ivil Appeal No 3297 of 1981
From the Judgment and Order dated 1781981 of the Orissa High Court in Misc
Appeal No 145 of 1981
RK Mehta for the Appellant
AK Sen Arun Madan RK Sahoo and JDB Raju for the Respondent
The Judgment of the Court was delivered by VERMA J
This appeal by special leave under Article 136 of the Constitution challenges the judgment dated 1781981 of the High Court of Orissa dismissing Misc
Appeal No 145 of 1981 against the judgment dated February 28 1981 passed by the Subordinate Judge Baripada District Mayurbhanj in Title Suit No 106 of 1980 by which the arbitrator s award for a sum of Rs211183500 in favour of the plaintiff respondent Niranjan Swain was made a rule of the court and a decree was passed for that amount together with interest at the rate of six per cent per annum from the date of the decree
The main ground taken in this appeal was that the arbi trator s award was per se invalid since it gave no reasons
Some other points were raised to which we shall advert later
The question of invalidity of an arbitrator s award merely on the ground that it gave no reasons was involved for decision in a large number of matters pending in this Court and in view of the importance of this common question the bunch of cases was heard and decided by the Constitution Bench in Raipur Development Authority and others vs Ms Chokhamal Contractors and others 1
The Constitution Bench has held that the absence of reasons in the award does not by itself result in its invalidity except where the giving of reasons by the arbitrator for the award is the requirement of the arbitration agreement or the deed of submission or an order made by the Court or statute governing the arbitration
Accordingly this contention raised in the present appeal 824 and all other similar matters was rejected by the Constitu tion Bench with a direction that all such cases should go back to the Division Bench for disposal in accordance with law on the remaining points surviving therein for decision
This is how the present appeal has come before us
The conclusion reached by the Constitution Bench in the above case and the direction given therein is as under Having given our careful and anxious consid eration to the contentions urged by the par ties we feel that law should be allowed to remain as it is until the competent legisla ture amends the law
In the result we hold that an award passed under the is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support except where the arbitra tion agreement or the deed of submission or an order made by the court such as the one under Section 20 or Section 21 or Section 34 of the Act or the statute governing the arbitration requires that the arbitrator or the umpire should give reasons for the award
These cases will now go back to the Division Bench for disposal in accordance with law and the view expressed by us in this decision
 The only points now urged by Shri GL Sanghi learned counsel for the appellant are two namely 1 no interest could be awarded by the arbitrator in the present case upto the date of the award but the same is obviously included in the lumpsum award of Rs21 1183500 and the invalid part of the award not being severable from the rest the entire award must be set aside and 2 the High Court in its cryptic order has wrongly assumed as correct the trial court s refusal to call the arbitrator for being examined in the court
The learned counsel contended that any one of these defects was sufficient to set aside the entire award
In reply Shri Arun Madan learned counsel for the re spondent primarily contended that the arbitrator was empow ered to award interest upto the date of award
In the alter native learned counsel for the respondent contended that the invalid part of the award relating to grant of interest upto the date of the award was severable and therefore only that part should be set aside instead of setting aside the whole award
He also contended that the High Court did not make any wrong assumption and refusal to call the arbi trator for examination 825 was justified
It was also urged that in the present case there was nothing to indicate that calling the arbitrator for examination in the court was at all necessary
Before proceeding to consider the surviving points now urged on behalf of the appellant we may refer briefly to the few facts which alone are relevant at this stage
The con tract for the work Construction of Earth Dam balance work of Sansiali Nai MI Project in Division Mayurbhanj Bari pada was given by the appellant State of Orissa to re spondent Niranjan Swain and the agreement between the parties contained an arbitration clause for adjudication of disputes arising out of the contract
Consequently the dispute relating to the remaining claim for payment made by the respondent was referred for adjudication to the arbitra tor in terms of the arbitration clause contained in the agreement
The respondent s claim before the arbitrator was for the amount of Rs 190468900 as the balance amount due to him and for return of the security deposit of Rs2800000 or in all the total of Rs 193268900 as the principal amount
