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Madhya Pradesh High Court
M/S Modern Builders & Const.,Bhopal vs Nehru Science Centre & Anr on 19 February, 2026
NEUTRAL CITATION NO. 2026:MPHC-JBP:14679
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IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK JAIN
ON THE 19th OF FEBRUARY, 2026
MISC. APPEAL No. 1336 of 2004
M/S MODERN BUILDERS & CONST.,BHOPAL
Versus
NEHRU SCIENCE CENTRE & ANR AND OTHERS
Appearance:
Shri Ashok Lalwani Senior Advocate with Shri Aakash Lalwani- Advocate for the
petitioner.
Shri Anoop Kumar Shrivastava- Advocate for the respondent.
ORDER
By way of this appeal under Section 37 of Arbitration and
Conciliation Act 1996, the order of the District Court dated 26.03.2004 is
under challenge whereby the district court has rejected the application of the
petitioner for challenging the award of the Arbitrator which was filed under
section 30 of the Act of 1940 and then went on to hold that the award of the
Arbitrator be made rule of the court.
2. The necessary facts for the purpose of disposal of present appeal
are that initially an agreement was executed in the year 1990 between the
appellant and the respondent in relation to some construction work in
Regional Science Centre, Shyamla Hills, Bhopal and thereafter certain
controversies and disputes arose between the parties in relation to which the
parties went for arbitration and Dr. P. K. Chaudhary was appointed
arbitrator on 13-09-1999. Thereafter the appellant approached to the District
Court in M.J.C. 88 of 1994 contending therein that the earlier arbitrator be
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discharged and a fresh arbitrator be appointed. The said application was
rejected by the District Court with direction that the arbitrator earlier
appointed namely Dr. P. K. Chaudhary should complete the arbitration
process within 6 months. This was vide order was 25-04-2000. Thereafter the
arbitrator entered into the reference and passed the award dated 15-10-2001.
3. From a perusal of the aforesaid award, it is seen that the arbitrator
has written in the said award that he is seriously sick and remained
hospitalized for major portion of the year 2001 and still is undergoing
surgical operations and that has led to the delay in passing of the award. The
only consideration in the award is in the following terms.
"Now I, Dr. PK Chaudhuri having taken upon myself the burden of the
Reference and having carefully examined and considered the pleadings of the
parties, the documentary evidence produced before me, the arguments of the
parties and such other information as was considered necessary and obtained,
do hereby record my findings as below:"
4. After quoting the said consideration in the award, the arbitrator
went ahead to pass the award in tabular form mentioning the issues and
findings there upon. The entire award is written in tabular form. The entire
award is as under:-
"AWARD
In the matter of Arbitration under Indian Arbitration Act, 19406
BETWEEN
MODERN BUILDERS AND CONTRACTORS, BHOPAL
and
NEHRU SCIENCE CENTRE, MUMBAI
WHEREAS certain differences arose between the two parties out of the
Contract for Land Development Work at the Regional Research Centre,
Bhopal made between them.
AND WHEREAS Dr. Pranab Kumar Chaudhuri of VII-14 Purbachal, Salt
Lake City, Sector III, Kolkata 700 091 (New Postal Code 700 097) was
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appointed Arbitrator by the Director General, National Council of Science
Museums, Block-GN, Sector-V, Bidhannagar, Kolkata 700 091.
AND WHEREAS the Arbitrator being sick and hospitalised throughout the
second fortnight of May had first advised the two parties that his award would
be given in July 2001 (to which advice no reply or objection has been
submitted by either party) and subsequently advised the parties again that due
to a fresh hospitalization and surgical operation in the first fortnight of August
2001, the Award would now be made by 15.10.2001.
Now I, Dr. PK Chaudhuri having taken upon myself the burden of the
Reference and having carefully examined and considered the pleadings of the
parties, the documentary evidence produced before me, the arguments of the
parties and such other information as was considered necessary and obtained,
do hereby record my findings as below:
Sl.No. Issue Finding
The Claimant is not
entitled to any
Is the claimant entitled to payment of final bill
further amount
amount as claimed viz. Rs.1,30,706.00?
1. beyond what they
(Paragraph 17.1 of Claimant's Argument dated
have been paid
1.4./18.4.2001)
against their running
bills.
Is the Claimant entitled to payment of
The Claimant is not
compensation amount of Rs.2,32,820.00?
2. entitled to any
(Paragraph 17.2 of Claimant's Argument dated
payment.
1.4/18.4.2001)
Is the Claimant entitled to payment of amount The Claimant is not
3. of compensation Rs.8,500.00 (Paragraph 17.3 entitled to any
of Claimant's Argument dated 1.4/18.4.2001) payment.
