JUDGMENT O. M. P. No. 348 of 1993 : A.L. Vaidya, J.—The execution of the Sanjay Vidyut Pariyojna, Bhawa (120 MW) was taken up by the Himachal Pradesh State Electricity Board (hereinafter to be called as the Board) and for the construction of this Project, the Board entered into agreements with various parties for execution of various components of this Project. The Board entered into an agreement (vide contract No. SVP-BCC-I-83-II dated 25-5-1983) with the claimant company-M/s Hydel Construction Ltd., New Delhi for the construction of underground Power House, underground switchyard/transformer hall and the approach tunnel SVP, Bhawa. The said agreement was for one of the major components of Sanjay Pariyojna-Bhawa and was located in the District Kinnaur on the Bhawa Khad which was a tributary of River Sutlej. The stipulated date for the completion of this component of the Project was 10-4-1985 at an item rate tender amounting to Rs. 8,25,87,010. A dispute arose between the parties pertaining and relating to the terms, conditions and performance of the contract. The contractor preferred three claims during the year 1986-89 and the aforesaid claims after scrutiny were ultimately rejected by the Board, vide letter dated 21-2-1991. However, as per Clause 25 of the contract agreement entered between the parties, the dispute was referred to arbitrators. The claimant-contractor appointed Shri O P. Malhotra, as their arbitrator and the Board appointed Mr V. M. Bajaj as arbitrator on behalf of the Board. 2. The contractor-claimant submitted the following claims : "A. Claimants claims: Claim No. I—Variation limits. Part I: Plus Variation.—In relation to interpretation and applicability of Clause 12-A embodied in the Agreement relating to the rates for items exceeding deviation limit of 20% (for items exceeding Plus Variation Limit of 20%) amounting to Rs. 46,33,122.02. Part II: Minus Variation.—In relation to the interpretation and applicability of Clause 12-A embodied in the Agreement relating to the rates for items exceeding deviation limit of 20% (for items exceeding Minus Variation limit of 20%) amounting to Rs. 68,33,015.30. Claim No. 2 I Price Variation in Labour Cost: In relation to the interpretation and applicability of Clause 10-C (a) of the Agreement relating to Price Variation in Labour cost-amounting to Rs. 75,08,919.27. 68,33,015.30. Claim No. 2 I Price Variation in Labour Cost: In relation to the interpretation and applicability of Clause 10-C (a) of the Agreement relating to Price Variation in Labour cost-amounting to Rs. 75,08,919.27. Claim No. 3 : Extra lead for Transportation of Sand and Boulders : In relation to payment for carriage of sand and boulders from distant quarries other than those specified in the Agreement, amounting to Rs. 38,03,222.00. Ancillary reliefs : Besides the aforesaid main claims, the claimant has further claimed the following ancillary reliefs: (a) Interest—Interest at the rate of 18% from the date of claim till the date of award and then from the date of award till the date of decree and from the date of decree to the date of realisation. (b) Costs.— Costs of the proceedings of the Arbitration." The respondent-Board also put up the counter-claims which were as under : "Respondents Claims: 1. Counter-claim : The respondent has not only contested the claims of the Claimant but has also raised a counter-claim According to the respondent the grant of extension of time beyond the date stipulated in the contract does not disentitle it to claim liquidated damages. The counter-claim is in two parts, viz.: Part I : (i) Penalty.—Rs. 41,29,350.50 by way of penalty in terms of Clause 2 of the contract. (ii) Interest.—Interest on the aforesaid amount viz. Rs. 41,29,350.50 at the rate of 18% per annum from 1-11-1988 till actual payment. Part II: (i) Loss of revenue —Rs. 3,70,20,000 comprising of the loss of net revenue, additional cost of establishment etc. for supervising the work, additional cost to the Board on account of escalation of prices and loss of interest on the blocked up capital restricted to a period of 9 months only out of the extended period of 51 months and 21 days. (ii) Interest.—Interest on Rs. 3,70,20,000 at the rate of 18% per annum from 1-1-1988 till actual payment." Apart from the aforesaid counter-claims, according to the Board, Claim Nos. 2 and 3 of the claimant were barred by limitation as prescribed in Clause 25 of the agreement. 3. The arbitrators, after hearing the parties and going through the documents and other material brought by them on record passed the following award pertaining to the claim and counterclaims preferred by the parties, as referred to above : “A. Claimants Claims: Amount Awarded by us 1. 3. The arbitrators, after hearing the parties and going through the documents and other material brought by them on record passed the following award pertaining to the claim and counterclaims preferred by the parties, as referred to above : “A. Claimants Claims: Amount Awarded by us 1. Claim No. I Part I Rs 46,33,122.02 Rs. 23,38,840.73 Part II Rs. 68,33,015.30 Nil. 2. Claim No. 2 Part (a) Rs. 38,17,268.00 Rs. 38,17,268.00 Part (b) Rs. 36,91,651.27 Rs. 36,91,651.27 3. Claim No. 3 Rs. 38,03,222.00 Rs. 28,23,440.00 Total: Rs. 2,27,78,278.59 Rs. 1,26,71,200.00 Total amount awarded in favour of the claimant is Rs. 1,26,71,200,00 (Rupees one crore twenty six lacs seventy one thousand and two hundred only) and this awarded amount to carry rate of interest of 18% per annum from 31-7-1989 upto the date of this Award. B. Respondents’ counter-claims We have rejected claims raised in the counter claim in toto. C. In the circumstances of the case, each of the party to the Arbitration to bear its own costs of and incidental to the Arbitration and Award.” 4. The aforesaid award was made on 29-3-1993, The Award was filed in the Court and the Board has submitted the present Objection Petition, with the prayer that the award dated 29-3-1993 be set aside alongwith the costs of petition to the objector-petitioners. The grounds for setting aside the Award have been elaborately detailed in the objection petition, which may not be dealt with here in the same manner. However, the main grounds for setting aside the aforesaid award pleaded, have been that : (a) the award was not a speaking award, as the same was not suported by reasons, as agreed upon by the parties ; (b) a part of the award, as referred to above, has to be ignored, as the claim Nos. However, the main grounds for setting aside the aforesaid award pleaded, have been that : (a) the award was not a speaking award, as the same was not suported by reasons, as agreed upon by the parties ; (b) a part of the award, as referred to above, has to be ignored, as the claim Nos. 2 and 3 put up before the arbitrators were without limitation ; (c) the arbitrators have travelled beyond their jurisdiction in making the award especially when specific clauses of the agreement have not been taken into consideration and beyond those clauses, the award has been made ; (d) it has also been submitted that the claims awarded in favour of the claimants by the arbitrators could not have been so done, especially when such claims do not come within the ambit of the various clauses of the agreement; and (e) the award has been assailed and sought to be set aside, on the basis of an error apparent on the face of record and that the arbitrators have misconducted themselves and the proceedings. 