M/S COCHIN SHIPYARD LTD.versusM/S APEEJAY SHIPPING LTD.

                       [2015] 10 S.C.R. 994


A                  M/S COCHIN SHIPYARD LTD.
                                 v.
                   M/SAPEEJAY SHIPPING LTD.
                   (Civil Appeal No.9187 of2015)
B
                       NOVEMBER 06, 2015
          [DIPAK MISRA AND PRAFULLA C. PANT, JJ.)
         Arbitration Act, 1940- s. 30- Objection ·under-Alleging
c misconduct ofarbitrator- Scope of- Held the objection u/s.
  30 can be only alleging legal misconduct of the arbitrator
  and not personal/moral conduct - The a/legation of legal
  misconduct can be substantiated only from the records of
  the arbitral proceedings - Examination of any witness to
D substantiate such allegation is not permissible - In the
  present case, permission granted by High Court to
  substantiate the a/legation of misconduct against the
  arbitrator, by examining the witness, is wrong- However, it is
  open to establish the allegation from the arbitral proceedings.
E
       Words and Phrases:

        'Legal misconduct' - Meaning of, in the context of s. 30
    ofArbitration Act, 1940.
F       'Legal misconquct' and 'moral misconduct' - Distinction
    between - Discussed.

        Partly allowing the appeal, the Court

G         HELD: 1. In the present case, the issue centres
    ·around Section 30 of the Arbitration Act, 1940. Though
     certain grounds have been provided under Section 30,
     the eourt is required to deal with the ambit and sweep
     of legal misconduct on the part of the arbitrator inasmuch
H
                             - 994
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.          995


· as there are allegations as regards non-consideration A
  of relevant documents, ascription of reasons of passing
  of the award which do not flow from the material on
  record and further the conduct of the arbitrator during
  the arbitral proceedings in recording of the minutes. The
  assail does not pertain to personal misconduct or moral B
  misconduct of the arbitrator. [Para 8] (1003-H; 1004-A-C]

     Firm Madan/a/ Roshanlal Mahajan v.
     Hukumchand Mills Ltd., Indore AIR 1967 SC
     1030: 1967 SCR 105; Champsey Bhara &                c
     Company v. Jivraj Ba/loo Spinning and Weaving
     Company Ltd. AIR 1923 PC 66; K.P Poulose v.
     State of Kera/a and Another (1975) 2 SCC
     236: 1975 (0) Suppl. SCR 214; Union of/ndia
     v. Jain Associates and Another (1994) 4 SCC         D
     665; Dandasi Sahu v. State of Orissa (1990) 1
     SCC 214: 1989 (2) Su.ppl. SCR 348; Paradip
     Port Trust and Others v. Unique Builders (2001) 2
     SCC 680: 2001{1)SCR668; Hari Om Maheswari
     v. Vinitkumar Parikh vs. Bhagawti Oxygen Ltd. v.    E
     Hindustan Copper Ltd. (2005) 6 SCC 462: 2005
     (3) SCR 232; State of UP v. Allied Constructions
     (2003) 7. sec 396: 2003 (2) Suppl. SCR 55 -
     relied on.
                                                         F
     Jivarajbhai Ujamshi Sheth v. Chintamanrao Balaji
     (1964) 5 SCR 480; Puri Construction Pvt. Ltd. v.
     Union of India (1989) 1 SCC 411; State of Orissa
     v. Mis Lall Brothers (1988) 4 SCC 153: 1988 (2)
      Suppl. SCR 579; Gujarat Water Supply and           G
     Sewerage Board v. Unique Erectors (Gujarat) (P).
     Ltd. and Another (1989) 1 SCC 532: 1989 (1)
     SCR 318; Rajasthan State Mines and Minerals
     Ltd. v. Eastern Engineering Enterprises and
                                                         H
996      SUPREME COURT REPORTS                 [2015] 10 S.C.R.


