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1996 DIGILAW 470 (MAD)

State of T. N. v. Rao Constructions, Bangalore and Another

1996-04-09

ABDUL HADI, P.SATHASIVAM

body1996
Judgment :- ABDUL HADI, J. These three civil miscellaneous appeals under the Arbitration Act are by the State of Tamil Nadu and they are respectively against three separate orders all dated 4-10-1993 in O. P. Nos. 40, 41 and 42 of 1993 on the file of Principal Sub-Court, Madurai, filed by the Arbitrator (Mr. K. Thirunavukkarasu, Superintending Engineer, Public Works Department, now Chief Engineer posted as Director of Irrigation Management Training Institute on deputation) appointed under Section 14 of the Arbitration Act (hereinafter referred to as 'the Act'). He is the sole arbitrator to arbitrate in the three disputes between the respondent contractor (the claimant before the arbitrator) and the appellate State, represented by the Superintending Engineer, Periyar Improvement Circle. Pursuant to the said Section 14 in the said O.Ps. the said arbitrator sought for the Court below to receive his three different awards all dated 31-3-1983, and pass necessary decrees thereof. 2. The Court below has passed three different judgments and decrees in terms of the three different awards holding that the respondent could submit the relevant account details in accordance with the awards, to the appellant and receive the amounts due to it. It also held that the appellant is liable to pay 15% interest on the relevant amounts due from the date of the awards till realisation. 3. The abovesaid three different disputes related to three different works executed by the respondent pursuant to the agreement entered into between the appellant and the respondent which came into effect on 4-2-1991 for construction of link canal in the main scheme of modcrnisation of Periyar Vagai Irrigation System. The first dispute relates to the link canal from Km. 4 to Km. 8. The second dispute relates to the link canal from Km. 8 to Km. 11. The third dispute relates to the link canal from Km. 18 to Km. 22. As per the agreement between the parties the abovesaid work in each case, has to be completed by the contractor within 15 months, that is, by 3-5-1992. However, admittedly extensions were granted by the appellant to the contractor, due to causes which are attributable only to the appellant. 18 to Km. 22. As per the agreement between the parties the abovesaid work in each case, has to be completed by the contractor within 15 months, that is, by 3-5-1992. However, admittedly extensions were granted by the appellant to the contractor, due to causes which are attributable only to the appellant. In the case of first and third of three works to be executed, pursuant to the extensions granted, the works were completed on 31-10-83 and in the case of second of the abovesaid three works, pursuant to the extensions granted, the work was completed on 30-6-1993. In relation to the abovesaid three works, we are concerned in C.M.A. Nos. 1230 and 1231 of 1994, only with claim No. 1(a) and 1(b) in each of the said appeals and in C.M.A. No. 1232 of 1994 only with claim Nos. I, 2(a) and (b) 4(a) and 4(b) since the said claims alone were allowed by the arbitrator in favour of the respondent-claimant and the other claims were disallowed. We must also state that claim Nos. 1 (a) and 1(b) in each of the abovesaid first two appeals and claim Nos. 4(a) and 4(b) in the last appeal are of the same nature, while the abovesaid claim Nos.1 and the 2(a) and (b) in the last appeal are different. 4. In other words, one main common claim running through all the appeals is "whether the claimant is eligible for the payment of revised workable rates during the extended period of contract beyond 3-5-1992? If so, at what rate and amount?" * (This is the claim figuring as c1aim No. 1(a) in the first two appeals and claim No. 4(a) in the last appeal). The amounts claimed under this category in all the three appeals are respectively Rs. 69,08,820/- Rs. 7,62,516/- and Rupees 52,88,352.60. In relation to this main common claim, the arbitrator holds that the contractor is entitled to revised rates for the execution of the works during the extended period and fixes those rates for the different works so executed. 4A. The other common claim running through all the three appeals is only a consequential claim pursuant to the above referred to main common claim and relates to the interest on the abovesaid amounts. (This interest claim figures as claim No. 1(b) in C.M.A. Nos. 4A. The other common claim running through all the three appeals is only a consequential claim pursuant to the above referred to main common claim and relates to the interest on the abovesaid amounts. (This interest claim figures as claim No. 1(b) in C.M.A. Nos. 1230 and 1231 of 1994 and as claim No. 4(b) in C.M.A. No. 1232 of 1994). The amounts claimed by way of such interests in these three appeals are Rs. 1,38,176/-, Rs. 1,38,176/- and Rs. 2,11,534/-. 