5. The aforesaid objection petition has been resisted on behalf of the claimant and in reply-affidavit, the averments made in the objection petition have been denied. It has been pleaded that the award made by the arbitrators was supported by reasonings and a part of the claim, as disputed by the Board to be without limitation, was actually within limitation when the dispute arose. It has also been alleged that the arbitrators did not misconduct themselves or the proceedings and whatever claims they have accepted was within their power and authority and as per various clauses of the agreement. 6. Parties were put to trial on the following issues : 1. Whether the arbitrators, in making the award, bas misconducted himself and the proceedings ? OP Objector 2. Whether the award of the arbitrator or any part thereof is liable to be set aside on the grounds stated in the objections ? OP Objector 3. Relief 7. Learned Counsel for the parties have been heard in detail on the aforesaid issues and the material brought before this Court, covering the scope of these issue,., has been scrutinised. The findings on the aforesaid issues are given as under : Issue Nos. I and 2 : 8. Both these issues are inter-linked and, therefore, are taken up together. 9. Learned Counsel for the parties have been heard in detail on the aforesaid issues and the material brought before this Court, covering the scope of these issue,., has been scrutinised. The findings on the aforesaid issues are given as under : Issue Nos. I and 2 : 8. Both these issues are inter-linked and, therefore, are taken up together. 9. At the very outset, learned Counsel for the claimant has made a detailed reference of the law, governing the scope of the powers of the Court in setting aside the Award made by the Arbitrator. There is no dispute to the proposition that the parties, by referring their dispute for arbitration, have themselves by agreement, selected this mode of settling the disputes by a person or persons of their choice. Ordinarily, the award given by such arbitrator(s), appointed by the agreement of the parties, may not be interfered with, but then there are certain circumstances, wherein interference of the Court under the provisions of the Arbitration Act (hereinafter to be referred to as "the Act") can be there and on the basis of those provisions, the objector has preferred the objection petition. 10. The learned Counsel for the claimant, in this particular regard, has cited certain case law, which would be very much relevant for the disposal of the present objection petition. In AIR 1971 SC 696, M/s. Allen Berry and Co. Private Ltd. v. The Union of India, it has been held as under : "As the parties choose their own arbitrator, they cannot, when the award is good on the face of it, object to the decision either upon the law or the facts. Therefore, even when an arbitrator commits a mistake either in law or in fact in determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporate d in it so as to form part of it, the award will neither be remitter nor set aside notwithstanding the mistake. Mere reference to the contract in the award is not to be held as incorporating it" 11. In (1973) 1 SCC 708 : AIR 1973 SC 1338. Mis. Kapoor Nilokheri Co-op. Dairy Farm Society Lid. Mere reference to the contract in the award is not to be held as incorporating it" 11. In (1973) 1 SCC 708 : AIR 1973 SC 1338. Mis. Kapoor Nilokheri Co-op. Dairy Farm Society Lid. v Union of India and others\ it has been held that in case of arbitration, where the appellants had specifically stated that their claims were based on the agreement and on nothing else and all that the Arbitrator had to decide was as to the effect of an agreement between the appellant and the respondent, the Arbitrator had really to decide a question of law, i e. of interpreting the document, the agreement and his decision is not open to challenge. 12. In AIR 1987 SC 81, M/s. Hindustan Tea Co. v. M/s. K. Sashikani and Co, and another, it has been held that under the Law, the arbitrator is made the final arbiter of the dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. 13. In (1987) 4 SCO 497, Municipal Corporation of Delhi v. M/s. Jagan Nath Ashok Kumar and another; it has been held that if reasons appear per se not unreasonable and irrational, Court would not re-appreciate the evidence. It has further been held that decision of the arbitrator to be normally taken as reasonable. 14. In (1988) 3 SCO 36, Indian Oil Corporation Ltd. v. Indian Carbon Ltd., it has been held as under : "There is a trend that reasons should be stated in the Award though the question whether the reasons are necessary in ordinary arbitration agreement between the parties has been referred to the Constitution Bench. Even if it be held that it is obligatory to state the reasons, it is not obligatory to give a detailed judgment. Short intelligible indications of the grounds should be available to find out the mind of the arbitrator for his action. The reasons should not only be intelligible but also deal with the substantial points that have been raised. When the arbitration clause required the arbitrator to give reasons and the arbitrator does give his reasons in the award, the sufficiency of the reasons depends upon the facts of the particular case. The Court does not sit in appeal over the award and review the reasons. When the arbitration clause required the arbitrator to give reasons and the arbitrator does give his reasons in the award, the sufficiency of the reasons depends upon the facts of the particular case. The Court does not sit in appeal over the award and review the reasons. The court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusions or if the award is based upon any legal proposition which is erroneous." 