UPPER GANGES VALLEY ELECTRICITY SUPPLY COMPANY LTD. versus U.P. ELECTRICITY BOARD

Citation: [1973] 3 S.C.R. 107 · Decided: 19-12-1972 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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107 
UPPER GANGES VALLEY ELECTRICITY SUPPLY 
COMP~ LTD.-
v. 
U.P. ELECTRICTIY BOARD' 
December 19, 1972 
[H. R. KHANNA, Y. V. CHANDRACHUD AND C. A. V AIDIALINGAM, 
JJ.] 
ArbitrationAc~ (10 of 1940), s. 30-:-Speaking award-Error apparent 
on its face with respect to a · severable Item-If entire award should be set 
aside-Court, . if may amend award instead of remitting it. 
_. 
The respondent took over the appellant's Undertaldog, in May 1959, 
but as the parties were at varia;nce on the true market value to be paid 
to the appellant, the matter was referred to . arbitration. As the arbitra· 
tors were unable to agree on ·the question V{hether the appellant was. 
· entitled to compensation for the 'service lines' which were laid with the 
help of contributions made by consumers, they referred the question te> 
the umP,ire. The umpire framed an issue · and gave a finding that the 
appellant was not entitled to claim from the respondent the value of 
the portion of the service lines which were laid at the· cost of the 
consumers, for· the sole reason that they were laid at the cost of the 
consumers. 
The appellant filed an application under s. 30 of the Arbitratio.n Act, 
1940, challenging the validity of the award on the question. The lower 
court and High Cou~ held against the appellant. · 
· 
Allowing the appeal to--this Court, . 
HELD : (1) The appellant's oapplic'ation 'for .setting aside the award 
could succeed only if there was a:n error of law on the face of the 
awa'rd. The other conditions of s. 30 have no bearing on th,e case. 
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(2) The umpire had made a speaking award ru1d there was no ques-· 
tion of the construction of any document incorporated in or appe:nded 
to the award. - If it is transparent from the award that · a legal proposi· 
tion which forms its basis is erroneous, the award 
is liable to be-
set -aside. UllD] 
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Union of India v. Bugo Steel Furniture P. Ltd., [1967] (1) S.C.R~ 
324, M/S. Allen Berry and Co. P. Ltd. v. The Union of India, A.I.R~ 
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1971 S.C. 696, followed. 
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(3) The conditions of licence, the provisions of the Act namely,. 
ss. 2(f), (1) and (n), 3(f), 7(1) as it stood at the time of taking 
over, Section 8 of the Indian Electricity Act, 1910, Paragraph VI ot: 
the Schedule to the Act, and the legal position, aU point only ~ one 
direction that the appellant is entitled to receive compensation for the· 
service lines laid at the cost of the consumcrs. The umpire, however, 
in his calculations, had expressly excluded the value of the portion of 
service lines installed at the cost of cO'.J}Sumers. In making the exclusion, . 
the umpire had thtrefore mis-conducted himself ·in law rendering his. 
~ward erroneous on its face. [113G] 
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108 
SUPREME COURT REPORTS 
[1973] 3 S.C.R. 
Calcutta Electric Suppzy Corporation v. Commissioner of WeaJth-tax, 
West Bengal, 82 I. T. R. 154 .referred to. 
( 4) The. reference to . the arbitrations in the present case was on the 
broad questt~.n ~f the fa1r market v~lue of ~e appellant's undertaking, 
and the parhes d1d not refer any specific question of law for the dec'isipn 
of the arbitrators. Therefore, the decision in DurgG Prasad Chamria and 
A.nr. v. Sewkishendas Bhatter, A.I.R. 1949 P.C. 334 bas no application. 
{11SB] 
(5) The part of the award, which is invalid, being severable from 
that which is valid, there is no justification fur setting aside the entire 
award. [115D] 
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( 6) This Court should itself amend the award instead of remitting 
1~ in the interests of justice and to avoid undue delay in a dispute pendia& 
since 1959. [115BJ 
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(7) The consumers' contribution for laying the service li:ne were 
made from April 1, 1958 to March 31, 1959. The taking over of the 
undertaking by the respondent being in May 1959, t~ consumers' con· 
tribution would roughly represent the market value of the service lines, 
eve!f) if, as required by the . first proviso to s. 7 ( 1) as it then stood, due 
regard was to be had to the nature and condition of the 'works', to 
the circumstance that they are in such a position as to be ready for 
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immediate working, and to their suitability for the purposes of the under-
taking. Therefore, the sum representing the 
consumers' 
contributions 
should be taken into account in arriving at the price to be paid to the 
appellant. 
[1150] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1314 of 
1967. 
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Appeal by special leave from the judgmen

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