JUDGMENT
Govindarajan, J.
1. The above Appeal in O.S.A. No. 27/1995 arise out of the order passed in O.P. No. 370/1994 dated 24.8.1994. The said O.P. Was filed by the appellant under Sec. 30 of the Indian Arbitration Act 1940, to set aside the award passed by the 2nd respondent dated 20.7.1993 with reference to the dispute between the 1st respondent and the appellant. O.S.A. No. 25/1996 is directed against the order and decree made in O.P. No. 397/1994, dated 22.9.1995 filed by the appellant under Sec.30 of the Arbitration Act, to set aside the award passed by the 2nd respondent, dated 5.3.1994 in the matter of dispute between the first respondent and the appellant.
2. In these two cases, the main issue in question is similar and the contesting parties are also same, though the subject matters of contracts are different. Hence, this Court is inclined to deal with the matter in the common judgment.
3. On the basis of the tender issued in June 1988, the first respondent submitted their bid with respect to the following works:-
(a) construction of LRMR Air-craft Hangar and related works;
(b) construction of Air-craft Hanger and connected works;
(c) construction of septic tank and related works.
The contract was awarded to the 1st respondent, and an agreement was entered into thereon. Certain differences arose between the 1st respondent and the appellant out the above said contract entered into between them. So a request was made to refer the disputes to an arbitrator and the 2nd respondent was appointed as an arbitrator by a letter dated 27.11.1992. After examining the pleadings and other materials both documentary and oral evidence, the 2nd respondent filed his award dated 20.7.1993. To set aside the said award, the appellant filed O.P. No. 370/94. The learned Judge in the order and decree dated 24.8.94 rejected the case of the appellant. Hence the appellant filed the above Appeal in O.S.A. No. 27/1995 and the learned counsel submitted his arguments only with respect to claim Nos. 3, 17 and 24.
4. Similarly, the same 1st respondent was awarded a contract in 1988 for construction of roads and allied work at NAS, Arakonam. In view of certain disputes between the appellant and the 1st respondent arose out of the said contract, the matter was referred to an arbitrator. The 2nd respondent was appointed as an arbitrator by a letter dated 24.6.1993. The 2nd respondent after considering the pleadings and the documents, passed the award on 5.3.1994. Aggrieved against the said award, the appellant filed O.P. No. 397/94 under Sec. 30 of the Arbitration Act to set aside the same.
5. The learned Judge in the order and decree dated 22.9.1995 rejected the case of the appellant. Hence the appellant has filed these Appeals in O.S.A. Nos. 27/1995 and 25/1996 and that the learned counsel has submitted his arguments only with respect to clam Nos. 3, 5 and 13 to 16.
6. The points that arise for consideration in these Appeals are:-
(1) Whether the award passed by the Arbitrators with respect to claim Nos. 3 and 5 in O.P. No. 397/1994 and claim Nos. 3 and 17 in O.P. No. 370/1994 are sustainable?
(2) Whether the award with respect to claim No. 24 in O.P. No. 370/1994 and Claim Nos.13 to 16 in O.P. No. 397/1994 is sustainable, as it is contrary to clause 11(C)of the contract which prohibits any compensation as a result of extension of time granted by the Department?
7. Learned counsel appearing for the appellant has not pressed their Appeal in so far as claim No. 3 in O.P. No. 370/1994 is concerned. So, we are not dealing with the same, though it is also the subject matter of the Appeal.
8. With respect to claim No. 17, in O.P. 370/94 learned counsel for the appellant has submitted that the finding given by the arbitrator has no basis and the contractor has no right to claim any payment for providing additional platform. The said claim is for a sum of Rs. 4,46,028/- on the basis that the appellant forced the 1st respondent to put the additional platform and so the appellant is liable to pay the said amount. The 2nd respondent-arbitrator factually found that the appellant has in fact insisted for carrying out the work, and for that purpose the construction of extra platform was necessary and the same had helped the contractor in completing the work more quickly. On the basis that both the parties are responsible for the construction of the extra platform, the award was passed only for for a sum of Rs.2,23,014/-. Even before this Court it is not disputed that the contractor has spent money for the purpose of construction of extra platform for fabrication. It is also not in dispute that such a platform was constructed for the purpose of carrying out the work more quickly. In view of the fact that the arbitrator has given reasonings in support of his conclusion, we do not find any reason to interfere with the same. So, the Learned Judge is correct in confirming the award insofar as claim No. 17 in O.P. No. 370/1994 is concerned.
