Case: Sutna Stone &amp; Lime Co.Ltd., M.P.  Vs. U.O.I.

in reappreciating the material on record and substituting its own view in place of arbitrators view. This exercise is not permissible by the court in view of the settled legal position. 12. In the instant case, where there is an error apparent on the face of record or where the arbitrator has not followed the statutory legal position, the court would be justified in interfering with the award of the arbitrator. 13. Learned counsel for the respondents placed reliance on Trustees of the Port of Madras v. Engineering Constructions Corporation Limited (1995) 5 SCC 531 wherein this court observed as under:- "In the case of a reasoned award, the court can interfere if the award is based upon a proposition of law which is unsound in law. The error apparent on the face of the award contemplated by Section 16(1) (c) as well as Section 30 (c) of the Arbitration Act is an error of law apparent on the face of the award and not an error of fact. An error of law on the face of the award means an error of law which can be discovered from the award itself or from a document actually incorporated therein. The erroneous proposition of law must be established to have vitiated the decision. The arbitrator being a creature of the contract must operate within the four corners of the contract. It is not permissible to travel beyond and consider material not incorporated in or appended to the award." 14. The learned counsel for the respondents has also placed reliance on the case of Indian Sugar Mills Association AIR 1968 SC 22 (supra). In this case, this court laid down that the local administration was competent to increase the `rates of charges. The arbitrator ignored the settled legal position and consequently the High Court was justified in interfering with the award based on wrong principles of law.15. The learned counsel for the respondents also placed reliance on Bungo Steel Furniture Pvt. Ltd. v. Union of India (1967) 1 SCR 633. In this case, the court observed as under:- "The arbitrator in fixing the amount of compensation had not proceeded to follow any principles, the validity of which could be tested on the basis of laws applicable to breaches of contract. He awarded the compensation to the extent that he considered right in his discretion without indicating his reasons. Such a decision by an Arbitrator could not be held to be erroneous on the face of the record." In that case, the court further held as under:- "It is now a well settled principle that if an arbitrator, in deciding a dispute before him, does not record his reasons and does not indicate the principles of law on which he has proceeded, the award is not on that account vitiated. It is only when the arbitrator proceeds to give his reasons or to lay down principles on which he has arrived at his decisions that the court is competent to examine whether he has proceeded contrary to law and is entitled to interfere if such error in law is apparent on the face of the award itself." 16. The Privy Council in Champsey Bhara & Co. v. Jivraj Balloo Spg. & Wvg. Co. Ltd. AIR 1923 PC 66 observed as under:- "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, 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 you can then say is erroneous." 17. In Raipur Development Authority & Others v. M/s. Chokhamal Contractors & Others (1989) 2 SCC 721 , a Constitution Bench of this Court clarified that "the ground arising out of an error of law apparent on the face of the award prima facie appears to fall either under Section 16(1) (c) of the Act, which empowers the Court to remit the award to the arbitrator where an objection to the legality of the award which is apparent upon the face of it is successfully taken, or under Section 30 (c) of the Act which empowers the Court to set aside an award if it is `otherwise invalid."18. From the discussion of the aforementioned cases, it is clear that the error apparent on the face of the award contemplated by Section 16(1)(c) as well as Section 30(c) of the Arbitration Act is an error of law apparent on the face of the award and not an error of fact. Same principle has been reiterated in Thawardas Pherumal v. Union of India (1955) 2 SCR 48. The court reiterated the legal position that an arbitrator cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The legal position has been crystallized in a series of judgments of this Court that the arbitrator has got ample power in giving an award. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself a task of being a judge of the evidence before the arbitrator. The court should approve the award with the desire to support it, if that is reasonably possible rather than to destroy it, by calling it illegal. This court has very limited jurisdiction to interfere with the reasoned award. Only when the award is based upon a proposition of law which is unjustified in law, the error of law must appear from the award itself or from any document or note incorporated in it or appended to it. It is not permissible to travel beyond and consider material not incorporated in or appended to the award.19. In view of the clear legal position which has been correctly appreciated by the High Court in the impugned judgment, in our considered view, no interference is called for.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. In the instant case, where there is an error apparent on the face of record or where the arbitrator has not followed the statutory legal position, the court would be justified in interfering with the award of the arbitrator.From the discussion of the aforementioned cases, it is clear that the error apparent on the face of the award contemplated by Section 16(1)(c) as well as Section 30(c) of the Arbitration Act is an error of law apparent on the face of the award and not an error of fact. Same principle has been reiterated in Thawardas Pherumal v. Union of India (1955) 2 SCR 48. The court reiterated the legal position that an arbitrator cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The legal position has been crystallized in a series of judgments of this Court that the arbitrator has got ample power in giving an award. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself a task of being a judge of the evidence before the arbitrator. The court should approve the award with the desire to support it, if that is reasonably possible rather than to destroy it, by calling it illegal. This court has very limited jurisdiction to interfere with the reasoned award. Only when the award is based upon a proposition of law which is unjustified in law, the error of law must appear from the award itself or from any document or note incorporated in it or appended to it. It is not permissible to travel beyond and consider material not incorporated in or appended to the award.19. In view of the clear legal position which has been correctly appreciated by the High Court in the impugned judgment, in our considered view, no interference is called for.