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PETITIONER: STATE OF ORISSA AND OTHERS A

       Vs.

RESPONDENT: CONSTRUCTION INDIA

DATE OF JUDGMENT04/12/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 1530            1988 SCR  (2) 145  1987 SCC  Supl.  708     JT 1987 (4)   588  1987 SCALE  (2)1245  CITATOR INFO :  R          1989 SC 973  (12)  RF         1990 SC1340  (16)

ACT:      Unreasoned award  by arbitrator-Award  of interest from the date of reference-Validity thereof.

HEADNOTE: %      A contract  was entered into by the parties in 1970-71. The award  was made by the Arbitrator in 1982. The award was challenged before the subordinate Judge who upheld the same. Appeal  to   the  High   Court  against  the  order  of  the Subordinate Judge  was dismissed. The petitioners moved this Court by  special leave  against the order of the High Court and contended  inter alia  that since  a similar  matter  of unreasoned award  had  been  referred  by  the  Court  to  a Constitution Bench  of the  Court, this petition for special leave be also similarly referred to the Constitution Bench.      Dismissing the  petition with  a  modification  of  the award, the Court, ^      HELD: In  the facts  and circumstances of this peculiar case, the  matter is not referred to the Constitution Bench. [147B]      It appears  from the  order of  the High Court that the point of  unreasoned award,  though taken in the petition of appeal, was  not pressed before the High Court. Further, the Arbitrator had been appointed by the Court out of the panels submitted by the contesting parties. Also, in the case of an allied contract  in respect  of another  flat  in  the  same building, an  award had been made and the same had been made the rule  of the  Court subject  to the  certain conditions. [146G-H]      The award  is modified  to the extent that the interest awarded from  the commencement  of the  reference before the Arbitrator to  the date of the award, is set aside, which is in consonance  with the  views expressed  by this  Court  in Executive Engineer  Irrigation Galimala and Ors. v. Abaaduta Jena, [1987] 2 Scale 675. [147C-D]

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JUDGMENT:      CIVIL APPELLATE  JURISDICTION: S.L.P.  (Civil) No. 7389 of 1987. 146      From the  Judgment and  order dated  18.3.1987  of  the Orissa High Court in Miscellaneous Appeal No. 423 of 1982.      R.K. Mehta for the Petitioners.      Anil B. Divan and Vinoo Bhagat for the Respondent.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J. This is a petition for leave to appeal against  the judgment  and order  of the  High  Court dismissing  an   appeal  from   the  order  of  the  learned Subordinate Judge  dismissing a challenge to the award. This is an  unreasoned award. The petitioners challenge the award made in  this case  and ask  for leave  in view of the order passed by  this Court  on 16th July, 1986 in similar matters where the  question of  the validity of the unreasoned award has  been   referred   to   the   Constitution   Bench   for consideration. Mr.  R.K.  Mehta,  learned  counsel  for  the petitioners  submitted  that  this  matter  should  also  be referred for consideration before the Constitution Bench      In this matter it appears that the contract was entered into by  the parties  in 1970-71  and the  award was made in 1982. The High Court disposed of the objections to the award in 1987.  It is  true that  the grounds  of objections  were filed before  the learned  Subordinate Judge  and before the High Court.  The ground  was taken that it was an unreasoned award, inter  alia, amongst  many other grounds in the order of the  High Court  which have been gone into and these were that  the   arbitrator  had  misconducted  himself  and  the proceedings and  the award  did  not  allow  or  reject  the counter claim  made by  the appellants  and further that the award of  interest with effect from a date prior to the date of reference  is bad  in law. The High Court in its judgment had gone  into all  these aspects  but it  appears from  the order of  the High Court that this point of unreasoned award though taken  in the  petition of  appeal  was  not  pressed before the  High Court.  It also appears that in the grounds of appeal  of the  special leave  petition no  grievance has been made  on the  point although  it had  been taken by the petitioners. It  appears to  us  that  this  point  was  not pressed before  the High  Court. It further appears that the arbitrator had been appointed by the court out of the panels submitted by  the  contesting  parties.  Furthermore  in  an allied contract,  i.e. in  respect of  a contract of another nat in the same building an award has been made and the same has been  made  the  rule  of  court  subject  to    certain conditions. 147      It is  true that the question of validity of unreasoned award is pending consideration before the Constitution Bench of  this   Court.  It   is  for   consideration  before  the Constitution Bench as to whether even if unreasoned award be bad, such  award of  ancient vintage be bad. That would be a matter of  grave consequence.  In that view of the matter we are not  inclined to  interfere with  the order  of the High Court in  this case.  In the facts and circumstances of this particular case  and the features mentioned hereinbefore, we declined to refer the matter to the Constitution Bench.      We must  note that  the award  inasmuch as the interest which had  been awarded  is set aside to the extent that the award of  interest from  the commencement of the proceedings before the  Arbitrator to  the date of the award. Subject to

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this modification  the special  leave petition is dismissed. The award  will stand  modified by  deletion of interest for that period namely from the commencement of reference before the arbitrator  to the  date of award. This is in consonance with the  views expressed  by this  Court  in  the  case  of Executive Engineer  Irrigation Galimala  & Ors.  v. Abaaduta Jena, [1987]  2 Scale  675. The  special leave  Petition  is dismissed as indicated before. S.L.                                     Petition dismissed. 148