The court emphasized the necessity of procedural fairness and jurisdictional integrity in arbitration proceedings, illustrating that non-compliance jeopardizes the validity of awards.

1. Validity of fixation of grid tariff rate under S.46 of the Electricity (Supply) Act, 1948 (hereinafter referred to as 'the Act'), refund of amount paid was claimed and demand for the dues on basis of such rate was disputed by respondent in two arbitration proceedings. Umpire having made award in favour of the respondent, appellant objected to it in court. Not being successful in its objection, this appeal has been filed under S.39 of the Arbitration, Act (hereinafter referred to as 'the Act').

2. Respondent is a company carrying on business of supply of electricity to consumers. In the year 1957 it obtained a licence under S.3 of the Indian Electricity Act, 1910 for supply of electricity to consumers in towns of Rae - bareli, Pratapgarh, Sultanpur, Mahrajganj, Salon on Jais. While so supplying, appellant was constituted and respondent entered into an agreement on 31-5-1965 with appellant for getting bulk supply of electricity from appellant so that it can supply the same to the consumers in the aforesaid towns. In the agreement rates at which respondent was to pay were provided. There was a clause for arbitration in the written agreement. After the agreement while appellant was supplying electricity to respondent, it fixed grid tarrif in exercise of power under S.46 of the 1948 Act to be effective from 1-10-1968. The same was again fixed to be effective from 1-1-1972 and further charged to be effective from 1-1975. Respondent paid some amount due and same remained due when it raised dispute relating to the rates and as provided in the arbitration clause issued notice to appellant on 5-8-1975 appointing its arbitrator. Respondent appointed its arbitrator as provided in the agreement. Both arbitrators appointed an umpire and entered into reference. This proceeding was numbered Arbitration Case No.3. Respondents raised a further dispute, which was numbered as Arbitration Case No.4. Appellant raised objection to the jurisdiction of arbitrators to adjudicate the disputes. Arbitrators differed on question of jurisdiction for which the question was referred to the umpire. Before rendering the decision umpire expired. Another umpire was appointed, who held on 25-9-1984 that arbitrators have jurisdiction to adjudicate and decide the dispute. Thereafter, arbitrators continued the proceeding. Time for giving the award was once extended by court. When arbitrators did not make the award within extended time umpire sent for the record from the arbitrators and entered on the reference on 16-8-1985. Receiving records from one of the arbitrators, umpire issued notice to parties and appellant not having appeared gave the award considering both the proceedings together. Appellant filed objection to the award in court. The same having been rejected and award being made a rule of the court, this appeal has been filed.

3. Disputes raised by respondent in the two arbitration proceedings to be six in number. They are:
(i) Excess meter rent.
(ii) Over adjustment in price of coal.
(iii) Overcharge of coal price by national distribution.
(iv) Illegal bulk supply rate from 1-1-1975.
(v) Over adjustment in costs of bulk supply by discrimination between different licences; and
(vi) Higher rate of late payment surcharge.
Umpire did not accept claim of respondent in respect of excess meter rent. No objection was filed by respondent. Accordingly, the same requires no consideration. Balance five disputes having been answered a