TMI Blog2003 (9) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. In other words, the word ‘Award’ within the meaning of sub-section (3) would also include a part of the Award, which has been the subject-matter of the order of remission by the competent Court. In any view of the matter the applicability of sub-section (3) of section 16 of the Act, in the facts and circumstances of the present case, does not arise inasmuch as the matter is still pending before the Arbitrator. - CIVIL APPEAL NO. 1247 OF 1998 - - - Dated:- 18-9-2003 - V.N. KHARE AND S.B. SINHA, JJ. Prashant Kumar, Jay Savla and Ms. Reena Bagga for the Appellant. T.L.V. Iyer and Ms. A. Subhashini for the Respondent. ORDER 1. The interpretation of sub-section (3) of section 16 of the Arbitration Act, 1940 (hereinafter called, for the sake of brevity, the Act ) arises for consideration in this appeal, which arises out of the judgment and order dated 31st July, 1997 passed by the High Court of Bombay, Appellate Side, Panaji Bench, Goa in Appeal No. 7 of 1997. 2. The appellant and the respondent herein entered into an agreement whereby and whereunder the appellant undertook to carry out certain constructions. The agreement also provided for resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the whole Award has become void. Consequently, he appointed a new Arbitrator with the consent of the parties with a direction to the Arbitrator to give a de novo Award. Aggrieved, the State of Goa preferred an appeal before the High Court. The High Court was of the view that since the other part of the Award remained intact, the proceeding was required to be restricted to the aforementioned two points only on which earlier the Court wanted determination and, therefore, it was not open to the learned Civil Judge to have directed to resolve the dispute de novo . It is against the said judgment the appellant is in appeal before us. 6. Mr. Prashant Bhushan, learned counsel appearing for the appellant raised two submissions. The first submission is that since the two points on which the learned Civil Judge required determination were incapable of being decided, therefore, the Arbitrator was required to resolve the dispute de novo . The second submission is that once the Arbitrator has resigned and could not give the Award within the stipulated period, the Award was rendered void under sub-section (3) of the section 16 of the Act. 7. We do not find any merit in both the submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Umpire for reconsideration upon such terms as it thinks fit. Thus, sub-section (1) of section 16 is in two parts and talks of two distinct factors; one is for remission of the entire Award and the other any other matter . Whereas sub-section (3) of section 16 of the Act provides that an Award remitted under sub-section (1) shall become void on the failure of the Arbitrator or Umpire to reconsider it and submit his decision within the time fixed, it is silent as regards any other matter . It is a well-settled principle of law that no word used in a statute should be presumed to be surplus. In the event the contention of Mr. Prashant Bhushan is accepted, the words or any matter referred to arbitration become otiose. Sub-section (3) of section 16 is referable to sub-section (1) thereof. It is not in dispute that an Award could be good as regard one part thereof and bad as regards the rest. In Russell on Arbitration 19th Edition at page 484 it is stated : "An award bad in part may be good for the rest. If, notwithstanding that some portion of the award is clearly void, the remaining part contains a final and certain determination of every question submitted, the valid portion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w for reconsideration - the question arises whether the Award will be void under section 16(3) of the Act in such cases even if the arbitrator fails to reconsider these matters and submit his decision within the time fixed. It appears that, although the court has power to remit any matter referred to the arbitration under section 16(1) of the Act the consequence that follows on the arbitrator s failure to comply with the court s direction to reconsider and submit his decision on such matters is not the same. Under section 16(3) it is only when the Award is remitted and the arbitrator fails to reconsider and submit his decision, the Award shall become void. But not so, in cases where only certain matters are referred to for this purpose by the court as, clearly, the words "any matter" referred to the arbitration are significantly absent in the provision of sub-section (3) of section 16 of the Act and that only shows, in such cases section 16(3) may not have any application at all. In other words, it may be said that if there is any failure of the arbitrator to reconsider and submit his decision on certain matters referred to him the Award does not become void. In this connection we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "7. If the whole award is remitted, the effective award is the second award, see Brearcy v. Kemp [1855] 24 LJ QB 310 at 312. On such an order being made, the arbitrator must make a fresh award on all the matters referred to arbitration. Section 16(3) shows that on the failure of the arbitrator to reconsider the award and submit his decision within the time fixed, the award remitted to the arbitrator becomes void, see also Mohun Kishen v. Bhoobun Shyam, 7 Suth WR 406. In this context it would appear that the first award is avoided altogether also on the making and filing of the fresh award, see Ganapatrai and Sons v. Ramgopal Nanda Kishore 59 Cal. WN 807 at p. 809 : [(S) AIR 1955 Cal. 302 at p. 303]. 8. But if only one or some of the matters referred to arbitration is remitted to the arbitrator for reconsideration, pending the second reference, the award as to matters not sent back to the arbitrator seemed to be in a manner suspended. The arbitrator is functus officio as to those matters and cannot alter his judgment as to them, see [1851] 20 LJ QB 236 at p. 238. The order under section 16(1) may be made on such terms as the Court thinks fit. The Court may, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r fails to consider the same within the time specified by the Court, the entire award would become void but that situation would not arise in a case where only certain matters are referred to the arbitrator for reconsideration. Therefore section 16(3) will not be applicable and the award in respect of those matters which are not remitted to the arbitrator for fresh award would become final between the parties." 11. Yet again in Mehta Teja Singh Co. v. Fertilizer Corpn. of India Ltd. AIR 1968 Delhi 188, the law has been stated in the following terms : "(9) The order under section 16(1) may be made on such terms as the Court thinks fit. The Court may, therefore, give directions to the arbitrator as to the form of the fresh award. The arbitrator is bound to abide by and carry out the directions of the Court in this behalf. In the absence of any such direction the arbitrator acting under an order referring back some of the matters for reconsideration, must make a fresh award, confirming and repeating the first award as to matters not sent back which he could not alter as it were with a dry pen , thus the fresh award would embrace all matters originally referred, and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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