Appeal No 572  591 of 1980
From the Judgment and Order dated 71179 of the Orissa High Court in Misc
92 of 1979
GL Sanghi Harish N Salve section Khaitan and Darshan Singh for the Appellant in CA
No 57280 and Respondent in CA
No 57180
BM Patnaik RK Mehta and Ms Mona Chakraborty for the Respondent in CA
No 57280 and for the Appellant in CA
No 57180
The Judgment of the Court was delivered by BHARUCHA J
These are cross appeals and they can be disposed of by a common judgment
The Industrial Development Corporation of Orissa Ltd IDCO is the appellant in Civil Appeal No 571 of 1980 and Jajodia Overseas Private Ltd JOPL is the appellant in Civil Appeal No 572 of 1980
232 IDCO and JOPL entered into an agreement whereunder IDCO agreed to supply to JOPL 5000 tons of MS Rounds for export on the terms and conditions mentioned therein
The goods were not supplied
By a letter dated 12th September 1969 IDCO cancelled the agreement and intimated to JOPL that its offer which had culminated in the agreement should be treated as withdrawn
There was some correspondence between the parties
Thereafter the claim against IDCO for damages for breach of contract made by JOPL was referred to the Chief Secretary to the Government of Orissa the arbitrator named in the agreement for adjudication
The Chief Secretary declined to act as arbitrator 
Thereupon JOPL filed a suit under Section 20 of the  in the Calcutta High Court praying that the agreement be taken on file and the dispute between JOPL and IDCO be referred to an arbitrator to be nominated by the court
That plaint was returned to JOPL to be presented before the proper court
It was presented in the court of the Subordinate judge Bhubaneswar
On 4th April 1973 the learned Subordinate Judge appointed Mr B Mohapatra a retired Judge of the Patna High Court to act as the arbitrator to give his award on the disputes between the parties as enumerated in their respective pleadings and the order of this court
Reference he made to him requesting him to make the award by 30th June 1974
Copy of the plaint written statement and the order of this court be sent to the arbitrator
 The arbitrator entered upon the reference and after hearing parties and considering the material placed upon the record before him gave an award on 24th September 1985
In the Preamble to the award the arbitrator set out briefly some of the facts aforementioned
The arbitrator stated that issues had been settled for adjudication and that the parties produced a large number of documents examined witnesses and advanced elaborate arguments
The arbitrator having given careful consideration to all the written statements documents and evidence and the arguments set out the conclusions to which he had come upon the issues raised
He concluded  In the result my award is that Jajodia Overseas Pvt Ltd is entitled to recover from the Industrial Development Corporation of Orissa Rs 1100344 only eleven lakhs three hundred forty four with pendente lite interest at the rate of 6 per cent per annum from 28th April 1974 to the date of award 24th September 1975
233 The award was challenged by IDCO before the Subordinate Judge Bhubaneshwar
JOPL supported the award and prayed that it be made a rule of the court with future interest
The learned Subordinate Judge dismissed IDCO s petition and made the award a rule of the court ordering that JOPL was entitled to future interest at the rate of 6 per cent per annum
The judgment and order of the learned Subordinate Judge was impugned before the Orissa High Court
The learned Single Judge who heard the appeal rejected all contentions raised on behalf of IDCO except one be found that in answering three issues the arbitrator had arrived at inconsistent conclusions which had a bearing on the question whether or not damages should be awarded
The inconsistency was not a trifling or inconsequential matter and being apparent on the face of the award the learned Judge held that the arbitrator had been guilty of legal misconduct so that the award was set aside
The learned Judge directed that the records pertaining to the arbitration proceeding be sent back to the arbitrator who was directed to give a fresh award after giving an opportunity of hearning to both parties keeping in view the findings and observations made in the judgment
Against the judgment and order of the Orissa High Court both JOPL and IDCO are in appeal
JOPL contends that there is no inconsistency upon the face of the award which vitiates it
On behalf of IDCO it is contended that the award is bad and that in any event the High Court was in error in sending the matter back to the arbitrator for making a fresh award
It was submitted by Mr BM Patnaik learned counsel for IDCO that i No disputes which were referred to the Chief Secretary by JOPL and which were contained in the plaint and the written statement before the Subordinate Judge Bhubaneshwar and were referred by the said Subordinate Judge to the arbitrator were considered by the arbitrator because these documents were not mentioned in the award
Consequently the arbitrator had acted without jurisdiction
ii That the award of damages was based on no evidence or material
234 iii The answer by the arbitrator to issue No 2 set out in the award showed that the arbitrator had construed the agreement between the parties
As such the agreement was incorporated in the award and it was therefore open to the court to see if the arbitrator had in any wise misconstrued the agreement
iv The arbitrator had referred to the statement of claim and the counter filed before him and had given findings
As suck the statement of claim and the counter was incorporated in the award so that the whole matter was open before the court
v The award was a speaking award inasmuch as the answers to the issues were the reasons for the award
viThere were inconsistencies in the answers to the issues and the arbitrator had therefore misconducted the proceedings
