of Orissa & Ors A Vs. Construction India  INSC 362 (4 December 1987)
SABYASACHI (J) MUKHARJI, SABYASACHI (J) RANGNATHAN, S.
1988 AIR 1530 1988 SCR (2) 145 1987 SCC Supl. 708 JT 1987 (4) 588 1987 SCALE
INFO : R 1989 SC 973 (12) RF 1990 SC1340 (16)
award by Arbitrator - Award of interest from the date of reference-Validity
A contract was entered into by the parties in 1970-71.
award was made by the Arbitrator in 1982. The award was challenged before the
subordinate Judge who upheld the same.
to the High Court against the order of the Subordinate Judge was dismissed. The
petitioners moved this Court by special leave against the order of the High
Court and contended inter alia that since a similar matter of unreasoned award
had been referred by the Court to a Constitution Bench of the Court, this
petition for special leave be also similarly referred to the Constitution
the petition with a modification of the award, the Court, ^
In the facts and circumstances of this peculiar case, the matter is not
referred to the Constitution Bench.
It appears from the order of the High Court that the point of unreasoned award,
though taken in the petition of appeal, was not pressed before the High Court.
Further, the Arbitrator had been appointed by the Court out of the panels
submitted by the contesting parties. Also, in the case of an allied contract in
respect of another flat in the same building, an award had been made and the
same had been made the rule of the Court subject to the certain conditions.
The award is modified to the extent that the interest awarded from the
commencement of the reference before the Arbitrator to the date of the award,
is set aside, which is in consonance with the views expressed by this Court in
Executive Engineer Irrigation Galimala and Ors. v. Abaaduta Jena,  2
Scale 675. [147C-D]
APPELLATE JURISDICTION: S.L.P. (Civil) No. 7389 of 1987.
From the Judgment and order dated 18.3.1987 of the Orissa High Court in
Miscellaneous Appeal No. 423 of 1982.
Mehta for the Petitioners. Anil B. Divan and Vinoo Bhagat for the Respondent.
Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is a
petition for leave to appeal against the judgment and order of the High Court
dismissing an appeal from the order of the learned Subordinate Judge dismissing
a challenge to the award. This is an unreasoned award. The petitioners challenge
the award made in this case and ask for leave in view of the order passed by
this Court on 16th July, 1986 in similar matters where the question of the
validity of the unreasoned award has been referred to the Constitution Bench
for consideration. Mr. R.K. Mehta, learned counsel for the petitioners
submitted that this matter should also be referred for consideration before the
Constitution Bench In this matter it appears that the contract was entered into
by the parties in 1970-71 and the award was made in 1982. The High Court
disposed of the objections to the award in 1987. It is true that the grounds of
objections were filed before the learned Subordinate Judge and before the High
Court. The ground was taken that it was an unreasoned award, inter alia,
amongst many other grounds in the order of the High Court which have been gone
into and these were that the arbitrator had mis-conducted himself and the
proceedings and the award did not allow or reject the counter claim made by the
appellants and further that the award of interest with effect from a date prior
to the date of reference is bad in law. The High Court in its judgment had gone
into all these aspects but it appears from the order of the High Court that
this point of unreasoned award though taken in the petition of appeal was not
pressed before the High Court. It also appears that in the grounds of appeal of
the special leave petition no grievance has been made on the point although it
had been taken by the petitioners. It appears to us that this point was not
pressed before the High Court. It further appears that the arbitrator had been
appointed by the court out of the panels submitted by the contesting parties.
Furthermore in an allied contract, i.e. in respect of a contract of another not
in the same building an award has been made and the same has been made the rule
of court subject to certain conditions.
It is true that the question of validity of unreasoned award is pending
consideration before the Constitution Bench of this Court. It is for
consideration before the Constitution Bench as to whether even if unreasoned
award be bad, such award of ancient vintage be bad. That would be a matter of
grave consequence. In that view of the matter we are not inclined to interfere
with the order of the High Court in this case. In the facts and circumstances
of this particular case and the features mentioned hereinbefore, we declined to
refer the matter to the Constitution Bench.
must note that the award inasmuch as the interest which had been awarded is set
aside to the extent that the award of interest from the commencement of the
proceedings before the Arbitrator to the date of the award. Subject to this
modification the special leave petition is dismissed.
award will stand modified by deletion of interest for that period namely from
the commencement of reference before the arbitrator to the date of award. This
is in consonance with the views expressed by this Court in the case of
Executive Engineer Irrigation Galimala & Ors. v. Abaaduta Jena,  2
Scale 675. The special leave Petition is dismissed as indicated before.