Judgment :- MISHRA, J. 1. These appeals under clause 15 of the Letters Patent arise from a Common Judgment in proceedings filed at the instance of Manali Petro Chemicals Ltd., (MPCL for short) and UB Petro Products Limited (UBPL), under Section 14 (2) of the Arbitration Act, 1940, hereinafter referred to as the ‘Act’ for directing the award to be filed into court and at the instance of the appellant, Madras Refineries Limited (MRL), under Sections 30 and 33 of the Act for setting aside the award filed on behalf of MPCL and UBPL and to direct the Arbitrators to deliver the award into Court and fix a reasonable sum towards fees payable to the arbitrators. The trial judge has found no merit in the petitions of the appellant and ordered to make the award the rule of the court and to make accordingly a decree in terms of the award. 2. The bulk of the brief, the number of documents and the attitude of the parties to dispute and even innocuous statements of each other, have given to this case several twists and turns. We have noticed, however, that at least as respects facts, parties have hardly any scope for a dispute and when such facts upon which they entered into arbitration are culled out, the area of controversy between the parties is reduced to the conduct of the Arbitrators in making the award and the validity of the award otherwise. 3. Almost all descriptions and narrations necessary to know everything concerning the parties to the proceedings are stated in the judgment of the trial court, in case any examination in particular of any fact is necessary, we may pick up the same at the appropriate stage. 4. The facts which do not appear to be in dispute are that the appellant is an Instrumentality of the Government of India and is incorporated as a Government Company. It is engaged in the manufacture of various petroleum products and petrochemical feedstocks. Some of the products of the appellant are sold at prices determined by the Government of India and some classified as free trade products are sold at prices determined by the appellant and in accordance with the terms and conditions of any contract of sale. The respondents 1 and 2 are incorporated as public limited companies and are engaged in manufacture of certain petrochemical products. The respondents 1 and 2 are incorporated as public limited companies and are engaged in manufacture of certain petrochemical products. They entered into an agreement with the appellant on 4.5.1990 for the supply of propylene, a raw material for their various products on mutually agreed terms and conditions. Almost all terms and conditions of the agreements between the parties viz. (1) the appellant and Manali Petrochemicals Limited and (2) the appellant and UB Petroproducts Limited, are similar and almost the same, except some variations in numbering the terms and conditions. The most important of the terms and conditions are clauses which relate to the price and mode of fixation of price of propylene for sale. The appellant which is the seller agreed to supply annually to the respondents 1 and 2, who are the buyers of propylene, a maximum of a specific quantity of propylene which conformed to the specifications set out in the schedule of the agreement for the production of propylene-based che micals. Propylene supplied by the appellant in terms of the said agreement was required to be used only for the production of propylene oxide, propylene glycol and polycle. The appellant under the agreement was required to transfer propylene to the respondents by ‘pipeline to the point at its batter limit’ at a pressure and temperature as given in the Schedule to the agreement. The respondents were obliged to lift not less than the specified quantity of propylene every year in the first two years of the agreement, (we are told at the Bar there was further extension of the period; in any case there is a direction in the award for maintaining the future supply at a specified rate). For pricing the propylene, however, the parties introduced in the agreement the following clauses: “3.1. The basic price for the propylene supplied to the Buyer for the production of Propylene based chemicals, exclusive of duties and taxes, shall be Rs. 11,400/MT. The seller shall offer a market development discount of Rs. 900/MT on the above price upto 31.3.1993 and, thereafter, the price and the market development discount are subject to review every year. The basic price for the propylene supplied to the Buyer for the production of Propylene based chemicals, exclusive of duties and taxes, shall be Rs. 11,400/MT. The seller shall offer a market development discount of Rs. 900/MT on the above price upto 31.3.1993 and, thereafter, the price and the market development discount are subject to review every year. If the review indicates that both the price and the market development discount are to be continued for further periods of one year at a time up to 31.3.1995, in order to ensure the viability of the buyers project, the Seller may decide to do so. 3.2. The basic price quoted above is based on the prevailing price of Rs. 3529.08 per MT of Sellers raw material viz., essential bulk LIQUIFIED PETROLEUM GAS, as on 1st July 1988 as stipulated, by Government of India, and in the event of variation, in the price of the above raw material, the quoted price for Propylene will also be varied as per the formula: INCREASE IN RAW MATERIAL COST (1- PROCESS LOSS PERCENTAGE) and is liable to be altered either upward or downward at any time either before or after the commencement of supplies envisaged in this agreement. 3.3. Excise duty, if payable and sales tax or any other Tax, fee or levy now in force or that may be imposed during the period of this agreement payable on the propylene supplied will be paid by the Buyer, in addition to the basic price. 3.4. For account of Excise duty, if any, relating to the Propylene purchased by the Buyer and payable by the Buyer, the Buyer shall deposit with the seller such amount as the Seller may have to deposit with the Central Excise authorities as in initial deposit and shall arrange to make further deposits forthwith on receipt of information from the Seller of such further deposits with the Central Excise authorities. Excise duty arising out of transmission losses shall be borne by the Buyer.” The appellant continued the supply and the respondents found no occasion to worry and propylene was supplied in accordance with the said agreement and at the rates specified in clause 3.1 above, until the present controversy which developed on a telex message sent by the Under Secretary, Ministry of Petroleum and Chemicals, Department of Petroleum and Natural Gas, New Delhi; dated 14.10.1990 which message read as follows:— “Oilcoment/Telex To Xxx Xxx Xxx CMD, MRL, Madras Xxx Xxx Xxx No. P. 20012/27/90-PP Stop government have decided to levy a gulf surcharge at the rate of twenty five percent on the basic ceiling selling prices ex-storage point (i.e. refinery point) of all the price administered formula products for all uses on the ceiling selling prices ex-bombay and madras plants of automotive and secondary non-additive lubricating oils and on the ceiling transfer prices of blended lure base stocks from major oil companies to minor oil companies and other processors and also on the ceiling prices of non-formula products, viz., RPC, CPC and Carbon Black feedstock/phenol extract stop in the case of feedstocks transferred from the refinery unit of PRPL to the petrochemical unit of PRPL comma the amount of gulf surcharge to be levied will be the same in absolute figures as is levied on the respective feedstocks supplied to other petrochemical wells by the oil companies stop the gulf surcharge at the rate of twenty five per centage will also be levied on the selling prices as on Fourteenth October, 1990 of all the free trade products marketed by the oil companies stop the gulf surcharge on the ceiling selling prices ex-Bombay and Madras plants of automotive and secondary non-lubricating oils will be rounded off to the nearest ten rupee stop the gulf surcharge will be surrendered by the oil companies to the oil coordination committee on a weekly basis stop no gulf surcharge will be levied on the prices of LPG Packed comma bunker fuel for ocean going ships and on the prices of aviation turbine fuel for international air lines stop it has also been decided to give ceiling selling price ex-storage fresher inclusive of the gulf surcharge to each on the entire quantity of aviation turbine fuel provided its annual unliftment to the product exceeds 200.000 ki stop all the above decisions will be ex from the (sic)., of the 14th 15th October 1990 stop detailed instructions will be issued by the occ regarding the adjustments to be made by the oil companies with the good account stop petroleum new delhi the 14th October, 1990.” The appellant realised that a revision of the price of propylene was necessary and indeed the respondents also had the same realisation in October 1990. The appellant delivered a telex message to the respondents that the Ministry of Petroleum and Chemicals have conveyed the Government decision to levy a Gulf surcharge at the rate of 25 percent on the basic ceiling price at refinery point of all the products, from the midnight of 14th/15th October 1990, and, accordingly, it was raising the price provisio nally by including 25 percent surcharge levied by the Government. The respondents replied to said message as follows:— “XXXXXXXX We are aware that you are increasing the price as per the general guidelines of the Government of India as part of the 25% Gulf surcharge. We are sure that you would look into the matter in great detail and pass on only the real increase to us, as this price increase would have terrific impact on our operation in view of our stabilisation period of production and marketing. We earnestly hope that you will take necessary steps to reduce the price with retrospective effect from 15-10-1990 from which date the present price rise has come into effect.” A further revision of 10 per cent was introduced by the Government of India on 24-7-1991 and in addition to the said 25 per cent gulf surcharge, the additional levy also was introduced by the appellant in the price, leading only to the objections from the respondents in their letters dated 10-8-1991 and 2-8-1991. The respondents in their letters brought into focus clause 3.2 of the agreement above quoted and objected to the increase in the price mainly on the ground that the increase should have been based on the increase in L.P.G. (liquefied petroleum gas) price as per an agreed formula. The appellant, however, replied and maintained that the increase was only on account of the directives of the Union Government and it has no choice but to implement the same. The respondents, on protest, however noted that the clarification by the Ministry of Petroleum, Government of India, dated 2-6-1992, was that propylene was a free trade produce and the above surcharge and increase in price would apply to such products as well. The respondents, on protest, however noted that the clarification by the Ministry of Petroleum, Government of India, dated 2-6-1992, was that propylene was a free trade produce and the above surcharge and increase in price would apply to such products as well. The respondents, however, felt that this was not a clarification which would answer how the price would be fixed as it was not fixed by the Government of India and it was required to be fixed as agreed between the parties and after knowing whether the surcharge and the increase were directly attributable to the price already fixed or was required to be determined in accordance with the formula on the basis of any increase in the price of L.P.G. The respondents were thus not satisfied with the increase and issued a legal notice to the appellant on 18.12.1991 in which they categorically stated that they were invoking the arbitration clause to settle the disputes and nominated their arbitrator. Since the agreement contained, it is not in dispute, the arbitration clause, the appellant responded by appointing its arbitrator. 5. As learned counsel for the appellant has based some parts of his arguments on the basis of certain statements in the legal notice of the respondents, we note briefly how in the said letter, the respondents reiterated their case that the price revision was required to be made strictly in accordance with the formula in clause 3.2 of the agreement and on the increase, on account of the gulf surcharge in the price of L.P.G. and not in the manner the appellant had done. The notice stated inter alia as follows:— “Under instructions from our client, Manali Petro Chemicals Limited at No. 1, Club House Road, Madras-600002, we are issuing this legal notice to you. Pursuant to an agreement dated 4.5.1990 entered into between you and our client, you had been supplying propylene to our client at an agreed price of Rs. 10,500/- per M.T. As brought out clearly in this agreement, our client set up its plant at Manali adjacent to your refinery site for the production of Propylene based Chemicals only on the basis of supply of propylene by you at such quantity and price as agreed to by you. The supply of propylene by you at the agreed price is very crucial for the running of our clients plant. The supply of propylene by you at the agreed price is very crucial for the running of our clients plant. The very existence of our clients plant and its commercial viability depends upon the same. You have such a monopoly hold over our client. Precisely for the above said reasons, clauses 3.1 and 3.2 of the said agreement provide for the circumstances in which and the formula by which the price stipulated therein would be revised by you. In spite of this, you, have arbitrarily increased the price of propylene by 25% during October, 1990 and by another 10% during July, 1991, without having any regard to the contractual clauses. The protests made by our client and the representations made by our client through various letters have not evoked any positive response from you. In response to a letter dated 3.7.1991 sent by our client you had simply justified the price increase vide your letter dated 27.8.1991. The subsequent discussions held between your representatives and our clients representatives in order to settle the above said disputes regarding the price increase on two occasions, pursuant to clause 8.1 of the agreement did not bear fruit. Since the mutual negotiations have failed to amicably settle the disputes between you and our client is hereby invoking the arbitration clause, i.e., clause 8.1 in order to resolve the same. Our client is hereby nominating Mr. P.S. Subramaniam, B.E., F.I.E., Chartered Engineer, at No. 19, Ramachandra Iyer Street, T. Nagar, Madras-600017, to be an arbitrator and you are hereby called upon to nominate your arbitrator as per clause 8.1. of the agreement to enable the joint arbitrators to enter upon reference after appointing an umpire.” 6. Parties, however, never either before the appointment of arbitrators or after, prepared any statement of the case which identified any specific issue of controversy between them. When, however, they proceeded to make the statement of their respective cases before the Arbitrators, the respondents, besides their insistence how the price should be fixed, raised the fundamental question of imposition of any surcharge at all and further that there was no occasion for the appellant to add the surcharge amount to the price of propylene as it was not a duty, tax, fee or levy imposed during the period of the agreement on the propylene supplied by the appellant to the respondents. The Statement of case of the respondents contained inter alia that the price of propylene sold by the appellant to the respondent under the agreement could be revised by either party only in accordance with the mode in clauses 3.1 and 3.2 of the agreement and asserted: “The above clause is the only mode of revising the price by either party for the Propylene supplied by the respondent to the claimant. As mentioned above the claimant worked out the project cost of its plant and established the same mainly on the basis of the basic price of propylene, the essential raw material, committed for by the respondent and this ultimately culminated in the precise words of clauses 3.1 and 3.2 of the said agreement extracted above. Any change in the basic price of propylene by the respondent beyond the terms of the said agreement entered into between the claimant and respondent would not only amount to breach of the terms of the contract but also completely throw out of gear the calculations taken into account by the claimant on the cost of production of its propylene based chemical products, the selling price of the same and the viability of its venture. 8. The contractual basic price towards supply of propylene was charged by the respondent till 14th October, 1990. On 15.10.1990 the claimant received a Telex message No. 3912 (Exhibit C.2) from the respondent by which the respondent informed the claimant that the price of propylene will be increased form the midnight of 14th/15th October 1990 on account of Gulf surcharge at the rate of 25% on the basic ceiling selling price; provisional invoices would be raised including 25% surcharge being levied by the Government and that the final rate will be communicated to the claimant shortly. 9. By a letter dated 30.10.1990 (Exhibit C.3), the claimant drew the attention of the respondent to the above cited clauses 3.1 of the agreement and requested the respondent to reconsider the price revision. But there was no response from the respondent in respect of the representations made by the claimant regarding this and as such the claimant had been paying the revised price under protest in respect of the supplies of propylene made by the respondent subsequent to 14th/15th October, 1990.” 10. But there was no response from the respondent in respect of the representations made by the claimant regarding this and as such the claimant had been paying the revised price under protest in respect of the supplies of propylene made by the respondent subsequent to 14th/15th October, 1990.” 10. The respondent intimated the claimant vide its letter dated 31.7.1991 (Exhibit C.4) a further upward revision in the price of propylene.” As a result of the alleged loss suffered by them on account of the imposition of Gulf surcharge as part of the price of propylene, the respondents claimed as follows:— “(a) Claim towards refund of excess price charged by the respondent over and above the contractual price for the supply of propylene effected till the date of claim statement: Rs. 2,51,07,604/- (b) Claim towards damages incurred by the Claimants by way of cost of finance paid by the claimant on account of the price increases: Rs. 41,61,771/- (c) Claim towards damages continued to be incurred by the claimant subsequent to the date of the claim statement. (d) Claim for a direction to the respondent to supply propylene to the claimant at the contractual basic rate of Rs. 10,500 per M.T. during the contractual period and for reliefs as mentioned above in respect of the excess amounts that may be collected hereafter.” The appellants case from the date of the telex on the issue of Gulf surcharge and before the Arbitrator, was that the Central Government had levied the Gulf surcharge on all petroleum products and on their direction, the appellant only realised a levy which the Central Government had levied upon all petroleum products and, as directed, surrendered it to the Oil Co-ordination Committee. 7. The Arbitrators commenced their proceedings and it appears, certain issues were proposed by the parties and the Arbitrators finally entered upon the following issues: 1. Whether the respondent (Appellant herein) had increased the basic price of ‘propylene’? 2. Whether there was gulf Surcharge of 25% on ‘Propylene’ in October 1990 and whether there was a price increase of 10% on ‘Propylene’ by the Government during July, 1991? 3. Whether under Clause 3.2/3.3 of the agreement as the case may be, the respondent is entitled to include Gulf Surcharge of ‘Propylene’ supplied under contract, at 25% as per the first directive on 15.10.90 and increase of 10% as per the second directive on 25.7.1991? 4. 3. Whether under Clause 3.2/3.3 of the agreement as the case may be, the respondent is entitled to include Gulf Surcharge of ‘Propylene’ supplied under contract, at 25% as per the first directive on 15.10.90 and increase of 10% as per the second directive on 25.7.1991? 4. Whether the claimants are estopped from complaining about the increase in price of the ‘Propylene’ in view of Exhibit C.5? 5. Whether the respondent has charged any excess price over and above the contractual price? 6. Whether the claimant is entitled to any of the claims made and to any other relief? 