JUDGMENT — Mishra, J.

These appeals have arisen from the Original Petition No. 16/85 in the matter of an Award under the Arbitration Act which petition has been disposed of by a learned single judge of this Court along with another Petition No. 282/84, the former being a petition to set aside the award and the latter being a petition for filing the award into the court and passing a decree in pursuance thereof. Learned single judge has made the award a rule of the Court and dismissed the petition to set aside the award.

2. There is almost no controversy as to the facts leading to the award. The petitioner/appellant Tamil Nadu Cements Corporation entered into a contract with the Proprietary firm Oriental Stoppers, the terms thereof being fully set out in the tender that the appellant had issued and called upon the tenderers to fully acquaint themselves with the conditions of the contracts for clearing the cargo of cement imported at Madras Port etc. at specified rate per metric ton. The terms and conditions as noticed in the impugned judgment provided that the claimant was under the duty to clear the cargo as may be specified by the appellant and that the clearing agent would be entitled to be paid only at the rate as specified and would not be entitled to anything more. During the period in question, Oriental Shippers the first defendant/respondent alleged that he had to do a plenty of extra work and he should be paid extra amount of money. The petitioner/appellant had agreed to make extra payment in respect of reconstitution expenses by its letter dated (sic); according to it the expression in “reconstitution” means the collecting of the loose cement and putting it in bag so as to make it to weigh 50 Kg each bag. The first defendant/respondent agreed that in respect of the cargo handled by him he should bear the reconstitution expenses at an average of 7 per cent of the quantity and in excess of 7 per cent, it would be borne by the petitioner/appellant. According to the petitioner/appellant it was also agreed that in case percentage of constitution is less than 7 per cent of the quantity handled in any vessel the difference between 7 per cent quantity handled and the actual percentage of reconstution would be calculated and credited to the account of the petitioner/appellant for adjustment against the claims in respect of other vessels where the reconstitution was in excess of the 7 per cent of the quantity handled. The period of contract however was over by 30.6.1981 The dispute as to extra payment remained unresolved leading to demand by the first defendant/respondent and rejection thereof by the petitioner/appellant. When however the first defendant/first respondent wanted adjudication by arbitration, the appellant maintained that a dispute of this kind was not coveted by the contract, an argument which we shall in due course examine. To tell however a long story in short, in C.S No. 99/83, learned Judge ordered for arbitration appointing the second respondent as arbitrator and the arbitrator's award has been subjected to instant proceedings.

3. The Arbitrator had made an award on 31 7.84 in a sum of Rs. 2,70,326/- with interest al 12% per annum in respect of vessel M.V Cosmos Energy, the interest payable from 11.3.1981 another sum of Rs. 1,63,328/- in respect of vessel M.V Amar with interest at 12% per annum from 1.9 1981, in all a sum of Rs. 4,33,649/- with interest.

4. The five grounds of attack before the learned single judge namely, (1) the claim for extra expenditure made by the first respondent is not arbitrable (2) if held arbitrable, there is no provision in the agreement between the parties for payment of extra expenditure in future and thus the award is bad on the face of it; (3) the contract between the parties was for a specific period from 1.7.1980 till 30.6.81; it is one and indivisible and the work entrusted to the first respondent should not be taken for each ship separately, (4) the first defendant/respondent is not entitled to claim any amount outside the letter dated 9.2.1981 and (5) the award is bad as the Arbitrator had not given any reasons for his conclusions, are all answered specifically in the impugned judgment. The 6th ground that the grant of interest is illegal and untenable, is also answered in the judgment. We, however shall not advert to the last ground in our judgment any further for what has been granted by the learned single judge is rather less than what can be granted in the light of the latest pronouncements of the Supreme Court on the subject.

