Prabir Kumar Hajumdar, J.:-

(1) This is an appeal against a judgment and order dated 3rd january, 1974 passed by a learned single judge of this court whereby the learned judge refused to set aside an award on an application under sections 30 and 33 of the arbitration act, 1940 by the appellant, hindustan steel limited.

(2) The appellant made by the said application under sections 30 and 33 of the arbitration act, 1940 for setting aside the award on the ground, inter alia, as follows :

(i) that there were errors on the face of the award and the arbitrator had found that there was no fixed period for delivery very under the contract and that the time was not of the essence of the contract. Such findings, according to the appellant, were erroneous as they were contrary to clause 5 of the special terms and conditions of the sale order dated january 30, 1969 as such there was misconstruction of the terms of the contract;

(ii) the award was perverse and no reasonable person could make such an award; and (iii) one of the arbitrators sri d. R. Mehata misconducted himself or misconducted the proceedings on the ground - (a) by receiving fees based on percentage of the amount of the award from the respondent which was unreasonable and improper and as such the award was procured improperly; (b) the said sri d. R. Mehta influenced his co - arbitrator in making the award.

(3) By the said judgment and order dated 3rd january, 1974 the learned trial judge of the court of the first instance rejected all allegations of misconduct levelled against one of the joint arbitrators sri d. R. Mehta. The learned judge also held that there was no misconstruction of the terms of the contract. It was further held by the learned trial judge that the award did not incorporate the contract in it and as such the alleged misconstruction, if any, was not apparent on the face of the award. It was also held by the learned trial judge that in any event, a specific question of law viz. Construction of the ters of an agreement was referred to the arbitrators for their decision and hence their decision even if erroneous was binding on the parties.

(4) In the present appeal the allegations of misconduct against one of the joint arbitrators was not seriously pressed on behalf of the appellant. In the instant appeal, it was argued with great emphasis that the learned joint arbitrators have misconstrued the terms of the contract and other relevant documents in coming to the finding that no delivery period was fixed under the contract and that the time was not of its essence. The learned counsel for the appellant has taken us through various provisions of the contract and other documents to show that time was of the essence of the contract and that the entire quantity covered under the contract was to be despatched within 6 months from the date of the issue of the work order.

(5) The impugned award is as follows :

"award in re : arbitration ved prakesh ramlal vs. Hindustan steel limited. Whereas we, d. R. Mehta, m. A. , l. L. B. , advocate, high court, calcutta of 30 - a, preonath mullick road, calcutta - 26, and d. K. Sen, barrister at law of 57/3, ballygunge circular road, calcutta - 19, were appointed as arbitrators respectively by the claimant, ved prakash ramlal (hereafter referred to as the claimant) , and the respondent, hindustan steel limited (hereinafter, referred to as respondent) , under a written agreement dated the 30th january, 1969, being sale order no. Dfc/69/ 99/ckm/ej and the disputes and difference between the said claimant and respondent relating to the said agreement were referred to our arbitration. And whereas the time to file our award was, from time to time, extended by the hon'ble high court at calcutta, the last of such extension being granted by his lordship the hon'ble mr. Justice salil k. Roy chowdhury by his order dated the 2 6th september, 1972, whereby the time to file the award was extended till the 31st january, 1973. And whereas we took up on ourselves the burden of such reference and having considered the statements of the parties made before us and also the evidences, documentary and cral, adduced by the said parties and having heard respective submissions and contentions of the parties, we do hereby award and determine as follows : - as to the points of differences raised by the parties from their respective statements we answer and find as follows : - i) as regards point of difference no. 1, we find that no period of delivery as such was fixed under the contract. Ii) in view of our finding on the first point of difference, no. 2 call for no answer. Iii) as regards point of difference no. 3 we find for the claimant and against the respondent and hold that the time of delivery or lifting of goods was not of the essence of the contract. (iv) with reference to point of difference no. 4 we find for the claimant and against the respondent. We hold that there was failure and neglect on the part of the respondent to despatch and deliver the goods under the contract in question. The respondent having accepted the despatch orders submitted by the claimant, refused to deliver the goods. V) as regards point of difference no. 5, we find in favour of the claimant and against the respondent. We hold that there has been no failure or neglect on the part of the claimant, as alleged by the respondent. Vi) with reference to points of difference nos. 6 and 7, we hold that the claimant is entitled to a sum of rs. 3,73,000/ - (rupees three lakhs and seventy three thousand) from the respondent. We further find that the claimant is entitled to costs of these proceedings from the respondent, which we assess at rs. 16,500/ - (rupees sixteen thousand and five hundred). We award the said sums of rs. 3,73,0013/ - (rupees three lakhs and seventy three thousand) and rs. 16,500/ - (rupees sixteen thousand and five hundred) in favour of the claimant and direct the respondent to pay the same to the claimant. Dated, this 2 9th day of sd/ d. R. Mehta january, 1973. D. K. Sen arbitrators"

