ivil Misc
Petition No 28356 of 1986
IN CIVIL APPEAL No 5579 of 1983
From the Judgment and Order dated 2241983 of the Andhra Pradesh High Court in Civil Rev Petn
No 2626 of 1982
Dr Shanker Ghose and PP Singh for the Appellant
section Markandeya and C Markandeya for the Respondent
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
This is an application filed by the Hindustan Steelworks Construction Company Limited for filing the award of the Umpire appointed by this Court Shri Justice Jaganmohan Reddy retired Judge of this Court and for passing a decree in terms of the said award
It appears that there was an agreement between Shri Rajasekhar Rao the contractor and the Hindustan Steelworks Construction Limit ed petitioner in respect of certain works
Differences and disputes arose and there were proceedings before the arbi trator named in the Agreement and there were certain pro ceedings the detail of which is not necessary to refer
As the arbitrators could not agree there were differences
This Court by an order dated 16th of June 1983 directed that arbitrators appointed by each of the parties be ap pointed arbitrator to adjudicate upon the dispute between the parties
It was stipulated therein that in the said order of this Court dated 16th of June 1983 it would be no longer open to the party to question the validity of the appointment of the arbitrators
In the event of any disa greement between the two arbitrators Shri Jaganmohan Reddy a former Judge of this Court was directed to act as the Umpire
Further consequential directions were also given
Thereafter the parties appeared before the arbitrators and referred the matter to the umpire
The Umpire after consid eration has made the award dated 15th of July 1985 which has been filed in this 656 Court and the petitioner seeks a decree in terms of the award
The respondent contractor Shri Rajasekhar Rao ob jects to the award being made a rule of the Court
He states in his objections that the umpire had made a speaking award therefore according to his counsel the validity or otherwise of the said award was justifiable in a court of law
He however firstly contends that the award was made beyond time
He further contends that the umpire had no jurisdiction to proceed with the arbitration on or about 18th of December 1984 as the period of two months from the date of his entering upon the reference viz October 20 1984 had expired on December 18 1984
According to the said objections the umpire became functus officio
It was con tended that the power to extend the period of passing the award was vested in the court alone under section 28 of the and it was not permissible for the parties to extend the time
We are unable to accept this position
Mr Markendeya drew our attention to certain observations of this Court in the case of State of Punjab vs Sri Hardyal  He relied on the observations of the Court at page 656 and emphasised that law precludes parties from extending time after the matter had been referred to the arbitrator it would be contradiction in terms to hold that the same result could be brought about by the conduct of the parties
These observations in our opinion are out of the context
The policy of law is that the arbitration proceedings should not be unduly prolonged
The arbitrator therefore has to give the award within the time prescribed or such extended time as the court concerned may in its discretion extend and the court alone has been given the power to extend time for giving the award
The court has got the power to extend time even after the award has been given or after the expiry of the period prescribed for the award
But the court has to exercise its discretion in a judicial manner
In that case this Court found that the High Court was justified in taking the view that it did
This power however could be exercised even by the appellate court
In view of the policy of law that the arbitration proceedings should not be unduly prolonged and in view of the fact that the parties have been taking willing part in the proceedings before the arbitrator without a demur and had all along been willing to extend time this will be a fit case in our opinion for the extension of time
We accordingly extend the time for giving the award and the award will be deemed to have been given in time
In this case it appears that under section 28 and in the light of section 3 of the First Schedule the parties are allowed to extend the time
In this connection reference may be made to HK Wattal vs VN Pandya   where this Court 657 reiterated that sub section 2 of section 28 indicated one exception to the above rule that the arbitrator could not enlarge the time and that was when the parties agreed to such an enlargement
It is clear this Court reiterated that the arbitrator gets the jurisdiction to enlarge the time for making the award only in a case where after entering on the arbitration the parties to the arbitration agreement consent to such enlargement of time
In this case precisely it happened
Furthermore the parties have proceeded before the umpire on that basis which is just and proper and further more the time should be extended as was done in the case of State of Punjab vs Sri Hardyal supra
