JUDGMENT
The appellant (National Buildings Construction Corporation Limited, for short ‘NBCC’) and respondent (also referred to as the ‘contractor’) were described as defendant and plaintiff respectively in Arbitration Suit No. 5/2000 [earlier AC No. 16/1989 and AC No. 25/1988] on the file of the City Civil Court, Bangalore.
2. NBCC had undertaken the work of construction of Foodgrain Storage godowns for Food Corporation of India (‘FCI’ for short) at different places, with liberty to get the work executed through different contractors. In that behalf, NBCC invited tenders for construction of Five foodgrain godowns with other ancillary structures at Bhimavaram, Andhra Pradesh [Phase-II] on 8-2-1985. The tenderers had to submit a PERCENTAGE RATE TENDER for Group I work (Civil Works) and ITEM RATE TENDER for Group II work (Electrical and Sanitory Work). The tender documents contained separate Bill of quantities for Group I Work and Group II Work, enumerating the several items of work to be executed and the approximate quantity of each work. In regard to items of work in Group I, the Bill of quantities also contained the Basic rate for each item of work based on the CENTRAL PUBLIC WORK DEPARTMENT, DELHI SCHEDULE OF RATES - 1981 (‘1981 DSR’ for short) and the tenderer was required to quote a percentage over the said Basic rates, for execution of the work. In regard to Group II Work, the Bill of quantities did not indicate the rate and the tenderer was required to fill in the rate for each item of work. The contractor submitted his offer on 26-2-1985 and 27-2-1985 (modified by certain subsequent telegrams). By letter of intent dated 17/19-5-1985, NBCC accepted the contractor's offer for the said work as follows:(i) contractor's offer of 58.5% above the basic schedule of rates for Group-I works; and(ii) contractor's quoted rates for Group-II works. The contractor accepted the said letter of intent, by letter dated 14-6-1985. Consequently, an agreement was entered into by the parties on 26-6-1985 in regard to the said work, to be executed partly as a percentage rate contract (for Group I) and an Item rate contract (for Group II). The cost of the work as per the offer made by the Contractor (for the quantities estimated in the Bill of Quantities) was as follows:
i)Group-I works [civil works] for which the contractor had offered a rate of 58.5% over the Delhi schedule of rates, 1981.Rs. 1,19,56,240.15ii)Group-II work [that is electrical and sanitary items of work] for which the contractor had quoted items rates.Rs. 3,22,906.00TOTAL
Less 2.35% rebateRs. 1,22,79,146.15
Rs. 2,88,559.93Net Contract ValueRs. 1,19,90,586.22
As per the terms of contract, the due date for completion was 15-4-1986. Three of the five godowns were completed on 31-3-1987 and the remaining two godowns were completed on 27-8-1987.
3. The contractor made several claims against NBCC in regard to the said work. NBCC had also a claim against the contractor. The Chairman-cum-Managing Director of NBCC appointed Sri NSL Rao, retired Director General of CPWD as the sole Arbitrator by letter dated 15-12-1987. The Arbitrator entered upon the reference on 28-12-1987. Claim statement was filed by the contractor on 29-1-1988. NBCC filed its statement of objections with a counter claim on 23-2-1988. Rejoinder was filed by the contractor on 25-3-1988. After considering the claims and the material, a reasoned Award was passed by the Arbitrator on 17-8-1988.
4. The particulars of the claims made by the contractor against NBCC, particulars of the claim made by NBCC against the contractor, and the details of the award of the Arbitrator on the said claims are given below in brief:
1. Claims of the Contractor:- (Against NBCC)
Claim No. 1:- ( Re: Loss on account of non-release of site, change of site for godowns, change in design of foundation, extra charges for conveying materials on Sandy tracks etc.)
(a)Idle Labour and MachineryRs. 2,55,401.00(b)Idle skilled and unskilled labourRs. 3,25,754.00(c)Shifting the site for two godownsRs. 2,68,222.00(d)Increase in items of work as a result of change in foundations necessitated due to change of sites to low lying areas.Rs. 3,31,140.00(e)Shoring and stratting and bailing out of water.Rs. 1,35,444.00Total:Rs. 13,65,961.00
Claim No. 2 (Re: Loss on account of non-release of payments by NBCC in time, in terms of agreement conditions by having to borrow amounts from Banks and private money lenders.
(a)Interest on bank borrowings (State Bank of India, Chirala)Rs. 2,22,552.95(b)Interest charged on amounts (Rs. 4,58,000/-) borrowed from others.Rs. 1,51,520.00(c)Interest paid to NBCC on account of delayed recovery of mobilisation advance and interest paid to M/s. Press Metal Corporation for delayed Payment for suppliesRs. 27,287.00(d)Refund of rebate of 2.35% given by the contractor for prompt paymentRs. 2,39,796.07(e)Loss of overheads and site expenses due to prolongation of contract at Rs. 25,566/- per month for 18 monthsRs. 4,60,188.00(f)Travelling expenses incurred by contractor in connection with recovery of running bill paymentsRs. 77,000.00(g)Loss on turnover [@ Rs. 30,000/- for 30 months, restricted to to Rs. 1,50,000/-Rs. 1,50,000.00Total: Rs. 13,28,344.02, Rounded off toRs. 13,28,000.00
Claim No. 3 ( Claim for payments as per Delhi Schedule of Rates, 1981 (‘DSR’ for short) for four items of Work in Group-I [i.e difference between the rate as per 1981 DSR and the rate actually paid by NBCC].
(a)Providing & injecting chemical Emulsion as per CPWD specifications for pro-construction anti-termite treatment and creating a chemical barrier I.S 1307/1958Rs. 6,33,512.57(b)Brickwork in Cement mortar 1:6 (1 cement 6 fine sand) with bricks of Class designation 75 in foundation and plinth.Rs. 2,26,319.17(c)Brick work in cement mortar 1:6 (1 cement 6 sand) with bricks of Class designation 35 in Super-structure above plinth upto floor level.Rs. 2,32,328.59(d)Providing and fixing partly fixed And Partly centro hung V-4 type Steel Glazed ventilators of standard Rolled Steel sections .. .Rs. 72,239.82
Total of Rs. 11,64,400.25 shown as Rs. 11,64,396.80Plus percentage of 58.5%Rs. 6,81,172.10Total of claim No. (3):Rs. 18,45,568.90
[Note: Initial claim of Rs. 20,88,7453/- in the claim statement before Arbitrator was subsequently restricted to Rs. 18,45,568.90 in the rejoinder filed before the Arbitrator]
Claim No. 4: (Non reimbursement of losses caused to the constractor due to Floods) Value of materials lost, expenditure for shifting labour to safe places:
[Rs. 4,51,896/-] restricted to: Rs. 4,50,000.00
Claim No. 5 Interest at 24% p.a on Rs. 56,88,654.00 (aggregate of Claim Nos. 1 to 4) from the due date to date of payment.
