The court emphasized the commercial sense of the agreement, the application of principles of equity in contractual matters, and the limited grounds for challenging an arbitrator's award under the Arbitration Act.

( 1 ) LEARNED Counsel for the appellants wishes to withdraw the application for interim injunction.

( 2 ) IN view of the submissions made, the application is dismissed as withdrawn. F. A. O. (OS) No. 222/2004:

1. This appeal has been filed aggrieved by the impugned order dated 9th august, 2004 of the learned Single Judge dismissing the objections of the appellant. We are dismissing this appeal in limine as we have heard Mr. J. C. Seth, learned Counsel appearing for the appellant at length and the Counsel for the caveator.

2. In view of certain disputes between the parties, the matter was referred to arbitration of sole arbitrator, Mr. S. Krishnan, who was a retired manager of the appellant s organization. Mr. Seth has vehemently contended that the award was without jurisdiction. It was contended before us that the learned single Judge failed to appreciate that there was a specific bar in the contract against the payment of interest to the contractor. In this regard, reliance was placed on Clause 3. 3 (ix) of the General Condition of Contract relating to security deposit which is as under: "no interest shall be payable by the employer on earnest money, security deposit or any money due to the contractor by the employer. "

( 3 ) ON the basis of the aforesaid clause, it was contended before us that the clause clearly bars the payment of interest to the respondent on any amount due and payable from the appellant and, therefore, on the basis of aforesaid stipulation in the contract it was contended that the award was against the specific term of the contract and, therefore, was illegal and the learned Single judge failed to appreciate that the award was without jurisdiction. It was further contended that in terms of Section 28 (3) of the Arbitration Act, the award was in accordance with the terms of the contract and in view of the specific clause prohibiting the award of interest, the award deserved to be set aside on that score. It was contended that the reliance placed by the learned single Judge on the headings was misplaced and headings cannot control the clauses and headings were not decisive and in this regard reliance was placed on AIR 2000 Supreme Court 378, Forage and Co. (of Lushala) v. Municipal corporation of Greater Bombay and Ors. It was contended that headings or notes cannot be taken into consideration in interpretation or construction of the clauses of the contract.

( 4 ) IT was next contended by the learned Counsel for the appellant that parties had specifically agreed for non-payment of interest on any amount due. Therefore, the arbitrator had no power to award interest under Section 31 (7) (a) of the Act. In support of his contention, learned Counsel for the appellant relied on Rajasthan State Mines and Minerals Limited v. Eastern Engineering Enterprises and Another, VIII (1999) SLT 13=iv (1999) CLT 147 (SC)=air 1999 Supreme court 3627. It has been contended that while passing the award basic and fundamental terms of the agreement between the parties cannot be ignored and if fundamental terms are ignored then that will be a case of exceeding the jurisdiction by the arbitrator, and in such case the arbitrator by ignoring such terms would be travelling beyond his jurisdiction. Special emphasis was placed by learned Counsel for the appellant on sub-paragraph g of paragraph 44 of Rajasthan State Mines and Minerals (supra) which is as under :

"if there is a specific term in the contract or the law which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or there is a specific bar in the contract to the raising of the particular claim then the award passed by the arbitrator in respect thereof would be in excess of jurisdiction. "

( 5 ) IT is contended that in this case, the arbitrator having awarded the interest contrary to term of the contract, the award is on the face of it is illegal and in excess of jurisdiction. Reliance was also placed by the learned Cou