A        Another (1999) 9 SCC 283: 1999 (2) Suppl.
         SCR 71 O; Oil and Natural Gas Corporation v. Wig
         Brothers Builders and Engineers Private Limited
         (2010) 13 SCC 377; lnder Sain Mittal v. Housing
         Board, Haryana and Others (2002) 3 SCC
B        175: 2002 (2) SCR 5; Food Corporation of India
         v. Chandu Construction and Another (2007) 4
         SCC 697:2007 (4) SCR 160; State of U.P v. Allied
        .Constructions (2003) 7 SCC 396: 2003 (2) Suppl.
          SCR 55 - referred to.
c
       2. Misconduct does not always have a moral
  connotation. It may not have any connection with the
  individual/personal conduct of the arbitrator. The said
  conduct would be in sphere of moral misconduct. [Para
D 19] [1010-D-E]
      3. As far as legal misconduct is concerned, the same
  must be manifest or palpable from the proceedings
  before the arbitrator. A person urging the ground of legal
E misconduct has to satisfy the court from the records of
  the arbitral proceedings that there has been a legal
  misconduct on the part of .the arbitrator as a
  consequence of which the award gets vitiated. The
  question of adducing any kind of oral evidence to
F substantiate the plea or stand or stance does not arise.
  It has to be shown from the proceedings carried on
  before the arbitrator and the evidence adduced before
  the arbitrator. Evidence cannot be adduced in court to
  substantiate the challenge on the score of legal
G misconduct. [Para 19] [1010-E-H]
        /spat Engineering & Foundry Works, B.S. City,
        Bokaro v. Steel Authority of India Ltd., B.S. City,
        Bokaro (2001) 6 sec 347 - relied on.

H
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.           997


     Fiza Developers and Inter-Trade Private Limited       A
     v. AMC/ (India) Private Limited and Another (2009)
     17 sec 796 - distinguished.

    4. In the instant case, the High Court has granted
liberty to the respondent to examine its General Manager B
to substantiate its claim and further opining that the said
evidence should be considered within the parameters
of Sections 30 and 33 of the 1940 Act. The said liberty
has been granted to establish the misconduct. Since, to
substantiate a stance of legal misconduct on the part of c
the arbitrator, examination of any witness in court is
impermissible, it will be open for the respondent to
establish the ground of legal misconduct from the arbitral
proceedings. [Para 20) [1011-C-G]
                                                            D
                     Case Law Reference

    2002 (2) SCR 5              referred to. Para 4

    2007 (4) SCR 160            referred to. Para 5
                                                           E
    1967 SCR 105                relied on.    Para 9

    AIR 1923 PC 66              relied on.    Para 10

    1975 (0) Suppl. SCR 214 relied on.        Para 10
                                                           F
    (1994) 4 sec 665            relied on.    Para 13

    1989 (2) Suppl.SCR 348 relied on.          Para 13

    2001 (1) SCR 668            relied on.    Para 14      G
    (1964) 5 SCR 480            referred to. Para 14

    (1989) 1 sec 411             referred to. Para 14

    1988 (2) Suppl. SCR 579 referred to. Para 14           H
998         SUPREME COURT REPORTS               . [2015] 10 S.C.R.


A         1989 (1) SCR 318             referred to. Para 14

          1999 (2) Suppl. SCR 710 referred to. Para 14

          (2001) 6 sec 347             relied on.    Para 15

8         2003 (2) Suppl. SCR 55       relied on.    Para 16

          2005 (3) SCR 232             relied on.    Para 17

          (2010) 13 sec 377            referred to. Para 18
c         (2009) 11 sec 796        distinguished. Para 21

         CIVIL APPELLATE JURISDICTION: Civil Appeal No.
      9187of2015

D         From the Judgment and Order dated 11.08.2014 in O.P.
      (C) No. 482 of 2013 of the High Court of Kera la at Ernakulam

          Ranjit Kumar, SG, E.M.S. Anam for the Appellant.