Claim No. 6 - Arbitration Expenses of Rs. 32,500.00
II.Counter claim of NBCC against contractor:-
Liquidated damages for delay on the part of the contractor in completing the work - Rs. 4,29,100.00
III.Amounts awarded by the Arbitrator (under the Award dated 17-8-1988):-
(i)Claim Nos. 1(a), (b), (c) and Claims 2(a), (b), (e), (f)&(g) of contractorRs. 8,16,412.00(ii)Claim No. 2(c) of contractorRs. 13,050.00(iii)Claim No. 2(d) of contractorRs. 10,20400(iv)Claim No. 3(a), (b), (c) and (d) of contractorRs. 11,64,396.00Total amount awarded to contractorRs. 20,04,062.00Counter claim of NBCC (granted In favour of NBCC)Rs. 2,40,000.00Net amount due to the Contractor as per awardRs. 17,64,062.00
[Note: Claim No. 1(d) and 1(e), Claim No. 4 and 5 of the contractor were rejected. In regard to Claim No. 6 of the contractor (for costs), each party directed to bear their respective costs.]
5. Feeling aggrieved, NBCC filed Arbitration case No. 25/1988 under Section 30 and 33 of the Arbitration Act, 1940 (‘Act’ for short) to set aside the award made in favour of the contractor for Rs. 20,04,062-00, by declaring it to be invalid On the other hand, the Contractor filed Arbitration Case No. 16/1989 under Sections 15, 16, 17, 30 and 33 of the Act for the following reliefs:
(a) To pass a decree for Rs. 20,04,002 as per the award passed by the Arbitrator in his favour;
(b) To modify the award by allowing the remaining portion of claim No. 3 (Rs. 6,81,172.10 being 58.5% over the amount awarded under claim No. 3) and by allowing his claim regarding interest on all amounts awarded and pass a decree in respect of the modified award;
(c) To set aside the award of Rs. 2,40,000.00 made in favour of NBCC.
6. As the said two proceedings were in respect of the same award, they were clubbed together and numbered as Arbitration Suit No. 5/2000 showing the contractor as the plaintiff/petitioner and NBCC as the defendant/respondent. Though points for determination had been framed in AC No. 25/1988, as the Issues framed in AC No. 16/1989 covered all aspect, those were treated as Issues in A.S No. 5/2000. The said issues framed by the trial Court, on the pleadings, are:
(a) Whether the petitioner proves that he is entitled for a decree in terms of the award for a direstion to the respondent to pay a sum of Rs. 20,04,062.00?
(b) Whether the petitioner proves that he is entitled for modification of the award by allowing remaining claim of the petitioner under the 3rd head of the claim of (Rs. 6,81,172.10 being 58.5% over the award under the third head) and also in respect of claim regarding interest?
(c) If so, whether the petitioner is entitled for passing decree in respect of the modified award?
(d) Whether the petitioner proves that the award in respect of Rs. 2,40,000.00 in favour of the respondent is liable to be set aside?
(e) Whether the respondents prove that the award in question is violated due to the misconduct on the part of the Arbitrator as contended in para 3 of the objections?
(f) Whether the award in question is null and void as contended by the respondent in its objections statement?
(g) To what reliefs are the parties are entitled?
7. After evidence and arguments, the trial Court by judgment and decree dated 24-6-2000 decreed the suit in part by answering issues (a) to (c) in the affirmative and issues (d) to (f) in the negative. As a consequence, the award dated 17-8-1988 passed by the Arbitrator was accepted and made a rule of the Court. The Court also granted the prayer of the contractor for modification of award in regard to claim Nos. 3 & 5 of the contractor as follows:
(a) The contractor shall be entitled for the addition of 58.5% on Rs. 11,64,396/- and therefore the amount due under claim (3) shall be Rs. 18,45,568.10 instead of Rs. 11,64,396,00 awarded by the Arbitrator.
(b) The contractor shall be entitled to interest at 16.5% pa. on the award amounts from the date of reference till the date of decree or realisation of the entire award amount (instead of the award of Arbitrator rejecting claim No. 5).
Consequently, the prayer of NBCC under Section 30 and 33 of the Act for setting aside the award in favour of the contractor, was dismissed. The effect of the order of the trial court is that the amount awarded is increased by Rs. 6,81,172-10 and interest is awarded at 16.5% PA on all the amounts awarded.
8. Feeling aggrieved by the dismissal of its prayer for setting aside of the award in favour of the contractor and increase in the award made under claim No. 3 and award of interest, NBCC has filed MFA No. 4377/2000. In its appeal, NBCC has challenged the award of Rs. 8,16,412.00 against claim Nos. 1(a)(b), (c) & 2(a), (b), (e), (i) & (g), award of Rs. 18,45,568.00/- against claim No. 3(a) to (d) and award of interest at 16.5% p.a against claim No. 5. Feeling aggrieved by the confirmation of award of Rs. 2,40,000.00/- made in favour of NBCC, the contractor has filed Cross objections No. 34/2001. The only items of the award of the Arbitrator that are not challenged by either party before us are award of Rs. 13,050,00/- and Rs. 10,204/- under contractor's claim No. 2(c) and 2(d) and rejection of contractor's claims No. 4 and No. 6.
9. On the contentions raised, the following points arise for our consideration:-
(i) Whether the court below erred in confirming the award of Rs. 8,16,412.00 in favour of the contractor in regard to claim Nos. 1(a), (b), (c) and 2(a), (b), (e), (f) & (g).
(ii) Whether the award of Rs. 11,64,396.00/- by the Arbitrator, which is increased to Rs. 18,45,568.00/- by the Court below, in regard to claim No. 3(a), (b), (c) and (d) of the contractor requires to be interfered with?
