LexGUJARAT WATER SUPPLY & SEWERAGE BOARD versus UNIQUE ERECTORS {GUJARAT) (P) LTD. & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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GUJARAT WATER SUPPLY & SEWERAGE BOARD
v.
UNIQUE ERECTORS {GUJARAT) (P) LTD. & ANR.
JANUARY 24, 1989
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.)
Arbitration Act, 1940: Sections 14, 17, 29, 30 and 33-Award-
Setting aside of-No evidence to support conclusion-Based on legal
proposition which is erroneous-Award of arbitrator to be read reason-
ably as a whole--Unreasoned award-Effect of-Error apparent on
C face of award-What is-interest pendente lite-Cannqt be granted-
interest for period between date of award and date of decref! can be
allowed in cases governed by Interest Act, 1978.
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Interest Act, 1978: Section 3(1)(a)-Arbitration proceedings-
grant of interest bY Court.
Wor¢s & Phrases.
'reqsonable'-Meaning of.
In 1978 the State Government undertook the construction of the
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'·Bhavnagar City Water Supply Scheme', and on 12th January, 1979,
two contracts in respect thereof were awarded to respondent No. 1. On
29th March, 1981, respondent No. 1 filed a civil suit with regard to
measurements recorded by the Deputy Engineer and alleged underpay-
ments- On 14t!t June, 1981, he gave notice to the State Government and
the petitioner Board requesting for reference of the d.isputes to an
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arbitrator as provided for under clause 30 of the Agreement, and gave
notice under section 8 of the Arbitration Act, 1940 calling upon the
petitioner tO'concur in the appointment of one Sbri G.G. Vaidhya. On
6th August, 19,81 respondent No_ 1 filed a civil miscellaneous applica-
tion for appoin~ent of the said Sbri G. G. Vaidhya as the sole
ar.bi.tr.ator. after withdrawing th.e _civil suit. The petitioner contended
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. g tl!!lt the application_ was not maintainable. The Civil Jµdge however .
aPP'!in.t~!_I the s;ti.d Stu.i. G.G. Vaidbya as sole arbitrlltor. The arbitrl!tor
g!frll !l!l illtetjm !l"\Vl!!'cl h,!llcling thllt only two ~lllin_ts were not arbitrllble ~
~n.'-1 t!t;::::~::::~::: :::::·ti!~ !IP~.!. a w~~~r aP~ ,
H was filed in this Court. This appelll was, however, disposed of by con-
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GUJARAT WATER SUPPLY BOARD v. UNIQUE ERECTORS
319
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sent on 30th November, 1983 to the effect that a retired Secretary,
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Public Department who was at that time sitting member of the peti-
tioner-Board be appointed as the sole arbitrator to decide all the dis-
putes between the parties- On 8th July, 1985, this sole arbitrator made
a lump sum award. The Civil Judge directed that the decree he passed
in terms of the award, rejecting the objections of the petitioner.
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The High Court by a common judgment dismissed the two appeals
of the petitioner challenging the award.
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In the appeals to this Court by special leave, it was.contended: (1)
that the arbitrator had committed an error of law in not deciding or
disclosing his mind about the arbitrability of the claims or counter- c
claims, (2) in the award no basis or indication was given as to which
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claim was rejected, and further what amount was awarded as claim and
what amount towards element of interest, (3) there was an error appa-
rent on the face of the award inasmuch as the basis on which interest
had been awarded had not been disclosed and whether the interest has
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been ·awarded from the date of the institution of the proceedings, (4)
that the granting of interest pendente lite was contrary to the decision of
this Court and ( 5) that the non-speaking award had resulted in great
prejudice to the petitioner inasmuch as against the claim of Rs.I lakh,
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Rs.57 lakhs had been awarded.
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Disposing of the appeals, the Court,
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HELD: l(a) There is a trend in modern times that reasons should
he stated in the award though the question whether the reasons are
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necessary in ordinary arbitration awards is pending adjudication by the
Constitution Bench of this Court. Even if it be held that it is obligatory
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for the arbitrator to state reasons, it is not obligatory to give any
detailed judgment. l325E]
l(b) An award ~f an arbitrator should be read reasonably as a
whole to find out the implication and the meaning thereof. Short intel-
ligible indications of the grounds shall be discernible to find out the
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mind of the arbitrator for his action. l325F]
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l(c) The Court does not sit in appeal over the award and review
the reasons. The Court can set aside the award only if ii is apparent
from the award that there is no evidence to support the conclusion or if the
award is based upon any legai proposition whichExcerpt shown. Read the full judgment & AI analysis in Lexace.