         Vivek K. Tankha, Sonia Dube, Kanchan Yadav, Varun
E     Chopra (for Victor Moses &Associates) for the Respondent.

          The Judgment of the Court was delivered by

       DIPAK MISRA, J. In this Appeal, by special leave, the
F appellant calls in question the legal tenability of the order
  passed by the learned single Judge of the High Court of Kera la
  in O.P. (C) No. 482 of 2013 whereby he has granted liberty to
  the respondent to substantiate its objection preferred under
  Sections 30 and 33 of the Arbitration Act, 1940 (for brevity,
G "the 1940 Act") by adducing evidence which would be
  considered within the ambit and scope of the aforesaid
  provisions.

          2. The facts which are essential to be stated for the
.H    adjudication of this appeal are that an agreement was entered
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.                  999
                [DIPAK MISRA, J.]

into between the parties on 29.11.1980. As per the terms and A
conditions of the agreement, the appellant, a Government
undertaking, had agreed to build and deliver a cargo ship to
the respondent for the price of Rs. 32.527 crores. Certain ·
differences arose between the parties which led to an
arbitration proceeding and a former Judge of this Court was B
appointed as the arbitrator/sole umpire to resolve the disputes
between the parties. As facts would unveil, the learned
arbitrator after holding series of sittings passed an award on
15.07.2009. After the award was sent to the civil court, the
claimant-appellant moved the Court for passing a decree under C
Section 17 of the 1940 Act in terms of the award and the
respondent filed O.P. (Arb.) No. 30 of 2009 under Sections 30
and 33 to set aside the award. During the pendency of the
said petition, the respondent almost after expiry of two years D
filed an application. that is, I.A. No. 5625 of 2011 seeking
permission to examine the learned arbitrator and the General
Manager of the respondent as witnesses. The learned
Additional Subordinate Judge, vide order dated 2~.12.2011,
rejected the application holding that there was no justification E
to examine the arbitrator; that the Court while considering the
objections under Sections 30 and 33 of the 1940 Act does not
sit in appeal over the arbitrator's award; that the Court does
not assess or re-appreciate the evidence; that the award
passed by the learned arbitrator can only be assailed on the F
grounds as engrafted under Sections 30 and 33 of the 1940
Act; and that no reason had been disclosed by the respondent,
the applicant before the Subordinate Judge, to examine the
witness No. 2, that is, the General Manager.
                                                                 G
     3. The aforesaid rejection of the application constrained
the respondent to file a Writ Petition before the High Court
which concurred with the view expressed by the court below
opining that there was no necessity to examine the arbitrator
as a witness as more than five years had elapsed since the       H
1000          SUPREME COURT REPORTS                    [2015] 10 S.C.R.


 A  award was passed. The High Court further appreciated the
    reasoning expressed by the rule making Court and ruled that
    even if umpire would be examined, no fruitful purpose will be
  · served and, accordingly, gave the stamp of approval to the
    same. However, the High Court granted liberty to the writ
 B petitioner to produce other available evidence to substantiate
    its claim and specifically permitted to examine its employee
    as a witness in the proceeding. The High Court further
    observed that his evidence would be appreciated bearing in
    mind the scope of Sections 30 and 33 of the 1940 Act and,
 C accordingly, modified the order passed by the civil court. Be it
    noted, further liberty was granted to summon the entire record
    including the orders passed in the course of the arbitral
    proceeding.