8. Parties besides oral arguments, also filed their written arguments before the Arbitrators. The Arbitrators, however, after making the award ready, gave notice on 28th September 1992 that they had made, written and signed the Award and that their fees were fixed which fees the parties were required to share and either party could pay in addition to its own share, the balance fee payable by the other party and recover from the latter subsequently and on payment of fee, the party should collect a signed c opy of the Award and if any party intended to file the award in the Court, that party would take necessary steps in that regard. The Arbitrators Fees were fixed as follows:— (a) One-time down payment of Rs. 1,000/- (Rupees One thousand only) for clerical expenses to be paid to each Arbitrator to be shared equally between the two parties. (b) Each Arbitrator shall be paid a sitting fee of Rs. 2000/- (Rupees Two thousand only) per day of sitting or part thereof to be shared equally between the two parties. (c) Each Arbitrator shall be paid local conveyance charges of Rs. 100 (Rupees One hundred only) for attending each meeting to be shared equally between the two parties. (d) Each Arbitrator shall be paid a lumpsum fee of Rs. 3,00,000/- (Rupees Three lakhs only) by each party for reading the documents, making, writing signing and publishing the Award. Each Arbitrator has been paid already a part payment of Rs. 1,20,000/- (Rupees One lakh and twenty thousand only) by each party. The part payment shall be deducted from this sum of Rs. 3,00,000/- (Rupees Three lakhs only) and the balance of Rs. 1,80,000/-(Rupees One lakh and eighty thousand only) shall now be paid to each Arbitrator by each party. Each Arbitrator has been paid already a part payment of Rs. 1,20,000/- (Rupees One lakh and twenty thousand only) by each party. The part payment shall be deducted from this sum of Rs. 3,00,000/- (Rupees Three lakhs only) and the balance of Rs. 1,80,000/-(Rupees One lakh and eighty thousand only) shall now be paid to each Arbitrator by each party. (e) The Umpire shall be paid a retaining fee of Rs. 1,000/- (Rupees One thousand only) to be shared equally between the two parties. The respondents, it is alleged, paid the fees of the Arbitrators and collected a signed copy of the award and moved accordingly this Court under Section 14 of the Arbitration Act. The respondents appeared in the proceedings and objected to the Award and contested the Award on grounds inter alia that the Arbitrators had misconducted in fixing and demanding a very high rate of fee and were influenced and guided mainly by their receiving a handsome and very high amount of remuneration than conducting the proceedings impartially and fairly. They misconducted also by going beyond the reference and deciding issues which were not arising from the terms and conditions of the contract and were beyond the jurisdiction of the arbitrators as well as travelled beyond the dispute and delivered an award as regards the matters which never formed part of the reference to them. 9. Since no reasons were given for the award by the arbitrators the main arguments before the learned single Judge, were as respects the jurisdiction and misconduct of the arbitrators, and we shall notice hereinafter with, certain modifications and additions, the same, as they are reiterated before us as grounds of attack against the judgment of the learned single Judge and the award on behalf of the appellant and to support the Judgment of the learned single Judge and the award on behalf of the respondents. 10. We have already noticed that the arbitration in the case was at the instance of the respondents and in terms of the arbitration agreement, the two arbitrators, one appointed by each party, entered upon a reference without intervention of the court and made the award. 10. We have already noticed that the arbitration in the case was at the instance of the respondents and in terms of the arbitration agreement, the two arbitrators, one appointed by each party, entered upon a reference without intervention of the court and made the award. The Courts power is spelled out to modify or correct the award where, (a) 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, (b) the award is imperfect in form, or contains any obvious error which can be amended without affecting such decisions or, (c) the award contains a clerical mistake or an error arising from an accidental slip or omission, in section 15, to remit the award or the matter referred to arbitration to the arbitrators for reconsideration: (1) 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 (2) where the award is so indefinite as to be incapable of execution; or (3) where an objection to the legality of the award is apparent upon the face of it as provided under sub-clause 1 of section 16 and to set aside the award on grounds as envisaged under section 30 of the Act. The grounds for setting aside the award as found in section 30 of the Arbitration Act are (1) that an arbitrator or umpire has misconducted himself or the proceedings; (2) that an award has been made after the issue of an order by the court superseding the arbitration or after arbitration proceedings have become invalid under section 35; (3) that an award has been improperly procured or is otherwise invalid. An award cannot be set aside except on one or more of the above grounds. 10 -a. A non-speaking award is liable to be set aside only if the award is contrary to the basic or rather obvious features of the contract or traverses beyond the obvious terms of such contract or when it is found that the arbitrator has not made any reference to objection raised in defence statement based on agreed terms. 10 -a. A non-speaking award is liable to be set aside only if the award is contrary to the basic or rather obvious features of the contract or traverses beyond the obvious terms of such contract or when it is found that the arbitrator has not made any reference to objection raised in defence statement based on agreed terms. The courts hold such a technical error as a legal misconduct under section 30(a) for setting aside the award. We have already made a study on the subject in the case of Tamil Nadu Cements Corporation Ltd., Madras v. V.P. Chokhani and another (1993-2 L.W. 300) and delineated how in the case of a non-speaking award the court can look into the terms and conditions of the contract between the parties and how jurisdictional error can be noticed. We have said in the said judgment as follows:— “So far as the rule applied to the error of law apparent on the face of the 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”. We have culled out from the judgment of the Supreme Court in Associated Engineering Co. v. Government of Andhra Pradesh , A.I.R. 1992 S.C. 232, the following:— (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 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. 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. (2) 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. 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 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 be set aside. (4) 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 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. 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 materials 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 be 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 in 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. 11. It is a too well-settled principle that in the case of a non-speaking award, 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, it is not permissible for the court even to look into the agreement unless the same is incorporated in the award. An attack, however, on the jurisdiction of the arbitrator, is not within the confines either of the agreement or the proceedings before the arbitrators. If an arbitrator who commits jurisdictional error, obviously travels beyond the scope of the arbitration, thus he violates not only the terms and conditions of the contract, but also the very basis on which he is called upon to adjudicate, once he out-steps the confines of the contract and wanders far outside the designated area and digresses far away from the allotted task. His error arises not by misreading or misconstruing or misunderstanding the contract, but by acting in excess of what was agreed. His error arises not by misreading or misconstruing or misunderstanding the contract, but by acting in excess of what was agreed. Being such an act by anyone who is required to act fairly, is an error going to the root of the jurisdiction. No one can assume a jurisdiction by asking wrong questions to himself or a wrong question in disregard of the contract. We have reminded ourselves to the above before embarking upon the issues and contentions of the parties before us and even before referring to any of the findings recorded by the learned single Judge, because the learned counsel for the parties have been so vehement in their stands before us, one against the award, and the other, in support of the award. We thought unless we have a clear idea of road that we must take, we may fall in some errors somewhere and lose sight of a just conclusion of the case. We shall notice in the various arguments advanced before us by Mr. Shanthi Bhushan on behalf of the appellant and by Mr. A.K. Sen, on behalf of the respondents and clarificatory arguments only to assist the Court by Mr. Tulsi, contentions which this Court should ignore and contentions which this court must decide, but record our appreciation for the assistance they have given to the court. 12. The impugned judgment has made our task difficult, for, it has at several places gone beyond the confines in which validity of the award should be examined, but for such deflection, the Court is not to be blamed. There are certain areas of contentions which touch no-where the main controversy between the parties but have consumed much time. We do not propose to give any details of such matters as they do not appear to touch even the issue as to the conduct of the arbitrators or the validity of the award. We are intending therefore to pick up from the impugned judgment only such findings which, in our view, are relevant and on which, certain arguments have been advanced by the learned counsel for the parties before us. 13. We are intending therefore to pick up from the impugned judgment only such findings which, in our view, are relevant and on which, certain arguments have been advanced by the learned counsel for the parties before us. 13. According to the respondents, to show that there was no levy on propylene, they produced several materials, the most important being Exhibit C-23, which is a reply by the the Indian Oil Corporation to a letter by the appellant and another issued by Indian Petro Chemicals Corporation Limited, a Government of India Undertaking, confirming that they were not charging Gulf Surcharge on propylene as in the case of the appellant. The National Organic Chemical Industries Limited, another manufacturer and sell er of propylene, vide Ex. C-24, stated that there was no surcharge on propylene. This had given to them the basis for contending that the appellant was wrongly charging them to a tax which would not have been imposed upon the product the respondents purchased from the appellant. Submissions of the appellant herein are summarized by the learned single Judge as follows:— “Mr. R. Krishnamoorthi, learned senior counsel for M.R.L., raised the following submissions:— (a) The charging of the exorbitant fees amounts to misconduct and the award is liable to be set aside on this ground alone; (b) There is a clear case of collusion between the arbitrators and the contesting respondents viz., MPL and UBPL which would show that the award was improperly procured by the claimants; (c) The award passed by the arbitrators is liable to be set aside on the ground of lack of jurisdiction; (d) The arbitrators would have no jurisdiction to pass any award if MRL has acted within the terms of the contract; (e) The arbitrators have failed to note that the two levies were issued in exercise of powers of the Union Government under Article 73 of the Constitution of India. Consequently, the arbitrators would have no jurisdiction to direct refund of the same. (f) The award is liable to be set aside as it is otherwise invalid; (g) The arbitrators have ignored the terms of the contract. Gulf Surcharge and levy were as per the directions of the Government and even if these cannot be included under Clause 3.3 the same would come under the force majeure clause of the contract. (f) The award is liable to be set aside as it is otherwise invalid; (g) The arbitrators have ignored the terms of the contract. Gulf Surcharge and levy were as per the directions of the Government and even if these cannot be included under Clause 3.3 the same would come under the force majeure clause of the contract. No amount can be awarded if the act of one party is covered by the force majeure clause. (h) The arbitrators have failed to consider that the claimants were estopped from making any claim till the date of the legal notice. (i) The arbitrators have failed to answer the various issues specifically framed by them and therefore, the award has to be remitted for reconsideration under section 16 of the Act. (j) The arbitrators have awarded damages towards cost of finance in the absence of any proof of damages; (k) The arbitrators have failed to see that MRL was only playing the role of a collecting agent for the Government. No recovery can be made from MRL after the amounts collected have been remitted to the Union Government and as per the directives of the Union Government, the Surcharge was collected and transmitted to the O.C.C. Pool account. (l) The award is liable to be set aside because it suffers from complete non-application of mind and the Arbitrators have arrived at a conclusion which no reasonable person possibly can have.” 14. Learned single judge has held against the appellant on the grounds of lack of jurisdiction (submissions (c) and (d)) saying: “if it were so, nothing prevented MRL from filing before this Court an application under section 33 of the Act questioning the arbitrability of the disputes raised by the MPL and UBPL and could have asked this Court to decide the jurisdiction of the arbitrators to decide the dispute. On the other hand, MRL, without any objection or murmur, accepted the jurisdiction of the arbitrators to decide and resolve the disputes by participating in the arbitration proceedings right from the beginning till end, waited for the award to be passed by the arbitrators and is now questioning the validity of the award on various grounds after knowing that the award has gone against MRL. The conduct of MRL, in my opinion is very relevant and has to be taken into account while deciding the present controversy”. 15. The conduct of MRL, in my opinion is very relevant and has to be taken into account while deciding the present controversy”. 15. Learned single judge has also commented upon the conduct of the appellant and referred to the alleged admission on its part that arbitrators were asked to interpret the contractual clause and clause 3.3 of the contract aforequoted, thus made it imperative for the arbitrators to decide whether surcharge at 25% as per the first directive and increased at 10% as per the second directive, was, in fact, any tax, fee or levy, legally imposed and was besides the excise duty and sales-tax and or fee already imposed and commented, “MRL cannot question the jurisdiction of the arbitrators in passing the award”. On the contention whether in fact there was any statutory impost, learned single judge has found in favour of the respondents and held that there has been no tax or fee imposed which can attract clause 3.3 of the contract abovequoted and rejected the contention that even if it were not a statutory impost there was a gulf-surcharge introduced by the Government of India upon the products of MRL (appellant) which MRL, after realising from the purchasers, i.e., the respondents, delivered as per the directive aforementioned to Oil Co-ordinating Committee and the same was utilised for the purpose earmarked for the money realised by way of Gulf-surcharge by the Government of India, and expressed in his judgment that, “Even if the Government has given any directive to MRL according to the learned counsel for the contesting respondents it can only be in the capacity of the Government as the equity owner of MRL, MPL, though owned by Government of India in fuller in part, having entered into a firm contract with MPL and UBDL, is bound by the terms of the contract and cannot collect anything over and above the contractual price quoting any Government directive, which is not applicable to others. If MRL is bound by the so called directions, it can pay such inorease on its own but cannot collect the same from MPL and UBPL.” “I have carefully considered the rival submissions made by both parties on the above point and I am of the view that there is no provision in the contract for the Government to increase the price. Therefore, I hold that the arbitrators have jurisdiction to direct refund of the two levies.” 16. On submissions (f), (g) and (h), learned single judge has said as follows:— “The whole case, in my view, depends upon whether there was a levy on propylene or not and whether MRL is entitled to collect the same under Clause 3.2/3.3 of the agreement. The crucial issue being ‘levy’ and the interpretation of clause 3.2/3.3 of the agreement, the aspect of unjust enrichment has no place or meaning. The argument of Mr. R. Krishnamoorthi, learned senior counsel for MRL, regarding unjust enrichment has been advanced on the presumption that what has been awarded by the arbitrators, is directing MRL to refund some tax/duty which has been collected by MRL and remitted to the Government of India. When factually there was no levy on propylene and when the arbitrators have interpreted clause 3.2/3.3 of the agreement in whatever manner they felt right and have given a non-speaking award, in my opinion, the question of unjust enrichment or the award otherwise being invalid does not arise. Hence, I reject the above contention of the learned senior counsel for M.R.L.” and held that the Force majeure clause had no application on the facts of the case and concluded as follows:— “Thus, I am of the view that the award is the result of such interpretation of the contractual clauses and that the arbitrators have jurisdiction and legal right to interpret the contractual clauses taking into account of the facts and submissions made by both parties. Even if there were to be a mistake in such interpretation or in reaching a conclusion, which is not right, the courts would not have jurisdiction to set aside the award on such ground so long as it is not apparent on the face of award. The is finding of mine is fortified by the pronouncement of the Apex Court in the decision reported in S. Harcharan Singh v. Union of India (A.I.R. 1991 SC 945). Hence I answer points (f), (g) and (h) in favour of the claimants and against MRL.” 17. On submission (i), learned single Judge has said that it is not mandatory on the part of the arbitrators to frame issues, nor is it mandatory on their part to answer each issue separately if they have framed the issues for their convenience. Hence I answer points (f), (g) and (h) in favour of the claimants and against MRL.” 17. On submission (i), learned single Judge has said that it is not mandatory on the part of the arbitrators to frame issues, nor is it mandatory on their part to answer each issue separately if they have framed the issues for their convenience. Filing of pleadings and agreeing to a trial of the disputes on the issues raised by the arbitrators cannot be regarded as reference of specific questions. It only means, according to the learned Judge, that the parties agreed to have the disputes adjudicated on the issues raised for adjudication, and concluded, “Thus, it is seen, that the Arbitrators are not bound to deal with each claim or matter separately but give the consolidated award unless the reference requires them to do so. The legal position is clear that unless so specifically required, the award need not formally express the decision of the arbitrator, on each matter of difference”. xxx xxxx xxxx xxxx “It is incorrect to state that the arbitrators have decided only issue No. 4 whereas they have omitted to consider the vital issues preceding that issue. The arbitrators after considering all the issues placed before them, have passed the award. By no stretch of imagination can it be said that the arbitrators have left undetermined three crucial issues referred to arbitration. Since the arbitrators have not given any reasons for their award, it is not possible to assail the award on the ground that the arbitrators have not decided any of the issues raised by them. When no reasons are given the legal presumption is that all disputes, whether by way of issues or not, shall be deemed to have been disposed of by the award. The non-speaking award cannot be assailed on the ground that any matter or disputes or issues have not been decided by the arbitrators. The legal presumption has to be in support of the award having disposed of all matters, disputes and issues. As stated above, the question of the arbitrators not determining any issue raised before them does not arise especially when the arbitrators have stated in paragraph 10 of their award that having considered carefully all the evidence and records placed before them and having heard the argument with care, they have passed the award. As stated above, the question of the arbitrators not determining any issue raised before them does not arise especially when the arbitrators have stated in paragraph 10 of their award that having considered carefully all the evidence and records placed before them and having heard the argument with care, they have passed the award. Therefore, the award cannot be remitted for re-consideration under Section 16 of the Act. Accordingly this point is answered in favour of the claimants and against MRL”. 18. Learned single judge has found against the appellant also as respects the award of damages mainly on the ground that the Court is not in a position to know how much of damages have been awarded by looking at the non-speaking award. 19. Submission (k) has been answered by the learned single judge against the appellant mainly on the ground that the question whether MRL acted as the agent of the Government of India could arise only when there was in law a levy imposed by the Government of India on propylene and assumed that even if there were directives issued by the Government of India MRL (appellant) could enforce the same against the respondents only under the contract. The directives to MRL (Appellant) by the Government of India could not bind the respondents and Government of India could not enforce the same against the respondents as the Government of India was not a party to the contract and since Government of India was not a party to the contract, it was not at all necessary to implead the same in the proceedings before the arbitrators. 20. On the main contention that the arbitrators could issue no directive to the appellant to refund certain amount which, it realised under the directive of the Union of India and remitted accordingly to a specified fund, the learned single judge has said, “(i) First of all there is no levy to invite the price increase; (ii) The arbitrators had jurisdiction either to accept the claim or to reject the same; (iii) The arbitrators were not required to direct any party to file any petition in accordance with law; that they were not required to record any specific finding that there had been any breach of contract that they were as free to make a non-speaking award as they were free to make a speaking award”. and answered submission (i) also against the appellant. 