5. Learned counsel for the appellant has advanced two arguments, (1) that a proceeding under S. 20 of the Arbitration Act (hereinafter referred to as ‘the Act’) is different from proceedings under S. 30 and 33 of the Act. According to him, where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter 11; may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in court, meaning, it is not an act of consensus ad item and a determination thereof by the court is necessary before arbitration is ordered under S. 20 of the Act. Unlike arbitration by volition of the parties, on application in writing for the above purpose by a party a proceeding is started and notice thereof is given to all parties to the agreement, other than the applicant requiring them to show cause within the time specified in the notice why the agreement should not be filed and if there is no sufficient cause shown, to direct for the filing of the agreement and order reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator. The word or the language in sub-S. (5) thereof, reads as follows:

“Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable”.

The crux of the argument of the learned counsel for the appellant before us however is that once a proceeding under S. 20 of the Act is started, the filing of the award is not an independent act, but an act in the proceeding already pending in the court and even though grounds for selling aside the award are to be found in S. 30 of the Act, the contest thereof is not the same as in the case of an award in a proceeding of arbitration otherwise with the consent of the parties.

6. The Supreme Court in the case of Hind Builders v. Union Of India. A.I.R 1990 S.C 1340 has laid down the proposition that merely because the award is made for each item of claim, it cannot be treated as a speaking award or award with reasons stated therefor and further that items of claims enumerated in the award will not be related to various clauses of the contract and conditions of contract will not be read in the award or deemed to have been incorporated in the award. A Division Bench of this Court in the case of Tamil Nadu Cements Corporation Ltd. v. Sathiapal & Company 1992-1-L.W. 136 has considered a case of award for each item separately recorded; but no reasons assigned therefor and it is stated as follows:

“The ambit under which the court can examine the validity of award of this kind is Stated in a judgment of the Constitution Bench of the Supreme Court in Raipur Development Authority v. Chokramal Contractors (AIR 1990 SC 1426.) The Supreme Court has said:

“The scheme of the Arbitration Act is to provide a domestic forum for speedy and substantial justice, untrammelled by legal technicalities, by getting the dispute resolved by a person in whom the parties have full faith and confidence. The award given by such a person under the scheme of the Act can be assailed only on very limited ground like those mentioned in S. 30 of the Act. The result is that most of the awards at present are under rules of the court despite objections to their validity by the party against whom these awards operate. To have a provision making it obligatory for the arbitrator to give reasons for the award could be asking for the introduction of an infirmity in the award which in most cases is likely to prove fatal. Many honest awards would thus be set aside.”

Once the arbitrators are compelled to give reasons in support of the award, the inevitable effect of that would be that the validity of most of them would be challenged on the ground that the reasons or at least some of them are bad and not germane to the controversy. Sometimes, if some reasons are given in support of the award and one of the reasons is shown to be not correct or not germane the award would be challenged on the ground that it is difficult to predicate as to how far the had reason which is not germane has influenced the decision of the arbitrator. Many awards would not survive court scrutiny in such circumstances.

It is also noteworthy that in a large number of cases the arbitrator would be laymen. Although their final award may be an honest and conscientious adjudication of the controversy and dispute, they may not be able to insert reasons in the award as may satisfy the legal requirements and the scrutiny of the Court. The arbitrators having been chosen by the parties, it would, in our opinion, be not correct to put extra burden on them of also giving reasons which are strictly rational and germane in the eye of law in support of their award. Once the parties have voluntarily chosen the arbitrators, presumably because they have faith in their impartiality, the law it should not insist upon the recording of reasons by them in their award.

The previous experience, in fact, points out that it is awards incorporating reasons which have generally been quashed in court. The awards not giving reasons have survived the attack on their validity, unless the arbitrator is otherwise shown to have misconducted himself or his award suffers from some other technical defect.”

