# Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow v. M/S Trishul Enterprises

- **Citation:** (2026) 2 ILRA 875
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-18
- **Bench:** Arun Bhansali, C.J. Jaspreet Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sanjay-gandhi-post-graduate-institute-of-medical-science-lucknow-v-m-s-trishul-54215
- **Pages:** 17

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2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 875

18. The scope of ambit of the powers of the High Court invoking under Section 482 CrPC or
528 BNSS are very wide, but should be exercised with circumspection and in rarest of rare and
appropriate cases. This power do not confer arbitrary jurisdiction to act according to whims and
caprice and is used to prevent the abuse of process of law and for procuring the ends of justice.
This preposition of law is enunciated in the cases of Kurukshetra University Vs. State of
Haryana6 and the State of Haryana Vs. Bhajan Lal7. In the case of Som Mittal Vs. Government
of Karnataka8, Hon'ble the Supreme Court has given an expression of 'rarest of rare case', while
describing the scope of Section 482 CrPC. This view is consistently maintained by Hon'ble the
Supreme Court till the present day, which is settled by 'en' number of judgments, latest are Naresh
Potteries Vs. Aarti Industries9 and Punit Beriwala Vs. State (NCT) of Delhi10.

19. Therefore, the application under Section 528 BNSS is devoid of merit and is dismissed.
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(2026) 2 ILRA 875
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 18.02.2026

BEFORE

THE HON'BLE ARUN BHANSALI, C.J.
THE HON'BLE JASPREET SINGH, J.

Appeal U/S 37 Of Arbitration & Conciliation Act 1996 No.- 5 of 2024

Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow ...Applicant
Versus
M/S Trishul Enterprises ...Respondent

Issue for Consideration
Issue pertains to whether the arbitral award dated 20.08.2020, as affirmed by the Commercial Court u/s 34 of
Arbitration and Conciliation Act, 1996, suffers from patent illegality or jurisdictional error warranting
interference u/s 37 of the Act, particularly on the ground that the Sole Arbitrator exceeded the scope of
reference by adjudicating claims beyond the terms of contract and the arbitration agreement.

Headnotes
Arbitration and Conciliation Act, 1996 - ss. 11, 34, 37 - Code of Civil Procedure, 1908 - O. 2 R. 2 -
Arbitral Award - Modification - Severability - Jurisdiction of Arbitrator - Appeal - Scope of -
Arbitration clause - Interpretation of - The instant dispute emanates from an agreement dated
16.04.2008 executed between the appellant, and respondent contractor for carrying out
landscaping and maintenance works for a stipulated period, which agreement incorporated an
arbitration clause - Upon the expiry of contract and emergence of disputes, particularly
concerning alleged non-payment of dues including security deposit and other claims, the
respondent initially approached the High Court by way of writ petition seeking, inter alia,
appointment of an arbitrator, pursuant to which a Sole Arbitrator came to be appointed - Owing
to certain procedural delays and change of arbitrator, fresh arbitral proceedings were
commenced, culminating in an award dated 20.08.2020 whereby the Arbitrator partly allowed
the respondent's claims, including refund of security deposit, reimbursement towards provident
fund contributions, and other monetary reliefs - The appellant, assailing the said award as being
contrary to the terms of contract and beyond the scope of reference, instituted proceedings u/s
876 INDIAN LAW REPORTS ALLAHABAD SERIES
34 of Arbitration and Conciliation Act, 1996 before the Commercial Court, which, by judgment
dated 29.11.2023, dismissed the challenge and upheld the award - Aggrieved thereby, the
appellant has preferred the instant appeal u/s 37 of the Act before the High Court, calling into
question the legality and jurisdictional validity of arbitral award as affirmed by Commercial
Court.

