Judgment Case ID: 5794

Judgment:
Special Leave Petition [Civil) Nos. 1 l(i50 58 of 1987. From the Judgment and Order dated 3 1.7. 1987 of the Madras High Court in Appeal against Order Nos. 54 1 to 544 and 558 to 562 of 1981. A.K. Sen	 V. Krishnamurthy and V. Balachandran for the Petitioner. A. V. Rangam for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI	 J. These are petitions under Article 136 of the Constitution seeking leave to appeal against the judgment and order of the High Court of Madras dated 31st July	 1987. The petitioner company undertook the work of widening and strengthening pavements in Nation Highway No. 7	 Madurai Kanya kumari Road from Reaches 37.6 k.m. to '1 '	 k.m. on the Madurai Kanyakumari Road and the work was divided into fourteen Reaches and 14 separate agreements were entered into between the petitioner and the Superintending Engineer	 National Highways	 Tirunelveli. respondent No. 3 to the present petitions. There is not much dispute on this point. At the relevant time	 according to	 the petitioner	 the Superintending Engineer. National Highways	 Salem was one Thiru Mohan. He entered into reference. He took up the matter for arbitration and called for statements from the parties. Statements were filed before him and evidence were also adduced before him. But before he could complete the adjudication he was transferred and was succeeded by one Thiru J.R. Cornelius	 Superintending Engineer. The contention of the petitioner in this case was that he had no Jurisdiction to	 proceed and complete the arbitration. It appears however	 that he entered into the task of adjudication with the knowledge and consent of the petitioner and the petitioner had participated actively in the proceeding before him. From the notices served by Thiru Mohan previously and subsequently by Thiru Cornelius. it is apparent that the petitioner had knowledge of the change of the incumbent of the Superintending Engineer who was to arbitrate in the matter. This is evident from the documents appearing at pages 164 PG NO 465 and 165 of the present paper book and both the parties had notice of the succession in office. The arbitrator could not complete the award within time and there was need for extension of time. He wrote a letter to the petitioner on lst May 1977 stating "extension of time was necessary to pass orders on reference and hearing has been concluded". In reply to that fetter on 11th May	 1977 the petitioner agreed to such extension. The petitioner was content with that situation and never asked for any further or fresh opportunity either to make any submission or to adduce any evidence. In that light the arbitrator has made the award. This was challenged before the learned District Judge by means of a suit under sections 30 and 33 of the that the previous arbitrator Thiru Mohan having entered into reference and Thiru Cornelius had no jurisdiction to conclude. It was violative of the principles of natural justice	 it was submitted. But as mentioned hereinbefore	 the petitioner had knowledge of the change of the incumbent. He did not protest and the proceedings went on before Thiru Cornelius. It is apparent from the terms of the agreement between the parties that the Superintending Engineer of the Circle for the time being was the named arbitrator. The learned District Judge held that Thiru Cornelius was competent to pass the award. The High Court also upheld that and rejected the challenge to the award on this ground made by the petitioner. Shri A.K. Sen	 learned counsel for the petitioners	 urged before us that once an arbitrator had entered into reference	 the next incumbent could not conclude the said arbitration proceeding without a fresh agreement. In the facts of this case	 as the petitioner had knowledge of the alleged defect and had acquiesced in the proceedings before the successor	 namely	 Thiru Cornelius; we are of the c	pinion	 that this contention of Shri Sen cannot be entertained. It was contended that there was violation of the principles of natural justice. This objection cannot be entertained. If the parties to the reference either agree beforehand to the method of appointment	 or afterwards acquiescence in the appointment made with full knowledge of all the circumstances. they will be precluded from objection~ to such appointment as invalidating subsequent proceedings. Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence	 explains Russell on Arbitration. 18th Edition at page 105. This was stated by the Judicial Committee long ago in Chowdhury Murtaza Hossein vs Mussumat Bibi Bechunnissa	 3 I.A. 209. See also the observations of P.B. Mukherji	 J. in the decision of the Calcutta High Court PG NO 466 Calcutta	 A.I.R. 1456 Calcutta 470 at 472. This Court held in N. Challappan vs Secretary	 Kerala State Electricity Board and another; 	 that acquiescence defeated the right of the appellant at a latter stage. See also the observations of this Court in Prasun Roy vs The Calcutta Metropolitan Development Authority and another; 	 See Russell on Arbitration	 20th Edition	 pages 432 435. Shri Sen contended that no notice was issued after the appointment of the new arbitrator. This was factually incorrect	 as mentioned before. Then	 it was said that the award was bad as it did not consider all the claims. This also cannot be entertained. It must be assumed that the arbitrator had considered all the evidence adduced before him. There was no disregard of any principle of law. There was nothing to indicate that the arbitrator had not considered all the evidence. Unless there was a patent mistake of law and gross misstatement of facts resulting in miscarriage of justice or of equity	 the award remains unassailable. In this case the arbitrator gave no reason for the award. There is no legal proposition which is the basis of the award	 far less any legal proposition which is erroneous. There is no appeal from the verdict of the arbitrator. The Court cannot review	 in such circumstances	 the award and correct any mistake in the adjudication by the arbitrator See Champsey Bhara B Company vs Jivray Ballo Spinning and Weaving Company Ltd.	 50 I.A. 324 and the observations of Bachawat	 J. in Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd.	 Indore	 [ l967] 1 section C. R. 105 of this Court. In the facts and circumstances of the case	 in our opinion	 this award is not assailable. The High Court was	 therefore	 right in upholding the learned District judge 's dismissal of the challenge to the award. These petitions	 therefore	 fail and are dismissed accordingly 	without any order as to costs. N.P.V. Petitions dismissed.