15. There were other case law cited on behalf of the claimant in this particular behalf. The ratio of the various precedents referred to above, would be dependent upon the facts and circumstances existing in a particular case. The aforesaid principles, no doubt, can be taken note of as a guiding factor in order to interpret a particular situation arising in a particular case. 16. Needless to say, the agreement entered into between the parties, is the base and foundation for not only referring the dispute to the arbitrator, but also with respect to the power, authority and jurisdiction of the arbitrator. Not only that, the Court while passing any order, has to be guided by various clauses of the agreement entered into between the parties. It cannot be said that once an arbitrator is appointed under the agreement entered into between the parties, the arbitrator has unfettered powers to resolve the dispute, even going beyond the terms of the agreement. The jurisdiction and power of the arbitrator is also limited and parties rights and liabilities have to be enquired into and decided not only by the arbitrator but by the Court, remaining within the ambit of various clauses of the agreement. 17. At this stage, JT 1991 (3) SC 123, M/s. Associated Engineering Co. v. Government of Andhra Pradesh and another; can safely be referred. Paras 26 and 29 of the said judgment arc relevant, which are being reproduced hereunder : "26. The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract He has no power apart from what the parties have given him under the contract. Paras 26 and 29 of the said judgment arc relevant, which are being reproduced hereunder : "26. The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it, 29. If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction. But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error Such error going to his jurisdiction can be established by looking into material outside the award. Extrinsic evidence is admissible in such cases because the dispute is not something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award. The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award. The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence. The rationale of this rule is that the nature of the dispute is something which has to be determined outside and independent of what appears in the award. Such jurisdictional error needs to be proved by evidence extrinsic to the award." 18. The present objection petition has to be dealt with keeping in view the principles decided in the aforesaid reported precedents. 19. It has been contended on behalf of the objector that the award made by the arbitrators was not supported by reasons. Learned Counsels line of argument, in this particular behalf has been, that there is nothing in the award as to how the amount awarded has been calculated. 20. If one goes through the award itself, it is based upon not only reasonings, but upon the evidence brought on record by the parties. Learned Counsels line of argument, in this particular behalf has been, that there is nothing in the award as to how the amount awarded has been calculated. 20. If one goes through the award itself, it is based upon not only reasonings, but upon the evidence brought on record by the parties. It cannot be said, on any stretch of imagination, that award was lacking reasonings, but on the other hand, the reasonings were there, but whether such reasonings were available to the arbitrators in a particular claim, was altogether a separate matter. The arbitrators have referred the evidence, i. e. the documents exhibited before them. However, it could not be pointed out during the present proceedings on behalf of the objectors as to how the calculations arrived at by the arbitrator were wrong and not supported by reasons. Again, it may be very specifically referred here that the claims granted by the arbitrators may be assailed on other grounds, but the ground that these claims were not supported by reasons, on the face of it, is not available to the objectors. Thus, the objection that the award was based without reasonings, in the facts of the present case, does not carry any legal weight whatsoever and has to be ignored. Learned Counsel for the objectors further made a submission that Claim Nos. 2 and 3 were barred by limitation, as prescribed in Clause 25 of the contract agreement. 21. Clause 25 of the agreement also provided that in the event of rejection of contractors claim(s) by the Board, the contractor shall within 30 days after receiving intimation in writing of such decision shall give notice in writing to the Chief Engineer requesting him that the matter may be referred to the arbitration. It has been submitted that on the basis of this provision, the aforesaid claims were referred beyond 30 days. 22. In this behalf, the award made by the arbitrators can safely be referred, wherein this aspect of the matter has been discussed in detail by the arbitrators by appreciating the evidence brought on record. This Court can interfere only in case the arbitrators have misconducted themselves or the proceedings. 22. In this behalf, the award made by the arbitrators can safely be referred, wherein this aspect of the matter has been discussed in detail by the arbitrators by appreciating the evidence brought on record. This Court can interfere only in case the arbitrators have misconducted themselves or the proceedings. Here, in this case, the arbitrators have appreciated the evidence in this particular behalf in a particular manner and it would not be permissible for this Court to reappraise the entire evidence, even if it has not been properly appreciated by the arbitrators. In this view of the matter, the arbitrators9 findings in this particular regard require no interference whatsoever. 23. Learned Counsel for the parties have dealt with the various claims awarded by the arbitrators. Under Claim No. 1, Part I, the arbitrators awarded Rs. 23,38,840.73, though the claimant had claimed Rs. 46,33,122 02 in this particular behalf. This claim pertained to plus variation and it was in relation to interpretation and applicability of Clause 12-A embodied in the Agreement relating to the rates for items exceeding deviation limit of 20%, 24. The relevant provision of Clause 12-A runs as under : "Clause 12- A Rates for items exceeding deviation limit (i) In the case of any contracted or substituted item(s) which individually exceeds the quantity stipulated in the contract by more than twenty percent, the contractor shall within seven days from the receipt of order, claim revision of rate, supported by proper analysis in respect of such item(s) for quantity in excess of the said 20% limit, notwithstanding the fact that the rate for such item(s) exists in the tender for the main work or can be derived in accordance with the provisions of sub-clause (ii) of Clause 12 and the Engineer in-charge may revise its rate, having regard to the prevailing market rate and the contractor shall be paid in accordance with the rate, so fixed. The Engineer-in-charge, shall, however, be at liberty to cancel his order to carryout such increased quantity of work by giving notice in writing to the contractor and arrange to carry it out in such manner as he may consider advisable. But, under no circumstances, the contractor shall suspend the work on the plea of non-settlement of rates