LexNEELAKANTAN & BROS. CONSTRUCTION versus SUPERINTENDING ENGINEER, NATIONAL HIGHWAYS, SALEM & ORS.
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A B D E F G NEELAKANTAN & BROS. CONSTRUCTION v. SUPERINTENDING ENGINEER, NATIONAL HIGHWAYS, SALEM & ORS. AUGUST 16, 1988 [SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] Arbitration Act, 1940: Sections 2, 20, 30 and 33-Arbitration- Statements of parties filed-Evidence adduced-Change of Arbitrator -Parties did not protest and participate in proceedings before succes- sor-Whether amounts to acquiescence-Appointment of successor- Whether can be challenged as invalidating proceedings-Award- Unreasoned-No legal proposition made-Whether can be interfered with. The petitioner-Construction lirm entered into agreements with respondent No. 3, Superintending Engineer of a Circle for execution of certain civil works. Respondent No. I-Superintending Engineer of another Circle entered into a reference for arbitration and parties liled statements and adduced evidence. Before the adjudication was com- pleted, respondent No. 1 was transferred and his successor-in-office entered into the task of adjudication with the knowledge, consent and active participation of the petitioner in the proceeding. Since the arbitrator could not complete the award within time, be sought exten· sion of time by a letter to the petitioner and the petitioner agreed to such extension by a letter. The petitioner did not ask for any further or fresh opportunity for adducing any evidence. Thereafter, the arbitrator made his award. The petitioner challenged the award under ss. 30 and 33 of the Arbitration Act, 1940 before the District Judge on the ground that the previous arbitrat11r having entered into reference, his successor-in- oflice had no jurisdiction to conclude it and the award was violative of principles of natural justice. The District Judge held that the successor-in-office to the origill1"'' arbitrator was competent to pass the award. Upholding this, the High Court rejected the challenge to the award. Hence the petitioner liled the Special L~ave Petition in this Court contending that once an arbitrator bad entered into a reference, the next incumbent could not conclude the H said arbitration proceedings without a fresh agreement, that there was 462 NEELAKANTAN v. SUPT1JG ENGINEER 463 violation of principles of natural justice and that the award was bad. A Dismissing the Special Leave Petition, HELD: I. If the parties to the reference either agree before-hand to the method of appointment, or afterwards acquiesce in the ap- pointment ·made, with full knowledge of all the circumstances, they B will be precluded from objecting to such_ appointment as invalidating subsequent proceedings. Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquies- cence. [465G] · N. Challappan v. Secretary, Kera/a State Electricity Board and C 1 another, [1975] 1 S.C.C. 289 relied on. Chowdhury Murtaza Hossein v. Mussumat Bibi Bechunnissa, 3 I.A. 209 and Prasun Roy v. The Calcutta Metropolitan Development Authority and another, [1982] 2 Scale 125, referred to. Russell on Arbitration, 18th Edition/20th Edition, pages 105/432- 435, referred to. In the instant case, the petitioner had full knowledge of the change of the iitcumbent and did not protest and proceedings went on before - . the new incumbent. Thus, the petitioner had knowledge of the alleged defect, and had acquiesced in the proceedings before the successor. There was; therefore, no violation of principles of natural justice. [465C, Fl 2. Unless there was a patent mistake of law and gross misstate- ment of facts resulting in miscarriage of justice or of equity, the award remalris unassaila6fo. [466C] · Champsey Bhara & Company v. Jivrai Ballo Spinning and Weaving Company Ltd., 50 I.A. 324 and Firm Madan/al Roshanlal Mahajan v. Hukumchand Mills Ltd., Indore, [1967] I S.C.R. 105, referred to. In the instant case, the arbitrator gave no reason for tlie award. There is no legal proposition which is the basis of the award, far less any legal proposition which is erroneous. There is no appeal from the ver- dict of the arbitrator. The Court cannot review, in such circumstances, the award and correct any mistake in the adjudication by the arbi- D E F G trator. [466D] H / A B c 464 SUPREME COURT REPORTS [1988] Supp. 2 S.C.R. 3. In the facts and circumstances of the case, the award is unas- sailable. The High Court was right in upholding the District Judge's dismissal of the challenge to
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