Decided on May 12,1983

UNION OF INDIA Respondents


- (1.)The learned District Judge, in whose Court the impugned award was filed, having rejected the application of the appellant for setting aside the same, the appellant has come up in appeal against the order of the District Judge refusing to set aside the award.
(2.)The impugned award has not set out any of the facts and circumstances of the case or the respective contentions or arguments of the parties nor has given any reason whatsoever for accepting or rejecting any of the claims or counter-claims preferred by the parties and (to borrow expressions from the Civil P. C.) is in the nature of a "decree" only and not a "judgment". Mr. Deb, the learned Standing Counsel for the respondent Union of India, has, therefore, as is usual for a counsel appearing to support an award, urged that the award not having spelt out any fact or law, no error of law, and, therefore, far less an error of law apparent on the face of the award, can be discovered which would warrant setting aside of or any other interference with the award.
(3.)As is well-known, as early as in 1857, Williams, J., in Hodgkinson v. Fernie (1957-3, CB NS 189 at 202) observed that "where a cause or matters in difference are referred to an arbitrator, a lawyer or layman, he is constituted the sole and final Judge of all questions both of law and fact" and that "the only exceptions to that rule are cases where the award is the result of corruption or fraud; and one other where the question of law necessarily arises on the face of the award or upon some paper accompanying and forming part of the award" and in 1923 the Privy Council quoted these observations with unqualified approval in Champsey Bhara v. Jivraj Baloo (AIR 1923 PC 66) and ruled (at 69) that "an error in law on the face of the award means, 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." Even in 1901, two decades before the Privy Council made the above quoted view in Hodgkinson (supra) a part of law of Arbitration in India in Champsey Bhara (supra), it observed in Ghulam Khan v. Muhammad Hassan (1902 ILR 29 Cal 167 at 186) that the Arbitrators "may have erred in law, but Arbitrators may be Judges of law as well as Judges of facts and an error in law certainty does not vitiate an award". Be that as it may, the observations of the Privy Council in Champsey Bhara (AIR 1923 PC 66) (supra), based on the view in Hodgkinson (1857-3 CBNS 189) (supra), have been approved by our Supreme Court in a number of decisions and whether one looks at one of the earliest decisions in S.Dutt v. University of Delhi (AIR 1958 SC 1050 at p. 1053) or at one of the latest decisions in M. Chetlappan v. Secretary, Kerala State Electricity Board (AIR 1975 SC 230 at p. 235), one would find the same observations to be quoted and/or followed almost with faithful adherence. Reference may be made among others, to the decisions in Union of India, v. Rallia Ram (AIR 1963 SC 1685 at p. 1691), in Jivarajbhai v. Chintamanrao (AIR 1965 SC 214 at p 220), in Bungo Steel Furniture v. Union of India (AIR 1967 SC 378 at p. 380), in Madanlal Roshanlal v. Hukumchand Mill (AIR 1967 SC 1030 at p. 1031), in Union of India v. Bungo Steel Furniture (AIR 1967 SC 1032 at p. 1034) and in Allen Berry v. Union of India (AIR 1971 SC 696 at p. 698). But even though the principle is thus clearly and formally established by our pre-independence as well as post-independence apex Courts, difficulties very often arise in applying that principle to different sets of facts. It may be noted that, while laying down the ambit of the judicial scrutiny, Hodgkinson (supra) confined it to "the award or some paper accompanying and forming part of the award", and Champsay Bhara (supra) used the expression "the award or a document actually incorporated thereto, in S.Dutt (supra), however, the extent of the scrutiny has been stated to comprise the award itself or "some paper intended to be incorporated in it" and while in Allen Berry (supra) the expression used is "the award or a document appended to or incorporated in it so as to form part of it", in N. Chellappan (supra), the Supreme Court has again gone back to the expression used in Champsey Bhara (supra) namely, "the award or a document actually incorporated thereto".

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