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2001 DIGILAW 257 (CAL)

Union of India v. M. Muljee

2001-05-04

ASOK KUMAR GANGULY, Pranab Kumar Chattopadhyay

body2001
JUDGMENT Pranab Kumar Chattopadhyay, J. This appeal arises out of the judgment and order of the learned Single Judge of this court whereby and whereunder the application filed by the petitioner herein under sections 30 and 33 of the Arbitration Act, 1940 for setting aside the award was dismissed and also a decree was passed in terms of the award of the learned Arbitrator. 2. The respondent claimant entered into a contract for construction of a flyover bridge across the Korba-Gevra Road Railway line to serve Kusumunda for Mis. Western Coalfields Limited (W.C.L.). The respondent contractor started construction work in terms of the contract agreement No.18/Kus/CE/Con/Serl 83 dated 5th October, 1983 executed between the parties, namely, Chief Engineer (Construction), SE Railway for and on behalf of the President of India and the respondent contractor. The work of construction was required to be completed within eight months i.e. by February 25, 1985, but ultimately the same was completed on April 30, 1987 after the grant of five extensions. With the progress of work respondent contractor submitted running account bills and received periodical payments against such bills. After the completion of the work final bill was prepared and paid on December, 1991. 3. According to the appellant the respondent contractor accepted the said final bill in full and final settlement of all its claims under the contract after making necessary endorsement and/or declaration in this regard. It was also submitted on behalf of the appellant that an unconditional acceptance of measurement of all the works executed under the contract had also been recorded in the Measurement Book. After a lapse of two years of receiving the payment against the final bill, the respondent contractor served a notice on the General Manager, SE Railway raising claims for payment of further amount even after payment of final bill amount. In the said letter respondent contractor contended that payment of the final bill was received under protest. The respondent also requested the General Manger, SE Railway to make necessary payment of the claimed amount mentioned in the said letter within a reasonable period or otherwise to refer the matter to the Arbitrator for adjudication of the claims of the respondent by arbitration in terms of clauses 63 and 64 of the general conditions of contract. 4. The respondent also requested the General Manger, SE Railway to make necessary payment of the claimed amount mentioned in the said letter within a reasonable period or otherwise to refer the matter to the Arbitrator for adjudication of the claims of the respondent by arbitration in terms of clauses 63 and 64 of the general conditions of contract. 4. Since the claim was not referred to arbitration by the appellant, respondent contractor filed an application under section 20 of the Arbitration Act whereupon this Hon'ble Court passed an order for filing of the arbitration agreement in court and to refer the disputes mentioned in the petition to arbitration in accordance with the arbitration clause. In compliance with the said order •of this court, General Manager, SE Railway by written communication dated February 25,1995 appointed Joint Arbitrators in terms of the arbitration clause of the said agreement. By a subsequent order dated August 13, 1996 this Hon'ble Court while entertaining an application filed under sections 5,11 and 12 of the Arbitration Act, 1940 on behalf of the respondent/claimant herein found that the Joint Arbitrators could not proceed satisfactorily with the reference and it also transpired in course of hearing that one of the Joint Arbitrators had been transferred. 5. Considering the entire aspects of the matter this court while disposing of the said application of the claimants granted leave to the parties to revoke the authority of the Joint Arbitrators and appointed Mr. R. C. Nag, senior Advocate, as sole Arbitrator. But since Mr. Nag declined to act as Arbitrator this Hon'ble Court appointed Mr. Jatin Ghosh, senior Advocate as Arbitrator by a subsequent order dated 3rd September, 1996. After considerable progress in the arbitration proceedings the learned sole Arbitrator, Mr. Jatin Ghosh died on 13th October, 1998. By an order dated 24th December, 1998 Mr. Rajat Kr. Ghosh was appointed the sole Arbitrator in place of deceased Arbitrator, Mr. Jatin Ghosh. 6. On 10th May, 1999 learned Arbitrator passed the award in favour of the respondent contractor. After pronouncement of the award and after issuance of the notice under section 14 (2) of the Arbitration Act, 1940 an application was taken out by the Railway under sections 30 and 33 of the Arbitration Act for setting aside and/or cancellation of the said award. 7. After pronouncement of the award and after issuance of the notice under section 14 (2) of the Arbitration Act, 1940 an application was taken out by the Railway under sections 30 and 33 of the Arbitration Act for setting aside and/or cancellation of the said award. 7. Learned Trial Judge after considering the said application and upon considering the submissions of the respective parties, rejected the said application for settling aside the award on 16th September, 1999 and passed the decree in terms of the award wherefrom the present appeal has been preferred. 8. The award is a non-speaking one. The appellant challenged the said award mainly on the grounds, which are summarised hereunder: a) The Arbitrator had no jurisdiction to go into and adjudicate upon any of the claims made by the claimant in view of signing and acceptance of the final measurement and final bills without any dispute or claim. Signing of the final bills amounted to unconditional acceptance of the correctness of the final bills and, therefore, the same resulted in accord and satisfaction, according to the appellant. b) There can be no outstanding disputes between the parties warranting adjudication in view of the unconditional acceptance of the final measurement and also the amount of outstanding dues under the contract as reflected in the final bill. c) Arbitrator had no jurisdiction to go into and adjudicate upon any of the claims made by the claimant in view of final bills having been signed and accepted as correct. d) The prohibitory clauses incorporated in the contract between the parties operate as clear embargo upon the Arbitrator to grant any relief to the claimant contractor by awarding any amount on such account and Arbitrator acted beyond the jurisdiction by granting interest as in terms of clause 16(2) of the general condition of the contract, such grant of interest was prohibited. e) Arbitrator committed jurisdictional error in awarding costs in favour of the respondent/claimant when neither in the notice of reference nor in the statement of claim the respondent contractor made any prayer for award of such costs. 9. Mr. P. K. Roy, learned senior Counsel of the appellant, submitted that there has been full and final settlement between the appellant and the respondent contractor. There has been accord and satisfaction. 