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CASE NO.: Appeal (civil) 3683  of  1996 Appeal (civil)  4144     of  1996

PETITIONER: PARADIP PORT TRUST AND OTHERS

       Vs.

RESPONDENT: UNIQUE BUILDERS

DATE OF JUDGMENT:       30/01/2001

BENCH: S. Rajendra Babu & Shivaraj V. Patil.

JUDGMENT:

Shivaraj V. Patil, J. L...I...T.......T.......T.......T.......T.......T.......T..J

   These  two appeals are directed against the order  dated 25.8.1992   passed   by  the  High   Court  of   Orissa   in Miscellaneous  Appeal  No.  228/1987.  For  convenience,  we will  refer to Paradip Port Trust as the Trust and  Unique Builders  as  the Company.  2.  The Trust entered into  an agreement  with the Company on 31.3.1981 for sale of  scrap. Certain disputes arose between the parties.  Pursuant to the arbitration clause contained in the said agreement they came to  be  referred to an arbitrator.  Shri B.P.Das,  Advocate, was  appointed as Arbitrator;  he entered into reference and after  conducting  the  proceedings   passed  the  award  on 1.6.1985  to  the  effect that the Company was  entitled  to receive  a sum of Rs.  8,51,315/- together with the interest      @  18% per annum from 28.9.1992 from the Trust.  The parties did  not  lead any oral evidence before the  Arbitrator  and relied  only on the correspondence between them.  The  award passed  by the Arbitrator did not contain any reasons and is a  non-speaking  one.   The   Court  of  Subordinate  Judge, Jagatsinghpur,  on  receipt of the award, issued notices  to the  parties.   The Trust filed objections  challenging  the award  on various grounds.  The court after considering  the objections  under sections 30 and 33 of the Arbitration Act, 1940  (for  short the ‘Act) upheld them and set  aside  the award.   Aggrieved  by  the  same,  the  Company  filed  the Miscellaneous  Appeal before the High Court.  The High Court allowed  the  appeal and made the award a rule of the  court subject  to the modification as to the award of interest  as indicated  in  the  order.  Hence the Trust has  filed  this Civil  Appeal  No.  3683/1996 challenging the same  in  this court.  The Company has filed Civil Appeal No.  4144/1996 to the extent it was denied interest.

   3.   Shri  Gobind  Das, learned senior counsel  for  the Trust  urged  that  (1)  the High Court  was  not  right  in reversing  the  order of the learned Subordinate Judge  when

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the  award  had  been passed in violation of  principles  of natural  justice inasmuch as certain documents were received without  notice  to  the  Trust, after the  closing  of  the proceedings  before the Arbitrator and thereafter the  award was  passed;   (2)  The award passed by the  Arbitrator  was beyond  the scope of the arbitration agreement, as it  could not be made in respect of certain claims, the High court was not right in upholding the award;  (3) although recording of reasons  in  the  award could not be insisted  and  on  that account  itself,  award could not be vitiated, yet no  award could be passed arbitrarily.

   4.   Per  contra, Shri Raj Kumar Mehta, learned  counsel for  the  Company made submissions supporting  the  impugned order  upholding  the  award.  He added  that  the  impugned judgment  of  the  High court is based on  the  well-settled principles  of justice in the light of the law laid down  by this  Court.   He urged that there was no justification  for the High Court to deny pendente lite and future interest.

   5.   We  have  considered the submissions  made  by  the learned  counsel  for the parties carefully.  In para 11  of the impugned judgment, the High Court has recorded thus :-

   11.   some  arguments  were  advanced  by  the  learned counsel for the respondents that the arbitrator has violated the  principles  of  natural  justice as  he  accepted  some documents  after  closing the argument and  the  respondents were  not given any opportunity thereafter either to explain the  said  document  or adduce fresh  evidence  in  relation thereto.   This argument was abandoned after perusal of  the order-sheet of the arbitrator which shows that at each stage adequate  opportunity  was given to both parties.  Thus  the award  in  hand  cannot be set aside on any of  the  grounds relied on by the learned court below.

