R. R. K. TRIVEDI, J. This appeal under Section 39 of the Arbitration Act, 1940 (here-in-after referred to as Act), has been preferred against the judgment and order dated 18th May, 1992 passed by I Additional Civil Judge, Saharanpur in Suit No. 198 of 1991, whereby the objections of the appel lants against award dated 26th February, 1991 have been rejected and the award has been made the rule of the Court with costs. 2. The facts giving rise to this appeal are that vide agreement No. CWC/cc/ 7/sre-B. D.-45000 M. T. /80/81/890 dated 12th August, 1980, plaintiff-respondents M/s Harnam Singh and Company were as signed the work for construction of 45,000 M. T. C. godowns and other allied/related constructions at Central Warehousing Pilkhani, Saharanpur. A contract agree ment to the aforesaid effect was signed by the parties on 3rd Sep. , 1980. The total con tract was for 1,29,36,000. The work was to be completed in 18 months i. e. by 12th February, 1982. As per agreement, the con tractor started work for completing the work, time was extended firstly upto 12 August, 1982 then upto 23rd November, 1982. The last extention was granted on 18th January, 1983 extending time upto 28th March, 1983. However, a show- cause notice was served on respondents on 31st January, 1983 that the progress of the work is unsatis factory and why the contract may not be rescinded. Thereafter, vide order dated 21st February, 1983 the contract was rescinded. Aggrieved by the aforesaid order, respon dent contractor on 26th February, 1983 filed Original Suit No. 93 of 1983 for declaration that the order rescinding the contract is illegal and void and for injunction restrain ing appellants not to interfere in completing the work. In the aforesaid suit, a temporary injunction was granted in favour of contrac tor on 7th March, 1983 directing appellants not to interfere upto 28th March, 1983. Against the aforesaid order of the tem porary injunction, appellants filed First Ap peal from Order No. 159 of 1983 in this Court. The Division Bench of this Court by order dated 23rd March, 1983 stayed the operation of the order dated 7th March, 1983 passed by the learned Civil Judge. In this suit, appellants filed an application u/s. 34 of the Act requesting to stay proceedings in view of the Arbitration Clause No. 25 in the agreement. The Division Bench of this Court by order dated 23rd March, 1983 stayed the operation of the order dated 7th March, 1983 passed by the learned Civil Judge. In this suit, appellants filed an application u/s. 34 of the Act requesting to stay proceedings in view of the Arbitration Clause No. 25 in the agreement. The respondents, on the other hand, made an application on 30th April, 1987 for referring the dispute u/s. 21 of the Arbitration Act. The learned Civil Judge vide order dated 4-5-1987, rejected the application of the respondents for refer ring the dispute u/s. 21 of the Act and stayed proceedings of the suit u/s. 34 of the Act. 3. The respondents then filed a suit under Section 20 of the Act on 5th May, 1987 which was registered as O. S. No. 251 of 1987. While the suit was pending, the Managing Director, Central Warehousing Corporation vide order dated 14th July, 1987, appointed Sri M. C. J. Jauhari as ar bitrator and referred the dispute of the par ties for his decision. Under this reference, claims No. f, h, i and j of respondents were referred. However for remaining claims namely, a, b, c, d, e, and g the reference was refused on the ground that they are excepted matters as per the contracted agreement. On this reference, notices were issued by the Arbitrator on 2nd August, 1987 to the par ties on behalf of the appellants a counter claim was filed on 11th August, 1987 then Arbitrator passed an order dated 11th March, 1987 directing parties to obtain or ders from the Court m the suit pending under Section 20 of the Act i. e. Original Suit No. 251 of 1987. The learned Civil Judge by order dated 27th May, 1989 allowed the application partly. Learned Civil Judge referred all the claims mentioned in para graph No. 21 of the application for con sideration of the Arbitrator and by this order six months time was granted to the Arbitrator to give an award. The order dated 14th July, 1987 passed by the Managing Director appointing Arbitrator was ac cepted and the claim of the respondents for appointing some body else as Arbitrator was rejected. 4. After the order dated 27th May, 1989 passed by the learned Civil Judge, appellants again filed fresh counter claim on 16th October, 1989. The order dated 14th July, 1987 passed by the Managing Director appointing Arbitrator was ac cepted and the claim of the respondents for appointing some body else as Arbitrator was rejected. 4. After the order dated 27th May, 1989 passed by the learned Civil Judge, appellants again filed fresh counter claim on 16th October, 1989. Against this counter claim, an objection was filed by the respon dents. The Arbitrator after hearing the par ties by order dated 10th December, 1989 referred two questions of law under Section 13 (b) of the Act to the civil court. The two questions were as under: " (1) Whether the counter claim filed by the respondents (appellants herein) is maintainable and further the Arbitrator has jurisdiction to entertain the same. (2) Whether the Arbitrator has become fimctious officio and the time granted by the court has expired?" 5. Learned Civil Judge after hearing the parties gave opinion on 2nd April, 1990 against the appellants and also granted six months time to the Arbitrator to give an award. Aggrieved by which First Appeal from Order No. 357 of 1990 was filed in this Court. However, the appeal was rejected as not maintainable vide order dated 26th July, 1990 with the observation that if the Ar bitrator decides the claim of the parties rely ing upon this opinion the appellants will have a right to challenge the same before the appropriate court in reference proceedings. 6. On receipt of the opinion under Sec tion 13 (b) of the Act, the Arbitrator entered into the reference and after hearing the par ties gave his award on 26th February, 1991 in respect of the items 8 (a) to (e) amounting to Rs. 37,58,029. 57 P. with interest at the rate of 15% during pendency of the proceedings. Respondents filed the award under Section 14 (2) of the Act for being made rule of the court. The appellants filed objection under Sections 30 and 33 of the Act. 37,58,029. 57 P. with interest at the rate of 15% during pendency of the proceedings. Respondents filed the award under Section 14 (2) of the Act for being made rule of the court. The appellants filed objection under Sections 30 and 33 of the Act. The learned Civil Judge vide the im pugned judgment and order dated 18th May, 1992 has rejected the objections of the appellants and has made the award dated 26th February, 1991 rule of the court and awarded interest at the rate of 15% for the period 28th March, 1983 to 26th February, 1991 and for the period 27th February, 1991 until the payment of the amount at the rate of 6% per annum. Aggrieved by the aforesaid award dated 26th February, 1991 and the order dated 18th May, 1992 appel lants have filed this appeal under Section 39 of the Act. 7. Sri Murli Dhar, learned Senior Ad vocate appearing for the appellants has as sailed the award dated 26th February, 1991 and impugned order dated 18th May, 1992 on following grounds which are being men tioned serially: "the first submission of the learned Coun sel for the appellants is that the Arbitrator illegally refused to consider the counter claim raised by the appellants as time barred and not maintainable. It has been submitted that the opinion of the learned Civil Judge given under Section 13 (b) of the Act was not correct and the Arbitrator ought to have differed from the opinion given by the civil court. In this connection, learned Counsel for the appel lants has further submitted that the reference was made by the Managing Director of C. W. C. on 14th July, 1987 under Cl. 25 of the agreement and by this reference the claims of the appellants as well as respondents were referred to the Arbitrator for being decided. It is submitted that the subsequent order dated 27th May, 1989 passed in Original Suit No. 251 of 1987 filed by respondents under Section 20 of the Act could not effect the refer ence already made. There was not order restrain ing the Managing Director, to refer the dispute of the parties to the Arbitrator. It is submitted that the subsequent order dated 27th May, 1989 passed in Original Suit No. 251 of 1987 filed by respondents under Section 20 of the Act could not effect the refer ence already made. There was not order restrain ing the Managing Director, to refer the dispute of the parties to the Arbitrator. The order dated 27th May, 1989, superseded the order dated 14th July, 1987 only to the extent that the claims of respon dents which were rejected by the Managing Direc tor, could also be