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        1958 (9) TMI 77 - SC - Companies Law

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        Supreme Court dismisses appeal on arbitration award errors. The Supreme Court dismissed the appeal, concurring with the High Court that the arbitration award contained a legal error by attempting to enforce a ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Supreme Court dismisses appeal on arbitration award errors.

                              The Supreme Court dismissed the appeal, concurring with the High Court that the arbitration award contained a legal error by attempting to enforce a personal service contract. The court also found that the declaration of the appellant's continued professorship constituted a substantive error. The legality of the sole arbitrator's appointment was not addressed as it was not pivotal to the final decision. The appeal was dismissed with costs awarded to the respondent.




                              Issues Involved:
                              1. Entitlement to Selection Grade
                              2. Wrongful Supersession by Appointment of Dr. Seshadri
                              3. Wrongful Dismissal
                              4. Validity of Arbitration Award
                              5. Specific Enforcement of Personal Service Contract
                              6. Error on the Face of the Award
                              7. Legality of Sole Arbitrator Appointment

                              Detailed Analysis:

                              1. Entitlement to Selection Grade
                              The appellant claimed entitlement to the Selection Grade sanctioned by the Government of India in 1948 but was denied by the respondent. The arbitrator found that the appellant was wrongfully deprived of this grade, which the court later reviewed.

                              2. Wrongful Supersession by Appointment of Dr. Seshadri
                              The appellant contended that he was wrongfully superseded by the appointment of Dr. Seshadri as the Head of the Department of Chemistry. The arbitrator held that the appellant's removal from the headship was wrongful.

                              3. Wrongful Dismissal
                              The appellant argued that his dismissal by the Executive Council on April 26, 1951, was wrongful and mala fide. The arbitrator concluded that the dismissal was ultra vires, mala fide, and had no effect on the appellant's status. The High Court found that such declarations amounted to the specific enforcement of a personal service contract, which is prohibited by Section 21 of the Specific Relief Act.

                              4. Validity of Arbitration Award
                              The award made by Professor Saha, acting as the sole arbitrator, was challenged by the respondent on various grounds. The Sub-Judge, Delhi, initially upheld the award, but the High Court set it aside, citing an error on the face of the award.

                              5. Specific Enforcement of Personal Service Contract
                              The High Court held that the arbitrator's declaration that the appellant continued to be a professor was equivalent to the specific enforcement of a personal service contract, which is forbidden by Section 21 of the Specific Relief Act. The Supreme Court agreed with this view, stating that a contract of personal service cannot be specifically enforced.

                              6. Error on the Face of the Award
                              The Supreme Court examined whether the award disclosed an error on its face. The court held that an error appears on the face of the award if it contains a legal proposition that is clearly erroneous. The award's declaration that the appellant's dismissal had no effect on his status was found to be such an error, as it purported to enforce a contract of personal service.

                              7. Legality of Sole Arbitrator Appointment
                              The respondent contended that the appointment of Professor Saha as the sole arbitrator was illegal under Section 9 of the Arbitration Act, which applies to references to two arbitrators. However, the High Court had decided this point against the respondent. The Supreme Court did not express an opinion on this issue as the appeal was dismissed on other grounds.

                              Conclusion:
                              The Supreme Court dismissed the appeal, agreeing with the High Court that the award disclosed an error on its face by purporting to enforce a contract of personal service. The court also found that the declaration of the appellant continuing as a professor was not merely consequential but a substantive error. The legality of the sole arbitrator's appointment was not addressed, as it was unnecessary for the final decision. The appeal was dismissed with costs throughout.
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