21. There has been a serious argument, however, of the alleged misconduct of the arbitrators who, according to the appellant, were interested only in charging exorbitant fees. The learned single judge as said, “The conduct of the petitioner in this context is very relevant which has been mentioned in detail in the affidavit. While referring to the decision in Amaraja Constructions Co. v. State of Maharashtra (1987 Mah L.J. 757) (Bombay) Mr. Prabhakaran submits that the above judgment has no application to the facts of the case on hand. In that case, the arbitrator had made several wrongful claims like charging more than the Indian Airlines fare which had resulted in that judgment. Similarly the facts of the case Ardeshwar Irani v. The State of Madhya Pradesh ( AIR 1974 MP 199 ) Cited by the petitioner are entirely different from the facts of the present case, In that case the claimant paid the fees due by the respondent to the arbitrator and to the arbitrator and questioned the same in the Court as exorbitant. Further the arbitrator had demanded the fees from the claimant without the knowledge of the respondent. But, the facts of the present case in this court are clear and different. Jeevan Industries P. Ltd. v. Haji Bashiruddin (AIR 975 Del 215) is also not relevant since the arbitrators had made the demand on both the petitioner and the first respondent not only equally but also within the knowledge of both parties. I am of the view that the other cases cited by the petitioner are also not relevant because the fees demanded by the arbitrators, though exorbitant, cannot be deemed to be exorbitant taking into account the conduct of parties and other circumstances to be referred to in the later part of this judgment”. and concluded, “I am unable to accept the contentions of Mr. R. Krishnamoorthi that the award is liable to be set aside on the ground that the arbitrators have committed a misconduct by charging exorbitant fees, or that there is a collusion between the arbitrators and the contesting respondents and because of that the award is vitiated”. and concluded, “I am unable to accept the contentions of Mr. R. Krishnamoorthi that the award is liable to be set aside on the ground that the arbitrators have committed a misconduct by charging exorbitant fees, or that there is a collusion between the arbitrators and the contesting respondents and because of that the award is vitiated”. The learned single judge has further observed as follows: “Since the parties to the dispute have agreed to the payment of lump sum fee as demanded by the arbitrators, it is futile to contend now that the appellant is not bound to make the payment of Rs. 1,80,000/- on the ground that the arbitration fee. is exorbitant. In my view, the petitioner is bound by its tacit agreement to pay the arbitrators fees as determined and admitted by them. Equally untenable is the contention that only because payments have been made by Manali Petrochemicals Ltd. as UB Petroproducts Ltd. to the arbitrators as demanded by them towards the share of the fee payable by MRL there is a collusion between the arbitrators and the contesting respondents. As contended by the contesting respondents, the respondents have made the payment of Rs. 3,60,000/-on behalf of the petitioner to the arbitrators with a view to see that the arbitrators file the original award into court and the delay in filing the award would prejudicially affect them. There is no other material placed before me in support of the contention that there is a collusion between the arbitrators and the contesting respondents. Hence I reject the contention raised on behalf of the petitioner MRL. Therefore the petitioners are bound to reimburse the contesting respondents the amount paid by them to the arbitrators on their behalf. After recording as above, the learned single judge has made rather serious comments upon the conduct of the arbitrators in these words: “However, before parting with this case, I would like to say the following with a heaviness in heart. The MRL is a Public Sector Undertaking and the parties have chosen the forum of arbitration and have also nominated the respective arbitrators with a view to get speedy and cheap remedy instead of going through the laboured process of civil courts which is not only time consuming but also expensive. The MRL is a Public Sector Undertaking and the parties have chosen the forum of arbitration and have also nominated the respective arbitrators with a view to get speedy and cheap remedy instead of going through the laboured process of civil courts which is not only time consuming but also expensive. In the case on hand, the arbitrators had totally 10 sittings, out of which effective sittings took place only on four occasions. The parties have not chosen to let in oral evidence and even the documentary evidence is not voluminous. The arbitrators who are none else than the nominees of respective parties have charged the fee of Rs. 24.88 lakhs. The fees charged by the arbitrators in my considered opinion is unethical, unconscionable and unreasonable”. xxxx xxxx xxxx xxxx “The mere fact that the total amount claimed by the parties and the amount awarded by the arbitrators runs to several crores of rupees, does not justify the charging of extravagant, unreasonable and unconscionable fee”. xxxx xxxx xxxx xxxx “I have expressed my disinclination to interfere with the award on the ground that the arbitrators have charged an exorbitant fee, because the parties have given their consent to make such exorbitant and unreasonable payment”. xxxx xxxx xxxx xxxx “It is uncommon to find such demand from arbitrators. This shows the undue interest evinced by the arbitrators to collect their fees at any cost and knowing fully well that the party who succeeds in the arbitration proceedings would be most willing to make the payment not only on their account, but also on behalf of the other party to the dispute”. 22. Besides detailed arguments orally advanced in course of the hearing, learned counsel for the appellant has chosen to add to the bulk of the brief, written submissions. He has assisted fully the Court in determining the scope of enquiry in a proceeding under S. 33 of the Act read with S. 30 thereof. Learned counsel for the respondents has not been less vehement in his oral submissions before us and given to us full co-operation. He too has added in the shape of written arguments to the bulk of the brief before us. With efforts that the constraints of a judicial training permit, we have been able to pinpoint the contentions, with all extensions and expansions for the purposes of this appeal. He too has added in the shape of written arguments to the bulk of the brief before us. With efforts that the constraints of a judicial training permit, we have been able to pinpoint the contentions, with all extensions and expansions for the purposes of this appeal. Contentions which appear to us touching or bordering the jurisdiction of the arbitrators and contentions which fall under clause (a) and/or (c) of S. 30 of the Arbitration Act alone are relevant and can provide for setting aside the award in the instant case, subject to the Court finding any ground falling under S. 16 of the Act for remitting the award or any matter to the arbitrators and subject also to the ground as specified in S. 15 of the Act on which the Court can modify, separate the valid part and invalidate the other or amend the award without affecting adjudication or correct any clerical mistake or any error arising from an accidental slip or omission. 23. It is one thing to consider the dispute as to arbitrators remuneration or costs falling under S. 38 of the Act and another to take the demand of exorbitant remuneration as misconduct of the arbitrators and/or as a ground that the arbitrators misconducted themselves or misconducted the proceedings. Demand of exorbitant remuneration and concern for such remuneration may in a given case be such a misconduct which would vitiate the entire proceeding. Power exercised for an unauthorised purpose, it is generally immaterial whether its repository was acting in good faith or in bad faith, can provide such a ground. Someone who has acted innocently for all purposes in the sense that he had no intention to do a wrong but has acted in a manner which has caused apprehensions in the mind of the affected party cannot say that he has done so with an innocent mind. In another sense when it is possible to say that the parties to the arbitration had authorised the arbitrators to demand any remuneration they like also, the arbitrators cannot afford to be unreasonable and demand unreasonable high amount of remuneration or fee. In another sense when it is possible to say that the parties to the arbitration had authorised the arbitrators to demand any remuneration they like also, the arbitrators cannot afford to be unreasonable and demand unreasonable high amount of remuneration or fee. We do take notice of the observations of the learned single judge about the moral and ethical lapses on the part of the arbitrators but are not persuaded to go by such observations in the judgment of the learned single judge only to lament as has been done by him. We must, as every court is duty bound to do, examine whether there has been such a concern for remuneration in the mind of the arbitrators that the affected party might have apprehensions of collusion between the arbitrators and the successful party. In deciding this issue we cannot go to consider the moral lapse of the arbitrators. Courts are not at all concerned with the moral lapses while considering whether the alleged misconduct falls under clause (a) of S. 30 of the Act. 24. Mr. Shanthi Bhusan, learned counsel for the appellant has contended that the arbitrators in the instant case have shown their unusual concern for the remuneration not only by demanding a very big sum of money but by making it conditional that any party could receive the award after paying the remuneration for itself as well as for the other party and closing hastily the way which the appellant could have been under S. 38 of the Act. Mr. Sen, learned counsel for the respondents has, on the other hand, contested the allegation that arbitrators have demanded any unreasonable fee or remuneration and contended that the award of remuneration by the arbitrators to themselves, in case the court is of the opinion is on the high side, can be and in the instant case, should be separated from the award on the dispute between the parties as there are no material on the record of this case to show that any of the arbitrators acted to promote the interests of the respondents particularly when one of them is the arbitrator nominated by the appellant itself. 25. 25. Before we go to examine on the facts of this case whether the arbitrators have misconducted themselves or have misconducted the proceedings by making exorbitant demand of remuneration to themselves and by accepting the payment of remuneration by the respondents and releasing the copy of the award to them, we propose to prospect into the available authorities on the subject. 26. A Bench decision of the Madhya Pradesh Court in the case of A. Irani v. State of M.P. ( AIR 1974 M.P. 199 ) authored by J.S. Verma, J. as His Lord-ship then was, is perhaps the only study of the term ‘misconduct’ applied to the demand of remuneration by the arbitrator in the context of the provision in Cl. (a) of S. 30 of the Act. The arbitrator in the said case, who was a government servant, demanded exorbitant fees (four times of what the Court ultimately fixed) with the parties to the suit. One of the parties protested and referred the dispute about the fees to the Court by application under S. 38 of the Act. The other party (apparently it had reason to believe that the award was to be favourable to it, offered to pay the entire amount of fees and the arbitrator accepted the same without awaiting for the decision of the Court on S. 38 application. The arbitrator gave the award in favour pf the party paying the fees and also gave a direction that the entire costs of arbitration (which sum included his fees from both the parties) was to be paid to the party in whose favour the award wa s made. The Court held on the above facts that the case justified setting aside of the award on the ground of misconduct of the arbitrator under Cl. (a) of S. 30, or at least on the ground that the award was ‘otherwise invalid’ under Clause (c) thereof. On the subject why the Court should think that an arbitrator has not performed his duty fairly when he has demanded exorbitant remuneration and thus has committed misconduct inviting Cl. (a) of S. 30, or at least on the ground that the award was ‘otherwise invalid’ under Clause (c) thereof. On the subject why the Court should think that an arbitrator has not performed his duty fairly when he has demanded exorbitant remuneration and thus has committed misconduct inviting Cl. (a) of Section 30 of the Act, the Madhya Pradesh Court judgment has (cited) a quotation of a passage in Russell on Law of Arbitration, 17th Edition, at page 132 under the head ‘The Duty to act fairly’, a passage from Halsburys Laws of England, Third Edition, Volume 2, para 126 at page 57; again in Russell on Arbitration, 17th edition at page 307, and how clause (c) is attracted is stated in detail with quotations from the judgments of the Bombay and Calcutta courts. Quotations from Russell on the Law of Arbitration at page 132, 307, 331 and 332 are as follows:— “The first principle is that the arbiter must act fairly to both parties, and in the proceedings throughout the reference he must not favour one party more than another, or do anything for one party which he does not do or offer to do for the other. He must observe in this the ordinary well-understood rules for the administration of justice.” “The term ‘misconduct’ here would appear to be used in its widest sense perhaps even including mistake (in law or fact) admitted by the arbitrator.” “Misconduct justifying intervention by the court may take place at any stage between appointment and entering upon the reference, during the reference, or in the making of the award.” “The more difficult question, however is whether the extent of that irregularity is such as to justify interference by the Court either by way of setting aside the award or remitting the award. The determination of that issue depends upon whether the Court is satisfied that there may have been-not must have been-or that this irregularity may have caused-a substantial miscarriage of justice that would be sufficient to justify the setting aside or remitting of the award., unless those resisting the setting aside or remission could show that no other award could properly have been made than that which was in fact made, notwithstanding the irregularity.” Quotation from Halsburys Laws of England is as follows:— “What constitutes ‘misconduct’ - It is difficult to give an exhaustive definition of what amounts to misconduct on the part of an arbitrator or umpire. The expression is of wide import, including on the one hand bribery and corruption, and on the other, a mere mistake as to the scope of the authority conferred by the agreement of reference or a mere error of law appearing on the face of the award.” The Madhya Pradesh Court has noticed that the expression ‘misconduct’ occurring in clause (a) of Section 30 of the Arbitration Act has not been defined. This expression in relation to arbitration proceedings is incapable of any meaning and it has always been understood to have the same meaning which it has acquired under the English Law. The history of legislation shows that the words ‘or the proceedings occurring in clause (a) of Section 30 were not present initially in the corresponding earlier law and in the English law also they were introduced only by amendment in 1934. The reason for the amendment was to include within the ambit of misconduct even those cases where no turpitude on the part of the arbitrator was alleged. Such cases of technical misconduct have come to be known as those, which even though do not attribute any turpitude against the arbitrator yet clearly fall within the ambit of this expression, and the Court expressed itself thus, “Thus, such is the wide meaning that the expression ‘misconduct’ has assumed in legal parlance and that is how the expression has to be understood in relation to arbitration proceedings. It is not only the cases where moral turpitude of the arbitrator has been made out which alone fall within this category but even the cases where no moral turpitude is definitely proved against the arbitrator, yet the facts disclose a technical or legal misconduct in relation to the arbitrators conduct or the proceedings that a ground of mis-conduct for setting aside the award under clause (a) of Section 30 of the Act would be made out.” On clause (c) the Court has said, “The preamble to the Arbitration Act, 1940 states that it is an Act to consolidate and amend the law relating to arbitration. Such a consolidating Act must be treated as exhaustive to the extent provision is made therein. The opening words of S. 30 also indicate that an award can be set aside only on one or more of the grounds contained therein. Admittedly one such ground as contained in the latter part of clause (c) of Section 30 is, if the award is ‘otherwise invalid’. The difficulty really arises in determining as to what are the cases falling within this ground relating to invalidity of the award. No indication of the cases where the award is ‘otherwise invalid’ is given in the Act so that to this extent the Arbitration Act, 1940 cannot be treated as exhaustive. It has, therefore, to be held that where the facts of a case disclose the defect of a kind which would render the award invalid in the opinion of the court, the award must be set aside on this ground. It necessarily follows that the defect disclosed must have the effect of rendering the award invalid in the opinion of the court, being so related to the award as the cause and effect, in order to invoke this clause. But subject to this restriction, it is for the court to decide whether the defect is of such a kind as to render the award invalid. It is now settled that the expression ‘otherwise invalid’ is not to be construed ‘ ejusdem generis ’. ..” After quoting copiously from the judgment of the Calcutta High Court in Saha and Co. v. Ishar Singh ( AIR 1956 Cal. It is now settled that the expression ‘otherwise invalid’ is not to be construed ‘ ejusdem generis ’. ..” After quoting copiously from the judgment of the Calcutta High Court in Saha and Co. v. Ishar Singh ( AIR 1956 Cal. 321 (FB), the Madhya Pradesh Court has stated thus:— “It follows from the above that any cause which indicates that the award was not fairly and impartially made or that the arbitrator did not function in a manner befitting his role would render the award invalid on the ground of its being ‘otherwise invalid’ within the meaning of that expression in clause (c) of S. 30 of the Arbitration Act even where a case of invalidity on the ground of misconduct is not clearly made out.” On the facts before it, the Madhya Pradesh Court noted, “The admitted facts of the case do show that the demand of fees by the arbitrator was exorbitant. In fact, this was the common case of the parties in the trial court itself, in as much as even though plaintiffs had paid the whole amount, yet they had themselves thereafter made such an allegation and requested the court to determine a reasonable amount payable to the arbitrator. The conduct of the plaintiffs in not making any such protest prior to obtaining the award from the arbitrator but in making that allegation soon thereafter while filing the award in court does indicate that the plaintiffs, for some reason were keen to obtain the award, even though they treated the fees charged by the arbitrator as exorbitant. It is also clear that the plaintiffs did not wish to indicate to the arbitrator their intention to dispute the quantum of fees before they had obtained the award. This conduct alone is sufficient to indicate that the plaintiffs had reason to believe that the award was to be favourable to t hem.” “Such a conclusion is reinforced by some other facts which are also patent from the record. In the award commencing at p. 41 in paper book of Mis-Appeal No. 117 of 1970 there is a clear direction requiring the defendant to pay the entire costs of the arbitration to the plaintiffs which includes the total fees of the arbitrator. In the award commencing at p. 41 in paper book of Mis-Appeal No. 117 of 1970 there is a clear direction requiring the defendant to pay the entire costs of the arbitration to the plaintiffs which includes the total fees of the arbitrator. Such a direction in the award itself is difficult to understand unless the plaintiffs had already incurred that expense and paid the entire amount of fees of the arbitrator. In t his situation the criticism of Shri Mehta learned Additional Government Advocate that the plaintiffs had already paid the entire fees to the arbitrator before the award had been made and signed or at least a promise to that effect had been made by the plaintiffs to the arbitrator behind the back of defendant, has considerable force. In fact, there appears to be no other reason why such a direction should have been made in the award itself. It has already been indicated earlier that no document from the record has been pointed out containing the plaintiffs offer to pay the entire fees for obtaining the award, mention of which offer was made by the arbitrator in his memo dt. the 13th November 1969 addressed to the officer in charge of the case, on behalf of the State Government. Such a mention of the plaintiffs offer in the arbitrators memo does indicate some talk between the arbitrator and the plaintiffs in this connection, which was not in writing and was behind the back of the defendant. It is further significant that the defendant having disputed the reasonableness of the arbitrators demand and having filed an application in the court requiring the courts decision on the point under Section 30 of the Arbitration Act, an intimation of the same having been given to the arbitrator on 20.11.1969, the arbitrator acted with indecent haste in fixing the fees and included it in the costs shown in the award and then in accepting the entire fees from the plaintiffs without awaiting the courts decision on that application. No doubt the conduct of the arbitrator subsequent to 27.10.1969, the date of the award would ordinarily not be relevant on this question, but in the facts of this case we cannot treat this subsequent conduct as wholly unconnected with the making of the award so as to be irrelevant for our purpose. No doubt the conduct of the arbitrator subsequent to 27.10.1969, the date of the award would ordinarily not be relevant on this question, but in the facts of this case we cannot treat this subsequent conduct as wholly unconnected with the making of the award so as to be irrelevant for our purpose. This subsequent conduct is in fact relevant in explaining the arbitrators conduct upto the time of making the award.” The Madhya Pradesh Court, however, took notice of the fact that the arbitrator was a Government servant and could accept only such fees as were fixed by the Court. (Vide Section 15(5)(iv) of the M.P. Government Servants (Conduct) Rules, 1959). The Court on this held, “By virtue of this provision, the arbitrator was not entitled to demand any fee till the same was fixed by the Court and after it is fixed he could demand only the amount so fixed.” For this reason, relying on Section 14(2) of the Arbitration Act, 1940, alone the arbitrator could not fix the amount himself and demand the same ignoring section 15(5)(iv) of the M.P. Government Servants (Conduct) (Rules, 1959). Admittedly the amount demanded was also exorbitant as is evident from the fact that this was common ground in the court below and the court has ultimately fixed only about one-fourth of the same as proper fees.” The Court also took notice of the effect of the demand made by the arbitrator before making the award as one intended to give an opportunity to a party so minded to gain the favour of the arbitrator by offering to pay the entire amount even though the same was considered exorbitant by both the parties, and said, “The possibility of plaintiffs gaining favour of the arbitrator in this manner cannot, therefore, be ruled out.” The Madhya Pradesh Court then noted judgments of the English Courts and passages from Halsburys Laws of England and also, in particular, a judgment of the Calcutta Court in the case of Akshoy Kumar v. S.C. Dass and Co. (AIR 1935 Cal. (AIR 1935 Cal. 359) to summarize the law in these words, “In the passage at page 332 of Russell, on Arbitration, already quoted above, the test indicated is whether the irregularity may have caused and not necessarily must have caused a substantial miscarriage of justice that would be sufficient to justify the setting aside of the award unless it could be shown that no other award could properly have been made notwithstanding the irregularity. In order to see whether the award can be allowed to stand notwithstanding the irregularity, the contents of the award have to be seen and unless it is possible to conclude that the award actually made is justified on the facts, the award will have to be set aside. Unfortunately in the present case there are no reasons given by the arbitrator for his decision nor are there any other particulars to indicate the process by which the arbitrator reached his conclusion. The award contains only the conclusion, that is, the amount which was to be paid by the defendant to the plaintiffs. There is nothing even to indicate how that amount was calculated. It is, therefore, not possible for us in the present case to examine whether the award would be justified on the facts of this case notwithstanding the irregularity already dealt with at length by us. The possibility of sustaining the award notwithstanding the above position by applying this test is therefore, not available to us in the present case. It is no doubt true, as settled by the Supreme Court relying on an earlier Privy Council decision, that an arbitrator need not give any reasons for the award and where no reasons are given in the award the same cannot be set aside by the Court on the ground of an error on the face of the award itself. It has been held that an error on the face of the award cannot be discovered by attributing some reason to the arbitrator by a process of inference an argument where, in fact, no reasons have been given by the arbitrator himself (See Hunso Steel Furniture v. Union of India, A.I.R. 1967 S.C. 378). Those decisions, however are no authority for the proposition that the absence of reasons in an award cannot be taken notice of even for the purpose of applying the test indicated above in a case like the present. Those decisions, however are no authority for the proposition that the absence of reasons in an award cannot be taken notice of even for the purpose of applying the test indicated above in a case like the present. In all those cases, the question for determination was whether an award disclosed an error on its face on account of its containing no reasons. It was in that context that the Privy Council and the Supreme Court took that view. That, however, does not indicate that the absence of reasons is of no consequence even in a case like the present where the award is challenged on the ground of misconduct or being ‘otherwise invalid’. In our opinion, the absence of reasons in the award is relevant in a case like the present, at least as indicating that there is nothing to show that no other award could properly have been made than that which was in fact made notwithstanding such an irregularity.” According to Madhya Pradesh Court it will be a misconduct under S. 30(a) of the Act if arbitrator is found to have placed his interests of receiving a fat fee before the interests of a fair determination of the dispute or to have received a pecuniary inducement by one of the parties which might have had some effect on determination of the matters admitted to his adjudication. It will be necessary to see whether this might have caused a substantial miscarriage of justice. In order to see whether the award can be allowed to stand notwithstanding the irregularity, the contents of the award have to be seen. Unless it is possible to conclude that the award actually made is justified on the facts and the laws, the award will have to be set aside. The Madhya Pradesh Court has however, indicated that in the case of a non-speaking award, it will not be possible to adjudicate whether the award can stand notwithstanding the irregularity. In such a case, the Court can take notice of the conduct of the arbitrators and if the Court is satisfied that arbitrators by demanding exorbitant fees have put themselves into a position where it might be said against them that they have received a pecuniary inducement which might have had some effect on their determination of the matters submitted to their adjudication, may set aside the award. 27. 27. All that can be said for or against as to whether arbitrators conduct in demanding exorbitant fee was a misconduct vitiating the whole proceeding of award or otherwise would render the award invalid is found stated in the Madhya Pradesh Courts judgment (supra). If the amount of fees fixed by the arbitrator was totally unconscionable, its being atrociously exorbitant alone can give the impression that arbitrators had put their interests in receiving fee above all the considerations of fair adjudication. In less extreme cases the court may still find that the fee demanded by the arbitrators is exorbitant but the demand has not affected the adjudication and in any case, it is separable from the adjudication; otherwise, the Court may set aside that part of the award which related to fee-cost only. In other words, the nature of the remedy that the court may grant will depend upon the degree of misconduct, if the facts are so extreme as to show that the arbitrators had acted dishonestly, the Court may conclude that they cannot be trusted to have decided any part of the dispute in a proper manner and hence will set aside the entire award. 28. Learned counsel for the appellant has added to the above, a Bench decision of the Delhi High Court in the case of Jeevan Industries v. Haji Bhasheeruddin ( AIR 1975 Del. 215 ) in which the Delhi Court has said. “Such a charge of misconduct would also be open if the amount demanded is exorbitant having no relation to the work done or anticipated, nor to the standard of fees normally paid to arbitrators for such work.” He has also drawn out attention to the judgment of the Bombay High Court in Amiraj Constructions v. State of Maharashtra (1987 Mah. L.J. 753) which has held in the same way that if in any arbitration the arbitrators demand unreasonable unconscionable fee and seek to ensure their payment by showing expenses which are partly not genuine, such conduct is liable to be considered as misconduct within the meaning of the Arbitration Act. The reason is that such conduct amounts to unfair exploitation of the situation. 29. The reason is that such conduct amounts to unfair exploitation of the situation. 29. Learned counsel for the respondents, viz., UBPL and MPCL has substantially accepted the above proposition but has drawn our attention to relevant passages in the case of Prebble and Robinson (1892) 2 Q.B. 602) and Appleton v. Norwich Union Fire Insurance a judgment of Kings Bench Division (Lloyds List Law Reports, 1922, 345) to emphasise that where an excessive and extravagant charge by an arbitrator made by him as a part of the award might not amount to such misconduct as would justify setting aside the award. It is an open question and the Court must guard itself fully before taking such a charge against the arbitrators as a misconduct for setting aside the award. The illustration in Appletons case and deductions accordingly: “Suppose a man was asked to adjudicate concerning an estate of the value of 20,000/- pounds as to who was entitled to it, and he adjudicated and said his costs for adjudicating were about 50,000/-pounds. I think one would have little hesitation in saying that this is preposterous, and that the people, who employed him and submitted to his adjudication would say that they have (not?) contemplated that he would make a charge like this swallowing up the whole matter in dispute and asking for a fee over and above, that it is dishonest and could not be permitted and that the award must be set aside.”.. an approval of the view of Lord Coleridge in Prebble and Robinsons case (1892) 2 Q.B. 602) (supra) “Lord Coleridge seems to have comtemplated, I do not say a case as extreme as that, but something very different from this present case because he refers to an excessive and extravagant charge by an arbitrator” and the repetition once again in the separate judgment of one of the Lords constituting the Bench, “In considering the charges in a matter of this kind regard must be had to the magnitude of the dispute and the qualifications of the persons whose remuneration is in question”, relied on by learned counsel for the respondents (UBPL AND MPCL) are relevant no doubt and as a court we cannot but consider all relevant facts before holding that the arbitrators have demanded such exorbitant fee that it has rendered their conduct suspect and affected the award. The magnitude of the dispute the qualifications of the persons whose remuneration is in question, the conduct of the proceedings in submitting to the jurisdiction and accepting the arbitrators authority to fix their own fees and cost of the proceeding are matters, however, which must be considered before any inference is drawn unless the Court sees the preponderance of the arbitrators interest over the adjudication. In other words, the Court will take such allegation of demand of exorbitant fee by the arbitrators as misconduct or vitiating the award otherwise only on its reaching to the conclusion that arbitrators have not acted conscientiously and with a proper regard to the interests of the parties. In other words, the question that will come before the Court when such allegations are made will be whether the arbitrators have made the interests of the parties subordinate to their own interests of a fat fee. 30. In British Metal Corporation Ltd. v. Ludlow Bros (1913) Ltd. (Lloyds List Law Reports, Vol. 61, 1938, page 351) (KB) the same view is expressed in these words, “It may be that there is a suspicion in the mind of the Court that the charge seems a very full charge I merely say a suspicion by comparison with the other figures but that is very different from saying that it is necessarily an extravagant or an exorbitant charge. One would want something more to set the award aside than a mere suggestion of that sort.” Justice Goddard speaking for the Court in the said judgment has said: “I cannot look into the arbitrators minds, but there is nothing here to suggest to me that the arbitrators have acted improperly and if it is only suspicion in the minds of the court, the court may not act upon such an allegation but if there is something of substance in the conduct of the arbitrators or there is something to shake the conscience of the court, the court will be doing justice by interfering with the award.” Learned judge speaking for the court said, “There are great many difficulties which arise before one can set aside the award upon this ground. In the first place, as I understand it, if I did set aside the award on the ground of the extravagant charges, I should only set aside that part of the award which dealt with the charges. . In the first place, as I understand it, if I did set aside the award on the ground of the extravagant charges, I should only set aside that part of the award which dealt with the charges. . I cannot look into the arbitrators minds, but there is nothing here to suggest to me that the arbitrators have acted improperly, and there is ground for saying it except that the arbitrators here have charged a very great deal more than in the previous case. Mr. Willes suggested that the difference is so great that I ought to say that the award has been made vindictively and set aside the whole award. I quite refuse to do that, because I think the arbitrators came to the only decision on the point of principle at which they could have come. Therefore, the only question is whether I should set aside that part of the award which deals, with the costs on the ground that the amount is exorbitant or extravagant. I think there must be a jurisdiction which one would exercise except upon very clear evidence.” 31. Mr. A.K. Sen, learned counsel for the respondent-UBPL and MPCL has read quite a few passages which have dealt with the question of remuneration for arbitrators in some of the text books. In the Law and Practice of Commercial Arbitration in England (Second Edition by Sir Michael J. Mustill and Stewart C. Boyd) it is pointed out “Taxation by the arbitrator or umpire of his own fees is equally delicate, since he is acting as a judge in his own cause. He must somehow “arrive at a fee which not only is, but appears to be, fair to both himself and the parties. He must somehow “arrive at a fee which not only is, but appears to be, fair to both himself and the parties. The embarrassments and potential conflicts of interest which may arise where the fees are taxed in the award have led the courts to suggest that it may be convenient for the tribunal to abstain from taking the costs itself, leaving them to be taxed in the High Court under section 18(2) or, in appropriate cases, under section 19(1).” In this book almost the same thing which we have expressed earlier is stated in these words, “If the situation is one in which a review under section 19 is not feasible, the complainant must find a way to nullify the taxation in the award, so that he can either resist a claim by the arbitrator or (if he has paid in advance) bring an action to recover the excess. For this purpose, he must attack the award itself, alleging that the charges are so excessive that the arbitrator commits misconduct by insisting upon them; and he must then induce the Court either to set the award aside, wholly or in p art, or to remit the award to the arbitrator for reconsideration of the award relating to costs. There is no doubt that the Court has jurisdiction to make an order on these lines, since the discretion under section 18(2) is one which must be judicially exercised in good faith. Thus, if the Court is satisfied from the size of the sum awarded, or from other evidence, that the arbitrator has either put his own interests before those of the parties, or has misconceived the basis on which he should carry out the taxation, there is misconduct which justifies the remission or setting aside of the award. Consideration of this issue is not the same as re-taxation under section 19. The court does not substitute its own view for that of the arbitrator. In order to make good an allegation of misconduct, very clear evidence is required, and it is not enough to show that the amount demanded is more than the court would have considered appropriate if it has been approaching the matter afresh.” “The nature of the remedy granted will depend upon the degree of the misconduct Which has occurred. In order to make good an allegation of misconduct, very clear evidence is required, and it is not enough to show that the amount demanded is more than the court would have considered appropriate if it has been approaching the matter afresh.” “The nature of the remedy granted will depend upon the degree of the misconduct Which has occurred. If the facts are so extreme as to show that the arbitrator has acted dishonestly, the Court may conclude that he cannot be trusted to have decided any part of the dispute in a proper manner, and hence will set aside the entire award. In less extreme cases, the Court will set aside the part of the award which related to costs, leaving the remainder to stand. Finally, where the Court simply forms the view t hat the arbitrator may have mistaken the principles which he should apply, the award may be remitted for reconsideration of the taxation. This gives the arbitrator the choice between retaining the figure, as originally taxed, substituting a new figure, of deleting the taxation altogether, and thus opening the way for a taxation in the High Court under Section 18(2). Alternatively the award may be set aside, so far as it comprises the offending taxation, so that the costs must be taxed in the High Court if the challenge to them is maintained.” “If a party considers that the fee charged by the arbitrator is excessive, he should not immediately invoke the help of the court. He should first invite the arbitrator to explain how the fee was calculated. He may find on reflection that the explanation is convincing. If he does not, then the explanation should be laid before the court as part of his evidence on the application for relief. If the arbitrator declines to explain how his fee is calculated, or gives insufficient particulars, this may lead the court to infer that the discretion has not been properly exercised.” 32. What we learn from the above only supports the view that in a given case very exorbitant demand of remuneration by the arbitrators can be a misconduct and accordingly a ground for setting the award aside as a whole. What we learn from the above only supports the view that in a given case very exorbitant demand of remuneration by the arbitrators can be a misconduct and accordingly a ground for setting the award aside as a whole. The Court can do so and find the award ‘otherwise invalid’ as well but before setting aside the award it will be necessary to see whether any award other than which has been handed over by the arbitrators is possible. The court shall not proceed to infer a misconduct on the part of the arbitrators to invalidate the award or to otherwise declare the award invalid unless there is evidence for the inference that the arbitrators had subordinated the interests of the parties to their own interests. In the absence of evidence for such inference, when the charges of the arbitrators are excessive, the court may interfere with the charges and fix such proper and reasonable remuneration, which will do justice to the work done by the arbitrators. For assessing whether the charges as demanded by the arbitrators are high, the court shall take into account the quantum or the value of the property in the dispute, the nature of the dispute, the involvement or engagement of the arbitrators in the work, including the working days and hours and the conduct of the parties as well as the conduct of the arbitrators for noticing whether arbitrators had such interest of their own for which they might have compromised their impartiality and fairness. 33. It will not be proper to always assume against arbitrators merely because they put a condition that the party which would pay the fee first would receive a copy of the award. It will be indeed wrong to even suggest that such thing done should itself provide a cause for inference that arbitrators have put their interests above the interests of the adjudication. Section 14(1) of the Act provides that, when the arbitrators or umpires have made their award they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration. Section 14(1) of the Act provides that, when the arbitrators or umpires have made their award they shall sign it and shall give notice in writing to the parties of the making and signing thereof and of the amount of fees and charges payable in respect of the arbitration. In the complexities of the situation, besides fixing the fee, the arbitrators do demand payment of their remuneration and costs of arbitration before the award is delivered to the parties and in the notice incorporate such costs. Sub-Section (2) of Sec. 14 of the Act has for the said reason envisaged that the arbitrators or umpire, shall at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award, cause the award or a signed copy of it, together with any depositions and documents which may have been taken and proved before them, to be filed in court. 