considered by the Arbitrator. In all other respects the order dated 14th July, 1987 continued to be proper and valid referring order. Learned counsel has further submitted that in pursuance of the order dated 14th July, 1987, Arbitrator proceeded and issued notices to the parties on 2nd August, 1987 in response to which the appellants filed their counter claim on 11th August, 1987. However, when the Arbitrator was apprised about the pendency of the Suit No. 251 of 1987 under Section 20 of the Act, he asked the parties to obtain order from the court. After the order dated 27th May, 1989 by which all the 10 claims of the respondents were referred, appel lants again filed a counter claim on 16th October, 1989. It is submitted that the counter claim were legally maintainable and the Arbitrator illegally refused to consider the same and the error is sufficient to vitiate the award. Learned Counsel has further submitted that one of the reasonings adopted in the order dated 2nd April, 1990 under Section 13 (b) of the Act and the order dated 18th May, 1992 is that the appellants invoiced the ar bitration and as they failed to specify the dispute or disputes together with the amount or amounts claimed in respect of such disputes as required under Cl. 25, the counter claims cannot be con sidered. Learned Counsel has submitted that the order dated 14th July, 1987 passed by the Manag ing Director clearly referred the letter of the Ad vocate of the respondents on which basis refer ence was made, which has not been taken into consideration. The arbitration was invoked by the respondents. The finding recorded is perverse. Learned Counsel has submitted that the order dated 14th July, 1987 passed by the Manag ing Director clearly referred the letter of the Ad vocate of the respondents on which basis refer ence was made, which has not been taken into consideration. The arbitration was invoked by the respondents. The finding recorded is perverse. It has been further submitted that the counter claims of the appellants by way of defence can be raised before the Arbitrator, the view taken by the Arbitrator in this respect suffers from apparent error of law which is sufficient to vitiate the award. 8. It has been further submitted that the Civil Judge vide order dated 2nd April, 1990 passed under Section 13 (b) of the Act illegally gave an opinion that there could be no reference without the consent of the other side. It has been submitted that the consent was already given by the parties under Cl. 25 of the agreement and the fresh consent was not legally required. Learned Counsel has submitted that the reliance in case of Thawar Das v. Union of India, reported in A. I. R. 1955 SC 468 was not correct and view expressed therein had no application in the present case. Learned Counsel has placed reliance in case of Banwari Lal Kotiya v. P. C. Aggarwal, reported in A. I. R. 1985 SC 1003. 9. Learned Counsel has further sub mitted that the counter claims have been illegally held to be time barred. It has been submitted that the limitation for the counter claims cannot be computed from the date of the recession of the contract i. e. 21st February, 1983. The main items in the counter claims were penalty for not completing the work and the extra amount paid by the appellants in getting remaining work done by anther contractor. For both these amounts the cause of action could arise to appellants subsequently on the amount being known to them and not on 21st February 1983. Learned Counsel has fur ther submitted that the claims raised in Suit No. 251 of 1987 which was filed on 3-5-1987, were clearly time barred from the date 21st February, 1983 when the contract was res cinded. However, the respondents claimed benefit of Section 14 of the Act. Learned Counsel has fur ther submitted that the claims raised in Suit No. 251 of 1987 which was filed on 3-5-1987, were clearly time barred from the date 21st February, 1983 when the contract was res cinded. However, the respondents claimed benefit of Section 14 of the Act. It is sub mitted that if the benefit of Section 14 of the Act could be given to the plaintiff respon dents it ought to have been given to defen dant appellants with regard to their defence. It has also been submitted that in any case the question of limitation regarding the claims of respondents and the counter claims of the appellants should have been considered by the Arbitrator and the opinion of the court was wholly illegal and uncalled for. No such opinion was sought. In alternative, it has been submitted that the counter claims of the appellants in any case ought to have been considered as set-off under Order VI, Rule 6 of Civil Procedure Code. In support of this plea, learned Coun sel has placed reliance on some authorities which shall be referred at the appropriate place. Learned Counsel for the appellants has also assailed the award and the im pugned order on the ground that no suffi cient opportunity was given to the appellants to controvert the claims of the respon dents. It has been submitted that a large number of documents were admitted by the Arbitrator in absence of the appellants on 2nd February, 1991, 3rd February, 1991 and 8th February, 1991. It is submitted that as the proceedings were in violation of the principles of natural justice the award is liable to be set aside and cannot be sustained. 10. Assailing the award on merits, learned Counsel has challenged it only in respect of the claims b, c, and e. Claims b is with regard to the materials left at the site by the respondents, which, according to them, have been misappropriated by the appellants. The claim of the respondents under this head was 15,96,185. Under the im pugned award the Arbitrator has awarded 11 lacs. Learned Counsel has submitted that the claim could not be accepted in any manner. It is submitted that respondents filed Suit No. 93 of 1983 on 26th February, 1983. In the plaint, they claimed only three lacs with regard to the materials left at the site. Under the im pugned award the Arbitrator has awarded 11 lacs. Learned Counsel has submitted that the claim could not be accepted in any manner. It is submitted that respondents filed Suit No. 93 of 1983 on 26th February, 1983. In the plaint, they claimed only three lacs with regard to the materials left at the site. It is further submitted that after filing the suit, a telegram dated 24th March, 1983 was sent in which the value of this material was claimed five lacs. Then in pending suit an amendment application was filed on 8th January, 1983. In this amendment applica tion the amount claimed was 7. 09 lacs. How ever, this amount, was further enhanced without any basis in Original Suit No. 251 of 1987 and was mentioned as Rs. 15,09,185. The Arbitrator has illegally awarded the amount ignoring the objection of the appel lants on the ground that the telegram dated 24 March, 1983 has not been proved. Learned Counsel has submitted that the provisions of Evidence Act were not ap plicable to the proceedings before the Ar bitrator and this materials evidence has been illegally ignored. The amount of 11 lacs has been awarded on the basis of the guess work that the balance work worth about 44 lacs was to be completed by the contractor and he may have stored the material worth 25% of the aforesaid figure. Learned Counsel has submitted that such a reasoning cannot be accepted and the award suffers from manifest error of law. In this connection, learned Counsel has also referred to the Commissioners report filed in Original Suit No. 93 of 1983. 11. In respect of the claim under head Item No. c i. e. unmeasured work, learned Counsel has submitted that the Arbitrator has committed serious illegality in awarding Rs. 12,80,000,00 to the respondents as against the claim of Rs. 17,99,051. 00. Learned Counsel has submitted that in Suit No. 93 of 1983 only Rs. two lacs were claimed with regard to the unmeasured work. In telegram dated 24th March, 1983 this amount was claimed Rs. three lacs. In amendment application filed in Original Suit No. 93 of 1983 the amount shown was Rs. 10. 48 lacs. In Original Suit No. 25. 1 of 1987 this amount was enhanced to Rs. 16. 48 lacs and before Arbitrator the amount was mentioned Rs. 17. 99 lacs. In telegram dated 24th March, 1983 this amount was claimed Rs. three lacs. In amendment application filed in Original Suit No. 93 of 1983 the amount shown was Rs. 10. 48 lacs. In Original Suit No. 25. 1 of 1987 this amount was enhanced to Rs. 16. 48 lacs and before Arbitrator the amount was mentioned Rs. 17. 99 lacs. Learned Counsel has submitted that no reasonable person could have awarded the amount of Rs. 12,80,000. 00 in the facts and circumstances of the case. In this connection, it has been further submitted that it was admitted posi tion that the work worth Rs. 50. 90 lacs was left to the done which the appellants have got done through another contractor. The total contracted money under the agree ment in question was Rs. 1,29,35,606. 