of item(s) falling under this clause” 25. But, under no circumstances, the contractor shall suspend the work on the plea of non-settlement of rates of item(s) falling under this clause” 25. The arbitrators have referred to the table which has been provided on behalf of the claimant whereby according to claimant, the quantities of item(s) shown in the table had exceeded the permissible deviation limit stipulated in the contract by more than 20% individually for which the claimants were entitled to the revised rates in terms of Clause 12-A of the agreement. The table submitted by the claimant and relied upon by the arbitrators was given as under : "TABLE SJ. No. Item of work Quantity as per contract agreement Quantity including (+)20% variation Actual qty as executed Quantity exceeding 20% limit (i) Shortcreting 7600 bags 9120 bags 15145.45 bags 6025.45 bags (ii) Drilling 38 mm dia holes upto 3 m depth 700 Rm 840 Rm 8088.16 Rm 7248.16 Rm (iii) Cement concrete Grade M-150 3200 cum 3480 cum 5478.24 cum 1638.24 cum (iv) Cement concrete Grade M-200 5500 cum 6600 cum 9406.04 cum 2806 04 cum However, on the other hand, it has been contended on behalf of the objectors that the items (iii) and (iv) in the above table, i. e. Cement Concrete Grade M-150 and Cement Concrete Grade M-200 have not exceeded its limit of 20% as envisaged under Clause 12-A. It has been submitted that the entire amount of cement concrete required to be done was only one item which was divided into : (a) Initial Concreting-M-L^0 Grade (b) Final Concreting-M-200 and M-250 Grades. It has also been contended that neither the nomenclature of the items nor the technical specifications in respect of the manufacturing, transportation and placement of concrete in various works differ for various grades of concrete except the cement content. According to objector, whatever the variation in the quoted rates of the concrete was there, it was only on account of the cost difference in the quantity of cement. It was further submitted that the different grades of concrete were individual items and the deviation just comes out to be 8% and not more than 20%. Thus, it has been contended on behalf of the objector that Clause 12-A was not applicable. The table, in this behalf, given by the Board before the arbitrators, was as under; “TABLE Item No. as shown in Schedule of quantities Description Qty. Thus, it has been contended on behalf of the objector that Clause 12-A was not applicable. The table, in this behalf, given by the Board before the arbitrators, was as under; “TABLE Item No. as shown in Schedule of quantities Description Qty. envisaged in contract Agreement Actual qty, executed IV. Concreting - - - (a) Initial concreting M-l 50 Grade - 3200 cum 3478.24 cum (b) (i) Final concreting M-200 Grade - 5500 cum 9406.04 cum Final concreting M-2S0 Grade - 6900 cum 1939.08 cum Total - 15600cum 16823.26 cum Thus the deviation in the total quantity in Item IV I e. concreting is 8%” 26. On the basis of the agreement between the parties, the contention put forth on behalf of the Board appears to be correct. At this stage, Item No, IV of the Schedule of Quantity and Rates attached with the Agreement can safely be referred. This Item deals with the term "Concreting". Thus, Item No. IV is an individual Item of Concreting comprising of various grades of concreting. In those various grades, as per table put in by the Board, the deviation was only to the extent of 8%. 27. It may not be out of place to mention here that the arbitrators could award and accept the claim of the claimants in this particular regard in case the claim was within the ambit of Clause 12-A. This clause is itself very clear, whereby the individual item was the concreting, whereas, the arbitrators have taken different items while considering the claims of the claimant in this particular behalf, thus, going beyond the provisions of Clause 12 (a) It is not a case where interpretation of Clause 12 (a) was involved. It is a case, as per documents referred to above, where, on the basis of the facts provided by the parties, the applicability of Clause 12-A was not called for. As the variation was 8% not being 20%, as was the requirement of the clause, the claim awarded in this behalf by the arbitrators, was without jurisdiction, beyond the scope of Clause 12-A and, as such, has to be interfered with. 28. Regarding Claim No. 2, learned Counsel for the objector again has repeated the same argument that this claim granted was also beyond the scope of the agreement between the parties. 28. Regarding Claim No. 2, learned Counsel for the objector again has repeated the same argument that this claim granted was also beyond the scope of the agreement between the parties. Clause 10-C (a), which has been referred to dispose of the Claim No. 2 runs as under : “(a) Price variation in labour cost: Price variation in labour cost shall be computed by the following two methods viz : (i) and (ii). The amount payable to/recover able from the contractor will be the amount computed either under (i) or under (ii) whichever is higher. (a) (i) If during the currency of the work, the minimum daily wage of unskilled labour increases/decreases as a direct result of coming into force any fresh law or statutory rule or order, as applicable to District Kinnaur (HP) a corresponding increase or decrease in payment to the contractor, shall be computed on the basis of the following formula : V=25% x R x W-Wo Wo Where V=the amount of variation payable to/recoverable from the contractor. R= Value of work done after the date of increase/decrease of daily wages during the quarter under review. W = Revised minimum daily wages. Wo = Minimum daily wages on the date of opening of tender. The above adjustment will be allowed only after taking a certificate from the contractor that revised wages referred to above have been actually paid to the labour by the contractor.” The parties are at variance with respect to the interpretation of the aforesaid clause and as a consequence thereof, this dispute has given rise to the two claims preferred by the claimant : Claim No. 2 (a) It is with respect to the minimum wage for working inside the Tunnel; and 2 (b) is with respect to taking the base rate of minimum daily wage as Rs. 7.25 in the formula for price variation in labour cost. 29. By accepting the claim of the claimant for minimum wage for working inside the tunnel, two notifications have been taken note of by the arbitrators. The first Notification was dated 18-9-1981, which fixed Rs 7.25 as the minimum daily wage and further gave an increase of 25% w. e. f. 1-1-1981 for the workers working in the tribal area of Kinnaur District. The second notification was dated 12-12-1984 which increased the rate of daily minimum wage to Rs. The first Notification was dated 18-9-1981, which fixed Rs 7.25 as the minimum daily wage and further gave an increase of 25% w. e. f. 1-1-1981 for the workers working in the tribal area of Kinnaur District. The second notification was dated 12-12-1984 which increased the rate of daily minimum wage to Rs. 10 plus 25% being the tribal area allowance for the Kinnaur District and another 20% for the workers working inside the tunnel w. e. f. 16-8-1984 The arbitrators have referred the following table showing the minimum daily wages payable to the unskilled labourers/ workers in terms of the relevant Notifications issued by the Himachal Pradesh Government from time to time : TABLE S.No. From To Daily wages Rs. Increase over Daily wages-Rs. For tribal area @ 25% For working inside tunnels & 20% (20% of Col. 4+5) Minimum daily wages Rs. (Total of Col. 4 +Col. 5+Col. 6 1 2 3 4 5 6 7 I. 1-1-81 16-12-82 7.25 1.81 Nil 9.06 2- 16-12-82 15-8-84 8.25 2.06 Nil 10.31 3. 