SECRETARY IRRIGATION DEPARTMENT GOVERNMENT OF ORISSA SECRETARY TO GOVERNMENT OF ORISSA Vs. G C ROY:RAGHUNATH MOHAPATRA

JUDGEMENT

(1.) -These two appeals are directed against the judgment of the Orissa High Court making the award made by the Arbitrator rule of the court. The appellants challenged the validity of the award before this Court on two grounds, namely; (1) the Award was vitiated as it contained no reasons; and (2) the Arbitrator had no jurisdiction to award pendente lite interest.

(2.) The first question was considered by a Constitution Bench of this Court in Raipur Development Authority v. Chokhamal Contractors, (1989) 2 SCC 721. The Constitution Bench held that an award is not liable to be set aside merely on the ground of absence of reasons. The Constitution Bench further held that where the arbitration agreement itself stipulated reasons for the award the Arbitrator is under a. legal obligation to give reasons. Thus the first question stands concluded against the appellants. As regards the second question , when the appeal was taken up for hearing by a Division Bench the appellants placed reliance on a Three-Judge Bench decision of this Court in Executive Engineer Irrigation, Galimala v. Abnaduta Jena, (1988) 1 SCR 253, wherein it was held that the Arbitrator to whom the reference is made without the intervention of the court does not have jurisdiction to award interest pendente lite. On behalf of the respondents the correctness of that view was assailed. The Bench hearing these appeals referred the matter to Constitution Bench by order dated 15th March, 1991, as the learned Judges were of the view that the correctness of the view taken by this Court in Jena's case (supra) in so far as it held that the Arbitrator has no power to award pendentelite interest requires consideration by a larger Bench. That is how these appeals are before this Constitution Bench.

(3.) Before we deal with the submissions raised before us, we consider it appropriate to refer to the facts involved in Civil Appeal No. 1403/86. On 27-4-1977, Government of Orissa the appellant and G.C. Roy respondent entered into an agreement for construction of head works in Phulwani. Clause 23 of the contract contained provision for resolution of disputes through arbitration. Clause 23 is as under: