N.B. Patel, J.
1. These two appeals are directed against the common order, dt. 17th June, 1986 passed by the learned Civil Judge (S.D.), Ahmedabad (Rural) at Narol whereby he has disposed of Civil Misc. Application No. 231 of 1981 and Civil Misc. Application No. 158 of 1985. By this order, the learned Judge has allowed Civil Misc. Application No. 231 of 1981 (filed by the present respondent) by accepting the award made by the Sole Arbitrator regarding the disputes between the parties arising from two contracts. Civil Misc. Application No. 158 of 1985 (filed by the appellant), urging that the award may be set aside, has been dismissed by the learned Judge. Thus, it is the composite order overruling the objections against the award and the converting of it into the rule of the Court, which is the subject-matter of these two appeals filed by the Gujarat Water Supply and Sewerage Board (to be hereinafter referred to as the Board) against M/s. Unique Erectors (Gujarat) Pvt. Ltd. (to be hereinafter referred to as the Contractors).
2. One of the contentions taken up by the Board against the acceptance of the award was that it was pronounced beyond limitation period and the Contractors have filed Civil Application No. 1508 of 1987 urging that, if necessary this Court may grant extension of time to make and publish the award (vide S. 28 of the Arbitration Act). We propose to dispose of both the appeals filed by the Board and also the Civil Application filed by the Contractors by this common judgment.
3. The facts leading to the filing of the two Civil Misc Applications and then to these appeals may first be setout. By two contracts entered into between the parties, the Contractors undertook to provide fabricating, laying and joining 1000 mm dia, steel welded pipeline for a distance of 10.1 kms and 7.4 kms respectively. The two contracts entered into by the parties were in Standard Form B2 of the P.W.D. and they were contracts Nos. B-2/1 and B-2/2 of 1978-79. Disputes arose between the parties regarding the execution of the two contracts each side alleging that the other had committed breach of the contracts. The two contracts under which the work was to be carried out contained an arbitration clause being clause No. 30 in each contract. The arbitration clauses in both the contracts were identically worded. This arbitration clause (clause No. 30) provided that if any disputes enumerated in any of the sub-cls. (i) to (viii) of clause 30 arose between the parties, the same shall be referred to a Sole Arbitrator. Since disputes did arise between the parties the Conti-actors f Red Civil Misc. Application No. 231 of 1981 under Ss. 8 and 20 of the Arbitration Act in the Court of the learned Civil Judge (S.D.), Ahmedabad (Rural) at Narol for appointment of Arbitrator as per clause 30 of the Contract and for reference of the disputes to the Arbitrator. Thereupon, the court appointed one Shri G.G. Vaidya as an Arbitrator and, by his interim decision, dated 5th May 1982, Shri Vaidya decided that the disputes (claims) mentioned in paras 10(g) to 100 of Civil Misc. Application No. 231 of 1981 were not arbitrable as they did not fall within any of the sub-cls. (i) to (viii) of Clause 30 of the Contracts whereas the rest of the disputes (claims) were arbitrable. The Board challenged this decision of the Arbitrator Shri Vaidya by filing Special Civil Application No. 2750 of 1982 before this High Court, but this Special Civil Application was dismissed by this Court by the order dt. 16th/22nd Mar., 1983. The Board then took the matter to the Supreme Court against the said decision of this Court by filing Special Petition (Civil) No. 9610 of 1983. While the matter was pending before the Supreme Court, the parties submitted consent terms before the Court and the proceedings before the Supreme Court were thereupon disposed of in the same terms by an order dt. 30th Jan., 1984. The Supreme Court set aside the order of the High Court and substituted, in its place, its own order in terms of the compromise submitted by the parties. By the consent terms, the parties agreed to appoint Shri M. D. Patel, Retired Secretary. P.W.D., Gujarat State and then a sitting member of the Board as the Sole Arbitrator, in place of Shri G.G. Vaidya, to decide all the disputes between them concerning the works in question. It was also provided that the Board should also put up its counter-claim before this Sole Arbitrator and shall have a right to agitate all points, both in fact and in law, before the Sole Arbitrator including the question of arbitrability "within the meaning of clause 30 of the contract". It was also provided in the consent terms that both the parties shall agree to extend time, as and when necessary for completion of the arbitration proceedings. Execution by the parties of a formal agreement for arbitration, defining the scope of arbitration. was also envisaged by the consent terms. The Sole Arbitiator Shri M. D. Patel was thereafter approached, by letter dt. 16th Feb 1984, addressed to him by the Secretary of the Board to enter upon the reference A copy of the consent terms placed before the S supreme Court was enclosed with this letter addressed to the Arbitrator. It appears that a formal agreement, dated the 31st Mar., 1984 appointing Shri M.D. Patel as Sole Arbitrator to judicate upon and give his award as per the provisions of the Arbitration Act, 1940 in respect of various Claims of both the parties against each other in respect of both the works covered under the agreements Nos. B-2/1 and B-2/2 subject always to their admissibility under Clause 30 of the Contracts", was arrived at between the parties. It appears, however, that this formal agreement did not bear the signature of anybody on behalf of the Contractors. Be this as it may. Shri M. D. Patel entered upon the reference and the Contractors placed before him a statement of their claim under different items or heads totaling up to an amount of Rs. 4,92,20,685.00. The Board also submitted a statement of counter claim under different heads aggregating to a total amount of Rs. 26,87,217.40. The proceedings before the Arbitrator culminated into a lump sum award of Rs. 57,65,273.00 in favour of the Contractors. This award is dt. 8th July. 1985 and it was on adjudication upon the claim and counter-claim submitted by the parties before the Arbitrators. The award was filed before the Court of the Learned Civil Judge (S.D.). Ahmedabad (Rural) at Narol and the Contractors moved the Court in Civil Misc. Application No. 231 of 1981 to make it the rule of the Court and to pass a decree in terms thereof. On the notice of the filling of the award having been served upon the Board, it filed Civil Misc. Application No. 158 of 1985 detailing its objections against the acceptability of the award and urging that the award be set aside. After hearing the parties as regards the objections raised by the Board against the award the learned Judge has rejected the said objections and has made the award the rule of the court and has ordered that a decree for Rs. 57,273.00 with running interest at the rate of 17% per annum thereon from the date of the application, i.e. 6th Aug 1981, till the date of the decree as awarded by the Arbitrator and for further interest at the same rate from the date of the decree till realisation of the amount be drawn up against the Board. The judgment of the learned Judge resulting in this order is in challenge before us in the two appeals.
4. On behalf of the Board. a number of contentions were urged before the learned Judge against the acceptability of the award but Shri A.H. Mehta on behalf of the appellant-Board, has not raised all these contentions before us and we shall deal with only those contentions which have been urged before us. The submissions urged before us by Shri A. H. Mehta on behalf of the Board may conveniently be divided under four heads viz. (i) Arbitrability issue. (ii) Limitation, (iii) Award of interest and the rate at which the same is awarded and (iv) non-application of mind by the Arbitrator. It may be convenient at this stage to reproduce the award. It reads
In the matter of Arbitration Act, 1940
In the matter of
1. Providing, fabricating, laying and jointing 100 mm dia 10,100 mm long steel welded pipeline under Bhavnagar Water Supply Scheme based on Shetrunji Dam. Agreement No. B-2/1 of 1978-79.
2. Providing fabricating laying and joining 100 mm dia, 7,400 min long steel welded pipeline under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. B-2/12 of 1978-79.
In the matter of consent arrived at between M/s. Unique Erectors (Gujarat) Pvt. Ltd. and Gujarat Water Supply & Sewerage Board. Gandhinagar appointing Shri M. D. Patel as Sole Arbitrator to arbitrate upon all disputes and claims and counter claim arising from the above works.
Claimants: M/s. Unique Erectors (Gujarat) Pvt. Ltd. a Company registered under the Companies Act, 1956 having their registered office at 2nd floor, Natraj Chambers, Ashram Road, Ahmedabad.
Gujarat Water Supply & Sewerage Board having their registered office at Block GhSector-16 near Shalimar Cinema, Gandhinagar.
Whereas M/s. Unique Erectors (Gujarat) Pvt. Ltd., Ahmedabad and the Gujarat Water Supply& Sewerage Board. Gandhinagar who are the parties to the contract for both the works above named have appointed me vide their letter dt. 16-2-84 of Gujarat Water Supply & Sewerage Board as Sole Arbitrator to adjudicate upon their respective claims counterclaims and to give my award in respect of various claims of both parties against each other in respect of both the said works covered under Agreements Nos. B-2/1 and-B-2/2 of 1978-79.
Now, I.M.D. Patel Sole Arbitrator and Chairman of M/s. Gujarat, State Construction Corporation Limited and retired Secretary. P.W.D. Government of Gujarat, Ahmedabad having taken upon the burden of the reference, heard and examined and considered pleadings submitted on behalf of the parties and the documentary and oral evidences produced before me by them as also their oral submission and arguments.
That by consent of the parties, the time has been enlarged for publishing the award from time to time and lastly it has been extended up to 31st July. 1985.
I have also heard on the point of arbitrability of the claims and counter claims as per clauses of the contract agreement and after considering all the above aspects. I do hereby make and publish this my final award in writing of all concerning matters referred to me.
1. hereby award and direct that the respondent M/s. Gujarat Water Supply and Sewerage Board shall pay to the claimants M/s. Unique Erectors (Gujarat) Pvt. Ltd. amount of Rs. 57,65,273-00 (Rupees Fifty seven lacs Sixty five thousand, and two hundred seventy three only) with interest to be calculated at the rate of 17% per annum (seventeen per cent per annum) in the above sum adjudged with effect from 6th August. 1981 the date on which the application was filed by the claimant for appointment of the arbitrator in the Court of Civil Judge (S.D.) at Narol, till the date of actual payment or till the date of decree that may be passed by the competent Court of law. whichever is earlier in full and final settlement of all claims/counter claims raised before me in the present reference.
Each party will bear its own costs.
In Witness thereof, I the said Shri M. D. Patel Sole Arbitrator in the above reference has put my hand and seal. this Eight day of July 1985.
Signed and sealed and delivered by the within named Shri M. D. Patel.
Dt. 8th July. 1985
(M. D. Patel)
Chairman, Gujarat Estate
5. It was firstly contended by Shri A. H. Mehta on behalf of the Board that the Arbitrator has not decided, either as a preliminary issue or along with other issues, the question of arbitrability of the various disputes between the parties and the award does not show which of the claims have been held by the Arbitrator as arbitrable or non arbitrable in the light of clause 30 of the Contracts between the parties. In the submission of Shri A. H. Mehra, the award is, therefore, so unintelligible as to be totally vitiated. In this connection, Shri A. H. Mehra drew our attention to the compromise arrived at between the parties and submitted before the Supreme Court in terms whereof the Supreme Court has passed the order dt. 30th Jan., 1984. He laid stress on the fact that, by the consent term No. 4 it was specifically provided that the Board had a right to agitate all points, both in fact and in law before the Sole Arbitrator as per the terms and conditions of the Contracts including the question of arbitrability within the meaning of the Contracts. Similarly Shri. A. H. Mehta pointed out that the formal agreement dt. 31 st Mar 1984 between the parties provided that the Arbitrator should adjudicate upon and give his award in respect of various claims of both the parties against each other for the works covered under the two contracts -Subject always to their admissibility under Clause 30 of the Contract". On reading the consent terms submitted before the Supreme Court as also the formal agreement, dated the 31st March, 1984, there remains no doubt as to the position that the Arbitrator was required to decide the question about the arbitrability (in the light of clause 30(i) to clause 30(viii) of the Contracts of each and every item of the claim and the counter-claim the arbitrability of which may be challenged by the concerned party. At the same time, however, it is also clear from the consent terms and the formal agreement that they do not require the Arbitrator to decide the dispute of arbitrability wherever raised, separately or by way of a preliminary issue. The question, is whether in the circumstances of this case, it can be said that the Arbitrator has not at all decided the dispute of arbitrability of any item of the claim raised by the Board, simply because of the Arbitrator has not disclosed in his award as to whether he had found all the items of the claim arbitrable or simply because he had not specified any particular items as having been found by him as non-arbitrable and. therefore, as having been kept by him out of consideration while making the lump sum award in favour of the Contractors. The question really is whether it should or should not be presumed that the Arbitrator must have considered and decided the dispute regarding arbitrability in respect of each and every item of the claim where the same was challenged before him by the Board. The submission of Shri N. J. Mehta on behalf of the Contractors, was that it has to be presumed that the Arbitrator had decided the question of arbitrability in respect of each and every item where it was challenged) and had either found that all the items were arbitrable or that he had kept out of his consideration those items which were found by him to be non-arbitrable.
6. Before deciding this question of presumption one way or the other, it may be appropriate to dispose of one connected contention raised by Shri A. H. Mehta. Referring to the award it was strenuously urged by Shri A. H. Mehta that it does not anywhere state that the Arbitrator had "decided-the question of arbitrability of the claims and counter-claims. The relevant para in the award to which Shri A. H. Mehta invited our attention in this connection runs as under : -
"I have also heard on the point of arbitrability of the claims and counter-claim's as per clauses of the contract-agreement and after considering all the above aspects, I do hereby make and publish this my final award in writing of all concerning matters referred to me.
7. It is true as submitted by Shri A. H. Mehta, that the Arbitrator has not specifically stated in the award that he had decided the question of arbitrability. It is true that he has rested content only with saying that he had "heard" the parties on the point of arbitrability of the claims and counter claims. But then he has also proceeded further and stated that after considering all the "above" aspects, he was making and publishing his final award of all concerning matters referred to me." The question is whether the language employed by the Arbitrator does not convey and show that he had not merely heard and considered the question of arbitrability but had also decided the same. In our view, the aforesaid para in the award leaves no room for doubt whatsoever that the Arbitrator was very much aware of the fact that fie was required to decide the question of Arbitrability or to decide the disputes between the parties subject to their admissibility or arbitrability in the light of the provisions of clause 30 of the Contracts. The Arbitrator has clearly conveyed by the aforesaid recital in the award that, bearing in mind all the "above" aspects which would undoubtedly include the aspect of arbitrability to which the Arbitrator has made a specific reference) he was making his final award "of all concerning matters" referred to him. It may be recalled here that the consent terms arrived at between the parties were furnished to the Arbitrator and they left the question of Arbitrability to be decided by him. In fact, in the preamble to his award, the Arbitrator has specifically referred to the fact that he was appointed as Sole Arbitrator pursuant to the consent terms arrived at between the parties. Thus the Arbitrator who was required to arbitrate on all the disputes including the dispute of arbitrability and who was aware of that fact has stated that he had considered this aspect of the arbitrability and. after considering the same. he was making his final award, In these circumstances it is impossible to say that the Arbitrator had not decided the question of arbitrability wherever it arose in respect of any of the items, simply because he has stated that he had considered the dispute regarding arbitrability but has omitted to state that he had decided the same. Shri A. H. Mehta submitted that the mental process of considering a dispute cannot be equated with the mental process of deciding it. This may be true. But it would not be correct in the face of the aforesaid data to jump to the conclusion that the Arbitrator has not undertaken and completed the process of deciding the dispute. At the most, one may say that the Arbitrator had not employed as perfect and precise language as a meticulous lawyer would have employed. It is not possible to say that the Arbitrator had embarked upon an exercise in futility by merely recalling to his mind the submissions made by the parties on the point of arbitrability and had avoided the necessary exercise of deciding the same. Reading the award as a whole, we have no hesitation in rejecting the contention of Shri A. H. Mehta that the Arbitrator may have considered but had not decided the question of arbitrability arising before him.
7-A. We may now proceed to deal with the contention that. in fact, the Arbitrator had not decided the arbitrability dispute as a preliminary issue or along with merits of the relevant claim.
8. It is obvious from the award reproduced above that the Arbitrator has purported to make and publish a final award in writing of all concerning matters referred to me-. In other words, the Arbitrator has purported to give what is called a de premissis award. He also refers to the fact that he had heard (the parties) on the point of arbitrability of the claims and counter-claims as per clauses of the contracts and had considered all the aspects of the matter. Thus the Arbitrator has said that he had "considered" all the aspects including the 'aspect of arbitrability of the claims made before him. It is true that he has not specifically and explicitly said that he had decided, either by way of a preliminary issue or a final issue, as to which items of the claim and counter-claim were found by him to be arbitrable. Another feature to be noted about the award at this stage is that it is a nonspeaking award for a lump sum of Rs. 57,65,273.00 in favour of the Contractors and against the Board. He has not recorded separate decisions in respect of each and every item of the claim and the counterclaim.
9. It was contended by Shri A. H. Mehta on behalf of the Board that the consent-terms produced at mark 4/3 and para 4 of the order of the Supreme Court on the said consent terms produced at mark 4/4 enjoined upon the Arbitrator to decide, in respect of each item of the claim and the counter-claim, whether it fell within or outside the scope of clause 30 of the contracts and to take cognizance of only those items which fell within the scope of the said clause and to keep out of his consideration those items which fell outside the scope of the said clause. The contention of Shri A. H. Mehta was that the award in this case was vitiated because the Arbitrator had not decided, either by way of a preliminary issue or by way of final issue, the question of arbitrability of such of the items of the claim or counter-claim as was challenged. It was submitted by Shri A. H. Mehta that, in the peculiar facts and circumstances of this case, where the claim made by the Contractors comprised of several items and similarly the counter-claim made by the Board also comprised of several items, it was absolutely necessary for the Arbitrator to not only decide but also to record his decision in respect of each and every item whether the same was held by him to be arbitrable or not. The Arbitrator having not adopted this course, it was submitted by Shri A. H. Mehta, the award suffered from the vice of unintelligibility also and should, therefore have been rejected by the Court.
10. Before dealing with the aforesaid main contention raised by Shri A. H. Mehta, it will be advantageous to clear some legal ground having a bearing on the question as to what approach should be made by the Court towards an award given by an Arbitrator and whether an Arbitrator can make a lump sum award and that too without assigning any reasons for his award even in a case like the present one where a number of items have been put forward by way of claim and counterclaim by the parties. It may also be examined as to what is the legal position as regards the question whether the Arbitrator ought to give separate findings on the question of arbitrability of different items of the claim and the counter-claim.
11. So far as the approach to be made by the Court to the Arbitrator's award is concerned, it is a very well-settled position that the Court must uphold an award unless it is impossible to do so. This position has been reiterated over and over again in a number of decisions. But it may suffice to quote the following observations of Lord Goddard, C. J. in Mediteranean & Eastern Export Co. Ltd. v. Fortress Fabrics Ltd. (1948) 2 All ER 186 cited with approval by the Supreme Court in Municipal Corporation of Delhi V. Jagan Math Ashok Kumar. (1987) 4 SCC 497: (AIR 1987 SC 2316) : -
"The modern tendency is, in my opinion, more especially in commercial arbitration, to endeavour to uphold awards of the skilled persons that the parties themselves have selected to decide the questions at issue between them"
12. It is also a well- established position hat even in a case where a number of items are placed before the Arbitrator for his decision by way of a claim and a counterclaim the Arbitrator can give a consolidated or a lump sum award. Similarly, no fault can be found with the award even if it is a nonspeaking award i.e. an award in which the Arbitrator has not articulated his reasons for arriving at the consolidated amount awarded by him. A reference may be made in this connection to the case of Santa Sila Devi v. Dhirendra Nath Sen. AIR 1963 SC 1677 wherein the Supreme Court has laid down :
Besides it is obvious that unless the reference-to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. The legal position is clear that, unless so specifically required, an award need not formally express the decision of the arbitrator on each matter of difference."
13. It was also observed by the Supreme Court in this case :
Since the award now impugned expressly states that it is made "de premissis" i.e. of and concerning all the matters in dispute referred to the arbitrator, there is a presumption that the award is complete. In the circumstances, the principle of construction enunciated by Parke. B aptly covers the case and the silence of the award as regards the claim for accounting must therefore, be taken to be intended as a decision rejecting the claim to that relief."
14. In the above case, the Supreme Court has held that when an award is made "de premissis", the presumption is that the Arbitrator intended to dispose of finally all matters in difference and his award will be held final if by an intendment it can be made so. One of the questions before us will be whether in the present case also, where the award is a de premissis award, it should not be presumed that the Arbitrator had decided the question of arbitrability even though he might not have recorded an explicit decision on the said question. The point to be noted here is that, in the case of a de premissis award the presumption will be that the Arbitrator had intended to dispose of finally all matters in difference and his award will be final.
15. In the case of Kanpur Nagar Maha Palika v. Narain Das, (1969) 2 SCC 620 the Arbitrator had made a lump sum award on the whole case. It was contended by the Nagar palika that the claim of the Contractor for money due on account of the work done was governed by S. 326 of the U.P. Act and not by the period of limitation of three years under the Limitation Act and that if the Arbitrator had decided in favour of the plaintiff, it was in contravention of S. 326 and amounted to an apparent error. The Supreme Court did not entertain this contention on the ground that the award does not lay down any proposition of law on the question of limitation and does not put any construction on S. 326 of the U. P. Act. The Supreme Court also rejected the contention that the Arbitrator should have specifically dealt with the question of limitation.
16. In N. Chellappan v. Kerala State Electricity Board, AIR 1975 SC 230, the umpire had referred to the claims made by the Contractor and the arguments of the Kerala State Electricity Board in support of its plea and had then awarded a certain amount without expressly adverting to or deciding the question of limitation. The Supreme Court held that the umpire as Sole Arbitrator was not bound to give a reasoned award and if in passing the award he makes a mistake of law or of fact, that is no ground for challenging the validity of the award. It was also held that only when a proposition of law is stated in the award and is made the basis of the award and if that proposition is found to be erroneous, the award can be set aside or remitted on the ground of error of law apparent on the face of the record.
17. There cannot be any doubt that the limitation contention goes to the very root of the matter and is a jurisdictional contention. Despite this position, it emerges from the decisions of the Supreme Court that the mere fact that a decision is not explicitly recorded even on such a question would not vitiate the award. This is so, because the presumption in the case of a de premissis award has to be that the Arbitrator has decided all issues referred to him not with standing the fact that he has not explicitly recorded his decisions on such issues.
18. In principle then, there is no reason why in the present case the award should be rejected merely because the Arbitrator has not specifically or separately recorded his decision on the question of arbitrability of the items of claim. The question of arbitrability will as much strike at the jurisdiction of the Arbitrator as the question of limitation would
19. In the present case, there is all the more reason why the presumption should be that the Arbitrator has decided the question of arbitrability rather than that he has not decided it. This is so, because the award; makes it clear that it was very much present to the mind of the Arbitrator that he was required to decide all disputes between the, parties including the dispute of arbitrability. Or, in other words, the award makes it clear that the Arbitrator was alive to the fact that he had to decide the disputes between the parties subject to their arbitrability as per clause 30 of the contracts the matter does not rest here. The Arbitrator has, in clear words, stated in his award that he had also heard (the parties) on the point of arbitrability of the claims and counter-claims as per the clause of the contracts and after considering all the aspects he was making and publishing his final award " in writing of all concerning matters referred to me."
20. It is true that if the submission to the Arbitrator itself requires the Arbitrator to decide any particular issue as a preliminary issue or to decide it separately or if the submission requires him to decide each and every claim separately, he will be bound to do so. But if the submission does not require him to decide any issue as a preliminary issue or to decide it separately as in our case, he may not do so and may make a lump sum award. In Union of India v. Jai Narain Misra, AIR 1970 SC 753 the Supreme Court has observed :
"The Arbitrator is not bound to give an award on each point. He can make his award on the whole case. (see Gulam Khan v. Mohammed Hassan (190 1) ILR 29 Cal 167), An Arbitrator may award one sum generally in respect of all money claims submitted to him, unless the submission requires him to a-ward separately on some one or more of them .........As the final award in favour of the respondent professes to be made concerning all the matter's referred to him, it must be presumed that in making it, the Arbitrator has taken into consideratin all claims and counter claims ........ We hold that the award is a final and certain determination of all the disputes referred"
21. In our view, by analogy the Arbitrator in our case having not been required to decide the arbitrability issue as a preliminary issue or separately from other issues, his award cannot be found fault with on the ground that he had not decided the issue as a preliminary issue or separately from other issues.
22. Shri N. J. Mehta also drew our "attention to the case of Tarapore and Company v. Cochin Shipyard Ltd., Cochin, AIR 1984 SC 1072, wherein D. A. Desai, J. (as he then was), speaking on behalf of the Supreme Court, has held:
"Even the question of jurisdiction of an arbitrator can be the subject-matter of a specific reference. If the parties agree to refer the specific question whether the dispute raised is covered by the arbitration agreement, it becomes a specific question of law even if it involves the jurisdiction of the arbitrator and if it is so, a decision of the arbitrator on specific question - referred to him for decision even if it appears to be erroneous to the Court is binding on the parties."
23. On reading the Supreme Court order based on the consent terms arrived at by the parties and the formal agreement between the parties as also the earlier background of the Board having been taken to the High Court the preliminary decision of the former Arbitrator Shri Vaidya about the arbitrability of some of the claims, there remains no doubt :in our mind that in our case also the parties had also referred to the Arbitrator the specific .question whether the claims made before him were arbitrable or not in view of Clause 30 of the Contracts. That this specific question of 'law impinging on the jurisdiction of the arbitrator was referred to the Arbitrator for his decision is evident in our case at every stage of the proceedings. It is already seen above that the parties had made their submissions before the Arbitrator relating to the arbitrability of the chims advanced by the Contractors. We have also reached the conclusion as mentioned earlier that the Arbitrator must be presumed to have decided the dispute of arbitrability (wherever it was raised), even though the Arbitrator has not given explicit and claim-wise decisions on the question of arbitrability. This is so because the award in our case is a de premissis award
24. However, Shri A. H. Mehta, on behalf of the Board, tried to distinguish the aforesaid Supreme Court case, AIR 1984 SC 1072 on the ground that the facts of the said case were vitally different from the facts of our case. Now, in that case the appellant M/s. Tarapore & Co. made a certain claim against the respondent, Cochin Shipyard Ltd. on account of increase in the cost of pile driving equipment and technical know-how fees on the ground that the Contractor was entitled to be compensated by the respondent for the same. By its letter dated the 1 st March, 1976 M/s. Tarapore & Co. invoked the arbitration clause and by their letter dated the 17th March, 1976 the respondent-Cochin Shipyard Ltd. denied the claim for compensation and simultaneously framed three points including their contention that the dispute or claim raised by M/s. Tarapore & Co. was not covered by Clause 40, i.e. the arbitration clause in the Contract between the parties. The appellant M/s. Tarapore & Co. by their letter dt. 19th April, 1976 suggested that the proper course would be to refer to the arbitration even the dispute regarding arbitrability as also the merits of the claim for compensation for increase in the cost of pile driving equipment and technical know-how. Thereafter, the parties appointed one Shri C. Srinivasa Rao as the Sole Arbitrator and the points/disputes referred by the parties to the Sole Arbitrator read as under : -
" 1. Does the claim of Messrs. Tarapore & Co. on Cochin Shipyard Ltd., for compensation for increase in the cost of imported pile driving equipment and technical know-how fees referred to in Cls. (2) and (3) hereunder fall within the purview of the first para of Clause 40 of the General Conditions of Contract entered into between the two parties?
2. If the answer to (1) above is in the affirmative, in terms of the provisions of the contract, are Messrs. Tarapore & Co. entitled to compensation for increase in the cost of imported pile driving equipment and technical know-how fees to be paid to them by Cochin Shipyard Ltd? If so, what is the amount?
3. The dispute that has arisen between Messrs. Tarapore & Co., and Cochin Shipyard Ltd. regarding the claim of M/s. Tarapore & Co., for compensation for increase in the cost of the imported pile driving equipment and the technical know-how fees.
25. The Arbitrator Shri C. Srinivasa Rao held on point No. I that the claim made by the appellant Messers. Tarapore & Co. did fall within the purview of the first para of CL 40 of the Contract entered into between the parties. The Arbitrator then awarded Rs. 99.0 lakhs as compensation to the appellant-Messers. Tarapore & Co. for the increase in the cost. The Kerala High Court held that the question whether the dispute is arbitrable or not cannot be finally decided by the Arbitrator because it is a matter relating to his jurisdiction. Reversing this decision, the Supreme Court, speaking through D. A. Desai, J. held that the arbitrability dispute was specifically referred by ~he parties to the Arbitrator for his decision and laid down that as the specific dispute of arbitrability was referred to the Arbitrator, he had the jurisdiction to decide it and his decision on the dispute will be binding to the parties even though the Court may feet that the decision of the Arbitrator on the dispute was erroneous.
26. Shri A.. H. Mehta submitted that in our case it was not possible to say that the specific dispute regarding arbitrability of the claims made by the Contractors was specifically referred to the Arbitrator. He also submitted that in our case there was no specific decision pronounced on the issue of arbitrability as in the case before the Supreme Court. It was, therefore, that he submitted that in the facts 6f the present case the ratio laid down by the Supreme Court will not be applicable. We are afraid, this is not so. The ratio laid down by the Supreme Court is that when a specific dispute of law is referred to the Arbitrator, his decision on the issue will be binding to the parties, notwithstanding the fact that the question of law referred~ touches upon the jurisdiction of the Arbitrator and notwithstanding the fact that the court may find the decision of the arbitrator on the dispute was erroneous. So far as this aspect of the matter is concerned, we are clearly of the opinion that; in our case also the parties had specifically referred to the Arbitrator for his decision the specific question whether the claims made by the Contractors were arbitrable or not. This is clear, apart from everything else, from the fact that all disputes "including the dispute of arbitrability" were referred by the parties to the Arbitrator for his decision. So far as the second aspect adverted to by Shri A. H. Mehta, viz. that the Arbitrator has not recorded his specific decision on the aforesaid issue is concerned, it must be said that the Arbitrator has not explicitly recorded any decision whether he had found all claims made by the contractors to be arbitrable and, if he had found some of the claims only to be arbitrable, he had not explicitly specified as which claims were found by him to be arbitrable and which were not found by him to be non-arbitrable. It will be presently seen whether this contention makes the award invalid. Before, however, we refer to that question, it may be repeated that from the mere fact that the Arbitrator has not explicitly pronounced his decisions claim-wise regarding arbitrability, it cannot be said in the case of a de premississ award, like the one made by the Arbitrator, that the Arbitrator has not at all decided the question of arbitrability wherever it arose. We have already spelt out our reasons for this view and need not repeat the same. We will only repeat that this being a de premissis award and there being sufficient indication on the face of the award, it must be held that the Arbitrator had decided all the disputes raised by the parties including the dispute of arbitrability.
27. Shri A. H. Mehta laid heavy reliance on the case of G. S. Atwal and Co. (GUA) V. Union of India, AIR 1976 Delhi 150 in support of his next submission, that the non pronouncing of the decision explicitly by the Arbitrator on the question of arbitrability renders the award in this case unintelligible and vague as to vitiate it altogether. For appreciating this submission of Shri A. H. Mehta, it may be necessary to refer to the facts of the case before the Delhi High Court. In that case, an Arbitrator was appointed by the General Manager, Northern Railway, to decide claims of the contractor on determination of the contract. It bears repetition to state that the Arbitrator was appointed only to decide the claims of the contractor and not to decide any counterclaim that may be put up by the Railway yet, the Preamble of the award referred not only to the claims made by the contractor but also to the counter-claims made by the Railway and the Arbitrator, without stating what claims and counter-claims were considered by him, gave a lump-sum award without stating any reasons and details. Furthermore, the award, mentioned that from the lump-sum awarded the Railway may recover income-tax at 2% as required by the Finance Act, 1972. The Court found that this was not a matter referred to him by the General Manager but as taken as an additional plea in the counter-claim. It was held that if the Arbitrator had said nothing about what was referred to him and merely said that sum was awarded to one of the parties, the Objector (Contractor) could hardly have pressed any objection to the award. Pointing out that the Arbitrator had in so many words, said that he had decided the disputes and differences not only in the statement of claim but also in the counterclaim, it was held that it followed that the Arbitrator must have decided the counterclaim. It was further observed that, in the circumstances, it can be inferred (in view of total lack of details and reasoning carried to the stage of unintelligibility so as to debar the court from determining what exactly was decided by him) that the award might have been for a larger amount if the counter-claim had been left out of consideration. It was held that the award could not be upheld as it had apparently decided matters out side the scope of the reference. It was also found that apart from the fact that the Arbitrator had transcended his limits in allowing the deduction for income tax, the Arbitrator's finding that under the provisions of the Income-tax Act, the Railway were entitled to make deduction, was erroneous. It was on these grounds that the award in that case was set aside. It is obvious from these facts that the award was held to be bad on the ground of unintelligibility because the unintelligibility was of such a nature as definitely to cause prejudice to the Objector (Contractor) in that case. The parties had not referred to the Arbitrator any counter-claim which the Railway might advance and yet the Arbitrator's award clearly indicated that the Arbitrator must have also decided the counter-claim which was of an order of Rs. 1,57,772/- and the Arbitrator had taken this counter-claim into consideration while computing the amount awarded to the Objector and hence, it could be inferred that the award might have been for a larger amount if the counter-claim had been left out of consideration. Thus, this was a clear case in which the silence of the Arbitrator as to what part of the counter-claim if any, was allowed by him to be set off against the claim made by the contractor resulted into an unintelligibility causing prejudice to the Contractor. It is clear, on a careful reading of the entire judgment, that if this aspect of the prejudice to the Contractor had not arisen in the case, the award might not have been found to be invalid. Therefore, the real question to be considered in our case is whether the silence on the part of the Arbitrator in not explicitly speaking as to which claims were found by him to be non-arbitrable or his omission to say explicitly that he had found all claims to be arbitrable as the case may be had resulted in any prejudice to the Objector i.e. the Board. In this connection it is very important to bear in mind that in our case, as stated at the Bar, the dispute about arbitrability was raised by 'the Board alone against some of the items o claim made by the Contractors. The Contractors had not raised any dispute about arbitrability qua any of the items in the counter-claim put forward by the Board. If the Contractors- had challenged the arbitrability of any item of the counter-claim and if the Arbitrator had upheld the challenge made by the Contractors and had, therefore, excluded from his consideration such item o counter-claim and had yet not specified such item, the Arbitrator's action would have prejudiced the Board. This is so because he Board would not then have been in a position to know as to which item of its counter-claim was excluded from consideration by the Arbitrator and yet it would not have been able to pursue any alternative remedy available to it for enforcing such item of the counter-claim. But this is not the situation arising in our case because the Contractors did not challenge the arbitrability of any item of the counter-claim made by the Board. In the facts and circumstances of our case, the silence of the Arbitrator would cause prejudice to the Contractors and not to the Board. But the Contractors do not feel aggrieved by the award made by the Arbitrator. Therefore, the fact-situation in our case is entirely different from the one before the Delhi High Court in AIR 1976 Delhi 150 (supra).
28. Rounding up the discussion, therefore, we conclude that :
(i) Dispute regarding arbitrability was specifically referred to by the parties to the Arbitrator;
(ii) The award being a de premissis award the presumption is that the Arbitrator had decided the dispute regarding arbitrability in respect of those items of the claim made by the contractors, the arbitrability whereof was challenged by the Board;
(iii) The Arbitrator was not required to decide separately or as a preliminary issue the dispute regarding arbitrability and, ,therefore, it was not necessary for him to decide it by way of preliminary issue or separately;
(iv) There is nothing illegal about the Arbitrator having awarded a lump-sum to the Contractors;
(v) Even if the Arbitrator's decision on the question of arbitrability is erroneous, it is binding to the parties, notwithstanding the fact that the dispute involves a question of law touching upon the jurisdiction of the Arbitrator; and
(vi) No prejudice has occurred to the Board by reason of the omission or failure on the par( of the Arbitrator to make an explicit or claim-wise pronouncement on the question of arbitrability and the award cannot, therefore, be set aside on the ground of un intelligibility in the facts and circumstances of the present case.
29. The above were the only circumstances made by Shri A. H. Mehta on the question of arbitrability and we find no substance in any of them.
30. The next contention urged by Shri A. H. Mehta on behalf of the Board was that the award was invalid as it was pronounced by the Arbitrator beyond the statutory limitation period of four months from the date on which the Arbitrator had entered upon the reference. It was suggested by Shri A. H. Mehta that the Arbitrator had entered upon the reference on 2nd April 1984, that is, the date on which he first issued notices to the parties and thereby called upon them to file their statements of claims etc. before him. It was submitted that the Arbitrator was statutorily required to pronounce his award within four months of this date, i.e., on or before the 1st of July, 1984 unless the Court had extended the time for giving the award or both the parties had moved the Arbitrator for extension of time and the Arbitrator had extended the same. It may be noted that the award was pronounced on 8th July 1985 and, therefore, it was certainly beyond the period of four months counting from2nd April, 1984. There is no dispute that the Court had, at no stage, extended the period for the making of the award. However, the contention raised on behalf of the Board was sought to be repelled by Shri N. J. Mehta, on behalf of the Contractor, firstly, on the ground that, in law, the Arbitrator can be said to have entered upon the reference not on the 2nd April, 1984 but on the 22nd August, 1984 when the Arbitrator, for the first time, applied his mind to the questions to be resolved by him or, in other words, towards the adjudicatory functions which he was required to discharge as Arbitrator. Secondly, it was submitted by Shri N. J. Mehta that before the statutory period of four months counted from 22nd Aug, 1984, expired on 21st Dec. 1984, the Arbitrator had extended the period for submission of the award up to 31st Mar, 1985 with the consent of the parties expressed in the shape of a joint pursis submitted on 15th Dec. 1984. Shri A. H. Mehta challenged the genuineness of this alleged pursis dt. 15th Dec. 1984 and pointed out that it did not bear the signatures of the parties. If it appears that the parties had, in fact, moved the Arbitrator on 15 th Dec. 1984 to extend the period up to 31st Mar. 1985 and the Arbitrator had accordingly extended the period up to that date, it is indisputable that the award is not hit on the ground of being beyond the period of limitation. This is so, because there is no dispute that on 19th April, 1985 the parties had again moved the Arbitrator by a joint application to extend the period till 30th June, 1985 and had again moved the Arbitrator by a joint pursis dt. 15th June, 1985 to extend the period till 30th July, 1985, and the Arbitrator had extended the period up to 30th July, 1985 and, before expiry of the said period, had pronounced his award on 8th July, 1985.
31. Before proceeding further, some of the relevant dates may be mentioned which would of course involve repetition of the mention of the aforesaid dates also. These dates are as follows :
16-2-84 The Arbitrator was informed by the Board about his appointment as such pursuant to the Supreme Court order and was requested to enter upon the reference.
31-3-84 The Arbitrator was informed about the formal agreement of reference executed by and between the parties pursuant to the order of the Supreme Court.
2-4-84 Registered notices by the Arbitrator to the parties informing the parties of his acceptance of the appointment as Arbitrator and calling upon the parties to file their claims, counter-claims, documents etc. within the time schedule mentioned in the said letter and further informing them that he would proceed to enter upon the reference and fix the date and time and place of the first hearing ONLY on receipt of the claims, counterclaims. Documents etc.
19-4-84 The Contractors filed statements of their claim.
28-4-84 The Board asked for time up to30th June, 1984 to file their counter-claim and the said request was granted.
30-6-84 The Board filed its counter-claim.
9-7-84 A copy of the counter-claim of the Board supplied to the Contractors.
26-7-84 The contractors filed their rejoinder or thereabout
6-8-84 The Arbitrator intimated to the parties that the first hearing will be held on 22nd Aug. 1984.
12-8-84 The first meeting held by the Arbitrator in presence of the representatives of the parties.
16-9-84 The second hearing before the Arbitrator.
23-11-84 The third hearing before the Arbitrator.
24-11-84 The fourth hearing before the Arbitrator
14-12-84 The fifth hearing before the Arbitrator.
32. The minutes of the aforesaid fifth meeting are dt. 1st Jan. 1985 and there is a specific mention therein that the parties had submitted a joint application requesting the Arbitrator to enlarge the time limit for three months and the Arbitrator had enlarged the time for three months i.e. up to 31st Mar. 1985. The unsigned pursis dated the 15th Dec. 1984 is referred to as the joint request by the parties to enlarge time up to 3 1st Mar. 1985. Thus, if 22nd Aug. 1984 is taken to be the date on which the Arbitrator entered upon the reference, this joint request was made within four months of the said date, viz, 22nd Aug. 1984 and in that case the time can be said to have been validly extended up to 3 1st Mar. 1985.
33. The question, therefore, is as to which is the date on which the Arbitrator can be said to have entered upon the reference. The Board submits that 2nd April, 1984 was the date on which the Arbitrator can be said to nave entered upon the reference because that was the date on which the Arbitrator had called upon the parties to submit their claim, counter-claim and the documents etc. It is, however, pertinent to note that in this very letter the Arbitrator himself has clearly stated in para 8 that he would enter upon the reference and would fix the date, time and place of the first hearing only on receipt of the statements of the claim and counter-claim etc. It is true, as submitted by Shri A. H. Mehta, that merely because the Arbitrator or one of the parties mentions a particular date as the date upon which the Arbitrator had entered upon the reference, that date cannot become the first date of entering upon the reference if, in law, it cannot be held to be so.
34. In order to appreciate the rival contentions of the parties on this point in a proper perspective it may be necessary to refer to some material legal provisions.
35. Section 3 of the Arbitration Act provides that an arbitration agreement, unless a different intention is expressed therein, shall be deemed to include the provisions set out in the First Schedule in so far as they are applicable to the reference. It is not said that in this case the agreement between the parties expressed therein an intention as to the duration within which the Arbitrator was required to give his award. Therefore, the provision set out in the First Schedule as to the period within which the award must be given will be attracted by the facts of this case. Now, the relevant provision on the point is to be found in para 3 of the First Schedule which lays down. "The arbitrators shall make their award within four months after entering on the reference or after having been called upon to act by notice in writing from any party to the arbitration agreement or within such extended time as the Court may allow."
36. Speaking about the present case, therefore, the Arbitrator was required to make his award within four months after entering upon the reference. In this case, the Court itself has not extended the time for the making of the award by the Arbitrator.
37. The power of the Court to enlarge time for making the award is dealt with by sub-section (1) of S. 28 of the Arbitration Act which says that the Court may, if it thinks fit, whether the time for making the award has expired or not and whether the award has been made or not, enlarge from time to time the time for making the award. We are not concerned in the present case with this provision of S. 28(1) of the Arbitration Act but we are directly concerned with the provision made in sub-section (2) of S. 28 of the Arbitration Act. That sub-section clearly lays down that any provision in an arbitration agreement whereby the arbitrator or-umpire may, except with the consent of all the parties to the agreement, enlarge the time for making the award, shall be void and of no effect.
38. It is all too apparent even from a bare reading of sub-sec (2) of S. 28 of the Arbitration Act that, even if there is a clause in the arbitration agreement that the Arbitrator may extend time suo motu or at the instance of one of the parties, it will be void. At the same time, however, it is equally clear that if there is a clause in the agreement that the Arbitrator may, with the consent of all the parties to the agreement enlarge the time for making the award, such a clause will be perfectly valid and binding. Now, in this case if we turn to the consent terms submitted before the Supreme Court, it is clearly provided in para thereof that both the parties shall agree to extend the time as and when necessary for completion of arbitration proceedings. Thus, the agreement between the parties in this case did not only empower the Arbitrator to extend the time for the making of the award with the consent of the parties but it also enjoined upon the parties to consent to such extension whenever it was necessary for completion of the arbitration proceedings.
39. At this stage, it is also pertinent to mention that the Arbitrator in this case was very much aware of the fact that he has to give his award within four months from the date of entering upon the reference. This is evident from the fact that the Arbitrator has, in para 9 of his registered notice dt. 2nd April, 1984 served on both the parties, specifically cautioned the parties that the award has to be given within four months from the date of entering upon the reference and, therefore, they should submit their claim and counter-claim strictly within the time schedule fixed by him in the said notice. The Arbitrator having apprised the parties of this position, it can well be taken that the parties were also aware of the same. It is especially in the context of this background that we have to consider whether the parties had or had not jointly moved the Arbitrator at the meeting dt. 14thDec. 1984 to extend the time and had not then given a joint pursis to that effect dt. I ' 5th Dec. 1984 though that pursis omitted to bear the signatures of the parties.
40. Before, however, going further into the above question, it may be considered as to when the Arbitrator can be said to have entered upon the reference, whether on the 2nd April, 1984 or on 22nd Aug 1984. The expression "entering upon the reference" is not defined, and, therefore, when we turn to some decided cases throwing light on the question of connotation of this expression, we find that there is overwhelming authority for the proposition that the Arbitrator enters upon the reference only when he applies his mind for the first time to the disputes to be resolved by him and not when he first issues a notice (like the notice dt. 2nd April, 1984 in this case) whereby he calls upon the parties to produce t heir statements of cases etc., See Soneylal Thakur v. Lachhminarain Thakur, AIR 1957 Pat 395, Ramsahai Sheduram v. Harishchandra Duttchandji, (AIR 1963 Madh Pra 143), Assadullah Makhdoomi v. Lassa Baba, AIR 1966 J. & K. 1 and Kalinga,Otto (P) Ltd. v. Charanji Kochhar, AIR 1973,Orissa 172.
41. A Full Bench of the Calcutta High Court in Ramanath Agarwalla v. Goenka & Co., AIR 1973 Cal 253 has also held :-
The Arbitrator, under the Act, may have to do various ministerial acts but the doing of any of the ministerial acts is not entering on the reference. It is only when he first applies his mind to the dispute referred to him that he enters on the reference. When, however, in a particular case, he first applied his mind to the dispute would depend in the facts and circumstances of that case".
This view of the Calcutta High Court is followed by the Bombay High Court in Jolly Steel Industries v. Union of India AIR 1979 Bom 214 wherein it is pointed out that an arbitration proceeding consists of some merely ministerial acts as also of effective adjudicative acts in furtherance of the work ,of arbitration. It is further laid down in the said case that the Arbitrator cannot be said to have entered upon the reference unless he starts the effective adjudicative part of his functioning as Arbitrator. It appears that in that case the Arbitrator had only issued notices to the parties on 17th Nov. 1971 to file their statements of claims and it was held that the Arbitrator cannot be said to have entered upon the reference on that day. The hearing of the dispute had actually commenced on 21st Feb. 1972 and it was held that each one of the earlier stages covered merely some or other ministerial acts such as issuing of notices, acceptance of the statements of claims and adjourning the case to suit the convenience of the parties. As already said in the facts and circumstances of that case, 21st Feb. 1972 was held to be the date on which the Arbitrator had entered upon the reference.
42. Thus, there is heavy weight of authority in support of the proposition that the Arbitrator enters upon the reference on the date on which he starts the adjudicative part of his function and not when he starts just the ministerial part of his function. Applying this test to the facts and circumstances of the present case, there should not be any hesitation in holding that the Arbitrator had entered upon the reference earliest on 22nd Aug. 1984. The period of four months from 22nd Aug. 1984 would, therefore, have been over on 21st Dec. 1984 and the question is whether both the parties had not moved the Arbitrator on the 14/15th Dec. 1984 for extension of time.
43. The faint suggestion that this document dt. 15th Dec. 1984, which purports to be a joint pursis by the parties for extension of time is a fake document, does not merit any consideration whatsoever. It is true that it does not bear the signatures of the parties. However, it appears to be a clear omission. The minutes of the meeting dt. 14th Dec. 1984 recorded on 1st Jan 1985 clearly mention about the submission of this joint pursis dt. 15th Dec. 1984. Nowhere any allegation of partisanship or mala fides is made against the Arbitrator. The Arbitrator had no reason to allow either party to smuggle in this document on the record or to himself do so. It is also an indisputable and undisputed fact that, even after this date, viz, 14/15th Dec. 1984, the Board had participated in the proceedings without any demur whatsoever and had in fact given two more applications for extension of time (dt. 19th April, 1985 and 15th June, 1985 jointly with the Contractors). There was also no dispute about the fact that the minutes dt. 1st Jan. drawn for the meeting held on 14th Dec. 1984 were sent to the parties and the said minutes make a specific reference to the joint pursis dt. 15th Dec. 1984. We have, therefore, no hesitation in finding that the parties had actually jointly moved the Arbitrator for extension of time on 14th/ 15th Dec. 1984 and, even though the pursis dt. 15th Dec. 1984 do not bear signatures of the parties, they were the conscious authors of the said pursis and had, in fact, submitted the same to the Arbitrator for extension of time. The pursis cannot be equated with a pleading in a civil case and the mere omission on the part of the parties to sign it cannot detract from the fact that the parties had jointly moved the Arbitrator to extend the time and the Arbitrator had done so with their consent. One may go further and say that it is not necessary that the consent of the parties to enable the Arbitrator to extend time has to be in writing. It may as well be oral vide Sakalchand Moti v. Ambaram Haribhai, AIR 1924 Bom 380. It appears in this case that on 14th Dec. 1984 the parties must have orally moved the Arbitrator to extend the time and must have submitted the pursis on the next day forgetting that they had not put their signatures thereon.
44. In the case of Chaturbhai Sohanlal v Clive Mills Co. Ltd. AIR 1965 Cal 145 there is authority even for the proposition that the parties may by consent enlarge time after expiry of the period of four months and the Court can also do so. We are also of the same view and this will cover the gap between 31-3-85 and 19-4-85 also.
45. In view of the foregoing discussion, there is no manner of doubt in our mind that the award in this case was made within the stipulated and validly extended time limit. It may only be mentioned that while contending forcefully that the award in this case was not vitiated on the score of limitation as contended by the Board, the Contractors have also filed Misc. Civil Application No. 1508 of 1987 urging that, if necessary, this Court may grant extension of time to make and publish the award. Since we have taken the view that the award is made within the validly extended period, there is no question of the Court having to grant extension of time to make and publish the award. We may, however, add that if such a contingency had arisen, we would not have hesitated, in the facts and circumstances of this case, to extend the time, ex post facto, by allowing Misc. Civil Application No. 1508 of 1987. The main reason why we would have adopted that course is that even after Dec. 1984 the Board had participated in the proceedings before the Arbitrator without any demur whatsoever and fully willingly. In that connection the Court would also have been required to take note of the fact that in the consent terms before the Supreme Court the parties had bound themselves to agree for extension of time for completion of the arbitration proceedings. It would also have been a very material consideration that the parties have spent lot of money and time to have their disputes resolved by arbitration. Furthermore, if the award were to be set aside on this ground, the agreement to have the disputes referred to the Arbitrator would still have stood and there would have been another round of arbitration proceedings. The considerations which should weigh with the Court in the matter of extending the time for the making of the award are spelt out by the Supreme Court in Hindustan Steel Works Construction Limited v. C. Rajasekhar Rao (1987) 4 SCC 93 and, in our opinion, the ratio laid down in the said case is squarely attracted by the facts and circumstances of the present case. We, therefore, find no merit in the challenge of the Board against the award on this count.
46. We now proceed to deal with the contention raised by Shri A. H. Mehta in respect of the award of interest by the Arbitrator to the Contractors. It may be noted in this connection that the Arbitrator has awarded to the Contractors the total amount of Rs. 57,65,273-00 with interest to be calculated at the rate of 17% per annum (seventeen per cent per annum) on the said amount with effect from 6th Aug. 1981 (the date on which the application was filed by the claimants (Contractors) for the appointment of an Arbitrator in the Court of Civil Judge (S. D.), at Narol) till the date of actual payment or till the date of the decree that may be passed by the competent Court of law, whichever is earlier, in full and final settlement of all claims/ counter-claims raised before him in the reference. Shri A. H. Mehta challenged the authority of the Arbitrator to award any interest whatsoever to the Contractors. Secondly, in his submission, the Arbitrator had committed an error apparent on the face of the record in awarding interest at the rate of 17% per annum, even assuming that he had the authority to award interest at all. It was the contention of Shri A. H. Mehta that the award of any interest whatsoever was beyond the scope of reference made to the Arbitrator and was, therefore, totally bad in law. Shri A. H. Mehta's argument was that the parties had not specifically referred to the Arbitrator any dispute regarding interest claimable by one from the other nor were all the disputes referred by them to the Arbitrator unequivocally and, therefore, this is not a case in which it can even be said that any dispute regarding interest was impliedly referred to the Arbitrator. It was submitted by Shri A. H. Mehta that the dispute regarding interest can be said to have been referred to the Arbitrator only if (i) all the disputes arising between the parties are referred to the Arbitrator or (ii) the dispute regarding interest is specifically referred to the Arbitrator or (iii) when reference to the Arbitrator is by a Court in a pending suit involving an issue of interest and the Court has appointed an Arbitrator to decide all disputes arising in the suit. There cannot be any doubt that the contingency No. (iii) stated just hereinabove does not exist in the present case because the reference was not made in the course of a suit. However, the question still remains for consideration whether in the circumstances of the present case, it must not be held that the parties or, at least the Contractors, had specifically referred to the Arbitrator their claim for interest against the Board and also whether there was not a reference to the Arbitrator of all the disputes arising between the parties which would impliedly cover an issue or dispute regarding interest. There cannot be any quarrel with the submission of Shri A. H. Mehta that the reference to the Arbitrator in the present case was only of those issues which were covered by Clause 30 of [he two contracts. However, whether any particular dispute fell within the parameters of Clause A) or not and was, therefore, arbitrable or not, was also specifically referred to the Arbitrator as already stated earlier. Therefore, if the Contractors had advanced a claim for interest on the amount adjudged as payable to them, it was within the exclusive jurisdiction of the Arbitrator to pronounce whether that claim was covered by Clause -30 of the Contract or not. Again, if the Arbitrator has held, explicitly or impliedly, that the dispute was covered by Clause -1) of the Contract that decision of the Arbitrator will be final and cannot be challenged on the ground that it was beyond the scope of reference and beyond the scope of authority of the Arbitrator. In this case, it is an indisputable and undisputed fact that the Contractors had, in fact, claimed interest on the amount which, according to them, was payable to them. There is then no doubt in our mind that all the disputes, subject to their arbitrability in the light of Clause 30 of the contracts, were referred to the Arbitrator. We, therefore, fail to understand as to how it can be contended that the Arbitrator had no authority to award interest or that the award of interest by him fell outside his jurisdiction. Shri A. H. Mehta, of course, rightly pointed out that Clause 30 does not specifically empower the Arbitrator to award interest. However merely because the said clause does no explicitly and specifically refer to the award of interest, it cannot, in our opinion, be contended that it takes away the authority o the Arbitrator to decide that, by necessary implication, the award of interest was covered by terms of Clause 30. In this connection one more fact to be noted is that Clause 30 does not specifically exclude the authority of the Arbitrator to take cognizance of a dispute regarding award of interest and to decide the same. Since the Arbitrator has, in fact awarded interest to the Contractors, it must be presumed that he had held that he had a least the implied authority to award the interest. This is especially so, because interest in such circumstances may be taken to be incidental to the award of the principal amount.
47. However, in support of his proposition that if the dispute regarding interest is not referred to the Arbitrator he cannot award the same. Shri A. H. Mehta sought support from the decision of Umraosingh and Co. Mahanagar, Lucknow (U. P.) v. State of Madhya Pradesh, AIR 1976 Madh Pra 126. But then, we have no hesitation in finding that this case does not help Shri A. H. Mehta. In that case, the Contractors had claimed additional payments under 11 items on different grounds and the Arbitrators had partly allowed all additional claims except one under item No. 6. The Arbitrators had also allowed interest on the additional amount awarded by them at the rate of 6% per annum after expiry of two months from the date of the award in case of non-payment of the amount by the Government. The question which fell for the decision of the Division Bench of the Madhya Pradesh High Court was whether the Arbitrators were right in awarding interest. It was pointed by the High Court that none of the claims referred to the Arbitrators included claim for interest. Pausing here, it may be pointed out that, in the case before us, the contractors had made a specific claim for award of interest to them. The learned Judges, after referring to the fact that none of the claims referred to the Arbitrators included a claim for interest, quoted the following observations of the Supreme Court from Thawardas v. Union of India, AIR 1955 SC 468 : -
"It was suggested that at least interest from the date of a suit could be awarded on the analogy of S. 34 of the Civil P.C. 1908. But S. 34 does not apply because an arbitrator is not a "Court" within the meaning of the Code nor does the Code apply to Arbitrators, and, but for S. 34, even a Court would not have the power to give interest after the suit. This wag, therefore, also rightly struck out from the award".
48. After referring to the aforesaid observation in Thawardas' case, the learned Judges of the M. P. High Court have, however, pointed out that the view taken i ' n the said case is modified tosome extent in subsequent cases viz. Firm Madanlal Roshanial v. Hukumehand Mills AIR 1967 SC 1030, Union of India v. Bungo Steel Furniture AIR 1967 SC 1032 and State of M. P. v. S & S (P). Ltd. AIR 1972 SC 1507. The learned Judges have pointed out that in all these cases it is held that Thawardas' case does not deal with the question whether the Arbitrator can award interest subsequent to the passing of the award if the claim regarding interest was referred to the arbitration. It is also observed that, in these cases, it is pointed out that if a dispute as to interest is referred to arbitration, it is an implied term of the reference that the Arbitrator will decide the dispute according to the existing law and give such relief with regard to interest as the Court would give if it decided the dispute. It is said that on this basis it is held in the aforesaid cases that the principle of S. 4 will be applicable in such cases and the Arbitrator will have jurisdiction to allow interest subsequent to the passing of the -award. It is also made clear that the aforesaid Supreme Court cases lay down that if the reference is of "all matters in difference", the Arbitrator may allow interest as was held by the Court of Appeal in Chandris v. Isbrandtsen- Moller Co. (195 1) IKB240.The M. P. High Court has, therefore, concluded in the case of Umraosingh & Co. (AIR 1976 Madh Pra 126) (supra) that the position, therefore, is that if there is a dispute as to interest which is referred to the arbitration or if all the matters in difference are referred to arbitration, the Arbitrator may award interest on principles analogous to S. -14 of the Code, but if the reference does not include a dispute as to interest or if it is not so widely worded as to include "all matters in difference", it appears that Thawardas' case (AIR 1955 SC 468) will still prevail and the Arbitrator has no jurisdiction to allow interest after the date of the award. It was found by the M. P. High Court that, in the case before them, the claims referred to Arbitrators did not include any dispute as to interest and, further, the reference was not of "all matters in difference" but only of specific matters. In that view of the matter, the M. P. High Court held, in the case before it, that Thawardas' case was applicable to the facts of the said case and the Arbitrators had exceeded their jurisdiction in awarding interest.
49. It should be clear from the aforesaid judgment of the M. P. High Court cited by Shri A. H. Mehta himself that if the dispute regarding interest is referred to the Arbitrator or if all the disputes between the parties are referred to the Arbitrator, the Arbitrator has ample authority to award interest on principles analogous to the principle embodied in S. 34 of the C.P.C. Therefore, the real question to be considered in our case is whether the dispute regarding award of interest was referred to the Arbitrator or not or whether all disputes between the parties were referred to the Arbitrator or not. In our opinion, it is entirely a different matter that the question whether a particular dispute fell under Clause 30 of the Contracts or not and was, therefore, arbitrable or not, was also referred to the arbitration. If dispute regarding interest was referred to the Arbitrator or if all the disputes between the parties were referred to the Arbitrator. the Arbitrator was, of course, required to decide whether the dispute regarding interest was covered by Clause 30 of the Contracts. Now, in the present case a conjoint reading of the consent terms submitted before the Supreme Court and the formal agreement leaves no doubt in our mind as to the fact that all disputes between (lie parties, including the dispute regarding arbitrability, were referred to the Arbitrator. Not only that, but the Contractors had specifically made a claim for award of interest and it is in that context that it has to be seen I hat all disputes were referred tot he Arbitrator subject of course, to their arbitrability in the light of Clause -14) of the Contracts. However' as already stated, the mere fact that the dispute regarding interest was not explicitly enumerated in any of sub-clauses of Clause 30. it cannot be said that the Arbitrator could not have upheld the plea that the dispute regarding interest was impliedly covered by Clause 30 of the Contracts. In any event, even if the Arbitrator has committed an error in holding that the dispute regarding interest was covered by (:1. 30, such finding of the Arbitrator will be binding to the parties and cannot be disturbed by the Court. This is so' because the parties had conferred exclusive jurisdiction on the Arbitrator to decide even the dispute regarding arbitrability of any claim including the claim for interest.
50. Shri A. H. Mehta also submitted that there was nothing on the face of the award to show that the amount of Rs. 57,65,273-00 awarded by the Arbitrator did not include some interest for the period prior to the date of the filing of the Misc. Civil Application by the Contractors in the Civil Court at Narol and if the Arbitrator had included in the aforesaid amount any amount of interest for the period prior to the date of the filing of the application, the award to that extent must be held to be beyond the jurisdiction of the Arbitrator. However, we have to presume, if and whenever necessary, that the Arbitrator had acted within the scope of his authority. We cannot presume otherwise, as submitted by Shri A. H. Mehta. The presumption has to be in favour of the validity of the award and not in favour of its invalidity.
51. In this connection, it may be repeated that the Contractors had claimed interest at 17% per annum on all claimed amounts from 13-5-1981 till the date of actual realisation (vide paras l(c) and 10(m) of their C.M.A. No. 231 of 1981 filed in the Court of learned Civil Judge (S. D.). Narol). It may also be repeated that the consent terms before the Supreme Court and the formal agreement dated 31-3-1984, read together, refer all disputes between the parties concerning the two works to the Arbitrator subject of course, to the arbitrability of such disputes under Clause 30 of the Contracts. This means that all claims including the claim of interest were referred to the Arbitrator. Of course, the Arbitrator had to find out whether the claim for interest fell within the explicit or implied purview of Clause 30 or not. The award of interest by the Arbitrator must, as already mentioned, imply that he had held the said claim to be arbitrable.
52. In Union of India v. Bungo Steel Furniture Private Ltd., AIR 1967 SC 1032 the Supreme Court has observed :
"Though, in terms, S. 34 of the Civil P.C. does not apply to arbitration proceedings, the principle of that section will be applied by the arbitrator for awarding interest in cases where a Court of law in a suit having jurisdiction of the subject matter covered by S. 34 could grant a decree for interest."
In the said case, the Supreme Court also quoted with approval the following observations from the judgment of Jarvis, C. J. in the case of Edwards v. Great Western Rly, ( 185 1) 11 C B 588, viz
"A further answer would be, that, this is a submission, not only of the action, but of all matters in difference; and the interest would be a matter in difference, whether demanded by t he notice of action or not. If the arbitrator could give it, he might give it in that way, notwithstanding the want of claim of interest in the notice."
53. In Ashok Construction Company v. Union of India (1971) 3 SCC 66 the relevant clause of the arbitration agreement provided :
"Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other questions, claim, right, matter or thing, whatsoever, in any way arising out of, or relating to the contracts, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whatever, arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the Superintending Engineer. xx xxx .......
Thus, the terms of the arbitration agreement in the case referred to in the preceding para did not specifically provide for reference of any dispute regarding interest to the Arbitrator but the Supreme Court noted that the terms of the arbitration agreement did not exclude the jurisdiction of the Arbitrator to entertain the claim for interest on the amount due under the contract and held that the award of interest by the Arbitrator cannot be said to be invalid. In our case also, Clause 30 does not exclude from the purview of the authority of the Arbitrator taking cognizance of any dispute relating to interest and furthermore all disputes arising between the parties were referred to the Arbitrator subject, of course, to the question of arbitrability of such disputes.
54. The case of State of Madhya Pradesh v. Saith and Skelton (P) Ltd., AIR 1972 SC 1507 is also an authority for the proposition that if all disputes are referred for arbitration, the Arbitrator has power to award interest pendente lite i.e during the pendency of the arbitration proceedings. It is also observed in the said case :-
"In the case before us, admittedly the contract does not provide that no interest is payable on the amount that may be found due to any one of them."
It is also observed in this case :
Therefore, the question ultimately will be whether the dispute referred to the arbitrator included the claim of interest from any particular period or whether the party is entitled by contract or usage or by a provision of law for interest from a particular date." It is also pertinent to note that in this case there was a contention that the award of interest at 9% per annum was exhorbitant and the Supreme Court has said :-
"Mr. Shroff further contended that the award of interest at 9% per annum is exhorbitant. The short answer for negativing this contention is that it is seen from the claim statement filed by both the appellant and the respondent-firm that each of them claimed for payment of the amount, due to them with interest at 12%, per annum under S. 61 of the Sale of Goods Act. Therefore, it follows that the rate of interest awarded is not excessive. As we have already held that ,the arbitrator has got power in this case to award interest from June 7, 1958 at the rate specified by him, the third contention of Mr. Shroff will have to be rejected."
55. A reference to this aspect of the case (rate of interest) is made here because, in the case before us also, the appellant-Board itself had admittedly charged interest from the Contractors at the rate of 17% per annum for certain amounts advanced by them to the Contractors as envisaged by the contracts and yet they now contend that the award of the interest at the rate of 17% by the Arbitrator was excessive. We will further advert to this aspect of the reasonability of the rate of interest awarded by the Arbitrator a little later also.
56. In State of Punjab v. Ajit Singh, AIR 1979 Punj and Har 179 also, a Full Bench of the Punjab and Haryana High Court has held that the power to grant future interest, i.e. interest from the date a4 the reference, did not depend on the pleadings of the parties and that interest cannot be refused on the' ground that the party entitled had not expressly claimed it. Referring to S. 34 of the Civil P.C. the Full Bench has further observed that the matter of granting interest under S. 34 of the Civil P.C. is primarily in the discretion of the Court itself and cannot easily be fettered on the technical plea that the claim for future interest was not made by the party entitled thereto in so many words.
57. Apart from the aforesaid Full Bench decision of the Punjab and Haryana High Court, there is authority provided by Gopalkrishna Pillai v. Meenakashi Ayal, AIR 1967 SC 155 and Lala Gobind Ram Kapoor v. Prem Parkash Kapoor AIR 1984 J and K 48 for the proposition that future interest or future mesne profits are, as it were, incidental matters and may be awarded even though not specifically claimed if the same are not inconsistent with the other reliefs claimed.
58. In the aforesaid Jammu and Kashmir High Court case, it is also laid down that if a Court can award interest in exercise of its powers under S. 34 of the Civil P.C. even though the same is not claimed in the suit, there can be no manner of doubt that an Arbitrator has also power to award interest in arbitration proceedings even if it has not been specifically claimed.
59. The Orissa High Court has held in State of Orissa v. J. N. Choudhury AIR 1982 Orissa 275 that unless there is a specific clause in the agreement prohibiting award of interest, the Arbitrator has jurisdiction to award interest. It is also held that the Arbitrator has power to award interest when it is an implied term of reference and in the absence of prohibition in the agreement, interest maybe awarded from due date till the date of the award and the award allowing interest is not vitiated on that ground. In our case, there is no prohibition against the award of interest which may be found due to any party.
60. In Krishan Kumar Madhok v. Union of India, AIR 1982 Delhi 332, the Delhi High Court has held that though S. 34 of the Civil P.C. does not specifically apply to arbitration, the Arbitrator has power to award interest pendente lite as the Court itself could give if the question of interest has been referred for arbitration. It is held that the power of Arbitrator in this regard is discretionary in the same way as it is discretionary with the Court under S. 34 of the Civil P.C. It is also held in this case that if the Arbitrator thinks that 18% per annum is the reasonable rate at which the interest should be awarded the Court should not interfere with the award of the Arbitrator regarding the rate of interest.
61. The Orissa High Court, following the Supreme Court decision in the case of Ashok Construction Co. v. Union of India (1971-3 SCC 66) (supra), has held that if the arbitration agreement did not exclude the jurisdiction of the Arbitrator to entertain the claim for interest on the amount due under the contract, then, his award on that count cannot be said to be invalid It is still more important to note that, in this case, the Orissa High Court has observed that the question of payment of interest is certainly a matter incidental to the final settlement of the claim. It is again interesting to note that, in this case before the Orissa Court also, both the parties had claimed interest in their claims and counterclaims and it was observed that they had possibly done so as they were conscious of the fact that the payment of interest was covered by the agreement. It is also to be noted that the parties by demanding interest on their claims and counter-claims were held to have submitted to the jurisdiction of the Arbitrator to assess the quantum of interest on their respective claims and counter-claims. It is also pointed out that the Chief Engineer who acted as an Arbitrator in the said case before the Orissa High Court was expected to know the usage of the trade in such cases and that point so also the award of interest by him can justly be attributed to the usage of the trade and his award on cannot he struck down.
62. The proposition that the Arbitrator has power to grant interest pendente lite is further fortified by the decision in the case of Executive Engineer, R. E. Division, Dhenkanal v. J. C. Budharaj, AIR 1% 1 Orissa 172 and Union of India v. Builders Union, AIR 1981 Orissa 188. Similarly, the implied authority of the Arbitrator to grant interest is upheld in the case of Union of India v. M/s D. P Wadia and Sons, AIR 1977 Bom 10. There is thus overwhelming and conclusive authority for the proposition that if the contract does not prohibit the award of interest and if all disputes are referred to the Arbitrator, the Arbitrator has authority to award interest pendente lite. In the present case, there is nothing in the relevant contracts which excludes claim for interest being made by any party entitled thereto and, by virtue of the consent terms submitted to the Supreme Court and the formal agreement between the parties, all disputes were referred to the arbitration subject to their arbitrability. It must, therefore, follow that the Arbitrator had the authority to award interest pendente lite and the Contractors had referred their claim for interest to the Arbitrator and the Arbitrator has implied found that such claim for interest was not non-arbitrable under CL -30 of the Contracts. We, therefore, find no substance in the submission of Shri A. H. Mehta that the award of the Arbitrator or even its relevant part (awarding interest) is vitiated by the ground of interest.
63. We also find no substance in the contention that the award of interest at the rate of 17% as made by the Arbitrator is bad. As already seen, the Board itself had charged interest from the Contractors at the rate of 17%. It must also be borne in mind that the Arbitrator was a sitting member of the Board and an experienced retired officer of a high rank and the presumption must be that he knew as to what was the prevailing market rate of interest or bank rate of interest. We, therefore, reject even the contention that the rate at which interest is awarded by the Arbitrator is excessive.
64. That takes us to the last contention urged by Shri A. H. Mehta viz. that the award is vitiated by non-application of mind on the part of the Arbitrator. The basis on which this contention is advanced by Shri A. H. Mehta appears to be extremely frail. The ground is based on the fact that the Arbitrator has recited in his award that he had considered oral evidence also in arriving at his conclusions and making the award- It was pointed out by Shri A. H. Mehta, and there is no dispute about it, that neither party had led any "oral evidence" before the Arbitrator in the sense in which the expression "oral evidence" is understood in courts and other similar forums. Before proceeding further on this point, it may be pointed out that what the Arbitrator has stated in his award, by way of preamble, is "Now, 1, M. D. Patel, Sole Arbitrator and Chairman of M/s. Gujarat State Construction Corporation Ltd. and retired Secretary, P. W. D., Government of Gujarat, Ahmedabad, having taken up the burden of reference, heard and examined and considered the pleadings submitted on behalf of the parties and documentary and oral evidence produced before me by them as also their oral submissions and arguments ..................... I hereby award and direct ....................
65. It is clear from the above that the Arbitrator has not merely stated in his award that he had heard and considered the oral evidence led by the parties before him, but he has also categorically mentioned that he had heard, examined and considered the pleadings and the documentary evidence and the oral submissions and arguments of the parties. The question is, whether in the face of this statement, it can be said that the Arbitrator was guilty of non-application of mind merely because he had referred to oral evidence even though there was no oral evidence on record before him in the sense in which men versed in law understand the expression "oral evidence". We are emphatically of the opinion that, in the circumstances of this case, it is not possible to say that the award made by the Arbitrator was a product of non-application of mind. It must be remembered that the Arbitrator chosen by the parties in this case was not a man of law who can be credited with precision of language to the same degree as a man of law would be, especially in matters of legal parlance. Furthermore, the record clearly shows that the meetings and the hearings before the Arbitrator had stretched to several sittings and oral submissions were made by the advocates of the parties before the Arbitrator. If, in these circumstances, the Arbitrator merely said that he had heard and considered oral evidence, it must simply be taken as a loose way of expressing himself, but nothing more than that. It is already seen that the approach to be made to awards of the Arbitrators should not be to prick holes and to find faults here and there but should be such as would sustain the award, the reason being that the Arbitrator is a person in whom both the parties have reposed confidence for resolving their dispute effectively and honestly. It is also possible that the Arbitrator was mistaken in referring to oral submissions made before him as oral evidence. This possibility appears to be more plausible in the circumstances of this case and it is not possible to jump to the conclusion that the Arbitrator had not applied his mind to the matters before him, particularly when the record shows that he had before him documents produced by the parties and had considered the same and had also entertained arguments from the parties at length.
66. Reliance placed by Shri A. H. Mehta on his point on Fertilizer Corporation of India Ltd. v. Bharat Painters, AIR 1986 Orissa 82 is, with respect misplaced. The decision does not lay down any proposition that merely because the Arbitrator is imprecise in the use of language in his award he must be held guilty of non-application of mind. The dispute between the parties in 1hat case was in respect of a claim made by the respondent for reimbursement of costs amounting to Rs. 10.00 lakhs approximately which the respondent had spent for de-watering 3,00,000/- kiloliters of water while executing additional works in a Coal Handling tunnel. Each and every averment made in the claim statement filed before the Arbitrator was denied in the written statement and no evidence either, oral or documentary, was led before the Arbitrator by either party but the Arbitrator had simply inspected the site on one day and had passed the award for Rs. 8,20,800/-. It was specifically found by the High Court that by the time the Arbitrator inspected the site, the work in question had already been over and was not in progress and the Arbitrator could not have arrived at the conclusion as to the quantity of dewatering merely by his inspection of the site after the work was over. In these facts and circumstances, it was held that the conclusion of the Arbitrator was not backed by any evidence and that such conclusion can be interfered with by the Court even though the Arbitrator had not given any reasons for arriving at the said conclusion. The determination made by the Arbitrator was, therefore, held to be perverse and the perversity was held amounting to misconduct within the meaning of S. 30 of the Arbitration Act enabling the Court to interfere with the award. It was in these facts and circumstances that the Orissa High Court reached a clear conclusion that the award was vitiated by such non-application of mind as would amount to misconduct on the part of the Arbitrator. After having reached this conclusion, one more fact noted by the Orissa High Court was that the record showed that the Arbitrator had indicated that he had gone through the documents produced before him when, in fact, no documents were produced before him by either party. This circumstance was referred to by the High Court as giving one more indication of non-application of mind on the part of the Arbitrator. The facts of the case before us cannot even remotely be likened with the facts of the case before the Orissa High Court. In this case, the fundamental ground on which the award was struck down by the Court was that there was no evidence whatsoever before the Arbitrator to find out the extent of dewatering and yet he had passed an award in a huge amount and, while doing so, he had stated that he had referred to the documentary evidence on record when, in fact, no such evidence existed. The award in that case was not struck down merely because of the wrong recital made in the award about the Arbitrator having considered the documentary evidence but it was struck down basically because, in fact, there was no evidence whatsoever before the Arbitrator to arrive at the conclusion which he had done. It is, therefore, that we find that Shri A. H. Mehta cannot derive any help from this decision.
67. Shri N. J. Mehta on behalf of the Contractors rightly relied on the following observation from Russel on Arbitration at page 303 (Twentieth Edition) to repel the contention of Shri A. H. Mehta in this behalf. The citation in question reads :-
"An arbitrator cannot by a false recital give himself an authority beyond the submission. Nor, on the other hand, will a false recital invalidate the award .................... An award is not vitiated by a recital containing a ,....................... mistake as to ....................the arbitrators having considered the decision of the 'umpire' when there has, in fact, been no consultation with the umpire.'
68. Similarly, the following observation quoted from Halsbury's Laws of England, (Vol. 11, Arbitration) is quite apt in the context and negatives the contention of Shri A. H. Mehta. The observation is:
"Inaccurate recitals do not affect the validity of the award."
69. In the result of the above discussion', we find no substance in the contention of Shri A. H. Mehta that the award is bad on the ground of non-application of mind by the Arbitrator.
70. Having thus given all possible consideration to the contentions and, submissions raised by Shri A. H. Mehta we' find ourselves unable to accept any of the same.
71. In the result, therefore,' both the appeals viz. First Appeal No. 848 of 1986 and First Appeal No. 849 of 1986 are dismissed with costs. Interim relief vacated.
72. In view of the observations made in our judgment hereinabove on the question of limitation, we find it unnecessary to pass any order on Civil Application No. 1508 of 1987 filed by the Contractors for extension of time to make and publish the award and the said application is, therefore, filed without any orders as to costs thereof.
73. At the request of Mr. K. H. Baxi for Mr. A. H. Mehta the operation of this order is stayed till 15th June, 1988 in order to enable the Board to approach the Supreme Court and obtain appropriate orders.
74. No further extension will be granted.
75. Appeals dismissed.