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Secretary, Works Department, Govt. of Orissa and ors. Vs. Ghanashyam Sahu - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberMisc. Appeal No. 48 of 1982
Judge
Reported inAIR1982Ori166; 53(1982)CLT586
ActsArbitration Act, 1940 - Sections 8(2), 13 and 20
AppellantSecretary, Works Department, Govt. of Orissa and ors.
RespondentGhanashyam Sahu
Appellant AdvocateB. Nayak, Addl. Govt. Adv.
Respondent AdvocateDevananda Misra, ;Deepak Misra and ;A. Deo, Advs.
DispositionAppeal dismissed
Cases ReferredGanjam (Roads and Buildings) Division v. Sankar Maharana). In
Excerpt:
.....smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - 2 failed to appoint an arbitrator as per clause 23 of the agreement the respondent moved the court for appointment of an arbitrator under section 8(2) of the act......date till the date of the claim and pendente lite interest at the same rate up to the date of the award. the arbitrator left it to the court to award future interest. by his judgment dated 13-11-1981, the learned subordinate judge upheld the award and granted future interest to the respondent at 12 per cent per annum from the date of the decree till final payment.3. on going through the award i find that the arbitrator has not given any reasons for his decision. it is the settled position of law that the arbitrator is the sole judge of the facts and law involved in the case before him and his decision when not supported by reasons is not open for review by the court. the learned counsel for the appellants has submitted that after appointment of the arbitrator under section 8(2) of the.....
Judgment:

B.N. Misra, J.

1. This appeal under Section 39(1)(vi) of the Arbitration Act, 1940 (hereinafter referred to as the Act) is directed against the judgment dated 13-11-1981 passed by the learned Subordinate Judge, Bhubaneswar in O. Section No. 62 of 1981-1.

2. The respondent is a contractor. Appellant No. 3 had entrusted him with the construction work of the road to connect the capital at Bhubaneswar with the University. Appellant No. 3 and the respondent entered into an agreement --vide Agreement No. 10-F-2 of 1973-74. Disputes arose between the parties and as appellant No. 2 failed to appoint an Arbitrator as per Clause 23 of the Agreement the respondent moved the Court for appointment of an Arbitrator under Section 8(2) of the Act. The learned Subordinate Judge appointed an Arbitrator in Misc. Case No. 210 of 1979. The Arbitrator called for the statement of claims and counter-claims from the parties and finally made an award of Rupees 1,82,637.72 p. in favour of the respondent as against his claim for Rupees 3,41,735.00. This award of Rupees 1,82,637.72 p. includes the principal amount of Rs. 93,942.45 p., interest at 18 per cent per annum from the due date till the date of the claim and pendente lite interest at the same rate up to the date of the award. The Arbitrator left it to the Court to award future interest. By his judgment dated 13-11-1981, the learned Subordinate Judge upheld the award and granted future interest to the respondent at 12 per cent per annum from the date of the decree till final payment.

3. On going through the award I find that the Arbitrator has not given any reasons for his decision. It is the settled position of law that the Arbitrator is the sole Judge of the facts and law involved in the case before him and his decision when not supported by reasons is not open for review by the Court. The learned counsel for the appellants has submitted that after appointment of the Arbitrator under Section 8(2) of the Act, it was incumbent on the respondent to join the appellants in making a joint reference to the Arbitrator and in case the joint reference could not be made, to invoke the jurisdiction of the Court under Section 20 of the Act. This submission must be rejected as it is based on a complete misconception of the provisions of the Act. The jurisdiction conferred on the Court under Section 8 is quite distinct from that conferred on it under Section 20 of the Act. In AIR 1976 SC 1745 (Union of India v. Om Prakash) it was held (at p. 1748) :

'..... The Act contemplates threekinds of arbitration: (i) arbitration without intervention of a Court, dealt with in Chapter II of the Act which includes Section 3 to Section 19, (ii) arbitration with intervention of a Court where there is no suit pending, dealt with in Chapter III which consists of only one section, viz., Section 20; and (iii) arbitration in suits, which is covered by Chapter IV. It is clear from the provisions of Chapter II that after the appointment of arbitrator, the proceedings are to be outside Court and up to the stage of filing the award intervention of Court is not contemplated unless any occasion arises requiring the Court to remove the arbitrator under Section 11. An agreement to submit differences to arbitration implies an agreement to refer the differences to the arbitrator. Section 8 only empowers the Court to appoint an arbitrator where the parties do not concur in the appointment. Section 20 occurring in Chapter III contains provisions for arbitration with the intervention of a Court where there is no suit pending.....'

After extracting Section 20 of the Act, the Supreme Court further observed (at p. 1748) :

'This section (Section 20) confers power on the Court to order the agreement to be filed and, further, to make an order of reference to the arbitrator appointed by the parties, or, where the parties cannot agree upon an appointment, to an arbitrator appointed by the Court. Sub-section (1) of Section 20 makes it plain that the provisions of the section can be availed of only if no proceeding under Chap. II has been initiated. Section 8 does not contain any provision empowering the Court to make an order of reference to the arbitrator as one finds in Sub-section (4) of Section 20. Thus it seems clear that the Court in the instant cases had no jurisdiction, after appointing an arbitrator under Section 8(2), to proceed further to make an order referring the disputes to the arbitrator.'

In the present case there is no dispute at all that the Arbitrator was appointed by the Court under Section 8(2) of the Act. Therefore, as pointed out in the aforesaid decision, the provisions of Section 20 could not be availed of after a proceeding under Chapter II of the Act had been initiated.

4. Learned counsel for the appellants has further urged that the Arbitrator had no jurisdiction to award interest from the due date till the date of the claim. This point has been considered by this Court, on a number of occasions and it has been consistently held that in the absence of a specific clause in the agreement prohibiting award of interest, the Arbitrator has jurisdiction to award interest from the due date of payment till the date of the award (See (1971) 37 Cut LT 937 -- State of Orissa v. Govinda Choudhury; (1978) 45 Cut LT 443 : (AIR 1978 Orissa 121) -- Executive Engineer, Ganjam (Roads and Buildings) Division v. Sankar Maharana). In the present case it is conceded that there is no clause in the agreement prohibiting award of interest from the due date till the date of the claim. Hence I must hold that the Arbitrator had jurisdiction to award such interest.

5. Finally, on going through the award I find that there is no error apparent on the face of it. The impugned judgment does not call for interference. This appeal is accordingly dismissed. In the circumstances of this case parties will bear their own costs.


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