M/S. ENGINEERS SYNDICATE versus STATE OF BIHAR AND ORS.

Citation: [2007] 1 S.C.R. 1080 · Decided: 17-01-2007 · Supreme Court of India · Bench: AR. LAKSHMANAN · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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MIS. ENGINEERS SYNDICATE 
v. 
STATE OF BIHARAND ORS. 
JANUARY 17, 2007 
[DR.AR. LAKSHMANAN AND V.S. SIRPURKAR, JJ.] 
Arbitration Act, 1940-Section JO-Non-speaking award-
Interference by court-Scope of-Held: Award without giving reasons 
cannot be remitted or set aside by court being unreasoned in absence of 
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any stipulation to the contrary in arbitration agreement or deed of 
submission-Where no reasons are given by the arbitrator for arriving at 
the conclusion, court cannot speculate nor consider whether the view of 
arbitrator on evidence is justified-Thus, order of trial court setting aside 
the award being non-speaking and arbitrator failed to refer the claim item 
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wise and objection raised, not correct and set aside. 
Dispute arose between the parties and they invoked arbitration clause 
as per the agreement. Arbitrator passed an award in favour of the appellant 
and against the respondent. Trial Court set aside the award on the ground 
that tile award was non-speaking and it failed to refer the claim item-wise 
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and objection of the respondent. Hlgh Court upheld the order. Hence the 
present appeal. 
Allowing the appeal, the Court 
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. HELD: It is not open to the court to speculate, where no reasons are 
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given by the arbitrator, as to what impelled the arbitrator to arrive at his 
conclusion. The power of the court to attempt to probe the mental process 
by which the arbitrator had reached his conclusion where it was not 
disclosed by the terms of his award is declined. The court in dealing with 
an application to set aside an award has not to consider whether the view 
of the arbitrator on the evidence is justified and that the arbitrator's 
adjudication is generally considered binding between the parties, for he is 
a tribunal selected by the parties and the power of the court to set aside 
the award is restricted to cases set out in section 30 of the Arbitration Act. 
An award can neither be remitted nor set aside merely on the ground that 
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it does not contain reasons in support of the conclusion or decisions 
1080 
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ENGINEERS SYNDICATE v. STATE [LAKSHMANAN, J.] 
1081 
reached in it except where the arbitration agreement or the deed of 
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submission requires him to give reasons. The arbitrator or umpire is 
under no obligation to give reasons in support of the decision reached by 
him unless under the arbitration agreement or in the deed of submission 
he is required to give such reasons and ifthe arbitrator or umpire chooses 
to give reasons in support of his decision it is open to the court to set aside 
the award if it finds that an error of law has been committed by the 
arbitrator or umpire on the face of the record on going through such 
reasons. Thus, the order passed by trial court and as upheld by High Court 
is set aside and the award passed by the arbitrator is restored. 
(Paras 8 and 10] [1083-A-F, 1084-F) 
Raipur Development Authority and Ors. v. Mis Chokhamal Contractors 
and Ors., (1989] 2 SCC 721, followed. 
Bharat Coking Coal Ltd. v. Annapurna Construction, [2003] 8 SCC 
154, distinguished. 
Rajendra Construction Co. v. Maharashtra Housing and Area 
Development Authority and Ors., [2005) 6 SCC 678, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 266 of2007. 
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From the Judgment and Final Order dated 30.9.2004 of the High Court 
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of Judicature at Patna in C.R. No. 2035/2001. 
Uday U. Lalit, Sr. Adv., Manoj K. Srivastava and K.L. Taneja for the 
Appellant. 
Nishakant Pandey and Gopal Singh for the Respondents. 
The Judgment of the Court was delivered by 
DR. AR. LAKSHMANAN, J. : I. Leave granted . 
2. The case on hand arise under the Arbitration Act, 1940. 
3. This appeal is directed against the final judgment dt.30.09.2004 
passed by the High Court of Judicature at Patna in C.R.No.2035 of 2001. 
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4. The short facts leading to the filing of this appeal are as under :· 
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1082 
SUPREME COURT REPORTS 
(2007] 1 S.C.R 
The appellant made an agreementNo.58 F-2of1980-81 with respondent 
No.2 acted on behalf of respondent No. I for the construction of 'C' type 
six blocks quarters at Sherpur Colony Gandak Project Muzaffarpur for the 
total consideration of an amount of Rs.19,02,428.21. Since there is dispute 
between the parties, the appellant had to resort to the court of Subordinate 
Judge, Muzaffarpur to invoke the arbitration clause of the aforesaid agreement. 
The 1st Subordinate Judge vide its order dt. 02.04.1988 in Misc. Case N
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