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2004 DIGILAW 232 (JK)

R. B. Jodhamal v. State

2004-08-06

Y.P.NARGOTRA

body2004
FACTUAL BACKGROUND: The petitioner firm is forest lessee engaged in extraction of timber. State of Jammu and Kashmir granted a forest lease in favour of the petitioner in January, 1974. A lease agreement was executed between the parties in respect of forest compartment Nos. 13, 14, 15 and 16-a of Paddar range in Kishtwar division. Under the terms of the agreement the lessee was to pay a sum of Rs. 41,05,000/- to the lessor i.e. Govt. of J&K as royalty for being entitled to convert and remove the timber from the trees marked for felling in the above said compartments. Under clause 11 of the lease agreement the lessee was to commence felling immediately after handing over of the trees and was to remove the produce beyond the coupe boundaries concerned by the end of December 1974. Thus the period of lease was for four years. However1 sub-clause (2) of clause 12 of the agreement provided as follows:- "(2)-Extension in the working period of forest lease under clause (1) shall not be claimed as a matter of right but may be granted in deserving cases in accordance with Government orders on the subject in force from time to time including furnishing of additional security by way of Bank guarantee or mortgage of property. All such extensions shall be covered by supplementary agreements." 2. Completion of the felling of the trees and removal of the timber could not be done by the petitioner-lessee and on his application/request extensions were granted to him by the Government and last being under Govt. order No. 22-FST of 1982 for extending the period up to 31.12.1982. The petitioner availed the last extension as well, still could not complete the work of extraction of timber under the lease, which initially was to expire on 31.12.1978. The petitioner firm again applied to the Government for granting further extension but extension was refused. The petitioner filed writ petition No. 141 of 1982 in thiscourt. The writ was allowed on 5.5.1983. The State went in Letters Patent Appeal before the Division Bench and during the pendency of appeal a settlement came to be arrived at by the parties pursuant to which the Government passed Govt. The petitioner filed writ petition No. 141 of 1982 in thiscourt. The writ was allowed on 5.5.1983. The State went in Letters Patent Appeal before the Division Bench and during the pendency of appeal a settlement came to be arrived at by the parties pursuant to which the Government passed Govt. order No. 205-FST of 1984 dated 22.2.1984 which reads:- "Whereas with a view to minimizing the litigation regarding forests without prejudice to the policy of the Government in respect of forests and the stand taken by it before the Court, the Government vide Government order No. 1727-GD of 1983dated 11.11.1983 constituted a High Powered committee and; Whereas the Government having accepted the recommendations of the Committee makes the following order:- Consistent with the policy of the Government regarding nationalization of extraction operations of forests by the end of December, 1984 the forest lessees will be allowed to work on the existing leases including those ordered by courts up to December, 1984 to complete the extraction and to handover the forests back to the department by 31st of December, 1984." 3. From the above Government order it is manifest that Government had taken a policy decision for nationalization of extraction operations of the forest by the end of Dec.1984 where after no forest lessee was to be allowed to work in the forest on the existing leases including those ordered by the courts up to December, 1984. 4. Consequent upon the aforesaid order of the Government a fresh supplementary agreement came to be executed between the parties on 29.3.1984 whereby time for completion for the work was extended up to 31.12.1084. Clause (1) of the supplementary agreement reads:- "Subject to payment of royalty the lessee will have a right to cut, fell, convert and remove timber from trees marked for felling in compartment of 13, 14, 15 & 16 Padar, 12 &13 of the Forest Division, more specifically described in clause 3 by or before 31st of December 1984 and handover the said forests by that date. In the event of lessees failing or committing to handover the said forests by 31st December, 1984 the standing marked trees shall automatically be deemed to have been reverted to the Government alongwith any timber extracted and lying over in the forest without payment of any compensation whatsoever." 5. In the event of lessees failing or committing to handover the said forests by 31st December, 1984 the standing marked trees shall automatically be deemed to have been reverted to the Government alongwith any timber extracted and lying over in the forest without payment of any compensation whatsoever." 5. Before the expiry of the extended period of lease the petitioner-lessee yet again applied to the Government for granting another extension but this time Government did not pass any order. The petitioner lessee instead of handing over the forest back to the forest department of J&K Government on due date i.e. 31.12.1984 handed back the same on 10.12.1984. 6. The principal agreement of 1974 in its clause 50 incorporated an arbitration agreement as follows:- "Except where otherwise provided in the agreement if any question, difference of objection, whatsoever, shall arise in any way connected with or arising out of or touching this instrument or the meaning or operation of any part thereof or the rights, duties or liabilities of either party, shall be referred to arbitration by any officer of the Government of Jammu and Kashmir to be nominated by the Minister Incharge Forest Department Jammu and Kashmir Government in accordance with the Arbitration Act in force in the State. There will be no objection to any such appointment that the arbitrator so appointed is a Government servant and the decision of the arbitrator appointed under this clause shall be final and binding on both the parties." 7. The petitioner lessee raised the dispute that during the extended period he was not able to complete the work of extraction due to some unforeseen events and had to leave 541 standing trees equal to 55928 Cft volume under the following species:- Deodar 6 trees Vol. 420 Cft. Kail 525 trees Vol. 52,157 Cft. Fir 10 trees Vol. 3351 Cft. Total 541 trees 55928 Cft. 8. And therefore he should be paid compensation. The petitioner invoked the arbitration clause and filed A.A.197 of 1985 under sec.20 of Arbitration Act 1940 in this Court for seeking appointment of an arbitrator for adjudicating upon the dispute through arbitral proceedings. The state upon being put on notice did not file objection and this Court by order dated 19.3.1987 directed Minister Incharge Forest department to nominate the arbitrator. The state upon being put on notice did not file objection and this Court by order dated 19.3.1987 directed Minister Incharge Forest department to nominate the arbitrator. Matter remained pending until 14.4.1988 and no steps were taken by the Minister for nominating the arbitrator, then the petitioner filed CMP No. 312/88 in this Court. The State filed objections however, this Court by order dated 22.10.1988 appointed Chief Conservator of Forest as arbitrator, who also declined to enter upon the reference, consequently on the fresh application CMP No. 39/90 of the petitioner another Chief Conservator of Forest was appointed as arbitrator by order dated 4.5.1990. This arbitrator too did not enter upon the reference so ultimately on application of the petitioner CMP No. 93/91 by order dated 14.11.1991 a learned Single Judge of the court appointed Justice J.N.Bhat(retd) as arbitrator. State filed CIMA No. 17/92, which was dismissed by a Division Bench on 30.9.1992. The learned arbitrator entered jupon the reference and passed his award on 7.6.1993 and filed the same in this Court for making the same ule of the court. PRESENT CONTROVERSY; 9. Petitioner has filed A.A. No. 104/1993 prayed that the award be made rule of the court. State-objector has filed application CMP No. 420/1993 for objecting the award under section 30/33 of the Arbitration Act. Petitioner has also filed CMP No. 388/93 seeking rectification of the award on the plea that there is an arithmetic error. There is also CMP No. 392/93, which is reference on the application of the petitioner filed by the petitioner before the learned Arbitrator for rectification of the arithmetical error in the award which was declined by him to the petitioner as his office had become functus officio after the award. All these matters are being disposed of together. 