Is the Claimant entitled to additional payment
of Rs.44,057.00 towards making good of
The Claimant is not
underpayment against quantity of Earth Work?
4. entitled to any
(item no.1 of schedule)(Paragraph 17.3 of
payment.
Claimant's Argument dated 1.4/18.4.2001)
Is the Claimant entitled to payment
ofRs.39,260.00 towards making good of under The Claimant is not
payment due to alleged mistake in entitled to this
computation against E.I No.1? amount or any part of
(Paragraph17.4(b) of Claimant's Argument it.
dated1.4/18.4.2001)
Is the Claimant entitled to payment
ofRs.39,668.00 towards making good of The Claimant is not
6. alleged underpayment against labour for entitled to anything
boulder filling? (Paragraph 17.4 (c) of on this account
Claimant's Argument dated 1.4/18.4.2001)
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The Respondent is
Is the Respondent entitled to the recovery
entitled to the
ofRs.42,612.17 from the final bill against
7. payment of
overpayment? (Paragraph E of Respondent's
Rs.42,612.17 by the
counterclaim dated 12.8.94)
Claimant.
Is the Respondent entitled to a compensation
amount of Rs.1,72,922.17 as from the The Respondent is
Claimant as alleged in the Counter Argument not entitled to any
dated:16.05.2001? payment.
5. In the said award the issues have been framed and the final one line
conclusions have been recorded against the issues but there is no finding or
consideration part in the entire award. The only finding in consideration part
is that the arbitrator has gone through the pleadings of the parties,
documentary evidence and arguments of the parties and all necessary
information. Such an award is utterly non-speaking award and there is not a
single word of consideration on the pleadings of the parties and the
documents placed before him. The arbitrator has went ahead to reject all of
the eight claims made before him by the appellant but while non-suiting the
appellant for all of the claims and did not give a single word of consideration
in the entire award.
6. In this case, even no application under Section 34 (4). Had been
filed by the respondent before the District Court. The defect does not seem
curable under Section 34, and now it is impossible to be cured as the
Arbitrator has died long ago. The Hon'ble Supreme Court in the case of I-
Pay Clearing Services Vs. ICICI Bank and others, 2022 (3) SCC 121 has
held as under :-
40. Merely because an application is filed under Section 34(4) of the Act by a
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party, it is not always obligatory on the part of the Court to remit the matter to
Arbitral Tribunal. The discretionary power conferred under Section 34(4) of
the Act, is to be exercised where there is inadequate reasoning or to fill up the
gaps in the reasoning, in support of the findings which are already recorded in
the award.
41. Under the guise of additional reasons and filling up the gaps in the
reasoning, no award can be remitted to the arbitrator, where there are no
findings on the contentious issues in the award. If there are no findings on the
contentious issues in the award or if any findings are recorded ignoring the
material evidence on record, the same are acceptable grounds for setting aside
the award itself. Under the guise of either additional reasons or filling up the
gaps in the reasoning, the power conferred on the Court cannot be relegated to
the arbitrator. In absence of any finding on contentious issue, no amount of
reasons can cure the defect in the award.
42. A harmonious reading of Sections 31, 34(1), 34(2-A) and 34(4) of the
Arbitration and Conciliation Act, 1996, make it clear that in appropriate cases,
on the request made by a party, Court can give an opportunity to the arbitrator
to resume the arbitral proceedings for giving reasons or to fill up the gaps in
the reasoning in support of a finding, which is already rendered in the award.
But at the same time, when it prima facie appears that there is a patent
illegality in the award itself, by not recording a finding on a contentious issue,
in such cases, Court may not accede to the request of a party for giving an
opportunity to the Arbitral Tribunal to resume the arbitral proceedings.
7. In the case of Union of India v. Sudershan Gupta, (2009) 6 SCC
298 it has been held by the Hon'ble Supreme Court that if quasi-judicial
authority which passes some order has to retain the records for some
reasonable time. However, in this case, even the record of the Arbitrator has
been lost.