   6.   The learned senior counsel for the Trust was not in a  position  to  say that the statement made  in  the  above paragraph  is incorrect.  If that be so, his contention that the  arbitrator  passed  the  award   in  violation  of  the principles  of natural justice, cannot be accepted.  It  may be added that the parties did not lead any oral evidence and they  were  satisfied with the documents placed  before  the Arbitrator.

   7.   In the operative portion of the award it is  stated thus:  -

   Having perused and considered by the statements of claim filed  by the claimants, written statement and counter claim filed  by  the opposite parties, documents filed by  parties and  having considered the objections raised by the  parties at   different  stages  of   hearing  and  having  carefully considered the documents/evidence on record and arguments of learned   advocates  of  the   parties  assisted  by   their respective clients I make the following awards.

   M/s.   Unique Builders Ltd., the claimant is entitled to receive  from Paradeep Port Trust (Respondent No.  3) a  sum of  Rs.  8,51,315.00 (Rupees Eight lakhs, fifty one thousand three hundred fifteen only) with interest at the rate of 18% per  annum with effect from 28th September, 1982.  The  opp. Party  are  directed to pay the aforesaid amount  within  60 days.

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   The  counter  claim made by the opp.  Parties 1,  2  and Paradeep Port Trust is disallowed.

   8.   The  contents of this award also  clearly  indicate that  fair  and  sufficient  opportunity was  given  to  the parties  by the Arbitrator.  This again shows that there was no  violation of principle of natural justice in passing the award.

   9.   The  arbitration clause contained in the  agreement entered into between the parties reads thus:  -

   In  the  event of any dispute or difference  of  opinion between  the  Port  Trust  and  the  Purchasers  as  to  the respective  rights and obligations of the parties  hereunder or  as  to the true intent and meaning of those presents  or any   articles  or  conditions   thereof,  such  dispute  or difference of opinion (except the matter regarding which the decision  has been specifically provided for in the terms  & conditions)  shall be referred to the sole arbitration of an officer  of  the Port Trust who shall be nominated  for  the purpose  for the time being and his decision shall be final, conclusive  and binding on the parties.  For the purpose  of this  contract,  the  Chairman  will mean the  head  of  the Organization.

   10.   The  clause relating to the arbitration  extracted above,  is wide enough to cover all disputes or  differences of opinion between the parties as to their respective rights and  obligations  or  as to the true intent and  meaning  of those presents or any articles or conditions thereof (except the   matter   regarding  which   the  decision   has   been specifically provided for in the terms and conditions).  The claims  made  in the statement by the Company, in our  view, are  clearly  covered  and  they fall within  the  scope  of arbitration  clause.  The learned counsel, referring to  the claim nos.  2 and 7 urged that these claims were outside the terms   of  agreement.   The  Company   made  a  claim   for Rs.12,93,260/-  against  various  heads and  the  Arbitrator granted  Rs.8,61,315/- with interest as stated in the award. It  is an award made in lump sum.  It is not possible to say whether  the Arbitrator awarded any amount under claim  nos. 2  and  7 when the award was made only for Rs.8,61,315/-  as against  the  total  claim  of Rs.12,93,260/-.   It  is  not possible  to read mental process of the Arbitrator as to how he  came to the conclusion in passing the award for lump sum amount.   Further the award passed by the Arbitrator  cannot be  set aside assuming that another view is possible.   Thus we  are  unable to agree with the contention of the  learned counsel  that the award passed by the Arbitrator was  beyond the  scope of either the arbitration clause or the terms  of the  contract or it was in excess or opposed to the terms of reference.   In  view  of what is stated above,  it  is  not possible  to  take  a  view that the  award  passed  by  the Arbitrator was arbitrary or unsustainable.

