1. The State has preferred this misc. appeal under Section 39 of the Arbitration Act, 1940 (for short 'the Act') challenging the judgement and decree dt. 16-7-1996 passed by the District Judge Jhalawar, whereby deciding objections of the State tothe application of the respondent M/s Navabharat Construction Co. (for short 'the Company') of claiming compound interest, the learned District Judge Jhalawar awarded simple interest @ 15% p.a. on the original award of Rs. 29,96,060/- from the date 16-7-1996 of its order till realization and further ordered to pass a decree entitling the respondent Company to recover whatever its claim granted under Award dt. 29-5-1995 from the State and also make Award amount a part of the decree. The decree passed is reproduced as under :--
'With reference to the Award by Shri V. K. Gupta dt. 29-5-1995 the decree is passed asbelow :--
(i) An amount of Rs. 29,96,060/- (Twenty nine lakhs, ninety six thousands sixty only) will be paid by the non applicant for the claims except claim No. 30 for which separate order is being given on the next paras.
(ii) Bank F.D.R. amounting of Rs. 2,84, 000/- (Two lacs eighty four thousand) is released in favour of the applicant.
(iii) Interest difference (18% Minus F.D.R. interest rate) on F.D. amount w.e.f. 15-12-1982 till to date is awarded to the applicant however the interest awarded from 17-11-1978 to 14-12-1982, is to be reduced from the final calculated sum.
(iv) Interest @ 18% per annum for the period from 15-12-1982 to 15-7-1996 on total amount of claims except F.D.R. amount is awarded to the applicant.
(v) Interest @ 15% p.a. is awarded to the applicant from 16-7-1996 till the date of payment on the amount of Rs. 29,96,060/-.
(vi) Rs. 20,000/- (Twenty thousand) will be paid to the applicant as cost of arbitration and part of the fees of the arbitrator.
The amount awarded as payable to the applicant as above will be paid by the non applicant to the applicant.'
2. The facts leading to this appeal, briefly stated, are that on 30-5-1995 Moolchand Luharia partner of the respondent Company submitted his application praying therein for grant of relief stated in para 8 and stating that claim Nos. 1 to 39 except No.3 were allowed to the extent of Rs. 29,96,060/- in favour of Company by Umpire Shri V. K. Gupta under his Award dt. 29-5-1995 under which F.D.R. worth Rs. 2,84,000/- was awarded to be released by the State, withinterest granted under the Award, besides expenses to a sum of Rs. 20,000/-. In the application dt. 30-5-1995 the respondent Company claimed compound interest @ 18% p.a. instead of simple interest allowed under the Award dt. 29-5-1995, and also claimed interest @18% p.a. w.e.f. 29-5-1995 till payment. Against application dt. 30-5-1995 of the Company, the State raised objections besides submitted application Under Sections 30 & 33 of the Act on 3-7-1995 praying therein for setting aside the Award (sic) on 9-11-1995 the respondent Company also filed its reply to the application of (sic) of the Act. Before the District Judge, both the parties jointly did not press to adduce any evidence, and therefore the learned District Judge heard both the parties and on the basis of their respective pleadings, at Joint request, went on to decide the matter at issue. After hearing the parties, the learned District Judge by his order and decree dt. 16-7-1996 allowed simple interest @ 15% p.a. on the total Award amount and further ordered to make the impugned Award dt. 29-5-1995 as part of the decree itself, as detailed above. Hence, this misc. appeal.
3. On the first date 22-11-1996. Shri R. P. Garg, learned counsel for the respondent appeared and case was adjourned to 26-11-1996 for admission. On 26-11-1996, partner Shri M. C. Luharia of respondent, this Court summoned the record. Whereafter arguments were heard and order was reserved on 20-1-1997 by another bench of this Court. However, on 28-3-1997 the respondent Company filed cross objection under Order 41 Rule 22 CPC. On 4-4-1997 another bench of this Court released the ease from part heard and ordered to list the ease before regular bench. Whereupon, on 4-7-1997 the Registry has pointed out defects inter alia that cross objection has been filed belatedly and is not within time and moreover Court-fee is not sufficient. It has also been pointed fee is not sufficient. It has also been pointed out that provision of law has not mentioned and that its copy has also not been given to the counsel for the appellant. Thereafter, this appeal was admitted on 8-7-1997 after hearing both the parties. However, the case was especially assigned to this bench by Hon'ble the Chief Justice. Hence, this appeal came up for final hearing.
