Supreme Court of India
STATE OF ORISSAversusDANDASI SAHU
- Citation
- 1988 INSC 184
- Decided
- 22 July 1988
- Disposal
- Dismissed
- Bench
- SABYASACHI MUKHERJI
Holding
An award without reasons is not per se bad; it can be set aside only for misconduct or an apparent error of law, and the award in this case is valid except for the interest pendente lite.
Summary
The State of Orissa contracted Dandasi Sahu for an irrigation project; after completion and final payment, Sahu claimed extra work and invoked the arbitration clause. The arbitrator awarded Rs 15,23,657 plus interest without giving reasons. The Sub‑ordinate Judge set aside the award, but the Orissa High Court restored it and ordered further interest. The State appealed, arguing that a non‑reasoned award is per se bad, that clause 11 of the contract barred arbitrability, that the large sum shocked the conscience, and that the arbitrator lacked jurisdiction to award interest pendente lite. The Supreme Court held that an award lacking reasons is not void per se and can be challenged only for misconduct or an apparent error of law; clause 11 did not exclude the dispute from arbitration; the size of the award does not invalidate it; and interest pendente lite is beyond the arbitrator’s jurisdiction, so that portion was deleted. The appeal was dismissed, with the award confirmed except for the deletion of interest pendente lite.
Issues considered
- Whether an award made without reasons is per se bad and can be set aside.
- Whether the dispute falls within the exclusion clause (clause 11) of the contract, rendering it non‑arbitrable.
- Whether the magnitude of the award renders it invalid for shocking the conscience.
- Whether an arbitrator has jurisdiction to award interest pendente lite.
Legislation cited
- Arbitration Act, 1940s. 14, s. 16, s. 29
- Constitution of Indias. 136
Subjects
arbitrationunreasoned awardjurisdictioncontract clause 11interest pendente liteaward validitylarge awardspecial leave petitionArticle 136Arbitration Act 1940
Judgment
STATE OF ORISSA
A
v..
DANDASI SAHU
JULY 22, 1988
B [SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.]
Constitution of India, 1950: Article 136-Decision of larger
bench pending on the question of unreasoned award-Plea to await that
decision-Whether could, be allowed.
Arbitration Act, 1940: Section 14-Unreasoned award-Not per-
C · se bad-Plea to await decision of larger bench-Whether justified.
Sections 16 and 3{}-Whether award becomes bad merely because
the amount awarded is quite high-Factors to be considered-Only if
there is error apparent on the face of award, can be remitted or set
D aside-Validity of award-Whether the points, upon which arbitrator
adjudicated, covered, by .the exception clause in the contract.
Section 29-lnterest pendente lite-Whether arbitrator. has juris-
diction to award.
E The construction of the Irrigation Project was entrusted to the
respondent. As per the contract the work commenced on 4th May,
1973 and was actually completed on 30th December, 1975, the . stipn-
lated date being 4th November, 1974. According to the appellant, the
respondent. accepted the final payment and was duly paid a snm of
Rs.23, 74,001 for the work done by him including the extra work. The
F last payment was alleged to have been made to the respondent in
September, 1976. A 'nil' bill was the last bill prepared. Thereafter, the
. respondent raised a claim and gave notice for appointment of an
arbitrator. One Nanda was appointed a5 the arbitrator by the Chief
Engineer. But on an application made by the respondent, the Subordi-
nate Judge removed Nanda and appointed one Patnaik as the arbitra-
G tor. Again an application for removal of the arbitrator was made, but
was dismissed.