viiIn any event if at all the matter had to go back it should not go back to the arbitrator but to the arbitral tribunal now constituted in the State of Orissa
It is we think necessary first to clear some cobwebs
A speaking or reasoned award is one which discusses or sets out the reasons which led the arbitrator to make the award
Setting out the conclusions upon the question or issues that arise in the arbitration proceedings without discussing the reasons for coming to these conclusions does not make an award a reasoned or speaking award
The arbitrator has in the award before us only answered the issues that were framed
He has not discussed or set out the reasons for the answers
The award is therefore not a speaking or reasoned award
That the arbitrator merely referred to the pleadings filed before him does not mean that the pleadings are incorporated in the award
As was aid in the context of a contract in a passage quoted by this Court with approval in Allen Berry and Co vs Union of India   from he judgment of Diplock LJ
in Ciacomo Costa Fu Andrea vs British Italian Co Ltd  It seems to me therefore that on the cases there is none which compels us to hold that a mere reference to the contract in the award entitles us to look at the contract
It may be that 235 in particular cases a specific reference to a particular clause of a contract may incorporate the contract or that clause of it in the award
I think that we are driven back to first principles in this matter namely that an award can only be set aside for error which is on its face
It is true that an award can incorporate another document so as to entitle one to read that document as part of the award and by the reading them together find an error on the face of the award 9
The question whether a contract or a clause of it is incorporated in the award is a question of construction of the award
The test is does the arbitrator come to a finding on the wording of the contract
If he does he can be said to have impliedly incorporated the contract or a clause in it whichever be the case
But a mere general reference to the contract in the award is not to be held as incorporating it
 The arbitrator merely referred to the fact that parties had filed their statements before him and that he had given careful consideration to all the written statements documents and evidence and the arguments
This is not such a reference as can be said to incorporate the pleadings before him in the award
Reference was made to issue No2 and its answer and it was contended that the arbitrator had thereby made a specific reference to the agreement and it must therefore be held that the agreement was incorporated in the award
Issue No 2 and the answer to it read thus Issue Was the said agreement a commission agency or export agency agreement
Answer The agreement was not a commission agency or export agreement
 In the first place the pleadings before the Subordinate Judge Bhubaneshwar and the order of reference made by him are not placed by IDCO before us
If it was IDCO s case that no issue of law had specifically been referred to the arbitrator it was its obligation so to show
But we shall proceed on the basis that a specific question of law was not referred
The submission on IDCO s behalf was that the arbitrator misconstrued the 236 agreement and therefore the court was entitled to look into the agreement and determine whether the award was correct
We do not think that this broad submission is correct
It would appear that the arbitrator construed only such clause of the agreement as was relevant to decide whether the agreement was as contended by IDCO a commission or export agency agreement
Such clause alone would be incorporated in the award and could be looked at by the court to determine whether the arbitrator misconstrued it
We cannot accede to the submission that by reason of the answer to issue No 2 the entire agreement became incorporated in the award and that it was therefore open to the court to look into the entirety of the dispute in the arbitration proceedings and determine whether the award was correct
Even assuming the incorporation of the agreement an error apparent upon the face of the award had to be shown
We may refer with advantage to this court s judgment in Bungo Steel Furniture Pvt Ltd vs Union of India  The court quoted the well known passage from the judgment of Lord Dunedin in Champasey Bhara and Company vs Jivraj Balloo Spinning and Weaving Company Ltd 50 IA 324 thus An error in law on the face of the award means in their Lordships  view that you can find in the award or a document actually incorporated thereto a for instance a note appended by the arbitrator stating the reasons for his judgment some legal proposition which is the basis of the award and which you can then say is erroneous
It does not mean that in narrative a reference is made to a contention of one party that opens the door to seeing first what that contention is and then going to the contract on which the parties  rights depend to see if that contention is sound
 It went on to observe An award may be set aside by the court on the ground of an error of law apparent on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator has committed some mistake in arriving at his conclusion
 237 It was argued on behalf of IDCO before the High Court that the pleadings before the Subordinate Judge Bhubneshwar and the order of reference to the arbitrator made by him were not before the arbitrator and that therefore the arbitrator had acted without jurisdiction
The High Court rejected that contention and made reference to the order of the Subordinate Judge which we have quoted above which showed that if directed that the copy of the pleadings and of itself should be sent by
the Court to the arbitrator
Before us it was submitted that these pleadings and order had not been considered by the arbitrator because he had not mentioned them in the award