10. From the pleadings of the parties following issues were framed for determination:- 1. Whether the application under section 30;33 of the Arbitration Act is within time? 2. Whether the arbitrator has misconducted himself as well as the proceedings for the reasons given in grounds (A), (b), (d), (g), (i) and (j)? 3. For the reasons stated in groundc is the award without application of mind? 4. Whether the petitioner can question the validity of the reference made to the Arbitrator at this stage? 5. Is the award not covered by any clause of the agreement? 3. For the reasons stated in groundc is the award without application of mind? 4. Whether the petitioner can question the validity of the reference made to the Arbitrator at this stage? 5. Is the award not covered by any clause of the agreement? If so how and what is its effect? 6. Whether the arbitrator failed to consider subject matter of ground (f)? If so how and what is its effect? 7. Whether the amount of compensation awarded by the arbitrator and the interest allowed on the same was not permissible under law? If so how? 11. The parties were afforded opportunities for leading evidence in the shape of affidavits. Petitioner has filed the affidavit of Sh.Joginderlal Kuthalia while state filed the affidavit of Sh.D.N, .Sharma Senior Assistant. 12. I have heard the learned counsel for the parties and perused the record thoroughly. 13. Learned Arbitrator has allowed the claims of the petitioner-lessee by his award in the following terms: "The net result is that the claimant is entitled to the original claim-compensation of Rs. 37,99,060/-plus interest from 1.4.1986 to 1.6.1993 at the rate of 12% per annum, which comes to Rs. 32,67,191-60. The claimant has made a further claim of Rs. 70,000/-as the arbitration expenses. I allow only arbitrators fee (claimants share only), which is yet undecided as costs to the claimant-petitioner. The rest of the costs incurred by the parties will be borne by the parties." 14. It is apparent from the above that an arithmetic error has crept in while totaling the sums of Rs. 37,99,060 and Rs.32, 67, 191.61. The total should be Rs. 70,66,251.61 whereas it has come to be recorded as Rs. 60,66,251.60. The question of rectification would depend upon the ultimate validity of the award and therefore, would be take up after dealing with the challenge of the State to the award. Learned Arbitrator for determining the disputes formulated the following issues:- 1. Whether the completion of the work in the compartments in question within time prescribed in the agreement was impossible or adversely affected the force majure conditions referred in the statement of claims? 2. In case issue No. 1 is proved in affirmative whether the claimant was prevented by the force majure conditions from extracting the balance volume of 55928 Cft of different species from the lease area in question? 3. 2. In case issue No. 1 is proved in affirmative whether the claimant was prevented by the force majure conditions from extracting the balance volume of 55928 Cft of different species from the lease area in question? 3. In case issue Nos.1&2 are proved in the affirmative whether the claimants are entitled to the reimbursement of the loss suffered on account of 55928 Cft having remained behind? 4. In case the above issues are proved whether the claimants are entitled to a) the reimbursement of loss of Rs. 37,99,060/-(b) interest of Rs. 84,55,379/-@ of 20% and to (c) interest pendente lite @ 24% per annum and to what amount on this score? 5. Whether the claimant is entitled to any relief in view of the provisions of J&K Nationalization of Forest Act 1987? 6. Whether the question of arbitrability of the claim can be raised before the Arbitrator when the reference has been made by Honble High Court? 7. In case the above issue is decided in favour of the respondents, whether the claims in question are not arbitral in view of the constitution of an authority under SRO 271 of 1992?" 15. Learned Arbitrator has simply recorded the respective submissions made by the learned counsel for the parties appearing before him and without recording any reasons has decided the issues formulated by him. The award is non-speaking award in essence. 16. Before the Arbitrator for the petitioner inter alia it was argued that extraction work in the lease could not be completed within time fixed, firstly because connecting link between the leased area and other side of river Chenab was a bridge at Gulabgarh which was set on fire on 1.10.1984 and secondly because working on the lease was adversely effected because of the events which took place in the country after operation Blue Star and the subsequent killing of then Prime Minister due to which labour became not available. Learned Arbitrator has decided the issues No. 1 to 5 in favour of the petitioner and issue 6&7 against the State and awarded the claims of the petitioner as already said. The award is being challenged by the State on various grounds. 17. Learned counsel for the respondent-State Mr. Kapoor firstly contends that the award of the arbitrator is without jurisdiction as according to him in terms of the supplementary agreement and Govt. The award is being challenged by the State on various grounds. 17. Learned counsel for the respondent-State Mr. Kapoor firstly contends that the award of the arbitrator is without jurisdiction as according to him in terms of the supplementary agreement and Govt. Order No. 205-FST the left over timber after 31.12.1982 became the property of the State, therefore, no claim in respect thereof could be maintained by the petitioner-lessee. However Mr.Shah learned counsel for the petitioner contends that the interpretation of the terms of the contract was within the domain of powers of the arbitrator and the learned Arbitrator has considered the same and passed the non-speaking award, therefore, it is not permissible for this Court to look into the terms and conditions of the agreement for reaching on a different conclusion. 18. How far interference into a non-speaking award is permissible U/S 30/33 of the Arbitration Act? 19. An award can be set aside under Section 30 of the Arbitration Act if there is an error apparent on the face of the award, or if the arbitrator is found to have traveled out side the agreement. 20. What would be an error apparent on the face of the award? An error apparent on the face of award would arise when the reasons given for decision by the Arbitrator either in the award or in any document incorporated with it, are based upon an erroneous legal proposition. This would however be subject to one exception that is when parties themselves refer a question of law specifically to an arbitrator for determination and the arbitrator decides the question, his decision however erroneous shall be binding upon the parties. If there is no such error apparent on the face of the award and the decision of arbitrator is based upon the appreciation of evidence and record. It is not open to the court to re-appreciate the evidence for reaching a conclusion other than that of the arbitrator. 