A.K.Banerjee, J. - (1.) Principles of law relating to an award under the new Arbitration Law Although under the new Arbitration Law, arbitrator is bound to disclose reasons, the scope of judicial scrutiny of an award has come in a very narrow campus under the present law. Under the present law, on merits an award can be impugned only if it is found that the arbitrator has travelled beyond the scope of reference of if the same is illegal being contrary to the laws of the land. The award can also be impugned if it is in conflict with the public policy of the country being affected by fraud or corruption or in violation of section 75 or 81 of the Arbitration and Conciliation Act, 1996.
(2.) Since fraud, corruption or violation of section 75 or 81 are absent here the only question calls for my determination is to whether the subject award is devoid of reason or whether the award or any part thereof is contrary to settled principles of law. 2.1. "Reason" in an award has been defined by Supreme Court of India in two illusions judgments being the case of Indian Oil Corporation Ltd. and in the case of Gujarat Water Supplies reported in AIR 1988, Supreme Court, page 1340 and AIR 1989, Supreme Court, page 973. Considering the proposition of law decided by the said two Apex Court judgments our Division Bench in a recent decision in the matter of Union of India v. Royal Construction reported in 2001 (suppl.) Arbitration Law Reporter, page 488 has given clear meaning of "reasons". Paragraph 20 of the said judgment is quoted below:- "The law as it appears from the above authorities and especially the two last ones referred to above is as follows:- (i) To make a reasoned award the Arbitrator has to make his mind known on the basis which he has acted. (ii) Statement of reasons is not the same thing as the giving of a detailed judgment. (iii) Reasons are short and intelligible indications of the Arbitrator's mind, no more. (iv) The reasons must have such connection with the conclusions reached by the Arbitrator as to show that the Arbitrator has not acted irrelevantly, unreasonably or capriciously. (v) The reasons should deal with the substantial points raised in the reference."
(3.) To find out whether the subject award is devoid of logical reasons based on the well settled principles of law, I would apply the test laid down by Their Lordships in the said Division Bench judgment in the instant case shortly hereinafter. Facts of the case;