9. Similarly, claim No.3 in O.P. No. 397/1994 relates to filling of road formation, the arbitrator has given reasonings for awarding a sum of Rs. 6,20,730/-, though the claim was made for a sum of Rs. 38,86,927/-. Since the arbitrator has given reasonings based on materials, we cannot sit on appeal on those reasonings and the learned counsel for the appellant also is not in a position to point out as to how the award with respect to the said claim is not correct. Hence the learned Judge is correct in confirming the award with respect to the claim No. 3 in O.P. No. 397/94.
10. Even with respect to claim No. 5 in O.P. No. 397/1994, learned counsel appearing for the appellant has submitted that there are no materials with the Arbitrator to accept the claim of the 1st respondent/claimant, and such an award is contrary to the conditions mentioned in the agreement. Under the said claim, the 1st respondent had claimed a sum of Rs. 25,91,680/- towards the Murrum used as filling material and WBM. It is the case of the 1st respondent that he got approval of the sample and he started to use the same on the site. The first respondent claimed that since he was allowed to use Murrum as filling material, they quoted the terms. But on 13.9.1989, the 1st respondent was instructed by the Department to use only 13.2 aggregate as screening instead of using Murrum. But on 13.3.1990 against the department reverted back to the decision of using murrum for bottom layers only and used aggregate as screening. So the first respondent claimed additional cost. The Arbitrator on inspection of the measurement book found that the first respondent used 12.5 MM grade aggregate and the figures mentioned therein had been authenticated by the parties. Having found so, the Arbitrator has not agreed with the calculation submitted by the contractor and fixed the amount only at Rs. 6,17,600.00, as against the claim made by the 1st respondent is Rs. 25,91,680/-. Since the second respondent-arbitrator has given reasonings thereon, the learned Judge is correct in confirming the said portion of the award.
11. Next we have to consider with reference to claim No.24 in O.P. No. 370/1994 and claim Nos. 13 to 16 in O.P. No. 397/1994. The above said claims had been made on account of additional payment towards additional cost incurred due to extension of time. The said claims were made on the basis that the first respondent could not complete the contract within the stipulated time due to various delays on the part of the Department. According to the first respondent, the site was not only handed over in time but also it was changed and extra items of work ordered and that there was delay in the supply of electricity etc. The first respondent had also relied on the fact that the contract was cancelled wrongly, though the items of work were completed. Though the appellant has denied the allegation that the delay is due to the fault of the Department, the fact remains that time was extended to complete the contract.
12. The Arbitrator factually found in the award filed in O.P. No. 370/1994 that –
“the department cannot absolve itself of partial breaches committed which are of fundamental nature and had snow-ball effect. The department is not fully responsible, and the contractor also has contributed to certain delays. But it is a fact that contractor continued his establishment and carried on the work despite fundamental changes in the nature of contract. The department had cancelled the contract unilaterally and not followed the procedure properly and prevented the contractor to some extent in not releasing the money due. …. Major portion of work was completed and even put to occupation. The department did not revoke the cancellation, but allowed the contractor to complete the work despite of contractor’s request.”
13. With respect to the claim in O.P. No. 397/1994,the 1st respondent had also made the claim under claim Nos. 13 to 16 on the basis that the department did not keep up the promises with respect to the following aspects:-
(a) Sites were not handed over at a time;
(b) Samples of material were approved belatedly;
(c) Initial survey and fixing up date of Datum points and the centre line was not done; (d) Decisions on specifications were changed from time to time; (e) Status of "Unrestricted" was changed to "Restricted" at a later stage. 14. Though such a complaint was made by the first respondent before the Arbitrator, on perusal of the evidence and arguments, the Arbitrator found that -
“the documents, the evidence and the arguments clearly indicate to me that the delay for completion has been a joint responsibility of both the Department and Contractor. The Department cannot escape the responsibility of their breaches of promises and delay thereafter. These breaches have had a snow balling effect as quoted by the Contractor as well as the law of the land gives a provision for compensation for these losses. It cannot be taken for granted that Contractor will be able to complete the work in stipulated time when promises have been breached. I am therefore of firm opinion that the Contractor has only partially defaulted and the Department had unilaterally cancelled the contract, not followed the procedure properly and prevented the Contractor for getting his due to an extent and therefore has to pay the extra cost/compensation.”