The Respondent filed his claims before the arbitrator. These
claims were for the alleged extra work in respect of which the decision
of the Superintending Engineer under clause 11 of the contract was
H final and the same was excluded from the purview of the arbitration
562
STATE OF ORISSA v. DANDASI SAHU 563
clause. The appellant initially contended that the arbitrator had no
A
jurisdiction to deal with such claims but later filed a counter claim., and
denied all the claims of the respondent. While the application for re-
moval of the arbitrator was pending, an adjournment was sought for
from the arbitrator and it'was refused. After hearing the parties and
considering the evidence produced, the arbitrator made a non-speaking
and non-reasoned award for Rs.15,23,657 plus interest @ 10% in B
favour of the respondent. Objections to the award were filed in the
Court. The Subordinate Judge upheld the objection and set aside the
award. On appeal, the High Court set aside the judgment of the Subor-
dinate Judge aud made the award rule of the Court, aud ·directed pay-
ment offuture interest at 6%.
In this appeal, by special leave, against the High Court judgment, c
the appellant-State submitted that the award is without any reason. It
also suggested that since the validity of the non-reasoned award is being
gone into by a larger Bench of this Court, that decision should be
awaited.
D
Dis1nissing the appeal,
HELD: 1.1 The law as it stands today is that award without
reasons is noibad per se. Indeed, an -award can be set aside only on
the ground of misconduct or an error of law apparent on the face of the
·award. [567F] - ' E
1.2 In the instant case, the plea that the award was bad being an
-· unreasoned one, was neither mooted before the learned Subordinate
Judge nor before the High Court. It was also not raised in the objection
to the award, filed originally. It is only in the special leave petition that
snch a plea has been raised for the first time. Arbitration is restored to F
as a speedy method of adjudication of disputes. Stale and old adjudica-
tion should not be set at naught, or examination of that question kept at
bay on the plea that the point is pending determination by a larger
Bengh of this Court. Even if it is held ultimately that the unreasoned
award per se is bad, it is not sure whether such a decision would upset
all the awards in this country which have not been challenged so far. G
Certainly, in the exercise of discretion under Article 136 of the Con-
stitution, and in view of the facts and circumstances of the present case,
it would not be justified in allowing the party to further prolong or
' upset adjudication of old and stale dispute. l567C-E]
2. Clause 11 of the contract between the parties makes the deci- H
56:4 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.
slon of the Engineer-in-Charge final in respect of some issues. Proviso
A
of Clause 11 stipulates that in case of dispute about the rates and time
for completion of the work and any dispute as to proportion that the
lldditional work bears to the original contract work, the decision of the
Superintending Engineer of the Circle would be final. The points up_on
wllich the arbitrator in the instant case bas adjudicated are not those
B which are excepted or covered by Clause 11 of the agreement. IJdhat
view of the matter, this clause bas no ·applicaticin in the instant
controversy. [570B-D]
Bombay Housing Board (now the Maharashtra Housing Board)
v. Kharbase Naik & Co., Sholapur, [1975] 3 SCR 407; Chief
Administrator, Dandakaranya Project, koraput, Orissa & Anr. v. M/s.
c Prabartak Commercial Corpn. Ltd. Calcutta, AIR 1975 MP 152 1md
Food. Corporation of India' v. P.L. Juneja, AIR 1981 Delhi 43
distinguished.
State of Orissa v. Gokulchandra Kanungo, [1981) 52 Cut LT 416
D referred to.
L
3.1 It is well-settled that when the parties choose their own
arbitrator to be the judge in the dispute between them, they cannot,
when this award is good on the face of it, object to the decision either
upon law or on facts. Therefore, when arbitrator commits a mistake
E either in law or ·in fact in determining the matters referred to him,
where such mistake does not appear on the face of the award and the
documents appended to or illcorporated so as to form part of it, the
award will neither be remitted nor $el aside. [571F-G]
3.2 The fact that merely the award amount is quite high or that a
F large amount has been awarded, does not vitiate the award as such. If'
there is any evidence of malady of racket of arbitration, the Court may
scrutinise the award carefully in each such case. [572A~B]
3.3 It is clear from the facts of this case that the arbitrator is a
highly qualified person having several Indian and foreign Degrees and
.G at the relevant time was acting as Chief Engineer-in-Charge of the State
Government. Having regard to the nature of claims involved, and the
fact that the additional work has been done for which large amounts
have been-paid in this case, it is evident that all due opportunities were
given. to the parties to adduce all evidence. It cannot be said that the
award was so ·disproportionate as to shock the conscience of the Court
H leading it to hold that the award was bad per se. The High Court was
STATE OF ORISSA v. DANDASI SAHU [MUKHARJI, J.) 565
right in dismissing the challenge to the award on this ground. [572C-D l
A
Union of India v. Bungo Steel Furniture Pvt. Ltd., [1967] l SCR
324 and Allen Berry & Co. (P) Ltd. v. Union of India, [1971] 3 SCR
282 relied on.