(iii) Whether the court below erred in confirming the award of Rs. 2,40,000.00 in favour of NBCC
(iv) Whether the court below was justified in awarding of interest at 16.5% P.A on the amounts awarded from the date of reference till date of realisation,
10. A brief reference to the principles relating to interference with Arbitration Awards will be relevant before examining the points for consideration. It is well settled that in a proceeding to set aside an Arbital Award, the court cannot and does not sit in appeal over the conclusions reached by the Arbitrator. Nor can the court, re-examine or re-appraise the evidence and hold that the conclusion reached on facts by the Arbitrator is wrong. An erroneous decision on facts by the Arbitrator is not ground for interference. The Arbitrator is the sole Judge of the quality or quantity of evidence. The reasonableness of the reasons given by the Arbitrator cannot be challenged. But, an Award of the Arbitrator can be set aside, if there is an error apparent on the face of the award, or where the Arbitrator fails to consider material evidence or relevant documents, or where the Arbitrator's finding is not based on any evidence, or where the Arbitrator makes an award beyond the reference or makes an award on a claim not made by the panics, or where the Arbitrator misconducts himself or the proceedings. In addition, in the case of a reasoned award, the Court can interfere if the award is based upon a proposition of law which is unsound in law-vide UNION OF INDIA v. KALINGA CONSTRUCTION COMPANY (AIR 1971 SC 1646), K.P POULOSE v. STATE OF KERALA (AIR 1975 SC 1259), SUDARSHAN TRADING v. GOVERNMENT OF KERALA (AIR 1989 SC 890), FOOD CORPORATION OF INDIA v. JOGINDERPAL MOHINDERPAL (AIR 1989 SC 1263), BIJENDRANATH SRIVATSAVA v. MAYANK SRIVATSAVA [1994 (6) SCC 117], TRUSTEES OF PORT TRUST OF MADRAS v. ENGINEERING CONSTRUCTION CROPORATION LTD. (AIR 1995 SC 2423).
10.1) In UNION OF INDIA v. JAIN ASSOCIATES [1994 (4) SCC 663] the Supreme Court observed thus:
“It is, therefore, clear that the word ‘misconduct’ in Section 30(a) does not necessarily comprehend or include misconduct of fraudulent or improper conduct or moral lapse but does comprehend and include actions on the part of the arbitrator, which on the face of the award, are opposed to all rational and reasonable principles, resulting in excessive award or unjust result or the like circumstances which tend to show non-application of the mind to the material facts placed before the Arbitrator or Umpire. In truth it points to the fact that the Arbitrator or Umpire had not applied his mind and not adjudicated upon the matter, although the award professes to determine them. Such situation would amount to misconduct. In other words, if the arbitrator or Umpire is found to have not applied his mind to the matters in controversy and yet, has adjudicated upon those matters in law, there can be no adjudication made on them.”
(emphasis supplied)
10.2) It is also well settled that an Arbitrator is not a concilator and his duty is to decide the disputes submitted to him according to the legal rights of the parties and not according to what he may consider to be fair and reasonable. An arbitrator is not entitled to ignore law or misapply it, nor can he act arbitrarily, irrationally, capriciously or independent of the contract. “Courts of law have a duty and obligation, in order to maintain purity of standards and preserve full faith and credit as well as to inspire confidence in alternate dispute redressal method of arbitration, when on the fact of the award it is shown to be based upon a proposition of law which is unsound or findings recorded which are absurd or so unreasonable and irrational that no reasonable or right-thinking person or authority could have reasonably come to such a conclusion on the basis of the materials on record or the governing position of law, to interfere.” [vide RAJASTHAN STATE MINES & MINERALS LTD., v. EASTERN ENGINEERING ENTERPRISES [1999 (9) SCC 283) and Sikkim Subba Associates v. State Of Sikkim [2001 (5) SCC 629].
10.4) The Arbitrator in this case, has made a reasoned award. We will now consider the correctness of the said Award and the decision of the Court below modifying the award, in the light of the said principles.
Re: Point No. (i):-
11. To consider the correctness and validity of the award of Rs. 8,16,412.00. in respect of claims 1(a)(b)(c) and 2(a), (b), (e), (f) and (g), it is necessary to refer to the particulars of the claims made by the contractor and the reasoning of the Arbitrator for awarding the said sum against those claims. The Claims were:
Claim No. 1(a):- Contractor alleged that NBCC failed to release to entire site for the work at one stretch. As a consequence, Tractors and Lorries engaged by him as also the labour engaged by him for the work for loading and unloading with a view to collect materials before the on set of monsoon and floods in Godavari river remained idle. He claimed compensation for idling of 7 Tractors [3 Tractors for 91 days, 3 Tractors for 93 days and 1 tractor for 94 days, at the rate of Rs. 166.70 per Tractor per day as hire charges] and two Lorries (for 94 days at the rate of Rs. 416.70 per Lorry per day as hire charges) and idling of 82 labourers for 94 days at Rs. 9.00 per day, in all Rs. 2,55,401/-.
Claim No. 1(b):- Contractor alleged that NBCC failed to release the entire site for the work at one stretch; and that as a result of the non-availability of entire site, skilled and unskilled labour engaged by him for construction of the time bound project could not be fully utilised, resulting in idling of 61 Masons, 42 Mason helpers, 37 Carpenters, 21 Carpenter helpers, 21 Rod benders, 13 Rod bender helpers for 121 days (idling component being 2/5th) and idling of 107 earthwork labour for 102 days (idling component being full extent) involving a loss of Rs. 3,25,754.00.
Claim No. 1(c):- The contractor alleged that on account of shifting of the site in regard to two godowns and shifting of the site of chowkidar quarters, he had to transport the construction materials collected at the original site (Bricks, chips, sand, metal, AC sheets and trusses) to the new sits involving an expenditure of Rs. 2,68,222.00.
Claim No. 2(a) and (b): The contractor alleged that NBCC was bound to pay the running bills once a month, within 10 days from the date fixed under the contract; that NBCC delayed the payments and as a consequence, he was obliged to borrow money from scheduled Banks and private lenders by paying interest; that if NBCC had paid the Bills in time, he would not have incurred the said expenditure by way of interest; and that therefore he was entitled to reimbursement of the following amounts paid by him as interest:
2(a) Interest on Bank borrowings: Rs. 2,22,552.95
2(b) Interest paid to private lenders: Rs. 1,51,520.00
Claim 2(e): The contractor alleged that the contract got prolonged, on account of delayed payments by NBCC snd delay in handingover site and therefore he had to incur establishment expenditure of Rs. 25,566/- tor an additional period of 18 months, in all Rs. 4,60,188/- and NBCC was bound to reimburse the same.
Claim 2(f): The contractor alleged that he had to travel to Delhi, Bangalore, Hyderabad and Madras several time for obtaining payment, incuring an expenditure of to Rs. 77,000.00 and NBCC is bound to reimburse it.
