STATE OF ORISSA versus DANDASI SAHU

Citation: [1988] SUPP. 1 S.C.R. 562 · Decided: 22-07-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

A 
STATE OF ORISSA 
v .. 
DANDASI SAHU 
JULY 22, 1988 
B 
[SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.] 
Constitution of India, 1950: Article 136-Decision of larger 
bench pending on the question of unreasoned award-Plea to await that 
decision-Whether could, be allowed. 
Arbitration Act, 1940: Section 14-Unreasoned award-Not per-
C · se bad-Plea to await decision of larger bench-Whether justified. 
Sections 16 and 3{}-Whether award becomes bad merely because 
the amount awarded is quite high-Factors to be considered-Only if 
there is error apparent on the face of award, can be remitted or set 
D 
aside-Validity of award-Whether the points, upon which arbitrator 
adjudicated, covered, by .the exception clause in the contract. 
Section 29-lnterest pendente lite-Whether arbitrator. has juris-
diction to award. 
E 
The construction of the Irrigation Project was entrusted to the 
respondent. As per the contract the work commenced on 4th May, 
1973 and was actually completed on 30th December, 1975, the .. stipn-
lated date being 4th November, 1974. According to the appellant, the 
respondent. accepted the final payment and was duly paid a snm of 
Rs.23, 74,001 for the work done by him including the extra work. The 
F 
last payment was alleged to have been made to the respondent in 
September, 1976. A 'nil' bill was the last bill prepared. Thereafter, the 
. respondent raised a claim and gave notice for appointment of an 
arbitrator. One Nanda was appointed a5 the arbitrator by the Chief 
Engineer. But on an application made by the respondent, the Subordi-
nate Judge removed Nanda and appointed one Patnaik as the arbitra-
G 
tor. Again an application for removal of the arbitrator was made, but 
was dismissed. 
The Respondent filed his claims before the arbitrator. These 
claims were for the alleged extra work in respect of which the decision 
of the Superintending Engineer under clause 11 of the contract was 
H 
final and the same was excluded from the purview of the arbitration 
562 
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STATE OF ORISSA v. DANDASI SAHU 
563 
clause. The appellant initially contended that the arbitrator had no 
jurisdiction to deal with such claims but later filed a counter claim., and 
denied all the claims of the respondent. While the application for re-
moval of the arbitrator was pending, an adjournment was sought for 
from the arbitrator and it'was refused. After hearing the parties and 
considering the evidence produced, the arbitrator made a non-speaking 
and non-reasoned award for Rs.15,23,657 plus interest @ 10% in 
favour of the respondent. Objections to the award were filed in the 
Court. The Subordinate Judge upheld the objection and set aside the 
award. On appeal, the High Court set aside the judgment of the Subor-
dinate Judge aud made the award rule of the Court, aud ·directed pay-
ment offuture interest at 6%. 
In this appeal, by special leave, against the High Court judgment, 
the appellant-State submitted that the award is without any reason. It 
also suggested that since the validity of the non-reasoned award is being 
gone into by a larger Bench of this Court, that decision should be 
awaited. 
Dis1nissing the appeal, 
HELD: 1.1 The law as it stands today is that award without 
reasons is noi bad per se. Indeed, an -award can be set aside only on 
the ground of misconduct or an error of law apparent on the face of the 
A 
B 
c 
D 
·award. [567F] 
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E 
1.2 In the instant case, the plea that the award was bad being an 
unreasoned one, was neither mooted before the learned Subordinate 
Judge nor before the High Court. It was also not raised in the objection 
to the award, filed originally. It is only in the special leave petition that 
snch a plea has been raised for the first time. Arbitration is restored to 
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as a speedy method of adjudication of disputes. Stale and old adjudica-
tion should not be set at naught, or examination of that question kept at 
bay on the plea that the point is pending determination by a larger 
Bengh of this Court. Even if it is held ultimately that the unreasoned 
award per se is bad, it is not sure whether such a decision would upset 
all the awards in this country which have not been challenged so far. 
G 
Certainly, in the exercise of discretion under Article 136 of the Con-
stitution, and in view of the facts and circumstances of the present case, 
it would not be justified in allowing the party to further prolong or 
upset adjudication of old and stale dispute. l567C-E] 
2. Clause

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