Held: Considering the findings given by Sole Arbitrator while considering issue nos. 5 and 12, it would reveal
that the Arbitrator has entirely misconstrued the agreement and has gone beyond the terms of contract
rendering the award susceptible to judicial interference - The Commercial Court No.1 also fell in the same
error and it failed to consider the terms of contract and the manner in which it was construed by Sole
Arbitrator - The manner in which the Commercial Court No.1 decided the petition u/s 34 of Act of 1996 by
merely considering the respective contention, noticing certain decisions of Apex Court and without
appreciating its applicability to the given set of facts and circumstances of case at hand and it dismissed the
petition, cannot be appreciated in law - Thus, the claim relating to Employee Provident Fund Contribution
granted by Sole Arbitrator and upheld by Commercial Court No.1 is unsustainable in law and is liable to be set
aside - It is a fit case where certain claims which could not have been granted can be severed from the award
and preserve the remaining part rather than setting aside the entire award - Accordingly, the claims under the
head of Employee Provident Fund Contribution reimbursement of Rs.6,17,629/- alongwith interest at the rate
of 18% per annum and the claim relating to refund of security money of Rs.6,12,000/- and bill of Rs.9456/-
with 18% interest per annum are disallowed and rejected - The rest of claims as awarded shall remain intact
and preserved - Accordingly, the award dated 20.08.2020 shall stand modified - It will be open for the
respondent to raise his claims relating to return of security money and any other outstanding bill of claims
pertaining to contract No.107 of 2013 - 2014, if the law so permits, before the appropriate forum/court -
Appeal partly allowed. [Paras 40, 46 to 48] (E-13)

Case Law Cited
State of Chhattisgarh v. SAL Udyog (P) Ltd., (2022) 2 SCC 275; PSA SICAL Terminals Pvt. Ltd. v. Board of
Trustees of V.O. Chidambranar Port Trust Tuticorin and others, AIR 2021 SC 4661; Group 4 Securities
Guarding Ltd. v. Employees Provident Fund Appellate Tribunal and others, 2011 Lawsuit (Del) 3837; B.R.
Patil v. Tulsa Y. Sawkar, 2022 SCC OnLine SC 240; UCM Coal Co. Ltd. v. Adani Enterprises Ltd., 2025 SCC
OnLine All 7608; M/s. Regenvo Mobile Private Limited Lucknow v. M/s. Siyogi Enterprises and others,
2026(1) ADJ 250 (DB)(LB); Gayatri Balasamy v. ISG Novasoft Technologies Ltd., (2025) 7 SCC 1 -
referred to

List of Acts
Arbitration and Conciliation Act, 1996; Code of Civil Procedure, 1908

List of Keywords
Arbitral award; Commercial Court; Sole Arbitrator; Maintenance of landscape; Arbitration Agreement;
Mandamus; Arbitration clause; Reference to arbitration; Jurisdiction of Arbitrator; Excess of jurisdiction; Terms
of contract; Contractual provisions; Interpretation of contract; Creature of contract; Adjudication of disputes;
Non-arbitrable disputes; Separate contract; Subject matter of arbitration; Claim petition; Findings of
Arbitrator; Reimbursement of provident fund contribution; Refund of security deposit; Imposition of penalty;
Deduction from bills; Commercial Court; Severability of award; Modification of award; Setting aside of award;
Preservation of award;; Principal employer; Labour law compliance; Arbitral proceedings; Arbitral tribunal;
Jurisdictional error; Illegality going to the root of matter; Adjudicatory limits of Arbitrator; Appeal partly
allowed.

Case Arising From
APPELLATE JURISDICTION: Appeal u/s 37 of Arbitration and Conciliation Act, 1996 No. - 5 of 2024

From the Judgment and Order dated 29.11.2023 passed by the Commercial Court No.1, Lucknow in
Arbitration Case No.119 of 2020
2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 877
Appearances for Parties
Advs. for the Appellant:
Pritish Kumar, Shubham Tripathi

Advs. for the respondent:
Ashish Gupta (in Person)

(Delivered by Hon'ble Jaspreet Singh, J.)

1. Under challenge is the judgment and order dated 29.11.2023 passed by the Commercial
Court No.1, Lucknow in Arbitration Case No.119 of 2020 (Sanjay Gandhi Post Graduate Institute
of Medical Sciences Lko. vs. M/s Trishul Enterprises) whereby a petition under Section 34 of the
Arbitration and Conciliation Act 1996 (hereinafter referred to as the Act of 1996) was dismissed, as
a consequence, the award passed by the Sole Arbitrator dated 20.08.2020 has been upheld.

2. In order to appreciate the controversy involved in the instant appeal, it will be appropriate to
notice relevant facts leading upto this appeal.

3. An agreement was made between the appellant and the respondent bearing No.1 of 20082009, dated 16.04.2008 for the purposes of maintenance of the landscape in the campus of Sanjay
Gandhi Post Graduate Institute of Medical Sciences (hereinafter referred to as the SGPGI). The
agreement was for a period of three years and it could be extended till the finalization of a new
tender process or three months which ever was earlier. The said agreement, inter alia, contained an
arbitration clause.