The respondent also claimed interest on the sum of Rs 190468900 at the rate of 18 per cent per annum from 1541977 to 1551978 namely the date of submission of the statement of claim before the arbitrator amounting to Rs 3714 1400 and interest on the security deposit of Rs 2800000 at the same rate from 1591977 to 1551978 amounting to Rs336000
The respondent further claimed interest at the rate of 18 per annum from 165
1978 till payment of the amount to the respondent by the appellant
In the statement of claim the total amount claimed was mentioned at Rs230746300 together with interest  18 per annum on Rs 193268900 from 1651978 to the date of the award
The appellant denied the respond ent s claim including the claim for payment of interest
The arbitrator gave the award dated 2121980 as under AWARD After perusal of the claim statements and counter statements the counter claim of the respondent the rejoinder of the claimant the documentary and oral evidence and on a careful consideration of the submissions and arguments of the parties and the IR advocate I have come to the conclusion that the claimant is entitled to get a sum of Rs211183500 Rupees twenty one lakhs eleven thousand eight hundred thirty five only in full and final satisfac 826 tion of his claims till the date of the award from the respondent
The respondent is not entitled to get any amount towards his counter claim from the claimant
sd BS Patnaik Arb itrator 21 21980 emphasis supplied It is on the basis of the contents of this award that the above contentions have to be considered and decided
We may dispose of the second point urged by learned counsel for the appellant straightaway since it does not merit any elaborate consideration
The argument of the learned counsel for the appellant relating to calling the arbitrator for examination as a witness in the court was based on the decision of the Orissa High Court in State of Orissa vs DC Routray AIR 1983 Orissa 163
That decision itself says that even though an arbitrator is a competent witness the court must exercise the power of calling him as a witness cautiously and sparingly and not in a routine manner
It is obvious that when the court is requested to call the arbitrator for examination as a witness it must be shown that there is some cogent ground for his examination within the permissible limits
Nothing has been shown in the present case to indicate that it was at all necessary to call the arbitrator as a witness to depose on any matter which could legitimately be examined by the court in the proceedings
This alone is sufficient to justify the view taken by the High Court
This contention of learned counsel for the appellant is therefore rejected
The only point surviving for consideration now relates to the grant of interest by the arbitrator and its effect on the validity of the award
It is obvious from the contents of the award and the details of the respondent s claim before the arbitrator that a lumpsum amount of Rs211183500 awarded in the respondent s favour by the arbitrator was in full and final satisfaction of all the respondent s claims before the arbitrator till the date of the award
As mentioned earlier the respondent s claim before the arbitrator mentioned the sum of Rs190468900 plus the security deposit of Rs2800000 or in all Rs 193268900 only as the total principal amount of the claim and the sum claimed in excess thereof was on account of interest
The grant of a lumpsum amount of Rs211183500 in the award in full and final 827 satisfaction of all the claims till the date of the award must therefore obviously include interest also
It is equally plain that the claim for the entire principal amount was not accepted by the arbitrator
The effect on the ques tion of validity of the award has to be decided on this basis
It is settled by the decision of this Court in Executive Engineer Irrigation Balimela and others vs Abhaduta Jena and others 18 that in cases wherein the reference to arbitration was made prior to the commencement of the  on August 19 1981 the arbitra tor is not empowered to grant interest for the period either before the commencement of the proceedings or during the pendency of the arbitration
This is clear from the position summarized in Abhaduta Jena s case supra as under In the remaining cases which arose before the commencement of the  the respondents are not entitled to claim interest either before the commencement of the proceed ings or during the pendency of the arbitra tion
They are not entitled to claim interest for the period prior to the commencement of the arbitration proceedings for the reason that the Interest Act 1939 does not apply to their cases and there is no agreement to pay interest or any usage or trade having the force of law or any other provision of law under which the claimants were entitled to recover interest
They are not entitled to claim pendente lite interest as the arbitrator is not a court nor were the reference to arbitration made in suits