(6) It is argued on behalf of the appellant that the court is entitled to look into the terms of the contract and other relevant documents because the award, according to the learned counsel appearing for the appellant, is a speaking award and the findings in items nos. (i) to (v) in the said award set out above are the reasons and the findings in item no. (vi) is the ultimate decision of the arbitrators based on the aforesaid reasons contained in item nos. (i) to (v). It is argued by the learned counsel for the appellant that in item no. (i) the arbitrator held that no period of delivery as such was fixed "under the contract" and as such there is a reference in the award to the contract and the contract stands incorporated in the award thus entitling the court to look at the same.

(7) In support of the said contentions that the contract stands incorporated in the award reliance has been placed on behalf of the appellant on a decision of the court of appeal in the case of giacomo costa fu andrea v. British italian trading limited, reported in 1962 (2) all england law reports, page 53. Reliance has also been placed on the decision of the supreme court in allenbury and co. V. Union of india, reported in a. I. R. 1971 s. C. 696. The learned counsel for the appellant relying on the said decision of giacomo costa fu andrea v. British italian trading limited (supra) , argues that the question whether a contract or a clause in a contract is incorporated in the award is a question, of construction of the award, and when such contract by reference is incorporated into the award the court can look into the said contract in order to find out whether there is any error on the face of the awards. The learned counsel contends that such is the principle laid down in landauer v. Asser, reported in 1905 (2) k. B. 184. The learned counsel also in support of the said contention has relied on a sentence in paragraph 9 of the report in the case of allenbury ft co. V. Union of india (supra) at page 699 of the report (air) which says that the test for determining whether a contract is incorporated in the award is, "does the arbitrator come to a finding on the wording of the contract". The learned counsel for the appellant contends that the arbitrators having found under the issue no. 1 that no delivery period was fixed "under the contract", the aforesaid test has been satisfied and the contract stands incorporated in the award.

(8) The learned counsel appearing for the respondent submits that the aforesaid sentence in allenbury's case (supra) does not bear the construction sought to be put upon it by the appellant and that particular sentence cannot be read in isolation. The learned counsel for the respondent places reliance on the decision of the court of appeal in england in the said case of giacomo costa fu andrea v. British italian trading limited and has drawn our attention to the various passages of the said decision. Referring to the allenbury's case (supra) the learned counsel contends that a mere general reference to the contract in the award is not to be held as incorporating it. The learned counsel for the respondent also has pointed out that it is observed by the supreme court in that case that the principle of reading contracts and other documents into the award is not to be encouraged.

(9) The learned counsel for the respondent also cited a bench decision of this court in the case of union of india v. N. P. Singh, reported in a. I. R. 19 (62 calcutta 594. In the case p. B. Mukharji, j. (as he there was) pithily summarised the law on this point. The learned judge observed,

"first, unless it can be shown by something appearing on the face of the award that the arbitrator had proceeded illegally, his award must stand. Secondly, an award of an arbitrator can be set aside only on the ground of error of law on the face of the award when in the award a document is incorporated with it, as for instance, a note appended by the arbitrator standing the reasons for his decision and there is some legal proposition which is the basis of the award and which is erroneous. Thirdly, the statement in the award that a dispute relates to a contract between the parties of certain date does not thereby incorporate the contract with the award as to entitle the court to refer to its terms and by so doing to embark on an enquiry whether there is any error of law. Fourthly before a court can set aside an award on the ground that an error of law appears on the face of it by its reference to some document, it must be demonstrated affirmatively that the law was departed from by the arbitrator in noticing the existence or contents of those documents so that a mere reference to certain documents in the award is insufficient to establish that it was wrong in law to refer to them."

