{"id":92261,"date":"2003-09-18T00:00:00","date_gmt":"2003-09-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/k-k-john-vs-state-of-goa-on-18-september-2003"},"modified":"2015-02-01T18:00:57","modified_gmt":"2015-02-01T12:30:57","slug":"k-k-john-vs-state-of-goa-on-18-september-2003","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/k-k-john-vs-state-of-goa-on-18-september-2003","title":{"rendered":"K.K. John vs State Of Goa on 18 September, 2003"},"content":{"rendered":"
Supreme Court of India<\/div>\n
K.K. John vs State Of Goa on 18 September, 2003<\/div>\n
Bench: V.N. Khare Cj, S.B. Sinha<\/div>\n
           CASE NO.:\nAppeal (civil)  1247 of 1998\n\nPETITIONER:\nK.K. JOHN\n\nRESPONDENT:\nSTATE OF GOA\n\nDATE OF JUDGMENT: 18\/09\/2003\n\nBENCH:\nV.N. KHARE CJ & S.B. SINHA\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
2003 Supp(3) SCR 937<\/p>\n
The following Order of the Court was delivered :\n<\/p>\n
The interpretation of sub-section 8 of Section 16 of the Arbitration Act,
\n194C (hereinafter called, for the sake of brevity, the Act’) arises for
\nconsideration in this appeal, which arises out of the judgment and order
\ndated 31st July, 1997 passed by the High Court of Bombay, Appellate Side,
\nPanaji Bench, Goa in Appeal No. 7 of 1997.\n<\/p>\n
The appellant and the respondent herein entered into an agreement whereby
\nand whereunder the appellant undertook to carry out certain constructions.
\nThe agreement also provided for resolution of dispute by an Arbitrator. It
\nappears certain dispute arose as a result of which the appellant herein
\npreferred a claim on 19th September, 1990 and subsequently on 26th October,
\n1990, first reference was made. On 12th March, 1991, the respondent herein
\nterminated the agreement. As a result of termination of agreement, the
\nappellant herein made another reference on 26th June, 1991 and put in
\nsecond claim on 27th September, 1991. The Arbitrator appointed, with the
\nconsent of the parties, gave an Award on 25th February, 1994. Thereafter
\nthe Arbitrator filed an Award for being made a Rule of the Court. The
\nappellant filed an objection before the learned Civil Judge, Senior
\nDivision, Mapusa, in the State of Goa. The learned Civil Judge in terms of
\nthe order dated 6th July, 1995 elaborately considered the contentions
\nraised by the appellant herein and came to the following conclusion :\n<\/p>\n
“20. There appears some glaring mistake under item no. 1 and 2 when the
\narbitrator mentioned that the earth excavation is nil though the quantity
\nappear to have been admitted by the respondent. But on this ground the
\naward cannot be set aside.\n<\/p>\n
21. Similarly, the claim no. 2 though the arbitrator has stated “could not
\nbe ascertained” there is no explanation as to why he could not do so and if
\nit would not be ascertained what would be the finding to that effect.”\n<\/p>\n
The learned Civil Judge, Senior Division, observe thus :\n<\/p>\n
“Considering the no objection of the learned Advocate for the respondent, I
\nfeel that the award has to be remitted on two points as under :\n<\/p>\n
(i) To decide the additional terms and reference by order dated 26.6.91
\nregarding the illegal closure of the contract and<\/p>\n
(ii) The undermined part of item no. 1 and 2 as mentioned in page 7 of the
\naward, to specify the term “could not be ascertained”.”\n<\/p>\n
The Arbitrator in concluding part of the order held that the other part of
\nthe Award stands not affected by the said order.\n<\/p>\n
On 10th October 1995, the Arbitrator resigned. Under such circumstances,
\nthe appellant herein instead of moving an application under Section 8(b) of
\nthe Act, filed a petition under Section 20 thereof for appointment of a new
\nArbitrator on 6th February, 1996. On 28th May, 1997 the learned civil
\njudge, after hearing the parties, was of the view that since the earlier
\nArbitrator did not give his Award within time, the whole Award has become
\nvoid. Consequently, he appointed a new Arbitrator with the consent of the
\nparties with a direction to the Arbitrator to give a de-novo Award.
