The main legal point established in the judgment is that an arbitrator's authority is confined to the matters lawfully submitted to him, and an award obtained without jurisdiction can be challenged under S.30(c) of the Arbitration Act.

PAREED PILLAY, J. :- Appellants are the defendants in O.S. (Arb.) 137 of 1978 of the Sub Court, Trivandrum. The respondent (plaintiff) was entrusted with the work of handling and transporting foodgrains under a contract dt. 8-7-1976 by the appellants. The respondent undertook to complete the work at 373 per cent above the scheduled rates. Respondent claimed remuneration at the rate of 650 per cent. He moved the Sub Court for appointment of an arbitrator under S.20 of the Arbitration Act. The Court below appointed an arbitrator. Appellants challenged the order of appointment by filing M.F.A. 364 of 1980. That appeal was dismissed as time barred. The arbitrator entered on the reference and passed the award. The respondent moved the Sub Court to make the award into a decree. The appellants filed application under Ss.16 and 30 of the Arbitration Act (for short 'the Act') to set aside the award. The Sub Court negatived the contention of the appellants and made the award into a decree. This is challenged in the above M.F.A.

2. Contention of the appellants is that under Clause 19 of the contract only a person appointed by the appellants could function as arbitrator and that being the position the court had no jurisdiction to appoint any one else as arbitrator. Cl. 19 of the agreement reads :

"All disputes and differences arising out of or in any way touching or concerning this agreement whatsoever (except as to any matter the decision of which is expressly provided for in the contract) shall be referred to the sole arbitration of any person appointed by the F.C.I...... It is also a term of this contract that no person other than a person appointed by the F.C.I. as aforesaid should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all."

From the above clause it is clear that whenever disputes and differences arise out of or in any way touching or concerning the agreement it shall be referred to the sole arbitration of any person appointed by the Food Corporation of India. It also states that no person other than a person appointed by the F.C.I. should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all. In P. G. Agencies v. Union of India AIR 1971 SC 2298 the Supreme Court has held in para 4 as follows :

"Section 20 is merely a machinery provision. The substantive rights of the parties are found in S.8(1)(b). Before S.8(1)(b) can come into operation it must be shown that (1) there is an agreement between the parties to refer the dispute to arbitration; (2) that they must have appointed an arbitrator or arbitrators or umpire to resolve their dispute; (3) anyone, or more of those arbitrators or umpire must have neglected or refused to act or is incapable, of acting or has died; (4) the arbitration agreement must not show that it was intended that the vacancy should not be filled and (5) the parties or the arbitrators as the case may, be had not supplied the vacancy."

The agreement would show that the parties had agreed that the matter in dispute shall be referred to the sole arbitration of any person appointed by the F.C.I. It also shows that no person other than a person appointed by the F.C.I. should act as arbitrator and if for any reason that is not possible the matter is not to be referred to arbitration at all. In view of the clear recitals in Clause 19 of the agreement it is apparent that the parties never intended to supply the vacancy if an arbitrator for some reasons could not be appointed.

3. Section 30 of the Arbitration Act postulates the grounds for setting aside an award. Under S.30(c) of the Act it is always open to a party to challenge the award if it is established that it has been improperly procured or is otherwise invalid. In Union of India v. Om Prakash, AIR 1976 SC 1745 it has been held that the words "or is otherwise invalid"in cl. (c) in S.30 of the Act are wide enough to cover all for