In the aforesaid view of the matter we are unable to accept the submission on behalf of Shri Markendeya that the award of the umpire was beyond time
It was next contended that the award contained error of law on the face of the award and there were inconsistent findings
It has to be borne in mind that it was only in a speaking award that the court could look into the reasoning of the award
In the case of Jivarajbhai Ujamshi Sheth and others vs Chintamanrao Balaji and others 1964 5 SCR 480 this Court observed that an award might be set aside by the court on the ground of error on the face of the award but an award was not invalid merely because by a process of inference and argument it might be demonstrated that the arbitrator had committed some mistake in arriving at his conclusion
The law on this point is well settled
The Judicial Committee in Chempsey Bhara and Company vs Jivraj Balloo Spinning and Weaving Company Ltd LR 50 IA 324 clarified that an error of law on the face of the award means that one could find in the award or a document actu ally incorporated thereto as 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 one could then say was erroneous
It did not mean that if in narrating a reference was made to a contention of one party that opened the door to seeing first what that con tention was and then going to the contract on which the parties  rights depended to see if that contention was sound
It has been further reiterated by this Court in the aforesaid decision relying on Chempsey Bhara and Company s case supra that in dealing with an application to set aside an award the court had not to consider whether the view of the arbitratorr on the evidence was justified
The arbitrator s adjudication was generally considered binding between the parties for he was the tribunal selected by the parties and the power of the Court to set aside the award was restricted to cases set out in section 30 of the Arbi tration Act
It is not open to the court to speculate where no reasons are 658 given by the arbitrator as to what impelled the arbitrator to arrive at his conclusion
It is not open to the Court to attempt to probe the mental process by which the arbitrator had reached his conclusion where it is not disclosed by the terms of his award
In this case this is not a speaking award
The learned Umpire has not spoken his mind indicating why he has done what he has done he has narrated only how he came to make the award
Counsel drew our attention to page 26 of the award where different items have been set out and referred to page 30 of the award where the arbitrator noted as under The Respondent demurs to this and its officers have denied having received them in their affidavits and in their oral testimo ny
No officer of the Post Office from which the letter was sent by Registered Post or of the Post Office through which delivery of that Registered letter was effected to the address ee has been summoned to establish that these letters did not emanate from their Post Of fices or that the Post Office seals affixed on the Certificates of Posting and Postal Acknowledgements were not of those Post Offices which delivered them to HSCL or that they were forged or fraudulent nor was any thing produced to show that these were not posted or registered from the Post Offices from which they emanated
Counsel further drew our attention to the statement at page 33 of the award about the losses
Mr Markandeya con tended that these were the reasons given by the learned umpire
We are unable to accept
What the learned umpire did in the aforesaid paragraphs was to narrate the facts and state the history and state of pleadings
The umpire in the operative part of the award observed as under WHEREAS I perused and considered the entire record with great care including the record of affidavits the oral evidence ten dered before me the statement of claim dated 12101983 the counter statements dated 2731 101983 and the Rejoinder of the claimant and considered the documents filed in support of the case of the respective parties as also the written and oral submissions made before me by counsel for the parties in support of their respective cases of the parties for which they have 659 appeared and having duly considered the dispute in its varied aspects placed before me by the parties and in the light of the entire material in the case as above narrated
IPJAGANMOHAN REDDY the Umpire nominated by the Supreme Court of India as aforesaid and having jurisdiction to adjudi cate the dispute between the parties in the claims and counter claims relating to Work Orders Nos 3 4 5 6 and 8 concerning the Glass Factory and Works Orders Nos 9 and 10 concerning Lamp Factory and the contention of the claimant and the respondent in respect of the said Claims and counter claims
1 I DO HEREBY MAKE MY AWARD order and direct that the Respondent do pay to the claimant a sum of Rs31740 30p
Rupees thirty one thousand seven hundred and forty and thirty paise only in full satisfaction of its liability for the claim made by the Claim ant Contractor against the Respondent with interest at the rate of six per cent per annum from the date of Award
