P. G. Agarwal, J.— This appeal under section 39 of the Arbitration Act, 1940, for short, the Act is directed against the judgment and order passed on 10.2.97 by the District Judge, Shillong in Arbitration Misc Case No.93 (H) of 1989. 2. Meghalaya Tourism Development Corporation Ltd, hereinafter referred as MTDC floated a tender for construction of 3 Star Hotel by the name of Crowborough Hotel at Shillong. After the finalisation of the tender, contract was signed between the MTDC and the appellant M/s SA Builders Ltd, New Delhi, hereinafter referred as the builders. As per the terms of the contract, the construction was to be completed within a period of 20 months, that is, on or before 24.11.88. / As the work could not be completed, the builders prayed for extension and the initial extension for 150 days was granted. Thereafter the second extension was granted upto 23.6.89 on which date also the work remained uncomplete. The MTDC therefore terminated the contract by their letter dated 23.6.89. 3. The builders approached the Court for appointment of Arbitrator and for referring the matter to arbitration. The builders nominated Justice SP Goel as ° Arbitrator. MTDC first appointed one Mr. R Khargonkar as an Arbitrator. But as the said Khargonkar resigned, one Mr. JMJala was appointed as an Arbitrator. The two Arbitrators appointed Mr. Prem Chand Jain, Retired Chief Justice, arnataka High Court as an Umpire. The arbitration proceeding continued for period. After recording of the evidence and at the stage of hearing arguments was some disagreement on extension of time and the matter was referred to mpire by one of the Arbitrators namely Justice SP Goel on 5.6.95. The Umpire entered into the reference and the learned Umpire gave Award on 17.9.95. 4. The builders thereafter approached the Court at Shillong for making the Award a Rule of the Court. The learned District Judge, after hearing vide order dated 10.12.97 set aside the Award and referred the matter to a Joint Arbitrator for making and publishing a fresh Award within a period of 30 days. Hence the present appeal. 5. We have heard the learned counsel for both sides at length and perused the record. 6. The learned counsel for the MTDC has raised an objection to the effect that the Umpire had no jurisdiction to enter into the reference and as such the Award is bad in law. Hence the present appeal. 5. We have heard the learned counsel for both sides at length and perused the record. 6. The learned counsel for the MTDC has raised an objection to the effect that the Umpire had no jurisdiction to enter into the reference and as such the Award is bad in law. The said objection was upheld by the learned District Judge when he held that the "Umpire has acted without jurisdiction as reference was referred to him by one of the Arbitrator only which is against the provision of c Rule 4 of Schedule I of the Arbitration Act..." 7. Rule 4 of Schedule I read as follows : "4. If the Arbitrators have allowed their time to expire without making an Award or have delivered to any party to the arbitration agreement or to the Umpire a notice in writing stating that they cannot agree, the Umpire shall forthwith enter on the reference in lieu of the arbitrators." 8. The broad facts in this case are not in dispute. The time was extended before the two Arbitrators till 31.1.95 and thereafter the matter was fixed on 18.4.95 and 19.4.95 on which dates both the parties appeared which goes to show that there was implied consent for extension of time till that date. On 19.4.95 a difference arose between the parties regarding extension of further time. MTDC wanted four months whereas the builders was willing to extend it for one month only. On 19.4.95, one of the Arbitrators namely Justice SP Goel wrote a letter to the Umpire informing him about the difference of opinion. The other Arbitrator namely Mr. Jala also wrote a letter to the Umpire stating that there was no difference of opinion. In view of the admitted position with the difference of opinion regarding extension of time, we are unable to accept the contention of Mr. Jala in this respect. Thus we find that the extension was upto, 19.4.95 and thereafter it was not extended by mutual consent of the parties. The Umpire entered into the reference on 5.6.95 on which date the Arbitrators had allowed the time to expire without making an Award. The Umpire was appointed at the initial stage of the arbitration proceeding by the two Arbitrators and there is no dispute about the same. The Umpire entered into the reference on 5.6.95 on which date the Arbitrators had allowed the time to expire without making an Award. The Umpire was appointed at the initial stage of the arbitration proceeding by the two Arbitrators and there is