34. A party to the proceeding is given the option to move the court under S. 38 of the Act if in case the arbitrator or umpire refused to deliver his award except on payment of fees demanded by him and the Court after enquiry may order payment of fee in such sum of money as it has considered reasonable. A highly exaggerated or heavy demand of remuneration and other charges may be found entering into the proceeding and affecting the proceeding in various ways and can be seen at any stage of the proceeding, not necessarily when the award is made ready or after the award is made. What will matter is the effect of the demand of exorbitant fee upon the proceeding and the award, and also when the demand has been made. The court, as we have seen earlier, shall guard itself from going only by its suspicions as well as from being influenced by the heaviness of the total sum in the demand. 35. What will matter is the effect of the demand of exorbitant fee upon the proceeding and the award, and also when the demand has been made. The court, as we have seen earlier, shall guard itself from going only by its suspicions as well as from being influenced by the heaviness of the total sum in the demand. 35. In the case of a non-speaking award, however, the position is different and complicated in the sense that no reasons are available in the award from which it can be found that the arbitrators have committed any error of law or fact and had the mistake been not committed, there would have been a different award. Since the award contains only the conclusion, in such a case, the Court cannot know the process by which the arbitrators reached their conclusion. Merely because this test is not available, however, misconduct of the arbitrators or the proceedings in demanding exorbitant fees cannot evaporate; it will still be available if it is fatter than ordinary fee and shocking to the judicial conscience. Arbitrators entered appearance before the learned single Judge and contested the applications under S. 38 of the Act. In their return to the allegations on behalf of the appellant, they maintained that their fees and charges were fixed in the meeting held on 1.2.1992, parties agreed to pay clerical fee of Rs. 1,000/- a sitting fee of Rs. 2,000/- per day, conveyance charge of Rs. 100/- for each meeting and agreed to the stipulation that the arbitrators would be charging a lump sum fee for making, signing and publishing the award. They followed strictly the above arrangement and the parties made interim payment of Rs.1,20,000/- to each of the arbitrators. In the award as well as in the notice of the award, they stated that they should be paid a sum of Rs. 3 lakhs by way of fees by each party for reading the documents and making, signing and writing and publishing the award and accordingly after giving credit to the sum of Rs. 1,20,000/- to each party they demanded Rs. 1,84,000/- from the parties concerned. Since parties to the dispute had agreed to the payment of lump sum fee as demanded by the arbitrators, the arbitrators believed that they would raise no objections to a reasonable demand of fee. True, a total remuneration of Rs. 1,20,000/- to each party they demanded Rs. 1,84,000/- from the parties concerned. Since parties to the dispute had agreed to the payment of lump sum fee as demanded by the arbitrators, the arbitrators believed that they would raise no objections to a reasonable demand of fee. True, a total remuneration of Rs. 24.88 lakhs was realized by them but, for each dispute, i.e., the dispute between MRL and MPCL and MRL and UBPL, it was only Rs. 12.44 lakhs and for each party Rs. 6.22 lakhs only. According to them, they claimed a very reasonable remuneration, that is, Rs. 3 lakhs by way of fee for each party for reading the documents and making, signing, writing and publishing the award and rest for the hearing of or sittings in the proceedings, conveyance charges and the electricity charges fee. Mr. K. Ramamoorthy, who has appeared before us for the arbitrators has questioned the maintainability of the appeal against orders in Application Nos. 5071 and 5072 of 1992, that is Applications under Sec. 38 of the Act and on merits, adopted the arguments of Mr. A.K. Sen, who has appeared for the respondents (MPCL and UBPL). 36. Section 39(1) of the Act prescribes for an appeal from the orders passed under the Act to the Court authorised by law to hear appeals from original decrees of the Court passing the order. An order superseding an arbitration, an order on an award stated in the form of a Special Case; an order modifying or correcting an award, an order filing or refusing to file an arbitration agreement, an order staying or refusing to stay legal proceedings where there is an arbitration agreement and an order setting aside or refusing to set aside an award are enlisted as orders from which the appeal lies. Sub-section (2) of S. 39 of the Act says that no Second Appeal shall lie from an order passed in appeal under sub-section (1), but the appeal will lie to the Supreme Court. When this Court entertains a suit under clause 12 of the Letters Patent or a proceeding for the reason of the said jurisdiction in terms of S. 31 of the Act, the appeal lies under cl. 15 of the Letters Patent against the Judgment of a learned single judge sitting on the original side. When this Court entertains a suit under clause 12 of the Letters Patent or a proceeding for the reason of the said jurisdiction in terms of S. 31 of the Act, the appeal lies under cl. 15 of the Letters Patent against the Judgment of a learned single judge sitting on the original side. In a Full Bench Judgment in the case of Loyal Textile Mills Ltd. v. Allenberg Cotton Company (1993-1 L.W. 132), this Court has held that if all the conditions for an appeal under Clause 15 of the Letters Patent are satisfied and when there is no specific bar, merely because some other law is providing appeals against certain types of orders and says that against other orders there shall be no appeal to a Court, it cannot be inferred that even if it is appealable under Cl. 15 of the Letters Patent, since it is not appealable under S. 39(1) of the Arbitration Act, there shall be no appeal. The Letters Patent law being a Special Law it shall prevail over any general law so long as there is no specific abridgment, amendment or repeal by a competent legislature. The Court has relied upon the Judgment of the Supreme Court in the case of Umaji v. Radhikabai (A.I.R. 1986 SC. 1272) and Shah Babulal Khimji v. Jayaben ( AIR 1981 SC 1786 ) to hold that Letters Patent jurisdiction of this Court is saved under Art. 225 of the Constitution of India and that its jurisdiction to regulate its proceedings including its appellate power is preserved subject to the provisions of the Constitution and to the provisions of any law by the appropriate legislature made by virtue of the powers conferred on that Legislature by the Constitution. Until any appropriate legislation comes and the Letters Patent power is restricted, cl. 15 thereof will continue to provide for appeals against judgments on the original side of the court and to hold that it cannot be contended that the words under S. 39(1) of the Act ‘that an appeal shall lie from the following order under this Act and from no others to the Court authorised by law to hear appeals from original decrees of the Court passing order’ would fetter or overrule the provisions of the Letters Patent will not be possible. The Full Bench has distinguished the judgment of the Supreme Court in the case of Union of India v. Mohindra Supply Co. (A.I.R. 1962 SC. 256) which appears to give an impression that no appeal could lie against an order in a proceeding under the (Arbitration) Act unless the order in appeal is under S. 39(1) of the Act. In the said case, the Supreme Court dealt with clause 10 of the Letters Patent of the Punjab High Court having no Ordinary Original Civil Jurisdiction and having the Letters Patent appellate power in these words: “And we do further ordain that an appeal shall lie to the said High Court. from the Judgment (not being a judgment passed in exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court and not being an order made in the exercise of revisional jurisdiction .) of one judge of the High Court ..”. After taking note of the conflict of the views of different High Courts, the Supreme Court considered various aspects of the law, more particularly, the effect of sub-section (2) of S. 39 of the Act. The Full Bench has said as follows:— “The procedural law relating to arbitration which had previously been codified under the Code has since been codified and amended in the Arbitration Act, 1940. If a reference is made to the provisions in S. 104 of 1908 Code and then the words in S. 39(1) of Arbitration Act are taken notice of, one may have the impression that the Arbitration Act has intended to exclude from the Appellate Letters Patent Jurisdiction of the Court quite a few types of orders which otherwise were Judgments, appealable under Clause 15 of the Letters Patent. But when we make a closer examination and take notice of the provisions in the Code of 1877 and the Code of 1882 and find that Ss. But when we make a closer examination and take notice of the provisions in the Code of 1877 and the Code of 1882 and find that Ss. 588 and 591 together carried on almost a similar inhibition to appeals against orders in the arbitration proceedings, which were not covered by the order providing for appeals like S. 39(1) of the Arbitration Act, 1940, we are made to think that it cannot be contended by any show of force that the words in S. 39(1) that “an appeal shall lie from the following orders under this Act and from no others to the Court authorised by law to hear appeals from original decree of the Court passing the order” would fetter or override the provisions of the Letters Patent. It is in this way only that the observations of the Supreme Court in Shah Babulal Khimjis case (supra): “it cannot be contended by any show of force .. that the provisions of the Arbitration Act giving a right of appeal to a litigant from the order of a trial judge to the Division Bench in any way fetter or override the provisions of the Letters Patent has been made.” “We have already noticed that the Arbitration Rules which were originally in the Code of Civil Procedure have been separately codified in the Arbitration Act. It is no doubt an act of competent legislature. In sub S. (2) of S. 39, it is said that no Second Appeal shall lie from an order passed in Appeal under this Section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court. The legislature has in this clearly introduced a bar to the Second Appeal, whether under the Letters Patent or otherwise. In sub-S. (1) however, it has given a right to litigate in providing for appeals against specific types of orders and from no others. Can this be held to be a provision inhibiting like sub S. (2) any right of appeal available under any other statute?” and finally concluded as above on the strength of the judgment in Umajis case (A.I.R. 1986 SC 1272) (supra), in favour of the appeal and distinguished the judgement in Mohindra Supply Co. Can this be held to be a provision inhibiting like sub S. (2) any right of appeal available under any other statute?” and finally concluded as above on the strength of the judgment in Umajis case (A.I.R. 1986 SC 1272) (supra), in favour of the appeal and distinguished the judgement in Mohindra Supply Co. (A.I.R. 1962 S.C. 256), on the ground that the Supreme Court did not consider in the said case the question whether an appeal under Clause 15 of the Letters Patent would like against orders which were not covered by Sub-sec. (1) of S. 39 of the Act. 37. Learned counsel for the arbitrators, however, has drawn our attention to the judgment of the Supreme Court in State of West Bengal v. Gourangalal Chatterjee ( (1993) 3 SCC 1 ), which contains the following observations:— “Section 39 of the Arbitration Act came for consideration in Union of India v. Mohindra Supply Co. ( AIR 1962 SC 256 ). The Court after going into detail and examining various authorities given by different High Courts held that no Second Appeal lay under Section 39(2) against a decision given by a learned single judge under Section 39(1). In respect of the jurisdiction under Letters Patent the Court observed that since Arbitration Act was a consolidating and amending Act relating to arbitration it must be construed without any assumption that it “was not intended to alter the law relating to appeals. The Court held that in view of bar created by Sub-section (2) of Section 39 debarring any Second Appeal from an order passed in appeal under Sub-section (1) the ‘conclusion was inevitable that it was so done with a view to restrict the right of appeal within strict limits defined by Section 39”. herefore, so far as the second part is concerned, namely the maintainability of the appeal under Letters Patent, it stands concluded by this decision.” “The learned counsel for the appellant vehemently argued that since the decision by the Supreme Court was in respect of an appeal directed against an order passed by a learned single judge in exercise of appellate jurisdiction no Second Appeal lay but that principle could not be applied where the order of learned single judge was passed not in exercise of appellate jurisdiction but original jurisdiction. The argument appears to be without any substance as Sub-section (1) of Section 39 is extracted below .. provides that an appeal could he only from the orders mentioned in the subsection itself. Since the order passed by the learned single judge revoking the authority of the Chief Engineer on his failure to act as an arbitrator was not covered in either of the six clauses mentioned in section 39, it is obvious that no appeal could be filed against the order of the learned single judge.” “Reliance was placed on certain orders passed by this Court and it was urged that settlement of dispute under Clause 25 of the agreement being in exclusive domain of the Chief Engineer, the High Court was not empowered to appoint any one else. The submission is devoid of any merit. It is not made out from the agreement. Rather, clause 25 itself permits appointment of another Arbitrator if the Chief Engineer fails or omits to act as such. Relevant portion of the agreement is extracted below:— “Should the Chief Engineer be for any reason unwilling or unable to act as such arbitrator such questions and disputes shall be referred to an arbitrator to be appointed by the (sic) arbitrator shall be final, conclusive and binding on all the parties to this contract.” In one of the decisions given by this Court the order of the High Court was set aside as the dispute being technical in nature the appointment of a non-technical arbitrator was not justified. Here in this case the High Court has appointed a retired Chief Engineer and not a non-technical man. No allegation has been made against him. Therefore, the order of the learned single judge also does not suffer from any infirmity.” “In the circumstances, the view taken by the Division Bench dismissing the appeal as not maintainable appears to be well founded. The appeal accordingly fails and is dismissed with costs.” This judgment of the Supreme Court, however, only supports the view of the Full Bench of this Court in Loyal Textile Mills Ltd. (1993-1-L.W. 132 (supra), if the facts of the case are taken note of. There, the question was whether any appeal was maintainable against an order passed by a learned single Judge under Section 39(1) of the Act either under Sec. 39(2) of the Act or under the Letters Patent Jurisdiction. 38. There, the question was whether any appeal was maintainable against an order passed by a learned single Judge under Section 39(1) of the Act either under Sec. 39(2) of the Act or under the Letters Patent Jurisdiction. 38. The question of maintainability of the appeal against the orders in applications under S. 38 of the Act, however, is not that relevant when there is an appeal against the order making the award a rule of the Court, and refusing to set aside the same; an order fully covered by S. 39(1)(iv) of the Act. The order in the application under S. 38 of the Act is only ancillary to the main order and interlocutory in the sense that in case the order of the learned single judge is set aside, the issue whether any order to be made in the application under S. 38 of the Act will become alive. It will be not wrong if such an order is taken as one falling under S. 105 of the Code of Civil Procedure which says, ‘no appeal shall lie from any order made by a Court in exercise of its original or appellate jurisdiction; but, where a decree is appealed from, any error defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal’. Since every matter that was before the learned single judge is before us and the demand of exorbitant fee by the arbitrators is raised as a ground for the annulment of the award, we cannot close our eyes to the fact that the appellant had made a complaint against the demand of fee by the arbitrators. Learned single judge has found that the demand was on the high side but declined to interfere with the award as a whole or of costs inclusive of the fees on the ground that the parties had agreed and accordingly surrendered to the jurisdiction of the arbitrators in the matter of determination of the remuneration payable to the arbitrators. 39. On the demand as above, what is not in dispute is that the parties had agreed to a certain amount of payment to the arbitrators as conveyance charges, clerkage and the arbitrators fees for each sitting for the hearing of the case. 39. On the demand as above, what is not in dispute is that the parties had agreed to a certain amount of payment to the arbitrators as conveyance charges, clerkage and the arbitrators fees for each sitting for the hearing of the case. It is difficult thus to see in these items any arbitrariness or any animus or bias of the arbitrators or presence of any special interests of arbitrators, which could effect the adjudication. The appellant and respondents had agreed to pay and paid in part, in accordance with the agreement, such amount of remuneration/fee and cost of the proceedings to arbitrators. It is only after taking the award ready, according to the admitted case of the parties, the arbitrators stated they should be paid a sum of Rs. 3 lakhs by way of fee by each party for reading the documents, and making, signing, writing and publishing the award. We have already noticed that it was/is legally permissible to the arbitrators to make the demand of remuneration and other charges of the arbitration proceeding, a condition for the delivery of a copy of the award to the parties. If one of the parties decided to do so and paid for the other party as well, it did so either because it had some information or indication of the award going in its favour or because it intended to bring to a close the proceedings as quickly as possible. There are some circumstances which indicate that respondents almost knew that the award had gone in favour of the respondents, but not enough to conclude that arbitrators had in some way or other connived with them or bargained on a payment of heavy remuneration to deliver the award in their favour. We give to the arbitrators benefit for the reason that the appellant had agreed for the clerical fee, sitting fee and the conveyance charge and made its contribution to these items and the notice demanding the fee, for reading the documents and for making, signing, writing and publishing the award, the arbitrators made no discrimination; they gave notice of the award to the appellant as well as the respondents and disclosed the amount of fee, etc. which they demanded from both the appellant and the respondents. which they demanded from both the appellant and the respondents. The proceeding in the award and the award thus, may not be said to have been affected by the demand of exorbitant fee/remuneration by the arbitrators. Nonetheless, there is no justification for the demand of Rs. 3 lakhs by way of fee for reading the documents and demands, which add heavy amounts to the sitting fee, clerical fee and conveyance charges. While we do not affirm the findings of the learned single judge that the fees charged by the arbitrators is “unethical, unconscionable and unreasonable”, we hold in agreement with the view of the learned single judge that the demand of any sum in excess of the stipulated fee for each sitting only for signing a non-speaking award and delivering the same is unreasonable. 40. We have already extracted the award. Learned counsel for the appellant, who has known the limitations of the attack upon a non-speaking award, has contended that the arbitrators have exceeded their jurisdiction by going beyond the reference to decide issues other than the dispute as to the price increase on two occasions by the appellant of propylene supplied by it to the respondents in accordance with the terms of the agreement. He has submitted that by no stretch of imagination the arbitrators could decide the price of propylene to the supplies effected from 1st September, 1992. According to him, the direction to the appellant to supply propylene at the basic price per metric ton exclusive of taxes and duties, affected the appellants right under the agreement to fix price on such eventualities as were/are stipulated in the agreement and thus, almost modified the agreement in favour of the respondents. 41. Learned counsel for the appellant has next contended that the issue whether there was any Gulf Surcharge imposed by the Central Government in accordance with law involved determination of the authority of the Central Government to impose such a surcharge, whether the said, authority was exercised by the Central Government in accordance with law and whether in fact and in law, there was any surcharge imposed by the Central Government or not. He has submitted that the arbitrators were not competent to go into these questions and decide one way or the other. He has submitted that the arbitrators were not competent to go into these questions and decide one way or the other. In any event, according to learned counsel, a decision on such issues could have been taken only in a proceeding in which the Central Government was represented and subjected to the award. He has shown in support of his arguments the statements in the correspondences leading to the appointment of the arbitrators and pointed out, in particular that in their letter when the appellant called upon to pay to them the amount of surcharge in addition to the price already fixed, dated 18th December, 1991 of MRL, the respondents never stated that there was no Gulf Surcharge imposed by the Central Government or that there was no legal impost which could attract Cl. 3.3 of the agreement. Thus, according to learned counsel for the appellant the dispute was only whether in view of the impost the price should have been increased, to the extent as realised by the appellant but calculated in accordance with the imposition of Gulf Surcharge upon the LPG. Arbitrators exceeded their jurisdiction, according to him, by entering upon the issues which were introduced after the dispute was raised and the parties agreed for the reference. 