15. In the light of the said factual findings given by the Arbitrator in both the cases, we have to proceed on the basis that the delay in completing the contract in time cannot be attributed solely to the first respondent, but it was due to joint responsibility of both the appellant and the first respondent. Due to the same, time was extended by the appellant now and then. In both the cases, the 1st respondent/claimant has come forward with the above claims for damages and escalation charges incurred during the extended period.
16. Learned counsel, appearing for the appellant referring to clause 11(C) of the general conditions of contract, has submitted that in view of the said condition, the Arbitrator has no jurisdiction to award any amount under the above said claims. To appreciate the said submission, it is beneficial to extract the said clause, which is as follows:-
“11(C). No claim in respect of compensation or otherwise howsoever arisen as a result of extension granted under conditions (A) and (B) above, shall be admitted.”
17. So, the question that has to be decided now with respect to the above said claims is whether the above said clause 11(C) will stand in the way of the Arbitrator from awarding any amount as claimed by the 1st respondent.
18. As stated already, the delay in carrying out the work is due to the contributory act of the appellant as well as the 1st respondent, and, as a matter of fact, time was extended. Learned counsel appearing for the appellant mainly relying on the decision of the Andhra Pradesh High Court in State of Andha Pradesh v. M/s. Associated Engineering Enterprises, Hyderabad, , has submitted that when there is a clause in the agreement prohibiting the contractor to make a claim for compensation on account of delay, the Arbitrator has no jurisdiction to award such compensation.
19. In the said decision, While construing the clause 59 of the contract, the Division Bench of the Andhra Pradesh High Court, has held as follows:-
“26. Applying the principle of the above decision to the facts of the case before us, it must be held that clause 59 bars a claim for compensation on account of any delays or hindrances caused by the department. In such a case, the contractor is entitled only to extension of the period of contract. Indeed, such an extension was asked for, and granted on more than one occasion. (The penalty levied for completing the work beyond the extended period of contract has been waived in this case). The contract was not avoided by the contractor, but he chose to complete the work within the extended time. In such a case, the claim for compensation is clearly barred by clause 59 of the APDSS which is admittedly, a term of the agreement between the parties.”
On the basis of the above said finding, the Division Bench of the Andhra Pradesh High Court in the above said decision ultimately has held that though the award did not suffer from error apparent on its face, the Arbitrator had exceeded his jurisdiction in awarding compensation when the agreement specifically prohibits the same.
20. The above said judgment was confirmed by the Apex Court in the decision in Associated Engineering Co. v. Government of Andhra Pradesh, . In the said judgment, it is held as follows:-
“26. The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it.
27. An arbitrator who acts in manifest disregard of the contract acts without jurisdiction. His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialised branch of the law of agency (see Mustill & Boyd’s Commercial Arbitration, Second Edition, p. 641). He commits misconduct if by his award he decides matters excluded by the agreements (see Halsbury’s Laws of England, Volume II, Fourth Edition, Para622). A deliberate departure from contract amounts to not only manifest disregard of his authority or a misconduct on his part, but it may tantamount to a malafide action. A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award.
