2003 INSC 0576
                                        SUPREME COURT OF INDIA

                                                     State of U.P.

                                                           Vs.

                                                Allied Constructions

                                               C.A.No.14152 of 1996

                        (V. N. Khare, C.J.I., K. G. Balakrishnan and S. B. Sinha, JJ.)

                                                      31.07.2003

                                                       ORDER

1. Under a contract entered into by and between the appellant and the respondent, the respondent
undertook construction of bridge-cum-fall at Nunda Khera Scape at the estimated cost of Rs. 37.2
lakhs. While the work was in progress, the work area was flooded in the night of August 25 and 26,
1991.

2. The respondent-contractor herein filed a claim on account of loss sustained by him due to
flooding of the work area. Ultimately, the matter was referred to an arbitrator. The arbitrator gave an
award for payment of a sum of Rs. 12,55,365/- together with interest at the rate of 18 per cent. from
1-11-1991 till the date of the award and 6 per cent. thereafter. The respondent filed the award for
being made rule of the Court. The appellant herein filed a petition, inter alia, on the ground that the
arbitrator has misconducted the proceedings, inasmuch as the force majeure contained in Cl. 47
disentitled the respondent from making any claim which was on account of unprecedented rain. The
said objection was rejected and the award was made rule of the Court. The appellant thereafter filed
a first appeal from order before the High Court and the same was dismissed. It is against the said
judgment, the appellant is in appeal before us.
3. Learned counsel appearing for the appellant reiterated his argument raised before the High Court.
In fact, his argument based on force majeure is that because of unprecedented rain the liability of
loss cannot be thrust upon the appellant. We do not find any merit in this contention. Clause 47 of
the agreement runs as under :

"Neither party shall be liable to the other for any loss or damage occasioned by or arising out of act
of God, such as unprecedented flood, volcanic eruption, earthquake or other convulsion of nature
and other acts such as but not restricted to general strikes, invasion, the act of foreign countries;
hostilities or warlike operations before or after declaration of war, rebellion, military or usurped
power which prevent performance of the contract and which could not have been foreseen or
avoided by a prudent person."

A perusal of Cl. 47 reproduced above shows that it protected the State from liability and damage
occasioned by unprecedented flood which could not have been foreseen or avoided as a prudent
person. The appellant herein did not lead any evidence before the arbitrator that the rain as a result
of which the loss was sustained by the respondent was unprecedented and in fact it was an act of
God. In absence of such an evidence, the arbitrator as well as the High Court has recorded a finding
of fact that the flood which has caused loss to the respondent was not due to the unprecedented rain
and, therefore, Cl. 47 of the agreement was not attracted.

4. Any award made by an arbitrator can be set aside only if one or the other term specified in Ss. 30

and 33 of the Arbitration Act, 1940 is attracted. It is not a case where  2001 AIR SCW 923 :

AIR 2001 SC 1171 : 2001 AllLJ 696, AIR 2001 SC 2516 : (2001 AIRSCW 2723 : 2001AIR _ Jhar

HCR 222 it can be said that the arbitrator has misconducted the proceedings. It was within his

jurisdiction to interpret Cl. 47 of the agreement having regard to the fact situation obtaining therein.

It is submitted that an award made by an arbitrator may be wrong either on law or on fact and error

of law on the face of it could not nullify an award. The award is a speaking one. The arbitrator has

assigned sufficient and cogent reasons in support thereof. Interpretation of a contract, it is trite, is a

matter for arbitrator to determine (see M/s. Sudarsan Trading Co. v. The Government of Kerala,

AIR 1989 SC 890). Section 30 of the Arbitration Act, 1940 providing for setting aside an award is

restrictive in its operation. Unless one or the other condition contained in S.30 is satisfied, an award

cannot be set aside. The arbitrator is a Judge chosen by the parties and his decision is final. The

Court is precluded from reappraising the evidence. Even in a case where the award contains reasons,

the interference therewith would still be not available within the jurisdiction of the Court unless, of

course, the reasons are totally perverse or the judgment is based on a wrong proposition of law. An

error apparent on the face of the records would not imply closer scrutiny of the merits of documents

and materials on record. Once it is found that the view of the arbitrator is a plausible one, the Court

will refrain itself from interfering (see U.P. State Electricity Board v. Searsole Chemicals Ltd., 2001

(3) SCC 397 and ISPAT Engineering and Foundry Works, B. S. City, Bokaro v. Steel Authority of

India Ltd., B.S. City, Bokaro, 2001 (6) SCC 347).
5. For that reason, we are of the view that the appeal has no merit and must fail. However, the
parties are agreed that from the date of filing of the claim till the date of award the interest
chargeable would be at the rate of 12 per cent. in place of 18 per cent. For that reason, the award
and judgment under challenge stand modified to that extent.

6. The appeal is disposed of in the aforesaid terms.

7. There shall be no order as to costs.
         Order accordingly.