2 I further award and direct that the counter claims made by the respondent do stand dismissed
3 I further award and direct that the parties do bear their respective costs incidental to these proceedings
4 I further direct that the amounts paid by the parties towards the heating fees etc from time to time in respect of the several heatings of these arbitration proceed ings and the amount in deposit be appropriated and has have accordingly been appropriated towards the remuneration of the Umpire
Therefore in his award as a whole no reasons have been given for the purpose of making the award
In other words it is not a speaking award at all
The Award did not speak as to why the umpire has awarded as he did
It does not speak the mind of the umpire
It mentions the events leading to the making of the award
In the award there is no legal proposition which is unsustainable or improper
In that view of the matter the challenge to the award cannot be accepted
660 In the premises the objections are rejected
There will be decree in terms of the award of the Umpire Shri P Jaganmohan Reddy
There will be interest on the judgment at 9 until realisation
The applicant will have the costs of this application
NPV Award Confirmed


Summary:
There was an Agreement between the respondent contractor and the appellant construction company in respect of certain works
Differences and disputes arose and there were pro ceedings before the arbitrators named in the Agreement
As the arbitrators could not agree and there were differences this Court by an Order dated 16th June 1983 directed that the arbitrators appointed by each of the parties be appoint ed arbitrators and if there was disagreement between the arbitrators the matter was to be referred to the Umpire
In pursuance of the said directions the parties appeared before the arbitrators who referred the matter to the Umpire and the Umpire after consideration made an award dated 15th July 1985
The petitioner construction company made a petition to this Court for a decree in terms of the award which was opposed by the respondent contractor contending that a the Umpire had made a speaking award and that the validity or otherwise of the said award was justifiable in a Court of law b that the Umpire had no jurisdiction to proceed with the arbitration on or about 18th December 1984 as the period of two months from the date of his entering upon the reference had expired and consequently the award was beyond time and c that the award contained error of law on the face of the award and there were inconsistent findings
The Court while confirming the award HELD 11 The policy of law is that arbitration proceed ings should not be unduly prolonged
The arbitrator there fore has to give the award within the time prescribed or such extended time as the 654 court concerned may in its discretion extend and the Court alone had been given the power to extend the time for giving the award
656E 12 The Court has got power to extend time even after the award has been given or after the expiry of the period prescribed for the award
But the court has to exercise its discretion in a judicial manner
This power could be exer cised even by the appellate court
656F 13 The arbitrator gets the jurisdiction to enlarge the time for making the award only in a case where after enter ing on the arbitration the parties to the arbitration agreement consent to such enlargement of time
657B In the instant case in view of the policy of law that the arbitration proceedings should not be unduly prolonged and in view of the fact that the parties have been taking willing part in the proceedings before the arbitrator with out a demur and had all along been willing to extend time this will be a fit case for the extension of time and the time for giving the award is accordingly extended and the award will be deemed to have been given in time
656F G 21 An award might be set aside by the court on the ground of error on the face of the award but an award is not invalid merely because by a process of inference and argument it might be demonstrated that the arbitrator had committed some mistake in arriving at his conclusion
657D Jivarajbhai Ujamshi Sheth and others vs Chintamanrao Balaji and others   followed
22 Only in a speaking award the Court could took into the reasoning of the award
It is not open to the Court to speculate where no reasons are given by the arbitrator as to what impelled him to arrive at his conclusion
It is also not open to the Court to attempt to probe the mental process by which the arbitrator had reached his conclusion where it is not disclosed by the terms of his award
657D H 658A The instant case is not one of a speaking award
The Umpire had not spoken his mind indicating why he has done what he has done he has narrated only how he came to make the award
No reasons have been given for the purpose of making the award
There is no legal proposition in the award which is unsustainable or improper
The challenge to the award cannot therefore be accepted
659G H 655 State of Punjab vs Sri Hardyal   HK Wattal vs VN Pandya  and Chempsay Bhara and Company vs Jivraj Balloo Spinning and Weaving Company Ltd LR 50 IA 324 referred to