Arbitral award protected where contractual tariff interpretation was a possible view and no patent legal error appeared.

An arbitral award based on the Umpire's interpretation of the bulk supply agreement and Section 49 of the Electricity (Supply) Act, 1948 was not vulnerable to interference merely because another view was possible. The Umpire held that the Board had accepted the agreement and that the contractual tariff and rebates continued despite later uniform tariff fixation. The governing principle is that an award may be set aside only if an erroneous legal proposition appears on the face of the award and forms its basis. Because the interpretation adopted was a possible view and no patent legal error was shown on the award's face, interference was not warranted.

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Issues: Whether the arbitral award could be set aside for error of law apparent on the face of the award on the ground that the Umpire interpreted the agreement and Section 49 of the Electricity (Supply) Act, 1948 so as to hold that the contractual tariff and rebates continued to bind the Board.

Analysis: The dispute turned on the construction of the bulk supply agreement and the effect of Section 49 of the Electricity (Supply) Act, 1948 after the undertaking was taken over by the Board. The Umpire held that the Board had accepted the agreement and that the contractual terms, including the agreed rebates, were not displaced by the later fixation of uniform tariff. The governing principle is that an award can be interfered with only where an erroneous legal proposition forms the basis of the award and is apparent from the award itself. A mere error in construction, or even a view with which the court might disagree, does not justify setting aside the award if the view taken is a possible one. On the facts, the interpretation adopted by the Umpire was held to be a possible view, consistent with the earlier decision relied upon and not showing any legal proposition on the face of the award that was itself erroneous.

Conclusion: The award did not suffer from an error of law apparent on its face and was not open to interference.

Ratio Decidendi: An arbitral award based on a possible interpretation of the contract and the governing statute cannot be set aside merely because another view is also possible or because the court would have construed the provisions differently; interference is warranted only when an erroneous legal proposition forming the basis of the award is apparent on its face.

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