9. Mr. P. K. Roy, learned senior Counsel of the appellant, submitted that there has been full and final settlement between the appellant and the respondent contractor. There has been accord and satisfaction. Respondent contractor executed and signed various important documents as mentioned here-in-below: a) Measurement Book: The measurement as recorded in the Measurement Book has been accepted as final and declaration that there is no claim by the respondent/contractor against the work order. There were five work orders under the contract. In all these five work orders, the respondent/contractor made similar endorsement in his own handwriting. b) The Final Bill: In the said final bill the respondent has specifically stated that there was no other claim against the above work order and the same was accepted as final. The respondent/contractor further certified that it has correctly and fully satisfied all claims under this account. The similar endorsements in writing have been made by the respondent/contractor in respect of other work orders in the final bill. 10. Referring to the statement of claim learned Counsel of the appellant submitted that the respondent contractor in the said statement of claim alleged that the final bill amount though has been paid but the same did not cover all the items of claims. In the said statement of claim respondent contractor also contended that the receipt of the final bill payment was made under protest. However, referring to the counter statement of facts learned Advocate of the appellant submitted that it was specifically stated in the counter statement that the final bill was accepted by the respondent without any reservation. Furthermore, "Advice Slip" sent to the respondent contractor in respect of the amount mentioned in the cheque was signed belatedly with the mark "under protest". Such endorsement, according to the learned Counsel of the appellant, cannot and does not amount to acceptance of the final bill under protest. 11. Learned Counsel of the appellant pointed out that in answer to question No.89 Mr. Bose, a witness of the respondent contractor, deposed before the learned Arbitrator that the contractor accepted the final bill with "no claim certificate". 11. Learned Counsel of the appellant pointed out that in answer to question No.89 Mr. Bose, a witness of the respondent contractor, deposed before the learned Arbitrator that the contractor accepted the final bill with "no claim certificate". The learned senior Counsel of the appellant, further submitted that the respondent contractor having accepted and signed the final bill without protest and having accepted and signed the Measurement Book without any protest and also stating therein that the contractor has no other claim under the work orders, the respondent/claimant has no right to claim any further amount. 12. According to the learned Advocate of the appellant, no arbitrable disputes existed in the matter which could be referred to the Arbitrator. Learned Counsel of the appellant cited following decisions in support of his contentions. i) 1995 (Suppl.) (3) SCC 324 para 3 [Nathani Steels Ltd. vs. Associated Construction] ii) 1994 (Suppl.) (3) SCC 126 paras 6 & 8 [M/s. P.K. Ramaiah vs. Chairman & Managing Director, National Thermal Power Corporation] iii) 1997 (10) SCC 528 para 5 [Wild Life Institute of India vs. Vijay Kr. Garg.] iv) AIR 1975 SC 1259 paras 4 & 5 [K.P. Poulose vs. State of Kerala. It has been contended on behalf of the appellant that specific question of fact or law referred to Arbitrator should be answered in the shape of an express award. 13. While dealing with the aforesaid grounds of challenge of the appellant herein, learned Counsel of the respondent submitted that the claimant herein did not sign and submit the "no claims certificate" and furthermore, the claimant took payment of the final bill upon putting the signature only on the "Advice Slip" and that too under protest. The appellant also admitted that the security deposit lying with the Railways in the shape of bank guarantee and NMDC could not be released for non-submission of "no claim certificate" required under general conditions of the contract. The appellant herein in various paragraphs of the counter statement virtually admitted that the claimant did not submit "no claim certificate" which was required as per general conditions of the contract and did not also dispute that the claimant had signed the "Advice Slip" for payment of final bill after specifically endorsing the words "under protest". The appellant herein in various paragraphs of the counter statement virtually admitted that the claimant did not submit "no claim certificate" which was required as per general conditions of the contract and did not also dispute that the claimant had signed the "Advice Slip" for payment of final bill after specifically endorsing the words "under protest". However, according to the appellant, signing of "Advice Slip" for payment of the final bill under protest subsequent to the signature of witnessing officials is illegal, mala fide and against the code of practice. 14. Learned Counsel of the respondent further contended that though according to the appellant, claimant had signed and accepted the Measurement Book and the final bill without any dispute and as such the claims of the claimant were not arbitrable but a specific issue in this regard was framed before the learned Arbitrator which would be evident from issue No.12. The said issue No.12 is set out here-in-below: "Whether the claimant has signed/accepted final measurement and final bills without any dispute or claims and as such the claim of the claimant should be rejected in limine as contended by the respondent at page 2 of the counter state of claims." 15. Learned Counsel for the claimant submitted that the Arbitrator was specifically invited by the parties to decide the issue relating to the validity of the claims of the claimant after signing and/or accepting final measurement and final bill without any dispute and as such according to the learned Counsel of the respondent, Arbitrator was invited by the parties to decide the said issue specifically. Learned Counsel of the appellant further submitted that when the disputes were referred to the arbitration under section 20 of the Arbitration Act by this Hon'ble Court no objection was taken by the appellant on the ground that in view of the accord and satisfaction between the parties those disputes were not referable to arbitration. 16. As a matter of fact, objection on the point of arbitrability of the claims of the respondent/claimant after signing and acceptance of the final measurement and final bill without any dispute has been raised for the first time before the Appeal Court. 16. As a matter of fact, objection on the point of arbitrability of the claims of the respondent/claimant after signing and acceptance of the final measurement and final bill without any dispute has been raised for the first time before the Appeal Court. Learned Counsel for the respondent submitted that question of arbitrability of the claims of the claimant herein cannot be raised at this stage by the appellant as that objection was never raised either before the Hon'ble Court at the time of deciding the application under section 20 of the Arbitration Act, 1940 or even before the Arbitrator. Learned Counsel of the respondent submitted that the parties had invited the Arbitrator to decide the validity of the claims of the claimant after signing and accepting the final measurement and the final bill without any objection. 