S. N. Sapra ( 1 ) BY means of an agreement No. 277 of 1981-82, the Indian Institute of Technology, respondent No. 1, awarded to M/s Sanyukt Nirmata, petitioner, the work for the construction of extension of blocks VII, V1i1, X, XI and XIV at I. I. T. Delhi for the value of Rs. 30,37,580. 00. In pursuance to the acceptance on October 29, 1981 of the tenders submitted by petitioner. Under the agreement the work was to be completed on or before May 7, 1983 but the same wagot extended for another period of five months and the work was to be completed by October 27, 1983. The work was completed on October 7, 1983. The disputes between the parties arose as to the payments to be made to petitioner. The agreement contained arbitration clause 25. These disputes were referred to respondent No. 2 who is a retired Chief Engineer. Respondent No. 2 made and published his award on December 15, 1984. ( 2 ) ITEM No. VIII was claim for a sum of Rs. 38. 500. 00 made by petitioner thereby praying that petitioner was entitled to an extra payment for the work done after the expiry of the contract period as contract was originally scheduled for completion on May 7, 1983 but was got extended for five months mainly due to the defaults and delays on the part of respondent No. 1. ( 3 ) PETITIONER filed an application being suit No. 92a of 1985 under Section 14 of Arbitration Act, 1940 in the High Court of Delhi for filing of award in Court. The petitioner filed objections under Sections 30 and 33 of the Arbitration Act, 1940. Vide judgment, dated March 25. 1986 S. Ranganathan, J. made the award so far as it related to items No. IV, V, VII, X and XI Rule of Court. However, with regard to item No. 8 award was set aside and remitted for re-consideration by the arbitrator i. e. respondent No. 2. ( 4 ) RESPONDENT No. 2 entered upon the reference with regard to item No. VIII and after hearing the parties, made and published his supplementary award on June 27, 1986 thereby awarding a sum of Rs. 17,521. 00 in favour of petitioner against the respondent. ( 4 ) RESPONDENT No. 2 entered upon the reference with regard to item No. VIII and after hearing the parties, made and published his supplementary award on June 27, 1986 thereby awarding a sum of Rs. 17,521. 00 in favour of petitioner against the respondent. Respondent No. 1 has filed objections under Sections 30 and 33 read with Section 15 (a) of the Arbitration Act, 1940 thereby challenging the correctness of the award on various grounds. On the pleading of the parties following issues have been framed. 1. Whether award dated June 27, 1986 is liable to be set aside? OP Objector. 2. Relief. ( 5 ) SHRI Suresh Singh, learned counsel for respondent No. 1 in the first place contends that award is beyond the scope of reference. Award in respect of claim No. 8 was remitted back to arbitrator only for quantifying the compensation under this heading. According to him, arbitrator was not required to investigate reasons and/or cause for delay in completion of the work under the contract and aportion the blame and rest the liabilities on the officers of respondent No. 1. While explaining the causes for hindrances, respondent No. 2, the arbitrator, has exceeded his jurisdiction and has acted beyond the scope of reference. He also submits that award in respect of item No. VIII was remitted back to arbitrator only for limited purpose. The next contention of Mr. Suresh Singh is that under clause 25 of the Agreement as well as under the terms of reference arbitrator was bound to give reasons for the award. In the present case, arbitrator has awarded a sum of Rs. l7,521. 00 without giving any reason or basis for reaching such a particular amount. As such according to him, arbitrator has misconducted himself and the proceedings by arbitrarily awarding the aforesaid amount in favour of petitioner against respondent No. 1. This is based on imagination. Mr. Suresh Singh urges that arbitrator has misconducted himself by misconstruing the provisions as contained in Section 73 of Indian Contract Act by holding that petitioner would be entitled to the profits on the remaining work done after the original contractual time under the contract. ( 6 ) RELIANCE has been placed by Mr. Suresh Singh on the judgment in case M/s. Polo Singh and Co. v. Union of India. 1 ( 7 ) MR. ( 6 ) RELIANCE has been placed by Mr. Suresh Singh on the judgment in case M/s. Polo Singh and Co. v. Union of India. 1 ( 7 ) MR. Manmohan Sareen, learned counsel for petitioner argues that the arbitrator has acted strictly within the scope of reference. The arbitrator has rightly given his views regarding the failure and defaults in the working of public institutions such as I. I. T. Dealing with the second point Mr. Sareen argues that the arbitrator has given reasons for awarding the aforesaid amount in favour of the petitioner. According to him, arbitrator was a technical man and was not expected to write detail judgment like the Court. The arbitrator has considered the provisions of Section 73 of Indian Contract Act while determining the compensation payable to the present petitioner. On coming to this conclusion, Mr. Sareen submits, the arbitrator has given various instances of breaches and defaults on the part of respondent No. 1. In the award arbitrator has also indicated his thought process for awarding compensation and he has taken into account the cost indices and also considered the applicable contract rates including the element of profit. According to him, award is fully justified because total value of the work was Rs. 30,37,580. 00 and the work done during the extended period was of the value of Rs. 3. 58,000. 00. Petitioner only claimed a sum of Rs. 35,800. 00 i. e. 10 per cent of the value of the work which was carried out by petitioner during the extended period. Mr. Sareen contends that respondent No. 1 had in fact, conceded that 2. 