JUDGMENT Kamlesh Sharma, J —Disputes arose between the parties in respect of agreement No. 5, dated 12th May, 1983 which were referred to Sh. D. S. Bhatia, the sole Arbitrator (Superintending Engineer, Central Circle C. P. W. D , Chandigarh), He has given his award dated 27th January, 1990 for an amount of 5,27,299 in favour of the plaintiff-claimant and has filed it in this Court for making it the Rule of the Court which is registered as Civil Suit No 56 of 1990 In response to the notice issued to the parties, the defendant Himachal Pradesh State Electricity Board (hereinafter referred to as the Board) has filed objections which arc registered as OMP No. 395 of 1990. 2. Two preliminary objections raised by the Board are that the award having been made on invalid reference is bad because the Senior Sub-Judge, Kangra had no jurisdiction to try the application under section 20 of the Arbitration Act and make a reference in respect of the dispute which were of the value of more than Rupees two lacs. Secondly, the Arbitrator had assumed jurisdiction not vested in him because the reference made to him was unilateral, having been made without the concurrence of the Board. 3. On merits, it has been alleged that the Arbitrator has misconducted himself and the proceedings He has exceeded his jurisdiction in entertaining claims and making the award, overlooking the terms and conditions of the agreement governing the rights of the parties. The condition with respect to settling stood withdrawn and never formed part of the agreement, therefore, the claim based on it was not permissible. Another claimed based on deviation in the quantity supplied was not maintainable before the Arbitrator on the correct interpretation of deviation clause in the agreement. But the assumed jurisdiction thereof. 4. Another objection raised by the Board is that the Arbitrator had enlarged the scope of the reference and entertained additional claims which were time barred and were not part of the reference made to him, as such, he exceeded his jurisdiction and thereby misconducted himself and the proceedings Further according to the Board, there is an error apparent on the face of the record inasmuch as it is based upon inadmissible evidence an inflated claims. It has also been pointed out by the Board that the award is vitiated in law inasmuch as there was no basis for allowing the basic claims and interest on the awarded amount at the rate of 16% The award is based on irrelevant considerations clearly ignoring the terms and conditions of the agreement dated 12th May, 1983. The Arbitrator had made up his mind to make an award in favour of the plaintiff-claimant and had asked the Board on 17th November, 1988 to supply non-judicial stamps for scribing the award when arguments were yet to be concluded, The award was ultimately given much thereafter on 27th January, 1990 Undue and unexplained delay in making the award gives rise to reasonable apprehension in the mind of the Board that the award has been improperly procured by the plaintiff-claimant. 5. In its reply, the plaintiff-claimant has denied the preliminary objections. According to the plaintiff-claimant, having submitted to the jurisdiction of the Arbitrator and joining the arbitration proceedings without raising any objection to take chance to get award in its favour, the Board has lost its right to challenge the award on the ground of jurisdiction. It is specifically denied that the reference was unilateral, therefore, the award is invalid. The appointment of Sh D S. Bhatia, Arbitrator is in accordance with clause 25 of the agreement and on the first date of hearing before him, the parties had made statements that they had no objection to his conducting the arbitration. It is also alleged that the award is non-speaking one which is not assailable on the objections raised on behalf of the Board. 6. On merits, the allegations made by the Board have been denied. It is alleged that the claims arise out of the contract and are covered by the arbitration agreement between the parties. The Arbitrator has not exceeded his jurisdiction to entertain the claims of the plaintiff-claimant and has not over looked the terms and conditions of the agreement covering the rights of the parties According to the plaintiff-claimant, no extraneous evidence has been taken into consideration by the Arbitrator and the terms and conditions of the contract agreed to between the parties have not been added to or supplemented as alleged by the Board. It is denied that the condition with regard to settling had been withdrawn and that there was no deviation clause in the agreement. It is denied that the condition with regard to settling had been withdrawn and that there was no deviation clause in the agreement. The Arbitrator had not enlarged the scope of the reference by entertaining the additional claims None of the claims of the plaintiff-claimant was beyond limitation. In fact, the plea of limitation was never raised by the Board before the Arbitrator. 7. It is further denied that the Arbitrator has mis-conducted himself and the proceedings as he had almost made up his mind to make an award in favour of the plaintiff-claimant. The allegations made by the Board in this regard are baseless, unfounded and not borne from the record submitted by the plaintiff-claimant. 8 In the replication filed on behalf of the Board, the allegations made in the objection petition have been reiterated and the contrary stated in the reply has been denied It is specifically averred that the additional claims were filed on 3rd October, 19 8 which were not within the period of limitation and were not part of the reference, therefore, these were not tenable. It is also alleged that the Arbitrator was appointed in pursuance to the order of the Court of Senior Sub-Judge Kangra at Dharamshala dated 12th July, 1985 which was upheld in appeal by the District Judge, Kangra Division at Dharamshala on 14th May, 1987 which Courts had no jurisdiction to make directions for the appointment of the Arbitrator and the Director General of works, C. P, W. D. New Delhi, could not appoint the Arbitrator. The Arbitrator could only be appointed by the Chief Engineer of the Board in terms of Clause 25 of the agreement. Copies of judgment dated 12th July, 1985 of Senior Sub-Judge, Kangra at Dharamshala, and dated 14th May, 1987 of the District Judge, Kangra Division at Dharamshala, have also been filed alongwith the replication. 9. From the pleadings of the parties, the following issues were framed;— 1. Whether the Arbitrator had travelled beyond the terms of the agreement in making the award as alleged ? OPO 2. Whether the Arbitrator has misconducted himself as also the proceedings ? OPO 3. Whether there is an apparent error on the face of award and consequent thereto the award in question is liable to be set aside as alleged ? OPO 4 Whether the interest has been awarded by the Arbitrator is legal ? OPO 5. Relief. OPO 2. Whether the Arbitrator has misconducted himself as also the proceedings ? OPO 3. Whether there is an apparent error on the face of award and consequent thereto the award in question is liable to be set aside as alleged ? OPO 4 Whether the interest has been awarded by the Arbitrator is legal ? OPO 5. Relief. 10. The parties were permitted to adduce evidence by way of affidavits. The Board filed affidavit dated 29th March, 1991 of Sh. P. S, Khurana, Superintending Engineer, who has submitted that the entire record of arbitration may be read in evidence which would demonstrate that the Arbitrator has misconducted himself and the proceedings. All other objections raised to the Award have also been reiterated It is pointed out that out of the total initial claim of Rs. 3,01,226 90, an amount of Rs. 1,16,100 80 p. pertains to interest whereas the Arbitrator has no jurisdiction to grant interest In the supplementary claim the plaintiff-claimant had demanded additional sum of Rs. 3,22,790 85 by compounding the interest which the Arbitrator had no jurisdiction to entertain and award The award being non-separable, the whole of it is vitiated. Certain documents as stated in para 2 of the affidavit were also filed alongwith it. 11. The plaintiff-claimant has also filed two affidavits dated 22nd April, 1991. A number of letters have been referred to in para 3 of the affidavit which were placed before the Arbitrator to show that whenever the Board unilaterally withheld the amount due to it, objections were raised and it was made clear that interest will be charged on the withheld amount. According to the deponent, Sh. Rajesh Kumar Sood, the Board never disputed its liability to pay such interest and, is fact, in its letter No. 571-73, dated 24th January, 1986 it replied that, "interest charges would be payable to you in case the award is announced in your favour by the Arbitrator." Further, in reply to claim No 4 of the plaintiff-claimant in respect of cost of material supplied and up to date interest on the said amounts, the Boards reply was that, "since the claims are not payable, hence interest is not payable". Therefore, from the reply, it is clear that the Board never objected to its liability to pay interest in case the claims of the plaintiff-claimant succeeded. Therefore, from the reply, it is clear that the Board never objected to its liability to pay interest in case the claims of the plaintiff-claimant succeeded. While allowing the claims, the Arbitrator has allowed admissible interest and future interest which is legal and valid. It is also averred that since in its claim the plaintiff-claimant had reserved its right to, "add, supplement, alter, modify and abridge the claims before the arbitration proceedings are concluded and award announced", it was within its right to supplement its claim with the leave of the Arbitrator to which the Board never objected to except in respect of limitation which was raised orally only. 12. This Court has heard the arguments of the learned Counsel for the parties and gone through the record, Sh. K. D. Sood, learned Counsel for the Board has urged that the