Before we refer to another judgment of the Supreme Court in Hind Builders v. Union Of India. A.I.R 1990 S.C 1340, we may take notice of the fact that the grounds of attack to the award are based solely on the award having been made for specific items of dispute enumerated therein in the manner extracted by us earlier. Otherwise, it is conceded that the award is not a speaking award. In Hind Builders, the Supreme Court considered the arguments for the Union of India that award having been granted in respect of each item of claim was really a speaking award so fair as it specified the amount granted in respect of each item of claim. The Supreme Court rejected the contention stating:

“We have considered the respective contentions of the parties and we are the opinion that the Division Bench erred in setting aside the award in so far it related to the sum of Rs. 25,96,000/- Though the annexure sets out the award of the arbitrators as against various items of claims, the mere enumeration of the heads of claim cannot be equated to an incorporation of the statement of claim by the contractors into the award. At any rate, the award does not relate the claims to the various clauses of the contract and the mere fact that the statement of claim refers to various items in the schedule to the contract does not result in the contract itself being incorporated as part of the award. No error can be found in the award unless one reads into it first the statement of claim and then the relevant clauses of the contract. But this cannot be done unless these documents are treated as incorporated in the award. This cannot be done.”

This judgment of the Supreme Court is an authority for the proposition that merely because award is made for each item of claim, it cannot be treated as a speaking award or with

reasons stated therefor and further that items of claims enumerated in the award will not be related to the various clauses of the contract and conditions of contract will not be read in the award or deemed to have been incorporated in the award. In the instant case therefore, unless the said declaration of law by the Supreme Court is ignored, it will not be permissible to read in the award contents of the various clauses of the contract and then to find out whether there has been any error of law or calculation done by the arbitrator. Learned counsel for the appellant however has placed reliance upon a judgment of the Supreme Court in Continental Constructions Co. Ltd. v. State of U.P (1986 S.C 1166) to contend that in any case the award of interest by the arbitrator and award beyond the claim of the contractor by the arbitrator have to be set aside as at least in this matter the arbitrator could be said to have misconducted himself According to an learned counsel there would always be an inherent objection to an award beyond the claim of the party and to the interest which is not stipulated in the contract. The arbitrator will be deemed to have misconducted himself in not deciding the objections in this behalf. In Continental Constructions Co. Ltd. a specific issue had been referred to the arbitrator. The arbitrator however had answered the issue by a non-speaking award, after referring to an earlier judgment the Supreme Court in Seth Thawardas Pherumal v. Union Of India (AIR 1955 S.C 468). The court observed:

“If no specific question of law is referred, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The arbitrator is a tribunal selected by the parties to decide their dispute according to law and so is bound to follow and apply the law, and if he does, he can be set right by the Court provided his error appears on the face of the award. In this case the contractor having contracted, he cannot go back to the agreement simply because it does not suit him to abide by it.”

The Supreme Court also rejected the contention that if specific issues referred to the arbitrator are answered by a non-speaking award there is no mistake of law apparent. On the face of record The Supreme Court approved the view of the District Judge saying

“This being a general question, in our opinion, the District Judge rightly examined the question and found that the appellant was not entitled to claim for extra cost in view of the terms of the contract and the arbitrator misconducted himself by not considering this objection of the State before giving the award:

This case is evidently distinguishable on facts. Since there were specific issues framed by the District Judge to the arbitrator, the terms of the contract were very much incorporated in the reference and the consequent award. Moreover, to answer a general objection it had become necessary to refer to the terms of the contract and to find that any claim for extra cost was not contemplated and also that such objections had been raised before the arbitrator there was no other conclusion possible. We are afraid if we permit any reference to the terms of the contract to find out whether the arbitrator has misconducted himself or not, we shall be committing a serious error of law. We also think that any examination of the question of interest in the award therefore is not possible in the instant case. The only inhibition which courts have to recognise upon the jurisdiction of the arbitrator to award interest is that interest could not be awarded for the period prior to the suit in the absence of an agreement for the payment of interest for any usage of trade having the force of law or any provision of the substantive law entitling the plaintiff to cover interest. It must be assumed that the arbitrator will have the same power to award interest as the Court, See - Nachiappa Chettiar v. Subramanian Chettiar Satindar Singh v. Umarao Singh (AIR 1960 S.C 307), Union of India v. Sungo Steel Furniture Pvt. Ltd. and State of Madhya Pradesh v. Salth & Skeleton Pvt. Ltd., (AIR 1972 S.C 1507 & A.I.R 1972 S.C 1507 respectively). Hind Builders cited supra however Supreme Court has added:—

