Civil Appeal No. 682 of 1974

Decided On: 21.11.1974

Appellants:N. Chellappan
Respondent:Secretary, Kerala State Electricity Board and Ors.

Hon'ble Judges/Coram:
A.N. Ray, C.J., K.K. Mathew and N.L. Untwalia


K.K. Mathew, J.

1. This is an appeal, by special leave, from the judgment of the Kerala High Court reversing an order passed by the District Judge making an award passed by the umpire a rule of the court after dismissing an application to set aside the award.

2. By a contract dated 21-4-1964, the construction of the Kuttiyadi Dam was entrusted by the Kerala State Electricity Board (for short the 'Board') to Shri Chellappan, the appellant, The work was left unfinished and therefore dispute arose between the appellant and the Board by reason of the non-execution of the work. While these disputes were pending, a second contract dated 15-7-1967 was entered into between the appellant and the Board for the execution of the remaining part of the work on or before 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 explaining the reasons for the delay in making the award and denying the bias attributed to them. One of the arbitrators in his statement submitted that he has no objection to his being discharged as he no longer wished to be an arbitrator. In this O.P. the appellant filed another application on 31-3-1972 to appoint Shri Kumara Pillai as a sole arbitrator in place of the two arbitrators. By an order dated 22-6-1972, the court allowed O.P. 11 of 1972 and revoked the authority of the arbitrators and directed the umpire to enter upon the reference in his capacity as umpire and also 'allowed' the application I.A. 1918/72 to appoint Shri Kumara Pillai as the sole arbitrator. On 5-3-1972, the Board filed O.P. No. 19 of 1972 for extension of time for passing the award by the arbitrators. This was disposed, of by an order dated 22-6-1972 stating that since O.P. 11 of the 1972 had been allowed, it had become unnecessary to extend the period. The umpire entered on reference in his capacity as umpire on 30-6-1972. Both the appellant and the Board participated in the proceedings before the umpire without demur and the umpire made the award in favour of the appellant for nearly Rs. 30 lakhs on 15-2-1973. The umpire field the award in court on 30-2-1973 and prayed by O.P. 21 of 1973 that notice of the filing of the award be issued to the parties and that the award be made a rule of the court. Notice was ordered on the application on 21-2-1973-The Board filed an application on 22-3-1973 I-A. 895 challenging the award under Sections