28. A dispute as to the jurisdiction of the arbitrator is not a dispute within the award, but one which has to be decided outside the award. An ampire or arbitrator cannot widen his jurisdiction by deciding a question not referred to him by the parties or by deciding a question otherwise than in accordance with the contract. He cannot say that he does not care what the contract says. He is bound by it. It must bear his decision. He cannot travel outside its bounds. If he exceeded his jurisdiction by so doing, his award would be liable to be set aside. As stated by Lord Parmoor;
“….It would be impossible to allow an umpire to arrogate to himself jurisdiction over a question which on the true construction of the submission was not referred to him. As umpire cannot widen the area of his jurisdiction by holding, contrary to the fact, that the matter which he affects to decide is within the submission of the parties…”
Attorney-General for Manitoba v. Kelly, (1922)1 AC 268, 276,
Evidence of matters not appearing on the face of the award would be admissible to decide whether the arbitrator travelled outside the bounds of the contract and thus exceeded his jurisdiction. In order to see what the jurisdiction of the arbitrator is, it is open to the Court to see what dispute was submitted to him,. If that is not clear from the award, it is open to the court to have recourse to outside sources. The Court can look at the affidavits and pleadings of parties; the Court can look at the agreement itself. Bunge & Co. v. Dewar & Webb (1921)8 Lloyd’s Rep 436 (KB).
21. In the above said decision of the Andhra Pradesh High Court, the learned Judges have relied on the decision of the Apex Court in Continental Construction Co. Ltd. v. State of M.P., . The Apex Court has held as follows:-
“8. in the aforesaid light, we are of the opinion, the High Court was right that the District Judge was entitled to examine the contract in order to find out the legality of the claim of the appellant regarding extra cost towards rise in prices of material and labour. As was pointed out by the learned District Judge clauses 2.16 and 2.4 stipulated that the contractor had to complete the work in spite of rise in prices of materials and also rise in labour charges at the rates stipulated in the contract. There was a clear finding of the arbitrator that the contract was not rendered ineffective in terms of Section 56 of the Act due to abnormal rise in prices of material and labour. This being so and the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour. The arbitrator misconducted himself in not deciding this specific objection raised by the State regarding the legality of extra claim of the appellant.”
22. The learned counsel appearing for the appellant has also relied on the decision in State of Orissa v. Sudhakar Das (dead) by L.Rs., . In the said judgment, it is held when the agreement does not contain escalation clause, the Arbitrator cannot assume any jurisdiction to award any amount towards escalation.
23. To get over the above said decisions, learned Senior Counsel appearing for the first respondent has relied on the decision of the Apex Court in Board of Trustees, Port of Calcutta v. Engineers-De-Space-Age, . In the said decision, the Apex Court has considered the claim made by the contractor relating to the award of interests pendente lite by the Arbitrator. The said issue was raised in view of the objection raised by the department on the basis of Clause 13(g) of the contract in which it is stated that –
“no claim for interest will be entertained by the Commissioners with respect to any money or balance which may be in their hands owing to any dispute between themselves and the Contractor or with respect to any delay on the part of the Commissioners in making interim original payment or otherwise.”
Though the Hon’ ble Judge referred to the judgment in Associated Engineering Co. v. Government of Andhra Pradesh, AIR 1990 S.C. 232 (supra) followed the earlier decision of the Constitution Bench of the Apex Court in Secretary, Irrigation Department, Government of Orissa v. G.C.Roy, , which had overruled the decision in Executive Engineer (Irrigation), Balimela v. Abhaduta Jena, , and the Apex Court in the above said decision, has held that the agreement must be in conformity with law, and ordinarily a person who is deprived of his money to which he is legitimately entitled as of right is entitled to be compensated in deprivation thereof, calling it by whatever name. Ultimately, the Hon’ble Judge of the Apex Court has observed as follows:-
“4. We are not dealing with a case in regard to award of interest for the period prior to the reference. We are dealing with a case in regard to award of interest by the Arbitrator post reference. The short question therefore, is whether in view of sub-clause (g) of Clause 13 of the contract extracted earlier the Arbitrator was prohibited from granting interest under the contract. Now the term in sub-clause (g) merely prohibits the Commissioner from entertaining any claim for interest and does not prohibit the Arbitrator from awarding interest. The opening words “no claim for interest will be entertained by the Commissioner” clearly establishes that the intention was to prohibit the Commissioner from granting interest on account of delayed payment to the contractor. Clause has to be strictly construed for the simple reason that as pointed out by the Constitution Bench, ordinarily, a person who has a legitimate claim is entitled to payment within a reasonable time and if the payment has been delayed beyond reasonable time he can legitimately claim to be compensated for that delay whatever nomenclature one may give to his claim in that behalf. If that be so, we would be justified in placing a strict construction on the term of the contract on which reliance has been placed. Strictly construed the term of the contract merely prohibits the Commissioner from paying interest to the contractor for delayed payment but once the matter goes to arbitration the discretion of the Arbitrator is not, in any manner, stifled by this term of the contract and the Arbitrator would be entitled to consider the question of grant of interest pendente lite and award interest if he finds the claim to be justified. We are, therefore, of the opinion that under the clause of the contract the Arbitrator was in no manner prohibited from awarding interest pendente lite.”
