K.V. MOHAMMED ZAKIR versus REGIONAL SPORTS CENTRE

Citation: [2009] 14 S.C.R. 554 · Decided: 16-09-2009 · Supreme Court of India · Bench: MARKANDEY KATJU, A.K. GANGULY · Disposal: Appeal(s) allowed

Judgment (excerpt)

(2009] 14 (ADDL.) S.C.R. 554 
A 
K.V. MOHAMMED ZAKIR 
•, 
v. 
REGIONAL SPORTS CENTRE 
(Civil Appeal No. 2506 of 2004) 
B 
SEPTEMBER 16, 2009 
[MARKANDEY KATJU AND ASOK KUMAR 
GANGULY, JJ.] 
ARBITRATION: 
c 
Award by arbitrator - Power of-eourt to interfere with -
Order of trial ,court making the award rule of the court - Appeal 
against- High Court setting aside a part of the !JWard whereby 
arbitrator awarded a certain amount as coqrpensation to 
D contractor for Loss caused to him by way of gain prevented or 
~ .....
loss of profit because of delayed suppiy of material and 
drawings to him by employer - Held: The ~ettled position in 
law is that court should not substitute its Olfl'n view for the view 
taken by the ·arbitrator while dealing with the proceedings for 
--
E 
setting aside an award - It is equally well settled, where the 
arbitrator acts within jurisdiction, 'the reasonableness of the 
reasons' given by the arbitrator is not open to scrutiny by 
! courts - However, if the reasons are such as no person of 
"' 
· ordinary prudence can ever approve of them or if the reasons 
F 
are so 'outrageous in their defiance ()f logic' that the¥ shock 
the conscience of the court, then it is a different situation, and 
in an appropriate case court may interfere - However, the 
degree of such unreasonableness must be greater than the 
standard in a certiorari proceeding - In the instant case, 
arbitrator has reached a finding of fact on the materials on 
G record about the delay on the part of the employer and that 
because of such delay the claimant was put in great difficulty 
., 
in completing the work. in time - It is nobody's case that by 
doing so the arbitrator has acted beyond his jurisdiction or 
committed any legal misconduct -. Therefore, there is no 
H 
554 
K.V. MOHAMMED ZAKIR v. REGIONAL SPORTS 
555 
CENTRE 
reason to interfere with the award of the arbitrator, and the A 
same is upheld. 
CIVIL AP PELLA TE JURISDICTION : Civil Appeal No. 
2506 of 2004. 
From the Judgment & Order dated 13.11.2002 of the High 
B 
Court of Kerala at Ernakulam in Misc. First Appeal No. 821 of 
1992. 
B. Vijayalakshmi Menon, Ekta Kapila and Sadhanshu Goil 
for the Appellant. 
C 
C.N. Sree Kumar, P.R. Nayak and D. Parashar for the 
Respondent. 
The following Order of the Court was delivered by 
ORDER 
1. Heard counsel for the parties. 
2. This appeal has been filed impugning the judgment of 
D 
the Division Bench of the Kerala High Court dated 13/11/2002 , E 
whereby the learned Judges of the High Court, on an appeal 
" 
by the respondent from a judgment by the Subordinate Judge, . 
Ernakulam dated 1 /1 /1991, were pleased to disallow part of 
the claims which were granted in favour of the appellant by the 
arbitrator. The relevant facts of the case are as under. 
F 
. 
. 
3. Tender was submitted by the claimant which was 
accepted by the respondent. An agreement dated 20/11 /1986 
was executed. In terms of the agreement, the work was to be 
completed within 12 months, i.e. within 19/11/1987. Work could 
not be completed by that time and the case of the claimant-
appellant before us is that it could not be completed on account 
of delay on the part of the respondent in the supply of cement 
and steel, and also the delay in making available the drawings 
and for various other factors. The matter was referred to the 
G . 
H 
556 
SUPREME COURT REPORTS [2009] 14 (ADDL.) S.C.R. 
<C"""
' 
A arbitration of a Sole Arbitrator who was a retired Judge of 
\.-
Kerala High Court. 
4. Claims and counter claims were raised before the 
arbitrator. After examining the rival contentions, the arbitrator 
B 
gave an award dated 16/03/1990 for an amount of 
Rs.19,51,334.25 with interest at the rate of 10% on 
Rs.18,86, 700.23, the principal amount, from the date of award 
to the date of decree. The claimant then applied for making the 
award into 'rule of the Court' and vide order dated 1 /1 /1991, 
~-
the Ill Additional Sub-Judge, Ernakulam passed an order 
c making the award 'rule of the Court'. 
5. Challenging the same: an appeal was filed before the 
High Court by the respondent herein. In the said appeal, 
Division Bench of the High Court was pleased, inter alia, to 
D hold that the claimant-appellant is not entitled to receive from 
t 
r 
the respondent an amount of Rs.3,63,344/- as compensation 
for the loss caused to the appellant by way of gains prevented 
or loss of profit. In other words it is a loss of profit of 15% of 
the cost of w

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