The arbitrator's jurisdiction is confined to the terms of the contract and cannot be expanded by implication or by incorporating subsequent circulars. The arbitration clause survives the termination of the contract and the arbitrator retains jurisdiction to decide disputes arising under or in connection with the contract. An express prohibition in the contract against granting interest cannot be disregarded by the arbitrator.

A. K. GANGULY, J.

( 1 ) THIS application has been filed by Union of India for setting aside an award dated 9th September 2000 published by the arbitrator in connection with disputes and differences arising between the parties out of an agreement of handling of goods parcel and booked luggage for Itwari and other goods stations. The said agreement is dated 9th December 1991 with effect from 3rd August 1991.

( 2 ) THERE are few facts which may be noted for proper appreciation of the nature of the dispute in this case.

( 3 ) CHALLENGING the award published by the departmental arbitrator, the respondent, the present award holder, filed a setting aside proceeding for setting aside the award given by the departmental arbitrator. On such application, this Hon'ble Court passed an order dated 12th February, 1999 and the award passed in respect of items 3, 4 and 5 were set aside.

( 4 ) FROM the order of the Hon'ble Court dated 12th February 1999 it appears that the learned judge found that the approach of the arbitrator was erroneous and as such the award against items 3, 4 and 5 of the claims were set aside but the award against items 1 and 2 were sustained. The learned judge appointed Mr. Gopal Chakraborty a learned member of the bar to adjudicate the claims against item No. 3, 4 and 5.

( 5 ) BUT by another order dated 1st July, 1999 passed by the Hon'ble Acting Chief Justice Satya Brata Sinha (as his Lordship then was) Mr. Anil Kumar Chowdhury another learned advocate of this Court was appointed arbitrator under section 11 of the Arbitration and Conciliation Act 1996 (hereinafter called ACA 96) in terms of the previous order of this Court dated 12th February 1999.

( 6 ) THE arbitrator by the impugned award awarded against claims 3, 4 and 5 a total sum of Rs. 32,71,773. 99p. rounded off to Rs. 32,71,774/- along with an interest at the rate of 18% per annum on that amount till payment. The relevant claim being claim Nos. 3, 4 and 5 in respect of which the award has been made are set out below :"claim No. 3 : Claim for increase in rates from 3. 8. 91 to 31. 12. 92 during the contractual period being sum of Rs. 10,74,408/ -. Claim No. 4 : Claim for increase in rates from 1. 1. 93 to 31. 8. 94 during the extended period being sum of Rs. 14,45,481/ -. Claim No. 5. Payment of 18% interest on claim of contractor claim No. 3 and 4 on and from 1. 11. 94 till the date. "

( 7 ) THE basic facts of the case which have been noted in the impugned award are as follows :"on or about 16th May 1990, South Eastern Railway opened a tender for 'handling of Goods, Parcel and Booked Luggage' at Itwari and other group stations. The claimant was declared to be the lowest tenderer. The claimant was called upon by the respondent, from time to time, for negotiation and extension of validity of the offer. The said tender was ultimately awarded in favour of the claimant on 2nd August, 1991. It became effective from 3rd August, 1991 for a period of 3 years. On the day of entering into the contract, as per the circular dated 17th January, 1990, the base 'fair rate' of wages was indicated to be @rs. 31. 15p; on an average, for the casual labour then in force. The claimant started demanding enhancement/revision of rate, in view of the circular published on 16th April 1992 by which the minimum 'fair rate' was increased to @ Rs. 42. 40p. ; to be paid to the casual labourers with retrospective effect. In reply thereto, the respondent Railway refused any enhancement as per the circulars, on the ground that the agreement was a firm price contract and that in the agreement there was or it no clause for enhancement of rate; and, as such, the question of any enhancement did not arise. So the claimant, in the premises, terminated the contract by giving a notice, in terms of clause 1 (1) of the agreement. The said termination was accepted by the respondent Railway with effect from 31st December 1992. However, the respondent Railway requested the claimant to continue with t

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