LexSTATE OF ANDHRA PRADESH & ANR. ETC. versus R.V. RAYANIM ETC. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
STATE OF ANDHRA PRADESH & ANR. ETC.
v.
R.V. RAYANIM ETC. ETC.
JANUARY 15, 1990.
B
[SABYASACHI MUKHARJI, CJ., M.M. PUNCHHI AND
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F
G
H
K. JAYACHANDRA REDDY, JJ.]
Arbitration Act, 1940: Sections 14, 17, 30 and 33-Award-
Challenge of-Error apparent on face of record-Arbitrator exceeded
jurisdiction-Only in speaking award Court can look into reasons.
The respondent-contractor had entered into an agreement with
the petitioner for formation of an earth dam. Disputes and difference
arose between the parties. A reforence was made to the arbitrator
wherein the respondent made elev1m claims out of which one claim was
later withdrawn. The arbitrator gave a non-speaking award in favour
of the respondent amounting to a consolidated sum of Rs.19 .39 lakhs.
The respondent filed a prom!ding before the Court to make the
award rule of the Court. The petitioner preferred an application for
setting aside the award which was dismissed. The High Court dismissed
the appeal and the revision of the petitioner.
Before this Court it was contended inter alia that the award
purported to grant damages on the basis of escalation of cost and prices,
and such escalation was not a metier within the domain of the bargain
between the parties. It was also· contended that the fact that the
arbitrator had taken into considerE1tlon the question of escalation would
make the award bad because it was not discernible whether he had
awarded any amount on account of excalation.
Dismissing the special leave petition, this Court,
HELD: (1) In matters of ch:allenglng an award, there are often
two distinct and different grounds. One Is an error apparent on the face
of the record and the other is that the arbitrator has exceeded his
jurisdiction. In the latter case the Court can look into the arbitration
agreement but under the former It caunot, unless the agreement was
Incorporated or recited in the award. [SBA-Bl
M/s Sudarshan Trading Co. v. Government of Kera/a & Anr.,
[1989] 2 sec 38, referred to.
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STATE OF A.P. v. R.V. RAYANIM [MUKHARJI, CJ.[
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(2) Only in a speaking awar.d the court can look into the reason-
ing of the award. It is not open to the court to probe the mental process
of the arbitrator and speculate, where no reasons are given by the
arbitrator, as to what impelled the arbitrator to arrive at his con-
clusion. [SSD I
A
(3) It is not discernible on the face of the record that the
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arbitrator has exceeded his jurisdiction in awarding damages on
account of escalation. All that the award states is that he has considered
the claim on the basis of escalation. Such a consideration does not make
the award, on the {ace of it, bad on the ground of error apparent on the
face of the record. [SSG-H; 59A-B]
( 4) The Arbitrator does not state that he has awarded any amount
on that account. There is neither any error apparent on the face of the
record, nor any material to satis!Y that the arbitrator has exceeded his
jurisdiction in awarding the amount as he did. [59B-C]
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CIVIL APPELLATE JURISDICTION: Special Leave Petition
D
(Civil) No. 8094 of 1988.
From the Judgment and Order dated 16.3.88 of the Andltra
Pradesh High Court in (A.A.O.) No. 1152/86 & C.R.P. No. 2728 of
1986.
C. Sitaramiah and G. Prabhakar for the Petitioners.
R.F. Nariman, K: Prabhakar and R.N. Kishwani for the
Respondent.
E
The Judgment of the Court was delivered by
. F
SABYAS~CHI MUKHARJI,
CJ. The
respondent
R.V.
Rayanim was, at all material times, a Class I contractor who had
entered into an agreement with the Government of Andhra Pradesh
for formation of earth dam in gorge portion from chainage 3360 to
3380-M of Raiwada Reservoir Project near Devarapalli village,
G
Chodavaram Taluk, Distt. Visakhapatnam, Andhra Pradesh. Disputes
and differences arose between the parties in respect of the aforesaid
agreement. A reference was made to the arbitrator as per the
arbitrator clause in the agreement between the parties. The respon-
dent made eleven claims claiming various amounts, particulars
whereof have been set out by the arbitrator as follows.
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SUPREME COURT REPORTS
[1990] 1 S.C.R.
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"I. Payment for forming cross
(Rs. in lakhs) 15.89
bund and refund of the
(subsequently reduced
amount recovered.
to Rs.14.89 lakhs)
IL
Refund of Seigniorage
2.071 (withdrawn)
Charges
III. Escalation and damages
14.00
B
IV. Extra load for sand
1.075 (subseExcerpt shown. Read the full judgment & AI analysis in Lexace.