17. According to the respondent full and final settlement of the claims under the contract by way of accord and satisfaction was very much a dispute arising out of and/or in relation to the contract executed by the parties and therefore the same is referable to arbitration. Learned Counsel of the respondent further submitted that the parties themselves have invited the Arbitrator to adjudicate upon the question whether the claimant has signed/accepted the final measurement and final bills without any dispute or claims and whether such claims of the claimant on the aforesaid ground should be rejected or not. 18. Learned Counsel of the respondent also submitted that the appellant had voluntarily clothed the Arbitrator with the jurisdiction to decide such question and as such now it is not open to the appellant to contend that the Arbitrator had no jurisdiction to consider the matter and pass award. Learned Counsel of the respondent further contended that the appellant had never raised any objection on the ground of jurisdiction and therefore, it is not open to the appellant to contend that the Arbitrator had no jurisdiction to consider the matter and to give his award. Decision cited by the learned counsel in this regard are reported in a) AIR 1974 SC 153 [Damodar Valley Corporation vs. K.K. Kar], b) 1982 (1) SCC 625 [M/s. Bharat Heavy Electricals Ltd. vs. M/s. Amar Nath Bhan Prakash] and c) AIR 1988 SC 1172 [Union of India vs. M/s. L. K. Ahuja & Co.]. 19. Decision cited by the learned counsel in this regard are reported in a) AIR 1974 SC 153 [Damodar Valley Corporation vs. K.K. Kar], b) 1982 (1) SCC 625 [M/s. Bharat Heavy Electricals Ltd. vs. M/s. Amar Nath Bhan Prakash] and c) AIR 1988 SC 1172 [Union of India vs. M/s. L. K. Ahuja & Co.]. 19. This Court finds that the appellant had all along participated in the arbitration proceeding, adduced evidence, produced documents and otherwise accepted the jurisdiction of the Arbitrator to decide the issue which was specifically mentioned as issue No.12. 20. Mr. Jayanta Mitra appearing on behalf of the respondent/claimant submitted that "no claim certificate" was never given in spite of signing the final bill as the claimant wanted to raise disputes for non-payment of legitimate claims by the appellant herein. Mr. Mitra further submitted that as per the clause 43 (2) of the general conditions of contract no claim certificate was required to be signed but the claimant did not sign the same as the claimant wanted to raise its claims. 21. It has also been contended on behalf of the claimant that no dispute had been raised regarding measurement as recorded in the Measurement Book as the claimant had signed the said Measurement Book and made an endorsement therein accepting the measurement. The claims have actually been raised, according to Mr. Mitra, basically on idle labour and escalation and the parties invited the Arbitrator to decide such dispute by framing specific issue being issue No.12. It has been further contended on behalf of the claimant that in the present case there is no scope for appreciating evidences adduced on behalf of the respective parties as the award is a non- speaking one. 22. Mr. Mitra, learned senior Counsel of the respondent/claimant, specifically contended that no case has been made out for setting aside the award. It has been contended on behalf of the respondent that the court can set aside the award if an error is apparent on the face of the award. But in the instant case appellant failed to indicate such error. Learned Counsel of the respondent/claimant further submitted that no grounds have been mentioned alleging that the Arbitrator had travelled beyond the jurisdiction or acted without jurisdiction in a non-speaking award. Referring to the decisions of the Supreme Court, Mr. But in the instant case appellant failed to indicate such error. Learned Counsel of the respondent/claimant further submitted that no grounds have been mentioned alleging that the Arbitrator had travelled beyond the jurisdiction or acted without jurisdiction in a non-speaking award. Referring to the decisions of the Supreme Court, Mr. Mitra submitted that the jurisdiction of the court to scrutinise the validity and/or legality of a non-speaking award is very limited and while considering any challenge to a non-speaking award, court should confine itself within the limited campus as has been repeatedly indicated in various judgments by the Supreme Court. 23. According to Mr. Mitra, learned Arbitrator passed the non-speaking award after considering all the papers, documents and pleadings of the parties and as such the Arbitrator had the jurisdiction to consider all the claims raised on behalf of the claimant. In a non-speaking award, legality and/or ralidity in respect of any particular head/heads of claim/claims cannot be gone into. Mr. Mitra specifically submitted that in the counter statement no specific averment has been made on behalf of the appellant on the point of non-arbitrable disputes. Referring to the various decisions of the Supreme Court which have been mentioned hereinafter, Mr. Mitra again submitted that error, if any, committed by the Arbitrator in exercise of the jurisdiction cannot be scrutinized by court. Decisions cited by Mr. Mitra in this regard are: 1) AIR 1990 SC 1426 at 1432, paras 13, 17 and 20 (cl. 4.49) (Raipur Development Authority vs. M/s. Chokhamal Contractors.) 2) AIR 1992 SC 2192 paras 4,6,7,8 and 10 (Hindustan Construction Co. Ltd. vs. State of Jammu & Kashmir.) 3) (1999) 4 SCC 214 at 215 and 216 (H.P. State Electricity Board vs. R.J. Shah & Co.] 24. According to the claimant, it will be seen from the issues raised to be tried that in none of them the appellant has raised the question of the Arbitrator's jurisdiction in allowing the amounts claimed. Each of the issues is on the merit of the claim, and not on the competence of the Arbitrator to award such amounts. The appellant having itself invited the Arbitrator to decide each of these claims on merit, is not entitled to assail the award on the ground that the Arbitrator had travelled outside the parameters of the contract and had acted without jurisdiction in awarding such sums. 25. Mr. The appellant having itself invited the Arbitrator to decide each of these claims on merit, is not entitled to assail the award on the ground that the Arbitrator had travelled outside the parameters of the contract and had acted without jurisdiction in awarding such sums. 25. Mr. Mitra, learned Counsel of the respondent, submitted that appellant took a chance of a favourable award in the instant case and when it found that the award had gone against it then only it sought to assail the same on the ground of lack of jurisdiction of the Arbitrator. According to the learned Counsel, the court does not and should not permit a party to arbitration to take such inconsistent stand. Learned Counsel of the respondent cited following decisions in support of the aforesaid contention. (i) Jupiter General Insurance Co. vs. Corporation of Calcutta, AIR 1956 Cal 470 , (ii) Prasun Roy vs. Calcutta Metropolitan Development Authority & Anr., AIR 1988 SC 205 ; (iii) N. Chellappan vs. Kerala State Electricity Board & Anr., AIR 1975 SC 230 . 