4. During the course of hearing Shri K. S. Rathore, learned Additional Advocate General appearing for the appellant State contended that the learned District Judge before making impugned Award dt. 29-5-1995 as rule of Court, failed to appreciate the fact that Shri V. K. Gupta, Arbitrator had not considered the Award of Co-Arbitrators (Shri Gambhir and Shri Liladhar Agrawal) despite objections having been raised by the parties, and therefore it is a clear case of misconduct. Shri Rathore further contended that the learned District Judge committed serious error of law and fact in not considering material and significant objections and aspect of the case inter-alia (i) that the Umpire has not gone through the agreement and specifications to which the respondent Company (claimant) was bound ; (ii) that the claimant has not specified any amount in the claim Itself but the Arbitrator under Impugned Award without considering State's reply to the claim has passed the award specifying therein the claim amount; (iii) that the Arbitrator could not consider all the claims conjointly while for each of claims, the evidence was adduced separately Inasmuch as, the Arbitrator could not have arbitrated the claims more than stated in the notice, therefore arbitration of 35 more claims was without jurisdiction in the impugned Award ; and (iv) the objections of the State the Arbitrator being the consultant of the respondent Company should have debarred from passing the impugned Award.
5. Lastly, Shri Rathore contended that the learned District Judge also committed error of law in awarding Interest for pre-reference period as well as reference period which was beyond Jurisdiction and terms of agreement whereas award interest for prer reference period was against the provisions of the Interest Act 1978, inasmuch as there has been discrepancy in the order and decree as to the rates of interest because the order mentions rate of interest @ 15% per annum whereas the decree states it as 18% per annum.
6. In support of his arguments, Shri Rathore inter-alia placed reliance on the decisions in (1) Chahal Engineering v. Irrigation Department Punjab Sirsa 1993 (4) JT (SC) 434 (AIR 1993 SC 2541), (2) Indian Oil Corporation Ltd. v. Amritsar Gas Services 1991 (1) SCC 533, (3) Union of India v. Jain Associates 1994 (3) JT (SC) 303, (1994 AIR SCW 2507) (4) KV George v. Water & Power Department Trivendrum AIR 1990 SC 53, (5) Dodsai Pvt. Ltd. v. D.E.S.U. 1996(2) SCC 576 (AIR 1996 SC 3229) (6) M. M. T. C. v. Sterlite Industries 1996 (6) SCC 716 (AIR 1997 SC 605) and (7) Nav Bharat Construction Co. v. State 1996 (7) SCC 89.
7. On the other hand, supporting the impugned Award of the Arbitrator and the judgement of the District Judge and consequential decree on all aspects except interest rate, Shri Moolchand Luharta partner of respondent Company contended that the learned District Judge committed error of law in awarding interest only @ 15% p.a. instead of 18% and that too only on the award amount of Rs. 29,96,060/-. He contended that since the respondent Company borrowed from financial institutions including nationalised Banks at the compound interest rate more than 18% per annum. So the respondent company is entitled to compound interest at 18% per annum and not at the simple interest. He has also cited various decisions in support of his contentions and so also against the contentions advanced by the learned Addl. Advocate General which would be discussed hereinafter at the appropriate place in this judgement.
8. Before dealing with the respective contentions of parties, I would like to refer in brief the Award passed by the Arbitrator on 29-5-1995 which has been made rule of Court and decree by the learned District Judge in its, judgement against which this appeal has been preferred.
9. Under the Impugned Award, Rs. 29,96,060/- towards Claim Nos. 1 to 39 except No. 3 detailed out in paras 15 & 16 of statement of claims, was ordered to be paid by the State in favour of the claimant firm. Award for refund and release of the back FDRs to the tune of Rs. 2,84,000/- which were kept as security deposit with the State, was ordered in favour of the claimant firm. Under the Award, the interest was ordered to be paid as under :-
(1) Differential amount of Interest (18% minus FDR interest rate) on F.D. amount w.e.f. 15-12-1982 till the date of Award subject to the reduction of interest from 17-11-1978 to 14-12-1982 to be made from final calculated sum.
