- (1.) Special leave is granted. The facts necessary to decide this Civil Appeal are that an incentive scheme to patronize cottage industry of carpet weaving was formulated by the State of Jammu and Kashmir. Applications on behalf of the persons who wanted to take advantage of the scheme were invited up to 16th August, 1980. The respondent was one of the applicants. An agreement between the parties was arrived at on 24th September, 1980. One of the clauses of the agreement, namely, clause (12) was with regard to reference of any dispute, arising out of the agreement, being made to the arbitration of the Managing Director of Jammu and Kashmir Handicrafts Corporation. An application was made by the respondent under Section 20 of the Jammu and Kashmir Arbitration Act for appointment of an Arbitrator on the ground that a dispute under the agreement has arisen between the parties. By an order dated 25th July, 1986 a retired District Judge was appointed as an Arbitrator. He entered into reference on 8th August, 1986. Notice was issued to the appellant which put in appearance and filed objection. Subsequently, however, there was default in appearance on behalf of the appellant and an ex parte award was made on 21st December, 1986. An application to set aside the award was filed by the appellant which was dismissed by a single Judge of the High Court and an L.P.A. filed against the judgment of the single Judge was dismissed by a Division Bench on 1st March, 1989. Aggrieved, the appellant has preferred this Civil Appeal.
(2.) Learned Advocate General appearing on behalf of the appellant has raised three points in support of this appeal: 1. The Arbitrator before making an ex parte award should have given notice of his intention to do so to the appellant. 2. The Arbitrator has allowed claims which were neither contemplated by the incentive scheme nor by the agreement whereunder the reference was made. 3. The Arbitrator had no jurisdiction to award interest either for the period prior to the date of institution of the proceedings or pendente lite and future.
(3.) We shall deal with the second point first. The learned Advocate General has placed before us the award and pointed out that the nature of the incentive contemplated by the scheme and the various items with regard to which decree was claimed by the respondent have been mentioned therein. It has been urged that according to the scheme the appellant was liable to pay to the respondent salary for a period of one year of one Craftsman as also rent for the same period of the centre in which the industry was run by the respondent. One of the items of the claim mentioned in the award is of Rupees 1,03,883.80 p. The details of Rs. 1,03,883.80 P. are to be found in the Claim Petition made by the respondent before the Arbitrator. Item No. (a) of the Claim Petition is for a sum of Rs. 69,897.60 p. as pay of Master Craftsman for one year and Item No. (b) is for a sum of Rs. 26,100.00 as rent of the six centres where the respondent started its business. The total amount of Item Nos. (a) and (b) comes to Rs. 95,997.60 p. It has been urged by the learned Advocate General that since in view of the scheme the appellant was liable to pay to the respondent by way of incentive only the amount covered by the aforesaid two items, the Arbitrator could have made an award with regard to a sum of Rs. 95,997.60 p. only.' According to him, the award with regard to the other itmes claimed by the respondent is beyond the jurisdiction of the Arbitrator inasmuch as the Arbitrator derived his jurisdiction only from the reference and since the reference could be only with regard to the aforesaid two items, any amount awarded over and above these two items would apparently be beyond the scope of the reference.;