8. In the present case, it is not in dispute that the records of the
arbitrator have been misplaced and lost and it has been alleged by the
appellant that the arbitrator handed over the records of the arbitration
proceedings to the respondent department and in pursuance to an order
passed by this court on 12-11-2014, the respondent department has stated
that the sole arbitrator has now expired many years ago and only some
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documents are traceable with the respondent department which are as under:-
"i) Letter dated 12.08.1994 i.e. Statement of Counterclaim submitted by
Respondent No.1 before the Arbitrator - P/1
ii) Letter of appointment of Arbitrator dated 15.11.1993 - P/2.
iii) Copy of award dated 15.10.2001 passed by Arbitrator - P/3
iv) Minutes of First sitting of Arbitration proceedings held on 5.09.1994 -P/4
v) Minutes of Second sitting of Arbitration proceedings held 3.10.1994 P/5 on
vi) Minutes of Third sitting of Arbitration proceedings held on 26.2.2001-P/6
vii) Parawise comments of Respondent No. 1 dated 16.5.2001 P/7 & P/8.
viii) Agreement dated 14.8.1990 between the Respondent No. 1 and Appellant
for the work of Land Development at Regional Science Centre, Bhopal - P/9
ix) Order dated 26.3.2004 of 5th Additional District Court, Bhopal - P/10
x) Order dated 15.4.2014 of Hon'ble High Court of Madhya Pradesh, Jabalpur -
P/11 (on record)
xi)Order dated 11.8.2014 of Hon'ble High Court of Madhya Pradesh, Jabalpur-
P/12 (on record)"
9. This is the entire record which is now available with both of the
parties in case and it is certain that the record of the arbitration has been
lost which cannot now be traced in view of the death of the arbitrator. The
arbitrator himself decided not to give any reason for rejection of claims and
has passed the utterly non-speaking award which cannot be sustained in
judicial scrutiny. Even as per the limited grounds of challenge to the award
under Section 34 of the New Act of 1996, the award is against the public
policy of India because the right to get a fair and a reasoned judicial order is
one of the hallmarks of public policy and legal policy, and that has been
denied in the present case to the present appellant.
10. The counsel for the respondent has relied on the judgment of the
Hon'ble Supreme Court in Gujarat Water Supply and Sewerage Board v.
Unique Erectors (Gujarat) (P) Ltd., (1989) 1 SCC 532 to contend that the
arbitrator is not obliged to give reasons for his decision. This court has gone
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to the aforesaid judgment of the Hon'ble Supreme Court and in the aforesaid
judgment, the plea that the award is non-speaking was not taken before the
district court and before the High Court and this plea was for the first time
taken before the Supreme Court, which the Supreme Court repelled. The
Hon'ble Supreme Court held that award of arbitrator should be read
reasonably as a whole to find out the implication and meaning thereof and
short intelligible indications of the grounds should be discernible to find out
the mind of the arbitrator for his action and if that short reasons are there
which are intelligible so as to clarify the grounds of acceptance or rejection
of the claims, then that can be said to be reasonably speaking award. The
Hon'ble Supreme Court held as under:-
"9. The scope and extent of examination by the court of the award made by an
arbitrator has been laid down in various decisions. It has to be noted that there
is a trend in modern times that reasons should be stated in the award though the
question whether the reasons are necessary in ordinary arbitration awards
between the parties is pending adjudication by the Constitution Bench of this
Court. Even, however, if it be held that it is obligatory for the arbitrator to state
reasons, it is not obligatory to give any detailed judgment. An award of an
arbitrator should be read reasonably as a whole to find out the implication and
the meaning thereof. Short intelligible indications of the grounds should be
discernible to find out the mind of the arbitrator for his action even if it be
enjoined that in all cases of award by any arbitrator reasons have to be stated.
The reasons should not only be intelligible but should also deal either expressly
or impliedly with the substantial points that have been raised. Even in a case
where the arbitrator has to state reasons, the sufficiency of the reasons depends
upon the facts and the circumstances of the case. The court, however, does not
sit in appeal over the award and review the reasons. The court can set aside the
award only if it is apparent from the award that there is no evidence to support
the conclusion or if the award is based upon any legal proposition which is
erroneous. See the observations of this Court in Indian Oil Corpn.
Ltd. v. Indian Carbon Ltd. [(1988) 3 SCC 36]"
11. In the present case, the award is totally unintelligible because this
court cannot discern the reasons for acceptance or rejection of the claims of
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the rival parties and apart from writing in a single line that the claimant has
not been found entitled to any payment, not a single word of consideration is
there in the award to reject the claims of the appellant contractor.
12. Therefore, it is a fit case where the award of the arbitrator should
be set aside as it suffers from non-application of mind and from the vice of
not containing a single reason, it is utterly unreasoned award, and thus there
is legal misconduct by the Arbitrator.
13. Now the question arises that what relief can be granted in the
present case and what consequential directions can be issued. The arbitrator
has undisputedly expired long ago and therefore it is not possible to remand
the matter to the arbitrator.
14. Therefore the impugned order of the District Court as well as the
Award are set aside and the appellant is set at liberty to seek appointment of
a new arbitrator as per the provisions of law applicable to the case.
15. With the aforesaid directions, the appeal is allowed.
(VIVEK JAIN)
JUDGE
MISHRA