(2) Interest @ 18% per annum from 15-12-1982 to 14-7-1983 on total claims amount except FDR sums, (pre-reference period).
(3) Interest @ 18% per annum from 15-7-1983 to 29-5-1995 on total claims amount except FDR sums (pendente lite period).
(4) Interest @ 18% per annum from 30-5-1995 till payment on total claims amount except FDR sums (post-award period).
10. Under the Award, cost of arbitration at Rs. 20,000/- was allowed towards part of fee of Arbitrator & Umpire.
11. Now let me first discuss what has been laid down by the Apex Court in the decisions cited by learned Additional Advocate General.
12. In K.V. George v. Water & Power Department Trivandrum (supra), where the Arbitrator made Award on the basis of claim of one party and kept counter claim of another party for consideration subsequently, the Division Bench of the Apex Court held that the Arbitrator misconducted himself and it was his duty to consider both claim and counter claim before making award. In the case at hand, it is not the case of the State that the Arbitrator has kept its counter claim for consideration subsequently, therefore, in my view, this citation does not at all help the State Appellant.
13. Next case cited on behalf of State appellant is M. M. T. C. v. Sterlite Industries (supra). It was a case where arbitration agreement providing that each party shall nominate one Arbitrator and the two arbitrators shall then appoint an Umpire before proceeding with the reference, was held valid by Division Bench of the Apex Court as it satisfied requirements of Sections 7 and 10 of the Act 1996 and also being in consonance with the implied condition contained in para 2 of First Schedule to the Arbitration Act, 1940, and hence the third arbitrator or Umpire was directed to be appointed in accordance with Section 11 (3) of the Act 1996. Obviously in the case at hand, the agreement clause as to the appointment of Umpire or the Arbitrator has never been challenged at any stage of the arbitration proceedings, the decision cited by learned Addl. Advocate General (supra) does not render / apply to the controversy raised at the bar.
14. Third case cited by the State counsel is Dodsal Pvt. Ltd. v. Delhi Electric Supply Undertaking of Municipal Corporation of Delhi (supra) wherein the Award was challenged by D.E.S.U. (respondent) on the ground of lack of jurisdiction of arbitrator because of non existence of arbitration agreement as the contract containing the arbitration agreement was void in view of violation of Sections 201 & 203 of Delhi Municipal Corporation Act read with byelaw 3(1) (a) and since the view earlier taken by the Five Judge Bench of Apex Court in Waverly Jute Mill's case (AIR 1963 SC 90) was doubted, therefore, the matter was referred to larger bench. In the case at hand, the controversy being entirely different than in Dodsal's case (supra), the same does not help the State appellant here.
15. Fourth case cited by the State counsel is Nav Bharat Construction Co. v. State of Rajasthan wherein the Firm filled a suit before the District Court for requiring the Court to refer the matter to arbitration under Section 20 of the Act but the suit was dismissed by the District Court and revision petition against dismissal was also rejected by the High Court, against which the appeals were preferred and the view of the High Court relying upon the decision in Tipper Chand's case AIR 1980 SC 1522 was held proper one by the Apex Court since it was a case where the Court declined to refer the dispute to the arbitration and wherein the Chief Engineer did not accept that the provisions of the Clauses 22 & 23 of the agreement spelt out an agreement for arbitration and so the Chief Engineer did not respond to the said application, the facts being different involving different controversy otherwise that here, are distinguished to the present case and so the decision in Nav Bharat's case (supra) does not apply.
16. Fifth case cited by learned State counsel is Union of India v. Jain Associates (supra), on the question of misconduct, it has different controversy than one raised in the instant case. In that case, the High Court found that the Umpire awarded damages twice over and that counter claim was also not considered, therefore, the Apex Court held that the Umpire committed misconduct by non application of mind and so the matter was remitted for consideration afresh for two Claim Nos. 11 & 12, and the Award of the severable part was confirmed. In that case, the Umpire awarded mechanically different amounts on each claim and failed to consider the counter claim on the specious plea that it is belated counter statement. Obviously in the case at hand, the controversy is totally different, the decision in Union of India v. Jain Associates, cited by the State counsel being distinguished is not applied rendering no assistance to the State.
17. Much stress was laid by Shri Rathore relying upon the decision in Chahal Engineering Co. v. Irrigation Department Punjab, Sirsa (supra) wherein the Apex Court set aside the Award and referred to the new Arbitrator holding that the award by the Arbitrator suffered from several patent errors and that the objections raised by the respondent department were within the scope of Section 30 of the Act, 1940. The Apex Court dealt with import of expression 'is otherwise invalid' in Section 30 (c) and held that this expression would include an error apparent on the face of the record. However, in cited case, the dispute related to the ascertainment of the quantities as well as to the quality of the work done under the contract. Therefore, the question before the Court was, whether the learned arbitrator has failed to consider any of the subject matter to him for arbitration or whether he has travelled beyond the scope of the dispute referred to him. After discussing the entire matter the Apex Court held that the Arbitrator committed errors apparent on the face of record, viz. (1) that he proceeded on the lump sum basis whereas the contract was on the item rate basis; and (2) that he did not consider counter claim. Accordingly, the matter was referred to a New Arbitrator to evalute the work on the item rate basis by considering the entire work executed till termination of the contract besides claims and counter claims of the parties. With due respect to the Apex Court, and without disputing the principles of law, the decision in M/s Chahal Engineering's case does not render any help to the case of present appellant in the case at hand.
18. Last citation is in the matter of Indian Oil Corporation Ltd. v. Amritsar Gas Service 1991 (1) SCC 533 (supra). In Amritsar Gas Service's case, ibid, the arbitrator in his award held that the Corporation committed breach of contract and it has been held liable to remedy the breach by restoration of the distributorship and pay compensation. The counter claim of the Corporation in the written statement was not decided by the Arbitratior on the ground that it did not come within the scope of the reference. The Apex Court held that granting the relief or restoration of the distributorship even on the finding that the breach was committed by the Corporation is contrary to the mandate in Section 14(1) of the Specific Relief Act and there is an error apparent on the face ofthe Award which is stated to be made according to the law governing such cases and the grant of this relief in the award was held to be not sustainable.
19. In the case at hand, the dispute raised does not attract Section 14 of the Specific Act, the case cited by Shri Rathore, ibid, is distinguishable and citation does not apply to the facts of this case at hand.
20. Shri Luharia, Partner of the respondent Firm cited a catena of decisions on the questions as to the scope of interference by Courts and the Courts to support with Award of the arbitrators. A brief resume of the decisions will suffice to resolve the controversy raised at the bar in the Instant case.
21. In Union of India v. Ralliaram AIR 1963 SC 1685, The Apex Court held that an award being a decision of an arbitrator whether a lawyer or a layman chosen by the parties, and entrusted with power to decide a dispute, Is ordinarily not liable to challenge on the ground of it being erroneous and that even the arbitrator is not bound to give a separate award for each claim but, he can give a lumpsum award.
22. In Madanlal Roshanlal v. Hukumchand Mills Ltd. AIR 1967 SC 1030. The Apex Court held that arbitrator's award on both fact and law is final and there is no appeal from his verdict as the Court cannot review the Award and correct any mistake in his adjudication, unless objection to legality of award is apparent on face of it. It has also been laid down that when arbitrator has given no reason for award nor there is any legal proposition as basis of award, the contention that there are errors of law on face of award, must be rejected.
23. In Union of Indian v. Kalinga Construction Co. AIR 1971 SC 1646, the Apex Court held that in proceeding to set aside, the appellate Court cannot sit in appeal over the conclusion of the arbitrator by reexamining and reappraising the evidence considered by the arbitrator so as to hold his conclusions as wrong, and that the Court though differs but cannot set aside the award as it cannot be said that there is any error apparent in the award. Reiterating the above position of law, the Apex Court in Puri Construction Pvt. Ltd. v. Union of India AIR 1989 SC 777, held that the Court cannot reexamine the merits of the award with reference to materials produced before the arbitrator, and, cannot sit in appeal overviews of the arbitrator. It has also been laid down that Court's jurisdiction is limited to grounds available under the Arbitration Act.
24. In Alien Berry & Co. v. Union of India AIR 1971 SC 696 a three Judge Bench of the Apex Court held that even when an arbitrator commits a mistake either in law or in fact In determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake.