5. The other compendious claim which pertains only to C.M.A. No. 1232 of 1994 is actually dealt with as claim No. 1 and claim No. 2(a) and 2(b) as per the award. The said claim No. 1 is as follows :- "Whether clause 31 of the agreement is to be applied as approved by the World Bank Authorities in place of the modified clause? If so, the clause (s) thereon to be defined and interpretation of (sic: interpreted are) clauses 31 and 32 of the agreement." The abovesaid claim No. 2(a) is as follows :- " Whether the claimant is eligible for the payment of extra item of work executed due to variation of tendered quantities by thirty per cent within the agreed periced of contract of 3-5-92?. The abovesaid claim No. 2(b) relates to interest on claim No. 2(a) amount. As already indicated these claims are actually one compendious claim. With reference to the abovesaid claim No. 1, the contention of the claimant is that clause 31 of the agreement between the parties is, as it stands, a modified one, that it is ambiguous and that the said clause and the succeeding clause 32 must be interpreted properly in relation to rates applicable for excess quantity of work done by the contractor over 30% of the tendered quantity. Then, with reference to the abovesaid, claim No. 2(a), it must be stated that the use of the expression "extra item of work" used in setting out the abovesaid claim is not quite appropriate since the said expression should actually read as "excess quantity of work". This claim No. 2(a) speaks only of "variation of tendered quantities by thirty per cent". This claim No. 2(a) speaks only of "variation of tendered quantities by thirty per cent". But, the award, apart from holding that for the variation upto thirty per cent, there is no revision in the rates at all, holds that for variation beyond thirty per cent, the contractor is entitled to revised rates and fixes the said revised rates, which are further held to be "subject to price adjustment under clause 54 of the agreement. 5A. The contractor's demand in relation to the abovesaid compendious claim is for a sum of Rs. 1,39,79,588/- and the interest claimed thereunder is for a sum of Rs. 13,07,958/-. 6. Thus, while the abovesaid main common claim in all the three appeals relates to rates for the work done during the extended period beyond 3-5-1992, the cocompendious claim which is peculiar to C.M.A. No. 1232 of 1994 alone, is regarding rates for excess quantity of work done. 7. The decision on the ahovesaid consequential common claim relating to interest depends on the decision on the other main common claim. With reference to the said interest, even now it may be stated that though the respondent claimed interest at the rate of 24 per cent per annum, the arbitrator only partly allowed it, fixing the said rate at 15 per cent per annum from the date of the award (31-3-1993) till date of decree or realisation, whichever is earlier. Likewise, in relation to interest claimed in the abovesaid claim No.2(b) in C.M.A. No. 1232 of 1994 also, same rate of 15 per cent per annum was granted by the arbitrator. 8. Thus, in respect of the abovesaid main and consequent common claims the arbitrator did not actually arrive at the actual amounts due to the contractor, but only fixed the rates for arriving at the amounts due. Likewise, even in respect of the compedious claim peculiar to C.M.A. No. 1232 of 1994, the arbitrator initially held," the rates for extra item of work be fixed afresh 'irrespective' of item rate quoted in the agreement"(Emphasis supplied) (Actually speaking, these rates are not for" extra item "of work, but for the extra quantity' of work done in excess, by more than 30%) Then the arbitrator also specially fixed those rates and also added that those rates are further subject to price adjustment clause. 8A. The said expression "subject to" used by the arbitrator is rather ambiguous. 8A. The said expression "subject to" used by the arbitrator is rather ambiguous. It may be argued that in no case, the amounts arrived at, taking into account the revised workable rates fixed by the arbitrator for the different works executed beyond the extended period, can exceed the amount that could be arrived at subject to the price adjustment clause under clause No. 54. Then the expression "subject to" may also convey the idea of a provision yielding place to another provision or other provisions, to which it is made subject. (Vide South India Private Ltd. v. Secretary, Board of Revenue, 1964 (4) SCR 281, 1964 AIR(SC) 207, 1964 (4) SCR 280 , 1964 (15) STC 74, 1963 (2) KerLR 312. But, in what sense the arbitrator has used the arbitrator has used the said expression "subject to" is not clear. 8B. Thus, in all the appeals, only because the rates alone have been fixed, which are stated to be subject to price adjustment clause, the court below, which chooses to pass decrees in terms of the awards, concludes that the respondent contractor could submit the relevant account details in accordance with the awards to the appellant and receive the amounts due to it. 9. It must also be stated at the outset, that the appellant has not filed any separate petition under Section 30 of the Arbitration Act to set aside the awards and that however it is agreed even by learned Counsel for the respondent that the counter filed by the appellant in each of the O.Ps. under Section 14 of the Act could be treated as such petitions under Section 30 of the Act, provided no contention is raised by the appellant that there is no "plea" by the respondent repudiating the contentions in the abovesaid counter in each of the O.Ps. Even before the Court below, it appears that oral arguments alone were made by the respondent against the contentions in the abovesaid counter to each of the O.Ps. Accordingly, on the abovesaid footing, we shall now consider the rival claims to see how far Section 30 of the Act could be invoked. 10. Now, let us see the rival contentions on the abovesaid main common claim. Accordingly, on the abovesaid footing, we shall now consider the rival claims to see how far Section 30 of the Act could be invoked. 10. Now, let us see the rival contentions on the abovesaid main common claim. First of all it must be stated that the eligibility of the respondent for a higher amount for the work done during the above extended period, is not questioned by the appellant. But the contention of the appellant is that the arbitrator has misconducted himself (as spoken to in Section 30(a) of the Act) in the manner in which he has quantified the abovesaid higher amount due. Learned counsel for the appellant, after pointing out the following provision is clause 52 of the agreement, viz.," * All awards shall be in writing and in case of awards amounting to Rs. 1,00 lakhs and above, been such awards shall state reasons for the amounts awarded ", submits that despite the abovesaid provisions, the arbitrator has not given any reason for concluding that at certain particular rates, the different types of works executed by the contractor during the said extened period, should be pair by the appellant. Just to illustrate, he points out that for excavation for canal cutting, etc., in all soils, except rock requiring blasting, the agreed rate per unit of 1 M3 during the contract period is Rs. 10/- or Rs. 11.78 as the case may be the rate demanded by the respondent for the extened period is Rs. 35/- and the rate awarded for the extended period by the arbitrator is Rs. 20/-. This rate of Rs. 20/- has been arrived at by the arbitrator according to learned Counsel for the appellant, arbitrarily without giving any reason for fixing it at the said figure. Likewise, in each of the different works to be executed, according to the said learned counsel, the award rates have been arbitrarily fixed without giving any raason for fixing them at different rates very much higher than the agreed rates during the contract period. 11. That apart he also points out that only the arbitrator has fixed at such higher rates without assigning any reason, he has also concluded by saying that the abovesaid rates shall be paid" * subject to price adjustment under clause 54 and 54A of the agreement between the parties. 11. That apart he also points out that only the arbitrator has fixed at such higher rates without assigning any reason, he has also concluded by saying that the abovesaid rates shall be paid" * subject to price adjustment under clause 54 and 54A of the agreement between the parties. "The said clause 54 provides for price adjustment if there is any increase of decrease in the rates of labour material, P.O.L. (Petrol, oil, lubricants), where the period of completion of the work under the contract as per tender document is "more than 12 months". (Under the contract between the parties, as agreed to.) Originally, it has to be completed within 15 months from 4-2-1991). The said clause provides for the abovesaid price adjustment by following a particular formula specified therein. The said clause also provides that the said price, adjustment" * shall be applicable only for the work that is carried out within the stipulated time or extension thereof due to reasons as are not attributable to the contractor. "(Emphasis supplied). According to the said learned Counsel, the abovesaid rider in the award, "subject to price adjustment under clause 54 and 54A", would further increase the amounts to be paid to the contractor. According to him, only the price adjustment clause, viz., clause 54 should have been applied for giving a higher rate to the contractor for the works done by' him during the abovesaid extended period. 12. On the other hand, learned Counsel for the respondent submits that on reading the awards of the arbitrat or, it could be at least impliedly held that the reason for fixing the abovesaid award rates, could be found from the judgments rclied on by learned Counsel for the respondent before the arbitrator and referred to in the awards of the arbitrator, themselves. Those judgments are (1) an unreported judgment of Karnataka High Court in M.F.A. 2317 of 1986 and (2) State of Karnataka v. R. N. Shetty and Co. (1LR 1990 Kar 1309) (corresponding to AlR 1991 Kar 96 (DB)). According to the said learned counsel there is no error in the arbitrator having stated that the said rates fixed by him are "subject to price adjustment under clause 54 and 54A". 