26. It was contended on behalf of the respondent that the decision cited by the appellant and reported in 1995 Suppl. (3) SCC 324 [Nathani Steels Ltd. vs. Associated Constructions] is clearly distinguishable as in the same case Supreme Court came to the finding that the disputes and differences were amicably settled and therefore, it was not open to either of the parties to unilaterally treat the settlement as no-est and to invoke the arbitration clause. In the present case, there is no such question of full and final settlement. "Advice Slip" was admittedly signed by the claimant "under protest" and furthermore, "no claim certificate" in terms of the general conditions of contract was not signed by the claimant. Accordingly, aforesaid decision of the Supreme Court as has been referred to by the learned Counsel of the appellant has no manner of application in the present case. 27. The next decision cited by the learned Counsel of the appellant is reported in 1994 Supp. (3) SCC 126 [M/s. P.K. Ramaiah & Co. vs. Chairman & Managing Director, National Thermal Power Corporation]. According to the learned Counsel of the respondent, aforesaid decision is also distinguishable on facts from the present case. 27. The next decision cited by the learned Counsel of the appellant is reported in 1994 Supp. (3) SCC 126 [M/s. P.K. Ramaiah & Co. vs. Chairman & Managing Director, National Thermal Power Corporation]. According to the learned Counsel of the respondent, aforesaid decision is also distinguishable on facts from the present case. In the aforesaid case, Supreme Court held that since full and final satisfaction was acknowledged by a receipt in writing and the amount was received unconditionally, there was accord and satisfaction by final settlement of the claims. In the instant case, claimant refused to accept the amount of the final bill and accepted the same "under protest". Furthermore, according to the learned Counsel of the respondent, refusal to sign the "no claim certificate" was a clear indication that there was no accord and satisfaction between the parties. 28. In the next decision reported in 1997 (10) SCC 530 [Punjab State Electricity Board, Patiala vs. Collector of Customs, Bombay] learned Counsel of the appellant though placed reliance in support of his contention regarding non-arbitrability of the disputes but according to the learned Counsel of the respondent, the decision has no manner of application in the present case. It was further submitted on behalf of the respondent that the aforesaid decision cited by the appellant is distinguishable as in the aforesaid case before the Supreme Court final payment was accepted by the respondent in full satisfaction of his claims under the contract and there was no dispute outstanding. In the instant case, appellant did not raise any dispute on the point of accord and satisfaction and furthermore invited the Arbitrator to decide the dispute by raising a specific issue being issue No.12. In the aforesaid decision cited by the appellant question of accord and satisfaction had been raised at the initial stage and even before the matter was referred to Arbitrator. But in the instant case, no such dispute was raised at the initial stage and on the contrary a specific issue being issue No.12 was framed and was referred to arbitration by an order of this court passed on an application under section 20 of the Arbitration Act. No appeal was preferred from the said order. But in the instant case, no such dispute was raised at the initial stage and on the contrary a specific issue being issue No.12 was framed and was referred to arbitration by an order of this court passed on an application under section 20 of the Arbitration Act. No appeal was preferred from the said order. The appellant accepted the said order and went before the Arbitrator for deciding issues including issue No.12 therefore, according to learned counsel of the respondent, appellant submitted to the jurisdiction of the Arbitrator and took the chance of getting a favourable award. Having failed to do so, this proceeding for setting aside the award has been initiated. So according to the learned Counsel of the respondent, claimant had all along refused to accord its satisfaction by issuing any "no claim certificate" as is required under the general conditions of contract. 29. Reliance has been placed by the learned Counsel of the appellant on the decision reported in AIR 1975 SC 1259 at page 1260 [K P. Poulose vs. STATE of KERALAI on the proposition that if the department fails to produce relevant documents before the Arbitrator, in order to arrive at a just and fair decision, it is incumbent upon the Arbitrator to get hold of all the relevant documents. According to the learned Counsel of the respondent, aforesaid decision has no application in the facts of this case. In the instant case, "no claim certificate" allegedly endorsed on the final bill was npt even produced before the Arbitrator. Such document also does not find place in the record. On behalf of the appellant, no attempt was made to produce such documents before the Arbitrator. Learned Counsel of the respondent also submitted that it is not the duty of the Arbitrator to call for the records from the department of the Railways even if its Counsel does not choose to produce the same. Learned Counsel further submitted that the Arbitrator is not required to fill up lacuna in the evidence of any of the parties. 30. On the scope of judicial review in respect of non-speaking award, learned Counsel for the respondent submitted that it is very limited and furthermore, in respect of non-speaking award it would not be open for the court to try to interpret the contract. 30. On the scope of judicial review in respect of non-speaking award, learned Counsel for the respondent submitted that it is very limited and furthermore, in respect of non-speaking award it would not be open for the court to try to interpret the contract. In the instant case, according to the learned Counsel of the respondent, no material is available to demonstrate on the face of the award that the Arbitrator has ex facie exceeded his authority or jurisdiction and as such this court should not interfere. The decision referred to and relied upon by the learned Counsel of the respondent in this regard is reported in AIR 1990 SC 1340 at pages 1346 & 1347 (para 11) [M/s. Hind Builders vs. Union of India]. The next decision cited by the learned Counsel of the respondent is reported in AIR 1990 SC 1426 at pages 1432 (para 13) & 1437 (para 20) [Raipur Development Authority etc. etc. vs. M/s. Chokhamal Contractors etc. etc.]. 31. Mr. Mitra, learned Counsel of the respondent, submitted that ultimate question is whether the Arbitrator has taken into consideration any matter outside the scope of the reference. According to the learned Counsel of the respondent, the arbitration agreement in the instant case is of the widest amplitude and none of the disputes/claims in the reference fall within the "excepted matters" which have been specifically excluded by the arbitration clause. 32. Mr. Mitra further submitted that it is nobody's case that the Arbitrator is incompetent to enter upon the reference nor it is the case of the appellant that any extraneous matter has been taken into consideration by the Arbitrator nor even any application has been made in respect of non-availability of the reasonable opportunity of being heard. According to the learned Counsel of the respondent, award in the present case being a non-speaking one, unless some error is apparent on the face of the award, it is difficult for the court to interfere. 33. Learned Counsel of the respondent further submitted that in determining the distinction between an error within jurisdiction and an error in excess of jurisdiction, court cannot substitute its own views for the views taken by the Arbitrator. 