4. If the amount of balance work is reduced from the total contracted money the amount left will be Rs. 78,35,950. 00. Admittedly respon dents under the final bill have been paid Rs. 74,97,980. 30. Thus, the unmeasured work in any way could not exceed more than Rs. 3,35,194. 60. This figure could be arrived at without much exercise and from the docu ment on record and the admitted position between the parties. The Arbitrator how ever, illegally refused to consider the telegram filed by the appellants and has illegally awarded Rs. 12,80,000. 00 under this head without applying his mind to the tacts of the case. 12. So far as Item No. e relating to increase in costs of materials/wages of labour is concerned, learned Counsel has submitted that the increase allowed by the Arbitrator is with regard to three items: (i) price of bricks (ii) price in respect of petroleum products and (iii) increase in the labour wages. Learned Counsel has sub mitted that so far as the bricks are con cerned the increase was not on account of any fresh law, statutory rule or order. Ac cording to the certificate issued by the Dis trict Supply Officer the difference in the price was on account of ordinary market fluctuations which could not be taken into account under Clause 10-C of the agree ment. Learned Counsel has submitted that under U. P. Bricks Control Order, 1971 the prices of the bricks were not fixed by the District Magistrate and no such order was produced before the Arbitrator. Learned Counsel has submitted that under U. P. Bricks Control Order, 1971 the prices of the bricks were not fixed by the District Magistrate and no such order was produced before the Arbitrator. The reliance has been only placed on the certifi cate issued by the District Supply Officer which mentions only about ordinary marketing fluctuations. The Arbitrator has illegally allowed this claim to the extent of 5. 40 lacs which was not admissible under Clause 10-C of the agreement. 13. Learned Counsel has submitted that under Clause 10-C increases in costs can only be allowed in respect of those materials which can be incorporated in the work. It is submitted that the petroleum products were not materials to be incor porated in the work and as such the claim cannot be accepted under Clause 10-C. The Arbitrator has failed to appreciate Clause 10-C of the agreement and has illegally awarded 1. 19 lacs under this head as in crease in the prices of petroleum products. Learned Counsel has submitted that the Arbitrator has misconducted himself in law. 14. With regard to the increase in the wages of the labour engaged it has been submitted that the reliance was placed on a Notification dated 26th August, 1982. The claim in this respect allowed by the Ar bitrator is to the extent of Rs. 5. 44 lacs. Learned Counsel has submitted that from the figures supplied by the respondents the claim could not be accepted. It has been submitted that notice was ever given to ap pellants, as required under Clause 10-C about any of these claims in absence of which claim could not be accepted. It is further submitted that the documents supplied by the respondents show that man days of all kinds of labour employed w. e. f. 1-1-81 to 26-8-82 was 1,42,682 which work out to approximately 238 workers per day. The total wage bill for these at the increased rate during this period comes to Rs. 9. 61 lacs. After the aforesaid notification the man days of 1,81,550 for the relevant period would be 27th August, 1982 to 28th February, 1983 works out to a labour force of over a thousand per day and total wage bill at the increased rate during this period conies to Rs. 15. 91 lacs. The respondents have claimed Rs. 52,612 wage increase upto 26th August, 1982 and Rs. 15. 91 lacs. The respondents have claimed Rs. 52,612 wage increase upto 26th August, 1982 and Rs. 4,47,033 wage increase from 27th August, 1982 to 28th February, 1983. The percentage of labour component by cross- checking from the measured work could be easily determined, but the claim has been arbitrarily accepted without applying the expert opinion. Learned Counsel has submitted that on this count also the Arbitrator has misconducted himself in law and the award cannot be sus tained. Learned Counsel has also chal lenged the finding of the Arbitrator recorded in respect of the claim a where it has been said that the respondents worked upto 28th March, 1983. It has been sub mitted that the contract was rescinded on 21st February, 1983 and thereafter the con tractor has not done any work as held by this Court in the order dated 23rd March, 1983. It has also been submitted that the Ar bitrator on this baseless assumption that the respondents worked upto 28th March, 1983 illegally inferred that the recession of the contract was waved which was not the case of any party. It has been submitted that both the findings under the claim a are perverse. The contract was rescinded on 26th February, 1983. It was never waived and the contractor did not do anything thereafter. Learned Counsel has placed reliance on certain authorities which shall be discussed at the appropriate place. 15. Learned Counsel for the respon dents, on the other hand, has submitted that Honble Supreme Court and this Court in series of cases have said that the reasonable ness of the reasons given by the Arbitrator cannot be challenged. The Arbitrator is the soke Judge of the quality as well as the quantity of the evidence and it will not be for the court to take upon itself the task of being a Judge of the evidence before the Ar bitrator. The Court should approach the award with a desire to support it, if that reasonably is possible rather than to distroy it by calling it illegal. Learned Counsel has placed reliance in case of Brijendra Nath v. Mayank Srivastava, reported in A. I. R. 1994 SC 2562 ; U. P. Hotels v. U. P. S. E. B. , reported in A. I. R. 1989; S. C. 268; U. PS. Learned Counsel has placed reliance in case of Brijendra Nath v. Mayank Srivastava, reported in A. I. R. 1994 SC 2562 ; U. P. Hotels v. U. P. S. E. B. , reported in A. I. R. 1989; S. C. 268; U. PS. E. B. v. Sear-sole Chemicals, reported in 1995 (2) ALR 175 ; G. C. Kanungo v. Stare of Orissa, reported in 1995 (5) S. C. C. 96 ; and Puri Constructions v. Union of India, reported in A. I. R. 1989 SC 777. 16. It has been further submitted that the conduct of the appellants throughout proceedings was not good. Their sole aim was to delay the proceedings as long as pos sible. They failed to produce any evidence before the Arbitrator and now the argu ments have been raised on the basis of the documents which were not before the Ar bitrator and the findings cannot be chal lenged on basis of such documents. Specifi cally it has been said that the record of Suit No. 93 of 1983 and Suit No. 251 of 1987 was not before the Arbitrator. It has been sub mitted that the arguments based on the documents of the aforesaid two suits may be ignored. 17. With regard to the counter claims, it has been submitted that the Arbitrator after hearing parties at length referred the question to the Civil Judge under Section 13 (b) of the Act by his order dated 10th December, 1989. The learned Civil Judge gave his opinion on 2nd April, 1990 and held that the counter claims were barred by limitation and for other reasons were not maintainable. It has also been submitted that the counter claims have rightly been not considered by the Arbitrator. It has also been submitted that after the award dated 26th February, 1991 a fresh reference was made by the Managing Director to another Arbitrator Sri P. K. Sharma. However, this reference was challenged by the respon dents by filing Suit No. 579 of 1992 before the Civil Judge which was decreed on 24th May, 1994 and it was held that fresh arbitra tion proceedings were not maintainable and also that the counter claims were barred by limitation. It has been further submitted that the Arbitrator by his order dated 26th February, 1991 refused to entertain the counter claims filed by appellants. It has been further submitted that the Arbitrator by his order dated 26th February, 1991 refused to entertain the counter claims filed by appellants. The claim with regard to counterclaims was then given up and the plea was raised that they should be considered as set-off but on the relevant date the appellants failed to press this plea which was rejected by the Ar bitrator. It has been submitted that it is not now open to appellants to challenge the award which is based on the opinion of civil court. It has been further submitted that the limitation for filing counter claims has rightly been computed from the date of the recession of the contract as appellants have never disclosed as to on which date the cause of action to the counter claims have accrued to them. No such date has been mentioned for counter claims. It has also been submitted that the reference made by the Managing Director vide order dated 14th July, 1987, lapsed as no proceedings were taken by Arbitrator, in view of the pendency of the proceedings of Suit No. 251 of 1987. It has also been submitted that appellants did not claim benefit of Section 14 of the Limitation Act in Original Suit No. 251 of 1987. As no such benefit was claimed by the appellants, the courts below have rightly rejected the claim. 