16-8-84 13-8-86 10.00 2.50 2.50 15.00 4. 14-8-86 14-4-87 12.00 3.00 3.00 18.00 5. 15-4-87 31-12-88 15.00 3.75 3.75 22.50 6. 15-4-89 - 18.00 4.50 4.50 2700 7. 26-1-90 — 20.00 5.00 5.00 30.00 30. It has been the case of the claimant that in order to work oat the payment of escalation of price variation in the labour cost, in accordance with the formula given in Clause 10-C (a) of the Contract, the statutory minimum wage for the unskilled worker should be inclusive of the increase for the tribal area and that for the workers working inside the Tunnel should be applied w e. f. 16-8-1984. The contractor as such, claimed an amount of Rs. 38,17,268.00 in this regard Learned Counsel for the Board -has contended that the minimum wage of the unskilled labour was to be calculated as applicable in Kinnaur District where the tribal area allowance was admissible since 18-9-1981 and as such, the minimum wage of the unskilled labour, on the basis of any statutory increase in the tribal area was not permissible. 31. I think the aforesaid plea submitted on behalf of the Board is not to" be favourably considered. 31. I think the aforesaid plea submitted on behalf of the Board is not to" be favourably considered. There is no doubt that the contractor was bound to pay the statutory minimum wages notified by the Government from time to time to every worker working with it, in all the categories such as unskilled, skilled and semi skilled etc. The contractor has claimed the amount of variation payable with respect to unskilled labour. The Boards submission that the minimum wage of the unskilled labour on the basis of statutory increase in the tribal area after the date of submission of the tender i e 30-6-1982 was not permissible and was inconsistent with the formula laid down in Clause 10-C (a), will not hold good. Clause 10-C (a) opened with the words "if during the currency of the work, the minimum daily wage of "unskilled labour" increases/decreases as a direct result of coming into force of any fresh law or statutory Rule or order, as applicable to District Kinnaur, H P., corresponding increase or decrease in payment to the Contractor shall be computed on the basis of following formula". Thus, it was very much evident that the formula has been prescribed in connection with the increase/decrease in the minimum wage of the unskilled labour as a direct result of coming into force of any fresh Jaw or statutory Rule or order, during the currency of the work”. Needless to say, the currency of work was only after the date of submission of the tender, 32. It has also been submitted on behalf of the Board—that only a part portion of the unskilled labour was actually deployed underground and a major worked over ground, and on that account also, the arbitrators award, taking into consideration the labour having worked underground, was not legal. There is nothing brought on record on behalf of the Board —as to what was the actual labour working underground/over-ground. The arbitrators award and findings, in this behalf, do not require any interference, especially when according to the arbitrators, the main work to be executed by the contractor was underground. The occasional over ground work will not, in any way, effect the claim of the claimant in this particular behalf, more so, there is no specific evidence adduced by the Board—as to what was the labour employed by the contractor over ground. The occasional over ground work will not, in any way, effect the claim of the claimant in this particular behalf, more so, there is no specific evidence adduced by the Board—as to what was the labour employed by the contractor over ground. The arbitrators inferences cannot be said to be without any base in this particular behalf. The claim granted under Claim 2 (a), as such, does not require any interference. 33. There is no dispute on the factual side that on 30-6-1982, the minimum wages for Kinnaur District fixed by H. P. Government was Rs. 7.25 per day and Notification, in this behalf, had been produced before the arbitrators. It has been contended on behalf of the objector that the Notification under section 5 (2) of the Minimum Wages Act could be retrospective and the requirement, under the agreement clause, was satisfied even if there was an internal letter of the H. P. Government to the Board fixing the rate of minimum wages of Rs. 8.25 per day, as has been done in the present case, which aspect is stated to have been covered by Clause 19-A of Agreement, which runs as under : "Clause 19-A : Minimum Wages (a) The contractor shall pay not less than the minimum wage(s) for Kinnaur District notified by H. P. Government/HPSEB from time to time for various types of labourers engaged by him on the work. (b) The contractor shall, notwithstanding the provision of any contract to the contrary, cause to be paid not less than minimum wage to labourers indirectly engaged on the work, including any labour engaged by his sub-contractors in connection with the said work as such labourers had been in his immediate employment. (c) In respect of all labour directly or indirectly employed in the works for performance of the contractors part of this agreement, the contractor shall comply with or cause to be complied with, the HPPWD/HPSEB Contractors Labour Regulations made by Government/HPSEB from time to time in regard to payment of wages, wage period, deductions from wages, recovery of wages not paid and deductions unauthorisedly made, maintenance of wage books or wage slips, publication of scale of wages and other terms of employment, inspection and submission of periodical returns and all other matters of the like nature. (d) The Engineer-in-charge shall have the right to deduct from the moneys due to the contractor any sum required or estimated to be required for making good the loss suffered by a worker or workers by reasons of non-fulfilment of the conditions of the contract for the benefit of the workers, non-payment of wages or deductions made from his or their wages are not justified