4. The respondent initially filed Writ Petition No.10358 (M/B) of 2015 wherein the respondent
sought a writ in the nature of mandamus directing the appellant to appoint an Arbitrator in terms of
clause 27 of the agreement dated 16.04.2008. A further writ in the nature of mandamus was sought,
seeking a direction for the appellant to release the security money amounting to Rs.6,12,000/- as
well as payment of Rs.10,000/- which was allegedly withheld by the appellant. Before the Division
Bench of this Court, it was informed by the appellant (who was the respondent in the writ court)
that Dr. C.M. Pandey had already been appointed as a Sole Arbitrator. Taking note of the aforesaid
statement, the writ petition was disposed of leaving it open for the respondent to get his claims
adjudicated before the Sole Arbitrator.

5. In furtherance of the order passed by the High Court dated 06.11.2025 in Writ Petition
No.10358 (M/B) of 2015 the respondent filed his statement of claim before the Sole Arbitrator,
namely, Dr. C.M. Pandey. Despite the appointment of the Sole Arbitrator, he did not hold any
proceedings, which led the respondent to file a contempt petition before the learned Single Judge of
this Court bearing Contempt Petition No.427 (C) of 2016 and upon issuance of notice in the
contempt proceedings, the Sole Arbitrator proceeded with the matter. However, the said Arbitrator
could not conclude the proceedings as he retired.

6. Once again the respondent was compelled to approach the High Court and this time, it filed
a petition under Section 11 of the Act of 1996 bearing number Arbitration Application No.29 of
2017 which was decided on 15.03.2019 and a fresh Arbitrator was appointed. This newly appointed
878 INDIAN LAW REPORTS ALLAHABAD SERIES
Sole Arbitrator started the proceedings afresh taking it forward from the stage of exchange of
pleadings. In the said arbitral proceedings, the respondent filed his statement of claim on
11.12.2015. The appellant (who was the respondent before the Arbitrator) filed its statement of
defence including a counter claim dated 26.07.2019. The parties led evidence, and thereafter the
Sole Arbitrator allowed the claims in part and made its award on 20.08.2020.

7. The appellant challenged the said award dated 20.08.2020 before the Commercial Court
No.1 at Lucknow by filing a petition under Section 34 of the Act of 1996 which was registered as
Arbitration Case No.119 of 2020.

8. The Commercial Court No.1 at Lucknow after hearing the parties did not find that there was
any error in the award, hence it affirmed the award by means of its judgment dated 29.11.2023
which is under challenge in the instant appeal preferred under Section 37 of the Act of 1996.

9. Shri Pritish Kumar, learned Senior Counsel assisted by Shri Shubham Tripathi for the
appellant primarily raised three grounds to attack the award passed by the Sole Arbitrator as well as
the judgment passed by the Commercial Court No.1 at Lucknow:

(i) It was urged by the learned Senior Counsel that the Arbitrator committed a manifest
error in allowing the claim raised by the respondent relating to refund of security money which was
the subject matter of the claim and was covered by issue no.15 as framed by the Sole Arbitrator. It
was submitted that the respondent in its claim petition in paragraph 15 had pleaded that after the
contract period was over and even defect liability period had come to an end, yet the appellant did
not release the security money of Rs.6,12,000/- and further a sum of Rs.10,000/- was illegally
retained.

(ii) Learned Senior Counsel pointed out that this claim was absolutely without any basis
since in terms of the contract bearing No.1 of 2008-2009, the respondent had merely submitted
money security of Rs,3,35,000/- and the same had already been returned to the respondent.

(iii) It was also pointed out that in the statement of defence while replying to para-15 of
the statement of claim, it was specifically pleaded that under the Contract No.1 of 2007-2008 the
respondent had only given the security money of Rs.3,35,000/- which had been returned. There was
no way that any security money was paid amounting to Rs.6,12,000/-. Moreover, the respondent
introduced a claim for seeking recovery of security money which related to another contract
bearing No.107 of 2013-2014, which was a separate contract all together and the same was not the
subject matter of the Arbitral proceedings. The respondent did not raise any claim in respect to the
other contract yet by misguiding the Arbitrator the said claim relating to a different contract was
introduced in the arbitration proceedings relating to contract no.1 of 2007-2008.