13. (1LR 1990 Kar 1309) (corresponding to AlR 1991 Kar 96 (DB)). According to the said learned counsel there is no error in the arbitrator having stated that the said rates fixed by him are "subject to price adjustment under clause 54 and 54A". 13. We have considered the rival submissions in this regard and we conclude that the subntission of learned counsel for the appellant on this aspect merits acceptance for the following reasons : 14. Before we give the reasons, we shall first extract the relevant portions in the awards of arbitrator. The said portions are the same in the awards relating to C.M.A. Nos. 1230 and 1231 of 1994, and even in the award relating to C. M.A. No. 1232 of 1994, it is almost the same. In the above circumstances, we extract oniy the relevant portior in the award in reation to C.M.A. No. 1230 of 1994, which is as follows:- " * During arguments, the advocate for claimant pleaded for new workable rates for execution of work beyond 3-5-1992 by quoting the unreported judgment of Karnataka High Court in M.F.A. 2317/86 and the judgment reported in ILR 1991 (1) ARBLR 334 , 1991 AIR(Kar) 96. 1991 (1) ARBLR 334 , 1991 AIR(Kar) 96 (DB) (supra) is referred since even according to learned Counsel for the respondent, both are similar. In 1991 (1) ARBLR 334 , 1991 AIR(Kar) 96 (supra) no doubt, there are certain similarities as in the present case. The contract in question therein was entered into on 7-1-1980 and the time stipulated for executing the contract was 30 months and the work was to be completed on 23-7-1982. Extension of time to perform the contract was granted up to 31-3-1985. There too, there was a price adjustment clause, more or less similar to the present case and the said clause there was, clause 19A and the contention of the Government therein was also that the arbitrator therein has wrongly grainted" * extra rates over the tendered items as if that was extra work done and also added escalation charges to it virtually amounting to double payment to the contractors. " 15A. " 15A. But learned Counsel for the appellant herein drew our attention to the following passage in the said judgment :- " * Although the arbitrators have termed that damages have to be paid on account of the delay caused on the part of the appellants what really has happened is that the rates prevalent and accepted by the department have been adopted as per the rate analysis filed by them. They have made detailed calculations with reference to the rates worked out by the parties and thereafter arrived at their conclusions. "15B. From this, the said learned counsel points out the distinguishing features in the above said Karnataka decision. In other words, he emphasized that there the rate analysis was filed by the Government department itself and that was also accepted by them. But, in the present case admittedly such rate analysis has been filed only by the contractor and the said analysis has not been accepted, but opposed by the appellant. The submission of learned counsel for the respondent that as against the analysis report filed by the respondent, the appellant should have filed an alternative claim, giving its own rates applicable in the abovesaid main common claim, but that it failed to do so, has no merit, since in fact the contention of the appellant is that no fresh workable rates could be arrived at for the work done during the extended period and that only the abovesaid price adjustment clause 54 must be applied to give higher amounts to the contractor for the work down by it during the abovesaid extended period. Further, learned counsel also points out from the above referred to extracted passage in the Karnataka decision that the Arbitrators therein had made" * detailed calculations with reference to the rates worked out by the parties and thereafter arrived at their calculations. "Learned counsel also points out that such detailed calculations had not been made at all in the present case for arriving at the conclusions reached by the Arbitrator herein. Further, learned counsel for the Appellant also points out that the said detailed calculations in the said case should have been inter alia, made in the context of the local conditions prevailing in the Karnataka State and it cannot also be said that the same conditions are prevailing in the present case in Tamil Nadu. Further, learned counsel for the Appellant also points out that the said detailed calculations in the said case should have been inter alia, made in the context of the local conditions prevailing in the Karnataka State and it cannot also be said that the same conditions are prevailing in the present case in Tamil Nadu. For all these reasons, learned counsel for the appellant submits that the said Karnataka decision or the reasonings therein cannot be adopted