 D           4. At the very outset, we are obliged to state that the
        respondent has not challenged the order passed by the High
       Court and, therefore, as far as examination of the umpire is
       concerned, it stands foreclosed. As far as liberty to examine
       the witness to substantiate the claim forthe rule making Court
 E     is concerned, it is contended by Mr. Ranjit Kumar, learned
       Solicitor General for the appellant, that the respondent has
       been allowed to examine the employee as a witness to prove
       the misconduct of the learned arbitrator in conducting of the
 F     arbitral proceedings asthe grounds had been raised pertaining
       to grant of adequate opportunity to the respondent and the
       recording of minutes. In essence, the stand of the respondent
       was that there had been violation of the principles of the natural
       justice by the learned arbitrator. It is urged by the learned senior
 G     counsel for the appellant that it is totally unwarranted to examine
       witnesses for the purpose of substantiating the claims before
       the Court which has the authority to accept the objection under
       Sections 30 ·and 33 of the 1940 Act or to pass a decree in
       terms of the award. In essence, the attack on the order by Mr.
 H     Ranjit Kumar is that the witness No. 2; General Manager, c~uld
    COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.                  1001
                  [DIPAK MISRA, J.]

not have been permitted by the High Court to be examined as A
a witness in the Court td prove any kind of legal misconduct,
for the same has to be demonstrated from the records of the
arbitral proceedings as well as the evidence adduced before
the learned arbitrator. It is further contended that the witness
sought to be examined had already been examined before B
the learned arbitrator and his evidence can be read by the trial
court to discern and decide if there is any perversity of
approach by the arbitrator. Learned Solicitor General, to bolster
his submissions, has placed reliance on Arosan Enterprises
Ltd. v. Union of India and Another1, lnder Sain Mittal v. C
Housing Board, Haryana and Others2, State of U.P. v.
Allied Constructions3, State Bank of India v. Ram Das and
Another4, D.D. S~arma v. Union of lndia 5, Hari Om
Maheshwari v. Vinitkumar Parikh6, Bhagawati Oxygen Ltd. D
v. Hindustan Copper Ltd. 7 and Oil and Natural Gas
Corporation v. Wig Brothers Builders and Engineers
Private Limitec:fl.

     5. Resisting the aforesaid submissions, Mr. Vivek Tankha,
learned senior counsel for the respondent, would contend that      E
adducing of oral evidence in a proceedings under Sections
30 and 33 of the 1940 Act is not prohibited and in the obtaining
factual matrix the High Court has correctly exercised its
discretion by granting the liberty to the respondent and,           F
therefore, the order cannot be found fault with. It is urged by
him that to establish the· legal misconduct on the part of the

1   (1999) 9sec 449
2
   c2002) 3 sec 175
                                                                   G
, (2003) 7 sec 396
• 2003) 12 sec 474
• <2004) 5 sec 325
• c2005) 1 sec 379
1  (2005) 6 sec 462                                                H
a (2010) 13 sec 377
1002           SUPREME COURT REPORTS                 [2015] 1OS.C.R.


 A     learned arbitrator as asserted by the respondent, it is
       necessary to examine the General Manager so that he can
       throw light on the proceedings before the learned arbitrator
       and, in fact, that is the only way it can be proven. It is further
       propounded by him that this Court in Fiza Developers and
 B Inter-Trade Private Limited v. AMC/ (India) Private Limited
   and Another4 while dealing with Section 34 of the Arbitration
   and Conciliation Act, 1996 (for brevity, "the 1996 Act") has
   clearly held that evidence can be adduced. Learned senior
   counsel has drawn inspiration from the authorities in K.P.
 C Pou/ose v. State of Kera/a and Another10, Union of India
   v. Jain Associates and Another11 and Food Corporation
   of India v. Chandu Construction and Another12•

         6. We have already indicated hereinbefore that the rule
 D making Court had declined the prayer to examine the learned
    arbitrator as well as the General Manager. The said order was
    the subject matter of assail in the Writ Petition under Article
    227 of the Constitution. We have noted the submissions of the
    learned senior counsel for the appellant that the application
 E preferred u.nder Section 151 of the Code of Civil Procedure
    read with Order XVI Rule 1 of the Code of Civil Procedure
    was filed for substantiating the plea of legal misconduct alleged
    in the application. The learned senior counsel has drawn our
 F attention to the various paragraphs of the petition and the
    relevant clauses to highlight the right to call for the learned
  · arbitrator as a witness has been foreclosed. The purpose to
    examine the General Manager, serial No. 2 in the list, is to
    substantiate its stand/claim as has been observed by the High
 G Court. Therefore, the thrust of the matter is whether on the basis


       • (2009) 17 sec 796
       '" (1975) 2 sec 236
       11 (1994) 4   sec 665
 H     12 c2007J 4   sec 697
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.                   1003
                [DIPAK MISRA, J.]

of the allegations of legal misconduct the High Court should      A
have allowed examination of the witness.