no dispute about the same. Hence, as per first proviso of Rule 4, as stated above, the Umpire was within his jurisdiction to enter into the arbitration as the two Arbitrators allowed their time to expire without making an Award. The learned counsel for MTDC has submitted that the reference by one of the Arbitrators to the Umpire was not in accordance with law and the Umpire had no jurisdiction to enter into the same. As stated above, as there was difference of opinion between the two Arbitrators as regards the extension of date, the mere fact that the reference was made by one of the Arbitrators will not stand in the way of the Umpire to enter into the reference. We are therefore, of the view that the Umpire Mr. PC Jain rightly entered into the reference. 9. The next point for consideration is whether in this case the Umpire was required to give a speaking Award or a non-speaking Award. 10. The Meghalaya State Amendment to the Arbitration Act provides that all Awards should be a speaking Award. Proviso added to section 14 (1) of the principal Act reads as follows : "Provided that the Arbitrator or the Umpire shall give reasons for the Award made under this section and no Award shall be valid unless reasons therefor are so given." The learned counsel for the MTDC has further stated that the contract agreement which provides for arbitration also categorically stated that the Award should be a speaking one, the learned counsel for the builders has fairly conceded that in the instant case, the Umpire was required to pass a speaking Award. In the case of Jajodia (Overseas) Pvt Ltd vs. Industrial Development Corporation, reported in (1993) 2 SCC 106 , the Apex Court had defined that a speaking or reasoned Award is one which discusses or sets out the reasons which led the Arbitrator to make the Award. Setting out the conclusions upon the questions of issues that arises in the arbitration proceeding without discussing the reasons for coming to these conclusions does not make an Award a reasoned or speaking Award. 11. Setting out the conclusions upon the questions of issues that arises in the arbitration proceeding without discussing the reasons for coming to these conclusions does not make an Award a reasoned or speaking Award. 11. In the light of the above, let us now consider whether the impugned Award is a speaking Award or not. By Award dated 17.9.95 the Umpire allowed the claim of the builders on the following three counts : (1) For the work already done. (2) Refund of security deposit. (3) Bank guarantee encashment. The learned Umpire in the impugned Award has split the claim No. 1A into two parts i.e. (i) work done after adjustment of balance advance and secured advance etc -Rs.22,64,023/- (ii) Payment towards extra items - Rs.43,42,700/- 12. The reasons for granting the above claim as detailed in the Award reads as follows: "With respect to the second part of the claim 1A relating to the payments towards the extra items, I have been taken through the various records and the bills filed by the claimants. Annexure C193 specially deals with various supplementary bills raised by the claimants in this regard. The analysis of each extra item executed has been placed on record as C195, 196, 197, 202, 203, 204, 205, 209 and other Annexures. I find that the amount in respect of extra items 8 executed comes to Rs.43,42,700/-. Thus this sum is awarded to the claimants." 13. From the above it is clear that the Umpire allowed the claim of Rs.43 lakhs to the builders on the basis of the supplementry bills raised by the builders. There is no whishper in the Award whether, these supplementry items were sanctioned, consented to and/or in fact carried out by the builders or even finds fo support in the joint inspection alleged to have been carried out as per order of the Assistant District Judge. 14. Before proceeding further, let us have a look at C193 on the basis of which claim No.lA was allowed by the Umpire. C193 is a letter dated 5.9.89 submitted by the builders to MTDC detailing consolidated statements of claims and finds place at page 349 of the statements of facts and claim of the claimants. 14. Before proceeding further, let us have a look at C193 on the basis of which claim No.lA was allowed by the Umpire. C193 is a letter dated 5.9.89 submitted by the builders to MTDC detailing consolidated statements of claims and finds place at page 349 of the statements of facts and claim of the claimants. The total claim is for Rs.2,22,77,185/- The claim under the head 1A finds place in Annexure A. The Annexure A contains list of as many as 19 bills out of which 6 bills ie item Nos 1,2, 3,12,13 and 14 are for labour escalation. Item Nos 15, 16 and 17 are for escalation/reimbursement of variation of prices of materials. Other 9 items are supplementary bills for extra items. The above claims were refuted on behalf of the MTDC by their consultant. In the impugned Award, the learned Umpire has not discussed whether the builders was entitled to labour escalation and escalation of material cost variation under the terms of contract agreement or not. So far the supplementary bills are concerned, the claim includes, amongst others, cost of binding wires, storage charges, hire charges etc. In one of the bills it is stated the due to heavy rain, site was flooded and the builders had to spend certain amount to drain out the rain water for which MTDC is required to reimburse. Another item in supplementary bill is for hiring charges for godown and office. In respect of building materials it is stated that the construction site was not sufficient to store the building materials and as such the builder had to hire space for storage of the building materials. When the builders undertook the work it is expected that they must have inspected the site. However, we will not comment anything regarding the merit of the claim as such. But these claims are definitely to be governed by the terms of contract and not at the sweet will of the Arbitrators. As a matter of fact, vide letter C200 the consultants of MTDC requested the builders to furnish the contract clause reference of the claim for consideration. 15. In para 22 of the Award the Umpire observed as follows : "22. Before the matter was referred to me as an Umpire, all the pleadings of the parties were completed and evidence had been recorded and documents had been filed. 15. In para 22 of the Award the Umpire observed as follows : "22. Before the matter was referred to me as an Umpire, all the pleadings of the parties were completed and evidence had been recorded and documents had been filed. Even written arguments had been filed and oral submissions were being made on the written arguments filed. The matter was at the final stage when there was a disagreement and the matter was referred to me." 16. Not to speak of discussing the evidence and the written argument filed by both the parties, the learned Umpire has not given a single reason for allowing the claim of Rs.43 lakhs and odd for the alleged extra work carried out by the builders. 17. The learned counsel for the respondent MTDC has submitted that in view of the provisions contained in Rule 2 and 3 of Order XVII of the Code of Civil Procedure, the Umpire was bound to consider the materials placed before ° him by MTDC, but the Umpire utterly failed to consider the materials submitted by the MTDC. It was a case of breach of the contract and as such the moot point for decision was who was at fault ? In the impugned Award there is no decision by the learned Umpire on this point. The relevant observations are as follows : "I find that various breaches of contract as attributable to the respondent and l in any case, the respondents have themselves stated in their letter of termination that there were certain unforeseen circumstances because of which the performance could have been affected”.The learned counsel has taken us through the contentions of the entire letter stated above and we find that the above observation have been picked up without considering the entire context and the spirit of the letter. There was no admission that the respondent was responsible for the non fulfillment of contract by the contractor. The builders in their letter dated 21.12.88 categorically stated that the times was the essence of contract as per agreement and the period of completion of 20 months covers the monsoon period also. It is submitted that in spite of two extensions granted to the builders they failed to complete the contract and as a matter of fact the MTDC has suffered huge losses for non completion of the project till date. It is submitted that in spite of two extensions granted to the builders they failed to complete the contract and as a matter of fact the MTDC has suffered huge losses for non completion of the project till date. The Umpire gave no reasons in the Award and even the provisions of the contract agreement were not considered. 18. In this case the builders gave two bank guarantees to MTDC - (1) Rs. 20,60,0007- in respect of mobilisation advance, and (2) Rs.5 lakhs against performance of contract. Both the bank guarantees were encashed by MTDC as per order of the High Court and it seems that the learned Umpire was not aware of the said fact and observed thus in any event the said mobilisation of bank guarantee could not have been encashed by the respondent concerned. Admittedly, there was unrecovered mobilisation advance of Rs.7,39,706 as detailed in page 13 of the Award. Further so far the second guarantee of Rs.5 lakhs is concerned there is no reasonable finding that the contract failed due to lapse of the MTDC and the builders is not liable for non performance of the contract. 