in the present case. 16. We see great force in this argument of learned counsel for the appellant. Not only the Arbitrator in the present case has not given any reason for coming to the abovesaid conclusion reached by him regarding the rates arrived at by him, but it cannot also be implied that the reasoning and the decision in the abovesaid Karnataka case have been applied by him in the present case. It is so, particularly in view of the fact that there are the above referred to distinguishing features between the said Karnataka case and the present case. The Court below also erred in holding that the reasoning in the said Karnataka decision could be applied to the present case and that the Arbitrator has given reason for coming to his conclusion. Therefore, the matter is only to be remitted back to the Arbitrator for himself giving the reason as contemplated in clause 52 of the agreement. 16. Further, as already pointed out, in clause 54 it is specially provided that the said clause shall be applicable for the work carried out by the contractor not only within the stipulated time, but also within" * extension thereof due to reasons as are not attributable to the contractor. "In the present case, there is now no dispute that the extension was necessitated not because of any default on the part of the contractor. But only because of the reasons attributable to the appellant. Therefore, the Arbirator should have also considered whether and how far in the light of the abovesaid provision in clause 54, a revised rate has to be applied in the present case in granting a higher amount to the contractor for the work done by him during the abovesaid extended period. But, he has not considered so. Therefore, the Arbirator should have also considered whether and how far in the light of the abovesaid provision in clause 54, a revised rate has to be applied in the present case in granting a higher amount to the contractor for the work done by him during the abovesaid extended period. But, he has not considered so. Thus, the Arbitrator has not only not given the reason as stipulated in clause 52 of the agreement, but he has also omitted to consider the abovesaid aspect. Therefore there is no difficulty in holding that the Arbitrator has misconducted himself as per Section 30(a) of the Act. 17. Learnd counsel for the appellant also drew our attention to Associated Engineering Co. v. Govt. of A. P., 1992 AIR(SC) 232, 1991 (2) ARBLR 180 , 1991 (2) BC 375, 1991 (3) CompLJ 86, 1991 (3) CCC 41, 1991 (3) JT 123 , 1991 (2) Scale 50 , 1991 (4) SCC 93 , 1991 (2) SCR 924 , 1991 (2) UJ 347 which dealt with a jurisdictional error committed by the Arbitrator. In the present case also, in the light of the abovesaid discussion. It is clear that the Arbitrator has committed another kind of jurisdictional error. 18. In the light of the above discussion, and in the view taken by us it is clear, to us that the decision relied on by learned counsel for the respondent in Indian Oil Corporation Ltd. v. Indian Carbon Ltd., 1988 AIR(SC) 1340, 1988 (1) ArbLR 394 , 1988 (2) JT 212 , 1988 (1) Scale 965 , 1988 (3) SCC 36 , 1988 (3) SCR 426 , 1988 (2) UJ 91 , 1988 (1) KLJ 797 has no application to the present case. The observation therein is as follow, (At p. 1343, Para 8):- " * The arbitrator has made his mind known on the basis of which he has acted; that, in our opinion, is sufficient to meet the requirements even if it is reasons should be stated in the award. It is one thing to say that reasons should be stated and another thing to state that a detailed judgment be given in support of an award. Even if it be held that it is obligatory to state the reasons, it is not obligator to give a detailed judgment. It is one thing to say that reasons should be stated and another thing to state that a detailed judgment be given in support of an award. Even if it be held that it is obligatory to state the reasons, it is not obligator to give a detailed judgment. " As we have already seen in the present case, the arbitrator has not made his mind known at all for coming to the above said conclusions he reached. In other words, he has not given any reason at all for the above said conclusions he had reached disregarding the abovesaid provision in clause 52 of the agreement. 19. Likewise the decision in M/s. Naraindas P. Israni v. Union of India, 1993 (1) ARBLR 233 , 1993 AIR(Del) 78 relied on by learned counsel for the respondent has also no application to the present facts. In the said Delhi judgment also, only a similar observation as found in the above referred to Supreme Court decision is found, viz., that the arbitrator is not required to give a detailed judgment and that it is enough if he gives out the trend of his thought process. It is clear in the present case, that the arbitrator has not given the trend of his thought process, he having not given any reason, as stated above. 