(iv) Learned Senior Counsel further submitted that the controversy before the Sole
Arbitrator was only in respect of contract No.1 of 2007-2008 and not the later context which came
into being i.e. Contract No.107 of 2013-2014. There was never any claim nor there was any request
for referring any dispute emerging from the later contract for arbitration, thus, the said claim could
not have been considered in the instant Arbitral proceedings. The Sole Arbitrator ,who is merely a
2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 879
creature of the contract, could not have extended its jurisdiction to include such a claim which was
never the subject matter of reference to arbitration.

(v) Learned Senior Counsel further submitted that the Sole Arbitrator grossly over
stepped its jurisdiction to include a claim for refund of security money which did not relate to the
contract in question or the reference which was made to the Arbitrator. The Sole Arbitrator
purposefully went ahead to grant the claim on the Sole premise that since the claim was between
the same parties and there is no clear denial of the said claim, hence in the interest of justice the
amount was awarded. This was clearly a patent illegality. Accordingly, the award on the aforesaid
ground suffered from excess of jurisdiction and a manifest error which vitiated the award.

10. Learned Senior Counsel for the appellant has further submitted that the Sole Arbitrator
committed a grave error in allowing the claim of the respondent relating to the contribution towards
provident fund of the employees, which was covered by issues No.5 and 12 as framed by the Sole
Arbitrator.

(i) It was submitted that the instant contract was never a labour contract nor the appellant
was required to reimburse any Employee Provident Fund Contribution and such liability was the
Sole responsibility of the respondent. Neither the appellant was the principal employer nor there
was any clause in the agreement between the parties by which the liability of the respondent under
the Employee Provident Fund could have been extended to the appellant.

(ii) The Sole Arbitrator completely misread the terms of the contract and rather by
granting the aforesaid claim relating to Employee Provident Fund contribution, it has re-written the
contract which was neither in the domain of the Sole Arbitrator nor it could be countenanced in
law.

11. Learned Senior Counsel has further urged that the Sole Arbitrator exceeded its jurisdiction
in awarding a sum of Rs.57,521/- which was alleged to have been deducted by the appellant by
imposing a penalty. It was urged that the agreement clearly vested power with the appellant to
make any deduction and impose any penalty on the respondent in case of any loss occasioned to the
appellant on account of any fault in the working of the respondent. In these circumstances, allowing
the claim by treating imposing of penalty and deducting the penalty amount from the bills of the
respondent, as being bad in law was not justified. Hence, the award on this count too was erroneous
and deserved to be set aside.

12. Learned Senior Counsel also urged that the aforesaid illegality which went to the root of
the matter and affected the jurisdiction of the Sole Arbitrator rendering the award patently illegal
was demonstrated before the Commercial Court No.1 at Lucknow. However, the said Court took a
dim view of the matter and in a cursory manner without considering the material brought to the
notice of the Court dismissed the petition under Section 34 of the Act of 1996 which itself was an
erroneous exercise of jurisdiction. Hence, the judgment passed by the Commercial Court No.1,
Lucknow dismissing the petition under Section 34 of the Act of 1996 dated 29.11.2023 deserves to
be set aside as also the award dated 20.08.2020 after allowing this appeal.
880 INDIAN LAW REPORTS ALLAHABAD SERIES

13. In support of his submissions, the learned Senior Counsel for the appellant has relied upon
the decision of the Apex Court in State of Chhattisgarh v. SAL Udyog (P) Ltd., (2022) 2 SCC
275 and PSA SICAL Terminals Pvt. Ltd. v. Board of Trustees of V.O. Chidambranar Port
Trust Tuticorin and others, AIR 2021 SC 4661. He has also relied on a decision of Delhi High
Court in Group 4 Securities Guarding Ltd. v. Employees Provident Fund Appellate Tribunal
and others, 2011 Lawsuit (Del) 3837 .

14. Shri Ashish Gupta, who is a partner of the respondent firm appeared in person and
submitted that the award passed by the Sole Arbitrator does not suffer from any manifest error nor
the judgment passed by the Commercial Court No.1, Lucknow can be said to be erroneous and
does not require any interference of this Court.

(i). Shri Gupta submitted that right from the inception the respondent had made his claim
regarding the security money and at no point of time it was ever denied by the appellant nor an
objection was taken that it did not relate to the Contract No.1 of 2007-2008.

(ii). Shri Gupta pointed out that when he filed his first writ petition bearing No.10358
(M/B) of 2015 the respondent had clearly sought a relief relating to the refund of the security
money of Rs.6,12,000/-. Even before the writ court, it was never alleged by the appellant that the
said security money did not relate to the contract in question.