award is bad as it has been made on invalid reference made on the directions of the Senior Sub-Judge who had no jurisdiction to decide the application under section 20 of the Arbitration Act filed by the plaintiff-claimant- On the other hand, Sh. R. S Mittal, appearing for the plaintiff claimant, has submitted that this objection cannot be raised at this stage, more so, when on the first date of hearing on 18th February, 1988 before the Arbitrator it was stated on behalf of the Board that it had no objection with regard to the appointment of the Arbitrator and adjudication of claims by him To this, the reply of Mr. K D Sood is that an objection was taken before the Senior Sub-Judge as noted in the judgment dated 12th July, 1985 and afterwards this Court is the Court of first instance where it can be taken Moreover, the Senior Sub-Judge had not made the reference but only directions to the authority given in the arbitration agreement to make a reference. 13. Though no issue has been framed with regard to this objection of the Board, yet, this Court is allowing the parties to raise it for its consideration and decision. From the judgment dated 12th July, 1985 of the Senior Sub-Judge, it is clear that the Board did raise an objection with regard to the maintainability and jurisdiction but it was not made clear whether by jurisdiction it meant pecuniary jurisdiction. From the judgment dated 12th July, 1985 of the Senior Sub-Judge, it is clear that the Board did raise an objection with regard to the maintainability and jurisdiction but it was not made clear whether by jurisdiction it meant pecuniary jurisdiction. As such, neither any issue was framed nor any findings were given by the Senior Sub-Judge with regard to the pecuniary jurisdiction The main point decided by the Senior Sub-Judge was, which was the authority under Clause 25 of the agreement to whom directions were required to be issued by the Court to make the reference to arbitration Ultimately, the Director General, C P W. D, New Delhi, was given directions to appoint an Arbitrator under Clause 25 of the agreement Fn the appeal filed on behalf of the Board, the District Judge did frame the point whether the Court below had jurisdiction to take cognizance of the proceedings and decided it in the affirmative The application was held to be under section 20 (4) of the Arbitration Act as under Clause 25 (f) of the agreement, the parties had agreed for the appointment of the Arbitrator by the authority given therein Interpreting Clause 25 of the agreement, the District Judge held that the trial Court had rightly assumed jurisdiction and directed the Director General, C. P. W. D , New Delhi, to appoint an Arbitrator. It seems the Board never took the objection of pecuniary jurisdiction before both the Courts of Senior Sub-Judge and the District Judge but its precise objection was that on the true interpretation of Clause 25, the Courts had no jurisdiction to make directions to the Director Genera!, C. P. W. D , New Delhi, to appoint an Arbitrator as in the absence of Additional Chief Engineer or administrative head of C. P W D , it was not possible to appoint another Arbitrator, therefore, the matter was not to be referred to arbitration at all. This submission was negatived and it was held that there was no such reason in the present case as to make the arbitration clause impossible as the administrative head of C. P. W. D was available who could be directed to perform his duty as provided under Clause 25 of the agreement. This was the correct view taken by the District Judge with which the Board rest contended and submitted to that jurisdiction of arbitrator. This was the correct view taken by the District Judge with which the Board rest contended and submitted to that jurisdiction of arbitrator. Therefore, this Court rejects the objection and holds that it is not tenable at this stage. In view of the arbitration Clause 25, the present case was covered under section 20 (4) of the Arbitration Act under which the Court could direct the authority nominated in the agreement to make a reference to the Arbitrator as provided therein. Moreover, the Board submitted to the jurisdiction of the Arbitrator, raised no objection to his deciding the claims, therefore, now, it cannot turn round and challenge the award that the reference was made without jurisdiction. (Please see: N. Chellappan v. Secretary Kerala State Electricity Board and another, AIR 1975 SC 230; Mis. Tarapore and Company v. Cochin Shipyard Ltd, Cochin and another ; AIR 1984 SC 2072; MJS. Neelkantan and Bros.% Construction v. Superintending Engineer. National Highway, Salem and others, AIR 198s SC 2045 and State of Himachal Pradesh v Smt Lila Devi and others* AIR 1987 HP 46y Issues Nos. 1, 2 and 3. 14. Before it is answered whether the Arbitrator had travelled beyond the terms of the agreement, whether he has mis-conducted himself and the proceeding and whether there is an apparent error on the face of the award, it is necessary to refer to arbitration agreement, the reference order and the award. 