24. But even the Constitution Bench of the Apex Court in the judgment in (supra) had also proceeded to decide a case where the agreement does not provide for grant of interest pendente lite nor does it permit such grant. On that basis, it was held that an Arbitrator who was appointed as an alternative forum for resolution of disputes will have all powers of the Court in deciding the dispute even applying the principle of Sec. 34 of the Code of Civil Procedure. The said legal position had been applied by the Hon’ ble Judge in the decision in (supra) to come to the following conclusion:-
“5. Looked at from another point, if there was a dispute as to whether under this term of the contract the Arbitrator was prohibited from awarding interest pendente lite, that was matter which fell within the jurisdiction of the Arbitrator, as the Arbitrator would have to interpret sub-clause (g) of Clause 13 of the contract and decide whether that clause prohibits him from awarding interest pendente lite. In that case it cannot be said that the Arbitrator had wandered outside the contract to deny to him jurisdiction to decide the question regarding payment of interest pendente lite.. Even if we were to accept the contention urged by the learned counsel for the appellant placing reliance on paragraphs 26 and 29 of the Associated Engineering company case (supra), we think, that the Arbitrator was well within his jurisdiction in awarding interest pendente lite.”
The conclusion regarding award of interest pendente lite is only on the basis that the court has power to award such interest in such litigation and so the Arbitrator is an alternative forum and has power to decide the same in spite of a clause in the contract prohibiting Commissioners from entertaining such claim for interest. The reasons and principles which weighed with the Hon’ ble Judge in the above case are the powers given to the Court under Sec.34 of the Code of Civil Procedure, and the opening words of clause 13(g) of the contract viz.,, “no claim for interest will be entertained by the Commissioner”. On that basis, the Hon’ ble Judge had concluded in para 4 of the judgment (extracted above) that the intention was to prohibit the Commissioner from granting interest and not the Arbitrator as the said clause has to be strictly construed.
25. So, the said judgment cannot be applied to the facts of the case, as in the present case, the contractor himself had been prohibited from claiming compensation or otherwise however arisen as a result of extension of time granted under clause 11(C) of the contract.
26. While considering similar clause in the contract in the decision in Rajasthan State Mines & Minerals Ltd. v. Eastern Engg. Enterprises, in , following various earlier judgments of the Apex Court, it is observed as follows:-
“44. From the resume of the aforesaid decisions, it can be stated that –
(a) …
(b) …
(c) …
(d) …
(e) …
(f)To find out whether the arbitrator has travelled beyond his jurisdiction,it would be necessary to consider the agreement between the parties containing the arbitration clause. The arbitrator acting beyond his jurisdiction is a different ground for the error apparent on the face of the award.
(g)In order to determine whether the arbitrator has acted in excess of his jurisdiction that has to be seen is whether the claimant could raise a particular claim before the arbitrator. If here is a specific term in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or here is a specific but in the contract to the raising of the particular clam then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction.
(h)The award made by the arbitrator disregarding the terms of the reference or the arbitration agreement or the terms of the contract would be a jurisdictional error which requires ultimately to be decided by the court. He cannot award an amount which is ruled out or prohibited by the terms of the agreement. Because of a specific bar stipulated by the parties in the agreement, that claim could not be raised. Even if it is raised and referred to arbitration because of a wider arbitration clause such claim amount cannot be awarded as the agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. This aspect is absolutely made clear in Continental Construction Co. Ltd. , by relying upon the following passage from Alopim Parshad v. Union of India, , which is to the following effect: (SCC p.88, para 5)
“There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered, The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous.”