by their terms of the service/contract or non-observance of applicable Regulations. (e) Under the provision of Minimum Wages Act, 1948 and Minimum Wages (Central) Rules, 1950, the contractor is bound to allow or cause to be allowed to the labourers directly or indirectly employed in the works one days rest for six days continuous work and pay wages for the rest day at the same rate as for duty. In the event of default, the Engineer-in-charge shall have the right to deduct the sum or sums not paid on account of wages for weekly holidays to any labourer, and pay the same to the persons entitled thereto from any money due to the contractor by the Engineer-in-charge. (f) Visa-vis the Board, the contractor shall be primarily liable to all payments to be made under, and for the observance of the regulations aforesaid, without prejudice to his right to claim indemnity from his sub-contractors. (g) The regulations aforesaid shall be deemed to be a part of this contract and any breach thereof shall be deemed to be a breach of this contract.” 34. Here, in the present case, as referred to above, the order dated 3-5-1982 of the H. P. Government fixing Rs. 8 25 per day as minimum wage w. e. f. 1-4-1982 was neither gazetted nor it preceded by an inquiry, as contemplated by section 5 (2) of the Act and, thus, as argued on behalf of the claimant, could not be a Notification in its legal sense. During the proceedings before the arbitrators, it was represented on behalf of the Board that the order dated 3-5-1982 was a gazetted Notification and if it was not, it would not have any force of law and could not be enforced. This representation, even if factually correct, will not solve the legal proposition. 35. During the proceedings before the arbitrators, it was represented on behalf of the Board that the order dated 3-5-1982 was a gazetted Notification and if it was not, it would not have any force of law and could not be enforced. This representation, even if factually correct, will not solve the legal proposition. 35. The order dated 7-6-1982 was an order for labour engaged by the Board and not an act of inviting the contractor under the terms of the contract (Clause 19-A), as has been submitted on behalf of the claimant. The official communication of the H P. Government to the contractor clearly established the fact that the minimum wage on 30 6-1982 was Rs. 7.25, as per notification filed during the arbitration proceedings. Under Clause 19-A of the agreement, contractor was required to pay not less than the minimum wages notified by H. P. Government/HPSEB from time to time for various types of labourers engaged by contractor on work. Thus, the order of the Board issued must be with specific respect to the labour engaged by the contractor pertaining to work under reference, 36. There is no such order issued by the Board concerning the labour of the contractor. A general order with respect to labour of the Board will not bring this order under Clause 19-A at all. Thus this order of Board has to be ignored. 37. It has been contended on behalf of objector that under Clause 10-C the order dated 7-6-1982 has to govern the wages so far as the parties were concerned. 38. In the present case, the arbitrators have tried to interpret Clause IOC (a) as, according to this clause, the minimum daily wages of the labour, if during the currency of the work increased/decreased as a direct result of coming into force of any fresh law or statutory rule or order, as applicable to District Kinnaur (HP), a corresponding increase or decrease in payment to the contractor was to be made and that was to be calculated in the manner referred in the clause. 39. According to objector, the word “order" referred in Clause 10-C (a) included the order passed by the Board in this behalf, which only will govern the clause with respect to the increase and decrease of the minimum wages of the labourers. 39. According to objector, the word “order" referred in Clause 10-C (a) included the order passed by the Board in this behalf, which only will govern the clause with respect to the increase and decrease of the minimum wages of the labourers. On the other hand, it has been submitted on behalf of the claimant that the order to be passed, has to having force of law or statutory rule. The learned Counsels line of argument has been that the order should not be an administrative order, but an order passed under the Minimum Wages Act and in the present case, according to the learned Counsel, the arbitrators have interpreted the order to be passed not under the Minimum Wages Act and, therefore, their interpretation cannot be interfered with. 40. In a situation of present nature; where under Clause 10-C (a), the order passed in this particular behalf can be referred to an order passed under any statute or rule, the interpretation given by the arbitrators has to be accepted. Arbitrators were within their jurisdiction and authority to interpret this clause under the circumstances existing in a particular case. It could be so interpreted, as has been interpreted by them, and it could be so interpreted as is being put up by the Board. With this background, to interpret a particular clause agreed to between the parties in a particular manner, comes within the authority of the arbitrators and in this view of the matter, interpretation so made by the arbitrators cannot be said to be beyond the ambit and purview of Clause 10 C or Clause 19-A and, therefore, the price variance awarded in labour cost by the arbitrators in the present case, cannot be interfered with and has to be accepted to be within the ambit of the agreement. 41. The arbitrators have dealt with the aforesaid proposition in their award by interpreting the clause in the following manner : “..... The next argument of the counsel for the respondent is that the Office Order of HPSEB dated 7-6-1982 (Ext. C-14 (17) "enforces" the Government Order dated 3-5-1982 fixing the minimum wage rate for unskilled labour at Rs. 8.23 per day. The next argument of the counsel for the respondent is that the Office Order of HPSEB dated 7-6-1982 (Ext. C-14 (17) "enforces" the Government Order dated 3-5-1982 fixing the minimum wage rate for unskilled labour at Rs. 8.23 per day. In this connection he relied on Clause 19-C (a) of the Contract, the relevant portion of which reads : "The Contractor shall pay not less than the minimum wages for Kinnaur District notified by Himachal Pradesh Government HPSEB from time to time for various types of labourers engaged by him on the work”. Therefore, he says that the order of HPSEB dated 7-6-1982 enhancing the minimum wage from Rs. 7.25 to Rs. 8 25 for the unskilled workers has "all the legalities for enforcing these rates in the organisation and the same was issued well before the date of opening of the tenders i. e 30-64982". We are not able to appreciate this argument We