18. Coming to the merits of the claims No. b, c and e it has been submitted that the respondents proved their claim by filing various papers. Detailed charts were filed in respect of the claims which were supported by evidence. The report of the Advocates Commissioner dated 2nd March, 1983 prepared in Suit No. 93 of 1983 was also filed. As against it, appellants did not file any document in support of their counter claims to controvert the. claim of respon dents. The respondents specifically denied the fact of their having sent any telegram to the appellants. However, the appellants did not make any attempt to prove their telegram by foiling original and felt satisfied by filing the photostat copy of the telegram. It is submitted that the telegram has been rightly ignored. The other documents relied on, relating to the suits were not before the Arbitrator and his conclusions cannot be assailed on basis of such materials. It is submitted that the telegram has been rightly ignored. The other documents relied on, relating to the suits were not before the Arbitrator and his conclusions cannot be assailed on basis of such materials. It has also been submitted that the appellants filed a photostat copy of the alleged final bill and the original bill was never produced before the Arbitrator in spite of the specific direc tions given. The Arbitrator has rightly not placed reliance on photostat copy of the final bill which bore several cuttings, over-writings in words and figures and erasions at several places. The alleged final bill was 26 running bill and word final was added before word bill by hand. The finding and the conclusions of the Arbitrator are based on the materials on record filed by the respondents and do not suffer from any error of law. With regard to claimed, it has been submitted that the appellants had not taken any specific plea in reply to this claim before the Arbitrator or in their objections before the Civil Judge. It is submitted that only objection raised was that as those claims were not claimed earlier hence it is not payable. It has been stated that it is for the first time that pleas have been raised in this Court. It has been submitted that the changes were made by the appellants and thus considerable delay was caused and prices were increased in the mean time for which due information and notice was given to the appellants which was filed before the Arbitrator. No such objections were raised before the Arbitrator or Civil Judge hence the plea of notice cannot be taken for the first time and is liable to be ignored. It is submitted that the certificate of the District Supply Officer was based on evidence and to support it purchase registers were filed. In respect of petroleum products also pur chase registers were filed before the Ar bitrator to prove that they were purchased at the increased price. The claim with regard to the petroleum products has rightly been allowed. With regard to escalation in labour wages the claim was fully established. The reliance has been placed in case of Tarapur & Co. v. State of M. P. , 1994 (3) SCC 521 . The claim with regard to the petroleum products has rightly been allowed. With regard to escalation in labour wages the claim was fully established. The reliance has been placed in case of Tarapur & Co. v. State of M. P. , 1994 (3) SCC 521 . It is submitted that the entire muster roll register, wage payment registers were filed before the Arbitrator which have been con sidered and then the amounts have been awarded. The finding does not suffer from any error of law. It has been further sub mitted that full opportunity was given to the appellants to defend the claim. However they failed to appear before the Arbitrator and failed to adduce evidence is spite of the directions given by the Arbitrator. It has been submitted that the appeal has no mer its and is liable to be dismissed with, costs. 19. We have considered the rival sub missions made by the learned Counsel for the parties. Much was argued by the learned Counsel for the appellants that they were not afforded reasonable opportunity of hearing by the Arbitrator. In this connec tion, we have perused the record, and the findings of the Arbitrator and the learned Civil Judge and after going through the same their remains no doubt that reasonable opportunity was afforded to the appellants. However, the officers of C. W. C. failed to avail the same. On their part, it appears, that their whole effort was to some how delay the arbitration proceedings on one pretext or the other and in this effort they even did not bother to file relevant records before the Arbitrator. For this Court it is difficult to assess as to why the concerned officers were acting in this man ner. We have no hesitation in making obser vation that C. W. C. officers acted with gross negligence and miserably failed to protect the public interest. However, it is for the Central Warehousing Corporation to con sider this aspect of the matter and take ac tion against the guilty officers. We are of the view that the grievance raised by the appel lants that they were not afforded reasonable opportunity of hearing by the Arbitrator has rightly not been accepted by the learned Civil Judge. 20. The second important question in volved in this appeal is about the counter claims raised by the appellants. We are of the view that the grievance raised by the appel lants that they were not afforded reasonable opportunity of hearing by the Arbitrator has rightly not been accepted by the learned Civil Judge. 20. The second important question in volved in this appeal is about the counter claims raised by the appellants. These counter claims were raised before the Ar bitrator by the appellants twice firstly on 11th September, 1987 i. e. immediately after appointment of Sri M. C. Jaunari as Ar bitrator and secondly on 10th October, 1989 after the order dated 27th May, 1987 was passed by the Civil Judge. Both these counter claims have not been considered by the Arbitrator on basis of the opinion ex pressed by the Civil Judge on 2nd April, 1990 under Section 13 (b) of the Act which has also been accepted by order dated 18th May, 1992 by which the award has been made rule of the court. In the order dated 2nd April, 1990 the counter claims have been held not entertainable on two grounds. The first ground is that the appellants failed to specify the dispute or disputes to be referred to the arbitration under Clause 25 of the contract bond together with the amount or amounts claimed in respect of each such dispute. The view taken is that the dispute or disputes to be referred with the amount or the amounts claimed ought to have been specified before the dispute was referred to the Arbitrator and as appellants failed to specify the dispute and the amount claimed in respect of each such dispute the counter claim could not be entertained. The second reason for not considering the counter claim, according to the learned Civil Judge, was that they were time barred. According to the learned Counsel for the appellants both the grounds are untenable and the Arbitrator has illegally refused to consider the counter claims which is suffi cient to vitiate the award. 21. Under clause 25 of the agreement the conditions for referring the dispute to the Arbitrator has been proved as under: "it is also a term of this contract that the party invoking arbitration, shall specify the dispute or disputes to be referred to arbitration under this Clause together with the amount or amounts claimed in respect of each such dispute. " 22. " 22. From bare reading of the aforesaid conditions following ingredients are clear: (i) That the obligation to specify the dispute and amounts is on the party invok ing arbitration. (ii) That the stage for specifying the dispute and the amount claimed is before the dispute is referred to arbitration. 23. In the present case the learned Civil Judge has found that the arbitration was invoked by the appellants and it was at their instance that the dispute was referred and on 14th July, 1987 the Arbitrator was ap pointed. This finding appears to be further justified in view of the letter dated 11th September, 1987 addressed to the Ar bitrator by the Executive Engineer in which it has been clearly admitted that C. W. C. is claimant and the arbitration proceedings has been invoked by C. W. C. to recover the risk and cost along with other claims from M/s. Harnam Singh and Company, Ambala Road, Saharanpur. It has also been said that the claim of C. W. C. , along with copy of the agreement are submitted herewith for fur ther proceedings. After this admission, there remains no doubt that the appellants had invoked the arbitration clause and under the aforesaid condition normally they should have specified the dispute and the amount claimed. From order dated 14th July, 1987 it is clear that the dispute was referred to arbitrator on basis of letter of the Advocate of respondents. This letter has been clearly referred in the order and a copy of which as sent along with order, however learned Civil Judge failed to notice this aspect of the order. Thus, the correct posi tion appears that both sides had invoked arbitration. 