Civil Appeal No 1389 of 1988
From the Judgment and order dated 671987 of the Orissa High Court in CMC No 375 of 1984
RK Mehta and Miss Mona Mehta for the Appellant
GL Sanghi and Vinoo Bhagat for the Respondents
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an appeal by special leave from the judgment and order of the High Court of orissa dated 6th July 1987
It arises out of a contract entered into between the State and the respondent for the construction of certain projects for irrigation
During 1973 74 the respondent was entrusted with the job of Construction of Ramaguda Minor Irrigation project in Kukudakhandi Block  vide agreement No 4 F 2
The value of the work was Rs999510
The work pursuant to the contract commenced on 4th May 1973 and 4th November 1974 was the stipulated date of com 566 pletion of the work
However on 30th December 1975 the work was actually completed
It is asserted by the appellant that the respondent contractor accepted the final payment and was duly paid a sum of Rs2374001 for the work done by him including the extra work
Thereafter no amount was due to the respondent according to the appellant and he did not raise any claim whatsoever before the Department
On 28th September 1976 the last payment was alleged to have been made by the respondent
On 30th October 1976 the last bill was prepared which was nil one
The respondent thereafter raised a claim and gave notice for appointment of an arbitrator
Consequently the Chief Engineer appointed one Shri AN Nanda as the arbitrator in terms of the arbitration clause
However on the application of the respondent the learned Subordinate Judge removed Shri AN Nanda and appointed one Shri B Patnaik as the arbitrator
It may be mentioned that the application was made for removal of the arbitrator Shri B Patnaik but the same was ultimately dismissed
Before the arbitrator the respondent filed the claim raising some claims which according to the appellant were fictitious and baseless
These claims were for the alleged extra work in respect of which the decision of the Superintending Engineer under clause 11 of the contract was final and the same was excluded from the purview of the arbitration clause
It was contended on behalf of the appellant that the arbitrator had no jurisdiction to deal with such claims
The appellant filed a counter claim for Rs211400 denying all the claims of the respondent
All the documents and relevant papers were produced before the arbitrator
It is stated that as the application for removal of Shri B Patnaik as arbitrator was pending an application had been made before Shri section Patnaik to adjourn the proceeding which was refused and the award was made
This award was claimed to have been made virtually ex parte
This however was not so and it appeared that the arbitrator on hearing the parties and considering the evidence produced before him made the award
The arbitrator made the said award on 18th March 1983 but the same was a non speaking and nonreasoned award for a lump sum of Rs1523657 plus interest  10 from 991975 till the date of payment or decree
Objections to the said award were filed in the Court
The learned Subordinate Judge upheld the objection to the award and set aside the award on 15th September 1984
There was an appeal to the High Court and the High Court set aside the judgment of the learned Subordinate Judge and made the award of the arbitrator rule of the Court
It also directed payment of further interest at 6
567 Being aggrieved thereby the State of Orissa has preferred this appeal
In support of this appeal it was submitted that the award in question was a lump sum af money and it was without any reason in favour of the respondent
It was also submitted that the validity of the non reasoned award is awaiting determination by a larger Bench of this Court
Hence it was urged that this question should await decision of the larger Bench
In the facts and circumstances of the case we are of the opinion that we would not be justified in acceding to this request on the part of the appellant
In this case the submission that the award was bad being an unreasoned one was neither mooted before the learned Subordinate Judge nor before the High Court
This contention was also not raised in the objection to the award filed originally
It is only in the special leave petition that such a plea has been raised for the first time
Arbitration is resorted to as a speedy method of adjudication of disputes
Stale and old adjudication should not be set at naught or examination of that question kept at bay on the plea that the point is pending determination by a larger Bench of this Court
Even if it is held ultimately that the unreasoned award per se is bad it is not sure whether such a decision would upset all the awards in this country which have not been challenged so far
Certainly in the exercise of our discretion under Article 136 of the Constitution and in view of the facts and circumstances of this case we would not be justified in allowing the party to further prolong or upset adjudication of old and stale disputes