State. df Orissa & Ors. v. Gangaram Chhapolia & Anr., AIR 1982 B
Orissa 277 referred to.
4.1 It is now well-settled that the interest pendente lite is not a
matter within the jurisdiction of the arbitrator. ~572G-H)
4.2 In the instant case; the order of the High Court is modified to
the extent that the award is confirmed subject to the deletion of the
c
interest pendente lite. It is made clear that interest for the period from
26.9.1981to18.3.1983 (the date of the award) is deleted. However, the
interest granted by the High Court from the date of the decree is
sustained. [573A-B]
D
Executive Engineer (Irrigation), Baitmella .& Ors. v. Abhaduta
Jena, [1988] 1sec418, followed.
CIVIL APPELLA1E JURISDIC'fION: Civil Appeal No. 1389
of 1988.
E
From the Judgment and Order da,ted 6.7.1987 of the Orissa High
Court in C.M.C. No. 375 of 1984.
R.K. Mehta and Miss Mona Mebta for the Appellant.
G .L. Sanghi and Vinoo Bhagat for the Re~pondents. F
The Judgment of the Court was delivered by
SABYASACHI MUKHARJI, J. This is an appeal by special
leave from the judgment and order of the High Court of Orissa, dated
6th July, 1987. It arises out _of a contract entered into between the G
State and the respondent .fot·tlie construction of certain projects for
irrigation. During 1973-74 the.respondent was entrusted with the job
of 'Construction of Ramaguda Minor Irrigation P.roject in Kukuda·
khandi Block' vide agreement No. 4-F-2. The value of th<; work was
Rs.9,99,510. The work pursuant to the contract C01D111~n~~!! on 4th
May, 1973 and 4th November, 1974 was the stip11l~tl'!l da_!~ for corn· H
566 SUPREME COURT REPORTS [1988] Supp. 1 S.C.R.
A
pletion of the work. However, on 30th December, 1975 the work was
actually completed. It is asserted by the appellant that the respondent
contractor accepted the final payment and was duly paid a sum of
Rs.23, 74,001 for the work done by him including the extra work.
Thereafter, no amount was due to the respondent, according to the
B appellant, and he did not raise any claim whatsoever before the
Department. On 28th September, 1976 the last payment was alleged to
have been made by the respondent. On 30th October, 1976 the last bill
was prepared which was nil one. The respondent, thereafter, raised a
claim and gave notice for appointment of an arbitrator. Consequently,
the Chief Engineer appointed one Shri A.N. Nanda as the arbitrator in
terms of the arbitration clause. However, on the application of the
c respondent the learned Subordinate Judge removed Shri A.N. Nanda
and appointed one Shri B. Patnaik as the arbitrator. It may be
mentioned that the application was made for removal of the arbitrator
Shri B. Patnaik but the same was ultimately dismissed. Before the
arbitrator, the respondent filed the claim raising some claims which,
D according to the appellant, were fictitious and baseless. These claims
were for the alleged extra work in respect of which the decision of the
Superintending Engineer under clause 11 of the contract was final and
the same was excluded from the purview of the arbitration clause.
It was contended on behalf of the wpellant that the arbitrator
E had no jurisdiction to deal with such claims. The appellant filed a
counter claim for Rs.2, 11,400, denying all the claims of the respon-
dent. All the documents and relevant papers were produced before the
arbitrator. It is stated that as the application for removal of Shri B.
