LexM/S GORA LAL versus UNION OF INDIA
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MIS. GORA LAL A v. UNION OF INDIA DECEMBER 18, 2003 (V.N. KHARE, CJ. AND S.H. KAPADIA, J.] B Arbitration Act, 1940-Work Contract-Arbitration clause-Refer- ence of dispute to arbitrator-Arbitrator to give finding in his award along with sum awarded on each item of dispute-Arbitrator awarding sum on each item-Award made rule of court by Single Judge of High Court- C However, set aside by Division Bench-Aggrieved party pleading that arbitrator has given findings in his award-On appeal, held: In terms of the arbitration clause words 'findings' with 'on each item of dispute' denotes 'reasons', in support of the conclusion on each item of dispute, therefore, arbitrator required to give 'reasons' in support of his finding D along with the sum awarded-As no findings recorded on each item, High Court justified in setting aside the award. Appellant and the respondent entered into a work contract and in terms of the contract dispute arising out of the contract was to be referred to an arbitrator. Arbitrator passing an award was to indicate E his findings along with the sum awarded separately on each individual item of the dispute. Dispute arose between the parties regarding final payment for the work undertaken by the appellant. Appellant filed an application seeking reference of the dispute to an arbitrator. Arbitra- tor was appointed who entered upon reference. Thereafter, he passed F an award, awarding a sum on each item which was later made rule of the Court. Aggrieved respondent filed letters patent appeal. Division Bench of High Court allowed the same. It set aside the award and directed the respondent to appoint new arbitrator to enter upon reference and pass a speaking award. Hence the present appeals. Appellant contended that the expression 'reason's is not akin to the expression 'finding'; that the expression 'finding' denotes 'conclu- sion' and not 'reason'; and that since the Arbitrator bas already given 'findings' in his award, the judgment under challenge suffers from G \ ' legal infirmity and is liable to be set aside. H 1129 1130 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A Dismissing the appeals, the Court HELD : In the instant case, the Arbitrator on each item has awarded a sum which is not a finding but merely a conclusion. Under the arbitration clause, the arbitrator was required to identify each B individual item of dispute and give his findings thereon along with the sum awarded. In this context, the word 'findings' is to be read with the expression "on each item of dispute" and if so read it is clear that the word "finding" denotes "reasons" in support of the said conclusion on each item of dispute. Therefore, applying the above test to the arbitration clause, the Arbitrator was required to give reasons in C support of his findings on the items of dispute along with the sums awarded. As no finding has been recorded on each item as required by the arbitration clause, the High Court was justified in setting aside the award. [1132-F-H; 1133-A-B] D Words and Phrases, Permanent Edition 17, West Publishing Co., E referred to. CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 4350- 4351 of 2002. From the Judgment and Order dated 8.12.99 of the Jammu and Kashmir High Court in LP.A. (C) No. 7 of 1998 and CIMA. No. 8of1998. P.P. Rao and Ashok Mathur for the Appellant. F N.N. Goswami, Ms. Rekha Pandey, Ajay Sharma, Ms. Sushma Suri G (NP) and B.V.Balram Das (NP) for the Respondent. The .Judgment of the Court was delivered by V.N. KHARE, CJ. : The appellant and the respondent herein entered into a written contract on 4.1.1982 whereby and whereunder certain work contract was awar<led to the appellant herein. The said contract stipulated that in the case of any dispute arising out of the contract, the dispute would be referred to an arbitrator. It is alleged that during the period of contract, the respondent took additional work from the appellant. It is not disputed H that the appellant completed the a!Iotted work. However, certain disputes I GORA LAL v. U.O.I. [KHARE, CJ.] ' 1131 arose as regards the final payment for the work undertaken by the appellant. A It is alleged that the appellant accepted the final bill under protest. , Subsequently, the appellant moved an application before the High Court under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as "the Act") seeking reference of dispute to an arbitrator. The B re
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