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P.K. Chinnasamy Vs. the Superintending Engineer, Execution Circle, Twad Board (Now Redesignated as Superintending Engineer, Twad Board and anr. - Court Judgment

LegalCrystal Citation
SubjectArbairation
CourtChennai High Court
Decided On
Reported in(1989)2MLJ415
AppellantP.K. Chinnasamy
RespondentThe Superintending Engineer, Execution Circle, Twad Board (Now Redesignated as Superintending Engine
Cases ReferredMudurai v. A.C.L. Irudayaraj and Anr. C.R.P. Nos.
Excerpt:
- - the award is bad only on the ground of error of law on the face of records......17 are plain from the very language of it and the said provision reads as follows:17. judgment in terms of award: where the court sees no case to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the court, shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award.if any decision has got to be adverted to, we can refer-to the pronouncement of the bench of this court, to which one of us nainar sundaram, j......
Judgment:

Nainar Sundaram, J.

1. The four Civil Miscellaneous Appeals and the two Revisions require a common disposal, because they arise out of a common judgment of the Court below, though in four different proceedings. There were arbitration proceedings between the Tamil Nadu Water Supply and Drainage Board, hereinafter referred to as the Board, and P.K. Chinnaswamy, hereinafter referred to as the contractor, with reference to the works executed by the latter. The arbitrator rendered two awards, because the controversy stemmed out of two contracts. The arbitrator passed awards ton 12.6.1980. The contractor filed O.P. No. 131 of 1980 before the Court below to pass a decree in terms of the award in respect of one contract. The Board filed O.P. No. 173 of 1980 to set aside that award. The contractor filed O.P. No. 132 of 1980 to pass a decree in terms of the award in respect of the other contract. The Board filed O.P. No. 172 of 1980 to set aside the award in respect of that contract. The Court below, by its common judgment, dismissed OP.Nos. 172 and 173 of 1980, finding no ground to set aside the awards, as coveted by the Board. The Board has filed C.M.A. No. 440 of 1983 against O.P. 173 of 1980 and C.M.A. 415 of 1984 against O.P. No. 172 of 1980. The Court below in O.P. Nos. 131 and 132 of 1980, chose to go into the merits of the claims adjudicated by the arbitrator and passed decrees, as per its own decisions on the claims. The contractor has filed C.M.A. No. 493 of 1982 against O.P. No. 131 of 1980; and G.M.A. No. 494 of 1982 against O.P. No. 132 of 1980. The Board does not want those decrees to stand and obviously wants the setting aside of the awards themselves and hence the Board has preferred C.R.P. No. 2144 of 1982 against O.P. No. 131 of 1980 and C.R.P. No. 677 of 1982 against O.P. No. 132 of 1980.

2. Mr. T. Raghavan, learned Counsel appearing for the contractor, would first submit that when the Court below found that there is no ground to set aside the awards, then by the very force of Section 17 of the Arbitration Act 10 of 1940, hereinafter referred to as the Act, the Court below is left with no other alternative but to proceed to pronounce the judgments according to the awards and upon the judgments being pronounced, decrees shall follow and the Court below committed an error in touching the awards on merits and passing decrees in terms of its own assessment of the claims. The implications of Section 17 are plain from the very language of it and the said provision reads as follows:

17. Judgment in terms of award: Where the Court sees no case to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court, shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with the award.

If any decision has got to be adverted to, we can refer-to the pronouncement of the Bench of this Court, to which one of us Nainar Sundaram, J. had been a party, in Ranga v. Asha Films Exchange (1981) 2 M.L.J. 68. where it has been observed as follows:

Even a bare reading of Section 17 leaves no room for doubt that if the Court sees no cause to remit the award on any of the matters referred to arbitration for reconsideration under Section 16 or to set aside the award, the Court, after the time for making an application to set aside the award has expired or such application having been made, after refusing it, has no other alternative but to proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow. It further lays down that no appeal shall lie from such decree except on the ground that it is in excess of or not otherwise in accordance with the award.

