Judgment

SHELAT, J.:- By this appeal, under special leave, the appellant company Challenges the correctness of the judgment of the High Court of Punjab, dated February 19, 1963 refusing to set aside an umpire s award, dated March 22, 1958. The award was in respect of certain disputes between the company and the Union of India in the matter of disposals of the United States surplus war materials left by the Government of the U. S. A. at the end of the last World War. These surplus materials called the U. S. Surplus Stores, consisted of vehicles and other stores. It was said that these were sold to the company by the Director-General, Disposals through correspondence and sale-notes. These contracts of sale were subject to the General Conditions of Contract (Form Con. 117). Clause 13 of these General Conditions provided that :

"In the event of any question or dispute arising under these conditions or any special conditions of contract or in connection with this contract - the same shall be referred to the award of an arbitrator to be nominated by the Director General and an arbitrator to be nominated by the contractor, or in the case of the said arbitrators not agreeing, then, to the award of an Umpire to be appointed by the arbitrators in writing before proceeding on the reference......

Upon every and any such reference, the assessment of the costs incidental to the reference and award respectively shall be in the discretion of the arbitrators, or in the event of their not agreeing, of the Umpire appointed by them."

2. Disputes having arisen between the parties both as regards the contents and the quantity of the vehicles delivered under the contracts, they were referred, in the first instance, to two arbitrators nominated by the parties and ultimately to an umpire. The disputes were crystallized into nine claims by the appellant-company totalling Rs. 6,73,34.500/-, and several counter-claims by the Government of India. At the end of the arbitration, the umpire, by his said award, disallowed all the claims made by the company, except one for which he awarded Rs. 6,94,000/- and held, in respect of the counter-claims filed by the Government of India, that the appellant-company was liable to pay to the Government in all Rs. 36,23,682. 50 P. and costs amounting to Rs. 5,40,544. In the result after deducting the claim allowed to the appellant-company, the company was held liable to pay to the Government Rs. 34,70,226.50 P.

3. The award having been filed by the umpire in the Court of the District Judge, Delhi and the Government of India having thereupon applied for a decree in terms of the award, the company applied to the Court for setting aside the award urging several grounds for so doing The District Judge by an elaborate judgment declined to set aside the award. He however, held that the award suffered from an error apparent on the face of the award in respect of the appellant s claim No. III (a), and further held that the counter-claims II IV, V and VI made by the Government were not covered by the reference, and consequently, the umpire had no jurisdiction to go into them. Declining, however, to set aside the award, he remitted it for reconsideration of the aforesaid items and also for readjustment of the amount of costs in the event of enhanced compensation being awarded to the company in respect of its claim No. III (a). Dissatisfied with the judgment of the appellate Court, the company filed an appeal before the High Court. The Union of India also filed certain cross-objections. The High Court heard the appeal and the cross objections together and by its aforesaid judgment dismissed both the appeal and the cross objections and upheld the judgment of the District Judge.

4. In support of the claim that the award was liable to be set aside, counsel for the company submitted the following six propositions for our acceptance:

1. that the contracts of sale entered into by the company were misconstrued by the umpire and such misconstruct