Claim (2)(g): The contractor alleged that he had organised men, machineries and material for carrying out a turn over of Rs. 10,00,000/- per month. But on account of delayed payments, change of site etc., the work was prolonged to Two and half years with an average monthly turnover of only Rs. 3,87,000/00 per month. As a consequence, the profit got eroded at the rate of about 5% on the deficit turnover of Rs. 6,13,000/- per month. Thus he lost profits at the rate of Rs. 30,000/- per month for 30 months in all Rs. 9,00,000/-. However, the claim on account of Loss of turnover was restricted to Rs. 1,50,000/-.
12. Strangely, the Arbitrator neither dealth with the said claims 1(a)(b)(c) and claims 2(a)(e)(f) and (g), nor determine, the liability or quantum in regard to each of those claims. On the other hand, the Arbitrator has awarded a sum of Rs. 8,16,412.00 as loss of profits at 10% of the contract value, against claim No. 1(a)(b)(c) and 2(a)(b)(e)(f) and (g), on the following reasoning:
“Both the parties agreed that there was a delay in handing over of sites for godowns 10 & 11 and locations of some structures were changed after the work was awarded. These naturally upset claimant's construction programme. Respondents admitted that delays did take place in making payments to the claimant. They also felt that the claimant had suffered loss of interest on the amounts due to him for delayed payments. In fact the respondents in Annexure IV attached to their letter No. CE/SE/ARB/BVRM/PH-II dated 22-6-1988 worked out Rs. 95,552.50 as the amount due to the claimant as interest at 16.5% for delayed payments. This is a clear admission of default of the respondents for not making timely payments to the claimant. Records also go to prove that delay in making payments of the running bills to the claimant was not on account of delay in receiving funds from the FCI. The amount claimed in respect of items (a), (b) and (c) of claim No. 1 and items (a), (b), (e), (f) & (g) of claim No. 2 comes to Rs. 19,10,637.95. This is the alleged loss claimed by the claimant. The respondents themselves mentioned that the claimant perhaps atbest could have reasonably expected to make a profit of about Rs. 9 lakhs to Rs. 10 lakhs. From the data furnished by the respondents, total net payment made to the claimant so far comes to Rs. 89,80,540.91. Assuming 10% as normal provision for contractor's profit and overheads, I award a sum of Rs. 8,16,412.00 to the claimant against items (ft), (b) and (c) of claim No. 1 and items No. (a), (b), (e), (f) & (g) of claim No. 2.”
13. A reading of the said reasoning given by the Arbitrator clearly shows that what was awarded has nothing to do with what was claimed by the contractor. Firstly, the Arbitrator did not examine any of the claims made by the contractor (that is claims 1(a)(b)(c) and claims 2(a)(b)(e)(f) and (g) of the contractor) with reference to the evidence placed before him nor recorded a finding as to whether the contractor in fact suffered losses as claimed by him under claim Nos. 1(a), (b), (c) and 2(a), (b), (e), (f) & (g) or as to whether NBCC was liable therefor. Nor did the Arbitrator record any finding as to whether the delay on the part of the NBCC amounted to breach. Mere delay in completion by itself will not entitle a party to a contract to claim damages from the other party unless it is established that such delay is a consequence of breach committed by the other party. In fact the Arbitrator has awarded the counter-claim of NBCC for delay, by holding that the contractor had delayed the work by refusing to accept the contention of the contractor that he was not responsible for the delay. There is also no finding by the Arbitrator that the contractor had engaged Tractors, Lorries and labour and that they were idle [as claimed in claim 1(a)], that contractor had engaged skilled and unskilled labour and they were idle [as claimed in claim 1(b)], that the contractor had collected large quantity of material at original work site and he had transported them to new site incurring a huge expenditure [as claimed regarding claim 1(c)], that the contractor had borrowed amounts from Banks and private financiers and had paid interest to them [as claimed in claims 2(a) and (b)], that he had engaged staff (establishment) and was spending Rs. 22,566/- per mouth for additional period of 18 months [as claimed in claim 2(e)], that the contractor travelled to Delhi and other places incurring Rs. 77,000/- for obtaining release of Bill amounts [as claimed in claim 2(f)] and that contractor had organisied men, machinery and material for carring work of the value of Rs. 10 lakhs per month and that he suffered a loss of profit of 5% of the deficit turnover [as claimed in claim 2(g)]. The Arbitrator has not quantified or awarded any amount in regard to claims 1(a), (b), (c) and 2(a), (b), (e)(f) and (g).
14. On the other hand, the Arbitrator proceeds on the basis that NBCC had “mentioned” that the contractor would have made a profit of Rs. 9 lakhs to 10 lakhs and as the data furnished by the NBCC show that the net payment made to the contractor was Rs. 89,80,540.91, the contractor's should be awarded Rs. 8,16,412/- as 10% profits and overheads. There is neither logic nor factual basis for award of the said amount. Firstly, there is no claim by the contractor for award of 10% on the sum of Rs. 89,80,540.91, as loss of profits and overheads. Secondly, there is no admission by NBCC that contractor would have made a profit of Rs. 9 lakhs to 10 lakhs in this work. Thirdly a general statement made by NBCC that normally 10% of the total cost of the work would be the provision for profit and overheads would only mean that the contractor has already recovered/earned 10% of the total cost of an the work as profit and not that the contractor is entitled to an additional sum of 10% of the cost of the work. NBCC had filed a statement before the Arbitrator showing that the total credit from NBCC to the contractor was Rs. 1,18,64,699.61 out of which the cash payment made to the contractor was Rs. 89,80,540.91, the balance being adjustments/recovereis on account of security deposit, cost of cement supplied, income tax deductions, recovery of mobilisation advance and other miscellaneous recoveries. NBCC stated that out of the said sum of Rs. 1,18,64,699.61, the contractor would have made a profit of 10%. To interpret that contention/statement as an admission on the part of NBCC that the contractor had lost a profit of 10% of the contract value, to say the least, is perverse, contrary to the terms of the contract and not based on any evidence.
15. There is yet another aspect. The jurisdiction of the Arbitrator depends on the reference. What he could decide upon are the claims that are referred to him for decision. An Arbitrator can decide whether a party making a claim is entitled to it or not. If the claim made is under head ‘y’ it is impermissible for the Arbitrator to make an award under head ‘z’ which is not claimed by the party. Nor can the Arbitrator ainect that his award under head ‘z’ should be treated as an award against claim ‘y’ made by the party. As noticed above, the award of Rs. 8,16,412.00 has been made by the Arbitrator as 10% on Rs. 89,80,540.91, as profit and overheads, ignoring the fact that the sum of Rs. 89,80,540.91 (plus other credits) paid to the contractor, includes the profit also. Therefore, award of any sum in addition to the contract amount does not arise, more importantly, when the contractor did not claim 10% of the contract amount as loss of profits. The contractor had made specific claims as additional cost or losses on account of idle labour and machinery, idle skilled and unskilled labour, cost for shifting the material interest paid on borrowings on account of receipt of delayed payments, travelling expensess and loss of turnover, under claims 1(a), (b), (c) and 2(a), (b), (e), (f) and (g). The failure of Arbitrator to grant any amount against those claims makes it clear that those claims have been rejected. On the other hand when the contractor had not made any claim for loss of profits at 10% of Rs. 89,80,540.91, the Arbitrator cannot award 10% of net payments as loss of profit and direct that the same may be treated as an award in respecpt of claims 1(a), (b), (c) and 2(a), (b), (e), (f) and (g).