20. The decision in M/s. Sudarsan Trading Co. v. Govt. of Kerala, 1989 AIR(SC) 890, 1989 (2) ArbLR 6 , 1989 (1) CompLJ 289, 1989 (1) JT 339 , 1989 (1) Scale 395 , 1989 (2) SCC 38 , 1989 (1) SCR 665 , 1989 (2) UJ 26 , 1989 (1) KLT 534 relied on by learned counsel for the respondent also has no relevance to the present case. In the said decision it is not stated that there was stipulation under the contract between the parties that the reasons must be given by the arbitrator for the conclusion he reaches. But, in the present case, as already mentioned, the contract itself provided that such reasons should be given for the conclusion the arbitrator reaches. On the other hand, it has been held in 1987 AIR(Delhi) 197 (DB), College v. Jaitely. That when the agreement between the parties, provide for the arbitrator giving reason, the arbitrator misconducts himself under Section 30(a) of the Act, if he does not gives reason for the award. 21. On the other hand, it has been held in 1987 AIR(Delhi) 197 (DB), College v. Jaitely. That when the agreement between the parties, provide for the arbitrator giving reason, the arbitrator misconducts himself under Section 30(a) of the Act, if he does not gives reason for the award. 21. The decision in Santa Sila v. Dhirendranath, 1963 AIR(SC) 1677, 1964 (3) SCR 410 relied on by learned counsel for the respondent has no application to the present case. No doubt, the observation there was; " * . . . . . . . . a Court should approach an award with a desire to support it, if that is reasonably possible. . . . . " But in the present case, it would be quite clear from our discussion above that it is not "reasonably possible" to support the present awards on the abovesaid main common claims. 22. Likewise, Delhi Municipal Corporation v. M/s. Jagan Nath Ashok Kumar, 1987 AIR(SC) 2316, 1987 (2) ArbLR 344 , 1987 (4) JT 25 , 1987 (2) Scale 695 , 1987 (4) SCC 497 , 1988 (1) SCR 180 , 1988 (1) UJ 226 relied on by learned counsel for the respondent also has no application to the present facts. There, the observation was, that the reasonableness of reasons given by an arbitrator in making his award cannot be challenged. But, in the present case, no reason at all has been given as already explained. 23. Accordingly, the award so far as the abovesaid claim 1(a) in both C.M.A. No. 1230 of 1994 and C.M.A. No. 1231 of 1994 and in so far as the abovesaid claim No. 4(a) in C.M.A. No.1232 of 1994 are concerned, are liable to be set aside and the matter has to be remitted back to the arbitrator to pass a fresh award in this regard in the light of our abovesaid observations. 24. With reference to the other consequential common claim relating to interest (in so far as the corresponding claim No. 1(b) in C.M.A. No. 1231 of 1994 and claim No. 4(b) in C.M.A. No. 1232 of 1994 is concerned) no argument was made for any alteration of the abovesaid 15% rate of interest. Accordingly we have to confirm the said rate. 25. Now coming to the compensation claim peculiar to C.M.A. No. 1232 of 1994, (namely claim Nos. Accordingly we have to confirm the said rate. 25. Now coming to the compensation claim peculiar to C.M.A. No. 1232 of 1994, (namely claim Nos. 1 and 2(a) and (b) as already indicated) the answer to the question involved, rests on the interpretation to be put on clauses 31 and 32 of the agreement between the parties. The materials portions of the said clauses are as follows:- Clause 31 : Schedule of Quantities:- " * ...Variation in the cluantities of work in the Bill of quantities shall not vitiate the contract. . . should quantities of work actually involved under any item exceed quantities provided in the tender by more than thirty per cent the rate of such excess over thirty per cent of quantity provided in the tender may be revised in accordance with the procedure indicated under clause "Extra Items"(This clause under the heading Extra Items' is clause 32). However the said revised item rate shall not exceed the item rate quoted subject to ajustment in accordance with price adjustment clauses. . . . . . (Emphasis supplied) Clause 32 Extra Items:- "Extra items of work shall not vitiate the contract. The contractor shall be bound to execute extra items of work as directed be the Engineer-in-charge. The rates for extra items are to be mutually agreed." * 26. While interpreting these two clauses, the arbitrator, after extracting the said clauses and setting out the argument of learned counsel for the respondent herein before him (on the footing of two other Karnataka judgments, one unreported and another reported in Govt. of Karnataka v. K. Sudhakar Reddy, 1992 ILR(Kant) 3276, and setting out the argument of learned counsel for the appellant herein, gives out his findings thus:- "Here the question involved is about the workable rate for executing certain items of work quite in excess of the deviation limit of plus or minus thirty percent over the tendered quantity. The tenderer comes prepared to execute hundred per cent of the work with the risk of plus or minus thirty per cent of devivation limit and quotes the rate; but after starting the work as per original agreement programme, the claimant has been asked