In that view of the matter we think that the pendency of this point before the larger Bench should not postpone the adjudication and disposal of this appeal in the facts of this case
The law as it stands today is that award without reasons are not bad per se
Indeed an award can be set aside only on the ground of misconduct or on an error of law apparent on the face of the award
This is the state of law as it is today and in that context the contention that the award being an unreasoned one is per se bad has no place on this aspect as the law is now
This contention is rejected
It was next contended that in view of clause 11 of the contract the matters upon which the arbitrator has adjudicated were excluded and these were not arbitrable
It was submitted that clause 11 of the contract between the parties made on these matters the decision of the Engineer Incharge final and binding
Hence inasmuch as the arbitrator has purported to act upon this field which was only to be decided by the Engineer in charge the award was bad
The disputes over which the arbitrator has purported to make an award were regarding 568 works covered by the agreement
lt was submitted that the provision to clause 11 af the agreement categorically provided that in the event of dispute over a claim for additional work the decision of the Superintending Engineer of the Circle would be final and hence the arbitrator by entertaining the additional claim of the contractor had exercised a jurisdiction not vested in him and as such misconducted himself
In order to judge this contention therefore it is Imperative first to refer to clause 11 of the agreement
It provides as follows Clause 11 The Engineer in charge shall have the power to make any alteration in or additions to the original specifications drawings designs and instructions that may appear to him necessary or advisable during the progress of work and the contractor shall be bound to carry out the work in accordance with any instructions which may be given to him in writing signed by the Engineer in charge and such alteration shall not invalidate the contract
Any additional work which the contractor may be directed to do in the matter above specified as part of the work shall be carried out by the contractor on the same conditions in all respects on which he agreed to do the main work and at the same rates as are specified in the tender for the main work
The time for the completion of the work shall be extended in the proportion that the additional work bears to the original contract work and the certificates of the Engineer in charge shall be conclusive as to such proportion and if the additional work includes any class of work shall be carried out at the rates entered in the sanctioned schedule of rates of the locality during the period when the work being carried on and if such last mentioned class of work is not entered in the schedule of the rate of the district then the contractor shall within 7 days intimate the rate which it is his intention to charge for such class of work and if the Engineer in charge does not agree to this rate he shall by notice in writing be at liberty to cancel his order to carry out such class of work and arrange to carry such class of work and arrange to carry out in such manner as he may consider advisable
No deviation from the specification stipulated in the contract or additional items of work shall ordinarily be carried by the contractor and should any altered additional or substituted work be carried out by him unless the rates of the substituted altered or additional 569 items have been approved as fixed in writing by the Engineer in charge
The contractor shall be bound to submit his claim for any additional work done during any month or before the 15th day of the following months accompanied by the copy of the order in writing of the Engineer in Charge for the additional work and that the contractor shall not be entitled to any payment in respect of such additional work if he fails to submit his claim within the aforesaid period
Provided it always that if the contractor shall commence work or incur any expenditure in regard thereof before the rates will have been determined as lastly herein before mentioned then in such case he shall only be entitled to be paid in respect of the determination of the rates as aforesaid accordingly to such rate of rates as shall be fixed by the Engineer in Charge
In the event of a dispute the decision of the Superintending Engineer of the Circle will be final  This clause has to be read in conjunction with the arbitration clause ie clause 23 which provides as follows Clause 23 Except where otherwise provided in the contract all questions and disputes relating to the meaning of the specifications designs and instructions hereinbefore mentioned and as to the quality of workmanship or materials used on the work or as to any other question claim right matter or thing whatsoever in any way arising out of or relating to the contract designs drawing specifications estimates instructions orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of work or after the completion or abandonment thereof shall be referred to the sole arbitration of a Superintending Engineer of the Circle