25. This Court in R. S. Sharma & Co. v. State of Rajasthan 1988 (1) RLR 435, referring to and reiterating principles of law laid down by the Apex Court in a catena of decisions, summed up the law on the context by observing interalia that the award cannot challenged solely on the ground of the arbitrator having given no reasons to his conclusions in the award ; that issue wise or item wise decision in award is not required and the Court could not draw adverse inference of non consideration of issues by arbitrators for the reason that issues framed were not available on record ; that a non speaking and lumpsum award is also valid and permissible and that it is not open to the Court to attempt to probe as to how the arbitrators might have reached at their conclusion. In the ultimate analysis, this Court held that the Court can interfere with award only on the ground of error of law apparent to the award.
26. In-State of Rajasthan v. Puri Construction Co. 1994 (6) SCC 485 (1994 AIR SCW 5061) the Apex Court held (1) that the arbitrator is the final arbiter for the disputes between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts and (2) that the Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties and (3) whether a particular amount was liable to be paid is a decision within the competency of the arbitrator and that being so, by purporting to construe the contract the Court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. As laid down in Puri Constructions case (supra)it is trite law the Court even cannot examine the reasonableness of reasons recorded for the award by arbitrator and that the Court can set aside the award only if it is apparent from the record that there is no evidence to support the conclusion or if the award is based upon any legal proposition which Is erroneous.
27. Hallsbury's laws of England vol.2 para 623 (4th Edn.) reiterates that arbitrator's award may be set aside for error of law appearing on the face of it; that though this jurisdiction is not to be lightly exercised, and the award can also be set aside, if, inter alia, the arbitrator has misconducted himself on the proceedings and therefore, it is difficult to give an exhaustive definition what may amount to a misconduct on the part of the arbitrator. However, as stated in Russel on Arbitration 20th Edn. page 422, it is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or law, and whether or not his findings of fact are supported by evidence.
28. In Union of India v. Ralliaram (supra), the Apex Court observed as under :--
'But the Court cannot interfere with the award if otherwise proper on the ground that the decision appears to it to be erroneous. The award of the arbitrator is ordinarily final and conclusive, unless a contrary intention is disclosed by the agreement. The award is the decision of a domestic tribunal chosen by the parties, and the Civil Courts which are entrusted with the power to facilitate arbitration and to effectuate the awards cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievance in the manner provided by the arbitration agreement.'
29. Lord Goddard, C.J. in Mediterran & Eastern Export Co. Ltd. v. Fortress Fabrics Ltd. 1948 (2) All ER 186 observed that the day has long gone by when the Courts looked with jealousy on the jurisdiction of the Arbitrators and the modern tendency in commercial arbitrations is to endeavour to uphold awards of the skilled persons who have been selected by the parties, themselves to decide the questions at issue between them. Lord Goddard, C. J. then held that if an arbitrator has acted within the terms of his submission and has not violated any rules ofwhat is so often called natural justice the Courts should be slow indeed to set- aside his award.
30. At last, I must hasten to refer the decision of a Five Judge bench of the Apex Court in Raipur Development Authority v. Chokhmat Contractors AIR 1990 SC 1426 wherein, 'their Lordships in a categorical term observed that an award passed under the Arbitration Act is not liable to be remitted or set aside merely on the ground that no reasons have been given in its support, except where the arbitration agreement or the deed of submission or an order made by the Court such as the one under Sections 20 or 21 or 34 of the Act or the Statute governing the arbitration requires that the arbitrator or the Umpire should give reasons for the award, and the Courts should be slow in taking decisions which will have the effect of shaking rights and titles which have been founded through a long time upon the conviction that a particular interpretation of law is the legal and proper one and is one which will not be departed from. Their Lordships then observed :--
'But there may be many arbitrations in which parties to the dispute may not relish the disclosure of the reasons for the awards. In the circumstances and particularly in view of various reasons given by the Indian Law Commission for not recommending to the Government to Introduce an amendment in the Act requiring the arbitrators to give reasons for their awards, that it would not be appropriate to say that all awards which do not contain reasons should either be remitted or set aside.'
31. In an ultimate analysis, the Apex Court held that giving reasons in support of a decision could not be considered to be a rule of natural justice either under the law of arbitration or under administrative law.