to do enormous quantity of work. For instance as against the agreement quantity of 1700 MS of hard rock requiring blasting the claimant has to execute 17329.93 MS. For instance as against the agreement quantity of 1700 MS of hard rock requiring blasting the claimant has to execute 17329.93 MS. Such an execution of unexpected huge quantity will upset the very basic programmes drastically based on which, the rate was originally quoted. In such a context when a contractor is bound to execute extra item of work as per clause 32 with a clear stipulation that the rate for extra items be mutually agreed" * , it is certainly reasonable to revise the rate realistically and consistently with the changed working conditions and programme; on merits of the item of work execute. Consequently, a workable basic rate for extra item of work has to be fixed afresh irrespective of the rate quoted in the tender. Over such a revised rates, the price adjustment will be applied according to the period construction of the item of work. Hence, the rider appearing in the fourth sentence of clause 31 reading "however the said revised item rate shall not exceed the item rates quoted" has to be necessarily ignored. "(Emphasis supplied). No doubt, he also adds that the argument for and against the question as to whether clause 31, as adopted in the agreement, was approved by the World Bank Authority is not relevant to decide the issue. 27. Now, that learned counsel for the appellant submits is that the arbitrator cannot ignore a particular term in the contract between the parties. In this connection, the said learned counsel also points out that the abovesaid Karnataka decision particularly, 1992 ILR(Kant) 3276 (supra), which is only similar to the earlier above referred to unreported Karnataka decision, have no application to the present case, since clause 31 in the present case and clause 31 in the abovesaid Karnataka decision 1992 ILR(Kant) 3276 are not identically similar. He points out that in the abovesaid fourth sentence in the present clause 31, there is also the clause" * subject to adjustment in accordance with the price adjustment clauses, which is not there in the corresponding clause 31 in the above said Karnataka decisions. Though clause 31 in the Karnataka case is similar in other respects to the present clause 31, according to him, there is a vital' difference with reference to the abovesaid fourth sentence in both the clauses. 27A. Though clause 31 in the Karnataka case is similar in other respects to the present clause 31, according to him, there is a vital' difference with reference to the abovesaid fourth sentence in both the clauses. 27A. We also find that in the Karnataka clause 31, the said fourth sentence reads thus; "However, the revised rate for the excess quantity shall not exceed the item rate quoted. But, in the fourth sentence in the present clause 31, apart from stating so, the abovesaid rider "subject to adjustment in accordance with the price adjustment clauses" is also there after the expression item rate quoted. No doubt, the observation in 1992 ILR(Kant) 3276 (supra) is as follows: " * If this sentence (beginning with the abovesaid word however') relied upon by the learned Government advocate "no doubt incorporated in clause 31, is to be given effect to, thereunder no circumstances could the contractor be paid anything over and above the tendered rate, whatever be the excess quantity of work that he may have to turn out. If that was all the intendment of the parties, then instead of fixing the deviation limit at 30% a clause whatever be the excess quantity of work that the contractor may be expected to turn out, he would be entitled to only at the tendered rate, would have been incorporated in this clause and nothing more could have been incorporated. If we accept this contention of the learned Government advocate, this fixing of this deviation limit at 30% would be rendered practically meaningless." * According to learned counsel for the appellant in the present case, the abovesaid reasoning in the Karnataka decision, is not applicable to the present case in view of the fact that in the abovesaid fourth sentence beginning with the word "However", the abovesaid "clause""subject to adjustment in accordance with the price adjustment clauses" is also added. But, it is not there in clause 31 of the abovesaid Karnataka case. Further, learned counsel for the appellant submits that even though the Arbitrator does not specifically say that he is following the reasoning in the abovesaid Karnataka case, he has actually done so without noticing the abovesaid difference in the present clause 31 compared with clause 31 in the Karnataka case. 28. We see great force in this agreement of learned counsel for the appellant. 