It will be no objection to any such appointment that the arbitrator so appointed is a Government servant
The award of the arbitrator so appointed shall be final
conclusive and binding on all parties to this contract
The learned Subordinate Judge was inclined to hold that the 570 arbitrator had no jurisdiction to arbitrate on disputes which he has purported to do but in view of the Bench decision of the High Court of Orissa in State of orissa vs Gokulchandra Kanungo  he held that he was not free to decide that the dispute was not arbitrable and rejected this plea
The High Court also did not entertain this objection
It was canvassed before us and submitted that in view of clause 11 the matters in dispute and the amount due for the alleged additional work were not arbitrable at all
We have noticed clause 11 which makes the decision of the Engineer in Charge final in respect of some issues
In this connection it is important to refer to the proviso of Clause 11 which states that in case of dispute about the rates and time for completion of the work and any dispute as to proportion that the additional work bears to the original contract work the decision of the Superintending Engineer of the Circle would be final
The points upon which the arbitrator in the instant case has adjudicated are not those which are excepted or covered by Clause 11 of the agreement
In that view of the matter this clause has no application in the instant controversy
Our attention was drawn to certain observations of this Court in Bombay Housing Board Now the Maharashtra Housing Board vs Karbhase Naik  Co Sholapur s  There in view of clause 14 of the said contract it was open to the respondent to make claim on the basis of the rates quoted
There Clause 14 was more or less identical to Clause 11 in the present case
This particular contention however did not arise in that case
The Court held that the respondent there being contractor was not bound to carry out additional or altered work and there was no reply to the notice stating the rates intended to be charged and the respondent there was not free to commence and complete the work on the basis that since the rates quoted were not accepted it would be paid at such rates to be fixed by the Engineer in charge and that if it was dissatisfied with the rate or rates fixed by the Engineer in charge it could raise a dispute before the Superintending Engineer and that the time limit for completion would be extended in all cases
This Court observed that only the rates were settled by the agreement
The respondents were under no obligation to carry out the additional or altered work but that is not the dispute before us in the present case
On the construction of Clause 11 of the contract we are unable to accept the contention but on the points that the arbitrator has awarded in this case were excluded by Clause 11 of the contract herein
Shri Mehta however strongly relied on certain observations of a Bench decision of Madhya Pradesh High Court in case of the Chief Administrator Dandakaranya Project 571 Koraput Orissa  Anr
vs Ms Prabartak Commercial Corpn
Ltd Calcutta  wherein while considering Clause 13A of the agreement there the High Court held that the dispute whether charges for stone chips could be adjudicated was not arbitrable
That was a case of rates which was within the jurisdiction of the Engineer in charge by Clause 13A of the bargain between the parties
In the instant case it is not the rate which is in dispute
The Madhya Pradesh High Court referred to several decisions of this type and came to the conclusion on the construction of Clause 13A in that case that the dispute that had arisen between the parties in arbitration was excluded by Clause 13A of the agreement
In view of the Clause in the instant case and the nature of the dispute which had arisen we are of the opinion that such decisions also cannot give much assistance to the appellant
Reliance was also placed on certain observations of the Delhi High Court in the case of Food Corporation of India vs PL Juneja AIR 1981 Delhi 43
There the Division Bench of the High Court was concerned with the questions which were to be decided by the Court and not by the arbitration
There also the Clause was very much dissimilar to the present one which is set out hereinbefore
Clause 15c provided that the question whether a particular service is or is not to be covered by any of the services specifically described and provided for the contract or is or is not material to any such services shall be decided by the Regional Manager whose decision shall be final and binding
It was not the case whether any additional work was done and if so the extent of such work