     7. To appreciate the controversy in proper perspective, it
is pertinent to refer to Sections 30 and 33 of the 1940 Act.
They read as under:-                                              B

       "Section 30. Grounds for setting aside award.-

     An award shall not be set aside except on one or more
     of the following grounds, namely:-
                                                                  c
     (a) that an arbitrator or umpire has misconducted himself
     or the proceedings;

     (b) that an award has been made after the issue of an
     order by the Court superseding the arbitration or after D
     arbitration proceedings have become invalid under
     section 35;

      (c) that an award has been improperly procured or is
    · otherwise invalid.
                                                                  E
     Section 33. Arbitration agreement or award to be
     contested by application.-Any party to an arbitration
     agreement or any person claiming under him desiring to
     challenge the existence or validity of an arbitration        F
     agreement or an award or to have the effect of either
     determined shall apply to the Court and the Court shall
     decide the question on affidavits:

     Provided that where the Court deems it just and expedient,
     it may set down the application for hearing on other G
     evidence also, and it may pass such orders for discovery
     and particulars as it may do in a suit."

   8. In the present case, the issue that has travelled to this
Court does not even remotely relate to Section 33 of the 1940     H
1004         SUPREME COURT REPORTS                   [2015) 10 S.C.R.


 A Act. It centres around Section 30 of the 1940 Act. Though
   certain grounds have been provided under Section 30, we only
   require to deal with the ambit and sweep of legal misconduct
   on the part of the learned arbitrator inasmuch as there are
   allegations as regards non-consideration of relevant
 B documents, ascription of reasons of passing of the award
   which do not flow from the material on record and further the
   conduct of the arbitrator during the arbitral proceedingsin
   recording of the minutes. The assail does not pertain to
   personal misconduct or moral misconduct of the learned
 C arbitrator.

        9. In this regard, reference to a three-Judge Bench
   decision in· Firm Madan/al Roshan/al Mahajan v.
   Hukumchand Mills Ltd., lndore 13 would be apposite. In the
 D said case, issue arose with regard to misconduct. It was
   contended before this Court that the learned arbitrator was
   guilty of misconduct as he had amended an issue behind the
   back of the appellant. Repelling the said submission, the Court
   opined:-
 E
             "Counsel then submitted that by amending an issue
             behind the back of the appellant, the arbitrator was guilty
             of misconduct.This contention has no force. The arbitrator
             had raised two issues.The second issue referred to the
 F           respondent's claim in respect of 46-1/2 bales a claim
             for loss in respect of the bales. At the time of the writing
             of the award, the arbitrator corrected this issue so as to
             show that the claim was for the price of the bales. By this
             amendment, the appellant suffered no prejudice. The
 G           parties well knew that the respondent claimed the price
             of 46-1 /2 bales and fought the case before the arbitrator
             on thatfooting."


 H     13 AIR 1967 SC 1030
     COCHIN SHIPYARD LTD. v. APEEJAYSHIPPING LTD.                    1005
                   [DIPAK MISRA, J.]

    10. In the said authority, the Court referred to the decision A
in Champsey Bhara & Company v. Jivraj Ba/loo Spinning
and Weaving Company Ltd. 14 wherein it has been laid
down:-

         "An error in law on the face of the award means, in their   B
         Lordship's view, that you can find in the award or a
         document actually incorporated thereto, as for instance
         a note appended by the arbitrator stating the reasons
         for his judgment, some legal proposition which is the
         basis of the award and which you can then say is            C
         erroneous."

