STEEMAN LTD. versus STATE OF HIMACHAL PRADESH

Citation: [1997] 2 S.C.R. 770 · Decided: 06-03-1997 · Supreme Court of India · Bench: A.S. ANAND · Disposal: Dismissed

Judgment (excerpt)

A 
STEEMAN LTD. 
v. 
STATE OF HIMACHAL PRADESH 
MARCH 6, 1997 
B 
(DR .. A.S. ANAND AND K. VENKATASWAMI, JJ.] 
Arbitration Act, 1940: Section 30. 
Award--Cliallenge of-Grounds-Arbitrator failed to answer question 
C of law raised before predecessor arbitrato1~From the non-speaking award it ' 
was not possible to find out whether the arbitrator had applied his mind to a 
pmt of claim-Arbitrator had not given reasonable opportunity of meeting the 
case-Interest awarded was at too low a rate of 6% whereas claim was for 
18%---Held : No such question of law framed as an issue by arbitrato~Al­
legation of Company's properties being forcibly taken possession of by 
D State-No separate claim made in the amended claim-Reasonable oppor-
tunity of meeting the case-Giving of-Proved by the detailed minutes of the 
Arbitrator drawn at the sittings hi!,ld by him-No good reason to think that 
the Arbitrator had awarded interest at 6% without taking into account the 
relevant facts and circumstances of the case-Jurisdiction of the Court to 
E inteifere with the award confined to matters enumerated in S.30. 
The applicant/petitioner was awarded the work of construction of a 
Bridge. As there was some dispute between the parties regarding the 
progress of the work and payments for the same, the petitioner submitted 
disputes/differences for adjudication by an arbitrator. However, the 
F 
respondents imposed a penalty in addition to rescinding the contract. 
Against the order rescinding the contract and imposing penalty, the 
petitioner successfully appealed to the State Government. Consequently, 
the petitioner was allowed to proceed with the work and the disputes were 
referred to an arbi\rator. The arbitrator entered upon the reference. While 
G the arbitration proceedings were going on, the respondents again res-
cinded the contract finally. 
The petitioner submitted additional claims before the arbitrator 
consequent upon the rescinding of the contract finally. The petitioner also 
raised a question of law before the arbitrator. The arbitrator referred that 
H question for opinion of the High Court under Section 13 (b) of the Arbitra-
770 
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---
•. 
STEEMAN LTD. v. STATE 
771 
tion Act, 1940. While that was pending a new arbitrator was appointed. A 
The High Court while setting aside the removal of the previous arbitrator 
did .not continue with the new arbitrator. Since, no orders were passed by 
the High Court for proceeding further with the arbitration matter, the 
petitioner filed a Transfer Petition before this Court. This Court disposed 
of the Transfer Petition by appointing an arbitrator. The said arbitrator B 
duly entered upon the reference, held as many as 10 sittings/hearings and 
drew minutes of every meeting in. detail. Based on that an award was 
passed and filed in this Court. The petitioner had filed an application 
challenging the award. 
On behalf of the petitioner it was contended that the arbitrator failed C 
to answer the question of law raised' before predecessor arbitrator, that 
since the arbitrator had made a non-speaking award it was not possible 
to find out whether he had applied his mind to a part of the claim; that 
the arbitrator had not given a reasonable opportunity of meeting the case; 
and that the interest awarded was at too low a rate as the claim was for 
18% and the award was at 6%. 
Dismissing the application, this Court 
D 
HELD : 1. By consent of both the parties, the arbitrator framed 
issues for adjudication and the question of law now being raised was not E 
one of the issues. Further the so-called question of law loses its relevance, 
after the appointment of the new arbitrator by the Court, as indeed no act 
of rescinding the contract took place after this Court appointed the 
Arbitrator. Therefore, there is no substance in the first point. [775-B] 
2. The Arbitrator as quite justified in not awarding any amount F 
under a separate head for the property of the Company forcibly taken 
possw;sion of in the light of the amended claims presented before him. 
There is thus no substance in the argument that the claim as originally 
put forward regarding company property allegedly taken possession of by 
the respondent illegally and forcibly, was not. separately considered by the G 
Arbitrator. In fact, no such separate claim was made by the petitioner in 
the amended claim. [777-E-F] 
3. The contention that the petitioner was not given a reasonable 
opportunity of meeting the case is not a

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