21. In M/S Sudarshan Trading Co. v. Govt. If there is no such error apparent on the face of the award and the decision of arbitrator is based upon the appreciation of evidence and record. It is not open to the court to re-appreciate the evidence for reaching a conclusion other than that of the arbitrator. 21. In M/S Sudarshan Trading Co. v. Govt. of Kerala, AIR 1989 SC 890 their lordships held as under:- "An award of arbitration can be set aside on the ground of error of law apparent on the face of the award only when in the award or in a document incorporated with it, as for instance a note appended by the arbitrator stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous." Their Lordships further held: - "It is not open to the court to probe the mental process of the arbitrator and speculate where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. See the observations of this Court in Hindustan Steel Works Construction Ltd. v. C. Rajasekhar Rao (1897) 4 SCC 93. In the instant case the arbitrator has merely set out the claims and given the history of the claims and then awarded certain amount. He has not spoken his mind indicating why he has done what he has done; he has narrated only how he came to make the award. In absence of any reasons for making the award, it is not open to the court to interfere with the award. Furthermore in any event reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter, which the court questions and considers. It the parties have selected their own forum; the deciding forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the arbitrator. The same principle has been stated in Alopi Prasad and Cons Ltd. V Union of India (AIR 1960 SC 588). The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the arbitrator. The same principle has been stated in Alopi Prasad and Cons Ltd. V Union of India (AIR 1960 SC 588). There this Court held that the award was liable to be set aside because of an error apparent on the face of the award. An arbitration award might be set aside on the ground of an error on the face of it when the reasons given for the decision, either in the award or in any document incorporated with it are based upon a legal proposition which is erroneous. But where a specific question is referred, the award is not liable to be asset aside on the ground of an error on the face of the award even if the answer to the question involves an erroneous decision on a point of law." Their lordships further observed:- "An award may be remitted or set aside on the ground that the arbitrator in making it had exceeded his jurisdiction and evidence of matters not appearing on the face of it will be admitted in order to establish whether the jurisdiction had been exceeded or not because the nature of the dispute is something which has to be determined out side the award-whatever might be said about it in the award or by the arbitrator." 22. And in M/S Tarapore and Co. v. Cochin Shipyard Ltd., Cochin, AIR 1984. S.C. 1072 the Supreme Court has held:- "If a question of law is specifically referred and it becomes evident that the parties desired to have a decision on the specific question from the arbitrator about that rather than one from court, then the court will not interfere with the award of the arbitrator on the ground that there is an error of law apparent on the face of the award even if the view of law taken by the arbitrator does not accord with the view of the court. The view that common law courts were very reluctant to part with its jurisdiction has hardly any relevance where a specific question of law including the one touching the jurisdiction of the arbitrator is referred to the arbitrator for his decision. The view that common law courts were very reluctant to part with its jurisdiction has hardly any relevance where a specific question of law including the one touching the jurisdiction of the arbitrator is referred to the arbitrator for his decision. Even if the decision of the arbitrator does not accord with the view of the court, the award cannot be set aside on the sole ground that there is an error of law apparent on the face of it.(1913)2 KB 32 AIR 1955 SC 468." 23. The Arbitrator is the sole Judge of the case of the parties having been chosen by them. His decision is final and binding on the parties and can be challenged only on the grounds specified in Section 30/33 of the Arbitration Act. For deciding the dispute between parties it is within the domain of jurisdiction of the Arbitrator to interpret various clauses of the agreement. 24. In case titled P.V. Suibba Naidu and others v. Government of A.P. and others, (1998) 9 SCC 407, it was held as follows:- "In the present case all the claims in question were expressly referred to arbitrator and were raised before the arbitrator. The High court was therefore not right in examining the terms of the contract or interpreting them for the purpose of deciding whether these claims were covered by the terms of the contract. 25. In the case of K.R. Reveendranathan v. State of Kerala, this Court relying upon the decision in Hindustan construction Co.Ltd. v. State of J&K has held that the court by purporting to construe the contract cannot take upon itself the burden of saying that it was contrary to the contract and as such beyond jurisdiction. This is precisely what has been done in the present case. In the case of Sudarshan Trading Co. v. Govt. of Kerala this Court has made a distinction between error apparent on the face of the award and lack of jurisdiction. It has held that only in a speaking award can the court look into the reasoning of the arbitrator. It is not open to the court to probe the mental process of the arbitrator, or speculate on what impelled an arbitrator to arrive at his conclusion. An award can be set-aside on the ground that the arbitrator in making it, had exceeded his jurisdiction. It is not open to the court to probe the mental process of the arbitrator, or speculate on what impelled an arbitrator to arrive at his conclusion. An award can be set-aside on the ground that the arbitrator in making it, had exceeded his jurisdiction. But 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. The same view has been reiterated in Hindustan construction Co. v. State of J&K." 26. And then in (1998) 9 SCC 410, K.R. Raveendranathan v. State of Kerala, it was held:- "The learned counsel for the appellant points out that the question in issue in the present appeals is squarely covered by the decision of this Court in Hindustan construction Co. Ltd. v. State of J&K. In particular, it drew our attention to para 10 of the judgment and the portion extracted from the decision in Sudarshan Trading co case wherein it was said 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. That is exactly what the court has done in the instant case. Therefore, the issue stands covered by this decision and the learned counsel for the respondents could not in the face of this decision argue otherwise." 27. If interpretation of the various clauses of the agreement is within the jurisdiction of the Arbitrator it can be argued and in fact has been argued that where in exercise of the power interprets the various clauses of the agreement including the exemption clauses then where is the scope for the court to look into the various clauses of the agreement to say that Arbitrator has committed the error apparent on the fact of the award and has traveled outside the contract. 28. There is a distinction between an error apparent within the jurisdiction and an error in excess the jurisdiction of the Arbitrator. If the error is within the jurisdiction the award cannot be set aside but where the Arbitrator has traveled beyond the jurisdiction the award would be without jurisdiction and shall not be upheld. How to determine whether the arbitrator has traveled outside his jurisdiction? 