      Be it noted, the proposition laid down in Champsey
Bhara & Company (supra) has also been followed in Firm
Madan/a/ Roshan/al Mahajan (supra).                      D

     11. In K.P. Pou/ose (supra) while dealing with the concept
of misconduct, a three-Judge Bench was dealing with the
speaking award where the reasons had been ascribed by the
learned arbitrator. A contention was raised that the learned         E
arbitrator was guilty of legal misconduct in conducting the
proceedings, for two very material documents were absolutely
ignored by the arbitrator resulting in miscarriage of justice. The
Court referred to the said two documents and took note of the
finding recorded by the arbitrator in the award but made an          F
obser'Vation which was inconsistent with his conclusion that
the contractor had no right to extra payment for the particular
work. In that context, the Court proceeded to observe as
follows:-
                                                                     G
         "We now come to the award. Although the arbitrator has
         held that "jetting, however, is not an authorised extra
         covered by the agreement", he has made the following
         significant observation which is inconsistent with his
14
     AIR 1923 PC 66                                                  H
1006         SUPREME COURT REPORTS                   [2015] 10 S.C.R.


 A          conclusion that the contractor has no right for extra
            payment for the jetting:

            "The Chief Engineer has rejected the claims of the
            contractor on grounds of non-inclusion of this Oetting) in
 B          the agreement which was executed subsequent to the
            direction issued by the department to adopt jetting. The
            Chief Engineer's decision totally ignores the next
            sentence in that letter 'Meanwhile you may execute the
            agreement'. By this sentence the issue of extra payment
 C          for jetting is left open even after the execution of the
            agreement."

            If the above is the conclusion of the arbitrator, rejection
            of the claim on the ground that "jetting, however, is not an
 D          authorised extra covered by the agreement" cannot be
            anything but rationally inconsistent. The award, therefore,
            suffers from a manifest error apparent ex facie."

         12. After so stating, the three-Judge Bench opined that
 E under Section 30(a) of the 1940 Act an award can be set aside
   when an arbitrator has misconducted himself or the
   proceedings and misconduct under Section 30(a) has not a
   connotation of moral lapse. It further observed that it comprises
   legal misconduct which is complete if the arbitrator on.the face
 F of the award arises at an inconsistent conclusion even on his
   own finding or arrives at a decision by ignoring the very material
   documents which throw abundant light on the controversy to
   help a just and fair decision. On that backdrop, the Court opined
   that there was a legal misconduct.
 G
           13. In Jain Associates (supra), the Court referred to the
       authority in K.P. Poulose (supra) and Dandasi Sahu v. State
       of0rissa 15 and observed thus:-

 H     "(1990) 1 sec 214
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.                     1007
                [DIPAK MISRA, J.]

     "... The arbitrator/umpire may not be guilty of any act which A
     can possibly be construed as indicative of partiality or
     unfairness. Misconduct is often used, in a technical
     sense denoting irregularity and not guilt of any moral
     turpitude, that is, in the sense of non-application of the
     mind to the relevant aspects of the dispute in its B
     adjudication. In K. \/. Georgev. Secretary to Government,
     Water& Power Department, Trivandrum, (1989) 4 SCG_
     595, this Court held that the arbitrator had committed
      misconduct in the proceedings by making an award
   .. without adjudicating the counter-claim· made by the           C
      respondent..."

     14. In this regard we may usefully refer to the authority in
Paradip Port Trust and Others v. Unique Builders 16 • In the
said case, a contention was raised that the award was passed        D
in violation of principle of natural justice inasmuch as, certain
documents were received without notice to the Port Trust. Such
a contention was raised before the High Court and the said
stand was abandoned after perusal of the order sheet of the
arbitrator which showed that at each stage adequate                  E
opportunity was given to both the parties. Thereafter the court
referred to the principles stated in Jivarajbhai Ujamshi Sheth
v. Chintamanrao Balaji 17, Puri Construction Pvt. Ltd. v.
Union .of lndia 18, State of Orissa v. Mis Lall Brothers 19,         F
Gujarat Water Supply and Sewerage Board v. Unique
Erectors (Gujarat) (P) Ltd. and Another0, Rajasthan State
Mines and Minerals Ltd. v. Eastern Engineering
Enterprises andAnother1 and opined thus:-
1008             SUPREME COURT REPORTS                    [2015) 10 S.C.R.