Hence, we find substance in the submission of Mr. T. Raghavan, learned Counsel appearing for the contractor, when a grievance is being expressed by him with regard to the court below, having found no ground to set aside awards, yet, touching the awards on merits and passing decrees in terms of its own assessment of the claims. Unless the Court sees cause to remit the award or any of the matters referred to arbitration for reconsideration, or to set aside the award, a definite and a positive result must follow and that is set out by the statute in Section 17. The court has no option except to pronounce judgment according to the award. In the present case, the court below found no cause for remittal or for setting aside as contemplated in Section 17. It is also not a case-of modification on the contingencies set out in Section 15. The Court below touched the merits of the awards and passed decrees in terms of its own assessment of the claims. The legal propriety of this action on the part of the Court below is also being put in issue, which we shall presently deal with. By the implications of Section 17, judgments ought to have been pronounced according to the awards and the decrees ought to have followed.

3. But, our answer to the above question does not bring a complete resolution to the controversy in the present Civil Miscellaneous Appeals and Revisions, because the Board has preferred independent Civil Miscellaneous Appeals, namely, C.M.A. Nos. 440 of 1983 and 415 of 1984 against the dismissal of its original petitions to set aside the awards. Mr. P.D. Dinakaran, learned Counsel appearing for the Board, would endeavour to submit that there are certain errors which, according to him, are legal, apparent on the face of records in the awards passed by the arbitrator and there is every justification for bringing the matters within the scope of Section 30 and in particular Clause (a) thereof of the Act, and setting aside the awards. Learned Counsel appearing for the Board would submit that this is a case where it must be held that the arbitrator has misconducted himself with reference to the controversy sought to be arbitrated by him. Learned Counsel for the Board is not in a position to expatiate his submission and demonstrate before us as to what are the errors of law apparent on the face of records in the awards and how the arbitrator could be held to have misconducted himself. His submission merely remained a theory without any substantiation. In fact, the Court below did not find any error of law apparent on the face of records. At this juncture, we must take note of certain principles which have been countenanced as settled onces, by Courts including the highest in the land. The arbitrator is not bound to give a reasoned award. While passing an award, if he makes a mistake of law or of fact, not apparent on the face of records, it is not open for challenge. The award is bad only on the ground of error of law on the face of records. An error of law apparent on the face of records means that some erroneous legal proposition, which is the basis of the award, is found expressed in the award, itself or in a document actually incorporated or appended thereto, as part and parcel of the award. The court has no jurisdiction to deal judicially with the merits of a case determined by the arbitrator. It is not the function of the court to scrutinise the award on merits as if it is sitting in appeal on the verdict of the arbitrator. In the instant cases, as already noted, no error of law, apparent on the face of records, has been noticed by the court below. On the other hand, the court below has chosen to investigate into the merits of the claims and deal with them as if it is an appellate forum. This is totally untenable and not permissible. There is a plethora of decisions, even of the highest court in the Land, on the subject and it is sufficient if we refer to some of them as follows:

(i) N. Chellappan v. Kerala State Electricity Board : [1975]2SCR811 : Coimbatore District P.T. Sangam v. Balasubramania Foundry : [1987]3SCR852 : and Raipur Development Authority v. Chokhamal Contractors and Ors. (1989) 2 S.C.C. 721.

The principles have also been taken note of by a Bench of this Court, to which one of us Bellie, J. had been a party in The Superintending Engineer, TWARD Board, Mudurai v. A.C.L. Irudayaraj and Anr. C.R.P. Nos. 1926 to 1940 of 1981 etc. Batch - (Judgment dated 4.3.1987).

4. When we take note of the above principles and apply them to the facts of the present cases, we find no scope for the court to invoke the aid of Section 30 of the Act for the purpose of setting aside the awards. If that is so, we find that the dismissals of O.P. Nos. 172 and 173 of 1980 by the Court below are perfectly in order and they do not require interference at our hands. Once there is a refusal to set aside the award, then the implications of Section 17 of the Act come into play and as we have already noted, there is no other alternative for the court, except to pronounce a judgment, as per the terms of the award, which shall be followed by a decree. The Court below committed an error when it touched the awards on merits and passed decrees in terms of its own assessment of the claims. It is true that the Board has filed Revisions i.e. C.R.F.Nos. 2144 and 677 of 1982, impeaching the action of the Court below in passing the decrees as it did. But, they have no significance at all, in the view of the matters which we have taken. The resultant position, as per our discussion, is as follows:

(i) C.M.A. Nos. 493 and 494 of 1982 are allowed and we pronounce judgments according to the terms of the awards and decrees upon our present judgments shall follow.

(ii) C.M.A. Nos. 440 of 1983 and 415 of 1984 are dismissed.

(iii) C.R.P. Nos. 2144 of 1982 and 677 of 1982 are dismissed.

The contractor would be entitled to costs in all the matters.


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