19 The learned counsel for the respondent has further submitted that MTDC has made several counter claims before the Arbitrator/Umpire. But these were not considered by the Umpire. The relevant observations of the Umpire are at para J of the Award which reads as follows : "With respect to the counter claims of the respondent exparte proceedings were taken against the respondent. Numbers of opportunities were given but none appeared. The same are dismissed." The above observation are in direct contradiction of the earlier statement of the Umpire that both the parties led evidence and filed written arguments in support of their claims. It is submitted that non consideration of the counter claims amounts to misconduct on the part of the Umpire and in support of the same the learned counsel for the respondent has referred to a decision of the Apex Court in the case of KV George vs. Secretary to Govt, Water and Power Department, Trivandrum & another, reported in (1989) 4 SCC 595 and also in the case of the Union of India vs. Jain Associates & another, reported in (1994) 4 SCC 665 . In the above referred two decisions the Apex Court has held that non 8 consideration of the counter claims amounts to misconduct. In another case namely Indian Oil Corporation Ltd vs. Amritsar Gas Service & others, reported in (1991) 1 SCC 533 , the refusal to consider the counter claims in written statement filed before the Arbitrator was held to be error apparent on the face of the record. 20. Shri Goswami, learned counsel for the appellant has submitted that in fa spite of the observations as stated above, the Umpire in the present case did consider the counter claims of the MTDC and granted relief to them. The unrecove- red mobilisation advance was taken care of and it was adjusted against the claim under 1 A. The bank guarantee of Rs.20 lakhs was against the mobilisation advance and as the bank guarantee was already encashed by MTDC as per order of the Court. This was no more a case of counter claim. As a matter of fact, the unrecovered mobilisation advance was to be adjusted against the bank guarantee only and not against the bills. In view of the specific observations of the Umpire that he did not consider the counter claim for the reasons mentioned, we have no hesitation to hold that the counter claims as such were not considered by the Umpire. 21. In view of aforesaid discussion and decision, we are of the view of that the impugned Award can not be termed as a speaking or reasoned Award and the Umpire has also misconducted himself by not considering the counter claims, evidence, written document and written arguments available before him. There is also no decision as to who was to be blamed for the breach of the contract which led to the termination. 22. It is well established that when the bad portion of the Award is severable from the good part, the Court may set aside the bad part and upheld the rest. In this case we find that the impugned Award suffers from non application of the mind and this being a case of speaking Award the Umpire has not given reasons for his decision and has also not considered the counter claims of the respondent we are of the view that the entire Award must go. In the result, the appeal is dismissed, without any order as to cost. In the result, the appeal is dismissed, without any order as to cost. The learned District Judge has referred the matter back to the two Arbitrators but in view of our decision above, the Award is remitted to the Umpire for giving a reasoned finding within a period of 45 days from the date of receipt of this communication. Although we have set aside the Award of the Umpire or in other words allowed the judgment of the District Judge by which the Award of the Umpire has been set aside, to remain in tact, subject to some modifications, yet we are constrained to observe that the proceedings right from the stage of Arbitrator uptill the stage of Umpire have been delayed by the Meghalaya Tourism Development Corporation Ltd. For the delaying tactics practised by the Corporation, it deserves all adverse comments. The proceedings before the Arbitrators as well as the Umpire clearly indicate that several adjournments were sought for, which could have been avoided and on several occasions none appeared for the Corporation thinking probably that the Umpire would give a date. Without dilating upon the matter any further on this point the Court wants to express its displeasure in the above terms. A copy of the judgment along with entire records be sent to the Umpire by the Registry forthwith.