Patnaik as arbitrator was pending, an application had been made
before Shri S. Patnaik to adjourn the proceeding which was refused
F and the award was made. This award was claimed to have been made
virtually ex parte. This, however, was not so and it appeared that the
arbitrator on hearing the parties and considering the evidence pro-
duced before him made the award. The arbitrator made the said award
on 18th March, 1983 but the same was a non-speaking and non-
"reasoned award for a lump sum of Rs.15,23,657 plus interest @ 10%
G from 9.9.1975 till the date of payment or decree. Objections to the said
award were filed in the Court. The learned Subordinate Judge upheld
the objection to the award and set aside the award on 15th September,
1984. There was an appeal to the High Court and the High Court set
aside the judgment of the learned Subordinate Judge and made the
award of the arbitrator, rule of the Court. It also directed payment of
H further interest at 6%.
STATE OF ORJSSA v. DANDASJ SAHU [MUKHARil, J.] 567
Being aggrieved thereby the State of Orissa bas preferred this
A
appeal. In support of this appeal, it was submitted that the award in
question was a lump sum of money and it was without any reason, in
favour of the respondent. It was also submitted that the validity of the
non-reasoned award is awaiting determination by a larger Bench of
this Court. Hence, it was urged that this question should await deci-
sion of the larger Bench. In the facts and circumstances of the case, we B
are of the opinion that we would not be justified in accediiJ.g to this
request on the part of the appellant. In this case the submission that
the award was bad being an unreasoned one, was neither mooted
before the learned Subordinate Judge nor befdre the High Court. This
contention was also not raised in the objection to the award, filed
originally. It is only in the special leave petition that such a ple"a has
been raised for the first time. Arbitration is resorted to as a speedy
c
method of adjudication of disputes.. Stale and old adjudication should
not be set at naught or examination of that question kept at bay on the
plea that the point is pending determination by a larger Bench of this
Court. Even if it is held ultimately that the unreasoned award per se is
bad, it is not sure whether such a decision would upset all the awards in D
this country which have not been challenged so far. Certainly, iiJ. the
exercise of our discretion under Article 136 of the Constitution and in
view of the facts and circumstances of this case, we would not be
justified iiJ. allowing the party to further prolong or upset adjudication
of old and stale disputes.
E
In that view of the matter, we think that the pendency of this
point before the larger Bench should not postpone the adjudication
and disposal of this appeal in the facts of this case. The law as it stands
today is that award without reasons are not bad per se. Indeed, an
award can be set aside only on the ground of misconduct or on an error
of law apparent on the face of the award. This is the state of law as it is F
today and in that context the contention that the award beiiJ.g an un-
reasoned one is per se bad, has no place on this aspect as the law is
now. This co~te:J.tion is rejected.
It was next contended that in view of clause 11 of the contract the
matters upon which the arbitrator has adjudicated were excluded and G
these were not arbitrable. It was submitted tllat clause 11 of the con-
tract between the parties made on these matters the decision of the
Engineer Incharge final and binding·. Hence, iiJ.asmuch .as the arbi-
trator has purported to. act upon this field which was only to be decided
by the Engineer-in-charge, the award was bad. The disputes over
which the arbitrator has purported to make an award, were regardiiJ.g H
568 SUPREME COURT REPORTS [1988) Supp. 1 S.C.R.
works covered by the agn~ement. It WljS submitted th<i,t the provi~o to
A
clause 11 of !hf! agre~ment categorically prgvided that in the'event of
dispute over a claim for addjtignal work, the de~ision of the Superin-
tending Engineer of the Circle. would be final and, hence, the arbitra-
tor by entertaining .the additional claim ot the contractor had exercised
a jurisdiction not vested.in him and, as such, miscond'l~tedhimself.