16. Lastly we may refer to another aspect. The claim of the contractor under claim Nos. 1(a), (b), (c) and 2(a), (b), (e), (f) & (g) are on the assumption that NBCC had committed breach in performing its obligations under the contract. On the other hand, the case of NBCC was that contractor committed breach in performing his obligations, by delaying the completion of the work. The Arbitrator while dealing with the counter-claim of NBCC, accepted the contention of NBCC that the work was delayed on account of the contractor and consequently, awarded a sum of Rs. 2,40,000.00 payable by the contractor to NBCC as damages on the ground that the owner (FCI) had recovered an amount of Rs. 2,40,000.00 from NBCC on account of the delay. Award of Rs. 2,40,000.00 to NBCC can only be on the basis that contractor had delayed the completion and thereby committed breach. Thus, if the award of Rs. 8,16,412/- is sustained, it would amount to upholding a decision of the Arbitrator awarding damages both to NBCC and the contractor in regard to the very same delay in completion of the work. To that extent there is an inconsistency in the award of the Arbitrator.
17. For the above reasons, we hold that there is a legal misconduct on the part of the Arbitrator in awarding Rs. 8,16,412.00 under claim Nos. 1(a), (b), (c) and 2(a), (b), (e), (f) and (g), involving an error apparent on the face of the award, inconsistency in the award, and exercise of power beyond jurisdiction. We answer point No. (i) accordingly.
RE: POINT (ii):
18. The work comprised of two parts, that is Group-1 relating to civil work where the contractor has not quoted his own rates for the items of work, but has quoted a percentage of 58.5% above the 1981 Delhi schedule of Rates, and Group-II relating to electrical and sanitary work, where the contractor has quoted rates on item rate basis. The Contractor contended that in regard to four items of work in Group-I, he was entitled to payment of 1981 DSR Rates plus 58.5%; that for the said four items, the rate as per 1981 DSR was originally mentioned in the bill of quantities; that, NBCC had unauthorisedly altered the rates regarding those four items by striking off the original rate specified and substituting a far lesser rate; and that therefore he was paid less than what he was entitled to. According to the contractor the said four items in regard to which short payment was made are as follows:-
Item in BOQDescription of workRate as per BoQ, before corractionRate as per DSR 1981Rate actually paidDifferenceQnty.Amount-12345678Part I-1 (claim 3a)Antitermits Treatment56.36 per sq.m56.3620.0036.3617223 sq.m6,33,512.57Part II-4.1 (claim 3b)Brick work class desi-gnation 75 [foundation and plinth]214.14 per cum214.14150.6963.453533.41 cum2,26,315.19Part II-42 (claim 3c)Brick work less designation 75 [super-structure]158.07 per cum221.62158.1763.453661.61 cum2,32,328.59Part II-6.3 (claim 3d)V-4 ventilator438.81 per sq.m-290.00148.81485.45 sq.m72,239.82(Rs. 11,64,396-17) Total Mentioned as11,64,396.80Plus Tender percentage of 58.5% (Rs. 6,81,172/10) Total18,45,568.90
The contractor had made a claim for the said amounts as claim 3(a) to (d). In the claim statement the claim No. 3 was mentioned as Rs. 20,88,853/-, but, in the rejoinder statement filed before the Arbitrator, the contractor gave particulars of the claim and reduced the claim to Rs. 18,45,568.90.
19. The Arbitrator has allowed the claim 3(a) to (d) to an extent of Rs. 11,64,396.00 on the following reasoning:
“I have gone through the documents produced by both the parties and heard carefully their oral arguments and perused their written statements. Tender for Group I is a “Percentage Rate” Tender. Existence of unattested corrections in the agreement in the rates for these items is not disputed by the parties. Neither party disputed the fact that rates for all the items in Group I except for the above 4 items are all based upon C.P W.D Delhi Schedule of Rates 1981. The Respondents did not make any attempt to clarify the basis adopted by them for the estimated rates for these 4 items in the Tender papers. Clause 12 of the agreement mentions clearly C.P.W.D Delhi Schedule of Rates 1981 as the basis for working out rates for extra and substituted items. The letter of acceptance of Tender (Respondents'‘letter No. CE/SZ/27(1)/Vol.II/85/842 dated 17/19 May 1985) mentions that the work was awarded at 58.5% above “the basic Schedule of rates”. The fact that these 4 items of work were executed as per C.P W.D specifications was also not disputed All the above show clearly that the correcte3d rates shown in the agreement for those items have no valid basis and the agreement envisages making payment for all the items of work in Group I of the tender schedule on the basis of C.P.W.D Delhi Schedule of Rates 1981 Since the Claimants executed these items of work as per C.P.W.D Specifications, his claim is admitted to the extent of Rs. 11,64,396/- and I award the Claimant payment of Rs. 11,61,396/- against this claim.
20. Thus, the grounds on which the claim has been granted, are: (i) that the rates mentioned in the bill of quantities (Group-1) are extracted from the DSR-1981; (ii) that in regard to the above four items, the rates originally mentioned as per 1981 DSR have been corrected subsequent to the contractor signing the contract; (iii) that the corrections are not attested and are not therefore binding on him; and (iv) that in regard to Group-1 work, the contractor is entitled to basic DSR-1981 rate plus 58.5% as these four items of work having been executed as per the CPWD specifications in 1981 DSR. The Arbitrator accepted the claim as worked out by the contractor for the difference in rates as Rs. 11,64,396/- (that is Rs. 6,33,512/57, Rs. 2,26,315/19, Rs. 2,32,328/59 and Rs. 72,239/82, as claimed by the contractor) and awarded the same; but he failed to add 58.5% thereof (that is Rs. 6,81,172/10) by oversight and awarded Rs. 11,64,396/-. The Trial court found that the omission to add 58.5% was an error apparent on the face of award and therefore added Rs. 6,81,172/- as 58.5% of Rs. 11,64,396/- and increased the award under claim 3(a) to (d) to Rs. 18,45,568/-. We will now examine the correctness of each of these from items of claims under claim (3).
