M/S ISPAT ENGINEERING AND FOUNDRY WORKS, B.S. CITY, BOKARO versus M/S STEEL AUTHORITY OF INDIA LTD. B.S. CITY, BOKARO

Citation: [2001] 3 S.C.R. 1190 · Decided: 25-07-2001 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

A 
MIS ISPAT ENGINEERING AND FOUNDRY 
WORKS, B.S. CITY, BOKARO 
r 
v. 
MIS STEEL AUTHORITY OF INDIA LTD. B.S. CITY, BOKARO 
B 
JULY 25, 2001 
[G.B. PATTANAIK AND UMESH C. BANERJEE, JJ.] 
Arbitration: 
c 
Arbitration Act, 1940-Sections 30 and 33-Non-speaking award by 
,-
Umpire-Award set aside by High Court as the Umpire has exceeded his 
jurisdiction-Jnte1fere11ce with the award-Validity of-Held, on facts, invalid 
as there is no evidence that the Umpire has exceeded his jurisdiction. 
D 
Appellant and respondent referred certain disputes to two artibtrators 
for arbitration. Due to disagreement between the arbitrators, the disputes 
were referred to an Umpire. The Umpire gave a non-speaking award and 
directed the respondent to pay Rs. 2,44,000 to the appellant. The award was 
made a rule of Court by Trial Court. The High Court, in appeal, set aside 
the award being invalid under Section 30(c) of the Act. 
E 
The appellant contended that the High Court, in an appeal has no 
jurisdiction to interfere with and .set aside the award except for the grounds 
stated under Section 30 of the Act. 
The respondents contended that the award should be set aside on the 
F ground that the Umpire had exceeded his jurisdiction in terms of the 
agreement for arbitration. 
Allowing the appeal, the Court 
HELD: The award of the Arbitrator is ordinarily final and conclusive 
G unless a contra intention is disclosed in the agreement itself. The Arbitrator 
or Umpire, as the case may be, has no authority or jurisdiction to abdicate 
. the terms of the contract of what the parties desired under the contract and 
not beyond these. There is no evidence on record that the Umpire has 
~ 
overstepped his jurisdiction or has travelled beyond the agreement and the 
H Court ought not to have entertained the objection and set aside the award as . 
1190 
,( 
!SPAT ENGIN. AND FOUND. WORKS'" STEEL A UTHO. OF INDIA LTD. [BANERJEE, J.] 
1191 
passed by the chosen forum of the parties. The High Court thus was in A 
manifest error in entertaining the appeal and setting aside the award. The 
--( 
order passed by the High Court cannot be sustained and the law being well 
settled on the score should not have been misread and misapplied by the High 
Court. (1193-C; 1198-F; H; 1199-A-B] 
State of Andhra Pradesh & Ors. v. R.V. Rayanim & Ors., (1990] l SCC B 
433; V.G. George v. Indian Rare Earths ltd. & Anr., (1999] 3 SCC 762 and 
Associated Engineering Co. v. Government of Andhra Pradesh & Anr. (1991] 
4 sec 93, distinguished. 
Arosan Enterprises Ltd. v. Union of India, (1999] 9 SCC 449; Champsey c 
Bhara & Co. v. Jivraj Ba/loo Spg. ~ Wvg. Co. Ltd., AIR (1923) PC 66; 
(1923r_AC 480; Union of India v. Bungo Steel Furniture (P.) Ltd., AIR (1967) 
SC 1032; (1967] 1 SCR 324; N. Chellappan v. Secy., Kera/a SEB & Anr., 
(1975] 1 SCC 289; Mis Sudarsan Trading Co. v. Government of Kera/a & 
Anr., (1989] 2 SCC 38; State of Rajasthan v. Puri Construction Co. ltd. & 
Anr., (1994] 6 SCC 485; Olympus Supestructures (P) Ltd. v. Meena Vijay D 
Khetan & Ors., (1999] 5 SCC 651; Union of India v. A.l. Ralliaram, (1964] 
3 SCR 164 and Jivraj Bhai U.S. & Ors. v. Chintaman Rao Balaji & Ors., 
/" 
(1964) 5 SCR 480, referred to. 
'CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4503 of 
2001. 
E 
From the Judgment and Order dated 29.6.2000 of the Patna High Court 
in Original Order No. 85/95. 
Shashi B. Upadhyay for Ms. Kumud Lata Das, Advocates for the 
Appellant. 
F 
Prabhijit Jauhar, C.L. Valia and S.S. Jauhar for the Respondent. 
The Judgment of the Court was delivered by 
BANERJEE, J. Leave granted. 
G 
The appeal pertains to the issue of interference of Court under Section 
30 and 33 of the repealed Arbitration Act, 1940. Undisputably, in the contextual 
> 
facts, the award in question is a non-speaking award of a former Judge of the 
'·'I 
High Court at Patna who acted as an Umpire on appointment by the Court. 
The award was made a rule of court by a judgment dated 29 .4.1995 rejecting H 
1192 
SUPREME COURT REPORTS 
[2001] 3 S.C.R. 
A the petition under Sections 30 and 33 of the Act of 1940. The High Court in 
appeal however set aside the award recording therein that· the award is 
otherwise invalid in terms of clause (a) of Section 30 of the Act of 1940 and 
~ 
hence the petition for special leave to appeal to this Court. 
Section 30 of the Act of 1940 was rather restrictive in its ~peration and 
B the use of the expression "shall" in the· main body of the Section made it 

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