Arbitrator cannot go beyond point of reference.

In the case of R. Natesan v. R. Padmanaben C.M.A (MD) No. of 276 of 2014, it was said that an
arbitrator cannot go beyond the terms of the contract between the parties. In the guise of doing
justice he cannot award contrary to the terms of the contract. If he does so he will have
misconducted himself.

In Associated Engg. Co. v. Govt. of Andhra Pradesh & Anr., AIR 1992 SC 232, this Court held that
an umpire or arbitrator cannot widen his jurisdiction by deciding a question not referred to him by
the parties. If he exceeded his jurisdiction by so doing, his award would be liable to be set aside.
Thus, an arbitrator cannot be allowed to assume jurisdiction over a question which has not been re-
ferred to him, and similarly, he cannot widen his jurisdiction by holding contrary to the fact that the
matter which he wants to decide is within the submission of the parties.

In M/s. Sudarsan Trading Co. v. The Govt. of Kerala  [(1989) 2 SCC 38], this Court has observed
that an award may be remitted or set aside on the ground that the arbitrator in making it had
exceeded his jurisdiction and evidence of matters not appearing on the face of it, will be admitted in
order to establish whether the jurisdiction had been exceeded or not, because the nature of the
dispute is something which has been determined outside the award, whatever might be said about it
in the award by the Arbitrator. This Court further observed that an arbitrator acting beyond his
jurisdiction is a different ground from the error apparent on the face of the award.

 In Bharat Coking Coal Ltd. v. Annapurna Construction (2003) 8 SCC 154, this Court reiterated
the legal position in the following words:
“There lies a clear distinction between an error within the jurisdiction and error in excess of
jurisdiction. Thus, the role of the arbitrator is to arbitrate within the terms of the contract. He has no
power apart from what the parties have given him under the contract. If he has travelled beyond
the contract, he would be acting without jurisdiction, whereas if he has remained inside the
parameters of the contract, his award cannot be questioned on the ground that it contains an error
apparent on the face of the record.”

In Steel Authority of India Ltd. v.  J.C. Budharaja, Government and Mining Contractor, (1999) 8
SCC 122 where this Court observed :
“ …….. that it is settled law that the arbitrator derives authority from the contract and if he acts in
manifest disregard of the contract, the award given by him would be an arbitrary one; that this
deliberate departure from the contract amounts not only to manifest disregard of the authority or
misconduct on his part, but it may tantamount to mala fide action…...” 

The Supreme Court in M/s MSK Projects (I) (JV) Ltd. v. State of Rajasthan & Anr., has reiterated
the principle that the arbitral tribunal cannot go beyond the terms of the reference and any attempt
to do so would be void and without any jurisdiction. The relevant extracts from the judgment are
reproduced hereinbelow;
6. The issue regarding the jurisdiction of the Arbitral Tribunal to decide an issue not referred to is
no more res integra. It is a settled legal proposition that special Tribunals like Arbitral Tribunals and
Labour Courts get jurisdiction to proceed with the case only from the reference made to them. Thus,
it is not permissible for such Tribunals/authorities to travel beyond the terms of reference. Powers
cannot be exercised by the Tribunal so as to enlarge materially the scope of reference itself.
Court, in Oil & Natural Gas Corporation Ltd. v. SAW Pipes Ltd., AIR 2003 SC 2629;
and Hindustan Zinc Ltd. v. Friends Coal Carbonisation, (2006) 4 SCC 445), held that an arbitration
award contrary to substantive provisions of law, or provisions of the Act, 1996 or against terms of
the contract, or public policy, would be patently illegal, and if it affects the rights of the parties, it
would be open for the court to interfere under Section 34(2) of the Act 1996.
What is not claimed cannot be granted in an Arbitration.
Relief that are not prayed/pleaded cannot be granted.

The Supreme Court in Shehla Burney Vs. Syed Ali Mossa Raza has reiterated that no relief can be
granted against a party unless it has been specifically claimed in the suit or petition, as mandated by
Order VII Rule(s) 5 & 7 of the Code of Civil Procedure. The Supreme Court while relying on
judicial authorities has held as under;
18. It is clear that in the amended plaint the prayer is against the defendant, therefore, the prayer is
only against defendant no.1 and not against defendant no.2. In a case where prayer is not made
against a particular defendant, no relief possibly can be granted against him.

In Scotts Engineering, Bangalore v. Rajesh P. Surana and others [(2008) 4 SCC 256]. In paragraph
10 at page 258 of the report this Court found that even after the appellant was arrayed as defendant
6, the plaintiff did not care to amend the plaint except making the appellant as defendant 6. No
relief was claimed against defendant 6. If we follow the said principle in the facts of this case we
have to hold that no relief having been claimed against defendant 2, who is the predecessor-in- title
of the present appellant, no relief can be granted against the present appellant. 

