JUDGMENT

P.K. Balasubramanyan, J.—Leave granted.

1. This appeal arises out of an award made by the arbitrator on a reference made to him under the Arbitration Act, 1940 (for short “the Act”). Though there was controversy between the appellant and the respondent as to whether there existed an arbitration clause justifying reference to an arbitrator, ultimately, the appellant agreed to the appointment of one of the arbitrators suggested by the respondent clarifying that the appellant was agreeing to the appointment of the arbitrator “not under the alleged contract but outside the alleged contract to decide whether there is a concluded contract and in any event can you invoke the arbitration clause under the alleged contract”. Thus, the dispute stood referred to a sole arbitrator. The sole arbitrator while making an award held that there had come into existence a valid contract between the parties; that there was an arbitration clause in the contract and proceeded to adjudicate the claim on merits and passed an award directing the appellant to pay a sum of Rs. 1,26,67,529.10 and costs of Rs. 75,600/- to the respondent on or before 31.07.1994 and failing payment, directed the appellant to pay interest at the rate of 11 per cent per annum on the sum of Rs. 1,26,67,529.10 from 28.06.1994 till the date of payment. The award was pronounced on 27.06.1994.

2. The appellant moved the High Court of Bombay in its original civil jurisdiction seeking to have the award set aside in terms of Section 30 of the Act. A learned single Judge of the Bombay High Court rejected the objections of the appellant to the award except as regards the quantum. The single judge modified the award by reducing the amount payable by the respondent to the appellant to Rs. 71,31,954.40 with costs of arbitration of Rs. 75,600/-. with further interest at the rate of 11 per cent per annum from the date of the decree till payment or final realization. An appeal filed by the appellant before the Division Bench was dismissed by the Division Bench upholding the finding of the arbitrator that there had come into existence a concluded contract between the parties and that there was an arbitration clause based on which the disputes between the parties could be referred to arbitration and consequently, the award was one rendered within jurisdiction. Feeling aggrieved thereby, this appeal by special leave has been filed by the appellant.

3. Learned senior counsel for the appellant challenged the decision of the High Court and that of the arbitrator that there had come into existence a concluded contract between the parties. He further contended that even if there was a concluded contract, there was no arbitration agreement in the contract or in the correspondence relating thereto. He also contended on merits that the arbitrator was not justified in awarding damages. Learned senior counsel for the respondent, on the other hand, submitted that the finding by the arbitrator that there had come into existence a concluded contract was based on an appreciation of the materials available and the circumstances obtaining and such a finding by the arbitrator was not amenable to correction in proceedings under Section 30 of the Act which conferred on the court only a circumscribed jurisdiction. Counsel submitted that the arbitrator and neither misconducted himself nor the proceedings. He also submitted that there was no error apparent on the face of the record justifying interference by this Court especially when the single judge and the Division Bench of the Bombay High Court have refused to interfere with the award subject to the modification of the quantum realizable by the respondent. The award could not also be said to be otherwise invalid.

4. We were taken elaborately through the materials by senior counsel for the appellant in an attempt to show that there was no concluded contract between the parties and there existed no arbitration clause. He attempted to argue that what the appella