1, 2 and 3. 14. Before it is answered whether the Arbitrator had travelled beyond the terms of the agreement, whether he has mis-conducted himself and the proceeding and whether there is an apparent error on the face of the award, it is necessary to refer to arbitration agreement, the reference order and the award. The arbitration agreement is contained in Clause 25 of the agreement which is as under j — "Clause 25.—Except where otherwise provided in the contract all questions and disputes relating to the meaning of specifications, designs, drawings and instructions hereinbefore mentioned and as to the quality of workmenship or materials used on the work or as to any other question, claim, right, matter or thing, whatsoever, in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Additional Chief Engineer, Central Public Works Department, in charge of the work at the time of dispute or if there be no Additional Chief Engineer, the administrative head of the said Central Public Works Department at the time of such appointment. It will be no objection to any such appointment that the arbitrator so appointed is a Government servant, that he had to deal with the matters or which the contract relates and that in the course of his duties as Government servant he had expressed views on all or any matters in dispute of difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Additional Chief Engineer or administrative head as aforesaid at the time of such transfer, vacation of office or inability to act, shall appoint another person to act as arbitrator in accordance with the terms of the contract, Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also term of this contract that no person other than a person appointed by such Additional Chief Engineer or administrative head of the C. P. W D as aforesaid should act as arbitrator and, if for any reason, that is not possible, the matter is not to be referred to aroitration at all. The arbitrator(s) may be from time to time with the comment of the part large extend the time for making and publishing of awards. In the event of dispute of any kind arising out of this contract, the Law Court at the district headquarter of the Engineer-in-charge or the High Court of H. P. Simla shall have the legal jurisdiction This condition will, however, not intercare with the arbitration clause of the contract agreement. Subject as aforesaid the provisions of Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made thereunder and for the time being in force shall apply to the arbitration proceeding under this clause.” 15. So far reference order is concerned, it was made by the Director General of Works, Central Public Works Department by his Memo dated 13th October, 1987 which is in the general terms. It is ;— "Whereas the Honble Shri G. R Sharma, Senior Sub-Judge, Dharamsala vide his orders dated 12-7-1985 in Arbitration Case No. 3 of 1984. M/s. Tashkent Stone Crushers v. The Chairman, H. P. State Electricity Board has directed me to nominate an Arbitrator in accordance with Clause 25 of the agreements mentioned below, to adjudice on the disputes which have cropped up between the parties to the said agreements. And therefore, I Harish Chandra, Director General of Works, C.P.W.D, New Delhi under the powers conferred upon me, according to the said Clause 25, hereby appoint Shri D S. Bhatia, S. E Chandigarh Central Circle, C.P.W D, Chandigarh, as a sole arbitrator to decide and make his award regarding the claims/disputes of both the parties to the contracts, subject to the admissibility thereof under the said Clause 25 of the agreement. No. of contract Name of Division 1. Agreement No. Nil dated 26-5-1982. Binwa Hydro Elect. Project, Division No. 1 HPSEB, Uttrala (HP) 2. Agreement No. 5 dated 15-2-1982. do 3. Tender dated 15-2-1982 Binwa Hydro Elect. Project Division No. II HPSEB, Uttrala (HP). No. of contract Name of Division 1. Agreement No. Nil dated 26-5-1982. Binwa Hydro Elect. Project, Division No. 1 HPSEB, Uttrala (HP) 2. Agreement No. 5 dated 15-2-1982. do 3. Tender dated 15-2-1982 Binwa Hydro Elect. Project Division No. II HPSEB, Uttrala (HP). Both the parties shall furnish details of the claims/counter claims to the above named Arbitrator in the manner to the prescribed by the Arbitrator." 16. In the award made by the Arbitrator, after referring to the reference order, the letter dated 18th November, 1987 by which he entered into the reference and the consent of the parties by which they had agreed for the extention of the date for making and publishing the award from time to time upto 31st January, !990, the Arbitrator has enumerated nine items of claim amounting to Rs 12,90,486.75 of the plaintiff-claimant. It is further mentioned that no claim or counter claim was preferred by the Board against the plaintiff-claimant. Thereafter, the Arbitrator has proceeded to hold that : And whereas I have gone through all the submissions and oral as well as written pleadings of both the parties and their learned Counsels in regards to all the claims under disputes including oral as well as documentary evidence produced before me. The authorities cited by the both the Counsels in support of their arguments and counter arguments have also been considered. After careful study and application of mind to all the submissions mentioned above I have arrived at my conclusions. Now, therefore, I hereby make and publish my award as follows j— Against the amount held justified under the claims preferred by the claimants, I hereby award that the respondents, H. P. State Electricity Board, shall pay to the claimants M/s. Tashkent Stone Crushers, Maranda, District Kangra (HP) a sum of Rs 5,27,299 ie. Rupees Five Lacs Twenty Seven Thousand two hundered ninety nine only which is inclusive of admissible interest. In case the above-mentioned amount is not paid by the respondents to the claimants within a period of 45 days from the making of this award, I further award in favour of the claimants and direct the respondents to pay further simple interest at the rate of 18% per annum on the amount of Rs. In case the above-mentioned amount is not paid by the respondents to the claimants within a period of 45 days from the making of this award, I further award in favour of the claimants and direct the respondents to pay further simple interest at the rate of 18% per annum on the amount of Rs. 5,27,299 i.e. Five lacs twenty seven thousand two hundered and ninety nine only from the date of award upto the date of actual payment or the date of decree whichever is earlier/ 17. There is no dispute that the above award is a non-speaking award and the scope of interference in respect thereof is extremely limited. In Mis. Sudarsan Trading Co. v. The Govt. of Kerala and another, AIR 1989 SC 890, it is settled by the Supreme Court of India that it is only in a speaking award that the Court can look into the reasoning of the award and where no reasons are given by the Arbitrator for arriving at his conclusion, it is not open to the Court to probe the mental process of the Arbitrator and speculate Relying upon its earlier judgment in Hindustan Steel Works Construction Ltd. v. C. Rajasekhar Rao, (1987)4 SCC 93, wherein the Arbitrator has merely set up the claims and given the history of the claims and then awarded certain amount, it was held that since the Arbitrator has not spoken his mind indicating why he has done so, it is not open to the Court to interfere with the award. It is further observed by the Supreme Court that an arbitration may be set aside on the ground of an error apparent on the face of it when the reasons given for decision, either in the award or in any document incorporated with it, are based upon a legal proposition which is erroneous but an award is not invalid because by a process of inference and argument it may be demonstrated that the Arbitrator has committed some mistake in arriving at his conclusion Besides the ground of error apparent on the face of record, the other ground to set aside the award, as stated by the Supreme Court, is that the Arbitrator has exceeded his jurisdiction and in this case the Court can look into the arbitration agreement. It has been reiterated that these two grounds are different. It has been reiterated that these two grounds are different. One of the misconducts is the decision by the Arbitrator on a matter which is not included in the agreement or reference but in such a case, one is to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. (Also please see: The Hindustan Construction Co. Ltd. v. The State of Jammu and Kashmir, JT 1992 (5) SC 325). It is also well settled by the Supreme Court of India that:— "...an award can neither be remitted nor set aside merely on the ground that it does not contain reasons |r> support of the conclusion or decisions reached in it except where the arbitration agreement or the deed of submission requires him to give reasons. The arbitrator or umpire is under no obligation to give reasons in support of the decision reached by him unless under the arbitration agreement or in the deed of submission he is required to give such reasons and if the Arbitrator or umpire chooses to give reasons in support of his decision it is open to the Court to set aside the award if it finds that an error of law has been committed by the arbitrator or umpire on the face of the record on going through such reasons The arbitrator or umpire shall have to give reasons also where the Court has directed in any order such as the one made under section 20 or section 21 or section 34 of the Act that reasons should be given or where the Statute which govers an arbitration requires him to do so." (Please see : Raipur Development Authority etc. etc. v. M/s Chokhamal Contractors etc, etc , AIR 1990 SC 1426). 