Important Point
When an award is made plainly contrary to the terms of the contract not by misinterpretation but which are plainly contrary to the terms of the contract would certainly lead to an inference that there is an error apparent the award results in jurisdictional error in the award. In such a case the courts can certainly interfere with the award made by the Arbitrator.

Judgment

Rajendra Babu, J.-On April 28, 1961, the respondent entered into an agreement with the appellant for supply of electical energy in which the contract demand was specified at 68 KWs and unless a certain percentage of the contract demand was utilised the respondent would be liable to pay minimum charges as specified in the agreement. On July 18, 1966, the tariff specified in the agreement was revised in terms of Section 49 of the Electricity Supply Act and such tariff as prescribed for general purpose tariff was made applicable to the respondent. However, no bill in terms of the revised rate as applicable to general purpose tariff was issued and a bill for additional amount payable was sent to the respondent. The respondent contended that the contract demand should be reduced from 68 KWs to 31 KWs. With effect from July 25, 1973, the respondent did not any amount to the appellant in respect of the energy consumed either at the revised rate effective from 1966 or at the old rate as specified in the agreement and continued to consume the energy without any payment at all. On account of non-payment of the energy charges, supply was disconnected to the respondent after due notice under Section 24 of the Indian Electricity Act, 1910. The respondent challenged the dis­connection and the demand raised by the Board by invoking the arbitration clause of the original agreement of 1961 and filed O.S. No. 127/77 under Sections 8 and 20 of the Arbitration Act for reference of disputes to arbitration. The Subordinate Judge, who considered this matter, allowed the claim of the respondent and an appeal was preferred to the High Court. In the appeal, a joint memo was filed to the effect that the respondent shall enter into a fresh agreement with the appellants and upon such agreement being executed the appellants would resume supply to the respondent; the respondent shall pay the charges from the date of reconnection at the new tariff rate applicable to the respondent; and arrears alleged to be due and claimed by the appellants, if ultimately accepted by the Arbitrator and made rule of the court shall be paid by the respondent. On Febru­ary 1, 1980, the respondent executed a fresh agreement which contained a recital in clause 27 thereof which provided that the arrears under the old agreement shall be deemed to be arrears under the new agreement. The Subordinate Judge appointed justice H. Mohapatra, a retired Judge of the High Court as the Arbitrator and referred five questions involving law and facts for consideration of the Arbitrator. On February 19, 1983, the Arbitrator made an award after perusing the claims and counter-statement of the parties and material on record and answered all the five questions against the appellants and further that no amount was payable by the respondent towards charges for consumption of electricity, although admittedly it had been consumed until the date of disconnection, that is, December 30, 1976, and no amount had been paid either at the revised rate or at the original rate with effect from February 16, 1973. When objection was filed under Sections 30 read with Section 33 of the Arbitration Act, the Subordinate Judge set aside the award principally on the ground that the award runs contrary to the agreement. On appeal by the respondent under Section 39 of the Arbitration Act, the High Court set aside the order made by the Subordinate Judge and confirmed the award made by the Arbitrator except in regard to one aspect, namely, that the Orissa State Electricity Board is not entitled to be paid anything by the respondent in respect of their claims in relation to the agreement. The High Court having noticed that the observations was outside the reference confirmed the award on all other questions. Hence this appeal.

2. In this Court, on each of the question referred to the Arbitrator answer is sought to be given by contending that the view taken by the Arbitrator was wholly outside the scope of the contract