33. Learned Counsel of the respondent further submitted that in determining the distinction between an error within jurisdiction and an error in excess of jurisdiction, court cannot substitute its own views for the views taken by the Arbitrator. Learned Counsel also contended that if it can be shown that the claims before the Arbitrator arose from the contract between the parties then the court cannot examine the reasonableness of the finding of the Arbitrator. Learned Counsel of the respondent relied on decisions reported in (1994) 6 SCC 486 (paras 22 to 28) [State of Rajasthan vs. Puri Construction Co. Ltd. & Anr.] and (1997) 11 SCC 40 (para 9) [State of Bihar & Ors. vs. Hanuman Mal Jain] and submitted that if the Arbitrator, while making a non- speaking award had considered all settlements, evidences and arguments offered by the contesting parties before him including clauses in the agreements, in that event award cannot be challenged or set aside on the ground of lack of jurisdiction. It was also submitted that the embargo created by the different clauses relied upon on behalf of the appellant were either brought to the attention of the Arbitrator or they were not. The award does not say either way. If the clauses of the contract relied upon on behalf of the appellant were brought to the notice of the Arbitrator, and he has given the award after considering the same, the award being non-speaking one, no exception can be taken to the construction put on such clauses by the Arbitrator. 34. According to the learned Counsel of the respondent, award being a non-speaking one, no interference can be made in view of the construction put on the clauses in the contract which had apparently the effect of creating a bar on the jurisdiction of the Arbitrator to consider the claims. 35. Learned Counsel of the respondent submitted that the scope of judicial review in respect of the award of an Arbitrator particularly in case of a non-speaking award is very limited. The decision cited by the learned Counsel of the respondent in this regard is (1999) 4 SCC 214 at page 222 (paras 17,20 & 27) [B.P. State Electricity Board vs. R. J. Shah and Company]. 36. The decision cited by the learned Counsel of the respondent in this regard is (1999) 4 SCC 214 at page 222 (paras 17,20 & 27) [B.P. State Electricity Board vs. R. J. Shah and Company]. 36. Learned Counsel of the respondent submitted that all claims and questions were expressly referred to the Arbitrator and were raised before the Arbitrator and there was no clause in the contract which prevented the Arbitrator from examining the claims which were referred to the Arbitrator. While distinguishing the decisions cited on behalf of the appellant and reported in (1999) 8 SCC 122 [Steel Authority of India Ltd. vs. J. C. Budharaja, Government and Mining Contractor] and (1999) 9 SCC 283 [Rajasthan State Mines & Minerals Ltd. vs. Eastern Engineering Enterprises & Anr.]. Mr. Mitra submitted that those decisions of the Supreme Court in fact support the contentions of the respondent. Mr. Mitra has rightly contended that the Supreme Court summarizing its earlier decisions on the question of jurisdictional errors laid down the law in para 4 at page 309 of the judgment reported in (1999) 9 SCC 283 . Referring to various paragraphs of the said decision of the Supreme Court, learned Counsel of the respondent submitted that in the said decisions Supreme Court actually considered the fact that even before commencement of the arbitration proceedings authorities had questioned the jurisdiction of the arbitrator and had referred the disputes to the arbitrator with the reservation that the claims were not maintainable in view of clauses 17 and 18 of the agreement. But in the instant case, no such objection was raised on behalf of the appellant questioning the jurisdiction of the Arbitrator to decide a dispute in view of final bill having signed and accepted as correct. Thus the aforesaid decision of the Supreme Court is not at all applicable, according to the learned Counsel of the respondent. 37. The other decision cited by the appellant and reported in AIR 1991 SC 957 [M/s. Prabartak Commercial Corporation Ltd. vs. The Chief Administrator Dandakaranya Project & Anr.] was also distinguished by Mr. Mitra. According to Mr. Mitra, the said decision also supports the contention of the respondent. 37. The other decision cited by the appellant and reported in AIR 1991 SC 957 [M/s. Prabartak Commercial Corporation Ltd. vs. The Chief Administrator Dandakaranya Project & Anr.] was also distinguished by Mr. Mitra. According to Mr. Mitra, the said decision also supports the contention of the respondent. In the said decision Supreme Court upheld the judgment of the High Court and held that the Arbitrator had no jurisdiction to entertain and consider those claims which by the terms of the contract were excepted matters and it was categorically mentioned in the contract that the decision of the superintending engineer was final. Since the Arbitrator decided ignoring such reservation as mentioned in the contract, Supreme Court in the aforesaid decision held that the Arbitrator had no jurisdiction to entertain and consider the claim as the Arbitrator is not empowered to decide any dispute which by the terms of the contract has been excluded from the jurisdiction of the Arbitrator. 38. Mr. Mitra, learned senior Counsel of the respondent, submitted that in the instant case appellant never raised the question of jurisdiction of the Arbitrator to entertain and consider the claims of the respondent and on the contrary invited the Arbitrator to decide various issues on merits. Furthermore, according to the learned senior Counsel of the respondent, there was no term which created any restriction on the Arbitrator to entertain any of the claims made by the appellant. It has been contended on behalf of the respondent that the controversy between the parties was on the interpretation of the various clauses of the contract which could be done only by the Arbitrator and whether the interpretation of the Arbitrator was right or wrong cannot be reopened in an application under section 30 of the Arbitration Act in respect of a non-speaking award. Referring to the decision reported in JT 1998 (8) SC 5.28 [K.R. Raveendranathan vs. State of Kerala] Mr. Mitra submitted that the Supreme Court in the said judgment, following several earlier judgments, categorically held that by purporting to construe the contract the court could not take upon itself the burden of saying that any particular thing was contrary to the contract and as such the same was beyond the jurisdiction of the Arbitrator. Mitra submitted that the Supreme Court in the said judgment, following several earlier judgments, categorically held that by purporting to construe the contract the court could not take upon itself the burden of saying that any particular thing was contrary to the contract and as such the same was beyond the jurisdiction of the Arbitrator. Learned Counsel of the respondent cited the recent decision of the Supreme Court reported in JT'2001 (2) SC 438 [T. P. George vs. State of Kerala & Anr.]