(iii) It has further been submitted by Shri Gupta that it was the appellant who informed
the writ court that it had appointed Dr. C.M. Pandey as an Arbitrator. Since, as per the contract the
appellant was required to appoint the Arbitrator if the appellant thought fit it could have appointed
the said Arbitrator for both the contracts together. However, at this stage, it cannot be said that the
Sole Arbitrator has exceeded his jurisdiction in granting the claim for refund of security money
relating to the other contract No.107 of 2013-2014.

(iv) Shri Gupta has further urged that in terms of Order 2 Rule 2 CPC, it was open for the
respondent to club all his claims together and therefore since the security money was outstanding
even though relating to a later contract and had not been refunded, hence the respondent was
justified in making his claim in this regard. On the contrary, if the respondent had failed to raise all
his claims then he would have been prevented from making his claim in view of the bar contained
in Order 2 Rule 2 CPC.

(v) He further submitted that there is no denial of the fact that the said amount was
outstanding and was required to be refunded. In this view of the matter, the Sole Arbitrator was
justified in allowing the claim, which cannot be said to be bad. Moreover, once on the basis of the
'no denial' an award has been made which is based on evidence on record then such a finding
cannot be assailed before the Court under Section 34 of the Act of 1996 and it is for the said reason,
the Court rejected the petition of the appellant under Section 34 of the Act of 1996. Apparently, the
jurisdiction of this Court to interfere under Section 37 of the Act of 1996 is narrower than scope of
interference under Section 34, thus it will not entitle this Court to interfere with the award.
2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 881

15. Shri Gupta taking his submissions forward urged that while submitting his bid for the
contract, he had enclosed two letters dated 01.10.2007 and 30.10.2007 which were part of his bid
and it was made part of the contract in terms of clause 23 of the contract. On a meaningful reading
of the two letters, which were part of the contract, it would be clear that the respondent quoted his
rates for the contract inclusive only of income tax. Any other new tax or duty if imposed was to be
paid by the appellant institute over and above the quoted rates.

(i) Relying upon the aforesaid clause 23 and the two letters dated 01.10.2007 and
30.10.2007, it was submitted that the respondent had made his contribution to the Employee
Provident Fund and the appellant was required to contribute its share. Since, it was not done hence
the respondent had raised his claim which has been allowed by the Arbitrator and upheld by the
Court while rejecting the petition under Section 34 of the Act of 1996. A view taken by the Sole
Arbitrator which is plausible cannot be interfered with in a petition under Section 34 of the Act of
1996 and certainly not in appeal under Section 37 of the Act of 1996. Thus, the said award does not
suffer from any error which may require interference from this Court.

16. Shri Gupta also pointed out that the appellant institute was not justified in imposing a
penalty and deducting the same from the bills of the respondent especially without putting the
respondent to any notice. (i) In this regard, the respondent had raised his claim and the appellant
could not bring any evidence on record which could justify the imposition of penalty and deduction
from the bill of the respondent, hence, the claim raised by the respondent was allowed.

(ii) It was stated that there is no palpable error either in the award or in the order passed
by the Commercial Court No.1, Lucknow, hence the submission of the learned Senior Counsel for
the appellant deserves to be turned down. The award as upheld by the order passed by the
Commercial Court No.1, Lucknow requires no interference and the appeal being devoid of merit
deserves to be dismissed.

17. Shri Gupta has relied upon the decision of the Apex Court in B.R. Patil v. Tulsa Y.
Sawkar, 2022 SCC OnLine SC 240.

18. This Court has heard the learned Senior Counsel for the appellant and Shri Ashish Gupta
in person for the respondent and also meticulously perused the record.

19. This Court had the occasion to consider the scope of an appeal under Section 37 of the Act
1996 in UCM Coal Co. Ltd. v. Adani Enterprises Ltd., 2025 SCC OnLine All 7608 and in M/s.
Regenvo Mobile Private Limited Lucknow v. M/s. Siyogi Enterprises and others; 2026(1)
ADJ 250 (DB)(LB). Keeping the parameters as noticed in the aforesaid two decisions, this Court
has proceeded to examine the contention of the respective parties.

