JUDGMENT Deoki Nandaii Prasad, J. 1. This Misc. Appeal under Section 39(1)(vi) of the Arbitration Act arise out of the judgment and decree passed by Shri Suresh Prasad Sinha, Sub-Judge III. Jamshedpur in Title Suit No. 66 of 1980. whereby and whereunder the learned Judge made the Award, Rule of the Court. 2. The short facts giving rise to this appeal that a contract agreement No. 1/Tata/ INC/CON/ACR/71 date 6.10.1971 was entered into between the Union of India represented by S.E. Railway and M/s. Hiralal & Co., contractors for construction of 24 units type I, 40 Ur Type II, 5 units type III quarters at Tatanagar Railway Station at an approximate value of Rs. 833917/- and finally worked out to Rs. 796893/-. Work was to be completed by 31.12.1972. The date of completion was extended at the contractors request to 30.11.1974. Accordingly a supplementary agreement was signed by the claimant. All the payments due to the claimants were released totaling Rs. 800412/- as well as the security deposit of Rs. 76288/- was also released. After receiving full amount of contract, the Contractor referred two Arbitrators for another sum of Rs. 14,31274/- plus interest. The claimants entered into supplementary agreement with the South Eastern Railway for extending the date of completion and variation in quantities voluntarily and agreed to execute the work at rates, terms, conditions as laid down in the contract agreement. Ultimately, the tenders submitted by the claimants was accepted as lowest tender and accordingly the formal agreement was entered into. Certain materials such as Cement, Steel requisites for the construction work were to be supplied by the Railway. Since, the work could not be completed within the stipulated date the last extension for completion of the work was given by the Railway till 30.11.1974 and accordingly, it was completed within the said period. It is claimed by the claimant that due to delay in completion of work for about two years, there had been a statutory increase in the minimum wages of labour fixed by the State Government from time to time as also abnormal rise in the price of the materials consumed in the work and the claimant/plaintiff suffered loss and therefore claimed additional payment on account of statutory increase in the wages of the labour as also escalation in the cost of the materials. Accordingly, the matter was referred to the Arbitrator for coming to the conclusion in terms of the agreement led down between the parties. 3. The plaintiff submitted detailed claim before the Arbitrators for a total sum of Rs. 14,31,274/- whereas the Railway contested the claims before the arbitrator and after hearing both sides, the Arbitrator prepared the award for a total sum of Rs. 3,72,333/-. The Railway also contested the said award in the court below and after hearing both sides and considering the evidences on record, the court below affirmed the Award and made the same rule of the Court, hence, this appeal. 4. At the very outset, it may be noted here that the date of the completion of the work was fixed to 31.12.1972 which was later on extended to 30.11.1974. It is also admitted position that all the payments due to the claimant/respondent were released totalling to Rs. 800412/- and security deposit of Rs. 76,288/-was also released. The claimant/ respondent entered into a supplementary agreement for completion of the left work for which the time was extended upto 30.11.1974. The amount of Award was allotted to the extent as given under: __________________________________________________________________ Sl. No. Details of claim Amount of claim vide __________________________________________________________________ Amount __________________________________________________________________ G.Ms Letter Contractors statement of claims/revised amount Amount awarded __________________________________________________________________ 1 2 3 4 5 __________________________________________________________________ 1. Compensation to be maade due to abnormal increase in cost of material and labour rates etc., from time to time as per Govt. Notification etc. 4,16,470/- 1,90,000/- 2. Heating of rerolled rods of sizes namely 1 - 1 /2" x 3/8" etc. -- 21,000/- 10,000/- 3. Alleged deduction of 63 bags of cement from our dues. -- 1,600/- -- 4. Carrying railway materials from railway siding to Railways godown etc. -- 24,000/- -- 5. Coservacy cess illegally deducted from the bill should be refunded. As the quarters had been built in the extreme of the TATA Nagar Colony i.e. outside the station committee area where there was no conservancy services, so the amount deducted from the bill from time to time should be refunded. -- 7,888/- -- 6. Reimbursement of extra cost due to longer period of continuation of work due to non supply of Railway materials namely cement, MS Rods Pipes etc. In lime as per our requirement and works prolonged for 23 months due to the failure on the part