24. Now another question related to the aforesaid finding is as to whether the Arbitrator could refused to consider the ref erence on the ground that the dispute and the amount claimed had not been specified before the authority referring the dispute. The answer to this question can be ascer tained on determining the nature of the conditions as to whether it is mandatory or only directory. Normally the nature of the relevant clause or condition is determined from the words used and also from the con sequences arising out of the non-com pliance of the condition. The answer to this question can be ascer tained on determining the nature of the conditions as to whether it is mandatory or only directory. Normally the nature of the relevant clause or condition is determined from the words used and also from the con sequences arising out of the non-com pliance of the condition. From perusal of the condition it is clear that the words shall has been used which make the provision or condition normally mandatory but no con sequences have been provided in the Clause for non-compliance of the aforesaid condi tion. If no adverse consequences are provided in case of non-compliance of the condition, the condition can be interpreted to by only directory though word shall has been used. In the present case also, in our opinion, the condition is directory as no serious consequences could follow from non-compliance of the same. The details of the dispute and the amount claimed could be specified before the Arbitrator also without causing any harm to the other side. Once the dispute has been referred, the Ar bitrator could not refuse to consider the same on this ground. Such refusal could be made by the authority referring the dispute to Arbitration but not by the Arbitrator. It is clear from the order dated 14th July, 1987 that the dispute or disputes were referred to arbitration at the instance of both the par ties. Thus, the opinion expressed by the learned Civil Judge that the counter claims of the appellants could not be considered as they had not specified the dispute and amount before making reference was not correct. The learned Civil Judge in his opinion dated 2nd April, 1990 relied on the case of Thawar Das Phemmal and another v. Union of India, reported in A. I. R. 1955 S. C. 468. This case was considered in detail by Honble Supreme Court in case of Banwari Lal Kotiya v. P. C. Agrawal reported in A. I. R. 1985 SC 1003. The Honble Supreme Court in paragraph No. 13 of the judgment concluded as under: "on reading the aforesaid observations in proper perspective it is clear that these were made in the context of the specific issue that arose before this Court and were not and are not in tended to apply generally to call references. The Honble Supreme Court in paragraph No. 13 of the judgment concluded as under: "on reading the aforesaid observations in proper perspective it is clear that these were made in the context of the specific issue that arose before this Court and were not and are not in tended to apply generally to call references. The statement that in the absence of either, agreement by both sides about the terms of reference, or an order of the Court under Section 20 (4) compell ing a reference, the arbitrator is not vested with the necessary exclusive jurisdiction makes it clear that the observations were confined to the refer ences of specific questions of law. Ordinarily the Court has jurisdiction to set aside an award if an illegality or an error of law appears on the face of it and it is only when a specific question of law has been referred to the arbitrator for adjudication that his decision thereon falls within his exclusive jurisdiction and cannot be interfered with by the Court howsoever erroneous it might be. The true effect of these observations is that even in the case of an arbitration agreement which squarely falls within the definition of that expression as given in Section 2 (a) (and which is not a bare arbitration agreement) there would be included in it a con sensual actual reference by the parties of all their disputes including questions of law that may arise later but the arbitrators award on such questions of law would not be within his exclusive jurisdic tion since specific question or question of law cannot be said to have been referred to him as required by the law of arbitration but though the reference would be valid the award and his decisions of questions of law if erroneous on the face of it would be liable to be set aside by the Court. This is far from laying down the wide proposition that there can be no reference to arbitration except through the Court under Sec tion 20 unless both the parties join afresh in the actual reference. " 25. This is far from laying down the wide proposition that there can be no reference to arbitration except through the Court under Sec tion 20 unless both the parties join afresh in the actual reference. " 25. Honble Supreme Court after con sidering the definition of two expressions "arbitration agreement" and "reference" provided under Section 2 (a) and Section 2 (o) respectively, expressed the opinion that the dispute can be referred for arbitra tion and the assent given in the original clause of arbitration agreement shall be available and fresh assent will not be re quired. In our opinion, in the present case the dispute raised by the appellants could be referred to the arbitration without any fresh assent from the respondent. The view ex pressed by the learned Civil Judge was not justified. 26. The second related question in this connection is about limitation. The learned Civil Judge in his opinion expressed in order dated 2nd April, 1990 has said that for deter mining the limitation of three years ap plicable to such claims the period should be computed from 21st February, 1983 on which date the contract was resigned by the appellants. It has been held that as period of three years had already expired the claims/counter claims could not be con sidered. In our opinion, on this question also the opinion expressed was to correct. In the claims filed along with letter dated 11th September, 1987 the appellants raised as many as seven claims including the recover the risk and costs claims from the respon dents. All such claims could not be held to be time barred, as cause of action for each claims could not be said to have arisen on the date of recession of the contract. For certain claims the cause of action could arise only on subsequent dates. The learned Civil Judge was not legally justified in computing period of limitation from 21st February, 1983 in respect of all the claims. 27. Learned Counsel for the appellants pressed counter claims regarding two items. The first claim was regarding the penalty clause and another about the loss suffered by the appellants in getting the balance work done through another contractor. 27. Learned Counsel for the appellants pressed counter claims regarding two items. The first claim was regarding the penalty clause and another about the loss suffered by the appellants in getting the balance work done through another contractor. In Claim No. c of the claims filed along with letter dated 11th September, 1987 it has been said that the amount is being incurred in excess which shows that the work was under completion on the date the claim was filed before the Arbitrator. On the face of it, it cannot be held to be time barred. Same way the counter claims filed on 16th Oc tober, 1989 also, this claim was referred to as Claim No. 3 and specific amount was claimed by appellants alleging that they suf fered a loss of Rs. 19,17,502. 16. This claim or counter claim whatever name is given to it could not be held to be time barred. In our opinion, the Arbitrator ought to have ex amined each claim separately as to whether the same is within time or not with reference to the relevant clauses in the agreement. In our opinion, the general view taken by the learned Civil Judge that the counter claims could not be considered was not justified and the Arbitrator committed manifest il legality in not considering the claims or the counter claims raised on behalf of appel lants. There cannot be any dispute about the legal position that if the claims/counter claims of the appellants have not been con sidered by the arbitrator; it is sufficient to vitiate the award. 