42. Mr. A.K. Sen, learned counsel for the respondents has contended that all matters touching the agreement were before the arbitrators and all such issues which emerged for the reason of the case as stated by the appellant on the one hand and the respondents on the other hand, were before the arbitrators and therefore, there was no limitation or restriction upon the jurisdiction of the arbitrators to inhibit them from going into the issues that they have decided. When parties agreed to arbitration, according to learned counsel for the respondents, they agreed for a decision on all questions of fact and law and the issues whether the conditions aforementioned permitted the appellant to realise a certain additional amount besides the price already determined as gulf surcharge, whether the said surcharge was a legal impost, whether it was realisable from the appellant or not, etc. are mixed questions of law and fact and arbitrators were/are competent to decide any question of fact as well as any question of law. Arbitrators could decide rightly and could decide wrongly as well. are mixed questions of law and fact and arbitrators were/are competent to decide any question of fact as well as any question of law. Arbitrators could decide rightly and could decide wrongly as well. Only because arbitrators committed any error of law in deciding any question which they ought to have decided, the award is not rendered invalid. He has drawn our attention to the fact that the direction in the award for supply of propylene by the appellant is in no way in excess of jurisdiction. The respondents had claimed before the arbitrators that the only way for the appellant to revise the price was to follow the mode as agreed between the parties and not to unilaterally do a thing which violated the terms and conditions of the agreement. Both parties, according to Mr. A.K. Sen, were alive to the fact that supply of propylene on a reasonable price to the respondents by the appellant was/is essential for the survival of the industries of the respondents, and any arbitrary increase in the price of propylene which respondents use as raw material in their industries was bound to cause serious injury to the respondents and affect supplies of their product to the consumers. The above direction in the award thus should not be exaggerated to find fault with the award. He has argued at length to demonstrate that the alleged surcharge is not a legal impost and does not fall under Clause 3.3 of the agreement. 43. Before we advert to the main contention we propose to dispose of summarily but not dismissively an attempt by Mr. Shanthi Bhushan, learned counsel for the appellant, to read clause 3.3 in a way that word ‘levy’ therein stands for something other than tax or fee and a thing called ‘levy’ was/is realisable in accordance with the agreement in addition to the basic price, which is not a tax or fee. It is difficult to imagine a person who would impose a levy which is not a tax or fee unless there is any suc h person shown or suggested in the agreement and was/is competent to impose a levy. Mr. It is difficult to imagine a person who would impose a levy which is not a tax or fee unless there is any suc h person shown or suggested in the agreement and was/is competent to impose a levy. Mr. Shanthi Bhushan has almost presumed that the Union of India is such an authority, which could impose a so-called levy which is not a tax or fee and have also assumed that as the principal of which the appellant is the agent, the Central Government has got the power to direct the appellant to add a certain amount in addition to the price called levy and realise this additional amount from the respondents. He has terme d this ‘levy’ as some sort of impost, which is neither a tax nor a fee, but has been thrown by the Central Government upon the appellant and the appellant in terms of the agreement (Clause 3.3) passed on the said burden to the respondents. We do not think that this contention is worthy even of a pause to delay the consideration of other contentions. This contention in our opinion, is futile for deciding whether the arbitrators have misconducted themselves as contemplated under S. 30(a) of the Act or have exceeded their jurisdiction and thus rendered the award invalid. We are not inclined to read any special meaning in the word ‘levy’ and we are in no way in doubt that the levy as contemplated under clause 3.3 is an impost which is in the nature of a tax or at the best in the nature of a fee, that is, it is nothing but comparable to a duty or a fee. 44. 44. Everything said and done but it is admitted that the appellant received a communication (telex) dated 4th October, 1990 from the Under Secretary to the Government of India which communication was not only addressed to it but to several other Undertakings/Establishments/Companies that Government had decided to levy Gulf Surcharge at the rate of 2.5% on the basic selling price ex-storage point, i.e., refinery point of all the price administered formula products, that it would also be levied on the selling prices as on 14th October, 1990 of all the free trade products marketed by the Oil Companies, that the surcharge would be surrendered by the Oil Companies to the Oil Co-ordination Committee on a weekly basis, that surcharge would be levied on the price of LPG/domestic .. and that the decision would come into effect from midnight of 14/15th October, 1990. A communication for additional 10% increase dated 24th July, 1991 was also issued by the Under Secretary to the Government of India to the appellant and others and contained almost a reiteration of the items aforesaid including the free trade products marketed by the Oil Companies. One will be tempted to examine whether the two communications satisfy the requirements of authentication as well as making of a Government instrument and it seems, in course of the proceedings before the arbitrators, this had emerged as an important contention. It is difficult to see in the expression “Gulf Surcharge” in the communications aforementioned any imposition o f a fee by the Central Government as a fee and in any case has to satisfy the test of quid-pro quo . None of the parties have contended before us that the Gulf Surcharge levied as above was/is a fee. How a tax is imposed, however, is not left for conjectures and the Constitution of India has in Article 265 provided as follows: “Taxes not to be imposed save by authority of law. No tax shall be levied or collected except by the authority of law.” ‘Law’ has not been defined in the Constitution but Article 13 thereof, has a declaration as respects Part III of the Constitution in these words: “13. No tax shall be levied or collected except by the authority of law.” ‘Law’ has not been defined in the Constitution but Article 13 thereof, has a declaration as respects Part III of the Constitution in these words: “13. (1) All laws in force in the territory of India immediately before the commencement of this Constitution in so far as they are inconsistent with the provisions of this part, shall to the extent of such inconsistency be void.” “(2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. (3) In this Article, unless the context otherwise requires, (a) “law” includes any Ordinance, Order bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law. (b) “Laws in force” includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof, may not be then in operation either at all or in particular areas. (4) Nothing in this Article shall apply to any amendment of this Constitution made under Article 368.” Even this wide sweep of the law cannot, however, give to any executive order or action which is not issued by an authority who is competent to make a law, the authority of law for levying and collecting a tax. Article 73 of the Constitution which indicates the extent of the executive power of the Union, makes the executive power of the Union co-extensive as respects the matter with respect to which Parliament has power to make laws; and to the exercise of such rights, authority and jurisdictions are exercisable by the Government of India by virtue of any treaty or agreement. It, however, speaks of the executive power of the Union and not its lawmaking power. A law made by the Parliament can delegate to the Government/Union of India a subordinate legislative power and in exercise of such subordinate power the Government can make rules, regulations, etc., and can make laws which are not inconsistent with the parent law and the Constitution, but its executive action and instruments are not laws; they are only executive actions and instruments in lieu of law. Since learned counsel for the parties have argued with some vehemence and we find no way to know the authority under which the said two communications were issued except a few informations which are available on the record of the case and even these informations are as scanty and incomplete as anybody can see, we gave notice to the Senior Standing Counsel, Mr. V.T. Gopalan and on instructions from Union of India, Mr. K.T.S. Tulsi, learned Additional Solicitor General appeared to assist us. We have called for the entire records with the concerned department of the Government and the Union of India has produced the same for our perusal. After seeing the records ourselves, we have found that there are no such secrets which should not be divulged to the learned counsel for the parties and the parties themselves. We have permitted learned counsel for the parties to see the records. Both Mr. Gopalan and Mr. Tulsi, however, have claimed privilege. We have considered this, however, only a technical claim of privilege and not of any substance. Mr. Tulsi has addressed us in some details as to when privilege should be acknowledged by the Court and when the Court may find that privilege is not available. We do not however, think any discussion on this aspect of the matter is necessary. Learned counsel for the parties have perused the records and presented in writing for the benefit of the Court their contentions and arguments on the basis of the material in the Government files in this regard. 45. Mr. A.K. Sen has maintained even after the perusal of the records of the Government that the two communications do not satisfy the requirements of making a Government Instrument and placed reliance for the said purpose upon Art. 77 of the Constitution of India. Mr. Shanthi Bhushan has, however, maintained that it is a proper order which has been authenticated by an Officer, who is empowered to do so and although it is not issued in the name of the President of India, nonetheless, it is a communication categorically saying that the Government of India has decided to impose ‘Gulf Surcharge’. 46. Mr. Shanthi Bhushan has, however, maintained that it is a proper order which has been authenticated by an Officer, who is empowered to do so and although it is not issued in the name of the President of India, nonetheless, it is a communication categorically saying that the Government of India has decided to impose ‘Gulf Surcharge’. 46. Speaking on the orders issued under Article 162 of the Constitution of India which speaks of the extent of the executive power of a State, a provision comparable to Article 73(1)(a) of the Constitution, the Supreme Court in G.J. Fernandez v. State of Mysore (A.I.R. 1967 S.C. 1753) has categorically said that the Article does not confer any power on the State Government to frame Rules and if only indicates the scope of the executive power of the State. Of course, under such executive power, the State can give administrative instructions to its servants how to act in certain circumstances, but that will not make such instructions statutory Rules which are justifiable in certain circumstances. In order that such executive instructions have the force of statutory Rules it must be shown that they have been issued either under the authority conferred on the State Government by some statute or under some provision of the Constitution providing therefor. We find difficulty thus in appreciating the vehemence with which both parties have contested the issue whether the two communications aforementioned satisfy the requirements of a Government Order/instrument and why no one has chosen to address us on the main issue whether an executive instrument can create a legal levy, duty or tax. We are conscious of the limitations of our jurisdiction in a case limited to the grounds under S. 30 of the Act and more particularly, when we are faced with an award which has only conclusions and no reasons to support the conclusions. At the same time, however, we do see a purpose in the powers granted to arbitrators under S. 13 of the Act and particularly clause (b) thereof which says that the arbitrators or umpires shall, unless a different intention is expressed in agreement, have power to state a Special Case for the opinion of the Court on any question of law involved, or state the award, wholly or in part, in the form a Special Case of such question for the opinion of the court. Section 113 of the Code of Civil Procedure which is applicable to the courts subordinate to the High Court, however, speaks of reference to High Court in these words:— “113. Reference to High Court:— Subject to such conditions and limitations as may be prescribed any court may state a case and refer the same for the opinion of the High Court, and the High Court may make such order thereon as it thinks fit: Provided that where the court is satisfied that a case pending before it involves a question as to the validity of any Act. Ordinance or Regulation or of any provision contained in an Act, Ordinance or Regulation, the determination of which is necessary for the disposal of the case, and is of opinion that Such Act, Ordinance, Regulation or provision is invalid or inoperative, but has not been so declared by the High Court to which that Court is subordinate or by the Supreme Court the Court shall state a case setting out its opinion and the reasons therefor, and refer the same for the opinion of the High Court.” Article 228 of the Constitution of India enables the High Court to withdraw a case from a court subordinate to it if it is satisfied that the case involves a substantial question of law as to the interpretation of the Constitution, the determination of which is necessary for the disposal of the case and either to dispose of the case itself, or determine the said question of law and return the case to the court from which the case has been so withdrawn together with a copy of its judgment on such question, and then to the said court, on receipt thereof to proceed to dispose of the case in conformity with such judgment. In Raja Ganga Pratap Singh v. Allahabad Bank Ltd. , AIR1958 S.C. 293) a Constitution Bench of the Supreme Court has considered the case of a Scheduled Bank which was sued in the Court of the Civil Judge, for the recovery of money due under an instrument of mortgage. The plaintiff-appellant claimed that he was entitled to relief under the Uttar Pradesh Zamindars Debt Reduction Act which reduced the amount recoverable on a debt as defined by it. The plaintiff-appellant claimed that he was entitled to relief under the Uttar Pradesh Zamindars Debt Reduction Act which reduced the amount recoverable on a debt as defined by it. The first contention was that the definition of ‘debt’ in the Act in so far as it excluded certain debts offe nded Art. 14 of the Constitution in as much as it made an arbitrary distinction between several classes of debtors and denied the excluded debtors, the equal protection of the law and that hence that portion of the definition which excluded certain debts was invalid and should be struck out and the rest of the definition should be left as operative. The lower court held that it was not necessary for the disposal of the case to decide such question of invalidity because even if it was decided in favour of the appellant, the result would be to exclude the entire definition from the Act as the offending portion was not severable from the rest and the appellant would, therefore, be in any event left without the protection of the Act. The High Court, however, held that there was no dispute as to the constitutional principle which was clear, namely, that every citizen was entitled to the equal protection of the laws and that any enactment which infringed that principle, is to that extent void, and that the only dispute was whether the impunged portion of the definition of a ‘debt’ in the Act was severable from the rest and that was not a question of the interpretation or the construction of the Act itself. The High Court also held that even if any question of the interpretation of the Constitution arose, a determination of that question was not necessary for the disposal of the case. The Supreme Court said- “The point that really arises in this appeal is whether it is necessary for the disposal of the case to decide the question of the validity of a portion of the definition of a debt in the Act. All other conditions necessary for an order being made under the proviso to S. 113 of the Code or Art. 228 of the Constitution exist and as to this there is no serious dispute. All other conditions necessary for an order being made under the proviso to S. 113 of the Code or Art. 228 of the Constitution exist and as to this there is no serious dispute. It is not necessary for us therefore to discuss these conditions.” “The question of the validity of the definition in so far as it excluded certain debts having been raised and pressed by the appellant it had to be decided by the Court. Without a decision of that question the case could not be disposed of. The fact that in the view of the Court the impunged part of the definition was not severable from the rest and therefore in any view of the question as to the validity of the impugned part, the appellant would not get any relief, did not alter the position. The quest ion as to the severability of the impugned part of the definition from the rest would arise only after it had been decided that the impugned part was invalid and so to be able to say that the impugned part of the definition was not severable from the rest it had first to be held that that part was invalid. It could not be said that as the impugned part was not severable from the rest it was not necessary for the disposal of the case to decide the question of the validity of the impugned part. We, therefore, hold that it is necessary to decide the question of the validity of the impugned part of the definition to dispose of the case.” 47. Before the Consolidating and Amending Act X of 1940, which is the present Arbitration Law, the rules as to arbitration formed part of the Code of Civil Procedure. A proceeding for arbitration is in lieu of a proceeding in court and arbitrators although laymen/women are in the place of the Judges. When parties choose their arbitrators and agree for adjudication by arbitrators, they do not expect the arbitrators to know the laws or to apply law stricto sensu. They go to them for adjudication on issues both of facts and law hoping and believing that arbitrators shall decide the disputes justly and fairly. When parties choose their arbitrators and agree for adjudication by arbitrators, they do not expect the arbitrators to know the laws or to apply law stricto sensu. They go to them for adjudication on issues both of facts and law hoping and believing that arbitrators shall decide the disputes justly and fairly. When the issue of law is whether a particular law applied to a particular set of facts or not or what are the consequences of the application of a particular law on a certain set of facts, there may not be any serious difficulty. Where, however, the validity of any Act, Ordinance or Regulation or of any provision contained in an Act, Ordinance or Regulation is involved and the determination of which is necessary for the disposal of the case, and there is no determination as to its validity by a court, the civil court is required to refer the question to the High Court for its opinion and in case interpretation of any provision of the Constitution is involved, Art. 228 of the Constitution says, the High Court may withdraw the case to itself for decision on the said question/or of the entire suit. Whether the Union of India imposed any Gulf Surcharge, whether the imposition of the said surcharge was made in accordance with law, whether the Gulf Surcharge was realised under a valid law or an invalid law are questions no less involved than the question as to the validity of any Act, Ordinance or Regulation or of any provision contained in an act. Ordinance or Regulation. When in Section 13 of the Act it is conceived as a power of the arbitrators that they can state a special case for the opinion of the court on any question of law involved, or state the award, wholly or in part, in the form of a Special Case of such question for the opinion of the court, it is intended in our opinion, to ensure that arbitrators proceed to decide a dispute only after knowing the law and the correct answer to the questions of law. If they had known the answer to the question of law they may proceed to decide the dispute in accordance with law; they are not expected and they also cannot expect that parties to the dispute will tell them that a particular law is valid or that a particular law is invalid or will get such information from a third party. In the instant case, we see in the proceedings that arbitrators awaited reply from the Government of India and other sources about the communications that Government of India had decided to impose Gulf Surcharge. One cannot visualize that although a civil court is not competent to decide a question