\nAggrieved, the State of Goa preferred an appeal before the High Court. The
\nHigh Court was of the view that since the other part of the Award remained
\nintact, the proceeding was required to be restricted to the aforementioned
\ntwo points only on which earlier the Court wanted determination and,
\ntherefore, it was not open to the learned Civil Judge to have directed to
\nresolve the dispute de-novo. It is against the said judgment the appellant
\nis in appeal before us.\n<\/p>\n
Mr. Prashant Bhushan, learned counsel appearing for the appellant raised
\ntwo submissions. The first submission is that since the two points on which
\nthe learned Civil judge required determination were incapable of being
\ndecided, therefore, the Arbitrator was required to resolve the dispute de-
\nnovo. The second submission is that once the Arbitrator has resigned and
\ncould not give the Award within the stipulated period, the Award was
\nrendered void under sub-section (3) of Section 16 of the Act.\n<\/p>\n
We do not find any merit in both the submissions. So far as the first
\nsubmission is concerned that the appellant did not challenge the order of
\nthe learned Civil Judge dated 6th July, 1995, whereby and whereunder the
\nlearned Civil judge held that the other part of the Award shall remained
\nintact and only two points were required to be determined. The said order
\nhas attained finality. The same, thus, cannot be permitted to be reopened.
\nThe submission of Mr. Prashant Bhushan to the effect that before the period
\nfor filing the revision application expired, the Arbitrator resigned and,
\nthus, there was no occasion for the appellant to question the said order is
\nmisconceived. Irrespective of the resignation of the Arbitrator, the
\njudgment of the learned Civil Judge remained operative and enforceable. If,
\nthus, the appellant was in any manner aggrieved thereby, the only remedy
\nopen to it was to move the high Court. It having failed to do so cannot now
\nbe permitted to raise the said question again before this Court. It is
\ntrite that what could be done directly cannot be permitted to be done
\nindirectly. So far the second submission is concerned, it is relevant to
\nset out Section 16 of the Arbitration Act, 1940, which reads as under :\n<\/p>\n
“16. Power to remit award (1) The Court may from time to time remit the
\naward or any matter referred to arbitration to the arbitrators or umpire
\nfor reconsideration upon such terms as it thinks fit –\n<\/p>\n
(a) where the award has left undetermined any of the matters referred to
\narbitration, or where it determines any matter not referred to arbitration
\nand such matter cannot be separated without affecting the determination of
\nthe matters referred; or<\/p>\n
(b)  where the award is so indefinite as to be incapable of execution; or<\/p>\n
(c) where an objection to the legality of the award is apparent upon the
\nface of it.\n<\/p>\n
(2)  where an award is remitted under sub-section (1) the Court shall fix
\nthe time within which the arbitrator or umpire shall submit his decision to
\nthe Court;\n<\/p>\n
Provided that any time so fixed may be extended by subsequent order of the
\nCourt.\n<\/p>\n
(3)  An award remitted under sub-section (1) shall become void on the
\nfailure of the arbitrator or umpire to reconsider it and submit his
\ndecision within the time fixed.”\n<\/p>\n
A perusal of sub-section (1) of Section 16 shows that the Court may from
\ntime to time remit the Award or any matter referred to arbitration to the
\nArbitrator or umpire for reconsideration upon such terms as it thinks fit.
\nThus, sub-section (1) of Section 16 is in two parts and talks of two
\ndistinct factors; one is for remission of the entire Award and the other
\n‘any other matter’. Whereas sub-section (3) of Section 16 of the Act
\nprovides that an Award remitted under sub-section (1) shall become void on
\nthe failure of the Arbitrator or Umpire to reconsider it and submit his
\ndecision within the time fixed, it is silent as regards ‘any other matter’.