 A              "    It is not· a- case where the arbitrator has acted
                arbitrarily, irrationally, capriciously or independently of the
                contract. It is difficult for us to take a view that there has
                been a deliberate departure or conscious disregard of
                the contract to say that the arbitrator misconducted
 B              himself... "

               15. In the case of /spat Engineering & Foundry Works,
       B.S. City, Bokaro v. Steel Authority of India Ltd., B.S. City,
       Bokaro 22 , it has been held that reappraisal of evidence by the
 C     court is not permissible and as a matter of fact, exercise of
       power to reappraise the evidence is unknown to a proceediflg
       under Section 30 of the Arbitration Act. The court as a matter
       of fact cannot substitute its own evaluation and come to the
       conclusion that the arbitrator had acted contrary to the bargain
 D     between the parties.

        16. At this juncture, we may refer to some other authorities
   as regards the scope of Section 30 of the 1940 Act. In Allied
   Constructions (supra), a three-Judge Bench after referring
 E to earlier judgments has opined that an award passed by an
   arbitrator can be set aside only if one or other condition
   contained in Sections 30 and 33 of the 1940 Act is satisfied.
   The Court further opined that the term provided for setting aside
   an award under Section 30 is restrictive in its operation and
 F unless one or other condition contained in Section 30 is
   satisfied, an award cannot be set aside, for the arbitrator is a
   Judge chosen by the parties and his decision is final. It has
   been further observed that even in a case where the award
   contains reasons, the interference therewith would still be not
 G 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 and further an error apparent on the


 H     22
            (2001) 6 sec 347
  COCHIN SHIPYARD LTD. v. APEEJAYSHIPPING LTD.                       1009
                [DIPAK MISRA, J.]

face of the record would not imply closer scrutiny of the merits     A
of documents and materials on record.

     17. In Hari Om Maheshwari (supra), the Court after
referring to the decisions in Arosan Enterprises Ltd. (supra)
and Allied Constructions (supra) opined thus:-                       B

     "From the above it is seen that the jurisdiction of the court
     entertaining a petition or application for setting aside an
     award under Section 30 of the Act is extremely limited to
     the grounds mentioned therein and we do not think that          c
     grant or refusal of an adjournment by an arbitrator comes
     within the parameters of Section 30 oftheAct. .. "

      18. In Wig Brothers (supra) while dealing with the
challenge under Sections 30 and 33 of the 1940 Act, the Court        D
opined that a court while considering a challenge to an award
under Sections 30 and 33 of the 1940 Act, does not sit as an
appellate court and it cannot reappreciate the material on
record. The Court further proceeded to state that an award is
not open to challenge on the ground that the arbitrator had          E
reached a wrong conclusion or had failed to appreciate some
facts, but ifthere is an error apparent on the face of the award
or if there is misconduct on the part of the arbitrator or legal
misconduct in conducting the proceedings or in making the
award, the court will interfere with the award. In the said case     F
reference was made to Rajasthan State Mines and Minerals
LtC:. (supra) and certain passages were quoted. We think it
seemly to reproduce the said paragraphs:-

     "22 . ... The rates agreed were firm, fixed and binding G
     irrespective of any fall or rise in the cost of the work
     covered by the contract or for any other reason or any
     ground whatsoever. It is specifically agreed that the
     contractor will not be entitled or justified in raising any
     claim or dispute because of increase in cost of expenses H
1010         SUPREME COURT REPORTS                   [2015] 10 S.C.R.


