An arbitrator cannot entertain claims beyond what is specified in the court's order of reference, ensuring jurisdictional limits are maintained.

1. A short but interesting question which arises in these appeals is whether the Arbitrator could entertain the claims and disputes which had not been referred to him by the referring Court.

2. At the outset, it would be pertinent to mention that these appeals relate to the proceedings which took place before the year 1995 and therefore, it is not disputed before us that the act governing these appeals would be the Arbitration Act, 1940 (hereinafter referred to as 'the Act') and not the Arbitration and Conciliation Act, 1996.

3. The facts relevant for decision of the case are that in the year 1981, M/s. Sarvatra Road Runners (Pvt.) Ltd. (hereinafter referred to as 'the Claimant') entered into a contract with the South Eastern Coalfields Limited ((hereinafter referred to as 'the SECL') for transportation of coal. It appears that first there was an oral agreement entered into between the parties on 01.11.1981 and thereafter, a formal written agreement was entered into on 13.11.1982 but the said agreement made it clear that it was effective from 01.11.1981. Clause 21 of this agreement provided that all the disputes arising out of this contract should be referred for arbitration. On 04.01.1984, another agreement for transportation was entered into between the parties. This agreement was also made effective from 26.03.1981 and clause 40 of this agreement contained an arbitration clause. On 07.03.1986, one week before the agreements were to end, the SECL terminated both the agreements on the ground that performance of the Claimant was unsatisfactory.

4. According to the Claimant, it made a lot of efforts to get the matter decided outside the Court but when these efforts were not fruitful, on 03.03.1989, the Claimant filed an application under S.20 of the Act for appointment of the Arbitrator before the District Judge, Bilaspur. The case was registered as Civil Suit No. 19 - A of 1989. In this claim petition, the Claimant claimed that the SECL owed an amount of Rs. 1,29,23,748.91 paise but it clearly limited its claim to Rs. 1,00,00,000/- only. On 06.09.1989, the District Judge referred the matter for arbitration. The terms of the reference read as follows:
'14. Issue No. 2: In the light of the foregoing discussions, Petitioner' s application under S.20 of the Arbitration Act is hereby allowed and the dispute between the parties including the claim of the petitioner and the counter claim of the respondent as enumerated by them in their petition and written statement, is hereby referred to the sole arbitrator who shall be an officer of the respondent - Company not below the rank of Director appointed by the Chairman - cum - Managing Director of the Company who is directed to make such appointment, under intimation to this Court, within one month of the receipt of the order of reference and the arbitrator so appointed by him shall adjudicate the matter within five months of his appointment. Costs shall abide the result of the arbitration. Pleader's fee Rs. 250/- if certified. '

5. It would also be not out of place to make reference to para 7 of the aforesaid order which reads as follows:
'7. According to the petitioner / plaintiff, the disputes have arisen between the petitioner - Company and the respondent - Company arising out of the agreements dated 13.11.82 and 04.01.84 on various points (in all 7 in number) as enumerated in para 15 of the petition giving rise to a claim of Rs. 1,29,23,748.94 as detailed in para 16 of the petition. After deducting an amount of Rs.28,77,196.62, the petitioner - Compan