20. At the outset, it may be noticed that it is not disputed that two separate contracts were
entered between the parties. It is also not disputed that the first contract dated 16.04.2008 bearing
Contract No.1 of 2007-2008 was for a period of three years which came to an end in the year 2011.
It is also not disputed that the second Contract bearing No.107 of 2013-2014 was entered after the
first contract had come to an end in the year 2011. It is also not disputed that under the first
882 INDIAN LAW REPORTS ALLAHABAD SERIES
contract, Contract No.1 of 2007-2008, the respondent had furnished the money security for a sum
of Rs.3,35,000/-. It is also not disputed that the security money under the first contract was released
by the appellant and received by the respondent . It is also not disputed that the sum of
Rs.6,12,000/- was the security money given by the respondent in context with the second Contract
No.107 of 2013-2014.

21. In this backdrop, it would be relevant to notice that in the first writ petition filed by the
respondent bearing No.10358 (M/B) of 2015 the respondent had primarily sought a relief of
mandamus commanding the appellant institute to appoint a Sole Arbitrator. This is evident from the
copy of the writ petition, which is on record. A Co-ordinate Bench of this Court on 06.11.2015
disposed of the said writ petition with a direction to the respondent herein to submit his claims
before the Arbitrator concerned who was required to take a look into the matter and take a decision
accordingly. The relevant portion of the order dated 06.11.2025 is being reproduced hereinafter for
ease of reference:-

"The petitioner entered into an agreement between himself and Sanjai Gandhi Post
Graduate Institute of Medical Science, Lucknow on 16.4.2008 and wants to settle his dispute
outside the Court by way of recourse as is provided under Clause-27 of the agreement.

Mr. Rajnish Kumar Advocate, holding brief of Sri I.P.Singh, learned Counsel for Sanjai
Gandhi Post Graduate Institute of Medical Science, Lucknow, has submitted that for settlement of
dispute Dr. C.M.Pandey, Head of Department, Biostatics and Health Informatics, Sanjai Gandhi
Post Graduate Institute of Medical Science, Lucknow, has already been appointed as Arbitrator to
settle the dispute.

In view of the aforesaid submission, we hereby direct the petitioner to address his claim
before the Arbitrator concerned, who shall look into the matter and take decision accordingly.

Accordingly, this petition is disposed of."

22. From the perusal of the aforesaid order, it would indicate that it specifically referred to the
agreement entered between the parties dated 16.04.2008. It will also be relevant to mention that
even in the entire writ petition the respondent had not raised any reference relating to the
subsequent Contract No.107 of 2013-2014. Thus, the only inference which can be drawn from the
order passed by the Division Bench dated 06.11.2015 is that the liberty was granted to the
respondent to get his claims adjudicated by the Sole Arbitrator.

23. In this regard, if the statement of claim filed by the respondent is perused, it would reveal
that it also relates to Contract No.1 of 2007-2008 and it does not make any reference to the
subsequent Contract No.107 of 2013-2014. At this stage, it will also be relevant to notice that in
paragraph-15 of the statement of defence containing counter claim filed by the appellant herein a
specific plea was taken denying the claim raised by the respondent herein for the security money.
For the ease of reference, para-15 of the statement of defence is being reproduced hereinafter:-
2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 883

"That Claim No.15 as raised in paragraph 15 of the statement of claim pertains to
withholding of security deposit of the petitioner of Rs.6,12,000/-. A perusal of the contract in the
instant case in Clause 24 would reveal that as far as the present contract is concerned, the security
deposit made by the claimant (contractor) was of Rs.3,35,000/- and not Rs.6,12,000/-. Even the
security deposit of Rs.3,35,000/- has been released to the claimant (contractor). However, the
petitioner has mixed up another contract relating to development of horticulture in the present
claim petition, which is not permissible and beyond the scope of instant Arbitrator. The said
contract, which bears Contract No.107 of 2013, is not the subject matter of arbitration before this
Hon'ble Arbitral Tribunal and, therefore, any claim relating to the said separate contract No.107 of
2013-14 cannot be sustained or maintained by the claimant (contractor) and as such the same
deserves to be rejected by this Hon'ble Arbitral Tribunal."

24. From the perusal of the aforesaid paragraph, it would reveal that it was clearly stated that
Contract No.107 of 2013-2014 was not the subject matter of the arbitration proceedings and the
Arbitral Tribunal could not consider the claim of a different contract in the instant proceedings.

