\/899911\/\">Jilarajbhai Ujamshi  Sheth  &amp;<br \/>\nOrs. v. Chintamanrao Balaji &amp; Ors.,<\/a> [1964] 5 SCR 480.<br \/>\n    The\t fact  that a lump sum award has been given,  is  no<br \/>\nground\tto declare the award bad. See further <a href=\"\/doc\/1553220\/\">Firm  Madanlal<br \/>\nRoshanlal Mahajan v. Hukumchand Mills Ltd. Indore,<\/a> [1967]  1<br \/>\nSCR  105 and <a href=\"\/doc\/1840796\/\">Union of India v. Bungo  Steel  Furniture\tPvt.<br \/>\nLtd.,<\/a> [1967] 1 SCR 324 as well as the decision of this Court<br \/>\nin <a href=\"\/doc\/931195\/\">Allen Berry &amp; Co,. (P) Ltd. v. Union of India, New Delhi,<\/a><br \/>\n[1971] 3 SCR 282.\n<\/p>\n<p>    Learned  Solicitor General for the petitioner relied  on<br \/>\n<a href=\"\/doc\/1815803\/\">Continental  Construction  Co.\tLtd.  v.  State\t of   Madhya<br \/>\nPradesh,<\/a>  [1988]  3  SCC 82.Reliance  was  misplaced.  If  a<br \/>\nquestion  of  law  was\tnot  specifically  referred  to\t the<br \/>\narbitrator his decision is not final. It was reiterated that<br \/>\nthe  arbitrator is bound by law, and if an error of  law  in<br \/>\nthe  award  is\ton  the face of it, it\tis  amenable  to  be<br \/>\ncorrected.\n<\/p>\n<p>    In that view of the matter the points sought to be urged<br \/>\nin  this application for leave, are not\t entertainable.\t The<br \/>\napplication fails and is accordingly dismissed.\n<\/p>\n<pre>N.V.K.\t\t\t\t\tPetition dismissed.\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India State Of Orissa &amp; Ors vs Lall Brothers on 25 August, 1988 Equivalent citations: 1988 AIR 2018, 1988 SCR Supl. (2) 579 Author: S Mukharji Bench: Mukharji, Sabyasachi (J) PETITIONER: STATE OF ORISSA &amp; ORS. Vs. RESPONDENT: LALL BROTHERS DATE OF JUDGMENT25\/08\/1988 BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-108777","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Of Orissa &amp; Ors vs Lall Brothers on 25 August, 1988 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/state-of-orissa-ors-vs-lall-brothers-on-25-august-1988\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Of Orissa &amp; 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