Issues were framed by the arbitrator obviously in consultation with the parties and arising upon the pleadings
There were several hearings
It is in these circumstances inconceivable that the issues would not have reflected the referred dispute between the parties
It is also significant that the pleadings before the Subordinate Judge Bhubaneshwar and the statement of claim and the counter filed before the arbitrator were not produced before us by IDCO so that we could determine whether the statement of claim filed by JOPL before the arbitrator raised claims different from those contained in the pleadings before the Subordinate Judge Bhubaneshwar
It was submitted that the award of damages was based on no evidence or material
The submission was based on the finding that the originals of the foreign sale contracts entered into by JOPL in respect of the goods under the agreement had not been sent to IDCO
That these original agreements had not been sent does not ipso facto lead to the conclusion that the arbitrator had no material before him upon which he could find that JOPL had suffered damage and assess the same in monetary terms
This brings us to the question of the inconsistencies found by the High Court upon the face of the award
The issues and the answers to which the High Court referred are issue Nos 6 7b and 9a
In our view it is necessary to reproduce the issue nos
6 7 9 and 10 and their answers in extenso
Issues 6
Did the claimant fulfil their obligations under the terms and conditions of the agreement
Answers JOPL fulfilled their obligations under the agreement in question
38 7a Did the respondent ac IDC accepted or affirmed or affirm the claimant s the JOPL s order for supply order for supply of 4000 ton of 4000 tonnes
as mentioned nnes as mentioned in para 4 of the statement of the claim  b Did the claimant send JOPL did not send the original the foreign sale contracts foreign sale contracts to originalnal foreign sale IDC contractsto the respondent
9a Were the acts mentioned The agreement provided inpara 10 of the counter state for JOPL sending the orig ment covered by the agreement nal foreign sale contracts to the respondent at a certain stage
Reference to para 10 of the counter statement IDC
b Were the acts mentioned in The agreement provided para 11 of the counter state that JOPL would arrange ment covered by the agree for export license Refer ment
ence to para 11 of the counter statement of IDC
c Were the acts mentioned The agreement provided that in para 12 of the counter JOPL would procure orders statement covered by the for export of 5000 metric agreeementJOPL tonnes of MS rounds within 3 months from the date of acceptance of the IDC s offer and they would follow up th indents placed by the respondentIDC for supply of billets and arrange for export licences letter of authorisation from the Iron the Iron and Steel Controller in time Ref
to para 12 of counter statement of IDC
239 d Were the acts mentioned in The acts  mentioned in para 13 of the counter state para 13 of the counter ment covered by the statement by IDC are cov agreement
red by the previous three paragraphs10 11 and 12 of that statement and they have been already dealtwith under sub issues
ab above
If so did the party concer The party concerned that ned perform such Acts is the JOPL performed their part of the work as was necessary under the agreement at relevant stage
Was the respondent jus IDC was not justified in tified in cancelling the cancelling the agreement
agreement It will be seen that the award says that the agreement provided for JOPL sending the original foreign sale contracts to the respondent at a certain stage
 It also says that JOPL fulfilled their obligations under the agreement in question and that JOPL performed their part of the work as was necessary under the Agreement at relevant Stage On the other hand it says that JOPL did not send the original foreign sale contracts to IDC  The award then finds that IDC was not justified in cancelling the agreement
Emphasis supplied
Reading these issues and answers together and harmoniously it is apparent that the agreement provided that JOPL should send to IDCO the original foreign sale contracts at a certain point of time and that it is found that JOPL had not sent the original foreign sale contracts to IDCO
It is also apparent that it is found that at the point of time at which IDCO purported to cancel the agreement JOPL had performed all its obligations under the agreement
The conclusion is there fore that upto that point of time JOPL had not been obliged to send the foreign sale contracts to IDCO
So read in our view there are no inconsistencies upon the face of the award as can be characterised as errors that vitiate the award
An award has to be read as a whole and harmoniously
The grounds upon which an award can be set aside are limited
The court 240 should be very circumspect about setting aside an award reached by an arbitrator for parties have agreed that the disputes that may arise or have arisen between them should be resolved not by a court of law but by arbitration
Mr Patnaik pointed out that the Orissa High Court had recognised that the malady of the racket of arbitration affected its State of Orissa vs Gangaram ahapolia and that this had been taken note of by this court in State of Orissa vs Dandasi Sahu  The court said In our opinion the evidence of such state of affairs should make this court scrutinise the award carefully in each particular case but that does not make the court declare that all high amounts of awards would be bad per se
 We are in respectful agreement
We do not having bestowed due care upon the award and the arguments advanced to assail it find the award to be bad in law
Having regard to the view that we take the question of setting aside the award and sending the arbitration proceedings back to the arbitrator or to the arbitral tribunal now created in the State of Orissa does not arise