\nIt is a well settled principle of law that no word used in a statute should
\nbe presumed to be surplus. In the event the contention of Mr. Prashant
\nBhushan is accepted, the words ‘or any matter referred to arbitration’
\nbecome otiose. Sub-section (3) of Section 16 is referable to sub-section
\n(1) thereof. It is not in dispute that an Award could be good as regard one
\npart thereof and bad as regards the rest. In Russell on Arbitration 19th
\nEdition at page 484 it is stated :\n<\/p>\n
“An award bad in part may be good for the rest. If, notwithstanding that
\nsome portion of the award is clearly void, the remaining part contains a
\nfinal and certain determination of every question submitted, the valid
\nportion may well be maintainable as the award, the void part being
\nrejected.”\n<\/p>\n
In the present case, we find that the entire Award was not remitted to the
\nArbitrator, The Arbitrator was only required to give determination on two
\npoints, and therefore, sub-section (3) is not applicable in the present
\ncase. The Parliament advisedly has restricted sub-section (3) of Section 16
\nof the Act to an Award which would mean the whole Award or a part of it.
\nThe valid part of the Award always remains enforceable in a Court of law.\n<\/p>\n
What can be held to be void is that part of the Award which has not been
\nmade a Rule of Court by sustaining the objections raised with regard
\nthereto inter alia on the ground that the same suffers from an error
\napparent on the face of the record or for any other reason; in the event
\nthe Arbitrator or umpire fails to reconsider it and submit his decision
\nwithin the time fixed therefore by the Court. In other words, the word
\n‘Award’ within the meaning of sub-section (3) would also include a part of
\nthe Award, which has been the subject matter of the order of remission by
\nthe competent Court. In any view of the matter the applicability of sub-
\nsection (3) of section 16 of the Act, in the facts and circumstances of the
\npresent case, does not arise inasmuch as the matter is still pending before
\nthe Arbitrator. This View of ours find support from the following :\n<\/p>\n
Johnson v. Latham, reported in (1851) 20 Law Journal 236 at 238 reads :\n<\/p>\n
“Suppose an award good as to three points and bad as to the fourth, and
\nsent back as to that alone, as at present advised, I am of opinion that the
\narbitrator is functus officio as to the three, and cannot alter his
\njudgment as to them.”\n<\/p>\n
Para 618 of Halsbury’s Laws of England reads as :\n<\/p>\n
“Partial remission. The whole or only a part of an award may be remitted;
\nin the former case the award so remitted is of no effect, in the latter
\nonly that portion of the award which is remitted is avoided, and the
\nremainder is valid and enforceable.”\n<\/p>\n
Para 19 of 74 Calcutta Weekly Notes reads as :\n<\/p>\n
This very point may be considered from another angle. Under section 16(1)
\nof the Act there are two kinds of remission, viz., (I) remission of the
\nAward and (II) remission of any matter referred to the arbitration. In the
\ninstant case if we proceed on the footing that only certain matters and not
\nthe Award were remitted by the court below for reconsideration-the question
\narises whether the Award will be void under Section 16(3) of the Act in
\nsuch cases even if the arbitrator fails to reconsider these matters and
\nsubmit his decision within the time fixed. It appears that, although the
\ncourt has power to remit any matter referred to the arbitration under
\nsection 16(1) of the Act the consequence that follows on the arbitrator’s
\nfailure to comply with the court’s direction to reconsider and submit his
\ndecision on such matters is not the same. Under section 16(3) it is only
\nwhen the Award is remitted and the arbitrator fails to reconsider and
\nsubmit his decision, the Award shall become void. But not so, in cases
\nwhere only certain matters are referred to for this purpose by the court
\nas, clearly, the words “any matter” referred to the arbitration are
\nsignificantly absent in the provision of sub-section (3) of section 16 of
\nthe Act and that only shows, in such cases section 16(3) may not have any
\napplication at all. In other words, it may be said that if there is any
\nfailure of the arbitrator to reconsider and submit his decision on certain
\nmatters referred to him the Award does not become void; In this connection
\nwe may usefully refer to a passage in Sarkar’s Tagore Law Lectures, 1942 on
\nthe ‘The Law of Arbitration in British India’ in which it is stated (at