29. In case titled Himachal Pradesh SEB v. R.J.Shah and Co. If the error is within the jurisdiction the award cannot be set aside but where the Arbitrator has traveled beyond the jurisdiction the award would be without jurisdiction and shall not be upheld. How to determine whether the arbitrator has traveled outside his jurisdiction? 29. In case titled Himachal Pradesh SEB v. R.J.Shah and Co. (1999) 4 SCC 410, their lordships of the Supreme court held as follows:- "In order to determine whether the arbitrator has acted in excess of jurisdiction what has to be seen is whether the claimant could raise a particular dispute or claim before an arbitrator. If the answer is in the affirmative then it is clear that the arbitrator would have the jurisdiction to deal with such a claim. On the other hand if the arbitration clause or a specific term in the contract or the law does not permit to give the arbitrator the power to decide or to adjudicate on a dispute raised by the claimant or there is a specific bar to the raising of a pa4rticular dispute or claim then any decision given by the arbitrator in respect thereof would clearly be in excess of jurisdiction. In order to find whether the arbitrator has acted in excess of jurisdiction the court may have to look into some documents including the contract as well as the reference of dispute made to the arbitrators limited for the purpose of seeing whether the arbitrator has the jurisdiction to decide the claim made in the arbitration proceedings." 30. And then in State of U.P. v. Allied Construction, (2003) 7 SCC 396 it was held as under:- "Any award made by an arbitrator can be set aside only if one or the other terms specified in section 30 and 33 of the Arbitration Act 1940 is attracted. It is not a case where it can be said that the arbitrator has misconducted the proceedings. It was within his jurisdiction to interpret clause 47 of the agreement having regard to the fact-situation obtaining therein. It is submitted that an award made by an arbitrator may be wrong either on law or on fact and error of law on the face of it could not nullify an award. The award is a speaking one. The arbitrator has assigned sufficient and cogent reasons in support thereof. It is submitted that an award made by an arbitrator may be wrong either on law or on fact and error of law on the face of it could not nullify an award. The award is a speaking one. The arbitrator has assigned sufficient and cogent reasons in support thereof. Interpretation of a contract, it is trite, is a matter for the arbitrator to determine (see Sudarshan Trading Co. v. Govt. of Kerala). Section 30 of the Arbitration Act, 1940 providing for setting aside an award is restrictive in its operation. Unless one or the other condition contained in section 30 is satisfied an award cannot be set aside. The arbitrator is a judge chosen by the parties and his decision is final. The court is precluded from reappraising the evidence. Even in a case where the award contains reasons, the interference therewith would still be not available within the jurisdiction of the court unless of course the reasons are totally perverse or the judgment is based on a wrong proposition of law. An error apparent on the face of the records would not imply closer scrutiny of the merits of documents and materials on record. Once it is found that the view of the arbitrator is plausible one, the court will refrain itself from interfering." 31. The Supreme Court laid down the test for determining whether the arbitrator has traveled beyond his jurisdiction in case Rajasthan State Mines and Minerals Ltd. v. Eastern Engineering Enterprises A.I.R. 1999 S.C. 3627, which reads as under:- "44. From the resume of the aforesaid decisions, it can be stated that: (a) It is not open to the Court to speculate, where no reasons are given by the arbitrator, as to what impelled arbitrator to arrive at his conclusion. (b) It is not open to the Court to admit to probe the mental process by which the arbitrator has reached his conclusion where it is not disclosed by the terms of the award. (c) 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. (d) If no specific question of law is referred, the decision of the Arbitrator on that question is not final, however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. (d) If no specific question of law is referred, the decision of the Arbitrator on that question is not final, however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. In a case where specific question of law touching upon the jurisdiction of the arbitrator was referred for the decision of the arbitrator by the parties, then the finding of the arbitrator on the said question between the parties may be binding. (e) In a case of non-speaking award, the jurisdiction of the Court is limited. The award can be set aside if the arbitrator acts beyond his jurisdiction. (f) To find out whether the arbitrator has traveled beyond his jurisdiction, it would be necessary to consider the agreement between the parties containing the arbitration clause. Arbitrator acting beyond his jurisdiction- as a different ground from the error apparent on the face of the award. (g) In order to determine whether arbitrator has acted in excess of his jurisdiction what has to be seen is whether the claimant could raise a particular claim before the arbitrator. If there is a specific term in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or there is a specific bar in the contract to the raising of the particular claim then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction. (h) The award made by the Arbitrator disregarding the terms of the reference or the arbitration agreement or the terms of the contract would be a jurisdictional error which requires ultimately to be decided by the Court. He cannot award an amount, which is ruled out or prohibited by the terms of the agreement. Because of specific bar stipulated by the parties in the agreement that claim could not be raised. Even if it is raised and referred to arbitration because of wider arbitration clause such claim amount cannot be awarded as agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. This aspect is absolutely made clear in Continental Construction Co. Even if it is raised and referred to arbitration because of wider arbitration clause such claim amount cannot be awarded as agreement is binding between the parties and the arbitrator has to adjudicate as per the agreement. This aspect is absolutely made clear in Continental Construction Co. Ltd. (AIR 1988 SC 1166) (supra) by relying upon the following passage from M/s Alopi Prasad v. Union of India (1960) 2 Scr 793: 1960 SC 588) which is to the following effect:- "There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered. The Contract Act does nto enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event which they did not at all anticipate, a wholly abnormal use or fall in process, a sudden depreciation of currency, an unexpected obstacle to execution or the like. There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because of account of an uncontemplated turn of events, the performance of the contract may become onerous." (i) The arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract. A deliberate departure or conscious disregard of the contract not only manifests the disregard of his authority or misconduct on his part but it may tantamount to mala fide action. (j) The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and reasonable; the arbitrator is a tribunal selected by the parties to decide the dispute according to law." 32. Then in case titled Pure Helium India Pvt.Ltd v. Oil and Natural Gas Commission, (2003) 8 SCC 593 the Supreme Court after noticing the case law observed and held as follows:- "The principle of law laid down in the aforementioned decisions leave no manner of doubt that the jurisdiction of the court in interfering with a non-speaking award is limited. Then in case titled Pure Helium India Pvt.Ltd v. Oil and Natural Gas Commission, (2003) 8 SCC 593 the Supreme Court after noticing the case law observed and held as follows:- "The principle of law laid down in the aforementioned decisions leave no manner of doubt that the jurisdiction of the court in interfering with a non-speaking award is limited. The upshot of the above decisions is that if the claim of the claimant is not arbitral having regard to the bar/prohibition created under the contract, the court can set aside the award but unless such a prohibition/bar is found out, the court cannot exercise its jurisdiction under section 30 of the Act. The High court therefore misdirected itself in law in posing a wrong question. It is true that where such prohibition exists, the court will not hesitate to set aside the award." 