- (1.) IN these two petitions under Art. 226 of the Constitution, the petitioner U. P. State Electricity Board has assailed the decision of the courts below to the effect that the award given by the Umpire in the dispute between the petitioner and the third respondent was not liable to be set aside as it did not suffer from an apparent error of law and had been made by the Umpire on principles of Justice equity and fair play. M/s Crystal Sugar Works. Bisauli (district Budaun) is the third respondent in writ petition No. 2399 of 1980 while M/s. G. T. Cold Storage and lee Factory. Ujhani (district Budaun) is the third respondent in writ petition No. 3833 of 1990.
(2.) THE third respondent in each of these petitions is a bulk consumer of electricity and under the agreement under which they are being supplied electricity by the petitioner, they had undertaken to pay, by way of minimum consumption guarantee on their contracted demand. THE petitioner had, on its part undertaken to make continuous supply of electricity available to the consumer during the off peak hours each day throughout the whole period of the agreement subject amongst others to the condition that it shall not be responsible for deficiency of energy caused inter alia an account of any direction issued by the Government of Uttar Pradesh or for some other cause beyond the control of the petitioner. THE dispute in these cases relates to the amount payable to the petitioner by the third respondent by way of minimum consumption guarantee amount for the period between Nov. 1972 and Sept. , 1974 in the case of M/s. Crystal Sugar Works and between January, 1973 and Oct. 12, 1974 in the case of M/s. G. T. Cold Storage. THE Umpire before whom the matter came up due to the difference between the two Arbitrators appointed by the parties in terms of the Agreement, has held in the former case that the petitioner was entitled to charge only 50 per cent of the minimum guarantee amount while in the latter case, he has taken the view that the petitioner was entitled to charge 80 per font of the amount. This award was upheld by the learned Civil Judge, Budaun who rejected the objection of the petitioner under Section 30 of the Arbitration Act. THE appeals filed by the petitioner under S. 39 of the Arbitration Act were also dimissed by the Additional District Judge, Budaun. The case of the petitioner, as presented in this Court by Sri Sudhir Chandra, is that as the Umpire was in error in holding that the consumer was not liable to pay the minimum consumption charges in regard to the contracted demand in its entirety only because fifty per cent and eighty per cent supply was made by the petitioner during the period in dispute to the third respondent in these cases and that the Umpire could not legally come to that conclusion without considering the fact that the petitioner had made supply of electricity for such duration in each of these cases which was sufficient to ensure it to the extent of the amount of minimum guarantee charges. It has been urged that the Umpire acted contrary to the settled legal position when he did not apply the principle laid down by this Court in 3hagwan Industries (P) Ltd. v. Uttar Pradesh State Electricity Board, AIR 1979 All 249. In that case the view taken was that the imposition of minimum consumption guarantee charges was justified where supply was given for sufficient time to cover the amount of minimum charges. That the Arbitrator (or the Umpire) is bound to decide a dispute in accordance with law is not in dispute. The question whether he has done so in a particular case or not is always amenable to scrutiny by the court subject, of course, to the limitation set for themselves by the courts that as far as possible they would not interfere with the decision given by an Arbitrator chosen by the, parties.
(3.) ONE of the principles, in the matter of interference by the courts with the award of the Umpire, is that except where the Umpire has based his decision on an erroneous legal principle which appears on the face of the award, an error of law, by itself, would not be sufficient to interfere with it. And, the face of the award has been described to be the award itself or some paper accompanying it wherein the Umpire records his reasons (in cases where he chooses to do so) for his ultimate conclusion. This, of course, would be a principle inapplicable to a case where a specific question of law is referred by the parties to the Arbitrator for his decision. There, the error, if any, in the view of law taken by the Arbitrator would not entitle the court to interfere with it. See: Upper Ganges Valley Electricity Supply Co. Ltd. v. U. P. Electricity Board, AIR 1973 SC 683; Iftikhar Ahmed v. Syed Meharban Ali, AIR 1974 SC 749; N. Chellappan v. Secy. , Kerala State Electricity Board, AIR 1975 SC 230; Bareilly Electricity Suppy Co. Ltd. v. State of Uttar Pradesh, AIR 1977 Cal 328 and Patel Engineering Co. Ltd. v. Indian Oil Corporation Ltd. , AIR 1975 Pat 212. In these petitions, a perusal of the award of the Umpire shows that one of the issues specifically framed was "whether the petitioner was entitled to charge the amount of minimum charges as per the Agreement in the absence of supply according to it?" While dealing with this issue, the Umpire referred to the fact that the supply had not been made in terms of the Agreement but had been made at fifty per cent in the case of M/s. Crystal Sugar Works and eighty per cent in the case of M/s. G. T. Cold Storage. In his award, in the case of both these consumers, the Umpire has given his reasons for coming to his conclusions. The conclusion of the Umpire that the petitioner was entitled to 50 per cent and 80 per cent amount of the minimum consumption charges on account of the supply made being to that extent only is clearly based upon the assumption that the payment of minimum guarantee charges is relatable to the extent of the supply made, i. e. , the charges payable are to be proportionate to the supply actually made. This assumption is legally erroneous in view of the principle laid down by this Court in M/s. Bhagwan Industries (AIR 1979 All 249) (supra ). To that extent, the award suffers from an error of law apparent on the face thereof. The learned Civil Judge, while disposing of the objection of the petitioner under section 30 of the Arbitration Act, and the learned Additional District Judge, while disposing of the appeals under S. 39 of the Act, were of opinion that the award was not liable to be set aside as a mere error of law was not enough to justify interference with it. They were not right in thinking so, inasmuch as, the award in both these cases was based upon an erroneous assumption in law which was the basis of the conclusion arrived at by the Umpire and the assumption, as seen earlier, was about the correlation between the supply of electricity and the right to realise proportionate amount by way of minimum guarantee charges.;