18. Keeping in view the law laid down by the Supreme Court and in the facts and circumstances of the present case, this Court holds that the Arbitrator has not travelled beyond the terms of the arbitration agreement in making his award. The scope of the reference is circumscribed to the arbitration agreement which is very wide and envelopes any claim, right, matter or thing whatsoever arising out of or relating to contract except those which are otherwise provided for It is not the case of the Board that for any of the claims of the plaintiff-claimant, special provision has been* made in the agreement. Their objection is that the claim against Items No. 1 to 3 is not tenable as per the terms of the agreement and Items No 4 to 9 pertain to interest, future interest, compound interest, and loss of profit for with-holding the amount of first three items for which the arbitrator had no jurisdiction to adjudicate upon It is correct that the first three items are the real claims and the other six items are ancillary thereto, as such it cannot be held that by adjudicating upon these items the Arbitrator has exceeded his jurisdiction. Moreover, the award being non-speaking, it cannot be said that which of the claim has been awarded. The award merely says that an amount of Rs. 5,27,299, which is inclusive of admissible interest is awarded against the amount held justified under the claims preferred by the claimants. The award does not stated that the arbitrator has awarded particular sum for particular item, therefore, it cannot be said that the arbitrator has either travelled beyond the terms of the agreement or there is any error apparent on the face of the record, (Please see State of Andhra Pradesh and another etc. v. /?. V. Rayanim etc , AIR 1990 SC626) 9 In the result, Issues No. 1 and 3 are answered in the negative. 20. So far Issue No 2 is concerned that the Arbitrator has misconducted himself and the proceedings, it is pointed out by Sh. K D. Sood, learned Counsel for the Board that the Arbitrator has entertained the additional claims made by the plaintiff-claimant which were hit by Order 2 Rule 2 C. P. C and were also time barred. In reply to this argument, Sh R. S. Mittal, learned Counsel for the plaintiff-claimant has urged that additional claims were made by way of amendment and Order 2 Rule 2 C. P. C. does not apply, which provision applies if another reference is sought for the same cause of action. In view of the wide scope of the reference and the arbitration clause, the additional claims could be entertained. However, Mr. Mittal has stated at the bar that this Court may ignore the additional claims and the award may be examined in respect of the claims initially made on 8th December, 1987. In view of the wide scope of the reference and the arbitration clause, the additional claims could be entertained. However, Mr. Mittal has stated at the bar that this Court may ignore the additional claims and the award may be examined in respect of the claims initially made on 8th December, 1987. Admittedly only claims of Items No. 1 to 4 were initially made and claims of Items 5 and 7 were made on 15th April, 1988 and 11th May, 1988 and claims of items 8 and 9 were made on 3rd October, 1988. 21. Though in view of the statement of Mr. Mittal, at the bar, this Court need not decide that by entertaining the additional claims, the Arbitrator has mis-conducted himself and the proceedings, yet, this court may point out that Mr. Mittal is right in submitting that additional claims made during the pendency of the reference are not hit by Order 2 Rule 2, C. P. C. which applies only if additional claims are made or a request for referring more disputes to arbitration is made after the award. (Please see : Delhi Development Authority, New Delhi and another v. M/s. Alkarma, New Delhi, AIR 1985 Delhi 132 and K V. George v. The Secretary to Government Water and Power Dept Trivandrum and another, AIR 1990 SC 53. Accordingly, Issue No. 2 is answered in the negative. Issue No. 4 : 22. During the course of arguments, on behalf of the plaintiff-claimant, a chart of abstract of claims has been placed on record, contents of which have not been disputed on behalf of the Board. This Chart is marked ‘X’ by this Court. From this Chart, it is clear that the amount of items of claims referred to in the award by the Arbitrator are mentioned in Column ‘K of this Chart which include the claim amount and interest thereof up to 30th September, 1988. This Chart is marked ‘X’ by this Court. From this Chart, it is clear that the amount of items of claims referred to in the award by the Arbitrator are mentioned in Column ‘K of this Chart which include the claim amount and interest thereof up to 30th September, 1988. The original claims were submitted on 8th December, 1987 which were revised on 15th April, 1988 and 11th May, 1988 and interest accruing thereon during the period 1st December, 1987 to 30th September, 1988 was added as stated in Column J\ So far the fourth item is concerned, it is also admitted to be interest on the amount of first three items at the rate of 24% for the period 1st July, 1984 to 30th November, 1987 which is pre-reference period The total of first four items comes to Rs 3,82,000 out of which only Rs 1,91,000 pertains to claim in respect of cost of material supplied and the remaining