JUDGMENT : V. Bhavani Subbaroyan, J. (Prayer: This Original Side Appeal has been filed under Section 37 of Arbitration and Conciliation Act, 1996 read with clause 15 of Letters Patent against the order dated 28.06.2018 made in O.P.No.130 of 2016 on the file of this Court.) The present appeal is directed against the order of the learned Single Judge dismissing a petition filed under Section 34 of Arbitration and Conciliation Act 1996. The appellant, who had filed a Section 34 application under Arbitration and Conciliation Act, 1996, challenging the Arbitral award dated 30.10.2015 by which award, the learned Arbitrator, the second respondent herein, passed the following award, which seems to be an exparte award. “Award In fine, the respondent has to pay the claimant a. A sum of Rs.1,41,16,050/- towards cancellation of the policy, b. A sum of Rs.9,70,998/- towards cash deposit account balance that remains unpaid, c. Rs.35,00,047/- towards third party premium refund on account of revision in the premium, totalling Rs.1,85,87,095/- , d. Pre-award interest at the rate of 9% per annum for the above said amount from the date of filing of O.P.No.904 of 2010 before the High Court, Madras till the award is passed by the Arbitral Tribunal. e. To pay interest at the rate of 9% per annum towards the post award interest on the sum due by the respondent to the claimant viz., a sum of Rs.1,85,87,095/- plus interest so arrived as per clause (d) of the award from the date of award till payment. f. A sum of Rs.1,00,000/- towards the costs. 2. On perusal of the award passed by the learned Arbitrator, it could be seen that the Arbitrator, on various occasions, had given several opportunities to the appellant herein to defend the claim initiated by the first respondent. f. A sum of Rs.1,00,000/- towards the costs. 2. On perusal of the award passed by the learned Arbitrator, it could be seen that the Arbitrator, on various occasions, had given several opportunities to the appellant herein to defend the claim initiated by the first respondent. In fact, it could be seen from the materials available on record that when the dispute arose between the appellant and the first respondent, the first respondent has initially requested for referring the dispute to the sole Arbitrator, relating to the refund of sums payable under the Memorandum of Understanding (MOU), when the dispute arose during the course of transaction between the appellant and the first respondent based on the Memorandum of Understanding (MOU) dated 20.04.2006 and Memorandum of Understanding (MOU) dated 18.12.2006, by which, the claimant/ first respondent was asked to provide a cash deposit by the appellant, which was also agreed upon and paid. However, during the course of the transaction of issuing cover notes, several cover notes/policies issued were cancelled due to various reasons and it is alleged that the appellant Insurance Company failed to refund the cash deposit amount to the first respondent, pursuant to the Memorandum of Understandings (MOUs). 3. It could be seen from the materials available that on receipt of the request for referring the dispute to the sole Arbitrator relating to the refund, the appellant had negated the same on ground of limitation, which made the first respondent to nominate an Arbitrator, which even was rejected by the appellant herein. Thereafter, the first respondent has approached this Court under Section 11 of the Arbitration and Conciliation Act seeking for an appointment of Arbitrator. The Hon'ble Chief Justice, by order dated 28.08.2014 in O.P.No.906 of 2014 had appointed the second respondent herein as the Arbitrator, after hearing the counsels of both parties. 4. Thereafter, the sole Arbitrator acted upon the reference and issued notice to the parties concerned. Despite receipt of notice issued by the Arbitrator, the appellant failed to participate in the Arbitration Proceedings. The appellant received notice for hearing on 29.10.2014, 18.11.2014, 02.12.2014, 17.12.2014, 27.12.2014 and 17.02.2015, which were duly served on the appellant, but for reasons best known to the appellant, they did not defend their case, which forced the learned Arbitrator to proceed further and pass the award. The appellant received notice for hearing on 29.10.2014, 18.11.2014, 02.12.2014, 17.12.2014, 27.12.2014 and 17.02.2015, which were duly served on the appellant, but for reasons best known to the appellant, they did not defend their case, which forced the learned Arbitrator to proceed further and pass the award. Thereby, the award dated 30.10.2015 came to be passed by the Arbitrator, which was challenged before the learned single Judge and the learned single Judge, upon perusing the materials available and relying on the restrictions imposed under Section 34 of the Arbitration and Conciliation Act, 1986 and guided by the principles laid down by the Hon'ble Supreme Court in various cases cited before the learned single Judge, had dismissed the Original Petition filed by the appellant herein. As against which, the appellant counsel is before us in the present appeal. 