B
In order to judge this contention, therefore, it is Imperative first
to refer to clause 11 of the agreement. It provides as follows:
"Clause 11-,The Engine~r-in-charge shall have the power
to make any lllter<i,tion in or ~di!ltions to ihe original
specifications, drawings designs, and instructions that may
c appear to him necessary or advisable dutlng the progress of
work and the contractor shall be bound to carry out the
work in accordance with any instructions· which may be
given to him in writing signed by the Engineer-in-charge
and such alteration shall not invalidate the contract. Any
D additional work which the contractor may be directed to do
in the matter above specified as p~rt of the work, shall be
carried out by the contractor on the sam~ conditions in ~l!
respects on which.he agreed to cjo the fllain work and at the
same rates as are specified in the tender for !hf! ll)ain wofk.
The time for the completion of the work shall be extended
E in the proportion that the additional work. bears . to the
' ..
original contract work and the certificates of the Engineer
in cl]llrge shall be conclusive as to such proportion and if
the additional wgrk incl'!des any class of work shall be
C?rried mint the rates ente~d in the sanctioned schedule of
r!!!!;§ gf tl!f! locality during the p~tjod when the work being
F carried on and if such last mentioned class of work is not
entered in the- schedule of the rate uf the district, then the
contractor shall within 7 days intimate the rate which it is
his intention to charge for such class of work and if the
Engineer-in-charge does not agree to this rate he shall by
notice in writing be at liberty to cancel his order to carry
G out such class of work and arrange to carry such class of
work and arrange to carry out in such manner as he may
consider advisable. No deviation from the specification
stipulated in the ~ontract or additional items of work shall
or!linarily b~ C<!rried by the ~ontractor and should any
alter~<!, additioqal or substi!uted work be carried out by
hi!l'l '!Jllf!SS !I!~ ra(es of \h~ substitutecj, altered or additional
STATE OF ORISSA v. DANDASI SAHU [MUKHARJI, J.] 569
·items have been approved as fixed in writing by the A
Engineer-in-charge.
The contractor shall be bound to· submit his claim for
any additional work done during any month or before the
15th day of the following months accompanied by the copy
of the order in writing of the Engineer-in-Charge for the B
additioneJ work and that the contractor shall not be en-
titled to any payment in respect of such additional work if
he fails to submit his claim within the aforesaid period.
Provided it always that if the contractor shall
commence work or incur any expenditure in regard thereof C
before the rates will have been determined as lastly herein
before mentioned, then in such case he shall only be en-
titled to be paid in respect of the determination of the rates
as aforesaid accordingly to such rate of rates as shall be
fixed by the Engineer-in-Charge. In the event of a dispute
the decision of the Superintending Engineer of the Circle D
will be final."
This clause has to be read in conjunction with the arbitration
clause i.e. clause 23, which provides as follows: ·
"Clause 23: Except where otherwise provided in the con- E
tract all questions and disputes relating to the meaning of
the specifications, designs and instructions hereinbefore
mentioned and as to. the quality of workmanship or mate-
rials used on the work or as to any other question, claim;,
right matter, or thing whatsoever in any way arising out of,
or relating to the contract, designs, drawing specifications, F
estimates, instructions, orders or these conditions or
otherwise concerning the works or the execution,or failure
to execute the same whether arising during the progress of
work, or after the completion or abandonment thereof
shall be referred to the sole arbitration of a Supreintending
Engineer of the Circle. It will be no objection to any such G
appointment that the arbitrator so appointed is a Govern-
ment servant. The award of the arbitrator so appointed
shall be final, conclusive and binding on all parties to this
contract."
The learned Subordinate Judge was inclined to hold that the H
570 SUPREME COURT REPORTS [1988) Supp. 1 S.C.R.
arbitrator had no jurisdiction to arbitrate on disputes which he has
A
purported to do but in view of the Bench decision of the High Court of
Orissa in State of Orissa v. Gokulchandra. Kanungo, I1981) 52 CLT
416, he held that he was not free to decide that the dispute was not
arbitrable and rejected this plea. The High Court also did not enter-
tain this objection. It was canvassed before us and fubmitted that in
13 view of clause 11, the matters in dispute and the amount due for the
alleged additional work, were not arbitrable at all. We have noticed
clause 11 which makes the decision of the Engineer-in-Charge final in
respect of some issues. In this connection, it is important to refer to the
proviso of Clause 11 which states that in case of dispute about the rates
and time for completion of the work and any dispute as to proportion
that the additional work bears to the original contract work, the deci-
c sion of the Superintending Engineer of the Circle would be final. The
points upon which the arbitrator in the instant case has adjudicated are
not those which are excepted or covered by Clause 11 of the agree-
ment. In that view of the matter, this clause has no application in the
instant controversy.
D
Our attention was drawn to certain observations of this Court in
Bombay Housing Board (Now the Maharashtra Housing Board) v.
Karbhase Naik & Co., Sholapur, [1975) 3 SCR 407. There in view of
clause 14 of the said contract, it was open to the respondent to make ~
claim on the basis of the rates quoted. There, Clause 14 was more or
E less identical to Clause 11 in the present case. This particular conten-
tion, however, did not arise in that case. The Court held that the
respondent there being contractor, was not bound to carry out addi-
tional or altered work and there was no reply to the notice stating the
·rates intended to be charged and the respondent there was not free to
commence and complete the work on the basis that since the rates
F quoted were not accepted, it would be paid at such rates to be fixed by
the Engineer-in-charge and that if it was dissatisfied with the rate or
rates fixed by the Engineer.::in-charge, it could raise a dispute before
the Superintending Engineer and that the time limit for completion
would be extended in all cases. This Court observed that only the rates
were settled by the agreement. The respondents were under no obliga-
G tion to carry out the additional or altered work but that is not the
dispute before us in the present case. On the construction of Clause 11
of the contract, we are unable to accept the contention but on the
points that the arbitrator has awarded in this case, were excluded by
Clause 11 of the contract herein. Shri Mehta, however, strongly relied
on certain observations of a Bench decision of Madhya Pradesh High
H Court in case of the Chief Administrator, Dandakaranya Project,
STATE OF ORISSA v. DANDASI SAHU [MUKHARJI, J.J 571 .
Koraput, Orissa & Anr. v. Mis. Prabartak Commercial Corpn. Ltd.
Calcutta, AIR 1975 MP 152, wherein while considering Clause 13A of A
the agreement there the High Court held that the dispute whether
charges for stone chips could be adjudicated, was not arbitrable. That
was a case of rates which was within the jurisdiction of the Engineer-
in-charge by Clause 13A of the bargain between the parties. In the
instant case it is not the rate which.is in dispute. The Madhya Pradesh B
High Court referred to several decisions of this type and came to the
conclusion on the construction of Clause 13A in that case that the
dispute that had arisen between the parties in arbitration, was
excluded by Clause 13A of the agreement. In view of the Clause in the
instant case and the nature of the dispute which had arisen, we are of
the opinion that such decisions also cannot give much assistance to the
appellant. Reliance was also placed on certain observations of the c
Delhi High Court in the case of Food Corporation of India v. P. L.
Juneja, AIR 1981 Delhi 43. There the Division Bench of the High
Court was concerned with the questions which were to be decided by
the Court and not by the arbitration. There also the Clause was very
much dissimilar to the present one which is set out hereinbefore. D
Clause 15(c) provided that the question whether a particular service is
or is not to be covered by any of the services specifically described. and
provided for the contract, or is or is not material to any such services
shall be decided by the Regional Manager whose decision shall.be final
and binding. It was not the case whether any additioal work was done
and if so, the extent of such work. In the aforesaid view of the matter it E
is not possible to hold that in view of nature of instant dispute, the
matters at issue were not excluded and the arbitrator did not commit
any wrong in proceeding with the arbitration.