In the result Civil Appeal No 571 of 1980 filed by IDCO is dismissed
Civil Appeal No 572 of 1980 filed by JOPL is allowed and the judgment and order of the Subordinate Judge Bhubaneshwar dated 9th March 1979 is restored
There shall be no order as to costs
UR CA No 57180 dismissed
No 57280 allowed


Summary:
The Respondent University invited applications for appointment to 10 posts of Assistant Professors
Out of 112 applications received the Screening Committee recommended 106 candidates for being Interviewed and found the remaining 6 applicants ineligible
However only 65 candidates appeared for the interview
6 candidates were selected from the general category  and 2 from the Reserved Category
5 candidates Including the petitioner were placed on the waiting list
As per the advertisement a candidate should have a doctorate degree or research work of equally high standard and good academic record with atleast a Second Class Master s Degree
The lack of doctorate degree could be made up by either research work of equally high standard or MPhil with two years research work
Except in the case of Respondent No10 who had a doctorate degree as on the last date for submission of applications the qualifications of other selected candidates had to be relaxed by the Scrutiny Committee
The petitioner challenged the appointment of the six selected candidates from the general category before the High Court but was not successful
Being aggrieved by the High Court s judgment the petitioner preferred the present Special Leave Petition
On behalf of the Respondent University it was contended that since at the time of selection Respondent Nos 5 and 4 had obtained their doctorate degrees they could be said to have fulfilled the qualifications 187 that since respondent Nos 6 and 7 were registered for Ph D in 1982 by the time of the selection they had put in research work connected with their thesis and on the date of selection they had about 3 years  experience in research work that respondent No8 had good academic record both in MA and BA and the Scrutiny Committee could under the Ordinance relax the qualifications as admittedly sufficient number of candidates with doctorate degrees were not available and that even the petitioner did not have the doctorate degree that the candidates had already been appointed in February 1985 and they have been working since then and some of them were also due for promotion to the higher posts in the near future and that their record of teaching so far has been excellent and unblemished and so their selection need not be interfered with at this late stage
Dismissing the Special Leave Petition and laying down the guidelines for future selection process this Court HELD  1
In the absence of a fixed date indicated in the advertisementnotification inviting applications with reference to which the requisite qualifications should be judged the only certain date for the scrutiny of the qualifications will be the last date for making the applications
Therefore when the Selection Committee took into consideration the requisite qualifications as on the date of selection rather than on the last date for preferring applications it acted with patent illegality and on this ground itself the selections in question are liable to be quashed
However the selected candidates have been working in the respective posts since February 1985
Almost eight years have elapsed Mere is also no record to show as to how the Selection Committee had proceeded to weigh the respective merits of the candidates and to relax the minimum qualifications in favour of some candidates in exercise of the discretionary powers vested in it under the University Ordinance
If the considerations which weighed with the Committee in relaxing the requisite qualifications were valid it would result in injustice to those who have been selected
For these reasons this Court is not inclined to set aside the selections made by the Screening Committee
195H 196A E AP Public Service Commission Hyderabad  Anr
vs B Sarat Chandra  Ors and The District Collector Society Vizianagaram  Anr
vs M Tripura Sundari Devi 1990 4 SLR 237 relied on
188 2
It is necessary to emphasise and bring to the notice of the Respondent University that the illegal practices in the selection of candidates which have come to light and which seem to be followed usually at its end must stop forthwith
For this purpose the following guidelines are laid down for the future selection process i The University must note that the qualifications it advertises for the posts should not be at variance with those prescribed by its OrdinanceStatutes
196F ii The candidates selected must be qualified as on the last date for making applications for the posts in question or on the date to be specifically mentioned in the advertisementnotification for the purpose
The qualifications acquired by the candidates after the said date should not be taken into consideration as that would be arbitrary and result in discrimination
It must be remembered that when the advertisementnotification represents that the candidates must have the qualifications in question with reference to the last date for making the applications or with reference to the specific date mentioned for the purpose those who do not have such qualifications do not apply for the posts even though they are likely to acquire such qualifications and do acquire them after the said date
In the circumstances many who would otherwise be entitled to be considered and may even be better than those who apply can have a legitimate grievance since they are left our of consideration
196GH 197A B iii When the University or its Selection Committee relaxes the minimum required qualifications unless it is specifically stated in the advertisementnotification both that the qualifications will be relaxed and also the conditions on which they will be relaxed the relaxation will be illegal