32. Having been benefited by principles of law laid down in a series of decisions, referred to above, I must also reiterate fortifying the well known observations that the Courts have disfavoured interference with arbitration award on account of error of law and fact on the score of misappreciation and misreading of the materials on record and have shown definite inclination to preserve the award as far as possible obviously because the people in India as in other parts of the world such as England, USA and Australia have become accustomed to the system of settlement of disputes by private arbitration and have accepted awards made against them as binding even though no reasons have been given in support of the awards for a long time and they have attached more importance to the element of finality of the awards than their legality. That being so, It is not necessary to indicate in the awards computation made for various heads and it is open to the arbitrator to give a lumpsum award, a lumpsum award is neither patently unjust or improper warranting interference by any Court of law. Lumpsum award by itself is not illegal as held in a plethora of decisions rendered by the Apex Court. My view is fortigied from the observations made in State of Rajasthan v. Puri Construction Co. Ltd. 1994 A.T.L.R. p. 481 = 1994 (6) SCC 485 = 1995 (1) Arb. L.R. p. 1, (1994 AIR SCW 5061).
33. Applying the principles of law summed up above to the facts of the instant case. I am of the considered opinion that the Umpire have not assigned any reason for his conclusion and he has given a lumpsum award, and that in cases of non-reasoned and non-speaking award, a probe can only be made in regard to the limited question as to whether the procedural requirements for conducting arbitration have been complied with or not, e.g. whether adequate opportunity of hearing had been given, the evidence brought on record had been considered, award was pronounced within time etc. However, in the case at hand, it is not the case of either of the parties that Umpire has not given any opportunity of hearing or that the evidence on record has not been considered or that the award was not pronounced within time. Therefore, once it is held that a non-speaking and lumpsum award is also valid and permissible, the alleged absence of non consideration of objections and the absence of claimwise to each of the claim does not effect the Award given by the Umpire. Thus viewed, the learned District Judge did not commit any error of law in upholding the lumpsum Award assigning no reasons either item or issue and claimwise, obviously because of the reason that the parties to the dispute did not introduce a term in any of the clauses to the arbitration agreement or in Clause No. 41 of the agreement in question or in the deed of submission requiring the Umpire to give reasons issuewise or claimwise in support of the Award.
Thus, it is not the case of either of the parties not only before theArbitrator but also before the District Judge that they (parties to the dispute) insisted upon reasons being given, therefore, in my considered view, the Umpire was not under an obligation to give reasons and the Umpire cannot be held to have misconducted himself in giving non reasoned, non speaking and a lumpsum award. However, in the light of Clause 41 of the arbitration agreement referred to by the District Judge in its judgment challenged In this appeal, which did not envisage without giving reasons claimwise, the impugned Award was rightly held not liable to be set aside merely on the reason of the Award being lumpsum or non-speaking.
34. Clause 41 of the arbitration agreement in a categorical term envisages that in case of any dispute, each of the parties to the dispute would appoint arbitrators and both the arbitrators of the parties would conduct arbitration proceedings and in case of difference of opinion between the arbitrators of the parties then an umpire would be appointed by parties to the dispute to decide the dispute under arbitration and the decision of such an Umpire would be final. In the light of aforesaid Clause 41, initially two arbitrators were selected by the parties to the dispute and since the arbitrators did not give a consented award and they had difference of their opinions in the award, Shri Gupta was admittedly appointed as an Umpire to the arbitral dispute and he gave his award dt. 29-5-95. In these circumstances, as rightly held by the District Judge and in my considered view, the Umpire who gave the impugned award dt. 29-5-95 was not under obligation to bring awards containing different opinions of earlier arbitrators on record and the Umpire was having independent jurisdiction in the light of aforesaid Clause 41 of the arbitration agreement to hear and decide the arbitral dispute and claims by his own conclusions and decision by giving independent Award. In this view of the matter, objections of the State appellant to the Award on this count was, therefore, rightly rejected by the District Judge in his judgment. Similarly, Shri Gupta was independent Umpire as per provisions contained in Clause 41 of the arbitration agreement; and the terms of the agreement did not envisage for the Umpire to have a look or to consider the Award either of Shri Gambhir or other arbitrators having given different opinions, it was not incumbent or obligatoryon the part of the Umpire to peruse or act upon the earlier Award of Shri Gambhir with a view to arrive at the conclusion for his independent Award. In these circumstances. I do not think that on this count the Award of Umpire deserves to be set aside for having not considered or acted upon earlier award of Shri Gambhir and the District Judge rightly rejected the objection of State appellant.