. Referring to paragraph 8 of the said judgment it was contended that when a question has been referred to the Arbitrator, the view of the Arbitrator would be binding if it is one which is a possible view. According to the learned Counsel of the respondent, view taken by the Arbitrator would be binding since the said view is a possible one. 39. Learned Counsel of the respondent further submitted that the Supreme Court while dealing with the non-speaking award have repeatedly held that in a case where the parties had been given fair and sufficient opportunity by the Arbitrators to make out their respective cases and there had been no violation of the principle of natural justice in passing the award, court should not try to read the mental process of the Arbitrator as to how he came to the conclusion in passing the award. 40. The appellant herein has also challenged the award on ground of awarding interest @ 15% p.a. from 15th September, 1993 to the date of the award i.e. 10th May, 1999 as according to the appellant, award granting interest is contrary to clause 16 (2) of the general conditions of the contract. The appellant specifically contended that no award could have been passed by the Arbitrator directing payment of interest in view of the clear embargo created by clause 16 (2) of the general conditions of contract. 41. While dealing with the aforesaid issue raised by the appellant, learned Counsel for the respondent submitted that the Supreme Court while considering similar Clauses restricting the right of the claimant to claim interest had specifically held that the Arbitrator has the jurisdiction to award amount on account of interest, notwithstanding such embargo. 41. While dealing with the aforesaid issue raised by the appellant, learned Counsel for the respondent submitted that the Supreme Court while considering similar Clauses restricting the right of the claimant to claim interest had specifically held that the Arbitrator has the jurisdiction to award amount on account of interest, notwithstanding such embargo. Learned Counsel of the respondent-cited several decisions of the Supreme Court in support of his aforesaid contention and submitted that the contention of the appellant is accordingly not tenable in view of the clear pronouncement of the Supreme Court. The decisions of the Supreme Court as have been referred to and relied upon by the respondent in this regard are mentioned hereunder: i) AIR 1996 SC 2853 at pages 2855-2856 (paras 4 & 5) [The Board of Trustees for the Port of Calcutta vs. Engineers-De-Space-Age), ii) (1997) 11 SCC 40 at pages 46-49 (paras 10 to 12) [State of Bihar & Ors. vs. Hanuman Mal Jain]. 42. The appellant has further challenged the authority of the Arbitrator to award costs of the reference and costs and expenditure incidental thereto in favour of the respondent as no claim for costs in the statement of claim has been made. According to the appellant, costs could not have been awarded by the Arbitrator as the same has not been claimed specifically in the statement of claim. Learned Counsel of the respondent submitted that though costs have not been specifically mentioned as the item of claim in the statement of claim but by an application dated 10th April, 1999 filed in the arbitration proceedings, respondent herein had claimed Rs.3 lakhs on account of cost and expenditure incurred by it in the arbitration proceedings. It was further mentioned that the Railways, viz. appellant herein did not file any opposition to the said application inspite of grant of leave by the Arbitrator. Furthermore, referring to Schedule I para 8 of the Arbitration Act, 1940, learned Counsel of the respondent submitted that cost of the reference and award shall be in discretion of the Arbitrator. It was further mentioned that the Railways, viz. appellant herein did not file any opposition to the said application inspite of grant of leave by the Arbitrator. Furthermore, referring to Schedule I para 8 of the Arbitration Act, 1940, learned Counsel of the respondent submitted that cost of the reference and award shall be in discretion of the Arbitrator. Learned senior Counsel of the respondent submitted that when the parties referred the disputes to arbitration in view of an agreement the parties impliedly also agreed that the question of costs would also be referred to in the arbitration and accordingly, it has been submitted on behalf of the respondent that it is no longer open to the appellant to contend that the Arbitrator had no jurisdiction to award costs as the same has not been specifically claimed in the statement of claim. It was further contended on behalf of the respondent that the learned Judge of this court while passing an order under section 20 of the Arbitration Act, 1940 directed that the costs of that application would be costs in the arbitration proceedings which means that even in the court before initiation of arbitration proceedings, it was stipulated that the. Arbitrator will have the jurisdiction to award costs of the arbitration proceedings. Learned Counsel of the respondent further submitted that the aforesaid order was passed by the learned Judge of this court in the presence of the learned Counsel of the appellant and is, therefore, binding on the appellant. 43. Learned Counsel of the appellant cited following decisions in support of the contention that the Arbitrator had the jurisdiction to award costs in the case of lump sum award. i) AIR 1945 PC 170 [Sir Mohd. Akbar Khan vs. S. Attar Singh (Deceased) & Ors.], ii) AIR 1956 Cal 11 [National Fire and General Insurance Co. Ltd. vs. Union of India & Anr.]. 44. Learned Trial Judge, however, while deciding the application filed on behalf of the appellant herein under sections 30 and 33 of the Arbitration Act expressed a firm opinion that the grounds, which have been mentioned in the said application, are not of much substance either in fact or in law. Ltd. vs. Union of India & Anr.]. 44. Learned Trial Judge, however, while deciding the application filed on behalf of the appellant herein under sections 30 and 33 of the Arbitration Act expressed a firm opinion that the grounds, which have been mentioned in the said application, are not of much substance either in fact or in law. The learned Trial Judge further held that this court could not probe the mental process of the Arbitrator in order to find out how the amount has been arrived at by the learned Arbitrator in course of adjudication of the claims of the claimant. Learned Trial Judge, therefore, dismissed the said application filed on behalf of Union of India, viz., the appellant herein. 45. After considering the rival contentions of the respective parties and also considering the materials on record we are of the view that the principal issue that falls consideration before us is whether any arbitrable disputes existed between the parties which could be referred to the Arbitrator under the arbitration clause of the agreement. It is a fact that the appellant had all along participated in the arbitration proceeding, adduced evidence, produced documents and in fact all along accepted the jurisdiction of the Arbitrator to decide the issues which were specifically framed for the purpose of deciding the disputes referred to the said Arbitrator. Furthermore, appellant raised no objection before the Arbitrator while a specific issue was framed by the Arbitrator in this regard. 46. After framing of the aforesaid specific issue being issue No.12 the court call safely hold that the parties had invited the Arbitrator to decide the validity of the claims of the claimant even after signing of the Measurement Book and acceptance of the final bill under protest. Full and final settlement of the claims under the contract by way of accord and satisfaction were very much a disputed question. The parties agreed to refer this question to the Arbitrator as a referable item in the dispute. 