UP STATE ELECTRICITY BOARD versus SEARSOLE CHEMICALS LTD.

Citation: [2001] 2 S.C.R. 13 · Decided: 21-02-2001 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed
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Judgment (excerpt)

U.P. STATE ELECTRICITY BOARD 
A 
v. 
1 
SEARSOLE CHEMICALS LTD. 
FEBRUARY 21, 2001 
[S. RAJENDRA BABU AND S.N. PHUKAN, JJ.] 
B 
Arbitration Act 1940 : Section 30. 
""' 
Award-Appeal against-Interference with-Supply of electricity-In-
.. 
terruption of power supply-ArbitraJor, on the basis of material placed by the c 
parties, made an award in favour of the industrial consumer and granted refund 
and also compensation for loss on account of interruption of power supply-
Award made mle of cour1 and decree passed-High Court upheld decree-
Correctness of-Held: When arbitraJor has applied his mind to the pleadings, 
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the evidence adduced before him and the terms of contract, there is no scope 
of re-appraisal of the malt er-When two views are possible the view taken by 
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the arbitrator prevails-Hence, no interference called for. 
The appellant and the respondent entered into an agreement for 
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supply of electrical energy. Disputes arose between the appellant and the 
respondent and the matter was referred to arbitration. The arbitrators, on 
the basis of material produced by the parties, made an award in favour of 
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..... 
the respondent and granted refund and also compensation for loss on 
account of interruption in the power supply. The award was made a rule of 
the court and a decree in terms of the award was passed, which was upheld 
by the High Court. Hence this appeal. 
Dismissing the appeal, the Court 
F 
HELD : 1. The view taken by the arbitrators cannot be characterised 
as not emanating from the agreement. When the arbitrators have applied 
their minds to the pleadings, the evidence adduced before them and the 
terms of the contract, it is not within the seope of this Court to re-appraise 
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the matter as if this were an appeal, and it is clear that where two views are 
possible, the view taken by the arbitrators would prevail.[16-C-D] 
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2. The High Court is justified in having dismissed the appeal r.Ied by 
the appellant, and there is no justification for this Court to interfere with 
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the award, which was made decree of the civil court and in appeal affirmed 
13 
14 
SUPREME COURT REPORTS 
[2001] 2 S.C.R. 
A 
by the High Court. [17-G] 
B 
c 
D 
E 
F 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10014of 1995. 
From the Judgment and Order dated 1.3.95 of \he Allahabad High Court 
in F.A.F.0. No. 448 of 1993. 
Ranjit Kumar, Pradeep Misra and T. Mahipal for the Appellant. 
P.B. Menon, Rohit Choudhary and Ms. B. Vijay Lakshmi Menon for the 
Respondent. 
The Judgment of the Court was delivered by 
RAJENDRA BABU, J. An agreement was entered into between the 
appellant and the respondent for supply of electrical energy and by virtue of 
clause I of the agreement, the supply of electrical energy shall be "in form 
of a three-phase alternating current at a pressure of approximately 400 Volts 
between phases, a frequency of approximately 80 cycles per second and a 
power not exceeding 744.12 KVA and the supply shall be available continu-
ously during the 24 hours of each day and throughout the whole period of this 
agreement, provided always that the supplier shall not be responsible for 
damages or otherwise on account of accidental interruption of supply or 
stoppage or deficiency of energy caused by any order or direction issued by 
the Government of Uttar Pradesh or resulting from fire, flood, tempest or any 
accident or from any strike or lock out of workman or from any other cause 
beyond the control of the supplier, but the supplier shall make every effort 
·to restore the supply as soon as possible". On the ground that disputes arose 
between the appellant and the respondent, the matter was referred to the 
arbitration as provided in the agreement. The respondent in the claim state-
ment made various claims for refund of the amounts paid under various bills 
and for various losses suffered on account of various acts of commission and 
omission of the appellant, details of which are set out therein. By their written 
statement the appellant refuted the various claims of the respondent. 
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On April 6, 1990 the arbitrators made an award for a sum of Rs. 
1,74,338.98 by way of refund, while in regard to losses suffered on account 
of interruption in the power supply as a result of the negligence and acts of 
omission and commission by the appellant a sum of Rs. 24,00,000 was 
awarded with interest at 12% with effect from 12.11.1986 up to the date of the 
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award and interest @· 6% per annum f
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