The court's jurisdiction to set aside an award on the ground of perversity is limited and must be exercised with caution.

The subject matter of challenge in this application under the Arbitration Act, 1940, is an award dated 18th April, 1977. In order to appreciate the challenge it would be necessary to refer to certain facts. It appears that the petitioner, as contractor had certain claims against the respondent. These claims were on different heads and details of these claims were tabulated in the statement of claim. The total amount claimed amounted to about Rs. 1,40,000/-. of this item no.1 of the claim was for Rs. 36,800/- which was earnest money. The respondent, Railway authorities submitted a rejoinder or a reply to the Statement of claim filed on behalf of the claimant, the petitioner herein. In the said reply, the Union of India had set out its own comments in respect of each head of items of claim made by the petitioner. It was thereafter stated in the said reply as follows:

"It is therefore submitted that the learned Arbitrator will be pleased to reject all the claims of the claimant and award in favour of the respondent, South Eastern Railway, a sum of Rs. 37,816,55. Out of which a sum of Rs. 36,800/- has already been recovered as stated in the foregoing and the balance is still due, the respondent also prays for award of cost."

2. The counter claims of the Railways were on account of the alleged extra cost for loading of ballast, departmental charges for supervision and to per cent penalty for not effecting the supply within the stipulated time. In the annexure to the reply dealing with the comments and the details of the claim of Rs, 94,429, leaving aside the other claims, the Union of India had, so far as the earnest money was concerned, stated as follows :

“Yes. Available with Railway and withheld for the claimant's failure to supply and loading of ballast contracted for."

3. Upon this, the arbitrator being the Engineer-in-chief (Survey), South Eastern Railway, Tatanagar made an award on the 18th April, 1977. In the said award, he held, inter alia, as follows:

"1. That the Respondents i.e. the President of India acting through the General Manager, South Eastern Railway, Garden Reach, Calcutta-43 shall pay to the claimants a sum of Rs. 9,952/- (Rupees Nine thousand nine hundred fifty two only) in full and final settlement of all claims;

2. That all the counter-claims of the Respondents stand rejected,

3. That the claimants shall pay to the Arbitrator, a sum of Rs. 20/(Rupees Twenty only) towards the cost of stamped paper used for making this Award:

4. That the parties shall bear their own costs."

4. The petitioner thereupon challenged the said award in this Court and on the 21st April, 1978 I had made an order remitting the award in terms of prayer (b) of the petition of the petitioner which was to the following effect because it was not clear whether the Arbitrator had dealt with the claim of refund of the security deposit:

''(b) In the alternative, the said award dated 18th April, 1977 be remitted to the said Arbitrator, Sri Seshagiri Rao, Engineer-in-chief (Survey), South Eastern Railway, Tatanagar for reconsideration and/or clarification and/or determination of the amount refundable and payable by the respondent to your petitioner in respect of earnest money and security deposits if the Court thinks fit and proper in the circumstances of the case and the said arbitrator be directed to submit his decision to this Hon'ble Court within such time as to this Hon'ole Court may seem fit and proper.

5. After remission, the arbitrator has made the second award which is the subject matter of challenge before me. After setting out the claimant's claims as they originally stood and the respondent counter claim of Rs. 37,816/the arbitrator has a warded as follows:

"The relevant items of my award are as follows:

i) The respondents shall pay to the claimants a sum of Rs. 9,952/- in full and filial settlement of all claims.

ii) All the counter claims of the Respondents stand rejected.

The earnest money and the security deposit were not an item of count