It was next contended that an amount of Rs.15,23,657 has been
granted for additional work over and above the payment of F
Rs.23,74,001 and this was disproportionately high and the award for
this amount was per se bad. It is well-settled that when the parties
choose their own arbitrator to be the judge in dispute between them,
they cannot, when the award is good on the face of it, object to the
decision either upon law or on facts. Therefore, when arbitrator com-
mits a mistake either in law or in fact in determining the matters G
referred to him, where such mistake does not appear on the face of the
award and the documents appended to or incorporated so as to form
part of fr, the award will neither be remitted nor set aside. The law on
this point is well-settled. See in this connection the observations of this
Court in Union of India v. Bungo Steel Furniture P. Ltd., [1967) 1 SCR
324 and Allen Berry & Co. (P) Ltd. v. Union of India, [1971) 3 SCR H
572 SUPREME COURT REPORTS (1988] Supp. 1 S.C.R.
282. It was, however, contended that the amount of the award was
A
shockingly high that it shocked the conscience of the Court and the
award must be set aside. The fact that merely the award amount is
quite high as commented by the High Court or that a large amount has
been awarded, does not vitiate the award as such. In the instant case
the original award was for Rs. 9 ,99 ,510. Admittedly, additional work
B was done and payment for such work was determined at Rs.23,74,001
and claim for further additional work was made for Rs.15,23,657. One
has to judge whether the amount of the award was so disproportion-
ately high to make it per se bad in the facts and circumstances of a
particular case. It is clear from the facts that the arbitrator is a highly
qualified person having several Indian and foreign Degrees and at the
relevant time was acting as Chief Engineer-in-charge of the·State
c Government. Having regard to the nature of claims involved and the
fact that the additional work has been done for which large amounts
have been paid and in this case it is evident that all due opportunities
were given to the parties to adduce all evidence, we are unable to
accept the submission that the award was so disproportionate as to
D shock the conscience of the Court and, ail such, it cannot be held that
the award was bad per se. In our opinion, the High Court was right in
dismissing the challenge to the award on this ground.
In support of the submission that the award must be held to be
bad in this case, Mr. Mehta drew our attention to certain observations
E of Orissa High Court in State of Orissa & Ors. v. Gangaram Chhapolia
& Anr., AIR 1982 Orissa 277, where at page 279 the learned Judge
observed the malady of the racket of arbitration was rampam in
Orissa. Though the learned Judge was apparently heeding to the
observations of Justice Holmes of America observed that the Court
should take note of "the felt necessities of the time".
F
In our opinion, the evidence of such state of affairs should make
this Court scrutinise the award carefully in each particular case but
that does not make the Court declare that all high amounts of award
would be bad per se. As mentioned hereinbefore, it cannot be said that
the amount of award was disproportionately high to hurt the consci-
G ence of the Court in this case.
It is now well-settled that the interest pendente lite is not a
matter within the jurisdiction of the arbitrator. In this connection
reference rµay be made to the observations of this Court in Executive
Engineer (Irrigation), Balimela & Ors. v. Abhaduta Jena & Ors.;
H [ 1988 I 1 SCC 418 where this Court held that the arbitrator could not
- 'J _::; •..,<: =·~ ~.
STATE OF ORISSA v. DANDASI SAHU [MUKHARJI, J.J 573
grant interest pendente lite. In the aforesaid view of the matter this A
direction in the award for the payment of such interest must be deleted
from the award. The order of the High Court is modified to the extent
that the award is confirmed subject to deletion of the interest
pendente lite. We make it clear that in the facts of this case interest for
the period from 26.9.81 to 18.3.83, the date of the award be deleted. B
The Hig)l Court has, however, granted interest from the date of the
decree. That is sustained.
The appeal is, therefore, dismissed except to the extent indicated
above. In the facts and circumstances of the case the parties will pay
and bear their own costs.
c
G.N. Appeal dismissed .
...
•
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