\npage 207, printed Edition 1942) as follows :\n<\/p>\n
“…. Under sub-section (3) of Section 16 an award remitted becomes void on
\nfailure of the arbitrator or umpire to reconsider it and submit his
\ndecision within the time fixed, but there is no provision to cover the case
\nwhere instead of the award, ‘any matter referred to arbitration’ is
\nremitted. In re Aitken’s Arbitra-tion, (1857) 3 Jur. (D.S.) 1296, only one
\nquestion out of several left undecided was remitted. Apparently in a case
\nlike this, section 16(3) has no application.”\n<\/p>\n
Even so, we do not think it necessary to decide finally this aspect of the
\nmatter in the facts and circumstances of the present case. For the reasons,
\nhowever, already given the question of superseding the arbitration under
\nsection 19 of the Act on the ground of ‘the award’ being void, does not
\narise at all.”\n<\/p>\n
Page 494 of Russell on the Law of Arbitration states : “Invalidity of
\nremitted award<\/p>\n
An award when remitted may cease to have any validity.\n<\/p>\n
An award made by an arbitrator appointed to assess compensation under the
\nLands Clauses Act, 1845 was remitted at the request of the claimants. For
\nseven months nothing was done, and then, on the claimants notifying their
\ndesire to have the compensation settled by a jury, the railway company
\napplied for an extension of time to make the amended award. The C.A., on
\naccount of the delay, refused the application and left the matter to go
\nbefore a jury for determination : Re Dare Valley Ry. (1869) L.R.4 Ch. 554.\n<\/p>\n
But where only one or more matters out of several are remitted, a question
\nmay arise whether the award remains valid as regards the matters therein
\nnot remitted. “What became of the award as to the residue of the matters
\nwhich were not sent back pending the second reference? It seems to be in a
\nmanner suspended.” (Per Erle J. Johnson v. Latham, [1851] 20 L.J.Q.B. 236
\nat p. 238). Apparently, therefore, the part not remitted will continue
\nvalid.”\n<\/p>\n
In Brahma Swaroop Gupta v. Diwan Chand Minotra, reported in AIR 1963
\nCalcutta 583, Division Bench of the Calcutta High Court considered the
\nquestion as regards the order of remission in relation to the whole Award
\nand some of the matters referred to Arbitration in the following terms :\n<\/p>\n
“7. If the whole award is remitted, the effective award is the second
\naward, see Brearcy v. Kemp, [1855] 24 LJ QB 310 at 312. On such an order
\nbeing made, the arbitrator must make a fresh award on all the matters
\nreferred to arbitration. Sec. 16(3) shows that on the failure of the
\narbitrator to reconsider the award and submit his decision within the time
\nfixed, the award remitted to the arbitrator becomes void, see also Mohun
\nKishen v. Bhoobun Shyam, 1 Suth WR 406. In this context it would appear
\nthat the first award is avoided altogether also on the making and filing of
\nthe fresh award, see Ganpatrai and Sons v. Ramgopal Nanda Kishore, 59 Cal
\nWN 807 at P. 809 : (S) AIR (1955) Cal 302 at p. 303.\n<\/p>\n
8. But if only one or some of the matters referred to arbitration is
\nremitted to the arbitrator for reconsideration, pending the second
\nreference, the award as to matters not sent back to the arbitrator seemed
\nto be in a manner suspended. The arbitrator is functus officio as to those
\nmatters and cannot alter his judgment as to them, see [1851] 20 LJ QB 236
\nat p. 238. The order under Sec. 16(1) may be made on such terms as the
\nCourt thinks fit. The Court may, therefore, give directions to the
\narbitrator as to the form of the fresh award. The arbitrator is bound to
\nabide by and carry out the directions of the Court in this behalf. In the
\nabsence of any such direction the arbitrator acting under an order
\nreferring back some of the matters for reconsideration, must make a fresh
\naward, confirming and repeating the first award as to matters not sent back
\nwhich he could not alter “as it were a dry pen”, thus the fresh award would
\nembrace all matters originally referred, and in the result the first award
\nwould become null and inoperative, see (1851) 20 LJ QB 236 at pp. 239 and\n<\/p>\n
240. In that case it was ‘ held that as the first award became thus, null,
\nthe Master’s allocatur for costs issued under it also became null though
\nthe second award repeated the terms of the first award as to costs. In this
\ncontext the observation in Halsbury’s Law of England, 3rd Edition, Vol. II,
\nArt. 122, page 57 to the effect that where only a part of the award is
\nremitted, the remainder is valid and enforciable, appears to be too broad.