have already held that the order dated 3-5-1982 was not a Notification A priori, it cannot override the rate fixed as Rs. 7,25 by the earlier Notification dated 18-9-1981 which was prevalent on the day of opening of the tender i, e 30-6-1982, We fail to understand as to how this order can be "enforced” by an executive fiat the Office Order of the HPSEB dated 761982 fixing the minimum wage at Rs 8.25 per day It is well settled law that an executive fiat cannot override the statutory instruments. Therefore, the office Order of HPSEB dated 7-6-1982 cannot be said to have "ail the legalities for enforcing" the minimum daily wage rate of Rs. 8 25. Besides, if this contention were correct, there was no need to issue the Notification dated 24-9-1992 purporting to amend the earlier Notification dated 15/16-12-1982 retrospectively fixing the minimum wage rate as Rs,, 7,25 "w. e. f. 1-4-1982", which the counsel relies on. According to him, in any case, by virtue of this Notification "w. e f. 1-4-1982", the minimum daily wage rate for unskilled labour, on the date of opening of the tender viz 30-6-1982 was Rs. 8.25 But as already discussed, in view of the law laid down by the Supreme Court, this Notification is ineffective It may also not be irrelevant to note here that the office of the Labour Commissioner of Government of H. P. itself, by its letter dated 3-11-1990 (Ext. 8.25 But as already discussed, in view of the law laid down by the Supreme Court, this Notification is ineffective It may also not be irrelevant to note here that the office of the Labour Commissioner of Government of H. P. itself, by its letter dated 3-11-1990 (Ext. C*7) addressed to the Contractor, has affirmed that the rate of minimum wage for unskilled labour on 30*6-1982 (the date of opening of the tender) were Rs 7,25 per day in view of the Notification dated 18-9-1981 (Ext. C-14 (1)............." 42. As pointed out earlier, so far as the calculations of the amount awarded by the arbitrators is concerned, there is nothing on record to suggest that those have not been correctly arrived at. Thus, this Court does not find any occasion whatsoever to interfere with the amount awarded under Claim Nos. 2 (a) and 2 (b) by the arbitrators 43. The objectors submissions for assailing Claim No. 3 has been that the arbitrators have travelled beyond their jurisdiction in awarding this amount, being beyond the scope of the agreement between the parties in this behalf. The arbitrators have awarded Rs 28,23,440 with respect to this Claim No. 3, which deals with extra lead for transportation of sand and boulders. 44. Two tentative sites have been shown in the drawing No, Bhaba, Spec-5 entitled "Tentative sites for Sand, Gravel and Boulders" appended to the contract Agreement for obtaining Sand/Aggregate/Boulders with the following foot note therein : "Adequate quantities of suitable Sand/Aggregate/Boulders may not be available from these sites and the contractor may have to resort to manufacturing of Sand/Aggregate or transport these materials from other distant sites.” Para 1.09 of the Technical Conditions further stipulated, "whenever natural sand conforming to specifications requirement is not likely to be available within economical reach, recourse has to be taken to manufacture stone sand of desired quality. The contractor shall comply with the direction of Engineer-in-charge in this behalf. No extra payment shall be made for use of manufactured sand for such change over. The contractor shall comply with the direction of Engineer-in-charge in this behalf. No extra payment shall be made for use of manufactured sand for such change over. The arbitrators, admittedly, have awarded the aforesaid amount under Claim No. 3 in utter violation of the aforesaid agreement between the parties, It has been very strongly contended on behalf of the claimant that as per evidence brought before the arbitrators, the aforesaid sand and other materials, were not available from the sites referred in the agreement and, therefore, contractor had no other alternative but to arrange for the same from another distant site and for that, in case the arbitrators have awarded some amount, it was rightly so done, under the circumstances present in this case. I think, this submission has to be ignored especially when, as pointed out earlier, it is the agreement between the parties which gives jurisdiction to the arbitrators to decide the disputes in the manner provided in the agreement. The aforesaid provision of the agreement between the parties, clearly stipulated that no extra payment shall be made for use of manufactured sand for such change over to the contractor and it has also been provided that the contractor may have to resort to manufacture of sand/aggregate or transport these materials from other distant sites. 45. Learned Counsel for the claimant has tried to take some support from (1995) 5 SCC 531, Trustees of the Port of Madras v. Engineering Constructions Corporation Ltd, In this reported case, the appellants contract with the respondent contractor was for the execution of works and the contractor required appellant to import machinery and supply the same to the contractor for execution of works. In this case, the contractor claimed compensation on ground of delay beyond six months on the part of appellant in importing and supplying the machinery. It was held that appellant was obliged to supply the machinery within a reasonable time in view of the principle underlying section 46 of the Contract Act and the delay of 12 months being unreasonable, contractor was entitled to compensation. 46. The ratio of the aforesaid case law will not at all be applicable to the facts of the present case. In this decided case, there was a stipulation in the agreement to supply some machinery within a reasonable period which was not so done and, therefore, the contractor suffered losses. 46. The ratio of the aforesaid case law will not at all be applicable to the facts of the present case. In this decided case, there was a stipulation in the agreement to supply some machinery within a reasonable period which was not so done and, therefore, the contractor suffered losses. In the present case, the stipulation between the parties was crystal clear, whereby the contractor was not to be paid any amount in case he had to resort to manufacturing of sand etc or transport these materials from other distant sites and no extra payment was to be made for use of manufactured sand for such change over. The arbitrators, as such, granted the claim in this regard, ignoring the agreement between the parties The arbitrators9 award, in this particular regard, suffers from jurisdiction and has to be Ignored legally. 