25. The respondent could not dispute the fact that while the evidence was led before the
Arbitral Tribunal, no plea relating to the separate Contract No.107 of 2013-2014 was raised nor it
was made the subject matter. Despite the clear plea taken by the appellant, no evidence was led by
the respondent in this regard to substantiate that in the scope of reference relating to Contract No.1
of 2007-2008, the claim relating to Contract No.107 of 2013-2014 could be introduced in the very
same Arbitral proceedings. It also could not be established that the respondent had raised the
disputes in respect of both the contracts, rather the record reflects that the disputes which had been
raised were particularly in respect of contract bearing No.1 of 2007-2008. There were no pleadings
nor evidence brought on record which could give any indication that claims of the subsequent
contract was also raised or included.

26. The respondent could not dispute the fact that the Sole Arbitrator which was appointed,
whether it be Dr. C. M. Pandey or the Arbitrator appointed vide order dated 22.02.2019, both
entered into reference relating to the disputes arising out of Contract No.1 of 2007-2008 and no
dispute was referred to the Arbitral Tribunal relating to Contract No.107 of 2013-2014. In this view
of the matter, the Arbitral Tribunal was constituted in terms of the Arbitration Clause No.27
emanating from Contract No.1 of 2007-2008 for adjudicating the disputes only in relation to the
Contract No.1 of 2007-2008.

27. It is now too well settled to be disputed that the Arbitrator is a creature of the contract and
it can only adjudicate such disputes which are referred to it by the parties. It is not open for the Sole
Arbitrator to travel beyond the terms of the contract or terms of the reference.

28. This aspect of the matter was considered by this Court in M/s. Regenvo Mobile (supra)
wherein in paragraph 38 and 40 it was noticed as under:-

"38. It will be relevant to examine how an arbitration clause is to be interpreted. Whether
it requires strict or liberal interpretation so as to expand the scope of arbitral disputes, even though
they may not have been explicitly provided in the clause/agreement, was considered by the Apex
884 INDIAN LAW REPORTS ALLAHABAD SERIES
Court in (i) Harsha Constructions v. Union of India, (2014) 9 SCC 246, (ii) United India
Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607, (iii)
Oriental Insurance Co. Ltd. v. Narbheram Power and Steel (P) Ltd., (2018) 6 SCC 534. The
aforesaid judgments were relied upon by the Apex Court in its later judgment in Indian Oil Corpn.
Ltd. v. NCC Ltd., (2023) 2 SCC 539 and Emaar (India) Ltd. v. Tarun Aggarwal Projects
LLP, (2023) 13 SCC 661. To avoid duplicacy, the relevant paragraphs of Emaar (supra) is being
reproduced hereinafter :

''14. In Oriental Insurance Co. Ltd. v. Narbheram Power & Steel (P) Ltd. [Oriental
Insurance Co. Ltd. v. Narbheram Power & Steel (P) Ltd., (2018) 6 SCC 534 : (2018) 3 SCC
(Civ) 484], it is observed and held by this Court that the parties are bound by the clauses
enumerated in the policy and the Court does not transplant any equity to the same by rewriting a
clause. It is further observed and held that an arbitration clause is required to be strictly construed.
Any expression in the clause must unequivocally express the intent of arbitration. It can also lay the
postulate in which situations the arbitration clause cannot be given effect to. It is further observed
that if a clause stipulates that under certain circumstances there can be no arbitration and they are
demonstrably clear then the controversy pertaining to appointment of Arbitrator has to be put to
rest (paras 10-23).

15. In Rajasthan State Industrial Development & Investment Corpn. v. Diamond &
Gem Development Corpn. Ltd. [Rajasthan State Industrial Development & Investment
Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470 : (2013) 3 SCC (Civ)
153], it is observed and held by this Court that a party cannot claim anything more than what is
covered by the terms of the contract, for the reason that the contract is a transaction between two
parties and has been entered into with open eyes and by understanding the nature of contract. It is
further observed that thus the contract being a creature of an agreement between two or more
parties has to be interpreted giving literal meanings unless there is some ambiguity therein. The
contract is to be interpreted giving the actual meaning to the words contained in the contract and it
is not permissible for the Court to make a new contract, however reasonable, if the parties have not
made it themselves. It is further observed that the terms of the contract have to be construed strictly
without altering the nature of a contract as it may affect the interest of either of the parties
adversely (para 23).