(10) It is well established by now that a mistake in an award can be a ground of remission or setting aside of the award only when such mistake is apparent on the face of it and formed a part of the award. What is an error of law on the face of the award has been discussed in various decisions and for that a reference is always made to the well known decision of the privy council in champsey bhara v. Jivraj baloo spinning and weaving co. Ltd. Reported in a. I. R. 1923 privy council 66. Lord dundin delivering the opinion formulated the principle thus : "an error in law on the face of the award means, in their lordships 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 erroneous. It does not mean that in narrative a reference is made to a contention of one party, that opens the door to seeing first what that contention is, and then going to the contract on which the parties' rights depend to see if that contention is sound. " now whether a contract or a clause of it is incorporated in the award can be found as the supreme court says by applying the test, "does the arbitrator come to a finding on the wording of the contract. If he does, he can be said to have impliedly incorporated the contract or a clause in it whichever be the case. " in formulating the test in the allenbury's case the supreme court perhaps had in mind the observation of denning l. J. In the case of blaiber and co. Limited v. Leopold new - borne in london, reported in 1953 (2) lloyds' reports at page 429. The observation is, "as i read the cases, if the arbitrator says : that on the wording of this clause i hold so and so, then that clause is impliedly incorporated into the award because he invites the reading of it. " in the said decision of the allenbury's case (supra) the supreme court has cautioned by saying that a mere general reference to the contract in the award is not to be held as incorporating it. The principle of reading contracts and other documents into the award is not to be encouraged or extended.

(11) A passage in the speech of lord diplock in the case of giacomo costa fu andrea v. British italian trading limited (supra) clearly explains the point when a court can in construing an award refer to the contract. Lord diplock observes as follows :

"it seems to me therefore, that on the cases there is none which compels us to hold that a mere reference to the contract in the award entitles us to look at the contract. It may be that in particular cases a specific reference to a particular clause of a contract may incorporate the contract, or that clause of it, in the award. I think that we are driven back to first principle in the matter, namely, that an award can only be set aside for error which is of its face. It is true that an award can incorporate another document so as to entitle one to read the document so as to entitle one to read the document as part of the award and, by reading them together, find an error on the face of the award. But the question whether a contract, or a clause in a contract, is incorporated in the award is a question of construction of the award. It seems to me that the test is to be as conveniently as it can he in the words of denning l. J. Which i have already cited from blaiber and co. V. Leopold new - borne (london) ltd. 'as i read the cases if the arbitrator says on the wording of this clause i hold so and so, then that clause is impliedly incorporated into the award because he invites the reading of it. '"

(12) The learned counsel appearing for the appellant in support of his contention that the reference of a contract or clause of it in the award invites a reading' of it by the court relied on a decision in the case of landauer v. Asser 1905 (2) k. B. 184 where it was held that as the umpire, had referred to the contract and the terms thereof, the court was justified in looking into the contract and having done so found that the umpire had passed his decision entirely upon the terms of the contract. This case was considered in the speech of lord diplock in the aforesaid decision of court of appeal in 1962 (2) all england law reports 53 (supra (. In refusing to accept the said decision lord diplock observes as follows : - "it does not appear that in the argument in that case any point was taken by counsel whether the court was or was not entitled to look at the contract, nor is the matter dealt with in the judgment. The said case of landauer v. Asser also came to be considered by the supreme court in allenbury's case in a. I. R. 1971 s. C. 696 (supra). In paragraph 7 of the report it is stated that the correctness of the decision in 1905 (2) k. B. 184 was challenged before the privy council in champsey bhara and co. V. Jivraj ballo spinning and weaving co. Ltd. , 192 3 a. C. 480 = a. I. R. 1923 p. C. 66. Lord dan din, however, did not expressly overrule it but rested content by observing that that decision was not binding on the board. Thus it appears that the decision in landaueir's case has been impliedly disapproved by the privy council in champsey bhara's case and the latter has been approved by several decisions of the supreme court including allenbury's case. Therefore, in our view, the decision in 1905 (2) k. B. 184 does not lay down the law as applicable in india.

(13) In the impugned award there is only a general reference to a contract and as observed by the supreme court such mere general reference to the contract in the award is not to be held as incorporating it. In the impugned award the arbitrators have not referred to any particular clause or clauses of the contract in support of their finding that there was no delivery period under the contract. Therefore, in our opinion, it cannot be said that on the wording of the contract something was held by the arbitrator and the award invited the reading of the contract.