   11.   From  several  decisions  of this  Court  and  the provisions  contained in the Act, it is clear that generally an  award  passed  by the arbitrator is  considered  binding between  the parties for the reason that the parties  select the  arbitrator  and  powers of the court to set  aside  the award  are restricted to cases set out in Section 30 of  the Act.   It  is not open to the courts to guess  or  speculate

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reasons  for  the  award, when it is  non-reasoned.   Courts cannot  attempt  to investigate the mental process by  which the arbitrator arrived at conclusion where it is not visible from  the award.  The jurisdiction of courts including  High Courts  is not independent of the statute.  The arbitrators award  is  final both on facts as well as law.  There is  no appeal from his verdict.  However, an award can be set aside only  in  situations specified in Sections 30 and 33 of  the Act.   In the light of law already settled by this Court, we consider  it  unnecessary to cite long list of decisions  in this  regard.  We will refer to few of them, including those relied  upon  by  the  learned counsel for  the  parties  in support of their respective contentions, hereinafter.

   12.   In  Jivarajbhai  Ujamshi   Sheth  and  others  vs. Chintamanrao  Balaji  and  others [AIR 1965  SC  214],  this Court,  in  para  18, has stated that An award made  by  an arbitrator  is conclusive as a judgment between the  parties and  the  Court  is entitled to set aside an  award  if  the arbitrator  has  misconducted himself in the proceedings  or when  the award has been made after the issue of an order by the  Court superseding the arbitration or after  arbitration proceedings  have  become  invalid  under   S.   35  of  the Arbitration  Act  or  where  an award  has  been  improperly procured  or is otherwise invalid (S.  30 of the Arbitration Act).   An award may be set aside by the Court on the ground of  error  on  the face of the award, but an  award  is  not invalid  merely  because  by  a  process  of  inference  and agreement  it  may be demonstrated that the  arbitrator  has committed some mistake in arriving at his conclusion.

   13.   This  Court in Puri Construction Pvt.   Ltd.   Vs. Union  of India [(1989) 1 SCC 411], has taken the view  that Even  on  accepting  the suggestion  and  interpreting  the objection petition of the respondent liberally, the decision of  the  High Court cannot be maintained.  When a  court  is called  upon  to  decide the objections raised  by  a  party against  an arbitration award, the jurisdiction of the court is  limited, as expressly indicated in the Arbitration  Act, and  it has no jurisdiction to sit in appeal and examine the correctness of the award on merits.

   14.   This Court in State of Orissa and others vs.  M/s. Lall  Brothers  [(1988) 4 SCC 153], has held that  the  fact that  there is a non-reasoned award, is no ground to set  it aside and that lump sum award is not bad per se, as such.

   15.   In  Gujarat  Water Supply and Sewerage  Board  vs. Unique Erectors (Gujarat) (P) Ltd.  And another [AIR 1989 SC 973],  in  para  11 of the judgment it is observed  by  this Court  that  Reasonableness as such of an award unless  the award  is per se preposterous or absurd is not a matter  for the  court  to  consider.  Appraisement of evidence  by  the arbitrator is ordinarily not a matter for the court.

   16.   In a recent decision this Court in Rajasthan State Mines   and   Minerals  Ltd.    Vs.    Eastern   Engineering Enterprises  and another [(1999) 9 SCC 283], after referring to  large number of decisions on the subject, in para 44 has reiterated the position of law as stated above.  The learned counsel  for the Trust, when specifically asked under  which clause  of para 44 the case of the Trust falls, pointed  out

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to  clauses  (h)  and (i) of para 44 of the  said  judgment. Clause  (h)  refers  to  the award made  by  the  arbitrator disregarding  the terms of the reference or the  arbitration agreement  or  the terms of the contract and states that  in such a case it would be jurisdictional error, which requires ultimately  to  be  decided  by  the  court.   This  has  no application to the present case as it is not shown to us how the  award was made by the Arbitrator disregarding the terms of  the reference or the arbitration agreement or the  terms of  the  contract.  Clause (i) also does not help the  Trust having regard to the facts of the case in hand and the award made by the Arbitrator based on documentary evidence.  It is not  a  case  where the arbitrator  has  acted  arbitrarily, irrationally, capriciously or independently of the contract. It  is difficult for us to take a view that there has been a deliberate  departure or conscious disregard of the contract to  say that the arbitrator misconducted himself.  The other clauses  contained in the same paragraph, if applied to  the facts of the case on hand, support the Company.

