Skip to content


U.P. State Electricity Board Vs. Vijai Pictures - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 7 of 1973
Judge
Reported inAIR1981All34
ActsArbitration Act, 1940 - Sections 30
AppellantU.P. State Electricity Board
RespondentVijai Pictures
Appellant AdvocateM.P. Gupta, Adv.
Respondent AdvocateS.R. Misra, Adv.
DispositionAppeal dismissed
Excerpt:
.....claim allowed for shorter period - giving specification of each item not essential for validity of award - arbitrator not bound to base an award on each point - appeal against award not entertained. - - gupta, learned counsel for the appellant has strenuously urged that 'the arbitrator had grossly mis-conducted himself, inasmuch as he had fail-ed to decide the real point of dispute between the parties referred to him, that the award was perverse and liable to be set aside. in fact, to make an award cryptic is the best way to place it beyond cavil and expansiveness on the part of an arbitrator is prone to make him more vulnerable. the rule thus is that as the parties choose their own arbitrator to be the judge in the dispute between them, they cannot, when the award is good on the face..........his main ground of attack was that the award allowed merely a lump sum in full satisfaction of the claim preferred by the board which was plainly illegal. he submitted that it was in cumbent on the arbitrator to deal with every item of the claim separately, to specify the period for which the claim was being allowed or disallowed, to mention the rate at which the claim was being accepted and that in any case the arbitrator travelled beyond the scope of the reference in allowing the claim for a shorter period than the one stipulated in the claim as set out in the reference. we are unable to accede to any of these submissions. the learned counsel has virtually invited us to enter into the mental processes of the arbitrator against which courts have repeatedly warned. sri gupta's.....
Judgment:

M.N. Shukla, J.

1. This appeal is directed against the judgment and order dated 29th September, 1972 of the learned Civil and Sessions Judge, Gorakhpur, dismissing the objection, of the appellant under Section 30 of the Arbitration Act for setting aside the award and. further making the award a rule of the Court.

2. Shorn of details, the facts are that under a written agreement dated 20-11-1955 the objector was supplying electric energy to the respondent (consumer). According to the U. P. State Electricity Board (objector) (hereinafter referred to as the Board) the consumer besides having domestic power meter was also consuming electric energy for light and fan though he did not keep a separate meter for the latter purpose. It is alleged that the respondent wrongfully utilised the domestic power meter fox purposes of light and fan during the period 15-11-1962 to 17-9-1965 for which the rate was higher and on that account the respondent was liable to pay a sum of Rs. 24,692.48 p. The agreement contained an arbitration clause to refer the dispute to the Electrical Inspector to the Government of Uttar Pradesh, Lucknow. The respondent denied the allegation that he had consumed domestic power for the purposes of light and fan and further stated that the mode of assessment adopted by the Board was completely wrong. The Arbitrator made the award on 25th January, 1971. The crucial part of the award was contained in the following recital in Paragraph. 1 thereof :--

'That the opposite party (S/S Vijai Picture Place, Gorakhpur) shall pay, to the applicant (The Executive Engineer, Hydel Distribution Division Gorakhpur) a sum of Rs. 1403.60 p. (Rupees one thousand four hundred three and paise sixty only) in full and final settlement of the claim as preferred by the applicant and refuted by the opposite party in respect of the period under dispute i. e. 15-11-1962 to 18-9-1967 and shall be entitled to a rebate of Rs. 235.80 (Rupees two hundred thirty five and paise eighty only) if the payment is made within fifteen days of the receipt of this award.'

3. Sri H.P. Gupta, learned counsel for the appellant has strenuously urged that 'the Arbitrator had grossly mis-conducted himself, inasmuch as he had fail-ed to decide the real point of dispute between the parties referred to him, that the award was perverse and liable to be set aside. His main ground of attack was that the award allowed merely a lump sum in full satisfaction of the claim preferred by the Board which was plainly illegal. He submitted that it was in cumbent on the Arbitrator to deal with every item of the claim separately, to specify the period for which the claim was being allowed or disallowed, to mention the rate at which the claim was being accepted and that in any case the Arbitrator travelled beyond the scope of the reference in allowing the claim for a shorter period than the one stipulated in the claim as set out in the reference. We are unable to accede to any of these submissions. The learned counsel has virtually invited us to enter into the mental processes of the Arbitrator against which courts have repeatedly warned. Sri Gupta's contention, if accepted, would necessitate a detailed and comprehensive award, setting out every step of the reasoning to justify the ultimate conclusion. This is precisely what has been disapproved by a catena of decisions of the Supreme Court. In the older decisions courts were apt to place an arbitrator's award more or less at par with a decision of a regular court but lately the judicial trend has been to give a wide latitude to an arbitrator as he symbolises an entity to whose verdict the parties have agreed to submit themselves voluntarily. It follows that 1he technicalities and strict or rigid compliance of rules and provisions of law which is imperative for judicial authorities do not embrace within their sweep proceedings before an arbitrator. They need not be conducted with such meticulous care as is required in ordinary Civil Courts so long as there is substantial compliance with the principles of natural justice. In fact, to make an award cryptic is the best way to place it beyond cavil and expansiveness on the part of an arbitrator is prone to make him more vulnerable. It will be in conformity with the present tenor of the case law to lay down that if an arbitrator's award is explainable by a reasonable hypothesis, it is not, open to the courts to probe into the reasons of fact or law on which it could ultimately rest An award may fee set aside by the court en the ground of an error which is apparent on the face of the award, but anaward is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion. It would be pertinent to refer to the following dictum of the Privy Council in Champsey Bhara and Co. v. Jivrai Bulloo Spinning and Weaving Co. Ltd., AIR 1923 PC 66 at p. 69 :--'An error in law on the face of the award means, in their Lordships' view, that you can find in the award or a document actually incorporated thereto, as for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous. It does not mean that if in a narrative a reference is made to a contention of one party, that opens the door to seeing first what that contention is, and then going to the contract on which the parties' rights depend to see if that contention is sound.'