(i) the arbitrator could not arbitrarily, irrationally, capriciously or independently of the contract. A deliberate departure or conscious disregard of the contract not only manifests the disregard of his authority or misconduct on his part but it may tantamount to mala fide action.
(j) The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and reasonable; the arbitrator is a tribunal selected by the parties to decide the disputes according to law.
45. In view of the aforesaid law and the facts stated above, it is apparent that the award passed by the arbitrator is against the stipulations and prohibitions contained in the contract between the parties. In the present case, there is no question of interpretation of clauses 17 and 18 as the language of the said clauses is absolutely clear and unambiguous. Even the contractor has admitted in his letter demanding such claims that the contract was signed with the clear understanding that the rate under the contract was firm and final and no escalation in rates except in case of diesel would be granted. Hence, by ignoring the same, the arbitrator has travelled beyond his jurisdiction. It amounts to deliberate departure from the contract. Further, the reference to the arbitrator is solely based upon the agreement between the parties and the arbitrator has stated so in his interim award that he was appointed to adjudicate the disputes between the parties arising out of the agreement. No specific issue was referred to the arbitrator which would confer jurisdiction on the arbitrator to go beyond the terms of the contract. Hence, the award passed by the arbitrator is, on the face of it, illegal and in excess of his jurisdiction which requires to be quashed and set aside.
27. On the basis of the reference made to the larger bench in Executive Engineer, Dhanakanal Minor Irrigation Division, Orissa vs. N.C. Budhiraj (dead) by LRS . The majority Judges of the Constitution Bench in Executive Engineer, Dhenkanal Minor Irrigation Division, Orissa and Others vs. N.C. Budharaj (deceased) by LRs (2001 (2) SCC 721) held that –
“An arbitrator has no competence to award interest for the pre-reference period unless any of the conditions, namely – (1) if the agreement between the parties entitles the arbitrator to award interest; (2) if there is a usage of trade having the force of law for award of interest; and (3) if there are other provisions of the substantive law enabling the award of interest, is satisfied”.
28. Considering the scope of clause 63 of Part VII of the General Conditions of Contract, the Apex Court in C.M. Ramalinga Reddy vs. Supdt. Engineer and another, , has held as follows:
” ….. Having regard to these terms of the contract between the parties, it is difficult to accept the submission that the appellant had encountered hard rock due to a tank nearby which had not been disclosed in the tender documents and that is why he was entitled to the extra rates as claimed. The High Court was right in pointing out that the contract expressly stated that no payment would be made on account of the lack of acquaintance of the contractor with the work site, he having been deemed to have satisfied himself in respect thereof before having quoted the rates. The arbitrator was bound by the contract between the parties and to decide the claims referred to him in the light thereof. His award being found to be contrary to the plain terms of the contract, it was liable to be set aside to that extent. The award in respect of Claims 3 and 7 was, therefore, rightly set aside”.
29. Following the above said judgment in another decision in Ramachandra Reddy & Co vs. State of A.P. , the Apex Court has held as follows:
” …… Then again the question of granting a higher rate for any extra quantity of work executed by the contractor would at all rise only when the contract provides for such escalated rate either expressly or by implication as in the case of S. Harcharan Singh where the competent authority had agreed for the same by correspondence. But in the case in hand, when there is no such acceptance by the competent authority, and there is no provision in the contract, permitting such escalated rate for the additional quantity of excavation made and in view of our rejecting the contention raised on the basis of clause 63, the conclusion is irresistible that the contractor will not be entitled to a higher rate for the additional excavation work and as such the High Court was fully justified in setting aside the direction of the trail Judge, remitting Claim Item 1 for reconsideration and we see no infirmity with the said direction of the High Court to be interfered with. We also find sufficient force in the submission of Ms. Amareswari, relying upon the letters of the competent authority, specifically intimating that the grant of extension of time will not in any way make the contractor eligible for any extra claim due to escalation in rates of labour and materials or due to any other reasons under any circumstances and the decision of this Court in Ramalinga Reddy supports the aforesaid contention. In the aforesaid premises, we do not find any merit in this appeal, requiring our interference with the impugned judgment of the High Court”.