4 per cent might be awarded which works out to Rs. 8,592. 00. The arbitrator has awarded approximately 4. 8% of the work done beyond the stipulated period due to increase in costs etc. Reliance has been placed on judgments in cases M/s- A T. Brij Paul Singh and Bros. v. State of Gujarat Hyderabad Municipal Corporation v. M. Krishnaswami Mudaliar and another, Delhi Development Authority, New Delhi v. Mjs Alkaram, New Delhi* Delhi Development Authority v. M/s Uppal Engineer Construction Co. , New Delhi, and College of Vocational Studies v. S. S. Jaitley. ( 8 ) IN case M/s. Polo Singh and Co. v. State of Gujarat Hyderabad Municipal Corporation v. M. Krishnaswami Mudaliar and another, Delhi Development Authority, New Delhi v. Mjs Alkaram, New Delhi* Delhi Development Authority v. M/s Uppal Engineer Construction Co. , New Delhi, and College of Vocational Studies v. S. S. Jaitley. ( 8 ) IN case M/s. Polo Singh and Co. v. Union of India (supra) it has been held as under : "as I read the award, I find that the arbitrator has come to the conclusion that there have been acts of omission and commission on part of both the parties to the agreement. This is the reason why he has rejected the claim of both the parties. The arbitrator, however, has not given any reasons as to why he has come to this conclusion. The aforesaid finding that both parties are guilty of acts of omission and commission is not a reason, but is a conclusion which has been arrived at by the arbitrator. What are the reasons which led him to a reasoned award has not to be written like a judgment of a Court, but the provisions of the arbitration agreement which requires the arbitrator to give a reasoned award would mean that the party which reads it must know the basis on which the arbitrator may have come to a patricular conclusion. " ( 9 ) IN AIR 1982 Delhi 365 (supra) it has been held that arbitrator is the final judge of fact and Court is bound by the arbitrator s findings of fact and cannot review them unless it appears from the award itself that there was no evidence to support the finding. It was further held that it was not open to the Court to examine the adequacy of evidence which led the arbitrator to his findings of fact. It has been further held that where the arbitrator indicates his reasons for corning to a conclusion and the award is challenged on the basis of its not being supported by evidence, the parties must show that it is patent upon the face of the award that there was no evidence on record to which the arbitrator arrived at his conclusion. It has been held that when arbitrator gives reasoned award, he is not required to write a detailed judgment setting out each logical step of his reasoning but it is sufficient if he indicates the trend of his thought process so that errors can be eliminated and arbitrariness avoided. ( 10 ) IN AIR 1987 Delhi 134 (supra) it has been held as under : "there are limits for judicial reviewability and the Courts exercise limited jurisdiction in the proceedings for setting aside an award under Section 30 of the Arbitration Act, 1940. The Courts do not exercise appellate jurisdiction over the verdict of an arbitrator and as such cannot go into the merits of the case nor the Courts can reappraise and re-examine the evidence led before the arbitrator. Unless it is specifically agreed between the parties by means of an arbitration agreement, the arbitrator is not bound to give reasons for his verdict, in other words, the arbitrator can give a non-speaking award unless he is required by means of an agreement or terms of reference to give reasons for his award. The Courts also cannot look into the insufficiency of the evidence led before the arbitrator. When the arbitrator is required to give reasons, it is not for the Courts to see the reasonableness of the reasons given by the arbitrator or sufficiency of the reasons. However, what reasons are required, it depends upon the facts of each case. " ( 11 ) IN AIR 1984 Supreme Court, l703 (supra) their Lordship of the Supreme Court held that as it was established that respondent was guilty of breach of contract, and contractor had executed part of the work, the contractor would be entitled to damages by way of loss of profit. In this case damages at the rate of 15 per cent of the value of the remaining part of the work contract was held justified. ( 12 ) IN AIR 1985 Supreme Court 606 (supra) the contractor was required to complete the work within one year. However, the work was not completed within the stipulated period because authorities requested the Contractor to spread over the work for two years more, that is to complete the work in three years After completion of the work, contractor submitted his final bill claiming 20 per cent extra over and above the rates originally agreed upon between the parties. However, the work was not completed within the stipulated period because authorities requested the Contractor to spread over the work for two years more, that is to complete the work in three years After completion of the work, contractor submitted his final bill claiming 20 per cent extra over and above the rates originally agreed upon between the parties. It was held that both in equity and law the Contractor was entitled to receive extra payment. ( 13 ) THE first point for determination is whether the arbitrator has exceeded the terms of reference and has acted beyond his jurisdiction in awarded the aforesaid amount. In the original award, the arbitrator had clearly found that responsibility for delay rests with the respondent No. 1. He gave clear findings in the first award that there was unreasonable delay on the part of respondent No. 1 in completing the contract and that arbitrator would have given compensation to the Contractor but for its interpretation of letter dated October 19, 1981. It means that arbitrator