(14) Therefore, it thus appears from a reading of the aforesaid cases that, the position in law regarding incorporation of a contract or the terms thereof in an award so as to invite the courts' reading thereof is that a mere general reference to a contract will not result in its incorporation in the award so as to entitle the court to look at it and find whether it has been properly construed. Only when a specific reference is made to a particular clause of the contract, such clause it may be said, stands incorporated in the award and the court can look at it for the purpose of finding out if there has been any error committed by the arbitrators. As we have already noted, in the instant case there is a mere general observation that there was no delivery period fixed under the contract and the time was not of the essence of the contract. Such general and passing reference to the contract cannot nave the effect of incorporating the contract in the award and, in our opinion, the court cannot {look into the contract for the purpose of finding out whether there has been misconstruction thereof. No error of law thus appears on the face of the award and, therefore in our opinion, there is no ground for any interference with the award and/or setting aside of the same.

(15) In a case of bungo steel furniture v. Union of india, reported in a. I. R. 1967. S. C. 378 it has been observed that an award may be set aside by the court on the ground of an error of law apparent on the face of the award but an award is not invalid merely because by a process of inference and argument it may be demonstrated that the arbitrator had committed some mistake in arriving at his conclusion. It is, further observed in that case in a. I. R. 1967 s. C. 378 - "it is only when the arbitrator proceeds to give his reasons or to lay down the principles on which he has arrived at his decisions that the court is competent to examine whether he has proceeded contrary to law and is entitled to interfere if such error of law is apparent on the face of the award itself. Therefore, it has been observed that the court is not to find out such an error on the award by demonstrating any process of inference and argument. In the instant case, the learned counsel appearing for the appellant has referred to various provisions of the contract and other documents in order to indicate that the learned arbitrators made erroneous findings and/or decisions by misconstruing the provisions contained in the contract and such contract and/or document are by reference clearly incorporated in this award. By referring to those provisions contained in the contract and to several other documents it seems to us that the learned counsel appearing for the appellant was trying to establish an error of law on the face of the award by his own reasoning, inference and argument, which we have noted, has been firmly disapproved by the supreme court.

(16) Even assuming that the alleged reference in the award to the contract has the effect of incorporating the contract in the award and that this court can test the validity of the award with reference to the contract, then the court has to be further satisfied that by construing or misconstruing the contract the arbitrators have allowed the error appearing on the face of the award or have laid down certain principles of law on the basis of which they have arrived at their decision. In our view, mere erroneous decision on a point of law does not entitle the court to interfere with the award.

(17) In the judgment under appeal the learned trial judge has held that the question of construction of the contract was specifically referred to the arbitrators for their decision and such question being a question of law there was reference of a specific question of law to the arbitrators. It is held by the learned trial judge that the decision of the arbitrators thereon is final and binding on the parties even if it be erroneous in law and the court cannot interfere with such finding. The learned trial judge held that there was reference of the specific question as to what was the period of delivery under the contract and the arbitrators were entitled to go into the question and whatever be their decision on it, whether erroneous or not, the court cannot interfere with such decision. The learned counsel appearing for the appellant submitted that filing of pleadings pursuant to the direction of arbitrators does not constitute reference of specific question of law to them but only when such questions are stated in the letter of appointment of the arbitrators itself, then only there was a reference of specific question to the arbitrators. The learned counsel for respondent submits that such principle cannot be universally applicable but will depend on the mode of the appointment of the arbitrators as prescribed by the arbitration agreement in a given case. The learned counsel for the respondent also submits that in the instant case each party was to nominate his own arbitrator and therefore there was no question of a single letter of appointment reciting all the disputes and resulting in a reference of a specific question to the arbitrators. He further submits that in the instant case the points of disputes which were settled by the arbitrators for their decision and which the parties had accepted by giving evidence and making submissions on such questions constitute the points of dispute which the parties must be taken to have mutually agreed to refer to the arbitrators for their decision.

(18) The learned trial judge in this connection relied on the decision reported in a. I. R. 1973 s. C. 1338 where it has been observed that where an arbitrator is called upon to decide the effect of the agreement he has really to decide a question of law that is of interpreting the agreement, and hence his decision is not open to challenge. It has been submitted by the learned counsel for the respondent that what was the time of delivery fixed under the contract was a question as to construction of the contract and was thus a question of law. In his submission the said question having been specifically referred to the arbitrators for their decision and relying on the same decision reported in a. I. R. 1973 s. C. 10 72, he argues that where a specific question of law is specifically referred to the arbitrators for their decision, their finding thereon is final and binding on the parties even if it be erroneous and such error appears on the face of the award and this includes the question regarding the arbitrators own jurisdiction to decide an issue referred to them for their decision.