of the Railway. -- 7,888/- -- 6. Reimbursement of extra cost due to longer period of continuation of work due to non supply of Railway materials namely cement, MS Rods Pipes etc. In lime as per our requirement and works prolonged for 23 months due to the failure on the part of the Railway. Administration through honest efforts were made by us to complete the work by 31.12.1972 about 10 months establishment remained idle and cost incurred at the rate of Rs. 3, 150/- per month. -- 31,300/- -- 7. Compensation to be made for works suspended to non availability of MS rods cement, pipes etc. and labours were remained idle for six months as below : (i) Cement not available 1.7.1972 to 31.7.72, & etc. (ii) M.S. Rods 1/2" not available from 14.6.1972 to 31.7.1972, 20.9.1972 to 18.11.72 and January, 1973. (iii) M.S. Rods 3/4" from 17.6.72 to 4.9.72 Janaury, 73. Extra cost incurred. -- 40,500/- -- 8. Extra cost incurred due to cement plaster done in celling as per instruction of the Railway Administration but no payment had been made for the full quantities. Approx. quantities 52.500 sft. 37.50 per 1,000 ft. plus 170% above. -- 10,031/- -- 9. Compensation to be made by way of Interest @ Rs 12-1/2 for the aforesaid amount as well as security amount not refunded within six months after completion of the work as per terms and conditions of the contract. -- 8,58,285/- 1,72,300/- 11% per annum from 25.14. 1980 to 25.2.1988. 10. Cost of reference to quota 10,000/- 11. Cost of arbitration proceedings. -- 10,000/- __________________________________________________________________ -- __________________________________________________________________ 14,31,274/- __________________________________________________________________ 3,72,333/- __________________________________________________________________ __________________________________________________________________ 5. Apparently, the claim put forward by the claimant is about compensation to be made due to the abnormal increase in cost of material and labour rates etc, from time to time as per Government Notification etc. for which the claimant claimed an amount of Rs. 4,16,470/- but the Arbitrator allowed the award for Rs. 1,90,000/- in lumpsum and the interest of the same was allowed to a sum of Rs. 1,72,333/- against the the claim of Rs. 8,58,285/-. 6. It would now be appropriate to appreciate the Agreement itself under the basis of which the whole work was completed. 4,16,470/- but the Arbitrator allowed the award for Rs. 1,90,000/- in lumpsum and the interest of the same was allowed to a sum of Rs. 1,72,333/- against the the claim of Rs. 8,58,285/-. 6. It would now be appropriate to appreciate the Agreement itself under the basis of which the whole work was completed. Clause 15 of the Agreement reads as follows : "The rates quoted and accepted are inclusive of all charges including all taxes levied by Union of India or State Government or Local bodies like municipalities, Corporations etc. including Sales Tax, Royalty octroi duties etc. No claim will be entertained for any fluctuation in market rate for any labour or materials, devaluation etc. during the period of contract." 7. Thus, there was specific clause already mentioned in the Agreement that no claim will be entertained for any fluctuation in market rate for any labour or materials, devaluation etc. during the period of contract. It is well settled that the Award made by the Arbitrator disregarding the Arms of the Reference of the Arbitration Agreement or the terms of the contract, would be a jurisdiction- al error, which requires ultimately decided by the Court. 8. Despite the admission by the Contractor as stipulated in Clause 15 of the Agreement, it is apparent that Arbitrator has ignored the aforesaid stipulations in the contract and the fundamental terms of agreement between the parties have obviously been ignored and by doing so, it is apparent that Arbitrator has exceeded his jurisdiction. 9. In the case of Bharat Coking Coal Ltd. v. M/s. L.K. Ahuja and Company, AIR 2001 SC 1179 , the Apex Court held as under : "If the award made by the Arbitrator is a non-speaking one the difficulty of showing that there is an error apparent on the face of the award becomes insurmountable and ordinarily such award cannot be challenged at all unless it is shown that the arbitrator has wholly travelled outside the contract which gives him the jurisdiction. The law is equally well settled that in cases of speaking awards the Court can interfere if there is an error apparent on the face of the award itself; it could also be shown that the arbitrator has misconucted himself in arriving at certain conclusions which are either plainly contrary to law or to the terms of the contract or ignored the provisions of contract of the evidence on record and such other similar matters. When a lumpsum award is made, it is ail the more difficult to find out as to what went into the mental process of the Arbitrator in fixing the same particularly when a part of the award is a speaking award and determines the portion of the claim in a particular manner and in respect of other claims merely refers to the pleadings but does not decides the matter but gives the award." 