accepted the proposition that under law, petitioner was entitled to compensation for delay in execution. In his judgment S. Ranganathan, J. clearly held that there was no substance in the contention urged on behalf of respondent that claim of the petitioner was unfounded in view of the claim made underSection 10 (c ). The award was remitted to respondent No. 2 for quantifying the amount of compensation. The arbitrator in his supplementary award has laid emphasis on the fact that delay was caused on account of fault on the part of respondent No. 1 and he held that there bad been failure on the part of IIT to give complete possession of the working site within a reasonable time which was suffering from obstructions, supply of complete working drawings at the time of commencement of work, shortage of cement during execution as brought out by the departmental officers, to supply complete structural drawings in time, even some of the footing details were wanting and occupations of one of the incomplete blocks by the Institute as a cement store preventing the contractors to complete work in all respects. According to the award, these factors were responsible in preventing the petitioner from executing the work uninterruptedly and to complete the same within the stipulated period. According to the award, these factors were responsible in preventing the petitioner from executing the work uninterruptedly and to complete the same within the stipulated period. Arbitrator was acting well within the scope of reference when he says that officers of the respondent were negligent, with regard to the execution of contract in question and this was a major fact of the claim by the petitioner as a result of delay and as such IIT has to pay damages for such defaults. In my view arbitrator has not exceeded the terms of reference. ( 14 ) IT is thus settled that when arbitrator is required to give reasons, then, what reasons are required, it depends upon the facts and circumstances of each case. Reasons are the links on the material, documentary or oral evidence, adduced before the arbitrator, on which certain inferences are drawn and conclusions are made. There must be some rational nexus between the two indicated in the award. The arbitrator may not set out every process of reasoning or may not deal with every point raised, but must, when he is called upon to give reasons, to tell the reason why he came to a particular conclusion. Applying the principles as laid down in the aforesaid judgments, it is to be seen whether in the present case, the arbitrator, has given reasons as would throw light on the trend of his thoughts. ( 15 ) ADMITTEDLY, the total value of the work was Rs. 30,37,580. 00. The work done during the extended period was for the value of Rs. 3,58,000. 00. The claim for Rs. 35,800. 00 was made by petitioner thereby calculating the same at the rate of 10 per cent of the value of the work done during the extended period. From the award it appears, respondent No. 1 concluded that 2. 4 per cent might be awarded to petitioner. In the present case, the arbitrator has awarded a sum of Rs. 17,521. 00, which comes approximately to 4. 8 % of the work done beyond the stipulated period. While awarding the compensation to petitioner, arbitrator has taken into consideration the provisions as contained in Section 73 of Indian Contract Act which has been reproduced in the award itself. In the present case, the arbitrator has awarded a sum of Rs. 17,521. 00, which comes approximately to 4. 8 % of the work done beyond the stipulated period. While awarding the compensation to petitioner, arbitrator has taken into consideration the provisions as contained in Section 73 of Indian Contract Act which has been reproduced in the award itself. Even in the earlier award, it was held by the arbitrator that delay in completing the work was caused due to the breaches and defaults committed by respondent No. 1. This is not in dispute. The arbitrator has clearly stated in the award that there has been failure on the part of IIT and for that he has given instances of various defaults on the part of respondent No. 1. In the present case, damages are payable by respondent No. 1 to petitioner but the question was how such damages should have been determined. The arbitrator has considered the method of profitability of the rates provided for in the contract in question in order to determine the amount of profit which the contractor should have expected to earn. The total claim of the petitioner was held to be a imaginery one. But the arbitrator considered on the basis of reasonableness that a sum of Rs. 17,521. 00 would be justified. This comes to about 4. 8 per cent. Thus, the method has been given by the arbitrator and this indicates his thought process for affording the compensation. He has taken into account the cost indices and also considered the applicable contract rates including the element of profit that are to be taken into account for work done after the contractual period. In AIR 1984 Supreme Court, 1703 (supra) award at 15 per cent on account of expected profit on balance work was upheld and was held to be reasonable. In AIR 1985 Supreme Court 607 (supra) it was held that 20 per cent as damages for the balance of the price of the work was justified. ( 16 ) I am of the view that arbitrator has given the basis for arriving at the figure of Rs. 17. 521. 00 and the method adopted by him was legally justified. The objections of respondent No. 1 in I A. 4946/86 are dismissed. The award is made a Rule of Court. ( 16 ) I am of the view that arbitrator has given the basis for arriving at the figure of Rs. 17. 521. 00 and the method adopted by him was legally justified. The objections of respondent No. 1 in I A. 4946/86 are dismissed. The award is made a Rule of Court. Decree be drawn in terms of the award shall form part of the decree.