21. Item (a) under claim (3) relates to anti-termite treatment work. It is Item No. 1 in Part I in Group I of the Bill of quantities and reads as under:
“Providing and injecting chemical emulsion as per CPWD specifica-ions for pre-construc-tion anti-termite trea-tment and creating chemical barrier under and alround the column pits, wall trenches, basement exacavation, top surface of plinth filling, junction of wall and floor, along the external portion of the building, expansion joints, surrounding of pipes and conduits etc., for conventional foodgrain godowns. Alderin emulsifiable concentrates [0.5%] (IS 1307-1958) Plinth area of the building at ground floor only shall be measured and this forms the basis for payment,”
We find that the unit rate per sq.m has been originally printed in the Bill of quantities as is Rs. 56.36 The said figure “Rs. 56.36” has been struck off and a new figure Rs. 20/- is inserted as the rate per sq.mtr The correction of rate is not attested. The contractor contended that Rs. 56.36 is the basic rate as per 1981 DSR and Rs. 20/- is an unauthorised, insertion made subsequent to his signing the contract documents, by deleting Rs. 56/36. The Arbitrator has not given any specific finding as to whether it was a subsequent correction, but he refers to it as an unattested correction. NBCC does not dispute that the correction is unattested, but it asserts that the correction was made before the contract documents were signed by the contractor. To demonstrate this, the NBCC points out that the first sheet of the Bill of Quantities contains the abstract of the value of the work under Group-I and Group-II, which is duly signed by the contractor and NBCC, In the said abstract the total estimated amount mentioned in respect of each godown as per the rates in the Bill of quantities for group-I aggregate to Rs. 16,09,429/-. For five godowns, it will be Rs. 80,47,145/- and it has been signed by the contractor. It is pointed out that the said sum of Rs. 16,09,429/- is arrived at adding the cost of all items of work including the anti-termite treatment and three other disputed items of work. The said figure of Rs. 16,09,429/- is reached only if the rate for anti-termite work is taken at Rs. 20/- per sq.ft and the rate for other three disputed items is taken as shown in column (5) of the tabular statement in para 18 above. On the other hand if the rate for anti-termite work is taken as Rs. 56.36 per sq.m, the cost per godown will be Rs. 17,54,869/-. If the rates tor all the four disputed items is as claimed by the contractor, then the total cost of each godown will be Rs. 18,37,367/-. The fact that the total cost of each godown has been shown as Rs. 16,09,429/- (without any correction) and is signed by the contractor, clearly demonstrates that when the contract was signed by the contractor, the rate mentioned in the BoQ (Bill of quantities was Rs. 20/- per sq.m and not Rs. 56/36.
21.1) But, what is the contract between the parties? The contract is that NBCC shall pay to the contractor 58.5% over and above the 1981 DSR for the several item of work in Group-I. Claim 3(a) relates to ante-termite treatment which Item No. 1 in part-I of Group-I. The description of this item in the bill of quantities, is based on the description of item code No 2.35 in the 1981 DSR and DSR rate for this work is Rs. 56.36, which was the rate originally written in the bill of quantities. 1981 DSR does not contain a rate of Rs. 20/- per sq.mtr for this work. NBCC has not been able to point out how it arrived at Rs. 20/- as the rate for this work. Its only submission is that the description of work in the bill of quantities is different from description of Item Code 2.35 in 1981 DSR as the words ‘far conventional foodgrains godowns’…… IS 1307-1958’ has been added in the described in the BoQ; and therefore the rate can be different. But, the addition of the said words does not change the nature of work. There is neither pleading nor evidence on the part of NBCC before the Arbitrator to demonstrate that the description of this item of work in the Bill of Quantities is different from 1981 DSR Item Code No. 2.35 The contract is clear that the contractor is entitled to 58.5% over Basic schedule rates (1985 DSR) in regard to Group-I work. The Arbitrator having examined the matter has rightly recorded a finding that the contract rate is Rs. 58.5% over and above the DSR-1981 and from the 1981 DSR rate is Rs. 56.36 per sq.m The finding of fact, with reference to the materials placed before the Arbitrator, is binding on the NBCC. The scope of interference in regard to award of arbitrator is limited and the court is not sitting in appeal over the award of the Arbitrator. We, therefore, find no reason to interfere with the award on this aspect that is award of Rs. 36/36 per sq.m being the difference between Rs. 56.36 and Rs. 20/- sq.m for the anti-termite treatment work.
21.2) We however find that there is an arithmetical error in the award of the Arbitrator inasmuch as he has awarded only the basic difference between the 1981 DSR rait (Rs. 56.36) and the rate that was actually paid (Rs. 20/-), for an area of 17223.24 sq.m which works out to Rs. 6,33,512/57. He has omitted to add 58.5% to the 1981 DSR rate to arrive the actual rate. Therefore, the court below was justified in increasing the amount awarded by adding 58.5%. Consequently, the contractor will be entitled to Rs. 6,33,512.57 (i.e a difference of Rs. 36.36 for 17223.24 sq.mtr) plus Rs. 3,70,604.85 (i.e, 58.5% of Rs. 633,512/57). Thus, the total amount to which the contractor will be entitled to under claim 3(a) is Rs. 10,04,117.42.
22. We will next take up the item (b) in claim No. (3) regarding the brick work in cement mortar [foundation and plinth] described as Item No. 4.1 in Part-II of Group-I of Bill of quantities. The contractor contended that the rate as per 1981 DSR for this item of work is Rs. 214.14; that the Bill of quantities originally mentioned the rate as Rs. 214/14; that this has been unauthorisedly correct as Rs. 150.69 that is paid at the rate of Rs. 150.09 and therefore he is entitled to difference of Rs. 63,45/- per Sq.m (wrongly mentioned as Rs. 64,05 pet sq.m), for 3533.41 cu.m in all Rs. 2,26,315/19. The Arbitrator has accepted this contention. But, the arbitrator has committed a blatant mistake is assuming that the rate as per 1981 DSR for this work is Rs. 214.14 Item code No. 6.1.10 of 1981 DSR gives the rate as Rs. 214.14 per cu.m, for brick work with bricks of class designation 75 in foundation and plinth. In the bill of quantities the class designation has been corrected as 35 instead of 75. We have already held while dealing with anti-termite treatment work, that the corrections were made even before the contract was signed. This is because the rate per godown worked out Rs. 1,609,429/- is arrived at by taking the rate for this work as Rs. 150/69 per cu.m and not Rs. 214/14. We find that 1981 DSR (Item code 6.5.2) provides that where the class designation of brick as 35 instead of 75, a deduction of Rs. 63.45 should be made out of the rate of Rs. 214.14 Therefore, the rate for brick work of cement mortar 1:6 with bricks of class designation 35 in foundation and plinth as per 1981 DSR would, therefore, be Rs. 150.69 and not Rs. 214.14 It is not in dispute that the contractor has been paid for this work at the rate of Rs. 150.69 plus 58.5%. The Arbitrator has committed an error apparent on the face of award by assuming the rate mentioned in 1981 DSR for this item of work as Rs. 214.14 by ignoring the deduction of Rs. 63.45 provided in the 1981 DSR where the brick class designation is 35. Hence, the award of Rs. 2,26,315.19 by the arbitrator against claim 3(a) and the addition of 58.5% thereon by the Trial Court, cannot be sustained and is liable to be set aside.
