JUDGMENT S.S. Sudhalkar, J. - By this appeal, the appellant is challenging the order of the learned Additional Civil Judge (SD) in Arbitration case No. 7 of 1997 as also the award of the Arbitrator. 2. The appellant is the Electricity Board. Respondent company manufacturers transformers. On 24.4.1987 (Annexure C/2) the appellant placed an order for supply of 1500 transformers of 25 KVA. Respondent submitted to the appellant drawings pertaining to the general assembly and core coil assembly of transformer as per specification vide letter dated 14.5.1987 (Annexure C/5) which were approved by the appellant, subject to certain observations. 3. Clause No. 9 of the purchase order dated 24.4.1987 was sought to be amended by letter dated 15.5.1987 to the effect that the date of inspection of the transformers will be considered as the date of delivery. This letter is annexed as Annexure C/4. 4. The supply was to be completed @ 167 transformers per month by April 10, 1988 after it was commenced 45 days from the date of approval of the drawings. The time was the essence of the contract. However, the shortfall of a month was to be allowed to be completed during the next month without imposition of penalty. 5. The price of transformer i.e. Rs. 8,250/- ex-works was variable as per IEMA with base as 1.12.1986 and was exclusive of Excise Duty leviable on finished goods. Testing charges were to be paid extra. The appellant had a right to increase/decrease upto 40% of the ordered quantity on subsequent date on the same rate, terms and conditions, during the pendency of the contract. There was a bank guarantee of Rs. 1,27,500/-, which was valid upto 3 months after the completion of the contract period and it was agreed that if the respondent failed to deliver the material, within the stipulated period, the same was liable to be rejected and if accepted, respondent was liable to pay as penalty charges, a sum of 0.5% of the cost of undelivered supplies/incomplete equipment per fortnight of delay or part thereof not exceeding 5% of the total cost of undelivered material. No variation or modification or waiver of the terms and provisions of the Purchase order was deemed valid unless mutually agreed upon in writing by both the parties. No variation or modification or waiver of the terms and provisions of the Purchase order was deemed valid unless mutually agreed upon in writing by both the parties. However, there was a force majeure clause in Clause No. 13 which also included non-availability of Government controlled raw-material, according to which neither of the parties shall be liable for losses or damages due to delay or failure to perform the contract provided the happenings were notified in writing within 30 days from the date of occurrence. 6. Respondents case is that CRGO lamination which was an imported item and was canalised through MMTC, a Government of India Undertaking, and over which the Company had no control for its procurement, was in short supply for 2-3 months which fact was intimated to the appellant and therefore, covered by the force majeure clause. The supply was commenced only in Nov. 1987. However, due to paucity of funds with the appellant, the terms of payment were not adhered to by it. The date of inspection was to be considered as date of delivery and 100% payment pro rata was to be made on inspection. However, the payment of the supplies was delayed by two to three months. This, according to the respondent, amounted to breach of material conditions contained in Clauses No. 7 and 9 of the Purchase order. It is contended that this clause was aimed at prompt recycling of the funds in the form of price of Transformers back into manufacture of more transformers. The respondent contended that they highlighted this fact vide letters ranging from 8.12.1987 to 6.5.1988. It is, therefore, contended that the delay in payment led to retardation in the production of Transformers and paucity of funds was admitted by the appellant in their letter dated 7.1.1988. It is alleged that this perpetuated the delay. The appellant did not treat this as an automatic extension of time and went on deducting penalty. The claims made by the respondent is as under :- 1). Refund of penalty of Rs. 1,78,945.26 plus interest. 2) Special Excise duty Rs. 25,495.92 plus interest. 3) Interest on delayed payment Rs. 52,262.32. 4) Loss of profit of Rs. 9,00,075/-. 5) Bank guarantee of Rs. 1,27,500/- - Refund of. 6) Damages - Rs. 25,00,000/-. 7) Price Escalation Rs. 10,232.76. 8) Penalty and further interest. 9) Costs Rs. 50,000/-. 7. Refund of penalty of Rs. 1,78,945.26 plus interest. 2) Special Excise duty Rs. 25,495.92 plus interest. 3) Interest on delayed payment Rs. 52,262.32. 4) Loss of profit of Rs. 9,00,075/-. 5) Bank guarantee of Rs. 1,27,500/- - Refund of. 6) Damages - Rs. 25,00,000/-. 7) Price Escalation Rs. 10,232.76. 8) Penalty and further interest. 9) Costs Rs. 50,000/-. 7. The appellant had submitted a counter claim which is as under :- 1). Extra costs incurred by the appellant on risk purchase of 1091 Nos. KVA Transformers - Rs. 89,85,017.78 plus interest @ 17.25% 2). Damages for the losses suffered by the appellant on account of non-supply of 1091 25KVA Transformers - Rs. 50,00,000/-. 8. The arbitrator had awarded the claim Nos. 1, 2 and 5. Regarding claim No. 8, it has been observed that the penalty and further interest has been allowed against the award in respect of clauses 1, 2 and 5 above. The Arbitrator also awarded costs of Rs. 16,112.50 in favour of the respondent. However, other claims of respondent (sic). 9. Counsel for the appellant has argued on the following points :- (1). The Arbitrator has awarded interest on the pre-reference period which he could not have legally awarded. (2). The Arbitrator has relied on clause of force majeure. According to learned counsel for the appellant, this clause is not applicable and if it is held applicable, benefits should go to both the parties. (3) Arbitrator is a creature of contract and is bound by the terms of the contract and cannot substitute his own thinking to the terms. 