M/S. CONTINENTAL CONSTRUCTION LTD. versus STATE OF U.P.

Citation: [2003] SUPP. 3 S.C.R. 1002 · Decided: 22-09-2003 · Supreme Court of India · Bench: V.N. KHARE · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
M/S. CONTINENTAL CONSTRUCTION LTD. 
v. 
STATE OF U.P. 
SEPTEMBER 22, 2003 
[V.N. KHARE, CJ. AND S.B. SINHA, J.] 
Arbitration'Act, 1940-Sections 9, 30 and 33-Dispute as regards 
claim for supply of extra earth and rock by the appellant referred for 
arbitration-A portion of the claim was allowed by the Umpire by a non-
C speaking award on the basis of a admission by the respondent-Civil Judge 
allowed the objections to the application for making the awards a rule of 
the Court-High Court upheld order setting aside the awards-On appeal 
Held, awards were justified as they were made on the basis of admissions 
having regard to documents on record and decision of the High Court in 
a matter between same parties-Such admissions not questioned by the 
D respondent and only a vague statement denying the claim was made-Also, 
the Umpire did not travel beyond the contract. 
Section 30-Jurisdiction of a Court-Limited Jurisdiction while 
adjudicating upon an objection to an award-No interference except where 
E arbitrator has misconducted himself or the proceeding or there exists an 
error apparent on the face of the award. 
Disputes and differences arose between the parties as regards the 
claim for extra earth and rock supplied by the appellant. These were 
F referred to arbitration. The respondent did not appoint any arbitrator 
and so the appellant requested the arbitrator appointed by it to 
proceed in the matter. The respondent filed an application under 
Sections 33 and 9 of the Arbitration Act, 1940 before the District 
Judge, which was allowed. The High Court, in appeal, directed both 
parties to appoint arbitrators. However, no award could be made 
G within the statutory period and the matter was referred to the umpire 
in accordance with the arbitration agreement. The Umpire awarded 
a sum of Rs.7,29,764.00 in respect of the claim for extra quantity of 
earth fill and a sum of Rs. 8,74,256,00 in respect of the claim for rockfill 
by a non-speaking award. The respondent filed objections under 
H Section 30 of the Act to the application for making the awards a rule 
1002 
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CONTINENTAL CONSTRUCTION LTD. v. STATE 
1003 
of the Court. The Civil Judge allowed the application and set aside the A 
awards. The appeals were dismissed by the High Court on the ground 
that as per the contract the appellant was not entitled to make any 
extra claim for supply of earth or rock. Hence this appeal. 
The appellant contended that the question regarding entitlement B 
for an extra claim had already been considered by the High Court in 
a matter between the same parties, wherein such a claim was held 
maintainable; that the courts below were not justified in entering into 
the merits of the matter as a non-speaking award had been passed; that 
the courts below ought not to have interfered with the awards in 
absence of any finding to the effect that the same were perverse as the C 
arbitrator had jurisdiction to construe the contract independently; 
that the respondent had admitted the entitlement of the extra claim 
before the Umpire and only then the awards were passed; and that the 
Umpire had only awarded a portion of the total claims of the appellant. 
The respondent contended that the Umpire was bound by the 
terms of the contract and could not have travelled beyond the same 
and that an affidavit having the effect of not admitting any claim of 
the appellant was filed before the Civil Judge. 
Allowing the appeals, the Court 
D 
E 
HELD : 1. A bare perusal of the awards clearly shows that the 
respondent admitted a part of the claim of the appellant, which in turn 
was accepted by the Umpire. Such an admission presumably was made 
having regard to the documents on record and also decisions of the F 
High Court in the matter between the same parties. The admission was 
not questioned by the respondent and a vague statement was made 
denying the claim, while dealing with the question as to whether the 
award have been a reasoned one or not. It is not borne out from the 
records that no such admission was made. [1008-A-C) 
2. The Umpire was required to adjudicate upon the claim of the 
appellant and for that purpose he was required to take into consideration 
the terms and conditions of contract vis-a-vis the conduct of the parties. 
G 
It is not a case where he travelled beyond the contract. The matter 
relating to construction of th 0 contract and/or application thereof fell H 
1004 
SUPREME COURT REPORTS [2003] SU

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