“While this is the position in cases which arose prior to the coming into force of the interest Act 1978 in cases arising after the coming into force of the Acts, the position now is that though the award of pendente lite interest is still governed by the some principles, the award of interest prior to the suit is now governed by the Interest Act 1978. Under the Interest Act, I978, an arbitrator is by definition, a court and award interest in all the cases to which Interest Act applies. Thus it is not a case in which without a reference to the contents of the contract and various terms and conditions therein, it will be possible to say that award of interest has been illegal and thus the arbitrator misconducted himself in making such an award. In view of the above, we do not find any force in the contention of the learned counsel for the appellant that there are questions of any legal misconduct of the arbitrator to be examined with reference to the various terms of the contract. The award for all purposes is final. The learned single Judge has committed no error of law in rejecting the objections of the appellant. There is no merit in the appeal. The appeal is accordingly dismissed. However, on the facts and in the circumstances of the case, there will be no order to costs.

Learned counsel for the appellant has however drawn our attention to a Full Bench judgment of Kerala High Court in the case of State of Kerala v. V.P Jolly, A.I.R 1992 Kerala 187 first to lay down that non-speaking awards are liable to be set aside if the awards are contrary to the basic or rather obvious features of the contract or traverse beyond the obvious terms of such contracts and second that when it is found that the arbitrator has not made any reference to objection raised in defence statement based on agreed terms in supplemental agreement, the court should hold that the arbitrator has committed a technical or legal misconduct. We do not however see any where in the Kerala Full Bench Judgment in the case of State of Kerala v. V.P Jolly (supra) any expression other than what is settled by the Supreme Court of the courts enquiry into the validity of a non-speaking award. Before we deal with this further. We may indicate that the Courts may modify or correct an award as provided under Ss. 15 and 16 of the Act and set aside the award on grounds as mentioned in S. 30 thereof. The grounds to modify or correct an award are (1) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred: or (2) where the award is imperfect on form, or contains any obvious error which can be amended without affecting such decision; or (3) where the award contains a clerical mistake or an error arising from an accidental slip or omission. The award is remitted to the arbitrator for reconsideration upon such terms as the court thinks fit in cases: (i) where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matters referred; or (ii) where an objection to the legality of the award is apparent upon the face of it; or (iii) where the award is so indefinite as to be incapable of execution. The award is set aside on the grounds (1) that an arbitrator or umpire has misconducted himself or the proceedings; (2) that award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under S. 35 of the Act; and (3) that award has been improperly procured or is otherwise invalid. If the grounds for modifying or correcting the award or remitting the award or for setting aside are not available and it is filed in any court having jurisdiction in the matter to which the reference relates, the judgment is required to be pronounced, in terms or the award (S. 17 of the Act). The cases falling under Chapter III and applications in court for arbitration give to the court discretion either to appoint an arbitrator or not to appoint depending upon the facts of the case. This discretion however, is judicial and is exercised by the court within and in accordance with the well known bounds of law. When no sufficient cause is shown, the court is required to order filing of the agreement in court and if there is arbitration agreement, to refer the case to the arbitrator appointed by the parties whether in the agreement or otherwise and in a case where the parties cannot agree upon an arbitrator, to refer to an arbitrator appointed by it. In either of these situations, all the parties in the case of reference to the arbitrator appointed by the parties, whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court however, the proceedings before the arbitrator are held in accordance with the same set of provisions of the Arbitration Act so far as they can be made applicable. There is no provision showing any departure from the application of the rules in Ss. 15, 16 and 30 of the Act in cases where the arbitrator is appointed with the intervention of the Court. Speaking as to a ground of error of law apparent on the face of the award, with reference to what is provided under S. 16(1)(c) of the Act, the Kerala Bench has stated:

“In the case of a non-speaking award, it is too well-settled, right from the cases of Hodgkinson v. Fermte, (1857) 3 CB (NS) 189: 111 RR 614, to Champsey Bhar & Co. v. Jivraj Balloo Spinning & Weaving Co. Ltd., A.I.R 1923 P.C 66 and down to the recent cases in 1991 decided by the Supreme Court,- that the Court cannot set aside the award unless the error of law is apparent on the face of the award or in a document incorporated therein. Further, in cases where the ground of attack is that the non-speaking award is bad on its face (as distinct from an attack based on jurisdiction), it is not permissible for the Court even to look into the agreement unless the same is incorporated in the award. In our view and obviously, the attack itself, as per the appellant's contention, being based on the arbitrator's alleged violation of the terms of the contract, or his alleged action in excess of his authority, such an attack cannot obviously be proved unless one is permitted to resort to the terms of the main contract, relating to the award of extra compensation or extra rate. But in the case of a non-speaking award, one has to be confined to the award itself or to any document incorporated therein. If the contract is not incorporated in the award, it is not permissible for the Court to look outside the award and refer to the terms of the contract. Therefore, the attack cannot succeed on the ground of error of law apparent on the face of the award, under S. 16(1)(c).”

Speaking however as to the jurisdiction or scope of reference under S. 16(1)(a), the Kerala Court has said:

“Now, it is necessary to notice that there is a distinction between the terms of the main contract whose terms determine the rights and obligations of the parties on the one hand and the arbitration clause, on the other. The latter may be part of the contract itself or may indeed be covered by independent contract or by correspondence. But the distinction is real. The arbitration clause determines the scope of the jurisdiction of the arbitrator under S. 16(1)(a) while the main contract determines the rights and obligations of the parties. The arbitrator cannot determine matters not referred to him nor can he omit to decide questions falling within its scope as staled in S. 16(1)(a). It is settled law that while dealing with the question of jurisdiction of the arbitrator under S. 16(1)(a) as from the scope of the arbitration clause, it is permissible for the Court to look into the arbitration clause in order to establish whet her the jurisdiction has been exceeded or not because the nature of the dispute is something which has to be determined outside the award — whatever might be said about it in the award or by the arbitrator’ (Christopher Brown Ltd. v. Genossen Schaft Cestenelchisher, (1954) I Q.B 8; Dalmia Dairy Industries Ltd. v. National Bank of Pakistan, (1978) 2 Llyods Rep. 223, quoted in Sudarshan Trading Co. v. Govt. of Kerala, AIR 1989 SC 890 at page 902 para 31.)

If, however, the attack is that the arbitrator is acting in violation of the terms of the main contract between the parties, or has acted in excess of the powers given to him under the contract, can it be brought under S. 16(1)(a) as amounting to a question of jurisdiction? If so, there should be no objection in following the principle in Christopher Brown Ltd., (1954) I.Q.B 8, etc. to look into affidavits, pleadings and the main contract to find out if the terms of the main contract or the limits or bounds set upon his powers.”

The Kerala Full Bench has then referred to the judgment of the Supreme Court in the case of Associated Engineering Co. v. Govt. of Andhra Pradesh A.I.R 1992 S.C 232 and said “that decision has now clearly laid down that if an arbitrator while giving a non-speaking award, acts in contravention of the clear, obvious or patent terms of the main contract which deals with the rights and obligations of the parties, such action will be without jurisdiction. It is also held that for the purpose of finding out if the arbitrator has so acted, it is open to look outside the award, including affidavits, pleadings and terms of the main contract. Such conduct also amounts to legal misconduct. In our opinion, whatever doubts there might have been as to the somewhat similar observations of the Supreme Court in Sudarshan Trading Co. v. State of kerala, (A.I.R 1989 S.C 890) while dealing with the corrections of two judgments of this Court in State of Kerala v. Poulose, (1987) I Ker. L.T 781 and State of Kerala v. Raveendranuthan, (1987) I Ker L.T 604, the matter is now set at rest and the legal position is placed beyond the pale of controversy by the Supreme Court in its aforesaid judgment in Associated Engineering Co. v. Govt. of Andhra Pradesh, (A.I.R 1992 S.C 232). The contention related to various claims. For our purpose, the decision of the Supreme Court under claim II, III, VI and IX are important. In respect of these four claims, after referring to the terms of the main contract - as distinct from the arbitration clause-Thommen, J. observed (in para 21) (of SCC (Para 23 of AIR)