5. The learned counsel for the appellant contended that the award is bad in law and it ought to have been set aside by the learned single Judge inasmuch as the learned Arbitrator has traversed beyond the reference made to the Arbitrator. The learned counsel appearing for the appellant contended that when the Arbitrator has passed the award, which is beyond the terms and conditions of the Memorandum of Understanding (MOU), the entire award ought to have been set aside under Section 34 of the Arbitration and Conciliation Act, 1986. This apart, the learned counsel emphasized that when misconduct is attributed on the Arbitrator and when the Arbitrator has not acted in accordance with the provisions of the Arbitration Act, the entire award has to be set aside under Section 34 of the Arbitration and Conciliation Act, 1986. The learned counsel also submitted that the learned single Judge had, in a pedantic view, confirming only with the parameters under Section 34 and failed to appreciate the legal grounds, especially when misconduct prima faciely established that the Arbitrator has travelled beyond the terms of agreement, the Memorandum of Understandings (MOUs) between the appellant and the respondent and also the provisions of the Act, the learned single Judge ought to have set aside the award and remanded the matter back to the Arbitrator as the award is erroneous, against the law and public policy. 6. Heard the learned counsel for the appellant. The learned counsel Mr. Harishankar was present as he has filed the caveat. 7. 6. Heard the learned counsel for the appellant. The learned counsel Mr. Harishankar was present as he has filed the caveat. 7. Arbitration and Conciliation is an alternative medium for the judicial process wherein both the parties agreed to submit before an Arbitrator or Arbitrators to find a solution for their disputes at the earliest point of time without knocking the doors of the Courts, so as to save time spent on litigations in the Courts, which takes a longer time. The legislators consciously enacted the Arbitration and Conciliation Act and have given wide power to the Arbitrators on mandate that the Arbitrators, thus appointed either by the Court or by the parties themselves, would work within the frameworks of the provisions of the Statute. In fact, the Courts have only limited scope for interference in the arbitration award passed, when the Statute itself has provided under Section 34 and the scope of interference by the Court in the award passed by the Arbitrator. While the learned counsel has placed reliance on the judgment referred in (2015) 3 Supreme Court Cases 49 (Associate Builders ..vs.. Delhi Development Authority), the learned counsel drew our attention to paragraphs 15, 17, 19, 42.3 of the said Judgment, which are extracted hereunder:- “15. This Section in conjunction with Section 5 makes it clear that an arbitration award that is governed by part I of the Arbitration and Conciliation Act, 1996 can be set aside only on grounds mentioned under Section 34 (2) and (3), and not otherwise. Section 5 reads as follows: "5. Extent of judicial intervention.-Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part." 16. ..... 17. ......It will be seen that none of the grounds contained in sub- clause 2 (a) deal with the merits of the decision rendered by an arbitral award. It is only when we come to the award being in conflict with the public policy of India that the merits of an arbitral award are to be looked into under certain specified circumstances. 18. ... 19. When it came to construing the expression "the public policy of India" contained in Section 34 (2) (b) (ii) of the Arbitration Act, 1996, this Court in ONGC v. Saw Pipes, 2003 (5) SCC 705 , held- "31. 18. ... 19. When it came to construing the expression "the public policy of India" contained in Section 34 (2) (b) (ii) of the Arbitration Act, 1996, this Court in ONGC v. Saw Pipes, 2003 (5) SCC 705 , held- "31. Therefore, in our view, the phrase "public policy of India" used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/ decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term "public policy" in Renusagar case [1994 Supp (1) SCC 644] it is required to be held that the award could be set aside if it is patently illegal. The result would be - award could be set aside if it is contrary to: (a) Fundamental policy of Indian law; or (b) The interest of India; or (c) Justice or morality, or (d) in addition, if it is patently illegal. Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void. 74. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void. 74. In the result, it is held that: (A) (1) The court can set aside the arbitral award under Section 34(2) of the Act if the party making the application furnishes proof that: (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration. (2) The court may set aside the award: (i)(a) if the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties, (b) failing such agreement, the composition of the Arbitral Tribunal was not in accordance with Part I of the Act. (ii) if the arbitral procedure was not in accordance with: (a) the agreement of the parties, or (b) failing such agreement, the arbitral procedure was not in accordance with Part I of the Act. However, exception for setting aside the award on the ground of composition of Arbitral Tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of Part I of the Act from which parties cannot derogate. (c) If the award passed by the Arbitral Tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract. (3) The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to: (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. (4) It could be challenged: (a) as provided under Section 13(5); and (b) Section 16(6) of the Act. (4) It could be challenged: (a) as provided under Section 13(5); and (b) Section 16(6) of the Act. (B)(1) The impugned award requires to be set aside mainly on the grounds: (i) there is specific stipulation in the agreement that the time and date of delivery of the goods was of the essence of the contract; (ii) in case of failure to deliver the goods within the period fixed for such delivery in the schedule, ONGC was entitled to recover from the contractor liquidated damages as agreed; (iii) it was also explicitly understood that the agreed liquidated damages were genuine pre-estimate of damages; (iv) on the request of the respondent to extend the time-limit for supply of goods, ONGC informed specifically that time was extended but stipulated liquidated damages as agreed would be recovered; (v) liquidated damages for delay in supply of goods were to be recovered by paying authorities from the bills for payment of cost of material supplied by the contractor; (vi) there is nothing on record to suggest that stipulation for recovering liquidated damages was by way of penalty or that the said sum was in any way unreasonable. (vii) In certain contracts, it is impossible to assess the damages or prove the same. Such situation is taken care of by Sections 73 and 74 of the Contract Act and in the present case by specific terms of the contract." 20. ..... 42.3 (c) Equally, the third sub-head of patent illegality is really a contravention of Section 28 (3) of the Arbitration Act, which reads as under: "28. Rules applicable to substance of dispute.- (3) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction." This last contravention must be understood with a caveat. An arbitral tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do.” 8. Construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair minded or reasonable person could do.” 8. The learned counsel for the appellant vehemently contended that it is not for the Arbitrator to travel beyond the terms and conditions of the Memorandum of Understanding (MOU) and the learned Arbitrator, merely because it is an exparte award, cannot take the default of the party as an admission of the claims made by the claimant. We find certain force in the contention raised by the appellant, thus requiring us to traverse the provisions of Arbitration and Conciliation Act with regard to default of the party. Section 25 of Arbitration and Conciliation Act emphasize the duty of an Arbitrator when there is a default of the party, which reads as follows:- “25. Default of a party.—Unless otherwise agreed by the parties, where, without showing sufficient cause,— (a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings; (b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant; (c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.” 9. It is clear from the above provision that the Arbitrator, when the respondent fails to communicate the statement of defence in accordance with 23(1), the Arbitral Tribunal shall continue the proceedings without treating the failure in itself as an admission of the allegation by the claimant. It is clear that when the respondent before the Arbitrator is absent or abstains himself from the Arbitral Proceedings, it is duty of the Arbitrator to put himself in the position of the respondent and not merely accept whatever has been stated in the claim petition without applying his mind. It is clear that when the respondent before the Arbitrator is absent or abstains himself from the Arbitral Proceedings, it is duty of the Arbitrator to put himself in the position of the respondent and not merely accept whatever has been stated in the claim petition without applying his mind. The provisions under Section 25 of the Arbitration and Conciliation Act, 1996 has to be interpreted that in the absence of the respondent before the Arbitrator, the Arbitrator has to give necessary explanation for his conclusion arrived at in favour of the claimant or against the claimant. The Arbitrator cannot superficially allow the claims made by the claimant merely because the respondent is absent for any reason. As such, it is the bounden duty of the Arbitrator when the respondent abstains himself after receiving the notice or even when the notice is not served on the respondent properly, the Arbitrator has to apply his mind judicially while passing an exparte award. Mere reference of the pleadings contained in claim petition may not be sufficient to pass an exparte award under Section 25 of the Act. 10. Keeping in mind the provision of the Act, it is to be seen whether the argument of the learned counsel for the appellant has to be taken into that the Arbitrator failed to act within the framework of the Statute or the Arbitrator has exceeded his jurisdiction, thereby to constitute misconduct on the Arbitrator to set aside the award passed by the Arbitrator. 