BHARAT COKING COAL LTD. versus M/S I.K. AHUJA AND CO.

Citation: [2001] 1 S.C.R. 1152 · Decided: 21-02-2001 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Disposed off

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Judgment (excerpt)

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B 
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BHARAT COKING COAL LTD. 
v. 
MIS L.K. AHUJA AND CO. 
FEBRUARY 21, 2001 
[S. RAJENDRA BABU AND S.N. PI-IUKAN, JJ.] 
Arbitration Act-Section 30-Award-Selling aside of-Non speaking 
award, speaking al\'ard--Scupe of challenge-Claim of Parties not referred 
by Arbitrator-Award nut clear-Error apparent-Award set aside. 
Arbitrator erstwhile officer of employer-Had correspondence with 
contractor earlier-Cannot act as an arbitrator. 
Limitation Act, I 91J3-Section 5-Delay in filing objections-
D Application for condonatiun can be filed 
The Appellant placed two work orders to the respondent on certain 
terms and conditions mentioned therein and two separate agreements were 
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executed by the parties. The schedule dates for completion of the respective 
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works were fixed as 24.3.1983 and 19.3.1983 The respondent sought for 
E extension of time which was granted by the appellant. Disputes arose between 
the parties, the matter was referred to the sole arbitrator. The arbitrator 
made two awards in respect of the two contracts which were filed in the court 
of the Civil Judge in two Title (Arbitration) Suits. Tbe arbitrator made the 
two awards after making elaborate reference to the pleadings on either side 
but not deciding any one of the claims except the claim relating to payment of 
F material escalation in the two claims. Civil Judge held that the objections for 
Title (Arbitration) Suit No. 37/86 was fil~ in time. In Title (Arbitration) 
Suit No. 40/86, the objections in question were filed after a delay of five days 
beyond the period of limitation prescribed under Article 119 of the Schedule 
to the Limitation Act, 1963, and hence they were not considered. Decrees 
G were passed in terms of awards. Appeals filed in the High Court by Appellant 
were dismissed. 
Disposing of the appeals, the Court 
HELD: I. The a11bitrator's awards are neith~r speaking awards nor 
H non-speaking-partly speaking and partly non-speaking awards. The law is 
1152 
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BHARAT COKING COAL LTD. v. L.K.AHUJA 
1153 
well settled that if the award made by the arbitrator is a non-speaking one the A 
difficulty of showing that there is an error apparent on the face of the award 
becomes insurmountable and ordinarily such award cannot be challenged at 
all unless it is shown that the arbitrator has wholly travelled outside the 
contract which give him the jurisdiction. The law is equally well settled that 
in cases of speaking awards the court can interfere if there is an error B 
apparent on the face of the award itself; it could also be shown that the 
arbitrator has misconducted himself in arriving at certain conclusions which 
are either plainly contrary to law or to the terms of the contract or ignored 
the provisions of contract or the evidence on record and such other similar 
matters. (1159-H; 1160-A-B) 
2. It is not clear from the pleadings whether the claim made by the 
respondent is in respect of escalation in the costs of material such as plants, 
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tools, appliances, implements, ladders, cordage, tackle, scaffolding, and 
tempers, works, etc. in as much as the appellant has the obligation to supply 
the most essential building materials such as cement, steel and such other 
building material. It is also not clear either from the pleadings or from the D 
award as to whether the escalation claim is in respect of the material provided 
by the respondent or in respect of escalation arising from delay in non-
supply of materials which was due to be supplied by the appellant. So far as 
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the plant and other equipment are concerned, they had already been provided 
for the purpose of the execution of the work and how the delay in non-supply E 
of building materials such as cement, steel, etc. caused escalation so far as 
the building materials provided by the appellant is concerned is not clear. 
The arbitrator has not applied his mind to this aspect of the matter at all. 
Having lost sight of the importance of clause 17 and application of the same 
to the circumstances of the case will clearly disclose that there is an error 
apparent on the fact of the award. (1161-D-Fl 
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3. The entire award in respect of both the agreements made by the 
arbitrator is set aside and the matter is remitted back. A new arbitrator be 
appointed in place of the old arbitrator because the arbitrator has dealt with 
the matter himself as au officer who had correspondence with the contractor G 
at the time when he was an officer of the appell

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