23. We may now turn to the item (c) in claim No. (3), relating to Brick work in cement mortar with brick class designation of 35 in superstructure above the plinth (described as item No. 4.2 in Part II of Group-I of Bill of quantities). The contractor has alleged that the rate as per DSR is 221.62 and that instead of being paid Rs. 221/62 plus 58.5%, he has been wrongly paid only Rs. 158.17 per cu.m plus 58.5%. The 1981 DSR Item code No. 6.1.10 read with item Nos. 6.5.2 and 6.3 makes it clear that a sum of Rs. 7.58 has to be added to the rate of Rs. 150.69 for arriving at the cost where the brick work is above the plinth. This has been done and the rate has been correctly shown as Rs. 158.17 in the bill of quantities. It is seen that Rs. 158/17 is the original rate mentioned in regard to Item No. 4.2 in Bill of Quantities relating to Godown and Residential Building. These is no correction in the rate. (Note: Only in regard to a small quantity of work relating to Laboratory Work, the rate is mentioned as Rs. 221/62 and corrected as Rs. 158/17). When the rates specified in the Bill of Quantities is Rs. 158.17 per cu.m which is the same rate as specified in the 1981 DSR, the question of taking the rate of Rs. 221.62 cu.m and awarding difference of Rs. 63.45 per cu.m does not arise. The contractor has wrongly contended that the rate is Rs. 221.62 and the Arbitrator has without verification of 1981 DSR accepted the wrong claim. The Arbitrator has committed two errors apparent on the face of the award by firstlty assuming that the rate specified in 1981 DSR for this item is Rs. 221/62 and secondly by assuming that a rate of Rs. 221/62 was mentioned as the rate in the Bill of quantities and that was unauthorisedly corrected as Rs. 158/17. The rate as per 1981 DSR is Rs. 158/17 and the rate mentioned in item 4.2 of part of Group-I of Bill of quantities (For Godowns and Residential Block) is also Rs. 158/17 and there is no correction of the rate. NBCC has made payment accordingly. Hence, Rs. 2,32,328/59 awarded by the Arbitrator under claim 3(c) and 58.5% thereof added to that amount by the court below are liable to be set aside.
24. We will now refer to item (d) under claim (3) in regard io work relating to V-4 type steel ventilators. The bill of quantities (Item No. 6.3 in part II of Group-I) stated the original rate as Rs. 438.81, which has been corrected as Rs. 290.00 As already held the correction, though unattested has been made before the contractor signed the contract documents as the total estimated cost of the godwn (Rs. 16,09,429/-) has been arrived at on the basis of the corrected rate of Rs. 290/- per sq.m The contractor's contention is that it should have been Rs. 438.81, as per 1981 DSR. But, 1981 DSR does not contain an item of work similar to the description of item No. 6.3 of the bill of quantities, nor specifies Rs. 438.81 as the rate. It is then argued that this item of work is a combination of work described as Item code No. 10.12.5 in the 1981 DSR which shows a rate of Rs. 278.38 and work described as Item code SL. No. 10.10.2, in 1981 DSR which shows a rate of Rs. 58.33 and certain other items of work. The Arbitrator has recorded a finding of fact that as per the 1981 DSR, the rate for the work would workout to be Rs. 438.81 and not Rs. 290/-. This is a finding of fact, which even if erroneous will be binding on NBCC. In the absence of an identical item of work in the 1981 DSR, we have to hold that the rate accepted by Arbitrator is not open to question. Consequently, the contractor will entitled to the difference in rate of Rs. 148.81 (that is difference between Rs. 438/81 and Rs. 290/-) per sq.m for 485.45 sq.m which will be Rs. 72,239/82, which has been accepted by the Arbitrator. As the Arbitrator had omitted to add 58.5%, the Court below was justified in adding that percentage and the contractor will be entitled to Rsw. 1,14,500/11 under claim 3(d).
25. As a result, the awards in respect of claim 3 (a) and (d) of the contractor, made by the Arbitrator and increased by the Trial Court is upheld and the awards against Claim 3 (b) and (c) made by the Arbitrator and increased by the Court below are set aside.
26. Therefore, as against the sum of Rs. 11,64,396.80, awarded by the arbitrator under claim (3)(a) to (d) which was increased to Rs. 18,45,568.90 by the trial court, we hold that the contractor is entitled to only to Rs. 11,18,617/53 (that is Rs. 10,04,117.42 + Rs. 1,14,500/11) under claim 3(a) and (d) and reject claim 3(b) and (c).
RE: POINT (iii)
27. NBCC has claimed a sum of Rs. 4,29,100/- as liquidated damages on account of delay in the completion of the work. It had also established that the FCI [owner of the godowns] had recovered a sum of Rs. 2.40 lakh from it (NBCC) on this account. The Arbitrator held that there was a delay in completion of the work. He did not accept the contractor's contention that he was not responsible for the delay. The Arbitrator therefore awarded Rs. 2.40 lakh as liquidated damages. No infirmity amounting to legal misconduct is made out by the contractor in regard to award of the said sum. The Tribal Court has also upheld this award. Hence, the challenge of the contractor to the award of Rs. 240,000/- to NBCC is rejected.
RE: POINT (iv):
28. The contractor claimed interest at the rate of 24% per annum on the amounts awarded from the date when the amount became due to the date of payment. In a subsequent letter submitted to the Arbitrator, the contractor restricted his claim for interest at the rate of 16.5% per annum from 28-12-1987 [date of reference] to date of realisation. When the Arbitrator heard the matter and passed his award on 17-8-1988, award of interest was governed by the decision of the Supreme Court in EXECUTIVE ENGINEER (IRRIGATION) v. ABHADATTA JENA [AIR 1988 SC 1520], wherein it was held that the Arbitrator not being a court, he could not award pendente lite interest from the date of reference. The Arbitrator, therefore, rejected the claim for interest in entirety.