The same way relief are not granted in any judicial proceeding they are not granted in an arbitration
if they are not claimed.

In M/s. Cinevistaas Ltd. V. M/s. Prasar Bharti,  O.M.P. (COMM) 31/2017, the High Court of Delhi,
while deciding a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996
("Act") challenging an order passed by an arbitrator, held that claims that have already been raised
in the notice of arbitration are not barred by limitation even if they are not part of the statement of
claim.

When can a Plaint be dismissed for wrong cause of action U/O 7 R 11.

Order VII Rule 11 of the Code of Civil Procedure is envisaged with the provisions of the rejection
the plaint by the Court.
Under Rule 11 (a) every suiit presupposes the existence of a cause of action against the defendant
because if there is no cause of action, the plaint will have to be rejected.
It is necessary for the plaintiff to state specifically when such cause of action arose. This will enable
the defendant as well as the court to ascertain from the plaint whether in fact and in law the cause if
action as alleged by the plaintiff in the plaint did arise or not.
In Kuldeep Singh v. Ganpat Lal, AIR 1996 SC 729, any error on the part of the plaintiff in indicating
the date on which the cause of action arose would be of little consequence if the cause of action had
arisen on the date in which the suit was filed and the suit was within limitation from the said date.
The error in mentioning the dare on whichthe cause of action had arisen in the plaint in such a case
would not disentitle the plaintiff from seeking relief from the court in the suit.

It was held in Begum Sahiba v. Nawab Mohd. Mansur, (2007) 4 SCC 343, if the plaint filed by the
plaintiff does not disclose any cause of action, the court will reject it. But in order to reject the
plaint on this ground, the court must look at the plaint and at nothing else.

The power to reject a plaint on this ground should be exercised only if the court comes to the
conclusion that even if all the allegations set out in the plaint are proved, the plaintiff would not be
entitled to any relief. In that case, the court will reject the plaint without issuing summons to the
defendants. The reading of the plaint should be meaningful and not formal.
But where the plaint does not disclose cause of action, clever drafting, ritual of repeating words or
creation of an illusion cannot insert a cause of action in a plaint.

In the case of Roop Lal v. Nachhattar Singh, (1982) 3 SCC 487 it was said that the plaint can be
rejected as a whole if it does not disclose the cause action. A part of it cannot be rejected.

Order II Rule 2 states that no person shall be troubled more than once for the same cause of action.
The principle behind this rule is that the plaintiff has to include all the claims at once in the suit
which he is instituting. However, if the cause of action is wrong then the plaint will be dismissed.

When is non joinder of necessary parties a ground for rejection of plaint.

Rule 9 of order 1 lays down that no suit shall be defeated by reason of misjoinder or non-joinder of
parties. In such cases, the court may deal with the matter in controversy as regards the rights and
interests of the parties avtually before it. However, this rule does not apply to cases where there is a
non-joinder of necessary party.

Non-joinder of necessary parties is not one of the grounds recognized by Order 7 Rule 11 which can
occasion rejection of plaint at the outset.
In the case of B. Prabhakar Rao v. State of A.P., 1985SCC 432, where all the affected persons had
not been joined as parties to the petition, and some of them only were joined, the Supreme Court
took the view that the interests of the persons who were not joined as parties were indentical with
those persons who were before the court and were sufficiently and well represented and therefore,
the petition was not liable to be dismissed on that ground.

If the objection as to non-joinder of necessary party has been taken by the defendant at the earliest
stage and the plaintiff declines to add the necessary party, he annot subsequently be allowed in
appeal to rectify the error by applying for amendment. It has been held by the Supreme Court that
where the plaintiff persists in not implementing a necessary party in spite of objection, the
consequences of non joinder may follow.

But,
In the case of Mariammal v. Subbuthai, SA(MD)No.255 of 2010 and MP(MD)No.2 of 2010, the
court held
58. The trial Court as pointed out earlier, has dismissed the Suit on the ground of non-
joinder of necessary parties. But the first appellate Court even though it has enormous powers
under Order 41 Rule 33 to decide the present lis, has erroneously found that Ex.B3, sale is not
binding upon the share of the plaintiff and ultimately decreed the Suit. In the light of the foregoing
enunciation of both the factual and legal aspects, this Court is of the considered view that the
Judgment and decree passed by the first appellate Court are not factually and legally sustainable and
the same are liable to be set aside.