4. The above rule was quoted with approval in Jivarajbhai v. Chintamanrao : [1964]5SCR480 and Shah, J. observed at page 230 :--

'The court in dealing with an application to set aside an award has not to consider whether the view of the arbitrator on the evidence is justified. The arbitrator's adjudication is generally considered binding between the parties, for the is a tribunal selected by the parties and the power of the Court to set aside the award is restricted to cases set out in Section 30. 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 conclusion. On the assumption that the arbitrator must have arrived at his conclusion by a certain process of reasoning, the Court cannot proceed to determine whether the conclusion is right or wrong. It is not open to the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of his award.'

It is manifest that an award can with impunity be sketchy and so long as it does not omit to decide the vital point referred to arbitration it will not be vitiated. It is in conformity with law that an arbitrator may commit a factual or legal error in either wrongly evaluating evidence or applying a provision of law, but if he either on account of ingenuityor ignorance does not choose to embody any such error or enunciate any such pronouncement expressly in the award, it cannot be set aside. This position was summed up by the Supreme Court in Alien Berry & Co. v. Union of India : [1971]3SCR282 , in paragraph 9 of the reports in these words:

'The rule thus is that as the parties choose their own arbitrator to be the judge in the dispute between them, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts. Therefore, even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him but such mistake does not appear on the face of the award or in a document appended to or incorporated init so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake.

5. Therefore, Sri Gupta is not justified in asking us to dissect the award in the manner of a finicky grammarian. Sri S.R. Misra, learned counsel for the respondent submitted that the award was far from being incomprehensible or enigmatic as suggested by the learned counsel for the appellant. Sri Misra's argument was that the lump sum awarded by the arbitrator would be consistent with the view that even though the charge of having used domestic power for purnoses of light and fan stood established yet the alleged user was not spread over the entire period claimed in the reference. This position is perfectly reconcilable with the award. No doubt, the award in the passage quoted in the earlier part of the judgment refers to the dispute in respect of the period i. e. 15-11-1962 to 18-9-1967 but from this it cannot be inferred that the amount awarded by the arbitator covers this entire period. It may be for a lesser period on the view that the domestic power had been used by the consumer for purposes of light and fan for a shorter period than the one mentioned above.

6. It is also now well settled that an award is unassailable if on an overall consideration of the whole dispute and the material before him the arbitrator arrives at a lump sum and fixes the liability of one party to another at that amount. An itemwise finding on each of the claims is not an essential requirement of a valid award. In Firm Madanlal Roshanlal Mahaian v. HukumchandMills Ltd. : [1967]1SCR105 the dispute between the parties concerned two distinct items of bales but the arbitrator passed only a lump sum award for a certain amount in respect of both items of the claims and it was ruled:--'The arbitrator could give a lump sum award. He was not bound to give a separate award for each claim. His award on both fact and law is final. There is no appeal from his verdict. The Court cannot review his award and correct anv mistake in his adjudication, unless on objection 1o the legality of the award is apparent on the face of it.'

To the same effect are the observations of the Supreme Court in the Union of India v. Jai Narain Misra, AIR 1970 SC 753. paragranh (5 :--

'The arbitrator is not bound to give an award on each point. He can make his award on the whole case, see Ghulam Khan v. Mohammad Hassan, (1901) ILR 39 Cal 167 at p. 186 (PC), An arbitrator may award one sum generally in respect of all money claims, submitted to him, unless the submission requires him to award separately on some one or more of them, see Whitworth v. Hulse, (186(5) LR 1 Exch 251. The arbitrator can lawfully make an award of a sum admitted to be due and a lump sum in respect of the remaining claim. As the final award in favour of the respondent professes 1o be made of and concerning all the matters referred to him, it must be presumed that in making it the arbitrator had taken into consideration all the claims and counter-claims, see Harrison v. Creswick, (185.3) 13 CB 399, Jewell v. Christie, (18(57) LR 2 CP 296'.

7. Thus, we are unable to accept the contention that the award in the present case is either vague or the result of non-application of mind or that it travelled beyond the scope of reference or that it failed to decide the real dispute between the parties which was referred to arbitration. We hold that the award was final and complete determination of the entire dispute actually referred; it does not suffer from any apparent error. The arbitrator did not misconduct himself nor did he violate the principles of natural justice.

8. In the result, we dismiss this appeal with costs and uphold the award. After we had dictated the judgment, Sri H.P. Gupta, learned counsel for the appellant orally asked for a certificate tothe effect that the present case was a fit one for filing an appeal to the Supreme Court. In our judgment we have referred to several decisions of the Supreme Court which fully cover the point at issue. We are not satisfied that the present case involves a substantial question of law of general importance which needs to be decided by the Supreme Court as contemplated by Article 133(1) of the Constitution. We accordingly reject the prayer for grant of a ertificate.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //