State of Orissa vs Gangaram Chhapolia

B.K. Ray, J.—This is an appeal by the State of Orissa u/s 39 of the Arbitration Act (hereinafter called the (''''Act'') .

A dispute between the Respondent and the Appellant regarding the former''s claim for the work done by him in pursuance to a contract entered into between them having been referred to arbitration, Shri Ganeswar Sahu, Superintending

Engineer (P and D), Orissa Lift Irrigation Corporation Limited, Bhubaneswar submitted an award in the Court below. An application having been made by the Respondent after submission of the a ward to make the same a rule of the Court, notices were issued by the Court below to the parties. On receipt of notice the present Appellant filed an application u/s 33 of the Act in the Court below challenging the award on several grounds. The Court below heard the parties on the application and by the impugned order rejected the same and made the award a rule of the Court. Hence the present appeal.

Mr. A. Rath, learned Additional Standing Counsel for the Appellant, raises only one point. He argues that u/s 37 of the Act the provisions of the Indian Limitation Act are applicable to arbitrations as they apply to proceedings in Court. The claim of the Respondent before the arbitrator was barred by limitation under Article 18 of the Indian Limitation Act on the very face of it. Therefore, it was the duty of the arbitrator to disallow the claim of the Respondent, but he has not done so obviously by ignoring the provisions of Article 18 of the Indian Limitation Act read with Section 37 of the Act. On this account the award should have been set aside by the Court below.

A reference to the statement made by the Appellant before the arbitrator does not show that a point of limitation was raised therein. A reading of the award also does not show that the arbitrator after considering the question of limitation raised before him has erroneously given his decision contrary to Article 18 of the Indian Limitation Act. Law is now well settled that unless the error of law committed by the arbitrator appears on the very face of the award the award cannot be remitted or set aside. In this connection, reference may be made to a decision Kanpur Nagar Mahapalika Vs. Narain Das Haribansh, . In that case, the Appellant made in application for setting aside an award made on the ground that the arbitrator misconducted himself ill the proceeding by not properly deciding the bar to the claim u/s 326 of the U.P. Municipalities Act. The Court set aside the award. The High Court held that if the arbitrator did not accept the limitation pleaded under the Act, it would not be an error of law on the face of the award. On an appeal to the Supreme Court the decision of the High Court was upheld on the ground that no error of Jaw appeared on the face of the award. The same view has also been expressed in the decision reported N. Chellappan Vs. Secretary, Kerala State Electricity Board and Another, , which lays down that where the arbitrator awards a sum to the contractor on account of certain claims made by him after considering the arguments made by the parties before it without expressly adverting to the question of limitation, the award is not vitiated on account of any mistake or error apparent on the face of the award. According to the said decision, an arbitrator is not bound to give a reasoned award, and even if in passing the award be makes mistake of law or fact, that is no ground for challenging the validity of the award. The said decision further lays down that it is only when an erroneous proposition of law is stated in the award and the same is made the basis of the award, then only the award can be set aside or remitted on the ground of error of law apparent on the face of the record. In the case before me, the question of limitation has not been dealt with in the decision of the arbitrator. The award does not contain any erroneous proposition of law on the basis of which it has been made. The bar of limitation, even assuming that it was raised before the arbitrator might have been met by the arbitrator by referring to the evidence led by the parties. For example, the arbitrator might have accepted an acknowledgment made by the Appellant to meet the plea of limitation. In the absence of the award showing that an erroneous view of law has been taken which is the basis of the decision, it cannot be said that there is a mistake in the award on the very face of it. In view of the law laid down by the Supreme Court as pointed out above, the point raised by the learned Additional Standing Counsel appears to be without any substance.

In the result, therefore, the appeal fails and is accordingly dismissed. But in the circumstances, there will be no order for costs.

Appeal dismissed.