47. Learned Counsel for the objector has contended that the arbitrators awarded interest at the rate of 18% per annum on the award amount from 31-7-1989 upto the date of the award, in contravention of Clause 9-C of the agreement and this direction being made without jurisdiction, has to be legally ignored Clauses 9-B and 9-C of the agreement deal with “No Claim Claim for Delayed Payment due to Dispute etc.” and “Interest on Money due to the Contractor". These run as under ; "Clause 9-B : No claim for delayed payment due to dispute etc The contractor agrees that no claim for interest or damages shall be entertained or payable by the Board in respect of any money or balances which may be lying with the HPSEB owing to any disputes, differences of misunderstanding between the parties or in respect of any delay or omission on the part of the Engineer in-charge in making intermediate or final payments or in any other respect whatsoever. Clause 9-C : Interest on money due to the contractor No omission on the part of the Engineer-in-charge to pay the amount due upon measurement or otherwise shall vitiate or make void the contract, nor shall be the contractor be entitled to interest upon any guarantee or payments in arrears nor upon any balance which may on the final settlement of his accounts be due to him." 48. At the cost of repetition, the parties right and liabilities and the power of arbitrators have to be gone into on the basis of the agreement between the parties. In the present case, there is a specific clause in the agreement whereby the interest could not be claimed for the claims referred by the claimant and the arbitrators could grant such an interest in the absence of any specific condition in this behalf. In case there was no condition provided in the agreement by the parties with respect to the payment of interest, in that event, the arbitrators would have acted within their jurisdiction to award interest and not otherwise. 49. Learned Counsel for the claimant has referred (1996) 1 SCC 516, Board of Trustees for the Port of Calcutta v. Engineers-De-Space-Age, wherein it has been held that arbitrator has jurisdiction to interpret the clause of the contract to decide whether interest pendente lite could be awarded by him thereunder. In this reported case, the facts were altogether distinct. The term of the contract merely prohibited the Commissioner from paying interest to the contractor for delayed payment, but once the matter went to arbitration/the discretion of the arbitrator was not in any manner stifled by this term of the contract and the arbitrator would be entitled to consider the question of grant of interest pendente lite and award the interest if he finds the claim to be justified. It was held in this reported case that in the aforesaid clause of the contract, the arbitrator was in no manner prohibited from awarding interest pendente lite. 50. In the present case, there has been specific conditions, as referred to in Clauses 9-B and 9-C, whereby contractor had agreed that no claim for interest or damages shall be entertained or payable by the Board in respect of any money or balances which may be lying with the Board owing to any disputes, differences or mis-understandings between the parties. It has also been specifically provided that the contractor shall not be entitled to interest upon any guarantee or payments in arrears nor upon any balance which may on the final settlement of his accounts be due to him. It has also been specifically provided that the contractor shall not be entitled to interest upon any guarantee or payments in arrears nor upon any balance which may on the final settlement of his accounts be due to him. Thus, in the present case, there is a direct bar in awarding interest in favour of the claimant for the claims submitted by him The arbitrators, as such, acted without jurisdiction, in violation of the aforesaid agreed terms of the contract. 51. It has been contended on behalf of the claimant that so far as the objection with respect to the interest awarded by the arbitrators is concerned, it has not been specifically taken in the objection petition and this specific objection being raised after the filing of the objection petition, would be without limitation and on this sole ground, it has to be ignored. 52. In the objection petition, the objector has prayed for setting aside of the entire award and their main plea has been that the award was not in accordance with the agreement between the parties. 53. Awarding of interest pendente lite of the arbitration proceedings, again, has to be taken note of on the basis of the terms of the agreement between the parties. As referred to earlier, arbitrators awarded interest, for which they had not been given any authority under the agreement by the parties. The award of this interest by the arbitrators is void, being without jurisdiction. It may not be disputed that suo motu Court cannot take any objection for setting aside the award, but the fact remains that an item of award having been made by the arbitrators, being without jurisdiction, is not only void, but amounted to misconduct of proceedings and also an error apparent on the face of record. In this view of the matter, the interest awarded by the arbitrators in favour of the claimant, has to be Ignored. 54. Thus, arbitrators power to award interest solely rests upon the conditions of the agreement in this particular behalf. Ordinarily, an arbitrator has the power to award interest, unless the award of interest was prohibited by the agreement. 55. On the basis of the aforesaid discussion, the award made by the arbitrators is set aside, except for the amount awarded in respect of Claim No. 2. The aforesaid issues stand decided accordingly, partly in favour of the objector. Ordinarily, an arbitrator has the power to award interest, unless the award of interest was prohibited by the agreement. 55. On the basis of the aforesaid discussion, the award made by the arbitrators is set aside, except for the amount awarded in respect of Claim No. 2. The aforesaid issues stand decided accordingly, partly in favour of the objector. No other point has been stressed. Relief 56. In view of the findings on the aforesaid issues, the present objection petition is partly accepted and except for the amount awarded under Claim No. 2, the other amounts awarded under Claims 1, 3 and the award of interest, are set aside. Parties to bear their own costs. Civil Suit No. 79 of 1993 57. On the basis of the aforesaid order in O, M P. No. 348 of 1993, the amount awarded under Claim No. 2, amounting to Rs 75,08,919.27 (Rupees seventy five lakhs, eight thousand nine hundred nineteen and paise twenty seven only) has been maintained. Accordingly, the award pertaining to the said amount is made the rule of the Court and as a consequence thereof, a decree for Rs. 75,08,919.27 (Rupees seventy five lakhs, eight thousand, nine hundred nineteen and paise twenty seven only) is passed in favour of the claimant and against the Board. The suit stands disposed of accordingly.