28. Another related submission in this connection was that the counter claims could be considered as set-off under Order VIII, Rule 6 of the Civil Procedure Code. However, as we have accepted the submis sion of (he learned Counsel for the appellants that the counter claims should have been considered by the Arbitrator, it is not necessary for as to express any opinion on this question. At this point, it may also be made clear that the order of reference dated 14th July, 1987 made by the Managing Director of the Central Warehousing Cor poration could not be effected by sub sequent order dated 27th May, 1989 passed by Civil Judge under Section 20 of the Act in Suit No. 251 of 1987. The Managing Direc tor was fully competent to make reference. The Managing Direc tor was fully competent to make reference. There was no order from any court prohibit ing him from making such a reference and the Arbitrator was appointed under this order. The only variation on basis of the order dated 27th May, 1989 was that the order dated 14th July, 1987 was superseded and all the ten claims raised by the respon dents were to be considered by the ar bitrator. In all other respects the order dated 14th July, 1987 remained intact. The submission of the learned Counsel for the respondents that the proceedings basis of the order dated 14th July, 1987 lapsed as Arbitrator had not proceeded, cannot be accepted. The Arbitrator on 11th March, 1988, directed the parties to obtain order from the court. At this place it would be relevant to reproduce the language used in the letter: "in response to my notice No. C. W. C. /7/87 dated 3rd August, 1987 the claimant have pleaded vide their letter of 25th August, 1987 that they have moved an application under Section 20 of the Arbitration Act in the Court of Civil Judge, Saharanpur. This case was filed on My 5, 1987 before I was appointed Arbitrator. He has also not filed any statement of facts or claims. The respon dents have submitted counter claims and copy of agreements. The parties are directed to obtain court order in this case. " 29. From the language used it is clear that the Arbitrator only suspended the proceedings and in our opinion rightly so that the parties may obtain order from the court but on the basis of this is cannot be said that the proceedings on basis of the order dated 14th July, 1987 lapsed. The sub mission is wholly misconceived. In pur suance of the reference as mentioned by the Arbitrator, the appellants had already filed their claims which were subsequently filed as counter claims. 30. Learned Counsel for the appellants has also challenged the award on basis of the amount awarded with regard to Claims No. b, c and e. It has been submitted that the claims raised by the respondents were highly inflated and wholly unjustified and the Ar bitrator without examining the material on record has illegally, accepted the same. 30. Learned Counsel for the appellants has also challenged the award on basis of the amount awarded with regard to Claims No. b, c and e. It has been submitted that the claims raised by the respondents were highly inflated and wholly unjustified and the Ar bitrator without examining the material on record has illegally, accepted the same. Learned Counsel for the respondents, on the other hand, submitted that this Court cannot look into the findings recorded by the Arbitrator which are based on materials on record. Reliance has been placed on various authorities mentioned in the earlier part of this judgment. Learned Counsel has further submitted that the appellants did not file any document which has been filed in this appeal along with paper book and have been relied on for assailing the findings of the Arbitrator. It has been submitted that the documents which were not filed before the Arbitrator cannot be looked into by this Court. We propose to examine the award with regard to claims b, c and e in the light of the submissions made by the learned Coun sel for the parties. 31. Under claim No. b respondents claimed Rs. 15,09,185. 00 as costs of materials belonging to them which was left at the site and has been misappropriated by the appellants. Against the claim Arbitrator has awarded Rs. 11,00,000. 00 to respon dents. Learned Counsel for the appellants has placed reliance in plaint of Original Suit No. 93 of 1983 where the amount claimed was Rs. 3,00,000. 00 under this head. Telegram dated 24th March, 1983 in which the costs of materials left at the site claimed was 5,00,000. 00 and the amendment ap plication filed on 8th January, 1985 in suit No. 93 of 1983 wherein this amount was claimed 7. 09 lacs whereas in Suit No. 251 of 1987 this amount was claimed 15,09,185. 00 It is true that the appellant did not file the plaint of Suit No. 93 of 1983, amendment application moved in aforesaid suit and the plaint of Suit No. 251 of 1987. But the aforesaid documents were such that the copies of which could be obtained from any party even from respondents. The duty was on him to give a correct and just award. There was vast difference in the claims for same items in different documents. But the aforesaid documents were such that the copies of which could be obtained from any party even from respondents. The duty was on him to give a correct and just award. There was vast difference in the claims for same items in different documents. It was a case where extra precautions were required to be taken. 32. Now the question maybe examined from different angle as to whether there was any other material on record on which basis Arbitrator could test the correctness of the claim of respondents with a critical eye. A copy of the Commissioners report dated 2nd March, 1983 from suit No. 93 of 1983 was filed by respondents themselves. At least this document was on record. If the claim of respondents of Rs. 15,00,000 and odd filed before the Arbitrator is tallied with this Commissioners report, in our opinion, the view taken by the Arbitrator cannot be accepted. Along with the claim filed before the Arbitrator the chart was filed as Appendix A showing details of the materials lying at the site. If the figures men tioned in the Appendix A are tallied with the figures mentioned in the Commissioners report it cannot be denied that the respondents mentioned highly ex aggerated figures in Appendix A. Some of the items are being mentioned below: Sl. No. Name of items Commissioners report Appendix 1. Cement bags 2. Sand /40 truck load 0 trucks 3. Core sand Quantity not mentioned 150 trucks 4. Bricks ,0000 ,50,001 The Arbitrator however while deter mining this claim has said that the balance of the work to be done by the claimant was in the last lap of completion and on the basis of the documents filed it is established that the large quantity of the materials were pur chased and brought to the site, hence I hold that the material lying on the site would be of the value of 25% of the balance work likely to be completed by the claimant which was admittedly Rs. 44,00,000 and it was fur ther held that the material was wrongly misappropriated by the C. W. C. on this find ing the Arbitrator awarded Rs. 11 lacs to the respondents. In our opinion, the Arbitrator ought to have examined the figures men tioned by the respondents in the light of the objections raised by the appellants. 44,00,000 and it was fur ther held that the material was wrongly misappropriated by the C. W. C. on this find ing the Arbitrator awarded Rs. 11 lacs to the respondents. In our opinion, the Arbitrator ought to have examined the figures men tioned by the respondents in the light of the objections raised by the appellants. Even in absence of the evidence filed by the appel lants, Arbitrator ought to have examined the claim of the respondents with an analyti cal eye. The contract was rescinded by the appellants as they were not satisfied with the progress of the work. Had respondents col lected all the materials for completion of the balance of the work, such a drastic ac tion could not have been taken. From the materials on record, it is clear that no work was done after 21st February, 1983. The Arbitrator has miserably failed to give reasons as to whether the alleged purchases shown by the respondents could be related to the materials allegedly left at the site. Learned Counsel for the appellants has sub mitted that the provisions of the Evidence Act have been illegally applied in arbitra tion proceedings and the Arbitrator was not justified in refusing to consider the telegram as evidence on the ground that it was not proved. It is true that the strict rules of the Evidence Act are not applicable in arbitra tion proceedings. The Arbitrator could use the copy of the telegram for raising a doubt for purposes of strict test of the claim of respondents, for reasoning advanced by the Arbitrator though the copy of the telegram could not be used for recording a positive findings, such a course was necessary con sidering the fact that payment of public money was involved in the case. Failure on the part of the Arbitrator in not doing this and ignoring the documents completely, in our opinion, amounts to misconduct in law and the award suffers from an error of law. 33. The second claim about Claim No. C under which the respondents claimed Rs. 17,99,051. 