33. In (1999) 9 S.C.C. 283, Rajasthan State Mines & Minerals Ltd. v. Eastern Engineer Enterprises and others, the Supreme Court held:- "23. It is settled law that the arbitrator is the creature of the contract between the parties and hence if he ignores the specific terms of the contract, it would be a question of jurisdictional error which could be corrected by the court and for that limited purpose agreement is required to be considered. For deciding whether the arbitrator has exceeded his jurisdiction reference to the terms of the contract is a must." 34. Thus an award can be challenged U/S 30/33 Arbitration Act on the ground that the same is bad in law being without jurisdiction or on the ground that there is an error of law apparent on the face of the award. GROUNDS OF CHALLENGE. 35. Mr.Kapoor learned counsel for the respondent-State firstly contends that the reference made to the Arbitrator for adjudicating upon the disputes raised by the petitioner-lessee is bad in law being incompetent in view of the J&K Nationalization of Forest Working Act 1987 and consequently the award of the arbitrator is also invalid. He argued that under the provisions of the said Act the lease agreement had ceased to have effect from the date Forest Working Ordinance 1986 came into force. Therefore, neither the reference could be made by the court U/S 20 AA nor the Arbitrator was competent to enter upon the reference and make his award. 36. On the other hand Mr. Therefore, neither the reference could be made by the court U/S 20 AA nor the Arbitrator was competent to enter upon the reference and make his award. 36. On the other hand Mr. Shah learned counsel for the petitioner has argued that the petitioner had applied to this Court for invoking the arbitration clause U/S 20 on 27.7.1985 when at that time Act of 1987 was not in force. It is true that when the application of the petitioner came to be decided on 19.3.1987 the Act had come into force but no such challenge to the competence of the reference was either made before the court nor any appeal against the order dated 19.3.1987 was ever filed by the State-respondent. In 1988 the petitioner filed CMP No. 312/1988 for appointment of independent arbitrator to which the State filed objections on 19.8.1988 wherein an objection was taken by the State that application was not maintainable in view of coming into force of J&K Nationalization of Forest working Act 1987 but despite such plea being taken this Court ordered for appointment of arbitrator on 22.10.1988 which means that by implication objection of the State was over ruled. The State filed an appeal against the order of the learned Single Judge on 22.10.1988. The appeal was dismissed and appointment of the arbitrator was upheld. The matter was not further agitated by the State. From all this, according to Mr. Shah, it is clear that the objection of the State about the applicability of the Act of 1987 to arbitration proceedings did not prevail with the court and State by not agitating the matter any further had accepted the legal position that the Act of 1987 did not bar making of reference u/s 20 AA to the arbitrator. Before the arbitrator also the State appears to have taken up the said objection but the same also did not prevail with the arbitrator. According to Mr. Shah by order of reference all matters in controversy were referred to the arbitrator for adjudication which included the issue of jurisdiction of the arbitrator.The arbitrator has not ruled out his jurisdiction in his award. The parties are bound by the decision of the arbitrator on the question of law the arbitrator being the chosen judge of the parties. Mr. Shah by order of reference all matters in controversy were referred to the arbitrator for adjudication which included the issue of jurisdiction of the arbitrator.The arbitrator has not ruled out his jurisdiction in his award. The parties are bound by the decision of the arbitrator on the question of law the arbitrator being the chosen judge of the parties. Mr. Shah further contends that even otherwise the provision of the Act of 1987 do not in any manner invalidate the award of the arbitrator for the reason that the Act does not cover the controversy in issue. 37. The State legislature in order to implement the policy of the State seeking nationalization of Forest Working in the State had enacted J&K Nationalization of Forest Working Act 1985 which was made applicable w.e.f. 24.9.1985. The Act prohibited felling of trees and removal of timber from the forest compartments by the lessees under the agreements granted to them for the said purpose. Constitutional validity of the Act of 1985 came to be challenged in a writ petition filed by various lessees. A Division Bench of this Court in case M/S Manzoor Mushtaq v. State held the Act of 1985 to be ultra vires of the constitution and quashed the same by its judgment dated 13.12.1985. From 13.12.1985 up to January 1986 thus there was no statute in existence for banning the working in the forest by the lessees. The State therefore promulgated J&K Nationalization of Forest Working Ordinance 1985 giving it retrospective effect from 24.9.1985 which was followed by another Ordinance of 1986 and then the present Act of 1987 came into force which also envisaged retrospectivity w.e.f. 24.9.1985 with regard to ban of forest working by private persons. The State therefore promulgated J&K Nationalization of Forest Working Ordinance 1985 giving it retrospective effect from 24.9.1985 which was followed by another Ordinance of 1986 and then the present Act of 1987 came into force which also envisaged retrospectivity w.e.f. 24.9.1985 with regard to ban of forest working by private persons. Sec.3 of 1987 Act reads as under:- "3.Ban on Forest Working by private persons-Notwithstanding anything to the contrary contained in any law, rule, instrument, agreement or contract or in any judgment, decree or order of any court or authority- (a) as from the commencement of the Jammu and Kashmir Nationalization of Forest Working Ordinance, 1986 (V of 1986) no persons shall fell any tree or convert any timber or carry on the felling of any tree or conversion or removal of any timber in any demarcated forest of the State; (b) any lease, contract or authority in existence at the commencement of Jammu and Kashmir Nationalisation of Forest Working Ordinance, 1986(V of 1986) for felling of trees or conversion or extraction of timber from such trees or for removal of timber from the demarcated forest shall cease to have effect and right which might have accrued to any person under any such contract, agreement or authority shall stand extinguished and shall vest in the State. Provided that nothing in clause (b) shall effect the right of the Government to recover any amount payable to it on account of royalty, interest, compensation, penalty or any other sum chargeable from any person by virtue of any lease, contract or authority referred to above in the manner provided for in any such lease, contract or authority. 