9911796707
TMI Blog2002 (3) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... aid securities. The securities were forwarded to the petitioner along with the blank transfer form. According to the petitioner, in the usual course of business, acting as intermediary/broker, the petitioner sold the said securities as holder in due course to respondent No. 2 through respondent No. 1 who is a member of NSE on 7-4-1998. Respondent No. 2 then submitted the stock certificate to Syndicate Bank with whom it had maintained its constituent SGL account for transfer and getting credit. The Syndicate Bank, however, advised respondent No. 2 that as stock certificate was issued from Madras, the RBI in Madras would have to attest the transfer form before the same was submitted to the Syndicate Bank. Accordingly, the respondent No. 2 got the transfer form duly attested by the RBI, Madras and submitted the same to the Syndicate Bank on 20-4-1999. Thereafter, the petitioner received a letter dated 25-6-1999 of respondent No. 2. Stating that the RBI had informed that the stock certificate No. MS-97, was kept in abeyance due to receipt of a legal notice dated 11-5-1999 from the Advocate of the trustees, Haileyburia Tea Estates Ltd., Employees Gratuity Fund, wherein it was informed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security having a good and clear title together with interest thereon from 7-4-1998 in replacement of the certificate MS-97 for 12.5 per cent GOI 2004, FV Rs. 21,45,000. Being aggrieved by the said award, the petitioners have filed the present petition on various grounds which are stated in clauses ( a ) to ( w ) of para 12 of the petition. However, probably realising that limited grounds available under section 34, Mr. Shailesh Shah, confined his challenge to the Award to the following two grounds contained in clauses ( i ) and ( u ) of para 12 of the petition. ( i )The award does not state the reasons upon which it is based. ( u ) Inter alia for the aforesaid reasons, the award is also in conflict with the pubic policy of India. Chapter VII of the Act, 1996 contemplates recourse against the arbitral award. Section 34 provides for filing of an application for setting aside the arbitral award and it reads as under: "34. Application for setting aside arbitral award. (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral Tribunal will eliminate the grounds for setting aside the arbitral award." 4. Turning to the first contention of Shri Shah, Shri Madon fairly conceded that the arbitral award does not contain any reasons. Shri Madon, however, submitted that on this ground, the award need not be set aside. He pointed out the provisions of section 31(4) and prayed for adjourning the proceedings so as to enable the arbitral Tribunal to resume the arbitral proceedings and incorporate in the award its reasons so as to eliminate the ground of want of reason for setting aside the award. I shall deal with this part of the submissions of Shri Madon a little later. But first I would like to consider the question whether it is necessary for the arbitral Tribunal to give reasons upon which its conclusions are based and what is the effect if no such reasons are given. Section 31 deals with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s expired or application to set aside the award is rejected by the court. This 3 months period can be extended by 30 days only where the applicant proves to the satisfaction of the Court that he was prevented by sufficient cause from making an application under section 34. The Court has, thus, a minimum supervisory role of intervention in the matters of arbitration. This being the position of an award there is a great responsibility upon the arbitrator to act with a sense of impartiality and conduct the proceedings with utmost fairness. The parties having agreed to abide by the arbitral award, repose confidence in the arbitrator. Therefore, unless it is otherwise agreed, it is a right of the parties to know the reasons upon which the award is based. The reasons given by the arbitrator may not be adequate or fully convincing. They cannot be put to judicial scrutiny like the reasons given by a trial court are subjected to scrutiny in appeal. Therefore, it is absolutely essential that an arbitral award, where there is no agreement to the contrary, must contain reasons which are indicative of the fact as to how the arbitrator has arrived at his conclusion. An award is not a judgment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the majority award. The petitioner filed a petition under section 34 for setting aside the award Ex. V. The respondent opposed the petition contending inter alia, that it was not Ex. V but Exh. X which was the final award. The petitioner then took out a chamber summons seeking an amendment to set aside Exh. X which was described as the final award. In that context, the learned Judge observed that Ex. X could be termed as an arbitral award because as per the provisions of sub-section (3) of section 3, the arbitral award has also to disclose the reasons. 8. The aforesaid two decisions, thus, make it clear that an award, in order to be such, must contain the reasons upon which it is based. Otherwise, it cannot be termed as an award. Consequently, if a document styled as an award not containing such reasons, though signed by the arbitrators and making adjudication of the dispute referred to them, cannot be set aside under section 34. Since it is not an award. 9. This brings me to the submission of Shri Madon which is based upon the provisions of section 34(4) and which are quoted above. According to Shri Madon, the court should adjourn the present proceeding and rem ..... 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