In the aforesaid view of the matter it is not possible to hold that in view of nature of instant dispute the matters at issue were not excluded and the arbitrator did not commit any wrong in proceeding with the arbitration
It was next contended that an amount of Rs1523657 has been granted for additional work over and above the payment of Rs2374001 and this was disproportionately high and the award for this amount was per se bad
It is well settled that when the parties choose their own arbitrator to be the judge in dispute between them they cannot when the award is good on the face of it object to the decision either upon law or on facts
Therefore when arbitrator commits a mistake either in law or in fact in determining the matters referred to him where such mistake does not appear on the face of the award and the documents appended to or incorporated so as to form part of it the award will neither be remitted nor set aside
The law on this point is well settled
See in this connection the observations of this Court in Union of lndia vs Bungo Steel Furniture P Ltd  and Allen Berry  Co P Ltd vs Union of India 282
It was however contended that the amount of the award was shockingly high that it shocked the conscience of the Court and the award must be set aside
The fact that merely the award amount is quite high as commented by the High Court or that a large amount has been awarded does not vitiate the award as such
In the instant case the original award was for Rs999510
Admittedly additional work was done and payment for such work was determined at Rs2374001 and claim for further additional work was made for Rs 1523657
One has to judge whether the amount of the award was so disproportionately high to make it per se bad in the facts and circumstances of a particular case
It is clear from the facts that the arbitrator is a highly qualified person having several Indian and foreign Degrees and at the relevant time was acting as Chief Engineer in charge of the State Government
Having regard to the nature of claims involved and the fact that the additional work has been done for which large amounts have been paid and in this case it is evident that all due opportunities were given to the parties to adduce all evidence we are unable to accept the submission that the award was so disproportionate as to shock the conscience of the Court and as such it cannot be held that the award was bad per se
In our opinion the High Court was right in dismissing the challenge to the award on this ground
In support of the submission that the award must be held to be bad in this case Mr Mehta drew our attention to certain observations of Orissa High Court in State of Orissa  Ors
vs Gangaram Chhapolia  Anr  where at page 279 the learned Judge observed the malady of the racket of arbitration was rampant in Orissa
Though the learned Judge was apparently heeding to the observations of Justice Holmes of America observed that the Court should take note of the felt necessities of the time
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 award would be bad per se
As mentioned hereinbefore it cannot be said that the amount of award was disproportionately high to hurt the conscience of the Court in this case
It is now well settled that the interest pendente lite is not a matter within the jurisdiction of the arbitrator
In this connection reference may be made to the observations of this Court in Executive Engineer Irrigation Balimela  Ors vs Abhaduta Jena  Ors 1988 1 SCC 418 where this Court held that the arbitrator could not 573 grant interest pendente lite
In the aforesaid view of the matter this A direction in the award for the payment of such interest must be deleted from the award
The order of the High Court is modified to the extent that the award is confirmed subject to deletion of the interest pendente lite
We make it clear that in the facts of this case interest for the period from 26981 to 18383 the date of the award be deleted
The High Court has however granted interest from the date of the decree
That is sustained
The appeal is therefore dismissed except to the extent indicated above
In the facts and circumstances of the case the parties will pay and bear their own costs
GN Appeal dismissed


Summary:
The first appellant in this appeal a private limited company occupying a portion of the premises belonging to the United Commercial Bank claimed to be the tenant of the Bank but this was not admitted by the respondent Bank
The Bank alleged that the appellant company had been allowed to occupy a portion of the Bank s premises as licensee in consideration of certain accountancy and secretarial services rendered to the Bank
The Bank had issued a notice of eviction to the appellant company under the West Bengal Premises Tenancy Act 1956  the 1956 Act 
Subsequently the Bank issued a notice to the appellants under the Public Premises Eviction of unauthorised occupants Act 1971  the 1971 Act  which is an Act of the Parliament