38. Provided that nothing in clause (b) shall effect the right of the Government to recover any amount payable to it on account of royalty, interest, compensation, penalty or any other sum chargeable from any person by virtue of any lease, contract or authority referred to above in the manner provided for in any such lease, contract or authority. 38. Section 4 of the Act provides that notwithstanding anything to the contrary contained in any law, rule, instrument, agreement or contract or in any judgment, decree or order of any court or authority -- (a) any extinguishments of right, cessation of lease, contract or authority or vesting of any timber in the State or declaration of any timber as the property of the State under any law, rule or order or under any agreement, contract or instrument prior to the commencement of this Act, shall and shall be deemed always to have been validly made or done and all acts done, proceedings taken or orders issued for purposes of or in relation to any such extinguishment of rights, cessition of lease, vesting of timber in the State or declaration of timber as the property of the State, shall be and shall always be deemed to be good and valid in law; and (b) any timber already vested in the State or declared to be the property of the State under or by virtue of any law, rule, order lease, agreement or contract any time prior to the commencement of this Act shall be disposed of by the Government in such manner as it may direct. Section 5 protects the rights of the Government to recover the amounts from the lessees under any law, rule, agreement, contract or instrument or order of any authority, before the commencement of this Act, whereas section 6 provides for payment and determination of the amount payable to the lessees. Section 5 protects the rights of the Government to recover the amounts from the lessees under any law, rule, agreement, contract or instrument or order of any authority, before the commencement of this Act, whereas section 6 provides for payment and determination of the amount payable to the lessees. Section 6 reads as follows:- 6-Payment and determination of amount-In respect of timber for which amount is payable under the Jammu and Kashmir Nationalisation of Forest Working Ordinance 1986 and which has not been paid, there shall be paid an amount to be determined in accordance with the following principles by an authority to be appointed by the Government namely:- (a) Actual expenditure incurred on the felling and conversion of timber and its transportation; (b) Any cost incidental to such felling, conversion and transportation (c) Cost of working capital employed for the above operation to be paid at the rate of 15% per annum; (d) Any other cost which in the opinion of the authority has been incurred but is not covered by the above provision to be paid; (e) Any royalty already paid to the Government in respect of such timber to be refunded." 39. If the aforesaid provisions are held to cover the controversy in hand then the award of the arbitrator holding otherwise shall tantamount to an error of law which is a ground for setting aside the award. For dealing with the objections of the State it has to be determined whether the provisions of this Act contain a bar to the making of the reference and to the passing of the award. 40. From the bare perusal of Sec.3 of the Act it is manifest that the Act banned the forest working by private persons notwithstanding anything to the contrary contained in any law, rule, instrument or contract or any judgment, decree or order of any court or authority. 40. From the bare perusal of Sec.3 of the Act it is manifest that the Act banned the forest working by private persons notwithstanding anything to the contrary contained in any law, rule, instrument or contract or any judgment, decree or order of any court or authority. The ban so imposed was to the felling of any tree or converting any timber or carrying on felling of any tree or conversion or removal of any timber from a demarcated forest of the State and if there was any lease, contract or authority in existence w.e.f. 24.9.1985 making a provision for felling of trees, conversion or extraction of timber from such trees or for removal of timber from the demarcated forest, same ceased to have effect and the rights which might of accrued to any person, under any such contract, agreement or authority, stood extinguished and vested in the State. 41. In the present case, the case of the petitioner is not that he is entitled to fell trees or to remove timber from the demarcated forest under agreement of lease and therefore he should be permitted to do so but his claim is simply that as per the agreement he was entitled to fell trees assigned to him through the agreement and convert the same and remove the timber up to 31.12.1984 and that as he has not been able to fell and remove the timber under the agreement, therefore, has suffered losses for his failure to fell and remove timber from the demarcated forest within the time allowed, he is entitled to be compensated for the losses suffered. As the petitioner has claimed compensation and not felling of trees and removal thereof, the dispute relating to payment of compensation is the dispute which is covered by the arbitration agreement and not effected by the provisions of the Act of 1987.Therefore, there is no merit in the contention of learned counsel for the State that neither reference could be made nor the award could be passed by the arbitrator in view of the provisions contained in that Act. As the provisions of the Act do not cover the dispute raised, the petitioner lessee therefore in view of the arbitration clause existing in the agreement executed between the parties, such disputes were arbitrable and reference for decision thereof through arbitration was competent. As the provisions of the Act do not cover the dispute raised, the petitioner lessee therefore in view of the arbitration clause existing in the agreement executed between the parties, such disputes were arbitrable and reference for decision thereof through arbitration was competent. The award of the arbitrator therefore on that account cannot be said to be suffering from error of law. 42. It has been next argued by Mr.Kapoor that the arbitrator had consented to give a speaking award and for that reason only he had recorded the submissions of the respective parties in detail in his award but he has passed a nonspeaking award. The award therefore, is invalid. 43. I am not in agreement with learned counsel for the State. There is nothing in the arbitration agreement requiring the arbitrator to pass a speaking award. Once the agreement is silent it is in the discretion of the arbitrator to pass a speaking award or a non-speaking award. In the instant case the Arbitrator has chosen to pass a nonspeaking award. No exception can be taken to it on that ground also. 44. Mr.Kapoor also contends that the petitioner while making an application u/s 20 AA had valued the dispute at Rs. 8.00 lacs but the arbitrator has awarded much more than that amount, the award therefore is bad in law. There is no force in this contentiontoo. After the disputes were referred to the arbitrator in its widest terms it was open to the parties to lay claims and counter claims before the arbitrator. Merely because the lessee-petitioner had initially valued his claim at Rs. 8.00 lacs would not bar laying of enhanced claims before the arbitrator, the reference being not limited to the question whether the claimant-lessee was entitled to Rs. 8.00 lacs only from the respondents. 