 The learned counsel for the respondent placed reliance on the decision of this Court in Gujarat Water Supply and Severage Board vs Unique Erectors Gujarat P Ltd and another  in support of his primary conten tion that the arbitrator was empowered to grant interest upto the date of award
We are unable to construe this judgment in the manner suggested by learned counsel for the respondent
The decision clearly refers to Abhaduta Jena s case supra and also follows it
The primary contention of the learned counsel for the respondent that the award does not suffer from any infirmity by grant of interest therein upto the date of award is therefore rejected
It cannot therefore be disputed that in the present case wherein the reference to arbitration was made and even the award was given prior to the commencement of the Inter est Act 1978 on August 19 1981 the arbitrator had no jurisdiction to grant any amount as interest 828 for any period either upto the date of submission of the claim before him or pendente lite upto the date of the award
From the above it follows that inclusion of the amount of interest in the lumpsum award of Rs211183500 by the arbitrator does render that part of the award invalid
The question now is of the consequence of this invalidi ty on the entire award
The learned counsel for the appel lant contended that the invalid part of the award not being severable from the rest the entire award must be set aside
On the other hand the learned counsel for the respondent urged that there is no difficulty in separating the invalid part from the rest and this could easily be done by deduct ing from the total sum of Rs211183500 granted in the award the maximum interest calculated at the rate of 18 per annum which was claimed by the respondent before the arbitrator upto the date of the award 2121980
He urged that such a view cannot in any manner prejudice the appel lant and if at all it can work only to the detriment of the respondent who make this suggestion
In our opinion it is possible in the present case to sever the invalid part relating to interest in order to sustain the valid part of award
Accordingly we requested both sides to calculate the total amount of interest and give to us the agreed figure
The agreed figure of Rs 126587 197 has been given by them as the maximum amount of interest which could be included in the award of Rs21 1183500 in accordance with the respondent s claim before the arbitrator
It is common ground that the invalid part of the award on the basis of grant of interest by the arbi trator cannot exceed the amount of Rs 126587 197 out of the total Sum of Rs21 1183500
It is also not disputed that the balance amount remaining after deduction of Rs 126587197 cannot be tainted with any invalidity
The learned counsel for the respondent has confined the respond ent s claim in the alternative to upholding of the award only in respect of this balance amount and no more
We do not see any reason why the award should not be modified and sustained to this extent only
We are conscious of the fact that the interest amount of Rs 126587197 so calculated for deduction from the total amount of Rs21 1183500 granted in the award is in excess of the interest calculated on the remaining balance treated as principal amount at this stage on the above suggestion
However in the peculiar circumstances of this case and in view of the alternative contention on 829 behalf of the respondent we see no reason for rejecting in the present case this alternative contention also
Viewed in this manner the balance amount of the award would not be tainted with any invalidity and therefore it would also be just and proper to sustain the award to this extent only
We therefore reject the contention of learned counsel for the appellant that the entire award should be set aside and instead accept the alternative contention of learned counsel for the respondent
In view of the above the agreed amount of interest upto the date of the award 2121980 that is Rs 126587197 is deducted from the amount of Rs211183500 leaving the balance amount of Rs84596303 say Rs84596300
This amount of Rs84596300 survives as the valid part of the award and therefore the decree of the courts below is modified to this extent so that the decree in favour of the respondent now remains for the sum of Rs84596300 only together with interest thereon at the rate of 6 per annum from the date of the decree passed by the trial court until payment
In view of the partial success of both sides the parties shall bear their own costs throughout
The appeal is partly allowed in this manner
We are informed that the respondent has withdrawn a certain amount against the decree during the pendency of this appeal
We direct that the amount due to the respondent shall be calculated on the basis of this modified decree
In case the amount obtained by the respondent is less than the amount to which the respondent is found entitled as a result of this modified decree the remaining amount shall be paid to the respondent with interest  12 per annum from 812