“These four claim are not payable under the contract. The contract does not postulate in fact prohibits payment of any escalation under claim No. III for ??? slabs of claim No. VI for extra lead of water or claim No IX for ??? of canal slopes or claim No II for escalation in labour charges otherwise than in terms of the formula prescribed by the Contract.’

and again:

“This conclusion is reached not by construction of the contract by merely looking at the contract. The umpire travelled totally out side the permissibly territory and thus exceeded his jurisdiction in making the award under these claims. This is an error going to the root of his jurisdiction. See Jlvarajbhal Ulomshi Sheth v Chintamanrao Bala Ji, (AIR 1905 SC 214)”

The Kerala Full Bench has further said.

“Thommcn, J. also held, as to whether for this purpose, affidavits pleadings and the contract can be looked also (in pjra 26) of SCC) (para 28 of AIR): ‘Evidence of man not appearing on the face of the award would be admisshle 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 Hear clear from the award, it is open to the Court to have recourse 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 and Webb, (1921) 8 LI Re. 436”.

It is again observed (see para 27) that if the arbitrater arts in contravention of the lerms of the contract be arts outside his jurisdiction. It is further held that such ??? error which goes to the root of the jurisdiction, can be established by looking into material outside the award, Extrinsic evidence is admissible because (para 29 of AIR 1992 SC 232)

‘the dispute is not something which arises under or in relation to the contract or dependent on the constitution of the contract or to be determined within the award’

(emphasis supplied).

The learned Judges of the Supreme Court said that in the case before them, the umpire decided ‘matters strikingly outside his jurisdiction He out stepped the confines of the contract. He wandered for out side the designated area the disgressed far away from the allotted task’. His error arose not by misreading or misconstruing or misunderstanding the contract, but by (para 30 of AIR 1992 SC 232) ‘acting in excess of what was agreed It was an error going to the root of his jurisdiction because he asked himself the wrong question disregarded the contract and awarded in excess of his authority. In many respect, the award flaw in the face of the provisions of the contract to the contrary. Anisminic Ltd. v. Foreign Compensation Commissioner, (1969)1 All ER 208 (UL)… (See also Mustill and Boyd's Commernal Arbitration. 2nd Edn., Halsbury's Laws of England, Vol. 11 4th Edn.

We may point out that the trend in this behalf was set in 1984 by Jaganatha Shetty, J. (as he then was) and Venkatachala, J. in M.S Kamiah v. State of Mysore, ILR (1984) 2 Kant 452 at 487, where in it was observed that:

“an arbitrator is not a conciliator. He has no right to dole out charity. He gets no Jurisdiction to award compensation when a party by express terms of a contract has no right to receive it.

The same principle was laid down in judgments of this Court in State of Kerala v. Reveendranthan, (1987) I Ker LT 604, by Thommen, J. (as he then was) and Balakrishnan, J. and in State of Kerala v. Poulose, (1987) I Ker. LT 781 by a 1. Bhat, J (as he then was) and Sankaran Nair, J.”

The nutshell thus, there is no difference in the approach adopted by the Bench of this Court in the case of Tamil Nadu Cements Corporation Ltd. v. Sathiabal & Company (1992- 1-L W. 136) and the Kerala Full Bench in the case of State of Kerala v. V.P Jolly (supra). So far as the rule applied to the error of law apparent on the face of award is concerned, a non-speaking award will not permit any reference to the conditions of the contract unless it is so found incorporated in the award. For the purpose however to test whether arbitrator has acted without jurisdiction or travelled beyond his jurisdiction, the courts shall see the arbitration clause or the agreement and if the arbitration clause or agreement will connect any of the conditions of the contract with the jurisdiction of the arbitrator or indicate limitations upon the jurisdiction of the arbitrator, it will not be wrong if such terms and conditions of the contract are examined even in the case of a non-speaking award. The Supreme Court has elaborately dealt with this aspect of the law in the case of Associated Engineering Co. v. Government of Andhra Pradesh AIR 1992 SC 232) and said (1) the arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract when his whole 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 conslrued 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. (2) An arbitrato 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 cmbodice principles derived from a specialised branch of the law of agency. He commits misconduct if by his award he decides matters excluded by the agreements. A deliberate department from contract amounts to not only manifest disregard of his authority or a misconduct on his part, but it may tantamount to a mala fide action. A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiated the award. (3) 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 umpire 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 doing so, his award would be liable to he set aside. (4) Evidence of matters not appearing on the fact of the award would be admissible to decide whether the arbitrator traveled 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 sec 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. (5) If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error. Such error going to his jurisdiction can be established by looking into material outside the award. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to e determined within the award. The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved by evidence extrinsic to the award.