29. By the time the matter came up before the Trial court, the Supreme Court had taken a different view. The trial court, relying on the decision in B.V Radha Krishna v. Sponge Iron India Ltd. [AIR 1997 SC 925] held that the Arbitrator had jurisdiction to award interest pendente lite as also for post award period. Accordingly, the court below modified the award by awarding interest at the rate of 16.5% p.a from the date of reference [15-12-1987] to date of realisation. This is challenged by NBCC, by putting, forth two contentions.
30. The first contention of NBCC against the award of interest is that when the award was made, the law on the matter was governed by JENA's case [supra], which had held that no interest could be awarded and therefore the award given by the Arbitrator, as on that date was correct and therefore it cannot be said to bs erroneous on the basis of subsequent decision of the Supreme Court. It is submitted that as the award could be challenged only on the ground of a legal misconduct, and as it cannot be said that when the arbitrator followed JENA's case, he committed a legal misconduct, the Trial Court could not have modified the Award bv awarding interest.
30.1) Per contra, the contractor relied on the decision in SECRETARY, IRRIGATION DEPARTMENT, GOVERNMENT OF ORISSA v. G C ROY [(1992) 1 SCC 508], wherein the Supreme Court clearly held that the Arbitrator had power to award interest pendente lite as the principles of Section 34 CPC would hold good to an Arbitrator also. Learned counsel for the contractor, therefore, contended that the question is settled by the Constitution Bench decision in G.C Roy, and the order of the court awarding interest from the date of reference to date of payment should not be interfered with.
30.2) Learned counsel for the NBCC tried to distinguish the decision in G C ROY's case, on the ground that it was prospective in operation, view of the following observation at the conclusion of the judgment:
Even though we have held that the decision in JENA's case does not lay down good law, we would like to direct that our decision shall only be prospective in operation, which means that this decision shall not entitle any party nor shall it empower any court to reopen proceedings which have already become final. In other words, the law declared herein shall apply only to pending proceedings.”
Learned counsel for NBCC argued that the words ‘pending proceedings’ would refer to proceedings pending before the arbitrator and not to proceedings pending before the court. He contended that the Award of Arbitrator became final when it was published on 17-8-1988 and the law prospectively declared in G C ROY's, case (on 12-12-1991) would not apply to the award in question and therefore the decision of the Arbitrator which is in consonance with the law laid down in JENA's case should be held to be correct and proper.
30.3) A careful reading of the observations of the Supreme Court in G.C Roy's case shows that the contention of NBCC is without merit. While making it clear that the law declared (in B.C Roy) will operate prospectively, the Supreme Court also made it clear that the decision will apply to all pending proceedings but not to proceedings which have become final. An Arbitrator's award under the Arbitration Act, 1940 is enforceable only when it is made into a decree of the court. An Award by Arbitrator by itself did not entitle to the party to payment, unless the court put its seal of approval, by making a decree in terms of it. In this case, as on the date when the decision in B.C ROY was rendered, the award had not been made into a rule of the Court and the matter was pending before the Court for that purpose. As long as the proceedings for making a decree in terms of the award was pending either before the court or in appeal, it cannot be said that the proceedings had become final. G C ROY's case was rendered during the pendency of the case before the trial court. We therefore have no hesitation in holding that the principles enunciated in G C ROY's case would apply to the case and award of interest from the date of reference to date of payment canot be said to be illegal.
31. Learned counsel for NBCC next contended that the award of interest at 16.5% per annum is excessive. He pointed out that there is no contract for payment of interest. According to him, where there is no contract for payment of interest, interest should not normaly exceed 6% per annum. On the other hand, learned counsel for the Contractor contended that in arbitration matters, interest is usually awarded between 15 to 18%, per annum on the basis of Bank lending rates and as NBCC itself charged interest at 18.5% per annum on the amounts due from the contractor. Mere fact the NBCC charged interest on a particular rate on the amount advanced by it, does not mean that the rate of interest would automatically be applicable to any amount due to the contractor. The matter relates to a work executed between 1985-87 and award made in 1988. In the absence of any contract in regard to rate of interest, what is awarded should be nearer to the rate of interest paid by Banks on long term deposits. On the facts and circumstances of the case and the rate of interests prevailing in 1988, we are of the view that award of interest at the rate of 12% p.a would proper and meet the ends of justice.
Conclusion:
32. Thus the amount due to contractor will be as follows:
(a) Amount due under claim 2(c) -Rs. 13,050-00(b) Amount due under claim 2(d) -Rs. 10,204-00(c) Amount due under claim 3(a) -Rs. 10,04,117-42(d) Amount due under claim 3(d) -Rs. 1,14,500-11______________Rs. 11,41,871-53Less Amount awarded to NBCCRs. 2,40,000-00______________TotalRs. 9,01,871-53______________
33. Accordingly, the appeal and cross-objections are disposed as follows:
a) Appeal filed by NBCC is allowed in part and the award is modified as follows:
(i) Award of Rs. 8,16,412/- in regard to claims 1(a), (b), (c) and 2(a), (c), (e), (f) and (g), by arbitrator (and confirmed by the Trial court) is set aside.
(ii) Rejection of claims 1(d) and 1(e) is upheld.
(iii) Award of Rs. 13,050/- and Rs. 10,204/- against claims 2(c) and (d) are upheld;
(iv) Award against claims 3(a) and (d) by the Arbitrator as increased by the Court that is Rs. 10,04,117/42 and Rs. 1,14,500/11 is upheld; (v) Award against claim 3(b) and (c) by the Arbitrator as increased by Court (that is Rs. 7,26,950/57) is set aside;
(vi) Rejection of claim No. (4) and claim No. (6) is upheld;
(vii) Award of Rs. 2.40 lakh in favour of NBCC is upheld.
(viii) The decision of the court below setting aside of the award of Arbitrator on claim No. (5) relating to interest is upheld but the rate of interest is modified as 12% per annum (instead of 16.5% P.A) from the date of reference till date of payment/deposit into Court.
(b) Cross objections filed by the contractor is dismissed;
(c) As a consequence, the contractor will be entitled to Rs. 9,01,871/53 (that is amounts awarded to contractor less amount awarded to NBCC) with interest at the rate of 12% PA from 28-12-1987 to date of deposit/payment of NBCC;
(d) The amount paid by the NBCC in pursuance of the interim order of this court shall be adjusted towards the amount payable. If excess has been received by contractor, he shall repay the same within three months to NBCC.
(e) Parties to bear their costs throughout.