   17.   This Court in Firm Madanlal Roshanlal Mahajan  vs. Hukumchand Mills Ltd.  [AIR 1967 SC 1030], has held that the arbitrator could give a lump sum award and that he would not be bound to give a separate award for each claim;  his award on  both fact and law is final;  there is no appeal from his verdict.

   18.   The  learned counsel for the Company  pointed  out that  the  High Court, placing reliance on the  judgment  of this  Court in Executive Engineer, Irrigation, Galimala  and others  vs.   Abnaduta  Jena  [AIR  1988  SC  1520],  denied interest pendente lite.  But in a subsequent decision by the Constitution  Bench  of this Court in Secretary,  Irrigation Department,  Government of orissa and others vs.  G.C.   Roy [(1992) 1 SCC 508], it is held that the decision in Abnaduta Jenas  case did not lay down good law on this aspect.   The Constitution  Bench  decided  the case on  12.12.1991.   The impugned  order  of the High Court was passed on  25.8.1992. We  agree with the submission of the learned counsel for the Company  as to the power of the arbitrator to award interest pendente  lite.   However, the High Court having denied  the interest  on the ground that there was no claim for interest pendente  lite  before it nor any argument was  advanced  in that  behalf, we are not inclined to upset that part of  the order of the High Court in relation to denial of interest to the  Company.   However, we do not find any good  ground  or valid  reason  to deny future interest from the date of  the decree  to  the Company.  Hence, having regard to the  facts and  circumstances  of  the  case we consider  it  just  and appropriate  to  award future interest @ 12% per annum  from the date of decree till payment.  The award of interest from 28.9.1982  to  10.1.1985 was justified by the High Court  in the  impugned  judgment.  The contention that there  was  no basis  for  choosing the date 28.9.1982 is answered  in  the judgment  of  the High Court itself stating that it  was  on 28.9.1982  that  the  Trust   repudiated  the  contract  and forfeited  the  deposit  made by the Company  and  that  the Arbitrator  entered  into reference on 10.1.1985.  We  agree with  the reasons recorded by the High Court in this regard. Further  as already noticed above, the award is made in lump sum.   As  rightly observed by the High Court, unless  there appears  to  be a mistake on the face of the award  and  the documents  appended or incorporated thereto which form  part of  the  award, it cannot be set aside even with respect  to interest  part  of it.  In this view of the matter, we  hold

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that  the  Company is entitled for interest @ 18% per  annum from  28.9.1982  to 10.1.1985 and future interest @ 12%  per annum from the date of decree till payment.

   19.   The learned senior counsel for the Trust drew  our attention  to  the  order dated 26.7.1993,  passed  by  this Court, which reads:

   Issue notice.

   Since  the  respondent  is represented  by  counsel,  no further notice to the respondent is necessary.

   The money would be paid to the respondent subject to the respondent   furnishing   sufficient     security   to   the satisfaction of the executing court.

   He  added  that the Trust has paid money to the  Company pursuant  to  the said order.  If the amount is paid to  the Company,   that  shall  be   taken  into  consideration   in satisfying the amount awarded to the Company.

   20.  For the reasons stated hereinabove Civil Appeal No. 3683  of  1996,  being devoid of any  merit,  is  dismissed. Civil  Appeal  No.   4144 of 1996 is allowed to  the  extent indicated  in  para  18 above in regard to  the  payment  of interest  and  the  order of the High Court to  that  extent stands modified.  In the facts and circumstances of the case the parties shall bear their own costs.