1981 in terms of the interim order of that date passed in this appeal and in case the amount obtained by the re spondent is in excess of that to which he is found entitled the excess amount shall be refunded by the respondent to the appellant similarly with interest at the same rate of 12 per annum from 812
1981 upto the date of its refund
TNA Appeal allowed partly


Summary:
The Commissioner of Police Ahmedabad Respondent No 1 therein passed an order of detention dated 2351988 against Abdul Latif Abdul Wahab petitioner s brother under section 32 of the Gujarat Prevention of Anti Social Activities Act 1985 and served the same on the detenu while he was in jail in pursuance of an order of remand made by the Desig nated Court Ahmedabad in CR No 40 of 1987
The petitioner detenu s brother challenged the validity of this order on the ground amongst others that there has been absolute non application of mind on the part of the detaining author ity in making the order of detention
The grounds of detention furnished to the detenu makes mention of three criminal cases viz Case No 37285 Case No 45687 and Case No 288 pending against the detenu at PS Kalupur out of which case No 37285 is stated to be pending in Court and the other two pending for examination
The detaining authority acting on the basis of the said complaints apprehended that detenu s criminal activities will adversely affect the public order because the activi ties the weapons kept by the detenu and his associates cannot except create terror in the State of Gujarat
The detaining authority further felt that the detenu though in jail there are full possibilities that he may be released on bail in that offence
It may be pointed out that in case No 288 the name of the detenu does not find place in the FIR
Likewise in case No 37285 aforesaid detenu s name is not there
891 In case No 45687 registered on 161087 the detenu was arrested the same day
The case related to the seizure of a revolver from the person of detenu
The detaining authority while issuing the order of detention against the detenu did not at all consider the fact that the Designated Court declined to grant bail to the detenu by its order dt
May 13 1988
The detaining authority also was not aware that no application for bail by detenu was filed between May 13 to May 23 1988 ie when the detention order was made
The Court in order to decide the various contentions advanced by the parties felt it necessary to consider the background as well as the various detention orders passed against the detenu
The first in the series is an order dt
11th September 1984 when the Respondent No 1 issued to the detenu a notice to show cause why he should not be externed from the boundaries of Ahmedabad and the surroundings rural areas
In 1985 the detenu was arrested us 307 143 147 148  324 IPC CR case No 3785 wherein he was granted bail by the Sessions Judge on February 14 1985
On 24th March 1985 Commr of Police passed an order of detenu s detention
On 6th July 1985 charge sheet in CR Case No 37 of 1985 was submitted
On 27th September 1985 inquiry into the externment proceedings was completed
On Dec 12 1985 the detenu surrendered and was taken into custody
On May 26 1986 the detenu was acquitted in that case
The detenu was released from the jail on June 23 1986 and as soon as he came out of the jail an order of detention under Preven tion of Anti Social Activities Act was served on the detenu there and then and he was once again taken into custody
It may be mentioned in this connection that on Jan 18 1986 the order of externment of the detenu from Ahmedabad city and rural areas of Gandhi Nagar etc was made when the detenu was in jail
The State Govt
on appeal by the detenu confirmed the order of externment
However on August 7 1986 the Govt
revoked the order of detention as Advisory Board could not be constituted
On the same day the State Govt
passed the second order of detention under PASA and the same was served on the detenu the same day
The detenu challenged the validity of both the externment order as also the detention order in the High Court
The High Court re jected the petition challenging the order of detention and he filed petition for special leave in this Court
This Court released the detenu on parole on 23187 as he was to participate in municipal elections which were to take place on 25th Jan 1987
The detenu was released on parole on 24th Jan 1987
He won the election from all the wards wherefrom he had contested
This Court on February 9 1987 quashed the detention order and 892 directed the respondents to set the detenu at liberty
On February 14 1987 when the detenu went to the police station with his advocate to mark his presence as required by the earlier bail order he was again taken into custody for breach of order of externment of 1811986
He was granted bail
On February 15 1987 an order of detention under section 8a of the National Security Act was passed against the detenu
The detenu challenged the same but in the meantime Advisory Board released him
On October 16 1987 the detenu was again arrested for an incident of Feb 14 1986