\nI am, however, inclined to think that where the order of reference back of
\none or some of the matters referred to arbitration specially directs the
\narbitrator to make his fresh award limited to the matters remitted to him,
\nthe fresh award must be limited to those matters and consequently the first
\naward with regard to the matters not remitted to the arbitrator would
\nremain operative.”\n<\/p>\n
In Goverdhan Doss v. Goya Prasad and Ors., reported in ILR 1981 Allahabad
\nat page 310, K.N. Singh, J., (as His Lordship then was), followed the
\ndecision of the Calcutta High Court in Brahma Swaroop Gupta’s case, stating
\nas under :\n<\/p>\n
“If the court instead of referring the entire award remits only certain
\nmatters for reconsideration to the arbitrator and if the arbitrator fails
\nto submit his award within time specified by the court, the consequence as
\ncontemplated by s. 16(3) would not arise. This would be clear on a close
\nscrutiny of the language used in s.16(l) and s. 16(3) of the Act. The
\nconsequence contemplated by s. 16(3) would arise only when the entire award
\nis remitted as s. 16(1) confers power on the court either to remit the
\nentire award or to remit any matter for consideration. By enacting s.16(3)
\nthe Legislature has laid down that if the entire award is remitted for
\nreconsideration and the arbitrator fails to consider the same within the
\ntime specified by the court, the entire award would become void but that
\nsituation would not arise in a case where only certain matters are referred
\nto the arbitrator for reconsideration. Therefore s.l6(3) will not be
\napplicable and the award in respect of those matters which are not remitted
\nto the arbitrator for fresh award would become final between the parties.”\n<\/p>\n
Yet again in Mehta Teja Singh and Co. v. Fertilizer Corporation of India
\nLtd. and Anr., reported in AIR (1968) Delhi 188, the law has been stated in
\nthe following terms :\n<\/p>\n
“(9) The order under Section 16(1) may be made on such terms as the Court
\nthinks fit. The Court may, therefore, give directions to the arbitrator as
\nto the form of the fresh award. The arbitrator is bound to abide by and
\ncarry out the directions of the Court in this behalf. In the absence of any
\nsuch direction the arbitrator acting under an order referring back some of
\nthe matters for reconsideration, must make a fresh award, confirming and
\nrepeating the first award as to matters not sent back which he could not
\nalter, as it were with a dry pen’, thus the fresh award would embrace all
\nmatters originally referred, and in the result the first award would become
\nnull and inoperative.\n<\/p>\n
“Where the order of reference back to on or some of the matters referred to
\narbitration specially directs the arbitrator to make his fresh award
\nlimited to the matters remitted to him, the fresh award must be limited to
\nthose matters and consequently the first award with regard to the matters
\nnot remitted to the arbitrator would remain operative.”\n<\/p>\n
Shri Chawla has also referred us to Russel on Arbitration (17th Edition)
\nand has submitted that the observations at page 305 that not only an award
\nbut the matters or any of them can be remitted, are based on a
\nmisappreciation of the ratio decidendi of the English decision in Johnson’s
\ncase [1851] 20 L.J. QB 236. Same comment has been made in regard to
\nparagraph 122 of Halsbury’s Laws fof England, Third Edition, Vol. II.”\n<\/p>\n
We agree with the views expressed in the aforementioned decisions.\n<\/p>\n
For the aforesaid reason, we do not find any merit in this appeal. The
\nappeal fails and is, accordingly, dismissed. There shall be no order as to
\ncosts.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India K.K. John vs State Of Goa on 18 September, 2003 Bench: V.N. Khare Cj, S.B. Sinha CASE NO.: Appeal (civil) 1247 of 1998 PETITIONER: K.K. JOHN RESPONDENT: STATE OF GOA DATE OF JUDGMENT: 18\/09\/2003 BENCH: V.N. KHARE CJ & S.B. SINHA JUDGMENT: JUDGMENT 2003 Supp(3) SCR 937 The following Order of […]<\/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-92261","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nK.K. 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