11. 11. On perusal of the award, though it is not warranted to go into the merits of the award, but to see whether the Arbitrator has misconducted himself by traversing beyond the terms and conditions of Memorandum of Understanding (MOU), it could be seen on the perusal of the materials available that the first respondent/claimant has not issued/cancelled the insurance policies to their customers on behalf of the appellant herein, but they have issued only cover notes, which cover notes have been marked as Exhibits before the Arbitrator and the Arbitrator, while discussing the issue, categorically revealed that the first respondent did not cancel the policy but, only made a request to the appellant herein to cancel those policies as and when the need arises, which is within the ambit of the Memorandum of Understanding (MOU) as entered by the appellant and the first respondent in Memorandum of Understandings (MOUs) dated 20.04.2006 and 18.12.2006, the later Memorandum of Understanding is the renewal of the first Memorandum of Understanding, which cannot give rise to two independent and separate cause of action, which is an acceptable finding of the Arbitrator. The main contention of the appellant that each and every Memorandum of Understanding (MOU) gives rise to separate cause of action and cannot be dealt by a single Arbitrator, cannot be accepted. 12. On perusal of the award passed by the learned Arbitrator, the learned Arbitrator has strictly followed the provisions of the Arbitration and Conciliation Act, 1996, especially Section 25. Hence, the argument put forth by the learned counsel for the appellant that the Arbitrator has acted beyond the provisions of the Statute thereby, misconducted himself cannot be accepted by this Court. 13. No doubt, the Hon'ble Supreme Court in a case reported in 2015 3 SCC 49 (cited supra) has categorically listed down the circumstances under which an award of an Arbitrator can be challenged under Section 34 of the Arbitration and Conciliation Act, 1996. The present case on hand do not fall neither under the grounds prescribed under Section 34 nor under the grounds as listed by the Hon'ble Supreme Court in the case reported in 2015 3 SCC 49 (cited supra). 14. The present case on hand do not fall neither under the grounds prescribed under Section 34 nor under the grounds as listed by the Hon'ble Supreme Court in the case reported in 2015 3 SCC 49 (cited supra). 14. The other limb of the argument putforth by the learned counsel appearing for the appellant that when he has established prima facie misconduct of the Arbitrator, the Court is warranted to interfere even in the merits of the award passed by the Arbitrator, even if it is an exparte award. No doubt, when the affected party challenging the award passed by the Arbitrator raises a specific ground or plea of misconduct or bias against the Arbitrator, prima faciely if the parties challenging the award were to prove the preliminary issue on the ground of misconduct of the Arbitrator, the Court need not always go into the merits of the award and instead set aside the award and order fresh Arbitration, provided, the Court has prima faciely satisfied that the parties challenging the award has established misconduct/bias against the Arbitrator on the face of the record. 15. The Court, if it is satisfied about the misconduct/bias on the face of the records, will touch the merits of the award only when the award is prejudicial to the others, which is interfered only under exceptional circumstances, unless it is warranted whether the Court is satisfied that there is a misconduct/bias established on the part of the Arbitrator. The misconduct also depends upon the nature of the allegations on the Arbitrator. As the Arbitrators are expected to pass an award following the procedures contemplated under the Statute and there is the reason why the award of the Arbitrators cannot be interfered unless otherwise they fit into the grounds as prescribed under Section 34 of the Act. As far as the present case on hand is concerned, the appellant has failed to establish the misconduct/any bias as against the Arbitrator. On perusal of the materials available before this Court, it is clear that the Arbitrator has conducted himself within the framework of the provisions of the Arbitration and Conciliation Act, 1996 and within the Memorandum of Understandings (MOU) between the appellant and the first respondent and had passed the award without traversing anything beyond the Memorandum of Understandings (MOUs) as alleged by the appellant. 16. 16. Under these circumstances, We do not find any reasons to interfere either with the award passed by the Arbitrator nor with the order passed by the learned single Judge in rejecting the petition filed under Section 34 challenging the award passed by the Arbitrator as the learned single Judge has considered each and every aspect and given a reasoned findings, which need not be interfered with and the same is upheld. 17. Accordingly, this Original Side Appeal is dismissed confirming the order of the learned single Judge. Consequently, connected Miscellaneous Petition is closed. No costs.