He applied for bail before the Designated Court which was refused
Against that order he preferred an appeal to this Court under section 16 of the Terrorists and Disruptive Activities Prevention Act 1985
This Court set aside the order of the Designated Court and remitted the matter back to the said Court with a direction to decide the matter afresh and enlarge the detenu on bail pending the disposal of the application for bail
Another order of detention was passed against the detenu on Jan 25 1988 which was later withdrawn as the Advisory Board declined to confirm the same
The detenu was released on March 14 1988
At the hearing of the appeal by this Court on 7488 an application was made that the detenu has absconded whereupon this Court ordered that the detenu should surrender within a week s time
He accordingly surrendered on April 13 1988
On May 23 1988 the order of detention in question was made which is hereby challenged
The contention raised on behalf of the petitioner is that in the grounds of detention furnished in support of the order of detention no prejudicial act on the part of the detenu is alleged between March 14 1988 and April 13 1988 during which small period he was a free man as he was in jail for nearly three years prior to March 14 1988 except for short periods when he was on parole and after April 13 1988 again he was under custody
It is urged that no preju dicial activity has been shown when the detenu was on parole
As such the action of the respondent is wholly vindictive and in total defiance of law
According to him there has been no application of mind at all to the most glaring fact that the Designated Court in defiance of this Court s order did not grant interim bail to the detenu by its order dt
13588
There was no possibility therefore of the detenu being released on bail
It was thus impossi 893 ble to prove the statement made in the grounds of detention that there were full possibilities that the detenu may be released on bail in this case
Allowing the petition this Court HELD The detention of a person without a trial is a very serious encroachment on his personal freedom and so at every stage all questions in relation to the detention must be carefully and solemnly considered
901G The past conduct or antecedent history of a person can be taken into account in making a detention order but the past conduct or antecedent history of the person on which the authority purports to act should ordinarily be proxi mate in point of time and would have a rational connection with the conclusion drawn by the authority that the deten tion of the person after his release is necessary
901F G There must be awareness in the mind of the detaining authority that the detenu is in custody at the time of service of the order of detention on him and cogent rele vant materials and fresh facts have been disclosed which necessitate the making of an order of detention
905D E In the instant case the detenu was in jail custody in connection with a criminal case and the order of detention was served on him in jail
It is also evident that the application for bail filed by the detenu was rejected by the Designated Court on May 13 1988
The statement in the grounds of detention that at present you are in jail yet there are full possibilities that you may be released on bail in this offence also clearly shows that the detaining authority was completely unaware of the fact that no appli cation for bail was made on behalf of the detenu for his release before the Designated Court and as such the possi bility of his coming out on bail is non existent
This fact of non awareness of the detaining authority clearly estab lishes that the subjective satisfaction was not arrived at by the detaining authority on consideration of relevant materials
The only period during which he was free person was from March 14 1988 to April 13 1988
During this period no act prejudicial to the maintenance of public order has been alleged to have been committed by the detenu
905E G 906E F A mere bald statement that the detenu is in jail custo dy is likely to be released on bail and there are full possibilities that he may continue 894 the offensive activities without reference to any particular case or acts does not show on the face of the order of detention that there has been subjective satisfaction by the detaining authority in making the order of detention in question
907C D The order of detention was accordingly quashed and the detenu directed to be set at liberty forthwith
907D Rameshwar Shaw Burdwan  Anr
vs Distt
Magistrate Burdwan  Anr  referred to Alijan Mian vs Distt
Magistrate Dhanbad  Ors
 1983 4 SCC 301 referred to Ramesh Yadav vs Distt
Magistrate Etah  Ors referred to Suraj Pal Sahu vs State of Maharashtra  Ors  referred to Vijay Narain Singh vs State of Bihar  Ors referred to Raj Kumar Singh vs State of Bihar  Ors  referred to Binod Singh vs Distt
Magis trate Dhanbad  Ors  at 420 21 Poonam Lata vs
ML Wadhawan and Anr  referred to and Smt
Shashi Aggarwal vs State of UP  Ors  at 440 referred to