M/S. CONSTRUCTION INDIA versus SECRETARY, WORKS DEPARTMENT, GOVERNMENT OF ORISSA AND ORS.

Citation: [1997] SUPP. 6 S.C.R. 371 · Decided: 10-12-1997 · Supreme Court of India · Bench: SUJATA V. MANOHAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

MIS. CONSTRUCTION INDIA 
v. 
SECRETARY, WORKS DEPARTMENT, GOVERNMENT OF 
ORISSA AND ORS. 
DECEMBER 10, 1997 
(SUJATA V. MANOHAR AND D.P. WADHWA, JJ.] 
Arbitration Act, 1940 : Sections 8 and 30. 
A 
B 
Award-Setting aside-Grozmd for-Jurisdiction of Arbitrator--Lack C 
of-Appointment of Arbitrator-By name or designation-Court appointed 
"Shri G.S. Patnaik, Chainnan, Arbitration Tribunal, Orissa" as Arbitrator by 
consellt of pa1ties under S.8-Arbitrator ceased to hold office dwing pendency 
of arbitration proceedings-Held: Appoil!tment is of a named person-Hence, 
even if he ceased to hold office during pendency of arbitration proceedings, D 
he would colllinue to have jwisdiction with the arbitration-Objection to 'the 
jwisdiction of Arbitrator raised but later withdrawn by party during arbitration 
proceeding~~niereafter, Arbitrator pronounced his award-Held: Party con-
sciously acquiesced in the continued jurisdiction of the Arbitrator-Hence, 
award cannot later be challenged on ground of lack of jurisdiction. 
Section 30-Award-Setting aside-Grounds fo,--/nadvertent mis-
take-Held; Inadveltent mistake in recording minutes of a date cannot be a 
ground for setting aside award. 
E 
The appellant had entered into an agreement with the respondents F 
relating to a works contract The court appointed "Shri G.S. Patnaik, 
Chairman, Arbitration Tribunal, Orissa" a~ Arbitrator under Section 8 of 
the Arbitration Act, 1940 by consent of parties. While the arbitration 
proceedings were going on, the Arbitrator ceased to be the Chair-
man of Arbitration Tribunal, Orissa. The respondents filed a peti- G 
lion before the Arbitrator to the effect that the Arbitrator had no 
jurisdiction to continue with the arbitration. However, the respondents 
withdrew this petition as not pressed. Thereafter, the Arbitrator 
pronounced his award. 
Being aggrieved the respondent~ challenged the award before H 
371. 
372 
SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R. 
A the High Court. The High Court set aside the award under Section 30 of 
the Act on the ground that there was a mistake in recording the minutes 
of one date by the Arbitrator, which amounted to non-application of mind 
by the Arbitrator. Hence this appeal. 
B 
On behalf of the appellants it was contended that the Ar-
bitrator was a named Arbitrator, who was appointed by consent of 
parties and that be continued to have jurisdiction although he had 
demitted bis office; that the res pond en ts did not press the objection as to 
the jurisdiction of the Arbitrator; and that this would amount to acc1uies-
cence by the respondents to the continuation of the arbitration before the 
C named Arbitrator. 
On behalf of the respondents it was contended that the appointment 
of the Arbitrator was an appointment by designation and hence he ceased 
to have jurisdiction when he demitted the office of the Chairman, Arbitra-
D tion Tribunal, Orissa. 
Allowing the appeal, this Court 
HELD : 1. The parties may choose an Arbitrator for various reasons. 
E They may rely on his expertise or his special skills at the time when they 
choose the Arbitrator. When the Arbitrator is named, unless there is a 
clear intention spelt out in the agreement of reference to indicate that he 
would continue to be an Arbitrator only so long as he holds a particular 
office, a mere reference to the office held by the Arbitrator will not 
F 
disqualify him from being an Arbitrator after he ceases to hold that office. 
The order of appointment clearly shows that the appointment of Shri G.S. 
Patanaik, Chairman of ~be Orissa Arbitration Tribunal, is of a named . 
Arbitrator. The order of appointment does not qualify this appointment 
either by prescribing that he can act as an Arbitrator so long as he 
continues as Chairman of the Orissa Arbitration Tribunal; nor is there 
G any implication to this effect in the Court's order. The reference to arbitra-
tion is also not to the Orissa Arbitration Trib1mal. This would require 
three members constituting the Tribunal to sit together. Therefore, it is 
difficult to hold that the Arbitrator who was named was to act as an 
Arbitrator only so long as he held the office of the Chairman of the Orissa 
H Arbitration Tribunal. The Arbitrator, therefore, had jurisdiction to give 
. ..., 
( 
CONSlRUCTJON INDIA v. SECY. WORKS DEPlT. GOVT. OF ORISSA 
373 
the awards. [375-F-H; 376-A] 
A 
Smt. Pratima Sarkar v. C01poratio11 of Calcutta, AIR (1973) Cal. 434, 
approved. 
Union of India v. Ch.

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