K. P. POULOSE versus STATE OF KERALA & ANR.

Citation: [1975] SUPP. 1 S.C.R. 214 · Decided: 21-04-1975 · Supreme Court of India · Bench: A. ALAGIRISWAMI · Disposal: Appeal(s) allowed

Judgment (excerpt)

214 
A 
B 
c 
D 
E 
F 
G 
K. P. POUI OSE 
STATE OF KERALA & ANR. 
April 21, 1975 
[A. ALAGIRISWAMI, P. N. BHAGWATI AND P. K. GOSWAMI JJ.] 
Arbitration Act, s. 30 (a)-Scope of. 
For the construction of three overhead reservoirs tenders were invited. 
The appellant was the successful tenderc.r for the work. The notification in-
viting tenders gave a description of the soils at the places of constn(ctions. 
Sometime later, however, the Research Institute of the State Government re-
commended a different mcxie of foundation in respect of one· reservoir and 
the department accordingly gave instruction to the appellant to adopt the: 
process recommended by the Research Institute. 
The appellant executed the-
\Vork in accordance with the recommendations of the Research Institute and 
claimed a higher payment on the ground that the work: done by him 'W3.S 
not included in the original design because wh_en he submitted his tender 
he assumed the site conditions to be as represented in the Schedule to the noti~ 
fication. The Department, having refused the claim, the di.<>pute was referred 
to Arbitration under cl. 34 of the tender notification. The Chief Engineer who 
v1as the sole Arbitrator ga.ve a. speaking order based on an ex~lID.ination of the 
d0cumcnts. 
The High Court. S('t aside the judgment of the Subordin::!tc Judge and res~or­
cd the or(k:· of the Arb!tralor. 
On appeal to this Court it was contended that the Arbitrator wa.'i' gullty of 
legal misconduct in conducting the procecdin2s in that the material documents 
were absolutely ignored by the Arbitrator, resulting in misc.;'lrria.~e of justice. 
Allov.'iog the appeal. 
HELD : Under s. 30(a) of the Arbitration Act an award can be set aside 
\Vhen an Arbitrator has misconducted himself .or the proceedings. Misconduct 
under s. 30(a) has not a connotation of moral lapse. It compri<;es Jegal mis-
conduct which is complete if the Arbitrator on the face of the award arrives 
at an inconsistent conclusion even on his own finding or arrives at a decision 
by ignoring very material documents which throw abundant light on the con-
troversy to help a just and fair decision. It is in this sense that the Arbitrator 
has misconducted the proceedings in thi! case. 
Jn the instant case the two documents which \he Arbitrator failed to consider 
were 
material 
docun1ents 
to 
arrive 
at 
a 
just 
and 
fair 
decision to 
resolYe the controversy between the Department and the appellant. In the back-
ground of ihc controversy in this case even if the Department did not prcxlucc 
these documents before the Arbitrator it was incumbent upon him to get hold of 
all the relevant documents including those two documents for the purpose of a 
just decision. 
The a'vard, therefore, suffers from a manifest error apparent 
ex facie. 
[218ABC] 
H 
Ov1L APPELLATE JURISDICTION Clv1L APPEAL No. 1485 OF 1974 
Appeal by special leave from the judgment and decree dated 29-1-73 
of the Kerala High Court iu A.S. No. 357 of 1972. 
S. V. Gupte, C. J. Ba/akrishna11 and A. S. Nambiar. for the appel-
lant. 
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K; P. POULOSJl '" KERAT,A (<Sos\vo111i, J.) 
215 
. 
T. S. Krisf111a111urt/1y Iyer and K. R. Nambiar, for the respondents. 
A 
The Judgment of the Court was delivered by 
GOSWAMI, J.-This is an appeal by 
special leave 
against the 
judgment of the Kcrala Hig)l Court setting aside the judgment of the 
Subordinate Judge, Ernakulam .and restoring the award of the Arhi-
B 
trator who had earlier refused th{1 claim of the appellant. 
The appellant (briefly the contractor) was a successful tenderer 
for conmuction af three zonal R.C.C. Overhead Reservoirs, two in 
Mate.ncherry and one in Cochin, in connection with the Ernakulam 
Mattencherry Water Supply Scheme. 
In the schedule annexed to the 
noUfication invitin)); tenders under the heading 'Site', it was stated that 
"the soil at the site for Reservoir No. 1 and Resetvoir No. 2 is loose 
clay and for Reservoir No. 3, sandy". The tenderer was to execute an 
i,grecment on a stamped paper before commencing work. It appears 
later on the Kerala Engineering Research Institute, Poochi, Soil Mecha-
nics and Foundation Division (briefly the Research Institute) submit-
ted a report (Ext. P. JO dated September 14, 1965) that the sub-soil 
at the three places chosen as sites for the reservoirs upto 16 m. showed 
that the top soil was sancl, the middle layer clay, and the bottom layer, 
silty sand or sand. 
It was stated that the clay 

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