Summary:
The petitioner Construction firm entered into agreements with respondent No. 3	 Superintending Engineer of a Circle for execution of certain civil works. Respondent No. 1 Superintending Engineer of another Circle entered into a reference for arbitration and parties filed statements and adduced evidence. Before the adjudication was completed	 respondent No. 1 was transferred and his successor in office entered into the task of adjudication with the knowledge	 consent and active participation of the petitioner in the proceeding. Since the arbitrator could not complete the award within time	 be sought extension of time by a letter to the petitioner and the petitioner agreed to such extension by a letter. The petitioner did not ask for any further or fresh opportunity for adducing any evidence. Thereafter	 the arbitrator made his award. The petitioner challenged the award under sections 30 and 33 of the before the District Judge on the ground that the previous arbitrator having entered into reference	 his successor in office had no jurisdiction to conclude it and the award was violative of principles of natural justice. The District Judge held that the successor in office to the original arbitrator was competent to pass the award. Upholding this	 the High Court rejected the challenge to the award. Hence the petitioner filed the Special Leave Petition in this Court contending that once an arbitrator had entered into a reference	 the next incumbent could not conclude the said arbitration proceedings without a fresh agreement	 that there was violation of principles of natural justice and PG NO 462 PG NO 463 that the award was bad. Dismissing the Special Leave Petition	 HELD: 1. If the parties to the reference either agree before	hand to the method of appointment	 or afterwards acquiesce in the appointment made	 with full knowledge of all the circumstances	 they will be precluded from objecting to such. appointment as invalidating subsequent proceedings. Attending and taking part in the proceedings with full knowledge of the relevant fact will amount to such acquiescence [465G ] N. Challappan vs Secretary	 Kerala State Electricity Board and another; 	 relied on. Chowdhury Murtaza Hossein vs Mussumat Bibi Bechunnissa	 3 I.A. 209 and Prasun Roy vs The Calcutta Metropolitan Development Authority and another; 	 	 referred to. Russell on Arbitration	 18th Edition/20th Edition	 pages 105/432 435	 referred to. In the instant case	 the petitioner had full knowledge of the change of the incumbent and did not protest and proceedings went on before the new incumbent. Thus	 the petitioner had knowledge of the alleged defect and had acquiesced in the proceedings before the successor. There was	 therefore	 no violation of principles of natural justice. [465C	 F] 2. Unless there was a patent mistake of law and gross misstatement of facts resulting in miscarriage of justice or of equity	 the award remains unassailable. [466C] Champsey Bhara & Company vs Jivraj Ballo Spinning and Weaving Company Ltd.	 50 I.A. 324 and Firm Madanlal Roshanlal Mahajan vs Hukumchand Mills Ltd.	 lndore; 	 	 referred to. In the instant case	 the arbitrator gave no reason for the award. There is no legal proposition which is the basis of the award	 far less any legal proposition which is erroneous. There is no appeal from the verdict of the arbitrator. The Court cannot review	 in such circumstances	the award and correct any mistake in the adjudication by the arbitrator. [466D] PG NO 464 3. In the facts and circumstances of the case	 the award is unassailable. The High Court was right in upholding the District Judge 's dismissal of the challenge to the award. [466F]