28. We see great force in this agreement of learned counsel for the appellant. It cannot be said in the present case, as has been concluded in the abovesaid Karnataka case, that the rate for extra quantity of work, under no circumstances, could be over and above the original tendered rate. 29. That apart, it must be noted that what is initially stated in the abovesaid clause 31 is that the revised rate for the extra quantity of work has to be arrived at "in accordance with the procedure indicate under clause Extra items' (that is, clause 32). But, on reading the Karnataka judgment, it is not clear that actually is clause 32 there, since the said clause has not been extracted in the said judgment. Further, one observation in the Karnataka case is as follows:- "What is an extra item. . . . .has been dealt with in clause 32." But in the present case, clause 32 does not say what is an extra item. Thus, there are dissimilarities between the present case and the abovesaid Karnataka judgment, reported in 1992 ILR(Kant) 3276 also, so the Court below also erred in justifying the arbitrator's award in this regard on the footing that his award is based on the abovesaid Karnataka decision. 30. Further, in the present case, what is stated in clause 32, is the rates, for extra items' are to be mutually agreed'. So, even for clause 31 to operate, it has to be seen initially whether there is the mutual agreement between the parties regarding the rate for extra quantity of work to be executed pursuant to clause 31. Then, what is stated in clause 31 by virtue of the abovesaid fourth sentence is that even when such mutual agreement is there, the said agreement could not provide a rate exceeding the original item rate quoted subject to adjustment in accordance with the price adjustment clause. 30A. In the view thus taken, there is no inconsistency in interpreting clause 31 and clause 32 and there is no scope for ignoring the abovesaid fourth sentence in clause 31. It cannot also be said that the Arbitrator's interpretation' is a possible view'. 30A. In the view thus taken, there is no inconsistency in interpreting clause 31 and clause 32 and there is no scope for ignoring the abovesaid fourth sentence in clause 31. It cannot also be said that the Arbitrator's interpretation' is a possible view'. Therefore, the Supreme Court decision reported in 1989 AIR(SC) 890, 1989 (2) ArbLR 6 , 1989 (1) CompLJ 289, 1989 (1) JT 339 , 1989 (1) Scale 395 , 1989 (2) SCC 38 , 1989 (1) SCR 665 , 1989 (2) UJ 26 , 1989 (1) KLT 534(supra) holding that" * if on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court in the manner done by the High Court in the instant case, "has no application to the present case. Therefore, such ignoring by the Arbitrator is also without jurisdiction and it is not a mere case of interpretation by the arbitrator, which could be argued has not calling for interference under Section 30 of the Act. No doubt, if there is inconsistency between two provisions of the agreement, if the Arbitrator in interpreting the said two provisions, ignores one of the two, there may be scope for considering whether such award could be interfered with by the Court under Section 30 of the Act. But, that is not the case here. No doubt as it stands there is no mutual agreement spoken to in clause 32 above. The arbitrator also says in the initial portion of his award thus:- " * There were considerable amount of variation in execution of scheduled quantity of works. The demand for extra rates by the claimant were settled. There was also difference of opinion about the interpretation of clauses of agreement. Thus disputes arose. . . ." (Emphasis supplied) In the circumstances, here also, the matter has to be remitted back to the arbitrator to see whether, if no mutual agreement is there, at least now he could impose a reasonable rate contemplated under clause 31 read with clause 32 and to see how far the said reasonable rate could be made subject to prove adjustment clause No. 54. 31. 31. The net result, is these appeals are allowed and the judgments and decrees of the Court below and the awards of the arbitrator in so far as different claims allowed are concerned, are set aside subject to one qualification that with reference to interest, the rate of 15% per annum fixed by him shall stand and the said rate has to be applied from the date of the award till realisation, and the matter is remitted back to the Arbitrator for fresh disposal in the light of the observations made above. No costs. 32. Despite our order dated 3-4-1996, delivered subsequent to the delivery of the principal judgment on the same day. In these City Miscellaneous Appeals, we are not convinced even after hearing both the counsel that the matter should necessarily be taken up again only by a different arbitrator, other than the above referred to Mr. K. Thirunavukkarasu, who was the Superintending Engineer, Public Works Department, at the time when the reference for arbitration was made, particularly in the light of the guidelines we have given in our judgment. Accordingly, the matter is remitted back to the same Arbitrator, Mr. K. Thirunavukkarasu, who is now said to be holding the post of the Chief Engineer as Director of Irrigation Management Training Institute (on deputation). Order accordingly.