00 in respect of unmeasured work. In suit No. 251 of 1987 the figure under this head was Rs. 16,49. 53. 80 p. which only has been taken into consideration by the Arbitrator. 33. The second claim about Claim No. C under which the respondents claimed Rs. 17,99,051. 00 in respect of unmeasured work. In suit No. 251 of 1987 the figure under this head was Rs. 16,49. 53. 80 p. which only has been taken into consideration by the Arbitrator. The identical evidence as under Claim No. b has been relied on by the appellants in regard to this claim also which we have held ought to have been taken into consideration. However, learned Counsel for the appellants has invited our attention to challenge this claim on basis of the dif ferent angle. It is submitted that the total contract money agreed between the parties was Rs. 1,29,36,000. 00. It has been sub mitted that the value of the balance work left was Rs. 50,90,000. 00 which was also the figure quoted by the respondents. If this amount is reduced the work done by the respondents could be of value of Rs. 78,35,950. 00 It is then submitted that they have already been paid about 75 lacs under the different running bills. Learned Counsel for the appellants has placed before us the various bills in this connection. If the amount already paid is reduced the balance will be around Rs. 3 lacs and odd. Learned Counsel for the appellants has submitted that it is difficult to imagine how the Ar bitrator could work out a figure of Rs. 12,80,000. 00 under this claim. Learned Counsel has submitted that in no case the claim could exceed Rs. 3,50,000. 00 It has also been submitted that the Arbitrator il legally assumed that the respondents con tinued to work upto 28th March, 1983. It has been submitted that after rescission of the contract no work was done by the respon dents at the site which is also clear from the judgment of this Court dated 23rd March, 1983 in F. A. F. O. No. 159 of 1983. Learned Counsel has submitted that from the final bill submitted before the Arbitrator, it was clear that the respondents were paid about Rs. 75 lacs inclusive of the materials sup plied by the appellants. 34. Learned Counsel for the respon dents, on the other hand, has submitted that as no evidence was filed by the appellants the finding of the Arbitrator has to be ac cepted and it cannot be interfered with by this Court. 75 lacs inclusive of the materials sup plied by the appellants. 34. Learned Counsel for the respon dents, on the other hand, has submitted that as no evidence was filed by the appellants the finding of the Arbitrator has to be ac cepted and it cannot be interfered with by this Court. However, in our opinion, under this head also the Arbitrator has failed to examine the claim of respondents with analytical eye. He ought to have cross check ed the figures as mentioned above which could easily show that the claim raised by the respondents was highly exaggerated and inflated. Even without referring any other evidence the Arbitrator could find out as to whether the claim is justified or not. It is true that the Court should not interfere with the conclusions arrived at by the Arbitrator but at the same time the court cannot ignore the injustice or illegality which is apparent on the face of record. What we feel is that the Arbitrator under pressure of time has hurridly decided the dispute without apply ing his mind to the highly exaggerated claims raised by the respondents. 35. The last claim is with regard to Claim No. e. This claim is based on Clause 10 (e) of the contract agreement. It would be appropriate to reproduce the relevant parts of the Clause 10 (c ). 35. The last claim is with regard to Claim No. e. This claim is based on Clause 10 (e) of the contract agreement. It would be appropriate to reproduce the relevant parts of the Clause 10 (c ). Under this clause both increase and decrease in material incor porated in the works may be taken into consideration if the variance exceeded 10% Clause 10 (c) reads as under: "if during the progress of the works, the price of any material incorporated in the works (not being a material supplied from the Engineer-in-Charges stores in accordance with Clause 10 hereof) and/or wages of labour, increases as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase exceeds ten per cent of the price and/or wages prevailing at the time of receipt of the tender for the work, and the contractor thereupon necessarily and properly pays in respect of that material (incorporated in the works) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied provided al ways that any increase so payable is not, in the opinion of the Manager Engineering (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the contractor: Provided however, no re-imbursement shall be made if the increase is not more than 10% of the said prices wages, and if so, the reimburse ment shall be made only of the excess over 10% and provided further that any such increase shall not be payable if such increase has become opera tive after the contract or extended date of comple tion of the work in question. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The contractor shall, within a reasonable time of his becoming aware of any alteration in the price of any such material and/or wages of labour, give notice thereof to the Engineer-in-charge stat ing that the same is given pursuant to this condi tion together with all informations relating thereto which he may be in a position to supply. " 36. From perusal of Clause 10-C relevant part or which has been quoted above, it is clear that the following in gredients were necessary to be established for allowing the amount claimed under Claim (e): (i) The price should be of any material incorporated in the work. (ii) The material should be other than material supplied from the stores of the Engineer-in-charge. (iii) Increase in the price of any material and/or wages of labour should be as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax ). (iv) Such increase exceeds ten per cent of the price and/or wages prevailing at the time of receipt of the tender for the work. (v) The reimbursement shall be made only of the excess over 10%. (vi) The contractor gives notice within a reasonable time of his becoming aware of any alteration in the price of any such material and/or wages of labour to the En gineer-in-charge. 37. Now it is to be seen whether the respondents could establish the aforesaid ingredients before the Arbitrator and he has rightly allowed the claim under Clause IOC. (vi) The contractor gives notice within a reasonable time of his becoming aware of any alteration in the price of any such material and/or wages of labour to the En gineer-in-charge. 37. Now it is to be seen whether the respondents could establish the aforesaid ingredients before the Arbitrator and he has rightly allowed the claim under Clause IOC. Under Claim (e) Arbitrator had allowed three claims : the first is the increase in the rate of the bricks. This claim has been al lowed on basis of the certificate of the Dis trict Supply Officer. It would be relevant to reproduce the contents of the certificate date 8th November, 1990 at this stage : @hindi = Matter From the aforesaid letter it is clear that there was no control of the Government over the prices of the bricks during the period of 1980-1983. Under Clause 10-C the increase in the price of the material incor porated in the works should be, as a direct result of the coming into force of any fresh law, or statutory rule or order. In the present case there was no evidence on record to show that the price of the bricks had in creased on basis of the statute, rules or statutory order. It appears that Arbitrator allowed the claim under this head without looking into the provisions contained in Clause 10-C and awarded the amount of Rs. 5,40,000. 00 as increase in the rates of the bricks. The ordinary fluctuation in the market in the price of the bricks cannot be basis for allowing claim under Clause 10-C of the agreement. 38. The second claim allowed under the Claim (e) is with regard to petroleum products. From Clause 10- C it is clear that the material should be such which is incor porated in the works. There is no evidence on record that the Petroleum products were incorporated in the constructions of the godowns or any other building. Arbitrator illegally allowed the claim to the extent of Rs. 1,19,200. 00 as increase in prices of petroleum products. 