10. The case at hand clearly goes to indicate that the Arbitrator allowed the award as being lumpsum of Rs. 1,90,000/- showing compensation to be made due to abnormal increase in cost of material and labour rates etc. Apparently, the date of completion of work was already fixed 31.12.1972 which was later on extended to 30.11.1974 and there was a specific Clause 15 stipulated in the agreement that no claim will be entertained for any fluctuation in market rate for any labour or material devaluation etc. during the period of contract which apparently establishes that the Arbitrator travelled beyond the agreement of contract as stipulated and has done without jurisdiction. It had also been reiterated in the case of Tamil Nadu Electricity Board v. Bridge Tunnel Constructions and Ors., AIR 1997 SC 1376 . as under : "In the matter of challenge to the award there are two distinct and different grounds, viz. that there is an error apparent on the face of the record and that the arbitrator has exceeded his jurisdiction. In the latter case, the Court can look into the arbitration agreement but under the former it cannot do so unless the agreement was incorporated or cited in the award of evidence was made part of the agreement. that there is an error apparent on the face of the record and that the arbitrator has exceeded his jurisdiction. In the latter case, the Court can look into the arbitration agreement but under the former it cannot do so unless the agreement was incorporated or cited in the award of evidence was made part of the agreement. In the case of jurisdiction-al error, there is no embargo on the power of the Court to admit the contract into evidence and to consider whether or not the umpire had exceeded the jurisdiction because the nature of the dispute is something which has to be determined. In the case of non-speaking award, it is not open to the Court to go into the merits. Only in a speaking award the Court can look into the reasoning in the award and correct wrong proposition of law or error of law. It is not open to the Court to probe the mental process of the arbitrator and speculate, when no reason have been given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. But in the later case the Court, with reference to the terms of the contract/arbitration agreement would consider whether or not the arbitrator/ umpire has exceeded his jurisdiction in awarding or refusing to award the sum of money awarded or omitted." 11. It is evident that there is nothing in the award to suggest how much of the claim awarded in respect of Item No. 1 related to statutory rise in the cost of labour and how much of it related to the claim of compensation due to abnormal increase in cost of material. The court below assumed the amount of Item No. I very fair and on the basis of natural justice passed the order impugned, which in my view, cannot be sustained in the eye of law, in the light of stipulated clause in the Agreement itself which bars about any escalation in the rate during the contract, period. No award can be made rule of the court on assumption as admittedly no document has been brought on the record to show the increase in the labour rates by State Legislation and, therefore, such findings of the court below cannot be taken into account. 12. No award can be made rule of the court on assumption as admittedly no document has been brought on the record to show the increase in the labour rates by State Legislation and, therefore, such findings of the court below cannot be taken into account. 12. In view of foregoing discussions, I have no option but to hold that the Arbitrators exceeded their jurisdiction by ignoring the specific stipulation in the agreement which prohibits entertaining of the claim made by the contractor and it is fit to be set aside. 13. It is submitted on behalf of the appellant that the claim is barred by limitation of six years as the contract was signed in 1971, though the contract was extended till November, 1974. But, this submission of the learned counsel have got no substance as apparently the Reference was made by the Court itself in the year 1985 by order dated 1.4.1985 on the basis of which the Arbitrators were appointed and the award dated 26.2.1988 was submitted, which does not appear to be hit by limitation. The objection raised about limitation has got no merit and it cannot be sustained. 14. Having regard to the above facts and circumstances coupled with the evidence on the record, I find merit in this appeal, which is allowed but without costs. The award passed by the Arbitrator is, hereby, set aside. Consequently, the judgment impugned is also set aside. 15. Appeal allowed.