M.P. HOUSING BOARD versus PROGRESSIVE WRITERS & PUBLISHERS

Citation: [2009] 4 S.C.R. 725 · Decided: 20-03-2009 · Supreme Court of India · Bench: LOKESHWAR SINGH PANTA · Disposal: Dismissed

Judgment (excerpt)

[2009] 4 S.C.R. 725 
M.P. HOUSING BOARD 
V. 
PROGRESSIVE WRITERS & PUBLISHERS 
Civil Appeal No. 1746 of 2009 
MARCH 20, 2009 
(LOKESHWAR SINGH PANTA AND B. SUDERSHAN 
REDDY, JJ) 
Arbitration Act, 1940: 
A 
B 
s.23 - Reference by court for arbitration - Power of c 
arbitrator- HELD: Arbitrator in such matters has all the powes 
which the court itself would have in deciding the issues in the 
suit - Arbitrator was well within his jurisdiction to frame such 
additional issues as would be just and necessary for disposal 
of reference u/s 23. 
s.30-Award by arbitrator- HELD: An award by arbitrator 
is ordinarily final and courts hearing application uls 30 would 
not exercise any appellate jurisdiction - Reappraisal of 
evidence of court is impermissible - Once it is found that view 
D 
of arbitrator is plausible, court will refrain itself from interfering. 
E 
Arbitration - Interpretation of agreement - HELD: Is a 
• 
~ 
matter for arbitrator to determine - In order to determine scope 
of an agreement, intention of parties is to be gathered - In the 
instant case, arbitrator having considered the relevant 
agreements, and subsequent events and documents 
F 
including correspondence between parties, rightly arrived at 
the conclusion that cost of construction mentioned in Clause 
1 of agreement dated 30 5. 1980 was tentative, and though in 
Clause 4 thereof a date was mentioned for payment, but time 
· ,. ~ 
was not the essence of contract. 
G 
Arbitrator - Misconduct - HELD: Erroneous application 
of law constituting the very basis of award and improper and 
incorrect findings of fact, which without closer and intrinsic 
725 
H 
726 
SUPREME COURT REPORTS 
[2009] 4 S.C.R. 
A scrutiny are demonstrable on the face of material on record 
are held as legal misconduct rendering the award as invalid -
In the instant case, there is no erroneous application of law by 
arbitrator or any improper or incorrect finding demonstrable 
on the face of material on record - There is nothing in the 
B award requiring interference by courts - Courts rightly refused 
to interfere with the award passed by arbitrator- It is not a fit 
case warranting interference in exercise of jurisdiction under 
Article 136 of the Constitution - Constitution of India, 1950 -
Article 136. 
C 
The appellant-Housing Board and the respondent-
depositor entered into an agreement on 18.2.1975 
stipulating that the Board would execute construction of 
Press Complex building for the respondent. The depositor 
made the initial payment towards the proposed cost, but 
D since it failed to deposit the balance amount, another 
agreement dated 4.5.1977 was entered into between the 
parties to the effect that the depositor would transfer the 
total area of the land and building to the Board, which in 
turn would re-transfer a part of the constructed portion to 
E the depositor. The parties entered into a third building 
agreement on 31.5.1980 which stated that the depositor 
would take the entire complex building on payment of the 
total amount of cost which was estimated at Rs.73.50 
lakhs. Under Clause 4 of the agreement, the depositor 
F agreed to pay the entire amount not later than 31.10.1980, 
failing which the agreement would be deemed to have 
been cancelled. The depositor could not comply with 
Clause 4 of the third agreement by 31.10.1980 and 
subsequently made certain representations to the Board 
G that they were willing to perform their part but were unable 
to do so for want of proper accounts and other details 
from the Board. The Board first filed a suit for permanent 
injunction and subsequently a comprehensive suit for 
declaration, specific performance of the contract and 
permanent injunction. The trial court referred both the 
H 
• 
M.P HOUSING BOARD V. 
727 
PROGRESSIVE WRITERS & PUBLISHERS 
suits for arbitration. The arbitrator made the award A 
whereunder the Board was required to handover 
immediate possession to the depositor and the Board 
would be entitled to a sum of Rs.37,70,309.87. In case of 
any default, the Board was held to be entitled to interest 
at 18% per annum capitalized quarterly. The trial court B 
confirmed the award and the High Court dismissed 
Board's appeals. 
In the instant appeal filed by the Housing Board it 
was contended for the appellant that the arbitrator 
· committed grave misconduct as he disregarded the terms C 
of the contract and based the award on conjectures and 
· surmises. It was submitted that the arbitrator 

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