30. Even in the recent judgment of the Apex Court, following the judgment in (supra), in W.B. State Warehousing Corpn. v. Sushil Kumar Kayan & others, ), the Apex Court has held as follows:
“11. … What has been held by this Court is that the award made by an arbitrator can be set aside if the arbitrator acts beyond jurisdiction, and, to find out whether the arbitrator has travelled beyond jurisdiction, it would be necessary to consider the agreement between the parties containing the arbitration clause and if the arbitrator acts beyond the arbitration clause then it would be deemed that he has acted beyond jurisdiction. In order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant can raise a particular claim before the arbitrator. If there is a specific term in the contract or the law which does not permit the parties to raise a point before the arbitrator and if there is a specific bar in the contract to the raising of the point, then the award passed by the arbitrator in respect thereof would be in excess of his jurisdiction.”
31. In the present case, clause 11 (C) prohibits the contractor from claiming compensation or otherwise howsoever arises as a result of extension of time granted. In view of the said prohibition, the 2nd respondent/Arbitrator should not have awarded any amount towards Claim No. 24 in O.P. 370/94 and Claim Nos. 13 to 16 in O.P 397/94 and he had acted in excess of his jurisdiction.
32. The learned Senior Counsel has further submitted that since the said dispute has been referred to and decided by the Arbitrator, the Court cannot interfere with the award in respect of the said Claims. The said submission cannot be sustained, in view of the judgment of the Apex Court, in (supra). Relevant portion of the judgment is extracted in para 26 of this judgment.
33. The above mentioned Rajasthan State Mines and Minerals case is referred to and the principle laid down therein has been approved in the recent judgment of the Apex Court in (supra).
34. Learned counsel appearing for the appellant has submitted that the Arbitrator has no jurisdiction in considering the different claims jointly in one head. The said submission cannot be accepted on the basis of the award passed by the Arbitrator.
35. The objection raised by the Learned Counsel is against the principles of law laid down in Smt. Santa Sila Devi & another v. Dhirendra Nath Sen & others, in which it held as follows:
“(10). Before dealing with this point it is necessary to emphasize certain basic positions. The first of them is that a Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal (See Selby v. Whitebread and Co., (1917) 1 KB 736 at p.748). Besides it is obvious that unless the reference to arbitration specifically so requires the arbitrator is not bound to deal with each claim or matter separately, but can deliver a consolidated award. The legal position is clear that unless so specifically required an award need not formally express the decision of the arbitrator on each matter of difference. (Vide Re. Brown and the Croydown Canl Co., (1839) 9 Ad and Ell 522: 112 ER 1309 and Jewell v. Christie (1867) 2 CP 296”.
36. Even in Firm Madanlal Roshanlal Mahajan v. Hukumchand Mills Ltd., Indore, , the Apex Court has held that the arbitrator could give a lumpsum award and he was not bound to give a separate award for each claim.
37. Moreover, in the present case, though the said claims have been numbered differently, each one is inter-linked, and factually, the Arbitrator has taken the same under two heads, namely (a) compensation for work done beyond original contract period; and (b) loss of profit and balance of work due to termination of contract. The Arbitrator has worked out the said claims on the basis of the materials and ultimately arrived at a sum of Rs. 41,51,847.50. It is relevant to mention here that learned counsel appearing for the appellant has not questioned the correctness of the quantum of amount fixed by the Arbitrator. Hence, we need not go into the said aspect.
38. In view of the above discussions, the awards of the arbitrator insofar as they relate to Claim No. 24 in O.P No. 370/94 and Claim Nos. 13 to 16 in O.P. No. 397/94 cannot be sustained and so the awards and the judgments of the Learned Judges to that extent are liable to be set aside and so they are set aside and these appeals are allowed in part. No costs. Consequently, CMP Nos. 1403 of 1995 and 1301 of 1996 are closed.