The appellants filed a writ petition in the High Court agitating the question whether the impugned Act which provides for eviction of unauthorised occupants from public premises belonging to or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Government was ultra vires as it was beyond the legislative power of the Parliament to extend the applicability of the said Act to such premises
The appellants were interested in denying the legislative power of Parliament in so far as it purported to extend the applicability of the 1971 Act to the premises belonging to or taken on lease by public sector corporations
Their argument went to the extent of urging that only the State legislatures and not Parliament were competent to legislate on a topic of landlord tenant relationship in respect of land and buildings
According to the appellants the provisions of 1956 Act were squarely applicable and should have been resorted to by the Bank for evicting them
494 The appellants contended that a legislation of the type of West A Bengal Land Eviction of unauthorised occupants Act 1962 1962Act which was on the pattern of the 1971 Act would fall within the legislative field exclusively open to the State Legislatures and that the 1971 Act was ultra vires the Parliament in so far as it purported to affect the appellants  rights
Dismissing the appeal the Court  HELD Per Sabyasachi Mukharji J
His Lordship agreed with Ranganathan J that the appeal should be dismissed
His Lordship preferred the view of the Madhya Pradesh High Court in LS Nair vs Hindustan Steel Ltd Bhilai AIR 1980 MP 106 to the view of the Bombay High Court in Miscellaneous Petition No 45879 Elliot Waud Hill P Ltd vs Life Insurance Corpn
This Court had in this Case proceeded on the short question whether the impugned Act which provides for eviction of unauthorised occupants from public premises to the extent it had been extended to premises belonging or taken on lease by a corporation established by or under a Central Act and owned or controlled by the Central Government was ultra vires or beyond the legislative power of the Parliament to extend the applicability of the Act to such premises
498D G There was no dispute as emphasised by Ranganathan J as to whether the premises in question or of this type was a public premises
For the purpose of this appeal once it was held that the Public Premises Eviction of Unauthorised occupants Act was intra vires the Parliament no further issue between the parties survived
It was not necessary to consider whether the provisions of the 1971 Act even if intra vires would pervail upon the provisions of the State Legislation
For the purpose of this appeal it was unnecessary to express any view on the amplitude and scope of Article 254 of the Constitution
498H 499A B It had to be taken that the legislation in question must be under stood in its pith and substance and so understood the Act in question in this case is in respect of transfer of property other than agricultural land and as such falls in Entry 6 of List III of the 7th Schedule to the Constitution
It is clear from the decision of this Court in Indu Bhusan Bose vs Rana Sundari Devi and Anr  and the subsequent decision in V Dhanapal Chettiarv
YesodaiAmmal  that the subject matter of housing accommodation and control thereof falls within the purview of concurrent list
In that view 495 of the matter it could not be convassed that the 1971 legislation in question was beyond the competence of the legislature
499C E Per section Ranganathan J
The present agrument of the appellants might not have been open to them if the premises of the Bank could be said to be premises belonging to the Union Government In that case the legislation to the extent it governs such premises can be said to fall under Entry 32 of List I as one covering the property of the Union
Though the premises being situated in Calcutta any legislation under that entry in regard thereto would be subject to State Legislation the state Legislation can only govern save in so far as Parliament by law otherwise provides Parliament having provided otherwise by the 1971 Act that Act will prevail over the 1156 and 1962 Acts
Though the Bank was a corporation wholly owned and controlled by the Government it had a distinct personality of its own and its property could not be said to be the property of the Union
The position was beyond the pale of controversy after the decision of this Court in Bacha FGuzdar vs CIT   State trading Corporation of India Ltd vs CTO 1964 4 SCR 99 and many other cases
lt was not possible for the respondents to support the legislation qua the premises under Entry 32 of List I 505A D Entry 32 of List I being out of the way the appellants contended that the legislation squarely regularly fell under Entry 18 of List II
A question as to the interpretation of Entry 18 or its predecessor Entry 21 of the Provincial List under the Government of India Act 1935 had arisen before the Federal Court and Privy Council and also was considered in some decisions of this Court which except in the case of Indu Bhusan Bose vs Rama Sundari Devi   were not helpful in deciding the issue before the Court