16. In Harsha Constructions v. Union of India [Harsha Constructions v. Union of
India, (2014) 9 SCC 246 : (2014) 4 SCC (Civ) 803], it is observed and held by this Court in paras
18 and 19 as under : (SCC p. 251)

''18. Arbitration arises from a contract and unless there is a specific written contract, a
contract with regard to arbitration cannot be presumed. Section 7(3) of the Act clearly specifies that
the contract with regard to arbitration must be in writing. Thus, so far as the disputes which have
been referred to in Clause 39 of the contract are concerned, it was not open to the Arbitrator to
arbitrate upon the said disputes as there was a specific clause whereby the said disputes had been
''excepted''. Moreover, when the law specifically makes a provision with regard to formation of a
contract in a particular manner, there cannot be any presumption with regard to a contract if the
contract is not entered into by the mode prescribed under the Act.
2 All. Sanjay Gandhi Post Graduate Institute of Medical Science, Lucknow Vs. M/S Trishul Enterprises 885

19. If a non-arbitrable dispute is referred to an Arbitrator and even if an issue is framed
by the Arbitrator in relation to such a dispute, in our opinion, there cannot be a presumption or a
conclusion to the effect that the parties had agreed to refer the issue to the Arbitrator. In the instant
case, the respondent authorities had raised an objection relating to the arbitrability of the
aforestated issue before the Arbitrator and yet the Arbitrator had rendered his decision on the said
''excepted'' dispute. In our opinion, the Arbitrator could not have decided the said ''excepted''
dispute. We, therefore, hold that it was not open to the Arbitrator to decide the issues which were
not arbitrable and the award, so far as it relates to disputes regarding non-arbitrable disputes is
concerned, is bad in law and is hereby quashed.''

* * * * *

19. On the question, who decides on non-arbitrability of the dispute, after referring to and
considering the earlier decisions on the point, more particularly, the decisions in Garware Wall
Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd. [Garware Wall Ropes Ltd. v.
Coastal Marine Constructions & Engg. Ltd., (2019) 9 SCC 209 : (2019) 4 SCC (Civ) 324],
United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd. [United India
Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2
SCC (Civ) 530] and Narbheram Power & Steel [Oriental Insurance Co. Ltd. v. Narbheram
Power & Steel (P) Ltd., (2018) 6 SCC 534 : (2018) 3 SCC (Civ) 484], it is observed and held in
Vidya Drolia case [Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC
(Civ) 549] that the question of non-arbitrability relating to the inquiry, whether the dispute was
governed by the arbitration clause, can be examined by the Courts at the reference stage itself and
may not be left unanswered, to be examined and decided by the Arbitral Tribunal. Thereafter, in
para 153, it is observed and held that the expression, ''existence of arbitration agreement'' in Section
11 of the Arbitration Act, would include aspect of validity of an arbitration agreement, albeit the
Court at the reference stage would apply the prima facie test. It is further observed that in cases of
debatable and disputable facts and, good reasonably arguable case, etc. the Court would force the
parties to abide by the arbitration agreement as the Arbitral Tribunal has the primary jurisdiction
and authority to decide the disputes including the question of jurisdiction and non-arbitrability.'

* * *

40. The Apex Court in in Pam Development Private Limited v. State of West Bengal,
(2024) 10 SCC 715, had the occasion to consider the effect of excepted/prohibitory clauses in an
agreement and in this regard it held as under :

''12. This submission is persuasive, but the contract clauses speak for themselves. In fact,
the High Court did what the Arbitrator should have done. Examine what the contract provides. This
is not even a matter of interpretation. It is the duty of every Arbitral Tribunal and Court alike and
without exception, for contract is the foundation of the legal relationship. Having considered the
abovereferred clauses in the contract the High Court came to the conclusion that awarding any
amount towards idle, machinery, etc. is prohibited under the ''Special Terms and Conditions'' of the
contract. The Arbitrator did not even refer to the contractual provisions and the District Court
dismissed the objections under Section 34 with a standard phrase as extracted hereinabove. The
886 INDIAN LAW REPORTS ALLAHABAD SERIES
High Court exercising jurisdiction under Section 37 did its duty and we are of the opinion that the
conclusions of the High Court are correct and cannot be interfered with.''

29. In light of the aforesaid undisputed facts, it is clear that the Sole Arbitrator had no
jurisdiction to enter into an unchartered territory which was occupied by the subsequent Contract
No.107 of 2013-2014 which was never made the subject matter of reference. Hence, if any disputes
which emerged from the subsequent contract it could not have been entertained or adjudicated upon
by the Sole Arbitrator. Thus, the attempt of the Sole Arbitrator to take cognizance of such a claim
was beyond its jurisdiction.

30. In this regard, the observations of the Apex Court in Sal Udyog Private Limited (supra)
are relevant and in paragraph 26, it held as under:-

26.