47. Mr. Mitra, learned senior Counsel of the respondent, has rightly submitted that the question of arbitrability of the claims of the claimant cannot be raised at this stage as no such objection was ever raised on previous occasions. Respondent herein being the claimant did not submit "no claim certificate" and received payment of the final bill after specifically endorsing the words "under protest". Respondent herein being the claimant did not submit "no claim certificate" and received payment of the final bill after specifically endorsing the words "under protest". In terms of provisions of the general conditions of the contract claimant was required to submit "no. claim certificate". In the instant case, claimant did not submit such certificate as the said claimant obviously wanted to raise disputes. 48. The appellant herein though submitted that signing of "Advice Slip" with the endorsement "under protest" cannot mean the non-acceptance of the-final bill, but we are not very much impressed by such contention of the appellant herein. It is undisputed that the "Advice Slip" sent to the claimant/contractor in respect of the final bill amount which was signed with the specific endorsement of "under protest" as the claimant did not like to incur any further loss by refusing to sign the final bill in the manner the appellant wanted. However, objections and/or dissatisfactions of the claimant were duly recorded by the claimant by making a specific endorsement "under protest" on the "Advice Slip" at the time of accepting the payment of the final bill amount. Signing of "Advice Slip" for payment of the final bill "under protest" subsequent to the signatures of witnessing officials may be against the code of practice but the same suggests that the claimant refused to accept the said payment on the final bill as full and final settlement of its entire claims under the contract. Accordingly, full and final settlement of the claims under the contract by way of accord and satisfaction were very much a disputed issue and the parties agreed to refer the same to the Arbitrator for necessary adjudication. In view of clause 43 (2) of the general conditions of the contract "no claim certificate" was required to be signed by the claimant but the same was not done as the claimant wanted to make it clear that it may raise claim in future. 49. The award herein is admittedly a non-speaking award and the disputes, which arose between the parties were referred to arbitration without any reservation on the question of jurisdiction of the Arbitrator in deciding the claims. No objections were ever raised with regard to the arbitrability of any disputes referred to the said Arbitrator on the earlier occasions. 50. 49. The award herein is admittedly a non-speaking award and the disputes, which arose between the parties were referred to arbitration without any reservation on the question of jurisdiction of the Arbitrator in deciding the claims. No objections were ever raised with regard to the arbitrability of any disputes referred to the said Arbitrator on the earlier occasions. 50. Furthermore, it is also to be noted that the contract between the parties did not present the claimant from raising claims as mentioned in the statement of claim. In the present case, Arbitrator was also required to decide the certain claims referred to him particularly when party agreed to refer those disputes to the Arbitrator inviting necessary adjudication. Accordingly, under no circumstances, it can be said that the Arbitrator exceeded his jurisdiction in deciding those claims. 51. In the case of Sudarsan Trading Company vs. Government of Kerala & Anr., reported in (1989) 2 SCC 38 , it has been specifically observed that there are two different and distinct grounds available for challenging arbitral award. One is the error apparent on the face of the award and the other is that the Arbitrator exceeded his jurisdiction. In the instant case, neither any error is apparent on the face of the award nor it can be held that the Arbitrator has exceeded his jurisdiction under any circumstances. 52. In the present case, appellant has failed to convince us that the award passed by the Arbitrator is in violation of any specific condition agreed upon the parties and mentioned in the contract. The appellant herein for the first time questioned the arbitrability of certain disputes referred to the Arbitrator and challenged the jurisdiction of the Arbitrator on the ground that certain claims could not be decided by the Arbitrator. Though objection was raised before this court at the time of hearing of the application under section 20 of the Arbitration Act or even before the Arbitrator or before the learned Trial Judge at the time of hearing of the application filed under sections 30 and 33 of the Arbitration Act. The appointment of the Arbitrator was not a conditional one and the appellant never participated in the arbitration proceeding with any reservation regarding the validity and/or maintainability of the reference. 53. The appointment of the Arbitrator was not a conditional one and the appellant never participated in the arbitration proceeding with any reservation regarding the validity and/or maintainability of the reference. 53. The arbitration clause in the present case is widely worded in order to accommodate all the disputes arising out of and/or concerning the contract in question so that same can be referred to the arbitration. When the disputes were referred to arbitration under section 20 of the Arbitration Act no-objection was raised on behalf of the appellant herein. Before the Appeal Court for the first time on behalf of the appellant it was contended that respondent/contractor having had unconditionally accepted the final measurement and also the amount of outstanding dues under the contract as reflected in the final bill in full and final settlement there cannot exist any outstanding disputes between the parties warranting adjudication. The aforesaid stand is not at all permissible. Admittedly, in the counter statement nothing had been stated on behalf of the appellant on the point of non- arbitrability of any dispute. The plea of non-arbitrability not having been taken before the Arbitrator, the said plea cannot be taken for the first time before the Appeal Court. 54. In the case of Sudarsan Trading Company (supra) it has been held by the Apex Court that "once there is no dispute as to the contract, what is the interpretation of that contract, is a matter for the Arbitrator and on which court cannot substitute its own decision". . 55. In Jivrajbhai Ujanshi Sheth vs. Chintamanrao Balaji & Ors., reported in AIR 1965 SC 214 at page 220, it was held that "The Arbitrator's adjudication is generally considered binding between the parties, for he is a tribunal selected by the parties and the power of the court to set aside the award is restricted to cases set out in section 30. It is not open to court to speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at this conclusion. On the assumption that the Arbitrator must have arrived at his conclusion by a certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or wrong. It is not open to court to speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at this conclusion. On the assumption that the Arbitrator must have arrived at his conclusion by a certain process of reasoning, the court cannot proceed to determine whether the conclusion is right or wrong. It is not open to the court to attempt to probe the mental process by which the Arbitrator has reached his conclusion where it is not disclosed by the terms of his award". 