In respect of Indu Bhushan s case while the respondents contended that the ruling concluded the issue in their favour the appellants urged that it could not be taken as a decision that the house tenancy legislation could not come under Entry 18 of List II
505E 506B C 513C It was true that the decision in Indu Bhushan s case ultimately turned on the wider interpretation of Entry 2 of List I favoured by this Court nevertheless the judgment contains a specific discussion of the terms of Entry 21
Indu Bhushan must be taken to have expressed a view that premises tenancy legislation in so far as it pertains to houses and buildinYs is referable not to Entry 18 of List II but to entries 67 496 and 13 of List III
The decision of the larger Bench of this Court in V Dhonpal Chettier vs Yesodai Ammal   also reinforced the same line of thinking
The discussion and ratio of Dhanpal Chettier fall into place only on the view that by that time it was taken as settled law that State house control legislations were referable to the legislative powers conferred by the Concurrent List
513C 520D E Entry 18 should be given as wide a construction as possible consistent with all the other entries in all the three legislative Lists
There is no reason why the first topic dealt with by the entry viz land should be narrowly interpreted
lt should be understood as including all types of land rural or urban agricultural or non agricultural arid cultivated fallow or vacant What is land  can be gathered from the other words of the entry which attempt a paraphrase
It is not possible to interpret this entry as encompassing within its terms legislation on the relationship of landlord and tenant in regard to houses and buildings
All the legislation coming up for consideration in the present case are referable to entries in the concurrent List and the topic of legislation is not referable to Entry 18 of List II
The provisions of the 1971 Act in so far as they were made applicable to the premises of the respondent Bank are intra vires and valid
520F H 525E Once it was held that the 1971 Act is infra vires the Parliament no further issue between the parties survived
There was some discussion r before this Court as to whether the provisions of the 1971 Act even if intra vires would prevail against the provisions of the State legislations
This case is clearly governed by the primary rule in Article 2541 of the Constitution under which the law of Parliament on a subject in the concurrent List prevails over the State Law
Article 2542 of the Constitution is not attracted because no provision of the State Acts enacted in 1956 and 1962 were repugnant to the provisions of an earlier law of Parliament of existing law
Even if the provision of the main part of Article 2542 can be said to be somehow applicable the proviso read with Article 2541 reaffirms the supremacy of any subsequent legislation of Parliament on the same matter even though such subsequent legislation does not in terms amend vary or repeal any provision of the State Legislation
The provisions of the 1971 Act will therefore prevail against those of the State Acts and were rightly invoked in this case by she respondent Bank
525F 529C E There was no substance in the appellants  contention that the provision in the 1971 Act appointing one of the officers of the respondent Bank as the Estate officers was violative of Article 14
529F 497 The appeal failed
LS Nair vs Hindustan Steel Ltd Bhilai AIR 1980 MP 106 Elliot Waud Hill P Ltd vs Life Insurance Corporation Miscellaneous Petiton No 45879 before Bombay High Court Indu Bhusan Bose vs Rama Sundari Devi and Anr   AC Patel vs Vishwanath Chadda ILR 1954 Bombay 434 V Dhanapal Chettiar vs Yasodai Ammal   Bacha P Guzdar vs CIT   State Trading Corporation of India Ltd vs CTO 1964 4 SCR 99 AP State Raod Transport Corporation vs ITO   Heavy Engineering Mazdoor Union vs State  Vidarbha Housing Board vs ITO  Western Coalfields Ltd vs Special Area Development Authority   Manohar vs CG Deasi AIR 1951 Nag 33 Raman Dass vs State AIR 1954 All
707 Darukhanawala vs Khemchand ILR  M Karuna vs State AIR 1955 Nag 153 Kewalchand vs Dashrathlal ILR  Sukumar Dutta vs Gaurishankar  Raval  Co vs Ramachandran AIR 1967 Mad 57Mangtulal vs Radhey Shyam AIR 1953 Pat
14 Milap Chand vs Dwarakadas AIR 1964 Raj 252 Rama Sundari vs Indu Bhusan AIR 1967 Cal 355 Nawal Mal vs Nathu Mal AIR 1962 Raj 193 Bapalal  Co vs Thakur Das AIR 1982 Mad 309 Vnited Province vs Atiga Begum  Megh Raj vs Allan Rakhia AIR 1947 PC 72 Atma Ram vs State of Punjab 1959 Supp
1 SCR 748 Manaklal Chhotalal vs MG Makwana  Ors   Babu Jagtanand Sri Satyanarayanji ILR 40 Patna 625 Union of India vs Valluri section Chaudhary   State vs Peter   292 Jaisingh Jairam Tyagi vs Maman Chand   Hoechst Pharmaceuticals vs State   Dhillon s case 1972 2 SCR 33 Jain Ink Manufacturing Co vs LIC  and Zaverbhai Amaidas vs State 1955 SCR 799 referred to