STATE OF ORISSA versus ORIENT PAPER AND INDUSTRIES LTD.

Citation: [1999] 2 S.C.R. 568 · Decided: 09-04-1999 · Supreme Court of India · Bench: D.P. WADHWA · Disposal: Dismissed

Judgment (excerpt)

A 
STATE OF ORISSA 
v. 
ORIENT PAPER AND INDUSTRIES LTD. 
APRIL 9, 1999 
B 
[D.P. WADHWA AND N. SANTOSH HEGDE, JJ.] 
Arbitration Act, 1940-S. 30-Dispute-Arbitration-Award-Arbitrator 
not d2ciding the dispute referred to him-High Court setting aside the award 
and remitting the matter back to the Arbitrator for redefermination-Validity 
C of-Held, High Court justified in setting aside the award and remitting it 
back for redetermination. 
Co~stitution of India, 1950-Article 136-Arbitration-Award-
Arbitrator not deciding the dispute referred-High Court setting aside the 
award and remitting it for redetermination-Appeal by State Government-
!). Necessity of-Held, in the circumstances of the case, it was not necessary for 
the State Government to have challenged the order of High Court causing 
unnecessary expense and delay in deciding the dispute-State can not act 
like a private litigant challenging each and every order-Arbitration Act, 
1940-S.16. 
E 
·p 
Disputes arose between the parties regarding exclusive right and licence 
to fell, cut and remove bamboos. The disputes were referred to an Arbitrator 
for determining (1) whether the decision of the Chief Conservator of Forests 
that 2300 metres or 7475 running feet of sail bamboos and 600 metres or 
1950 running feet of Daba bamboos would make a tonne in weight; (2) 
whether this calculation is scientific; (3) whether the calculation will apply 
in all cases, to take effect from 1.10.1973. Arbitrator passed an award 
holding that the Chief Conservator had determined under clause 10 of the 
Agreement that 2300 metres or 7475 running feet ofSalia bamboos and 600 
metres or 1950 running feet ofDaba bamboo respectively make a tonne and 
G the same was held to be final and binding on both the parties. The said award 
was made rule of the Court. On appeal, High Court holding that the Arbitrator 
had not decided the disputes referred to him for arbitration, set aside the 
award and remitted the matter back to the Arbitrator for redetermination. 
Hence the present appeal. 
H 
On behalf of the appellant-State it was contended that a perusal of the 
568 
STATE v. ORIENT PAPER AND INDUSTRIES LTD. 
569 
award shows that the Arbitrator had in fact concurred with the decision A 
taken by the Chief Conservator of Forests in regard to the methodology to 
be adopted for determining the quantity of bamboos cut and removed. Since 
the Arbitrator was agreeing with the methodology adopted by the Chief 
Conservator of Forests, the question of giving reasons in a non-speaking 
award does not arise. 
On behalf of the respondent-company it was contended that Arbitrator 
B 
had not at all decided the various points that arose in the first dispute 
referred to him and therefore, there was non-application of mind by the 
Arbitrator and consequently the dispute referred to the Arbitrator remained 
unanswered and to the High Court w'1sjustified in remitting the matter back C 
to the Arbitrator. 
Dismissing the appeal, this Court 
HELD : PER N. SANTOSH HEGDE, J. 
1.1. High Court was justified in setting aside the award and remitting D 
it back to the Arbitrator for redetermination. [573-A] 
1.2. The award of the Arbitrator in regard to the first dispute referred 
to him merely says that the Chief Conservator had determined under Clause 
IO of the Agreement that 2300 metres or 7475 running feet ofSalia bamboos 
and 600 metres or 1950 running feet ofDaba bamboo respectively make a E 
tonne and the same is held to be final and binding on both the parties. He 
did not even advert to the other points. The High Court was right in coming 
to the conclusion that the Arbitrator did not decide the question whether the 
method adopted by the Chief Conservator of Forests was scientific or not He 
also did not determine whether this methodology could be made applicable F 
to all cases w.e.f. 1.10.1973. By merely agreeing with the decision of the 
Chief Conservator of Forests, the Arbitrator has not addressed himself to 
other points arising in first dispute and has not answered those points. 
(572-G-H) 
PER D.P. Wadhwa (Supplementing) 
G 
It was not necessary that the State Government should have challenged 
the order of the High Court in the circumstances of the case causing 
unnecessary expense to the parties and the time this Court had to spend in 
hearing the appeal. Had the State Government abide by the order of the High 
Court the matter before the Arbitrator would have been completed years ago. H 
57

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