56. On a careful scrutiny of the records available before us, we find that neither the appellant questioned the jurisdiction of the Arbitrator to entertain and consider the claims at any point of time nor there was any specific term in the contract, which created any restriction on the Arbitrator to entertain any of the claims made by the claimant. As a matter of fact, there was no issue with regard to the arbitrability of any of the claims by the Arbitrator. So, the controversy between the parties at best can be said to be based on interpretation of the various clauses of the contract which could be done only by the Arbitrator and the Arbitrator having interpreted the contract in a particular way, such interpretation whether is right or wrong cannot be reopened in an application under section 30 of the Arbitration Act, 1940. 57. The Supreme Court in a decision reported in JT 1998 (8) SC 528 relying on the decision in the case of Sudarsan Trading Company (supra) held that "....... by purporting to construe the contract the court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction". In the instant case, Arbitrator was called upon to decide whether the claims of the claimant referred to the Arbitrator was valid and justified. Even if the Arbitrator construed the terms of the contract incorrectly it cannot be said that the award was in excess of his jurisdiction. The jurisdiction to construe the terms of the contract vests in the Arbitrator and his decision thereon is final and binding on the parties. 58. Even if the Arbitrator construed the terms of the contract incorrectly it cannot be said that the award was in excess of his jurisdiction. The jurisdiction to construe the terms of the contract vests in the Arbitrator and his decision thereon is final and binding on the parties. 58. Since the Arbitrator had passed a non-speaking award there is hardly any scope for this court to examine the validity and/or legality of the award as it is not open to this court to speculate what impelled the Arbitrator to arrive at his conclusion. The Supreme Court in Rajasthan State Mines and Minerals Ltd. vs. Eastern Engineering Enterprises, reported in (1999) 9 SCC 283 at paragraph 44, specifically laid down the principles of law. Relevant extract from paragraph 44 is set out hereunder: "44. From the resume of the aforesaid decisions, it can stated that: (b) It is not open to the court to speculate, where no reasons are given by the Arbitrator, as to what impelled the Arbitrator to arrive at his conclusion. (c) It is not open to the court to admit to prove the mental process by which the Arbitrator has reached his conclusion where it is not disclosed by the terms of the award. (d) If the Arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed question submitted for his adjudication then the court cannot interfere......." In para 45 of the said judgment the Supreme Court held that the award passed by the Arbitrator requires to be quashed as no specific issue was referred to the Arbitrator which could confer jurisdiction on the Arbitrator to go beyond the terms of the contract. Relevant extract from the para 45 of the said judgment is quoted hereunder: "........ No specific issue was referred to the Arbitrator which would confer jurisdiction on the Arbitrator to go beyond the terms of the contract. Hence, the award passed by the Arbitrator is, on the face of it, illegal and in excess of his jurisdiction which requires to be quashed and set aside." In the instant case, Arbitrator was specifically invited by the parties to decide the issue relating to the validity of the claims of the claimant after signing and accepting final measurement and final bill without any dispute. The specific issue was thus framed in this regard being issue No.12 and the same was referred to the Arbitrator which conferred the jurisdiction on the Arbitrator to decide the dispute and as such it cannot be said under any circumstances that the Arbitrator committed any jurisdictional error and the award passed by the Arbitrator, therefore, can under no circumstances be said to be vitiated by any error on the face of the award nor does it suffer from any excesses of jurisdiction. 59. The appellant has also challenged the award on the ground of granting interest contrary to clause 16 (2) of the general conditions of contract. The said clause 16 (2) is set out here-in-below: "Interest on amounts. -No interest will be payable upon the earnest money or the security deposit or amounts payable to the Contractor under the Contract, but Government Securities deposited in terms of sub-clause (1) of this clause will be repayable with interest accrued thereon." According to the appellant, there being a clear embargo created by the aforesaid clause with regard to the payment of interest to the contractor, no award could have been passed by the Arbitrator. The aforesaid submission of the appellant is not at all tenable in the eye of law. The Supreme Court has considered the similar point regarding restriction on the right of the claimant to claim interest and held that the Arbitrator has the jurisdiction to award interest notwithstanding such embargo. The decision reported in AIR 1996 SC 2853 paras 4 & 5 and (1997) 11 SCC 40 paras 10 to 12 are very much applicable in this regard. 60. The Arbitrator has also awarded costs of the reference and costs of expenditure incidental thereto in favour of the respondent. It has been contended that there was no claim for the costs in the statement of claim and as such no costs could have been awarded by the Arbitrator. We do not agree that the Arbitrator has no jurisdiction to award costs in the present case. 61. For the foregoing reasons, we do not consider that the Trial Judge committed any error by dismissing the application filed on behalf of the appellant herein under sections 30 and 33 of the Arbitration Act, 1940. We, therefore, do not propose to interfere with the judgment of the learned Single Judge. The appeal, therefore, fails and is dismissed. 61. For the foregoing reasons, we do not consider that the Trial Judge committed any error by dismissing the application filed on behalf of the appellant herein under sections 30 and 33 of the Arbitration Act, 1940. We, therefore, do not propose to interfere with the judgment of the learned Single Judge. The appeal, therefore, fails and is dismissed. Interim orders, if any, are vacated. In the facts and circumstances, there will be, however, no order as to costs. 62. Xerox certified copy of this judgment, if applied for, be supplied to the respective parties on urgent basis. Asok Kumar Ganguly, J. : I agree. May 7, 2001 63. Prayer for stay is made in the presence of the other side. Considering the facts and circumstances we are inclined to grant a short stay for a period of 7 days from today only to the extent that the respondent claimant will not be entitled to withdraw the money lying with the Reserve Bank of India authorities pursuant to the order of the Executing Court. Let this order be incorporated in the judgment and order dated 4th May, 200l. Appeal dismissed.