35. As regards objection of the State as to the consideration of more 35 claims instead of 4 claims in the Award, the contention of Shri Rathore is merely a red herring sought to be laid across the trial. The objection of State is per se preposterous false that only 4 claims were referred to the Arbitrators as against 39 claims decided under the impugned award. Contrarily the facts and circumstances of the case explicitly make it clear that admittedly the learned District Judge in his order dt. 1-3-85 on the application of the claimant for issuing the order referring the dispute between the parties for arbitration, directed that all disputes arising out of the agreement are referred to the Arbitrator for being arbitrated, inasmuch as the parties had disputes not only for four claims but also different claims at issue. In these circumstances, as rightly held by the District Judge, the Umpire has not committed an error apparent on the face of the agreement while giving award on 39 claims for which the dispute was at issue for arbitration in between the parties to the agreement and I also find nothing which may warrant interference in the impugned award and the judgment challenged in this appeal.
36. With regard to other objections of the State in objection petition at paras 4 to 11, 13 to 14 and 16, since it is a case where the Umpire has given a lumpsum award giving no reasons whatsoever for his conclusions in the award, and in the light of the above discussion made keeping in view the principles of law laid down in the cited decision holding that the lumpsum award containing no reasons itemwise cannot be interfered by the Courts, in my considered view the District Judge had no option except to uphold the lumpsum and unreasoned award, with-out examining merit of the claims allowed in the award of the Umpire, especially when the agreement between the parties one of which is the Govt. and its instrumentalities, does not introduce/envisage a term requiring/ binding the arbitrator to give reasons for theaward. The award can be interfered with if vitiated by an error of law apparent on the face of it. Error apparent on the face of the award as envisaged in Section 16(1)(c) as well as Section 30 of the Act is an error of law apparent on the face of the award and not error of fact. An error of law on the face of the award means an error of law which can be discovered from the award itself or from a document actually incorporated therein.
37. That apart, in the instant case, the Award has not even been challenged on the ground of error apparent on the face of the record, and therefore it is not required to be examined at all. As laid down in Santokh Singh v. Union of India, 1987 (4) JT(SC) 79, a lumpsum award cannot be interfered with by the Court and it can be interfered with only if it is contrary to the terms of reference. But again, the objection to the award does not relate to the contention that the award is contrary to the terms of reference. Therefore, in the instant case, the award cannot be interfered with by the Court on any objections of the State.
38. The arbitrator's adjudication is generally considered binding on the parties for, he is a Tribunal selected by the parties and the power of the Court to set aside the award is restricted and fettered to cases set out on Section 30 of the Act. Moreover, it is not open to the Court to speculate where no reasons are given by the Umpire/Arbitrator as to what impelled them to arrive at their conclusions. Therefore, as indicated above, in the case at hand, Umpire gave lumpsum award assigning no reasons for his conclusion to the award, the District Judge had no occasion to speculate as to what impelled the Umpire to arrive at his conclusion in the award. Even otherwise, as laid down by the Apex Court in a series of decisions (supra), it is not open to the Court to attempt to probe in the mental process by which the Umpire has reached his conclusion which were and does not disclose by the terms of the Award.
39. Besides, a Court while examining the objections taken to an award of the Umpire is not required to examine the correctness of the claim on merits. The scope is very limited and none of the points which can be entertained, has been substantiated by the objector. Therefore, the District Judge rightly refrained to consider the merits of the claim in further detail especially because no reasons have been assigned in the lumpsum award so as to discover an error of law from the award itself or from a document actually incorporated thereto.