as above; it has to take the opinion of the High Court and then to proceed to decide in accordance with the answer to the question as given by the High Court, the arbitrators can do so. In Superintending Engineer, Fishing Harbour Projects Circle v. Andhra Civil Construction Company (1993-2 L.W. 138), we have considered a case where the issue sought to be referred to the arbitrator was whether liability, if any, for the payment of excise duty on dolosses was that of the respondent therein and is not the Government bound to discharge such liability and help the contractor indemnified against the same. We have held as follows:— “We are of the view that there is substance in the first contention of the learned Additional Government Pleader to the effect that payment of Excise duty is a statutory liability arising out of the Central Excise and Salt Act, 1944 and it cannot be adjudicated in arbitration proceedings by the Arbitrator. It is only the authorities specified under the Central Excises and Salt Act who have the jurisdiction to decide whether excise duty is attracted for casting of dolosses and whether the same is manufac turing process. As per the Central Excises and Salt Act, excise duty is levied on manufacture of excisable goods, the person who is liable to pay is the manufacturer, viz., the persons who manufacture excisable goods. The Collector of Central Excise has already passed an order holding that casting of dolosses was manufacturing activity attracting levy of excise duty thereon. It is stated that though the show cause notice was issued to both the appellant and the respondent, the Collector of Excise has proceeded only against the respondent. The Collector of Central Excise has already passed an order holding that casting of dolosses was manufacturing activity attracting levy of excise duty thereon. It is stated that though the show cause notice was issued to both the appellant and the respondent, the Collector of Excise has proceeded only against the respondent. The respondent has already preferred an appeal before the Central Excise Appellate Tribunal constituted under the Act. We are of the view that a statutory liability imposed under an Act has to be decided only by the authorities specified under the Act and same cannot be decided in arbitration proceedings before the arbitrator. It is not open to contracting parties to oust the jurisdiction of authorities specified under the Act and confer jurisdiction to decide the matter in arbitration proceedings before the arbitrator. The first additional issue therefore cannot be referred to arbitration and learned single judge erred in law in referring the same to be decided by the Arbitrator. Further the Appellate Authority constituted under the Act has taken cognizance of the matter. We are of the view that under the Central Excises and Salt Act, it is the authorities specified under the Act who have the jurisdiction to decide whether a particular item is chargeable to the excise duty or not and the hierarchy of authorities specified under the Act alone have to decide the matter. We have not been unaware that parties themselves can create a contract and make obligatory on either of them payment of taxes, etc. and such a condition in the contract can be a subject of arbitration, if it is so provided in the contract. We have, however, not been persuaded to accept the extreme contention that a contract of this kind shall also mean a determination of the obligation of the either party which would ultimately, bind a statutory authority. The jurisdiction in this behalf created under a statutory authority shall remain unaffected and the authority concerned shall always proceed against the party obliged under the law concerned to pay the taxes. We are, therefore, of the view that the first Additional issue cannot be decided in arbitration proceedings. It is only the authorities specified under the Central Excises and Salt Act who have the jurisdiction to decide such matter and the incidents of the levy and payment will be on the person specified under the Act. We are, therefore, of the view that the first Additional issue cannot be decided in arbitration proceedings. It is only the authorities specified under the Central Excises and Salt Act who have the jurisdiction to decide such matter and the incidents of the levy and payment will be on the person specified under the Act. By agreement and mutual consent no other party can be substituted before the authority and escape the liability to pay excise duty or any other incidental levy thereon. The learned judge has erred in law in referring the above dispute to arbitration. We are of the view that a liability under the Statute cannot be referred to arbitration and the arbitrator has no jurisdiction to decide such issue. The learned judge has erred in law in referring the above dispute for arbitration.” 48. Although the question in the instant case is different from the question that we decided in the above cited case, we are inclined to take the view that when such an issue was involved in the proceeding before the arbitrators they were duty bound to know the correct answers, and correct answers to such questions they could obtain only by stating a Special Case for the opinion of the court or stating the award wholly or in part in the form of a Special Case of such question for the opinion of the court. Arbitrators cannot act as they like. If they do not take recourse to what is appropriate and proper and do act in a manner which is ex-facie inappropriate, arbitrators may be said to have misconducted the proceedings. 49. In spite of our sincere endeavours to find on the record of this proceeding materials to gather information whether there was any duty upon which the surcharge was levied, in other words, whether conditions as envisaged under Art. 271 of the Constitution existed and whether under the law under which a duty or tax had been imposed any power had been preserved for the Government to notify a surcharge under Art. 271 of the Constitution of India, we have not been able to find any such material. When we find it difficult to know whether there was any duty or tax imposed under any law and whether under such a law any duty or tax had been imposed, power had been conferred upon the State to impose any surcharge, we are genuinely surprised how arbitrators could answer the said question and that too, in favour of persons who questioned the validity of the impost and who contended that there was no Gulf Surcharge imposed by the Government of India, in the sense that the two communications were not enough for a Statutory imposition of a duty or tax. 50. According to the aforementioned communications the amount of Gulf Surcharge was required to be transferred to the Oil Co-ordination committee. There has been serious dispute on facts before us between the appellant on the one side and the respondents on the other side, whether any transfer of the surcharge amount to Oil Co-ordination Committee amounted to the transfer of the same to the Central Government. While learned counsel for the appellant has shown some materials obviously extrinsic and brought only in course of the hearing of the instant petition and appeal to prove that the Oil Coordinating Committee in turn transferred the said amount to the Public Account of India, learned counsel for the respondents Mr. A.K. Sen has maintained that there is no such evidence and it should not be inferred at all. He has contended also that whether the appellant has transferred the said amount as directed under the two communications aforementioned to Oil Co-Ordinating Committees account or to any other person is hardly relevant for deciding whether the appellant has legally realised the said amount of surcharge from the respondents and in such a controversy no other persons interest is involved. According to Mr. A.K. Sen, for dealings of the appellant with other person, the respondents should not be charged. 51. If we take notice of the materials which are brought on the record of the proceedings in this Court and record our opinion one way or the other, we would exceed our jurisdiction under Section 33 read with S. 30 of the Act. A.K. Sen, for dealings of the appellant with other person, the respondents should not be charged. 51. If we take notice of the materials which are brought on the record of the proceedings in this Court and record our opinion one way or the other, we would exceed our jurisdiction under Section 33 read with S. 30 of the Act. If we do not do it and proceed to take notice only of the issues before the Arbitrators and presume that the same has been answered in favour of the respondents, we like arbitrators, decide only a restricted issue confined to the revision of the selling price of propylene by the appellant, without deciding whether the appellant realised from the respondents the Gulf Surcharge imposed in accordance with law by the Government of India and thus implemented the directions of the Government of India and transferred the surcharge amount to the Co-ordination Committee. 52. With the presence of the Union of India before us represented by the learned Additional Solicitor General and the records of the Central Government, which are produced before us we are in a position to test the correctness of the contentions of the learned counsel for the parties on the issue as to the nature of the Gulf Surcharge, it being a valid impost, it falling under clause 3.3 of the agreement and being credited to any fund of the Government of India and the effect of the transfer of the surcharge amount to the Co-ordination Committee. Neither the Union of India nor the arbitrators had any such records. The decision of the arbitrators that the appellant was/is not entitled to realise any Gulf Surcharge from the respondents, we have to presume, is based upon such materials which were produced before them. The only information that one can get from the record of the arbitration proceedings is that arbitrators allowed time to the parties to produce documents and materials and also gave to the parties opportunity to bring proof from the Government of India that it had imposed a Gulf Surcharge and that it was a duty or tax. Ex. C.2 under which the appellant informed the respondents about the levy of Gulf Surcharge conveyed clearly that it was a levy on the basic selling price at refinery point of all the products. Respondents by Ex. C.3 replied to the above, referring to clause 3.1. Ex. C.2 under which the appellant informed the respondents about the levy of Gulf Surcharge conveyed clearly that it was a levy on the basic selling price at refinery point of all the products. Respondents by Ex. C.3 replied to the above, referring to clause 3.1. of the agreement and requested a p rice revision stating that due to imposition of Gulf Surcharge on the price of LPG price of propylene was to be revised on the basis of agreed formula. A revised price of propylene was communicated under Ex. C.4 to the respondents stating as follows:— “As per OCC Directive per budget proposal Ex. Storage price of propylene supply from MBL is revised to Rs. 16,711.40/MT which is inclusive of excise duty but exclusive of sales tax after allowing discount. P1. remit advance as per terms of payment and arrange to lift feedstock”. Respondents objected to same under Ex. C.5 saying that the revision in price of propylene was unilateral in the sense that pricing formula agreed upon by both parties had not been considered at all. They once again reiterated that the formula in clause 3.1 was to be applied and stated as follows:— “It could be seen that the revised price as presently advised is far in excess of the price arrived at by the above formula. As you know we are already facing a steep increase in propylene and due to Gulf Surcharge. Even at that time our contention was that the 25% increase in Gulf Surcharge should have been on the base LPG price of Rs. 3529.08 per MT as per the agreement as against 25% on the selling price of propylene imposed on us. Now to further impose a 10% increase in the total selling price of propylene inclusive of Gulf Charge will result in huge loss to our Company. There has been a hike of almost 40% in the price of propylene, which is our most essential and major raw material, within a short span of 10 months and this has put us into very serious difficulties. You will appreciate that it has not been possible for us to pass on this increase in raw material cost to our customers, since most of them are in Small Scale Sector and they in turn will not be able to bear this huge impact. You will appreciate that it has not been possible for us to pass on this increase in raw material cost to our customers, since most of them are in Small Scale Sector and they in turn will not be able to bear this huge impact. We also understand that in the case of chemically pure grade propylene (98.5%) marked by IPCL and NOCIL, the price increase in the re cent past have been much lower than imposed by MRL. In light of the above, we request you to kindly reconsider the extent of price increase and restrict the same as per terms of the agreement. Since the situation is very grave and will affect our very existence, we would be grateful for your assistance and request you, if necessary, to take up this matter with the Government of India on our behalf.” The appellant replied to the above and referred to clause 3.3. of the agreement and justified the hike in the price of propylene saying, “..this increase has to be considered in the light of two Government directives to us which state the MRL is to impose 25% Gulf Surcharge (first directive) and increase price by 10% (second directive) on all free trade products viz., Propylene marketed by it”. This was followed by the lawyers notice on behalf of the respondents, nomination of the arbitrators by the parties and finally the proceeding in arbitration. 53. According to Mr. Shanti Bushan, learned Senior Counsel, in the communications before the arbitrators entered upon the reference, the respondents acknowledged the Government directives and never disputed the surcharge or increase as indicated in the telex communications from the Under Secretary to the Government of India. According to them, i.e., respondents, Mr. Shanthi Bushan, learned Senior Counsel has submitted, the surcharge and the increases was required to be added to the raw material, liquefied petroleum gas, from which the appellant manufactured propylene and sold the same to the respondents and the price revision accordingly, they conceded, in accordance with the formula in clause 3.1 of the agreement. 54. Mr. Sen, learned counsel for the respondents on the other hand, has contended that the respondents never acknowledged any surcharge falling for addition as a tax under clause 3.3 of the agreement. They always maintained and insisted that the revision should be made in accordance with the formula in clause 3.1 of the agreement. 54. Mr. Sen, learned counsel for the respondents on the other hand, has contended that the respondents never acknowledged any surcharge falling for addition as a tax under clause 3.3 of the agreement. They always maintained and insisted that the revision should be made in accordance with the formula in clause 3.1 of the agreement. Thus the respondents always disputed realisation of 25 per cent of the Gulf Surcharge and the 10 per cent increase of the price as imposed falling under clause 3.3 of the agreement. According to Mr. Sen the main issue thus before any award was given before the arbitrators for decision was the item of Gulf Surcharge and increase in the price by the Government of India and whether it fell under clause 3.3 of the agreement or not. The arbitrators committed no error by entering upon this issue. 55. We have referred to these documents and noted the contentions only to fall back again to the situation that the arbitrators, even if it is assumed, they could assume jurisdiction to decide the question, could do so on the basis of some evidence which indicated that it was a valid impost and did tall under clause 3.3 of the agreement or that it was not a valid impost and did not fall under clause 3.3 of the agreement. 56. Once the question of the validity of the demand by the appellant which involved the question of the validity of the surcharge and the increase in the price, i.e., whether the Government of India was competent to impose the Gulf Surcharge and to direct for the increase of the price, whether the Government of India had done it at all, if it was done, whether it was done under a valid executive order or instrument and above all, whether it was a tax or duty or not and if it was a tax or duty, whether it was imposed in accordance with law by the Government of India or not was raised, we are of the view the only proper person to answer any question about it was/is the Union of India. 57. One of the settled principles of law is that all persons interested in the matter of dispute should be made parties and consent to the arbitration agreement before the arbitrators assumed jurisdiction to decide the dispute and deliver the award. 57. One of the settled principles of law is that all persons interested in the matter of dispute should be made parties and consent to the arbitration agreement before the arbitrators assumed jurisdiction to decide the dispute and deliver the award. If arbitrators decide a dispute which affects the interests of a person, who was not made a party and who had not consented to arbitration agreement, the award which they deliver is invalid and it not only does not bind a party who had not consented to the agreement, but also does not bind even the consenting parties. We have no material to suggest that there was any defect in the arbitration agreement itself between the appellant and the respondents or that any of the parties to the agreement indulged in any malpractice and it seems both the appellant and the respondents participated in the proceeding before the arbitrators without questioning in any manner their authority to proceed with, the reference and deliver the award for the reason that a party, which was likely to be affected by the decision was not before them. It is not a case where any motive or intention can be attributed even to the arbitrators for the reason that they proceeded to decide all the issues before them without giving any care to the fact that what they proposed to decide as an issue, that is, imposition and realisation of Gulf Surcharge and the increase in the price by the Government of India, was likely to affect the Government of India most and since it was indicated that Government of India had imposed a surcharge and demanded additional revenue, their decision might affect such public interest. 58. In Chabba Lal v. Kallu Lal & others (A.I.R. (33) 1946 P.C. 72 = 59 L.W. 309), the Privy Council affirmed the judgment of Allahabad High Court, where the issue was whether a reference to an outside party to decide matters in dispute in a suit, on behalf of the minors, without requisite permission on the Court under O. 32, Rule 7, Code of Civil Procedure, 1908, was a valid reference or not. The view of the Court, as affirmed by the Privy Council, was that an agreement, which removes the decision of a matter in dispute from the jurisdiction of the Court and refers it to some outside party, is clearly an agreement with reference to the suit and to protect the interests of the minors, so that their interests are not sacrificed by an improper reference to an arbitration, necessary application should have been made to the Court and Court should have made an order granting leave. The Privy Council said that if there is no valid reference, the purported award is a nullity and can be challenged in any appropriate proceeding. 59. A Bench of the Patna High Court in Deep Narain Singh v. Mt.Dhameshwariand others (A.I.R. 1960 Pat. 201) considered a case, where a reference to an arbitration was made under a panchnama; but all the interested parties did not joint it. The Patna Court opined as follows:— “Even assuming that there was a reference to an arbitration and the Panchnama (Exhibit 3) is a genuine document, the arbitration agreement was invalid and legally ineffective, because all the defendants did not join in the execution of the agreement. It is well to remember that there are fifteen defendants, and, as will appear from the Panchnama, only six of them were parties to this agreement. The other defendants have not joined in the arbitration agreement. It is said that Sigar (defendant No. 3) had the authority on behalf of the other defendants to refer the matter to arbitration and to sign the arbitration agreement or the consequential award. But, as held above, this authority has not been established at all. The result is that all the parties interested in the matter of dispute were not parties to the arbitration agreement and it is manifest that when an agreement is not consented to by all, such an agreement is invalid and cannot give the arbitrators jurisdiction to decide the dispute and the award given on the strength of such void reference is also void. The award passed upon such invalid reference does not bind even the consenting parties. It is void altogether. This does not require a detailed investig ation.” 60. It is pertinent in the instant case, as has been argued by Mr. The award passed upon such invalid reference does not bind even the consenting parties. It is void altogether. This does not require a detailed investig ation.” 60. It is pertinent in the instant case, as has been argued by Mr. Sen, to point out that there is no such initial invalidity in the reference to the Arbitrators of the dispute between the appellant and the respondents, as the dispute at that time was strictly confined to the revision of the price of propylene by the appellant on the basis of the alleged Gulf Surcharge and the increase as per the communication of the Under Secretary to Government of India in the concerned department. But, when the question as to the validity of the impost and other allied issues merged in the proceeding before the Arbitrators, it indeed became a subject, which involved the interests of the Union of India. It is not, however, correct to suggest that dispute initially between the parties, was not one, which involved the interests of the Union of India, when on the day one itself the appellant informed the respondents that there was a directive, under which, a Gulf Surcharge was imposed by the Central Government and which required the addition of the said Surcharge to the basic price of propylene. 61. A serious argument has been made before us, and we view the said argument, as one, which in proceedings between the parties, will require special attention and without deciding the said question, nothing specifically can be said about the effect of Gulf Surcharge upon the product, that is, propylene, the product involved in the instant case. It is not in dispute that propylene is a free trade product. Its price is determined by the Refinery, as the seller, and in the case of the respondents, it has to do it in accordance with the formula 3.1, 3.2, and 3.3 of the agreement. In support of their case that the additional burden of surcharge or the increase, should have been put upon the LPG and accordingly, the price should have been determined in accordance with clause 3.1 of the agreement, the respondents have brought on record materials to show that many other manufacturers of propylene were/are not realising the surcharge and the increase, as a tax or fee, in addition to the price of propylene, as the appellant has done. The appellant has not been able to seriously dispute this fact and almost conceded that there are traders, besides the appellant, who have been selling propylene, but not adding the Gulf Surcharge or the increase of 10% thereon as per the alleged directive of the Central Government. Mr. Shanthi Bushan, however, has argued that the directives were meant only to cover the sales by the refinery and not by other sellers and those directives applied to propylene, which is a product of the appellant, which is a refinery. There are reasons, therefore, to accept that in their conclusions, the arbitrators have given a finding against the appellant on the question of imposition of Gulf surcharge and increase of 10% upon it on the sale of propylene, a product of the appellant. There have also been arguments before us that propylene is not a petroleum product, but a petro-chemical product and the impost applied to petroleum products, should not be applied, to a petro-chemical product, i.e., propylene. We are afraid if we venture into these aspects of the dispute between the parties, we shall be sitting in appeal to consider the case on the basis of the evidence whether each finding of fact or law recorded by the arbitrators is a correct finding of fact or law or not. That will not only be transgression of the jurisdiction of the Court in a proceeding under Section 33 of the Act read with S. 30 thereof, but also violative of all such other constraints, which Courts exercise in a proceeding arising out of a non-speaking award. 62. Detailed and emphatic arguments at the Bar are most educative, but not very helpful to the Court in reaching to a just conclusion. Many arguments and citations have come handy to tell the Court that it has to function within specified and well delineated parameters and also to tell it that there are escape holes to peep into the prohibited area. We have, however several limitations as spelled out variously by the Courts as the award has only stated the conclusions and not the reasons. We have chosen to state the case of the parties, as we have understood and stated and applied the law on the subject to the extent they are relevant and necessary. We have, however several limitations as spelled out variously by the Courts as the award has only stated the conclusions and not the reasons. We have chosen to state the case of the parties, as we have understood and stated and applied the law on the subject to the extent they are relevant and necessary. How far we have been successful in exercising the restraint, we think, should not detain us in coming to our conclusions. 63. We have no hesitation in concluding on the facts as above in the light of the principles of law the arbitrators have exhibited a non-application of mind and proceeded oblivious of the fact that they had no materials before them to adjudicate as to the validity or otherwise of the Gulf Surcharge and the increase thereon under the two communications on behalf of the Government of India by the Under Secretary to the Government, committed legal misconduct by not taking notice of the consequence of the adjudication of a vital issue as to the imposition of a tax or otherwise, which involved public interest and proceeded to decide the same in the absence of the Union of India, which alone was the party competent to answer any such question on facts. We have held on the facts of the instant case that it may not be right to hold that arbitrators have misconducted themselves or the proceedings by putting their interest of receiving a heavy amount by way of re-muneration before the interest of a fair adjudication, but the award of cost of the proceedings, including fees etc. is unreasonable. The award of costs, which form part of the main award is obviously separable and can be affirmed, nullified or modified separately without affecting the main adjudication. 64. There has been a serious argument before us on behalf of the appellant that the respondents have passed on the increase in the price of propylene to their customers and thus by the award, as delivered by the arbitrators, they are going to enrich themselves unjustly. It can indeed be a matter of concern, for, any adjudication to see whether a party is likely to unjustly enrich itself by the award, but before it is so done, there should be sufficient and adequate materials for such adjudication. It can indeed be a matter of concern, for, any adjudication to see whether a party is likely to unjustly enrich itself by the award, but before it is so done, there should be sufficient and adequate materials for such adjudication. There is nothing before us to show that there was any such contention before the arbitrators and no materials have been brought before us, on which we can record our satisfaction that the respondents have passed on the increase in the price of propylene to their customers. In any event, if at all there is some basis for it, in our view, it shall be an issue for adjudication by the arbitrators, if parties go for arbitration, or by the court or the appropriate authority in law, if any such proceeding is taken out by the appellant. What has concerned us most in the instant case is the involvement of the interest of the revenue which is for all purposes interest of the public and the fact that arbitrators have misconducted the present proceedings by not taking notice of the intricacies of the legal and Constitutional question as to the validity of the Gulf Surcharge and the increase in the price by the Government of India, and instead, of taking recourse to S. 13(b) of the Act or otherwise deciding the questions as collateral or jurisdictional issue they have handed over their conclusions as respects the claims, as if there were no contentions before them on such vital issues. We have also seen that there were no materials before the arbitrators, much less, any evidence showing that there was no duty or tax under any law imposed on the sale of the products of the appellant and that no surcharge was imposed and no additional increase in the price was ordered by the Government of India. In this aspect of the matter, there is a complete non-application of mind by the arbitrators. The arbitrators have completely failed to take notice of the fact that the interest of the revenue was involved and there was a plea that the revenue realised by the appellant was transferred to a fund, as directed by the Central Government and finally appropriated by the Central Government. The arbitrators have completely failed to take notice of the fact that the interest of the revenue was involved and there was a plea that the revenue realised by the appellant was transferred to a fund, as directed by the Central Government and finally appropriated by the Central Government. The dispute was not confined at least in this respect between the appellant and the respondents, but involved the interests of the Government of India/Union of India and no decision in this behalf could be given in the absence of the Union of India. This has rendered the award void as a whole, except in so far as the award of cost of the proceedings including the fees, etc. of the arbitrators is concerned. Learned counsel for the arbitrators as well as Mr. Sen, we have already noticed, have made serious endeavors to persuade us to hold that the demand of the fee, as above, by the arbitrators, is not unreasonable. There has been no quarrel before us as to the mode to be adopted for finding out whether the demand of the remuneration of the arbitrators is fair and proper or not, and in what circumstances, the court many find that exorbitant/and heavy demand of remuneration by the arbitrators has affected the very adjudication. We have gone in some details to examine accordingly, whether the arbitrators in the instant case, should be allowed the amount demanded by them and found that the demand is unreasonable , arbitrators had already agreed and parties accordingly had accepted that the former would be paid the sitting fees each day and other charges at a particular rate and received part payments from the parties. Suddenly, however, in the notice of award, they (arbitrators) incorporated, ‘each arbitrator shall be paid a lump sum fee of Rs. 3,00,000/- by each party for reading the documents, making, writing, signing and publishing the award. The items, one-time down payment of Rs. 1,000/- for clerical expen ses, sitting fee of Rs. 2,000/- per day to each of the arbitrators, conveyance charges of Rs. 100/- for attending each meeting to be shared equally between the two parties, cannot be said to be on the lower side, but parties agreed for it and no fault can be found with the arbitrators for the same. However, the demand of lump sum payment of Rs. 2,000/- per day to each of the arbitrators, conveyance charges of Rs. 100/- for attending each meeting to be shared equally between the two parties, cannot be said to be on the lower side, but parties agreed for it and no fault can be found with the arbitrators for the same. However, the demand of lump sum payment of Rs. 3,00,000/- to each of the arbitrators by either party for reading the documents, making, writing, signing and publishing the award, has projected them badly. Lea rned single judge has recorded his opinion about them in the following words:— “The conduct of the arbitrators is unbecoming and such practice should be strictly deprecated.” Not one, who would see the number of documents on the record, before the arbitrators, the contents of the non-speaking award, wherein only conclusions are recorded and the effect required in making, writing and signing the award, would see reason for the demand of the arbitrators. Perusal of the documents and making, writing and signing the award needed much less exacting and onerous efforts than hearing at the matter and proceeding accordingly to decide as to what should be the award. We are not inclined to accept the contention on behalf of the arbitrators that the demand is reasonable. For the said reason we order accordingly and separately from our order as respects the award adjudicating the dispute between the parties that the parties shall abide by the sitting fee, one-time down payment of clerical expenses and local conveyance charges to the arbitrators for attending each meeting and pay accordingly to the arbitrators in full, and pay besides the above, remuneration in a sum of Rs. 30,000/- (Rupees thirty thousand only) by each party for reading the documents and making, writing, signing and publishing the award. The arbitrators are liable to refund any excess amount received by them. They are directed to do so within a fortnight from the date copies of judgment are ready for delivery to the parties. 65. We are satisfied for the reasons as above, that the award of adjudication of the dispute cannot be sustained and the same has to be set aside. We have given our anxious thought to the procedure that should be adopted. Should the case be left for the parties to choose the appropriate forum for adjudication? 65. We are satisfied for the reasons as above, that the award of adjudication of the dispute cannot be sustained and the same has to be set aside. We have given our anxious thought to the procedure that should be adopted. Should the case be left for the parties to choose the appropriate forum for adjudication? We have not decided to do so because the contract is a continuing contract and shall conclude in 2000 A.D. (31.3.2000). The issue of increase in price may periodically come up and strain the relation between the parties and each time may involve the interest of revenue. The contract has a specific arbitration clause and once there is an arbitration agreement between the parties, it is not proper to deny to any party the right to enforce the arbitration agreement. Since we have noticed a serious illegality in the award, should we exercise power under Section 16(c) of the Arbitration Act and remit the matter to the Arbitrators and fix a time limit for adjudication with a specific direction to state a Special Case on the question of law involved for the opinion of the Court and thereafter to decide the dispute in accordance with law? This undoubtedly is considerably a difficult situation. One way is to take out proceedings in such a way that in the event of adjudication of the dispute between the appellant and the respondents, the Union of India is also allowed to participate and thus is made a party to the arbitration proceeding. The other way is that the Union of India itself agree to participate in the arbitration and the third party situation, which is created on account of the special issues is thus resolved. The other way is that the Union of India itself agree to participate in the arbitration and the third party situation, which is created on account of the special issues is thus resolved. In commercial arbitration, by Mustill and Boyd , it has been pointed out there are four situations of a person not named as a party (1) the claimant was in reality always a party to the contract, although not named in it, (2) the claimant has succeeded by operation of law to the rights of the named party, (3) the claimant has a become a party to the contract in substitution for the named party by virtue of a statutory or concensualnovation, (4) the original party has assigned to the claimant either the underlying contract together with the agreement to arbitrate which it incorporates, or the benefit of a claim, which has already come into existence. The fourth situation appears to arise on the basis of the pleadings of the appellant that the Gulf Surcharge and the additional fee increase as per the alleged directive of the Government of India, has been transferred by it to the benefit of the Government of India. It has been pointed out by the authors in that book that decided cases on the rights of parties in this situation, are not clear, but has cited a case, which suggests, if the assignor will not join as a claimant, the Court will no doubt find some meaning of enabling the arbitration to proceed either by ordering the assignor to execute a legal assignment or by ordering him to allow his claim to be used as a claim against a proper indemnity to the cause of arbitration. This difficulty can be overcome if the Union of India agrees to join the arbitration or while exercising the power to state the special case for the opinion of the Court, under section 13(b) of the Arbitration Act, Arbitrators indicate that the interests of the Union of India are involved and the Court while deciding the Special Case so stated by the Arbitrators gives a hearing to the Union of India and decides the matter in the presence of the Union of India. 66. For the reasons stated below, we have to remove the arbitrators. We cannot obviously remit the award to them. 66. For the reasons stated below, we have to remove the arbitrators. We cannot obviously remit the award to them. The only course available under the Arbitration Act is as indicated under Section 12 thereof. We do not have, however any application by either party to appoint a person to act as sole Arbitrator in the place of the person/persons displaced. We can order however that the Arbitration agreement shall cease to have effect with respect to the difference, but we do not propose to do so, without affording a fresh opportunity to the parties. We conclude thus that the award of adjudication is fit to be set aside and the award of costs, etc., is fit to be modified as indicated above and order accordingly and direct: (1) each party shall nominate their respective Arbitrators within a fortnight, from the date when the copies of this judgment are ready for delivery to the parties. If any one of them fails to nominate the Arbitrator within the time allowed, the other party may make an application under Section 12 of the Arbitration Act before this Court on the original side within a week of the fortnight, aforesaid, and seek appointment of the Arbitrator accordingly. (2) If no Arbitrator is nominated by either of the parties and no application is made under Section 12 of the Act, the Arbitration agreement shall cease to exist. It shall be open to either party to seek remedy in accordance with law. (3) Arbitrators on their appointment by the parties, or in the event of an application to the Court under Section 12 of the Act, by the Court, shall proceed to hear the parties in accordance with law, but before making any award, state the Special Case for the opinion of the Court, on the question of law as above and refer the same to the Court, indicating not only the question of law to be decided by the court, but also the fact that the interest of the Union of India, is involved and while deciding the question of law, the Court may think it necessary to hear the Union of India in the proceeding. The arbitrators shall accordingly make the award after the opinion of the Court, is received. The arbitrators shall, however, complete all the proceedings within a period of six months. The arbitrators shall accordingly make the award after the opinion of the Court, is received. The arbitrators shall, however, complete all the proceedings within a period of six months. (4) As an alternative to the directions above, we record that parties may agree to abide by an arbitration by an Arbitrator or Arbitrators nominated by the Government of India and in that event, as per the consensus ad idem the Government of India may also agree to participate in the arbitration proceedings. The arbitrator/arbitrators so appointed may finally adjudicate all the controversies between the parties including the claim, if any, for or against the Union of India so that this alternative option may be fruitful. Either party can issue notice to the other, within one week from the date the judgment is ready for delivery and accordingly submit its representation to the Government of India (represented by the Competent Authority). The Government may communicate its decision to the parties within one month of the representation and on such agreement between the parties and the Government of India agreeing as indicated above, the directions for fresh arbitration, etc. as aforementioned shall become inoperative. No party, however, shall unnecessarily wait for any communication from the other party or from the Government of India and proceed as indicated above. (5) We have been informed at the Bar in the course of the hearing of the appeals that there has been further revision of the price of propylene (sic) by the appellant and the respondents nave been complaining that the appellant has been realising from them a much higher price for their supplies than the price at which they have been selling propylene to other customers. The appellant has disputed this allegation. Since we are informed and we have no reason to doubt that the products for the preparation of which the respondents purchase and use propylene as a raw material are articles of considerable importance and propylene is not available easily, except by import from foreign countries, we think it proper to caution the parties that they should not indulge in such practices and activities, which unnecessarily strain their relationship and create such a strain upon the contract that one or the other party is compelled to breach it. There can be no satisfactory answer to the question why the appellant shall supply propylene to other buyers at a lesser price than the price at which it has been sold to the respondents. We are inclined in these circumstances to order that the appellant shall not exercise any discretion to realise from the respondents any price higher than the selling price of propylene to other buyers, if, however, the respondents are found to have not adhered to the conditions of the agreement and lifted the supplies when offered for sale at a proper rate, the appellant shall be free to sell the same to other buyers at a price even less than the selling price otherwise and the respondents will get no benefit. 67. In the result, all these appeals are allowed, the judgment and order of the learned single judge are set aside. There will be an order as indicated above. However, there will be no order as to costs in these appeals. Learned counsel for the respondents seeks certificates required under Article 134-A(b) of the Constitution of India to appeal to the Supreme Court. We have decided the case strictly in accordance with the settled principles of law. We do not find any substantial question of law as to the interpretation of the Constitution or a substantial question of law of general importance, which needs to be decided by the Supreme Court, is involved in this case. Accordingly we refuse to grant the certificate, as prayed for. CMP Nos. 11991, 11993, 11996, 11998, 12000, 12003, 13805 to 13816, 15666 to 15671, 17250 to 17253, 17434, 17435 of 1993 and 1219 and 4267 of 1994. CMP. Nos. 2435 and 2436 of 1994 ; We have heard learned Senior Standing Counsel as well as learned Additional Solicitor General on behalf of the Union of India. We do not think it necessary however to add the Union of India as a party to the proceeding in the appeals. These petitions are accordingly rejected.