PRADIP PORT TRUST Vs. UNIQUE BUILDERS

JUDGEMENT

(1.) These two appeals are directed against the order dated 25-8-1992 passed by the High Court of Orissa in Miscellaneous Appeal No. 228/1987. For convenience, we will refer to Paradip Port Trust as 'the Trust' and Unique Builders as 'the Company'.

(2.) The Trust entered into an agreement with the Company on 31-3-1981 for sale of scrap. Certain disputes arose between the parties. Pursuant to the arbitration clause contained in the said agreement they came to be referred to an arbitrator. Shri B. P. Das, Advocate, was appointed as arbitrator; he entered into reference and after conducting the proceedings passed the award on 1-6-1985 to the effect that the Company was entitled to receive a sum of Rs. 8,51,315/- together with the interest @ 18% per annum from 28-9-1992 from the Trust. The parties did not lead any oral evidence before the arbitrator and relied only on the correspondence between them. The award passed by the arbitrator did not contain any reasons and is a non-speaking one. The Court of Subordinate Judge, Jagatsinghpur, on receipt of the award, issued notices to the parties. The Trust filed objections challenging the award on various grounds. The Court after considering the objections under Sections 30 and 33 of the Arbitration Act, 1940 (for short the 'Act') upheld them and set aside the award. Aggrieved by the same, the Company filed the Miscellaneous Appeal before the High Court. The High Court allowed the appeal and made the award a rule of the Court subject to the modification as to the award of interest as indicated in the order. Hence the Trust has filed this Civil Appeal No. 3683/1996 challenging the same in this Court. The Company has filed Civil Appeal No. 4144/1996 to the extent it was denied interest.

(3.) Shri Gobind Das, learned senior counsel for the Trust urged that (1) the High Court was not right in reversing the order of the learned Subordinate Judge when the award had been passed in violation of principles of natural justice inasmuch as certain documents were received without notice to the Trust, after the closing of the proceedings before the arbitrator and therefore the award was passed; (2) the award passed by the arbitrator was beyond the scope of the arbitration agreement, as it could not be made in respect of certain claims, the High Court was not right in upholding the award; (3) although recording of reasons in the award could not be insisted and on that account itself, award could not be vitiated, yet no award could be passed arbitrarily.