40. Next objection of the State that the Umpire being consultant of the respondent firm should have debarred from passing the impugned Award, cannot be examined by this Court for the reason that such an objection having been raised during arbitration proceedings has been dismissed by the District Judge in his earlier order dt. 16-11-93 which was upheld by this Court also. It is nobody's case that integrity of the Umpire has been doubtful; and that the Umpire was incompetent to enter upon the reference. It is also not the case of either of the parties that any extraneous matter has not been taken into consideration by the Umpire. There is also no allegation that reasonable opportunity of being heard has not been given to either of the parties by the Umpire or the Umpire has considered any document behind the back of any party. It prima facie appears to me that in basing the findings in the award, the Umpire has referred to and relied upon the materials on record with reference to the arbitration reference and agreement and it cannot be reasonably contended that there was no basis whatsoever to base conclusions made by the Umpire. In my view, the appellant State has failed to demonstrate that lumpsum award is either fanciful or not referable to the materials on record what has been sought to be contended by the appellant State is that the Umpire failed to properly appreciate various clauses of the agreement between the parlies in the manner suggested by the objectors in their claims. Whether a particular claim was liable to be allowed or rejected is a decision within the competency of the Umpire/Arbitrator. Since the parties have selected their own forum, the deciding forum must be conceded to the power of appraisement of evidence. The Umpire/Arbitrator is the sole Judge of the quality as well as the quantity of the evidence and it will not be for the Court to take upon itself the task of being a Judge on the evidence before the arbitrator or the Umpire. In the case at hand, the finding of the learned Umpire is thus based upon the material placed before him by both the parties andwas a pure finding of fact and cannot be interfered with by the Court. The impugned award though being lumpsum one is not vitiated by an error of law apparent on the face of it nor the Umpire was guilty of any misconduct in conducting the proceedings or otherwise.
41. Having regard to the view that I take, the question of setting aside the award and sending the arbitration proceedings back to the arbitrator does not arise.
42. As regards cross-objections raised by the respondent firm which pertain merely to rate and kind of interest, I must hasten to merely observe that rates and kind of interest have not at all been envisaged either in the Arbitration Act 1940 or the Arbitration Act 1996 or in the Interest Act 1978 or the Indian Contract Act. In the case at hand the parties to the dispute have not at all disputed the powers of the Umpire or the Court to grant interest on the claims allowed in the award. Shri Rathore, controverting the cross-objection merely urged that rate of interest should be one and not two different rates for the period allowed either under the Award or the decree making the award as rule of the Court. Shri Luharia has not been able to spell out any new limb of arguments in support of cross-objection except laying much stress and emphasis citing various decisions which in my considered view merely laid down the law as to the scope and power of the Umpire or the arbitrator and the Court as to grant of interest on the allowed claim, therefore any further discussion would be only exhortation adding to the length of this judgment. The very basis of the deductive piece of logic restored to by Shri Luharia is fallacious. What particular authority shall apply to a given case must depend on the facts and circumstances of that case. Thus, the citations relied upon by Shri Luharia which do not prescribe the guiding factor as to the rate and kind of interest, can avail the respondent nothing.
43. However, I find some substance in the contention advanced by Shri Rathore that once the District Judge himself found and held the rate of interest @ 15% as just and proper in the facts and circumstances of this case taken note of by him in the impugned judgment, itself, in paras 17 and 18, for the post period of the award i.e. the period from the date of Judgment (16-7-96) till payment (which can be called as futureinterest to the award), then in my considered view, the interest rate for the period during which arbitration proceedings were pending would also have been 15% as determined by the Court for future period especially when the District Judge categorically observed that the interest rate has been 15% in the decade of 1980. Thus, the District Judge has erred in not reducing the interest rate from 18% to 15% for period i.e. from 15-12-82 to 15-7-96 (till date of judgment). To this extent of interest rate for this period. State appeal deserves to be allowed but cross-objections deserve to be dismissed in toto even also on the objections pointed out by the Registry.
44. As a result of the above discussion, this appeal is partly allowed only with regard to rate of interest for the period from 15-12-82 to 15-7-96 shown in the impugned decree. However, on all other counts this misc. appeal is dismissed. The impugned Judgment dated 16-7-96 passed by the District Judge, Jhalwar in Civil Misc. Case No. 33/ 81 is upheld with slight modification in the decree dated 16-7-96 to the effect that the decree be modified granting interest @ 15% p.a. instead of 18% per annum for the period from 15-12-82 to 15-7-96 on total amount of claims except F.D.R. amount to the respondent (applicant) Company. Since the impugned judgment has been upheld as indicated above, cross-objections stand dismissed. No order as to costs in appeal as well as cross-objections.