amount is interest. This has been admitted in Para 5 of the affidavit dated 22nd April, 1991 of Rajesh Kumar Sood. By compounding the interest upto 30th September, 1988, the total amount claimed is Rs, 5,13,79135 as shown in Column -N\ The Arbitrator has awarded Rs 5,27,000 up to 27th January, 1990 when he gave his award, which amount includes admissible interest. It is correct that the award being non-speaking, this Court cannot probe into the mental process of the Arbitrator and speculate. Bat in this case, on the admitted facts, the amount of interest can be separated from the amount of claim of material supplied, as stated hereinabove, therefore, this Court is within its jurisdiction to examine whether the amount of interest which comes to Rs. 3,36,000 can be held to be admissible or in other words legal. This interest is on the amount of Rs, 1,91,000 for the period 1st July. 1984, since when the amount of items No. ! to 3 was withheld to 27th January, 1990 when the award was given, which period is pre reference and pendente lite reference-both. 23. 3,36,000 can be held to be admissible or in other words legal. This interest is on the amount of Rs, 1,91,000 for the period 1st July. 1984, since when the amount of items No. ! to 3 was withheld to 27th January, 1990 when the award was given, which period is pre reference and pendente lite reference-both. 23. By now it is well settled that the Arbitrator can award interest for all the three periods, namely, (i) the period commencing frow the date of dispute till the date the Arbitrator enters upon the reference; (ii) the period commencing from the date of Arbitrators entering upon reference till the date of making the award and (iii) the period commencing from the making of the award till the date the award is made the rule of the Court or till the date of realization, whichever is earlier. So far the first period is concerned, dealing with the arbitration agreement, which is parimateria to the arbitration agreement in the present case (Clause 25 of the agreement), the Supreme Court of India in M/s. Ashok Construction Company v. Union of India, 1971 (3) SCC 66 held that I— "The terms of the arbitration agreement did not exclude the jurisdiction of the arbitrator to entertain a claim for interest, on the amount due under the contract. The award of the arbitrator cannot be said to be invalid." 24 The principle of this judgment that since the arbitration agreement did not exclude the jurisdiction of the Arbitrator to entertain a claim for interest, he was competent to award interest on the amount due under the contract, has been approved by the latest judgment of the Supreme Court in Secretary* Irrigation Department, Government of Orissa and others v G. C Roy, AIR 1992 SC 732 and it is observed that this proposition is in accord with the principle laid down in Edwards v. Great Western Railway Company, (1851) 138 English Rep3rts 603 and Chandls v. Isbrandtsen Moller Co Inc, (1951) 1 KB 240 : (1950) 2 All ER 618 In fact, in the judgment in G. C Roys case (supra) proposition before the Supreme Court was that the arbitrator has no jurisdiction to award pendente lite interest and while answering it, the Constitution Bench has taken into consideration all the earlier judgments and laid down the following propositions :— “........On a Conspectus of afore-mentioned decisions\ the following principles emerge — (i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of section 3I, C PC, and there is no reason or principle to hold otherwise in the case of arbitrator. (ii) an arbitrator is an alternative form for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties, if the arbitrator has no power to award interest pen-dente lite9 the party claiming it would have to approach the Court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings. (iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law. This would lead to multiplicity of proceedings. (iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law. (The proviso to section 41 and section 3 of Arbitration Act illustrate this point). All the same, the agreement must be in conformity with law. Trie Arbitrator must also act and make his award in accordance with the general law of the land and the agreement (iv) over the years, the English and Indian Courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite. Thawardas AIR 1955 SC 468, has not been followed in the later decisions of this Court. It Has been explained and distinguished on the basis that in that case there was no claim for interest but only a claim for unliquidated damages. It has been said repeatedly that observations in the said judgment were not intended to lay down any such absolute or universal rule as they appear to, on first impression. Until Jenas case AIR 1988 SC 1520 almost all the Courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law. (v) Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (prereference period). For doing complete justice between the parties, such power has always been inferred." and concluded :— "Where the agreement between the parties does not prohibit grant of interest and where a party claims interest and that dispute (alongwith the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes or refer the dispute as to interest as such to the arbitrator, he shall have the power to award interest. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view." (Please also see ; Santokh Singh Arora v. Union of India and others, AIR 1992 SC 1809. 25. So far future interest is concerned, in another of its latest judgment, The Hindustan Construction Co Ltd. v. The State of Jammu and Kashmir, JT 1992 (5) SC 325, a Division Bench of the Supreme Court relying upon the five Judge Bench judgment in G. C. Roys case (supra) held that \— "...Though the said decision deals with the power of the Arbitrator to award interest pendente lite9 the principle of the decision makes it clear that the arbitrator is competent to award interest for the period commencing with the date of award to the date of decree or date of realization, whichever is earlier. This is also quite logical for, while award of interest for the period prior to a arbitrator entering upon the reference is a matter of substantive law, the grant of interest for the post-award period is a matter of procedure. Section 34 of Code of Civil Procedure provides both for awarding of interest pendente lite as well as for the post-decree period and the principle of section 34 has been held applicable to proceedings before the arbitrator, though the section as such may not apply. In this connection, the decision in Union of India v. Bango Steel Furniture (P) Ltd , (1967) I SCR 324/329, may be seen as also the decision in Gujarat Water Supply and Sewage Board v. Unique Erectors, (1989) 1 SCR 318, which upholds the said power though on a somewhat different reasoning. We, therefore, think that the award on item No. 8 should have been upheld." 26. In view of the law laid down by the Supreme Court, the next question is whether interest awarded by the Arbitrator is legal. We, therefore, think that the award on item No. 8 should have been upheld." 26. In view of the law laid down by the Supreme Court, the next question is whether interest awarded by the Arbitrator is legal. Liability in relation to interest in the present case has arisen out of a commercial transaction, therefore, interest at the rate at which moneys are lent or advanced by the Nationalised Banks in relation to commercial transactions, can be awarded on the principles laid down under section 34 C.P.C. As the Arbitrator has awarded lump sum amount which, according to him, includes the admissible interest, it cannot be ascertained that at what rate the interest has been allowed and whether it is simple or compound interest. However, for future, the Arbitrator has awarded simple interest at the rate of 18% per annum. If the interest for the period 1st July, 1984 to 27th January, 1990 is calculated at the rate of 18% simple interest on the principal amount of Rs 1,91,000, as stated hereinabove, the amount of interest will be much less than the amount of Rs 3,36,000 awarded by the Arbitrator as calculated by this Court. In fact, the Arbitrator has failed to determine the principal sum which he was required to do in order to find out what was the interest admissible thereon. From the enumerations of the items of claims, which find mention in Column K. of the Chart marked X, it is clear that th 5 Arbitrator has not applied his mind that what was the principal sum, that is, the claim for the material supplied, as the claims taken into account by him included interest upto 30th September, 1988. Moreover, the amount of interest of Rs 3,36,000 on the principal sum of Rs 1,91,000 for the period 1st July, 1984 to 27th January, 1990, which comes to about 5-1/2 years, is dis-proportionate. It is correct that unless the award is per se presposterous or absurd, the Court will not consider its reasonableness which has to be examined in the background and circumstances of each case but where it is palpable, as in the present case, the Court can interfere. 27. In the totality of circumstances, this Court holds that the amount of interest awarded by the Arbitrator is not legal. 27. In the totality of circumstances, this Court holds that the amount of interest awarded by the Arbitrator is not legal. Applying the rate which he has awarded for the future interest, the plaintiff-claimant is entitled to only 18% simple interest on the principal amount of Rs. 1,91,000 as calculated by this Court hereinabove. Therefore, Issue No. 4 is answered in the affirmative. Relief : 28. In view of the findings on Issue No 4, the objections are accepted to the extent that |h? interest awarded by the Arbitrator is not legal and admissible. The plaintiff-claimant is entitled to 18% per annum simple interest from 1st, July, 1984 to 27th January, 1990 and also for future till the date of realization of the principal amount. Accordingly the award is liable to be set aside to that extent. Costs on parties. Order Accordingly