STATE OF RAJASTHAN versus R.S. SHARMA & CO.

Citation: [1988] SUPP. 2 S.C.R. 441 · Decided: 16-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Disposed off

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Judgment (excerpt)

STATE OF RAJASTHAN 
v. 
R.S. SHARMA & CO. 
AUGUST 16, 1988 
[SABYASACHI MUKHARJl ANDS. RANGANATHAN, JJ.] 
Arbitration Act, 1940: Sections 14, 
17, 30 and 33-Award-
Setting aside of by Court-Error apparent on face of award-Award not 
invalid where by process of inference and argument it may be demon-
strated that the arbitrator had committed mistake in arriving at some 
conclusion. 
A dispute over the completion of construction work under a con-
tract led to the litigation between the appellant and the respondent-
company. However, during the pendency of the proceedings in the High 
Court, the parties agreed to settle the dispute through arbitration. 
The Arbitrators gave their award in favour of the respondent-
company on the ground that the appellant had committed breach of 
contract and was also guilty of wrongful revocation of the agreement. 
The award did not contain any reason as to why and how the 
Arbitrators had arrived at the sum awarded. 
The appellant filed objection to the respondent's application for 
making the award Rule of the Court_ on the ground inter alia that (i) no 
reasons had been given for the award, (ii) the award being ambiguous 
showed non-application of mind, and (iii) the amount of interest 
awarded was unjustified. The learned District Judge allowed the objec-
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tion and set aside the award on the ground of ambiguity and non-
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statement of reasons. The High Court, however, allowed the respon-
dent's appeal and also directed payment of interest for the period dur-
ing which the arbitration proceedings were pending. 
Before this Court it was urged that, because the question whether 
on the ground of absence of reasons the award is bad per se is pending 
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consideration by a Constitution Bench of this Court, the present case 
should await adjudication on this point by. the Constitution Bench. 
Disposing of the appeal, it was, 
HELD: (1) One of the cardinal principles of the administration of 
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441 
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B 
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442 
SUPREME COURT REPORTS 
[1988] Supp. 2 S.C.R. 
justice is to ensure quick disposal of disputes in accordance with law, 
justice and equity. Justice between the parties in a particular case 
should not be in suspended animation. [44SB-C, G] 
(2) Interests of justice and administration of justice would not be 
served by keeping at bay final adjudication of the controversy in this 
case on the plea that the question whether an unreasoned award is bad 
or not, is pending adjudication by a larger Bench. [44SE·Fl 
(3) It is not known whether the decision of this Court would have 
prospective application only in view of the long settled position of law on 
this aspect in this country or not. [44SG] 
(4) The law as it stands today is clear that unless there is an error 
of law apparent on the face of the award, the award cannot be chal-
lenged merely on the ground of absence of reasons. This is settled law 
by a long series of decisions. [44SE] 
(5) An award is.not invalid merely because by a process of infe-
rence and argument it may be demonstrated that the arbitrator had 
committed some mistake in arriving at some conclusion. [446B] 
(6) It is not open to the Court to speculate, where no reasons are 
given by the arbitrator, as to what impelled the arbitrator.to arrive at 
his conclusions. [446C] 
Jivarajbhai Ujamshi Sheth v. Chintamanrao Balaji & Ors., [1964] 
S SCR 480, referred to. 
(7) It is an error of law apparent on the face of it and not a 
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mistake of fact which could be the ground for challenging the award. (446F] 
Union of India v. Bungo Steel Furniture P. Ltd., I 1967] I SCR 
324 and Allen Berry & Co. P. Ltd. v. Union of India, I 1971 I 3 SCR 282, 
referred to. 
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8. In the present case the arbitrator gave no reasons for the 
award. There is no legal proposition which is the basis of the award. far 
less any legal proposition which is erroneous. And there is no allegation 
of any misconduct in the proceedings. [446E-F] 
(9) The award of interest pendente lite in this case was in violation 
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of the principles enunciated by this Court.· [447B] 
STATE OF RAJASTHAN v. R.S. SHARMA [MUKHARJI,. J.} 
443 
Executive Engineer (Irrigation) Balimela v. Abhaduta Jena, 
i 1988] 1sec418. followed. 
Food Corporation of India v. M/s. Surendra Devendra & 
Mohendra Transport Co., [1988] l SCC 547, explained. 
A 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3054 
B 
of i988. 
From the Judgment and Order dated 16.3.1988 of the Rajasthan 
High Court in S.B. Civil Misc

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