45. Mr.Kapoor has also contended that time was essence of the contract and Section 72 of the Contract Act can have no application. The submission is misconceived. Section 72 of the Contract Act has not been pressed into service either by the petitioner or by the learned Arbitrator in passing the award. In any case Sec.72 refers to liability of payment of money or thing delivered by a person to such person by mistake or coercion. The submission is misconceived. Section 72 of the Contract Act has not been pressed into service either by the petitioner or by the learned Arbitrator in passing the award. In any case Sec.72 refers to liability of payment of money or thing delivered by a person to such person by mistake or coercion. It is none of the case of the claimant that he had paid any money to the State by mistake or under coercion, so the State must pay the same back. 46. Mr.Kapoor has lastly contended that the award of the arbitrator is bad in law for being without jurisdiction. According to him clause (i) of the supplementary agreement clearly envisaged that in case the lessee-contractor failed to fell the assigned trees and remove the timber within the time allowed by the agreement i.e. up to 31.12.1984, he shall have no claim to compensation for those trees and the left over trees shall become the property of the State. He has further argued that the learned arbitrator ignored this express provision of the supplementary agreement entered into between the parties while making the award in favour of the petitioner in respect of the left over trees. 47. The contention of Mr. Shah learned counsel for the petitioner on the other hand is that under the supplementary agreement the petitioner-lessee was granted nine months for felling trees. The lessee failed to fell the trees and remove the timber within the stipulated period for the reason that due to unforeseeable situation he was not in a position to complete the extraction work and the connecting link between the leased compartment of river Chenab was a bridge at Gulabgarh which was set on fire on 1.10.1984 as an aftermath of operation Blue Star and the subsequent events which ensued after the killing of the then Prime Minister of India, the labour which had been employed by the petitioner for felling trees fled from the compartment. The petitioner being faced with this situation left 541 trees unfelled and was compelled by the circumstances to handover the compartment back to the respondents on 10.12.1984 i.e. 21 days prior to the expiry of the period of agreement. Mr. The petitioner being faced with this situation left 541 trees unfelled and was compelled by the circumstances to handover the compartment back to the respondents on 10.12.1984 i.e. 21 days prior to the expiry of the period of agreement. Mr. Shah further argued that faced with this situation the petitioner had applied for further extension but no formal orders were passed, therefore, in order to escape the rigor of clause (i) of the supplementary agreement the petitioner handed back the compartment to the respondents in terms of clause (i) aforesaid. His further submission is that those 541 trees could have become the property of the State if he had handed over the compartment in terms of the agreement on 31.12.1984. As he handed over the compartment due to inaction of the State for granting further extension on 10.12.1984 said trees could not have become the property of the State and the only obligation of the petitioner was to make payment of royalty to the State which he had done, time could be extended for completing the work by the petitioner under clause 12(2) of the original agreement of 1974. He also submits that non-performance in the present case is an excusable nonperformance which is coupled with the inaction of the Government in considering extension of time for execution of the contract, which resulted into losses to the petitioner and the State under the said agreement and under general law is bound to compensate the petitioner. He argued that the arbitrator has rightly appreciated the fact in issue and has rightly granted compensation to the petitioner. 48. I have considered the respective contentions of the parties. The original agreement entered into between the parties in 1974 under clause 12(2) contained a provision for granting of extension for completion of work. It reads as follows:- 12(1) The period of lease will commence from the date this agreement is signed by the lessee(s) until end of December 1979 by which time whole produce must be removed to or beyond the export point as fixed by the Divisional Forest Officer failing which the produce left behind will remain the property of the Government. It reads as follows:- 12(1) The period of lease will commence from the date this agreement is signed by the lessee(s) until end of December 1979 by which time whole produce must be removed to or beyond the export point as fixed by the Divisional Forest Officer failing which the produce left behind will remain the property of the Government. This, however, will not apply to the produce at the Sale Depots mentioned in clause 17; (2) Extension in the working period of various leases under clause (1) shall not be claimed as a matter of right but may be granted in deserving cases in accordance with the Government orders in force from time to time, including furnishing of additional security by way of bank guarantee or mortgage of property. All such extensions shall be covered by the supplementary agreements." 49. From the above it is manifest that time was not essence of the contract and in appropriate situations working period of the forest leases could be extended by the Government. Pursuant to this clause various extensions were granted which were availed by the petitioner lessee in respect of the working of the forest lease. However, in 1984 the State wanted to change its policy of granting leases for felling of trees and extraction of timber by private firms/lessees and therefore it thought no further extension shall be granted towards the execution of the agreement entered into with the petitioner and other forest lessees in the year 1974. Non-granting of extension gave rise to a challenge to the action of the Government in a writ petition filed by the lessees, which as already said, culminated into passing of Government order No. FST 205 of 1984. Pursuant to the said order, it appears that the Government agreed to grant one more extension to the forest lessee for completing the extraction work and for the said purpose a supplementary agreement came to be executed between the parties. Pursuant to the said order, it appears that the Government agreed to grant one more extension to the forest lessee for completing the extraction work and for the said purpose a supplementary agreement came to be executed between the parties. This agreement does not contain any clause for further extension of the working period of the lease and by clause (1) of the same it was agreed upon between the parties as follows:- "(1) Subject to payment of royalty the lessee will have right to cut, fell convert and remove timber from trees marked for felling in compartments 13, 14, 15, 16 Paddar, 12-A & 13 handedback, working circle in Range of forest Division more specifically described in clause 3 by or before 31.12.1984 and handover the said forests by that date. In the event of lessees failing or omitting to handover the said forests by 31st of December, 1984, the standing marked trees shall automatically be deemed to have been reverted to the Government alongwith any timber extracted and lying over in the forests without payment of any compensation whatsoever." 