GOA, DAMAN AND DIU HOUSING BOARD versus RAMAKANT V.P. DARVOTKAR

Citation: [1991] 3 S.C.R. 904 · Decided: 06-09-1991 · Supreme Court of India · Bench: B.C. RAY · Disposal: Dismissed

Judgment (excerpt)

A 
GOA, DAMAN AND DIU HOUSING BOARD 
v. 
RAMAKANT V.P. DARVOTKAR 
SEPTEMBER 6, 1991 
B 
[B.C. RAY,M.H. KANIA, K. JAGANNATHA SHETTY, 
LALIT MOHAN SHARMA AND J.S. VERMA, JJ.] 
Arbitration Act, 1940: Section 16-Award-When to be remitted 
to Arbitrator-No a/legation of bias or illegality-High Court remand-
ing awards for giving reasons-Whether justified. 
c 
..--
The appellant-Housing Board, which had entered into four 
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contracts with the respondent for construction of tenements within a 
certain time limit, terminated them after giving notice on the ground 
that the respondent had failed to complete the construction work 
despite several extensions granted to him, and filed a suit in the Court 
D 
of Civil Judge claiming damages of over Rs.4 lakhs. The respondent 
filed applications under Sections 34 and 20 of the Arbitration Act, 1940, 
for stay of the suit and for directions to the appellant-Board for filing 
the arbitration agreement in the Court and also for appointing 
arbitrator in terms of clause 25 of the agreement. As per Court's order, 
the appellant filed the agreement in the Court and appointed the 
• 
E 
Arbitrator. 
The Arbitrator made four awards granting the claims of the 
n;spondent to the extent of over Rs.8 lakhs and filed them in the Court 
for making them Rule of the Court. The appellant's objections for 
setting aside the awards on the ground that the Arbitrator had miscon-
i 
F 
ducted himself by not framing the main issue, viz., whether or not the 
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claimant abandoned the work and thereby committed the breach of the 
agreement, by ignoring the letter of terminatioi:i where in it was clearly 
stated that the termination had. been done on account of the abandon-
ment of the work by the claimant, and failed to decide upon the question 
of the abandonment of work and wholly side-tracked the issue and also 
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by not giving reasons for the award as required under the agreement, 
under which he was appointed, were rejected by the Civil Court, which 
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confirmed the awards and made them the Rule of the Court. The appel-
l'!nt's appeals against this decision was allowed by the High Court, 
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which set aside the Civil Court's order and sent back the awards to the 
arbitrator for giving reasons, as required under dause 25 of the agree-
H 
ment which specifically provided that in all cases where amount of 
904 
HOUSING BOARD v. RAMAKANT 
905 
claim was Rs.50,000 and above, the Arbitrator was bound to give 
reasons . 
. >·· 
In the appeal before this Court, on behalf of the appellant-
A 
Housing Board it was contended that having held that the arbitrator 
was guilty of misconduct and the awards were liable to be vitiated on 
that ground, the High Court ought to have set aside the awards instead 
B 
of sending them back for recording reasons, which was totally unwar-
ranted by law. 
On behalf of the respondent, it ~as contended that the High 
Court's order remanding the awards for recording reasons clearly fell 
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within the purview of Sec. 16(1)(c) of the Arbitration Act~ as the objec-
C 
tion to the legality of the award was apparent on the face of it, and not 
within the provisions of Sec. 30 of the Act, inasmuch as the arbitrator 
had not misconducted himself or the proceedings and the awards in 
question had not been improperly procured. 
Dismissing the appeals and confirming the awards, this Court, 
D 
HELD: 1.1 Section 16 empowers the Court to remit the award to 
the Arbitrator for reconsideration only in three cases specified therein. 
Clause (c) of Sub-Section (1) provides that the award shall be remitted 
to the Arbitrator by the Court where an objection to the legality of the 
award is apparent on the face of it. 171 OD I 
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1.2 No doµbt, in the instant case, the High Court has come to a 
finding that the Arbitrator was guilty of misconduct for his failure to 
give reasons as required but there is nothing to show that the Arbitrator 
misconducted himself or the proceeding in any other manner, nor is 
there anything to show that the awards have been improperly procured F 
nor any allegation, far less, any finding, that the Arbitrator was biased 
or unfair or he had not heard both the parties or he had not fairly 
considered the submissions of the parties in making the awards in. 
question. [710E] 
1.3 It is evident from the four awards made by the Arbitrator . G 
that the Arbitrator has 'considered all the specific issues raised by the 
parties in the arbitration proceedings and came to hi

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