(19) It has also been argued by the - appellant that in - awarding compensation and/or damages the arbitrators have not disclosed the basis of damages awarded by them, and the impugned award is vitiated on that account. In support of this contention the appellant relies on the; decisions in the case of union of india v. Appejay private ltd. , reported in a. I. R. 1983 calcutta "71, in the case of union of india v. Jolly steel india private limited, reported in a. I. R. 1980 s. C. 1346.

(20) In the case of union of india v. Appejay private limited (supra) the learned arbitrator gave reasons for award of damages but did not indicate the basis of damages awarded. The division bench of this court in that case held that

"the arbitrator could not have awarded damages in the manner he has done particularly when he gave his reasons but without indicating the basis upon which such damages was being awarded"

. The supreme court in the said decision (a. I. R. 1980 s. C. 1346) proceeded on the basis of a concession of the counsel before the court. The supreme court with the assistance of the counsel arrived at a settlement of the disputes between the parties indicating a basis of such settlement and decided accordingly. It is not clear whether the arbitrator in his award has given any reason or indicated any principle of law.

(21) In the impugned award the arbitrators have not indicated any reasons for awarding damages nor have they indicated any principles of law on which they have proceeded. It is well settled by now that law does not require the arbitrator to give any reasons, nor is he required by law to disclose the basis of the damages awarded. The court is competent to examine whether the arbitrator has proceeded contrary to law only when the arbitrator proceeds to give his reasons or to lay down principles on which he has arrived at his decision. We are, therefore, unable to accept this contention of the appellant.

(22) In the premises, we hold that there is no error appearing on the face of the award and further, assuming that the learned arbitrators committed an error by misconstruing the contract or the other documents relating thereto, such finding on the question of law cannot be interfered with by this court by holding that the learned arbitrators have committed an error of law. The question whether there was any time for delivery fixed under the contract or whether the time was of the essence of the contract, in our opinion, is the question of law which is specifically referred to the arbitration for their decision. In our view, such decision of the arbitrators on such question was final and binding on the parties. In arriving at the said decision even if the arbitrators committed an error of law then on that ground the award cannot be set aside or interfered with.

(23) Another point raised by the learned counsel appearing for the appellant remains to be disposed of is the question of misconduct of one of the joint arbitrators. It is alleged by the appellant that one of the joint arbitrators, mr. D. R. Mehta misconducted himself by receiving fees based on percentage of the amount of the award from the respondent which were unreasonable and improper and as such the award was procured improperly. As the allegations seemed to be serious the learned trial judge in the court of the first instance had directed the arbitrators to file affidavits and pursuant to such direction, the arbitrators filed their respective affidavits in the proceeding before the learned trial judge. After considering the argument by and on behalf of the appellant before the learned trial judge, the learned trial judge summarily rejected the appellant's contention on the point and, in our view, rightly. The appellant also sought to rely on one letter dated 31st january, 1972 before the learned trial judge which letter was alleged to have been written by the said d. R. Mehta to the law officer of the appellant. Regarding the said letter the learned trial judge was of the view that the said letter was of no consequence as that was a general letter by the arbitrator at a stage much prior to the award, and according to the learned trial judge the said letter was vague and it was not clear whether such letter refers to the fees of the said arbitrator in connection with the present arbitration proceeding. The said letter states, inter alia,

"i have to request to you to kindly desist from the final decision of any agreement with the claimants as they have not paid me a farthing towards my professional fees from the very inception till date."

. The claimant herein is the respondent before us. We agree with such view of the learned trial judge. We also agree with the views of the learned trial judge that on this aspect of legal misconduct assuming for a moment that the arbitrator had accepted fees at an exorbitant rate from the respondent, by whom the said d. R. Mehta was appointed as their arbitrator behind the back of the appellant/petitioner was of least consequence when each party was to pay fees to its nominee arbitrator. We think that the learned trial judge was right in his conclusion that assuming one of the arbitrators had accepted it from the party nominating him,that can never amount to a misconduct by the arbitrator. We also agree with the views of the learned trial judge that the case might have been different had there been a sole arbitrator who was to be paid by the parties and one of the parties refusing to pay his share the other party pays the same on the first instance without the knowledge of the parties refusing to pay. We further agree with the views of the learned trial judge that the allegations preferred by the appellant against the said d. R. Mehta do not have any basis whatsoever to establish a case of misconduct on the part of the said arbitrator. For the reasons aforesaid, the appeal fails and is hereby the appellant will pay the costs of this appeal to the respondent. Appeal dismissed.