50. The parties thus agreed that the petitioner-lessee shall be entitled to fell, convert and remove the timber from the remaining standing trees in the forest by or before 31.12.1984 and in case he failed to do so, the left over trees shall automatically be deem to have reverted to the Government alongwith timber extracted and lying over in forest, without payment of any compensation whatsoever. As the supplementary agreement did not envisage any further extension in the working period of the lease beyond 31.12.1984 time became essence of the contract. The effect of clause (1) of the agreement was that after 31.12.1984 the left over trees would have automatically become the property of the State Government, without payment of any compensation whatsoever. The petitioner was thus entitled to fell trees up to 31.12.1984. He left the felling on 10.12.1984. The fact of his leaving extraction work before the ultimate date 31.12.1984 did not change the ground reality that after 31.12.1984 the left over trees would become the property of the State. He had bargained for the same therefore to turn around and say that the bargain was unfair is unjustified. He had himself entered into agreement and thus was bound by clause (1) of the same. He had bargained for the same therefore to turn around and say that the bargain was unfair is unjustified. He had himself entered into agreement and thus was bound by clause (1) of the same. The case of the petitioner is that he was disabled because of force majure for completing the extraction work within the time allowed under the agreement, therefore, entitled to extension of the working period. The plea is untenable, firstly for the reason that time was essence of the supplementary agreement and non-execution of the contract on his part can not be excused because of force majure as the agreement entered into between him and the Government does not envisage the effect of force majure and secondly there being no clause in the supplementary agreement stipulating for extension of the working period of the lease, the lessee had no right to ask for extension of time. If the petitioner-lessee had left the lease on 10.12.1984 it was his own doing and on his own risk. The contention of learned counsel for the petitioner that because of his leaving the contract and handing back the forest to the Government on 10.12.1984, left over trees had not become the property of the State cannot sustain. He could have continued with the extraction work till 31.12.1984 and if he did not do so till that date it was his own decision and he has to bear the necessary consequences. After 31.12.1984 the left over trees had become the property of the State Government and no claim whatsoever pertaining to the left over trees was entertainable by the Government in view of the express condition of the supplementary agreement. The learned arbitrator being creature of the agreement was bound by the provisions contained in it. He was not entitled to travel out side the agreement. Clause (1) quoted above expressly contained a bar to the maintainability of the claim of the petitioner in respect of the left over trees against the Government. Learned Arbitrator has ignored this provision of the supplementary agreement and therefore in making the award he has traveled out side the provisions of the agreement. His award is, therefore, without jurisdiction and cannot be sustained. 51. Learned Arbitrator has ignored this provision of the supplementary agreement and therefore in making the award he has traveled out side the provisions of the agreement. His award is, therefore, without jurisdiction and cannot be sustained. 51. The contention of learned counsel for the petitioner that since the arbitrator has considered the scope of clause (1) of the agreement in determining the liability of the State, it is not open to this Court to look into the terms of the contract is without any merit. As per the law laid down by the Supreme Court in various judgments in order to determine whether the arbitrator has acted in excess of his jurisdiction, what is to be seen is whether the petitioner could raise the dispute for compensation with respect to the left over trees in terms of the express clauses of the agreement. If the answer is in the negative i.e. there is a specific bar in the contract to the raising of a particular claim then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction. In the present case there was a complete bar to the raising of the dispute with regard to compensation in respect of the left over trees after 31.12.1984. The award made by the arbitrator disregarding this term of the contract suffers from jurisdictional error. Even where a claim comes to be referred to an arbitrator in view of the existence of a wider arbitration clause, the award of such a claim if it is barred by the express terms of the agreement shall be without jurisdiction for the reasons that an arbitrator being the creature of the agreement draw his jurisdiction from the agreement itself and therefore cannot travel out side the agreement by ignoring the express condition of the agreement. He is required to rule on the dispute in terms of the clauses of the agreement. Even the provisions of the Contract Act do not enable a party to a contract to ignore the express covenant thereof and to claim compensation on the plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event, which they may not have at all anticipated. Even the provisions of the Contract Act do not enable a party to a contract to ignore the express covenant thereof and to claim compensation on the plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event, which they may not have at all anticipated. Neither the arbitrator nor the courts can absolve a party from his liability to perform his part of the contract merely because of account of an uncontemplated turn of events. The parties are bound by the terms of the agreement. In the present case it was agreed by the petitioner-lessee himself that in case he fails to remove the timber after felling the remaining marked standing trees by 31.12.1984 those trees shall automatically deem to have reverted to the Government alongwith the timber, if any extracted and lying over in the forest, without any compensation whatsoever. Having thus agreed so in terms of the supplementary agreement, the petitioner was not entitled to claim compensation for the left over trees on the ground that he was disabled because of unanticipated turn of events. Learned Arbitrator has thus traveled beyond the scope of the agreement and has ignored clause (1) of the agreement entered into between the parties. His award is, therefore, beyond jurisdiction, as such is liable to be said aside. Accordingly the contention of learned counsel for the State-respondent in this behalf is found to be meritorious. 52. After having said so, I answer the issues framed by saying that issue No. 1 is decided in favour of the State and application u/s 30/33 AA is held to be within time. Issue No. 2 is decided against the petitioner-lessee by holding that the learned arbitrator is found to have misconducted the proceedings by traveling out side the scope of the agreement. Issue No. 3 for the aforesaid reason is decided in favour of the respondent and against the petitioner. Issue No. 4 is decided against the State as reference has been found to be valid. Issue Nos.5&6 are decided in favour of the respondent by saying that the award is contrary to clause (1) of the supplementary agreement. Issue No. 7 is decided against the petitioner and he is held not entitled to any compensation. 53. Issue No. 4 is decided against the State as reference has been found to be valid. Issue Nos.5&6 are decided in favour of the respondent by saying that the award is contrary to clause (1) of the supplementary agreement. Issue No. 7 is decided against the petitioner and he is held not entitled to any compensation. 53. The net result of the aforesaid discussion is that the award of the arbitrator awarding Rs. 77,66,251.61P with future interest at the rate of 12% P.A. up to the date of final decision in the matter by the High Court, in favour of the lessee, is bad in law and as such same is set aside. Consequently the application of the petitioner that the award be made rule of the court, and that the arithmetic mistake be rectified, as well the reference of the arbitrator for making correction of the arithmetic mistake are dismissed, whereas the application of the respondent-State filed u/s 30/33 of the Arbitration Act is allowed. All connected matters shall also stand disposed of accordingly. Parties to bear their own costs.