39. The third increase under Clause 10-C is about the increase in labour wages. The Arbitrator has accepted claim of respondents under this head to the extent of Rs. 4,99,646. Arbitrator illegally allowed the claim to the extent of Rs. 1,19,200. 00 as increase in prices of petroleum products. 39. The third increase under Clause 10-C is about the increase in labour wages. The Arbitrator has accepted claim of respondents under this head to the extent of Rs. 4,99,646. 81 P. While examining this claim, also Arbitrator has failed to test reasonableness of the claim on basis of pay ments made under this head before and after the date of notification i. e. 26-8-1982. The genuineness of the claim could be easily tested by cross-checking the percentage of labour component in measured work during aforesaid periods. Unfortunately this has not been done in this item also. There is yet another aspect of this claim about notice which is being dealt with separately. 40. As clear from Clause 10-C of the agreement a notice was required to be given by the contractor to the Engineer-charge within a reasonable time of his becoming aware of any alteration in the price of any such material and/or wages of labour. In the present case there was no pleading about giving such a notice under Clause 10-C either in the plaint of Original Suit No. 251 of 1987 filed on 5-5-1987 or in the claim filed before the Arbitrator on 10th September, 1989. The Arbitrator has not recorded any finding about giving any such notice. The notice was required for increase in the price of the material as well as increase in labour wages. In our opinion, Claim (e) to the ex tent of Rs. 11,58,840. 81 has been illegally allowed without considering the necessary conditions provided under Clause 10-C. The Arbitrator has committed a manifest error of law. 41. The objection was raised by the appellants before the Arbitrator as well as before learned Civil Judge that the respon dents had mentioned a very small amount in Original Suit No. 93 of 1983. However on filing Suit No. 251 of 1987 under Section 20 of the Act the amounts have been inflated and exaggerated figures have been men tioned without any basis. There was a specific reference of Original Suit No. 93 of 1983. However on filing Suit No. 251 of 1987 under Section 20 of the Act the amounts have been inflated and exaggerated figures have been men tioned without any basis. There was a specific reference of Original Suit No. 93 of 1983. However, learned Civil Judge rejected objection on the ground that the Arbitrator was required to look into the figures shown in Original Suit No. 251 of 1987 and if in earlier proceedings the lesser amounts were shown in respect of the said items, it cannot effect the award of the Arbitrator. In our opinion, the view taken by the learned Civil Judge was wholly erroneous in law. There was vast difference in the amount men tioned and claimed by respondents regard ing items b, c and e in two Suits No. 93 of 1983 and 251 of 1987 and the Civil Judge ought to have applied his mind as to whether there was any unreasonable infla tion which has been allowed by the Ar bitrator in the award impugned before him. It should not have been forgotten that the learned Civil Judge was dealing with the case of public corporation and by the im pugned award heavy financial liability was being created due to default of the officers, who may have been doing so in collusion with other side. Such possibilities of under hand and clandestine dealings cannot be ruled out in present day atmosphere prevailing in this field. Otherwise no sane and reasonable person could have allowed this case to go by default and to create a heavy burden of a Crore Rupee on the Cor poration. Honble Supreme Court in case of K. P. Poulose v. State of Kerala and another, reported in A. I. R. 1975 SC 1259, set aside the award of the Arbitrator on the ground that he failed to consider two very material documents which were necessary for arriv ing at a correct decision to resolve the con troversy between the parties. If the Depart ment did not produce those documents before the Arbitrator it was incumbent upon him to get hold of all the relevant documents in question for the purpose of a just decision, in paragraph No. 6 their Lordship observed that "under Section 30 (a) of the Arbitration Act an award can be set aside when an Arbitrator has miscon ducted himself or the proceedings. Miscon duct under Section 30 (a) has not a connota tion of moral lapse. It comprises legal mis conduct which is complete if the Arbitrator on the face of the award arrives at an incon sistent conclusion even on his own finding or arrives at a decision by ignoring very material documents which throw abundant light on the controversy to help a just and fair decision. It is in this sense that the Ar bitrator has misconducted the proceedings in this case. We have, therefore, no hesita tion in setting aside such an award. " In our opinion, the view taken by the Honble Supreme Court in the aforesaid judgment is squarely applicable in the present case. In the present case the Arbitrator has misconducted himself as well as the proceedings in giving award in respect of the Claims (b), (c) and (e) challenged before us. He has also committed error of law which is manifest on record in not considering the claims raised by the appellants. The award thus cannot be sustained and in this case a fresh award is required to be given in accordance with law and in the light of observations made above. 42. Since we are remitting the matter back to the Arbitrator for giving a fresh award, we consider it necessary in the inter est of justice to give a direction to recon sider the rate of interest awarded by the Arbitrator for whole of the amount at the rate of 15% per annum during pendency of proceedings. The Arbitrator has awarded the rate of interest on basis of the judgment of Honble Supreme Court in case of Gangadhar Vishwanath Ranadey v. L. T. C. and others, reported in AIR 1990 SC 185 . Before Honble Supreme Court the dispute was about non-payment of the amount by the insurer for a long period. The Honble Supreme Court found 15% interest awarded as justified. However, the aforesaid judgment is not applicable in the present case, in arbitration proceedings. In State of U. P. in first Schedule of the Arbitration Act Paragraph 7 (a) was added by Section 24 (d) of U. P. Civil Laws (Reforms and Amendment) Act (i. e. U. P. Act No. 57 of 1976 ). However, the aforesaid judgment is not applicable in the present case, in arbitration proceedings. In State of U. P. in first Schedule of the Arbitration Act Paragraph 7 (a) was added by Section 24 (d) of U. P. Civil Laws (Reforms and Amendment) Act (i. e. U. P. Act No. 57 of 1976 ). Under Para 7 (a) of the Schedule the Ar bitrator has power to award interest and this para 7 (a) of the Act had been considered by this Court and it has been found that the Arbitrator has to consider the rate of inter est separately for different periods under para 7 (a) in the following manner: (i) Prior to the commencement of the arbitration. (ii) After commencement of the ar bitration proceedings and upto the date of the award. (iii) From the date of the award till the date of the payment of such earlier date which in no case shall be beyond the date of decree. The judgment of this Court in respect of interest has been given in case of State of U. P. and another v. M/s Allied Con structions Engineers and Contractors Gulmohar Enclave, Bulandshahr, reported in 1996 A. L. J. 22, (D. B. ). Under the aforesaid judgment the award of the interest at the rate of 15% for the entire period from 28th March, 1983 upto the date of the award i. e. 26th February, 1991 cannot be justified. The periods should have been bifurcated and the interest should have been awarded separately considering the conduct of the parties. The Arbitrator shall while giving the award afresh, determine the rate of in terest in the light of the judgment of this Court mentioned above. 43. For the reasons stated above, this appeal is partly allowed. The judgment dated 18th May, 1992 passed in Original Suits No. 198 of 1991 and 60 of 1991 together with the award dated 26th February, 1991 in respect of the claim of respondents regarding (b), (c) and (e) and rejection of the counter claims of the appel lants and determination of the rate of inter est are set aside. The remaining award shall remain unaltered. The matter is remitted back to the Arbitrator, for giving a fresh award in accordance with law and the agree ment between the parties and in the light of the observations made above. The remaining award shall remain unaltered. The matter is remitted back to the Arbitrator, for giving a fresh award in accordance with law and the agree ment between the parties and in the light of the observations made above. The Ar bitrator shall give his award within a period of six months from the date a copy of this order is filed before him. There will be no order as to costs. Appeal partly allowed. .