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TMI Blog1974 (11) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... efore 31-5-1969. On 4-6- 1968, the appellant stopped the work and the Chief Engineer terminated the second contract on 15-10-1968. The Board thereafter carried on with the unfinished work. On 22-8- 1970, five points were referred for the decision of two arbitrators both retired Chief Engineers, one to be nominated by the Board and the other by the appellant. The arbitrators entered on the reference and they nominated Shri G. Kumara Pillai, a retired judge of the Kerala High Court as umpire. the arbitrators did not make the award within the' time limit which was extended from time to time and which expired on 18-12-1971. Thereupon the appellant filed O.P. No. 11 of 1972 on 28-1-1972 for revoking the authority of the arbitrators under section 5 and 11 of the Arbitration Act. The grounds for the application were that the arbitrators did not make the award within the time limit for submission of the award and that they were disqualified by bias from proceeding with the arbitration. The prayer in the application was that Shri Kumara Pillai may be directed to enter upon the reference in his capacity as umpire and to proceed with the arbitration. The arbitrators filed statements explainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me day, the appellant's counsel stated "I submit that I shall not be pressing the fresh points raised in the affidavit for the purpose of today's arguments." In I.A. 1223 of 1973, the Board had stated that it was prepared to satisfy the court that the application under sections 16, 30 and 33 of the Arbitration Act was prima.facie maintainable and that it was necessary to adjourn the hearing for evidence and for final argument. The endorsement on the petition dated 6-4-1973 is "Call on the adjourned date". On 10-4-1973 the court passed final orders dismissing the application filed by the Board to set aside the award and passed a decree in terms of the award with interest at 6 per cent from the date of the decree till the realisation of the amount. All these orders were passed in O.P. 21 of 1973. On I.A. No. 1223 of 1973, the Court passed the order "rejected" on 10-1973. In the appeal filed by the Board against the decree, the High Court came to the conclusion that the umpire as sole arbitrator had no jurisdiction to pass the award as the orders revoking the, authority ,of the arbitrators to pass an award and appointing the umpire as sole arbitrator were bad in law and that no suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the learned Judge who passed the order in O.P. 11 of 1972 has said in his order making the award a rule of the court after rejecting the application of the Board to set aside the award, that the order passed in O.P. 11 of 1972 was a considered order and that the Board should have appealed against that order if it felt aggrieved by it and that the order had become final. Counsel submitted that when the Judge who passed the order in O.P. 1 1 of 1972 has himself stated that it was an order passed on merits in his order making the award a rule of the court and that the Board should have appealed against the order, it can only lead the conclusion that the order in O.P. 1 1 of 1972 was not a consent order. Counsel also submitted that although the appellant filed an objection to the application of the Board to set aside the award, that objection was withdrawn when the respondent sought to file an affidavit in rejoinder to that objection, and the effect of the, withdrawal of the objection by the appellant was that the averment in the application filed by the Board to set aside- the award that the order in O.P. 11 of 1972 was not passed on the basis of consent, stood uncontradi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward within the extended time. Neither the fact that the umpire wanted an order from the court to enter upon the reference nor the fact that an application was made by the Board on 5-2-1972 to extend the time for the arbitrators to make the award would denude the umpire of his jurisdiction to enter upon the reference and pass an award under rule 4 of the First Schedule. Therefore, when the Board without demur participated in the proceedings before the umpire and took the chance of an award in its favour, it cannot turn round and say that the umpire had no inherent jurisdiction and therefore its participation in the precedings before the umpire is of no avail. The fact that the umpire did not purport to act in the exercise of his jurisdiction under rule 4 of the First Schedule but under the order of the Court, would not make any difference when we are dealing with the question whether he had inherent jurisdiction. As the umpire became clothed with jurisdiction when the extended period for making the award by arbitrators expired, it cannot be said that he bad no inherent jurisdiction. As we said, neither the fact that the umpire expressed his unwillingness to enter upon the reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Board in respect of, the Contract. (c) What is the price, payable to the Contractor for such of the materials at site of Contract as were taken by the Board. (d) What are the claims of the Board against the Contractor in respect of and/or under the provisions of the said Agreement." The, contention of the Board before the High Court was that the claim reserved by the appellant by his letter dated 1-7-1967 to the Chairman had not been agreed to & reserved for adjudication by the Board but had been rejected by it definitely and unequivocally by the letters prior to 1967, that the appellant's letter of. 1-7-1967 had not been incorporated in the contract and therefore the claim referred under point I had been barred by limitation. The gist of the correspondence evidenced by the letters which passed between the parties would show that while the Board was insisting that the appellant's claim for rain damage flood damage and power failure had all been rejected and could no longer be re-agitated, and that the second contract should be executed without any reference to these, the appellant was insisting on his claims under these heads being reserved for adjudication in such ways as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good on its face, object to his decision, either upon the law or the facts." (see "Russell on Arbitration", 17th ed. p. 322). An error of law on the face of the award means that you can find in the award or a document actually incorporated thereto, as, for instance, a note appended by the arbitrator stating the reasons for his judgment, some legal proposition which is the basis of the award and which you can then say is erroneous (see Lord Dunedin in Champsey Bhara & Co. v. Jivraj Balco Co.( [1923] A. C.480.). In Union of India v. Bungu Steel Furniture Pvt. Ltd.( [1967] 1 S.C.R. 3.24), this Court adopted the proposition laid down by the Privy Council and applied it. The Court has no jurisdiction to investigate into the merits of the case and to examine the documentary and oral evidence on the record for the purpose of finding out, whether or not the arbitrator has committed an error of law. The only other point which remains for consideration is whether the direction in the award to return the security deposit of Rs. 1,81,000 to the appellant can be said to be a matter arising, out of the second contract and referred to arbitration, under point 2(a) or point 2(d) of the points of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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