Case: K.K. John Vs. State of Goa

2. The appellant and the respondent herein entered into an agreement whereby and whereunder the appellant undertook to carry out certain constructions. The agreement also provided for resolution of dispute by an Arbitrator. It appears certain dispute arose as a result of which the appellant herein preferred a claim on 19th September, 1990 and subsequently on 26th October, 1990, first reference was made. On 12th March, 1991, the respondent herein terminated the agreement. As a result o termination of agreement, the appellant herein made another reference on 26th June, 1991 and put in second claim on 27th September, 1991. The Arbitrator appointed, with the consent of the parties, gave an Award on 25th February, 1994. Thereafter the Arbitrator filed an Award for being made a Rule of the Court. The appellant filed an objection before the learned Civil Judge, Senior Division Bench, Mapusa, in the State of Goa. The learned Civil Judge in terms of the order dated 6th July, 1995 elaborately considered the contentions raised by the appellant herein and came to the followingThere appears some glaring mistake under item no. 1 and 2 when the arbitrator mentioned that the earth, excavation is nil though the quantity appear to have been admitted by the respondent. But on this ground the award cannot be set aside.21. Similarly, the claim no.2 though the arbitrator has stated "could not be ascertained" there is no explanation as to why he could not do so and if it would not be ascetained what would be the finding to that effect.The learned Civil Judge, Senior Division, observedthe no objection of the learned Advocate for the respondent, I feel that the award has to be remitted on two points as under:(i) To decide the additional terms and reference by order dated 26.6.91 regarding the illegal closure of the contract and(ii) The undermined part of item No.1 and 2 as mentioned in page 7 of the award, to specify the term could not be ascertained.The Arbitrator in concluding part of the order held that the other part of the Award stands not affected by the said order.5. On 10th October, 1995, the Arbitrator resigned. Under such circumstances, the appellant herein instead of moving an application under Section 8(b) of the Act, filed a petition under Section 20 thereof for appointment of a new Arbitrator on 6th February, 1996. On 28th May, 1997 the learned Civil Judge, after hearing the parties, was of the view that since the earlier Arbitrator did not give his Award within time, the whole Award has become void. Consequently, he appointed a new Arbitrator with the consent of the parties with a direction to the Arbitrator to give aAward. Aggrieved, the State of Goa preferred an appeal before the High Court. The High Court was of the view that since the other part of the Award remained, intact, the proceeding was required to be restricted to the aforementioned two points only on which earlier the Court wanted determination and, therefore, it was not open to the learned Civil Judge to have directed to resolve the disputeIt is against the said judgment the appellant is in appeal before us.

Reasoning: 9. In the present case, we find that the entire Award was not remitted to the Arbitrator. The Arbitrator was only required to give determination on two points, and therefore,(3) is not applicable in the present case. The Parliament advisedly has restricted(3) of Section 16 of the Act to an Award which would mean the whole Award or a part of it. The valid part of the Award always remains enforceable in a Court of law. What can be held to be void is that part of the Award which has not been made a Rule of Court by sustaining the objections raised with regard thereto inter alia on the ground that the same suffers from an error apparent on the face of the record or for any other reason; in the event the Arbitrator or Umpire fails to reconsider it and submit his decision within the time fixed therefor by the Court. In other words, the word Award within the meaning of(3) would also include a part of the Award, which has been the subject matter of the order of remission by the competent Court. In any view of the matter the applicability of(3) of Section 16 of the Act, in the facts and circumstances of the present case, does not arise inasmuch as the matter is still pending before the Arbitrator.We do not find any merit in both the submissions. So far the first submission is concerned that the appellant did not challenge the order of the learned Civil Judge dated 6th July, 1995, whereby and whereunder the learned Civil Judge held that the order part of the Award shall remained intact and only two points were required to be determined. The said order has attained finality. The same, thus, cannot be permitted to be reopened. The submission of Mr. Prashant Bhushan to the effect that before the period for filing the revision application expired, the Arbitrator resigned and, thus, there was no occasion for the appellant to question the said order is misconceived. Irrespective of the resignation of the Arbitrator, the judgment of the learned Civil Judge remained operative and enforceable. If, thus, the appellant was in any manner aggrieved thereby, the only remedy open to it was to move the High Court. It having failed to do so cannot now be permitted to raise the said question again before this Court. It is trite that what could be done directly cannot be permitted to be done indirectly.A perusal of(1) of Section 16 shows that the Court may from time to time remit the Award or any matter referred to arbitration to the Arbitrator or Umpire for reconsideration upon such terms as it thinks fit. Thus,(1) of Section 16 is in two parts and talks of two distinct factors; one is for remission of the entire Award and the other any other matter. Whereas(3) of Section 16 of the Act provides that an Award remitted under(1) shall become void on the failure of the Arbitrator or Umpire to reconsider it and submit his decision within the time fixed, it is silent as regards any other matters. It is a well settled principle of law that no word used in a statute should be presumed to be surplus. In the event the contention of Mr. Prashant Bhushan is accepted, the words or any matter referred to arbitration become otiose.(3) of Section 16 is referable to(1) thereof. It is not in dispute that an Award could be good as regard one part thereof and had as regards the rest. In Russell on Arbitration 19th Edition at page 484 it isaward bad in part may be good for the rest. If, notwithstanding that some portion of the award is clearly void, the remaining part contains a final and certain determination of every question submitted, the valid portion may well be maintainable as the award, the void part being rejected.We agree with the views expressed in the aforementioned decisions.