 A          on any ground whatsoever. By ignoring the said terms,
            the arbitrator has travelled beyond his jurisdiction as his
            existence depends upon the agreement and his function
            is to act within the limits of the said agreement. This
            deliberate departure from the contract amounts not only
 B          to manifest disregard of the authority or misconduct on
            his part but it may tantamount to mala fide action.

             23. It is settled law that the arbitrator is the creature of
            the contract between the parties and hence if he ignores
 C          the specific terms of the contract, it would be a question
            of jurisdictional error which could be corrected by the court
            and for that limited purpose agreement is required to be
            considered .... "

 o           19. We have referred to series of decisions to appreciate
       the concept of misconduct and how a party is entitled to make
       it the fulcrum of assail in his objection under Sections 30 and
       33 of the 1940 Act. Misconduct, as has been laid down, does
       not always have a moral connotation. To elaborate, it may not
 E     have any connection with the individual/personal conduct of
       the arbitrator. The said conduct would be in sphere of moral
       misconduct. As far as legal misconduct is concerned, as the
       authorities would demonstrate, the same must be manifest or
       palpable from the proceedings before the arbitrator. To
 F     elaborate, a person urging the ground of legal misconduct has
       to satisfy the court from the records of the arbitral proceedings
       that there has been a legal misconduct on the part of the
       arbitrator as a consequence of which the award gets vitiated.
       The question of adducing any kind of oral evidence to
 G     substantiate the plea or stand or stance does not arise. It has
       to be shown from the proceedings carried on before the
       arbitrator and the evidence adduced before the arbitrator.
       Evidence cannot be adduced in court to substantiate the
 H     challenge on the ~core of legal misconduct. We are not entering
  COCHIN SHIPYARD LTD. v. APEEJAY SHIPPING LTD.                     1011
                [DIPAK MISRA, J.]

upon any discussion pertaining to moral rnisconduct as that is A
not the issue in the case at hand. The decision in Fiza
Developers and Inter-Trade Private Limited (supra) has
been rendered by this Court while interpreting Section 34 of
the 1996 Act. The context being different, we are not inclined
to apply the principles enumerated therein to the objection filed B
under Sections 30 and 33 of the 1940 Act, for the simon pure
reason that the authorities are plenty to make it limpid that the
issue of legal misconduct on the part of the arbitrator should
be manifestly discernable from the record.
                                                                    c
     20. In the instant case, the High Court has granted liberty
to the respondent herein to examine its General Manager to
substantiate its claim and further opining that the said evidence ·
should be considered within the parameters of Sections 30
and 33 of the 1940 Act. The learned senior counsels for the D
parties have pressed their argument relating to legal
misconduct. Both the learned senior counsels for the parties
have construed the orderthatthe said liberty has been granted
to establish the misconduct and precisely that is the subject
matter of challenge before us. Therefore, we have clearly E
opined that to substantiate a stance of legal misconduct on
the part of the arbitrator, examination of any witness in court is
impermissible. It is because it must be palpable from the
proceedings and the learned single Judge has already F
directed that the proceedings before the arbitrator to be
rdquisitioned by the civil court. Least to say, it will be open for
the respondent to establish the ground of legal misconduct
from the arbitral proceedings. We may hasten to add that we
have not said anything as regards legal misconduct pertaining G
to the present case, although we have referred to certain
authorities as regards the legal misconduct.

     21. In view of the aforesaid premises, the appeal is allowed
in part as far as it grants permission/liberty to the respondent    H
1012          SUPREME COURT REPORTS                [2015] 10 S.C.R.


 A to examine any witness in court. The learned Civil Judge would
   requisition the records from the learned arbitrator, if not already
   done, and the respondent would be at liberty to advance its
   arguments for pressing the factum of misconduct from the said
   records. There shall be no order as to costs.
 B
       Kalpana K. Tripathy                         Appeal partly allowed.