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JUDGEMENTS                                               CIMA 95-A/2000                                   Back To Index

HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
CIMA No.95-A/2000

Date of decision. 27.11.2000

Ram Saroop Gupta. v Union of India
Coram:
The Hon’ble Mr. Justice Dr. B. P. Saraf, Chief Justice.
The Hon’ble Mr. Justice G. D. Sharma, Judge.

Whether approved for reporting: Yes
For the appellant: Shri R. K. Gupta, Advocate.
For the respondent. Shri Ravinder Gupta, Additional Central Government Standing Counsel .

JUDGEMENT AND ORDER

Per Dr. B. P. Saraf, Chief Justice (Oral)

This is an appeal under section 39 of the Jammu and Kashmir Arbitration Act, 2002 (1945 A.D.) against the order of learned Single Judge by which the learned Single Judge rejected the objection of the appellant ("contractor") to the award dated 13th April, 1991 being made rule of Court.

The material facts of the case are as follows. The appellant is a contractor. He entered into a contract agreement with the Garrison Engineer, 873 – Engineers Works for the construction of M.E.S. Key Personnel Quarters at Akhnoor and commenced work pursuant thereto. Later, the respondents terminated the contract on account of the failure of the appellant to complete the work within the stipulated time and in terms of the conditions of the agreement and got the balance works executed by some other contractor at the risk and cost of the appellant. The respondents also took charge of the materials of the appellant lying at the site . The appellant filed an application under section 20 of the Jammu and Kashmir Arbitration Act in this Court for a direction to the respondents to file the arbitration agreement in the court and for reference of the dispute between them to Arbitration. Along with the above petition, an application was also filed for appointment of a Commissioner to make an inventory of the materials belonging to the appellant lying at the work-site . This court after hearing both the parties, by order dated 21st September, 1989, referred the dispute between the parties to a sole arbitrator in terms of the arbitration clause in the contract agreement. Col. Shri J. Natrajan was appointed as the sole arbitrator to decide the disputes between the parties arising out of the contract. The appellant- contractor and the respondents filed their respective statement of claims before the arbitrator. The arbitrator gave his award on 13th April, 1991. By the said award the arbitrator awarded a sum of Rs.18,500/- in favour of the appellant contractor and a sum of Rs.2,10,691.42 in favour of the respondents .The award was filed in the court for being made rule of court. The appellant filed his objections to the award being made rule of the court and prayed that the award should be set aside on the ground of misconduct. The learned Single Judge, who heard the matter, observed that the dispute sought to be raised by the appellant was purely a factual dispute which could not be examined by the court under section 30 of the Jammu and Kashmir Arbitration Act because it was not open to the Court to re-examine and re-appreciate the evidence considered by the arbitrator. The learned Single Judge rejected the objections of the appellant and made the award rule of court. The learned Single Judge , therefore, rejected the objections of the appellant and made the award rule of court. The contractor seeks to challenge the above order of the learned Single Judge in this appeal.

We have heard Mr .R.P.Gupta, learned counsel for the appellant, who submits that the learned Single Judge committed a manifest error in law in not setting aside the award in the instant case on the ground of misconduct. According to him, the report of the Commissioner appointed by the Court during the pendency of the arbitration application under section 20 of the Act was binding on the arbitrator and he should have determined the compensation payable to the contractor on the basis of the said report . He submits that the determination of the compensation by the arbitrator in the present case is arbitrary and the award is liable to be set aside on that count .

We have carefully considered the above submissions of the learned counsel for the appellant. We are, however , not impressed by same. The award in the instant case is a non-speaking award. The appellant seeks to challenge the determination of the amount of compensation by the arbitrator under different heads which , in our opinion , is nor permissible. The arbitrator is a Judge by the choice of the parties. The award of the arbitrator is a decision of the domestic tribunal chosen by the parties. Law is well- settled that where the matters in difference are referred to an arbitrator, he is constituted the sole and final judge of all questions, both of law and of fact. The decision of the arbitrator is binding on the parties if it is reached fairly after giving adequate opportunities to the parties to place their grievances in the manner provided by the arbitration agreement. The civil courts are entrusted with the power to facilitate arbitration and effectuate the awards. They cannot exercise the appellate powers over the decision of the arbitrator. The award of the arbitrator can be challenged only within the limited scope by the provisions of the Arbitration Act and the legislature in its wisdom has limited the scope and ambit of challenge to an award. By and large, the courts have disfavoured interference with arbitration award on account of error of law and fact on the score of mis-appreciation and misreading of the materials on record and have shown definite inclination to preserve the award as far as possible. The award of an arbitrator cannot be set aside by the court merely because by a process of inference and arguments it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion on the merits of the dispute s referred to it for adjudication. The award can, however, be challenged on the ground of error of law on the face of it, when in the award itself or in any document actually incorporated in it, there is found some illegal proposition which is the basis of the award and which is erroneous. As observed by the Supreme Court in Allen Berry & Co. (P) Ltd. V. Union of India AIR 1971 SC 696, even when an arbitrator commits a mistake either in law or in face in determining the matter referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake. It is only when an erroneous proposition of law is stated in the award and it is the basis of the award that the award can be set aside or remitted on the ground of error of law apparent on the face of the record. But in any event the court cannot set aside the award on the ground of mistake of fact committed by the arbitrator . As observed by the Supreme Court in State of Rajasthan v Puri Construction Co. Ltd.(1994) 6 SCC 485, in its anxiety to render justice to the party to arbitration, the court should not re-appraise the evidence intrinsically with a close scrutiny for finding out that the conclusion drawn from some facts by the arbitrator is, according to the understanding of the court, erroneous. Such exercise of power ,which can be exercised by the appellate court with powers to reverse the finding of fact, is alien to the scope and ambit of challenge to an award under the Arbitration Act.

The jurisdiction of the court is further limited in case of a non-speaking award . It is only in a speaking award that the court can examine an error of law on the face of the record and look into the reasoning of the award which is not possible in case of non-speaking award. Because , as observed by the Supreme Court in Hindustan Steel Works Construction Ltd. v C. Rajasekhar Rao (1987) 4 SCC 93, it is not open to the court to probe the mental process of the arbitrator and speculate , where no reasons are given by the arbitrator , as to what impelled the arbitrator to arrive at his conclusion.

The grievance of the appellant in the present case appears to be that the learned Single Judge did not re-appraise the evidence with a view to finding out whether the arbitrator arrived at the amount of compensation correctly. According to the learned counsel for the appellant, if the Single Judge would have scrutinised the facts of the case closely, he would have found that the finding of the arbitrator in regard to the quantum of compensation was erroneous. As stated by us earlier , such reappraisal of evidence or close scrutiny of evidence for finding out that the findings of fact arrived at by the arbitrator are correct or erroneous is not permissible. It is well settled by now that an error of law or fact committed by an arbitrator by itself would not constitute misconduct to justify interfernce with the award. The award in the instant case is a non-speaking award. The arbitrator has not spoken his mind indicating why he has awarded a particular amount under a particular head or why he has disallowed the claim under any head. In such a case, it is not open to the court to probe into the mental process of the arbitrator and speculate as to what impelled him to arrive at his conclusion. The learned Single Judge rightly refused to do so.

In view of the above, we do not find any infirmity in the order of the learned Single Judge. This appeal, in our opinion, is wholly devoid of any merit. Hence, it is dismissed.

In view of the above, the CMP and caveat are also disposed of.