7. It is one thing thus to dispute an award on the ground that it is not in accordance with the pleadings of the parties or that it is not in accordance with the terms and conditions of the contract and another to say that in delivering a non-speaking award, the arbitrator has committed an error of jurisdiction. Jurisdictional errors are noticed, in manifest disregard of the contract, and the extend and limitations that are mentioned in the arbitration clause, if it is a part of a compact or a common contract or in the arbitration agreement as it is called if it is an independent arbitration agreement.

8. The grounds aforementioned which have been dealt with by the learned single Judge in the impugned judgment are all, it appears based on the fact (1) that in the original agreement, there has been nothing for payment of any extra expenditure and (2) that there has been some agreement for extra work connected with the original contract; but it was not a part of the original contract. The arbitration clause however has been extracted in the impugned judgment which reads as follows:

“All matters relating to any dispute which may arise during the execution of the contract, shall be referred to arbitration of an arbitrator to be mutually agreed upon between the successful tenderer and the Tamil Nadu Cements Corporation Limited. In case of failure on the appointment of one arbitrator, the dispute shall be referred to the award of two arbitrators, one to be appointed by the Tamil Nadu Cements Corporation Ltd., and the other by the successful tenderers. The two arbitrators shall appoint an Umpire in advance of their consideration of any point of dispute. The decision of the arbitrators in the case of the former or an umpire in the case of the latter shall be final and conclusive and binding on both the parties. The provision of the Indian Arbitration Act 1940 (Act 10 of 1940) and the rules made thereunder and any statutory modification thereof shall be deemed to form part of the contract. The venue of such arbitration shall be at Madras City only”.

The words ‘all matters’ relating to any dispute which may arise during the execution of the contract', are wide enough to include a dispute as to the extra work and the payment therefor. This also is available that there has been some demand for extra payment in course of the execution of the contract and there has been certain agreement in this regard between the parties. On a determination of these and other facts leading to dispute arising during the execution of the contract, the parties filed their claim and counter claim before the arbitrator. The arbitrator has answered all such questions. There may be error in the construction of the contract. There may also be error in constructing the conditions on which extra work was entrusted during the execution of the contract and the parties agreed in that behalf. Such errors however are errors within jurisdiction. There is nothing to show that the arbitrator wandered outside the contract and dealt with the matters not allotted to him. Indeed the caution that the courts are required to exercise in applying the rule is that the contents of the contract should be kept away unless they are found incorporated in the award. For each and every contention as to whether in the non-speaking award a particular provision of the contract has been adequately and properly dealt with or not however, the court shall not see the contents of the agreement or allow extrinsic evidence.

8-A. Heard the learned counsel for the appellant in O.S.A N0. 140 of 1988. There is some scope in this appeal in view of the judgment of the Supreme Court in the case of Associated Engineering Co. v. Government of Andhra Pradesh (AIR 1992 SC 232), to argue on the question of grant of interest. It is well settled that for grant of interest courts exercise restraint and ensure that nothing excessive, arbitrary or usurious is granted. We may therefore find error in the judgment of the learned single Judge in holding that no interest could be paid on the amount awarded for the period prior to the date of award. We are however, not inclined to set aside the same because the interest awarded by the trial court, in our opinion is sufficient.

9. In view of the above, we find no merit in the appeals and therefore the appeals are dismissed. No costs.

RR/VCS