10. Learned counsel for the appellant has relied on the case of Executive Engineer v. N.C. Budhiraj, 1999(9) SCC 541. The Supreme Court in that case was considering the power of the Arbitrator regarding award of interest for pre-reference period in respect of cases which arose prior to the commencement of Interest Act, 1978 on 19.8.1981. It is observed that there was conflict between the observations made by the Constitution Bench in the case of Secretary, Irrigation Department, Government of Orissa v. G.C. Roy, 1992(1) SCC 508 and in Executive Engineer (Irrigation) v. Abhaduta Jena, 1988(1) SCC 418 and State of Orissa v. B.M. Agarwalla, 1997(2) SCC 469 and therefore, the matter is referred to the Larger Bench for authoritative pronouncement. 11. 11. Counsel for the respondent has relied on the case of B.N. Agarwalla (supra), which is also reported as AIR 1997 SC 925. In that case, it has been held that the Arbitrator has the jurisdiction to award pre-reference interest in cases which arose after the Interest Act, 1978 has become applicable. It is also observed that with regard to those cases pertaining to period prior to the applicability of the Interest Act, 1978 in the absence of any substantive law, contract or usage, an arbitrator has no jurisdiction to award interest. 12. In the present case, the purchase order is after the new Interest Act came into force. Therefore, the fact that the question regarding interest awardable under the Old Interest Act is referred to the larger Bench, will not make any difference so far as this case is concerned. In view of the case of B.N. Agarwalla (supra), grant of interest for the pre-reference period cannot be said to be illegal. 13. In the case of B.P. Radha Krishna v. Sponge Iron India Ltd., 1997(2) RCR(Civil) 316 : AIR 1997 SC 1324 also, it has been held that the interest has to be awarded from the date mentioned in the notice and not from the date of notice. This also goes to show that there is no bar in granting pre-reference interest. 14. In the case of Ram Bahadur Thakur and Co. v. R.B. Shreeram Durgaprasad Private Ltd., Tumsar and another, AIR 1968 Bombay 35 it has been held that the Arbitrator was a Court and he had the power to award interest at the advance price in respect of 987 tons of ore which the defendant failed to deliver, under Section 61 of the Sale of Goods Act. Relying on this judgment also, learned counsel for the respondent argued that in the present cases, interest according to Sale of Goods Act can be awarded. Section 61 of the Sale of Goods Act is as under :- "61. Interest by way of damages and special damages :- (1) Nothing in this Act shall affect the right of the seller or the buyer to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover the money paid where the consideration for the payment of it has failed. Interest by way of damages and special damages :- (1) Nothing in this Act shall affect the right of the seller or the buyer to recover interest or special damages in any case where by law interest or special damages may be recoverable, or to recover the money paid where the consideration for the payment of it has failed. (2) In the absence of a contract to the contrary, the court may award interest at such rate as it thinks fit on the amount of the price - (a) to the seller in a suit by him for the amount of the price - from the date of the tender of the goods or from the date on which the price was payable; (b) to the buyer in a suit by him for the refund of the price in a case of a breach of the contract on the part of the seller - from the date on which the payment was made." Be that under the Sale of Goods Act or under the new Interest Act, in view of the above said position, the award of pre-reference interest cannot be said to be illegal. 15. The force majeure clause in the purchase order is as under ;- "10. Force Majeure During the pendency of the contract/Purchase order, if the performance in whole/part by either party or any obligation thereunder, is prevented/delayed by causes arising out of any war, hospital, civil commotion, acts of public enemy, sabotage, fire, floods, explosions, epidemics or non-availability of Government controlled-raw-material under order/instruction of Central/State Government regulation, strikes, lock-outs, embargoes, acts of Civil Military authorities or any other causes beyond their reasonable control, neither of the two parties shall be made liable for loss or damages due to delay or failure to perform the contact during the currency of Force Majeure conditions, provided that the happening is notified in writing (with documentary proof) within 30 days from the date of the occurrence. The supplies shall be resumed under the contract as soon as practicable after the happening (events) ceases to exist." 16. The Arbitrator has observed that he was satisfied that the appellant did not treat time as an essence of contract and held that though the respondent failed to adhere to the delivery schedule, the delay was initially due to shortfall of CRGO Lamination which is an event covered by the force majeure clause. The Arbitrator has observed that he was satisfied that the appellant did not treat time as an essence of contract and held that though the respondent failed to adhere to the delivery schedule, the delay was initially due to shortfall of CRGO Lamination which is an event covered by the force majeure clause. He has further observed that once the supply was started in November, 1987, the fault was invariably on the part of the Board which failed to pay for the supplies on the inspection/delivery of Transformers. He has further observed that as per clauses 7 and 9 of the purchase order, 100% payment on delivery was to be made and to consider the date of inspection as date of delivery was aimed at re-cycling of the funds received in the shape of price of supplies made by re-investing the same in further manufacture and supply. The same was, however, retarded by delay in payment. He has further observed that original period of delivery schedule ended on April 10, 1988 and inspite of repeated requests by the respondent, the appellant took two years to re- schedule the delivery which was done in March, 1990. He has further observed that the re-scheduling itself proved that the appellant realised that the causes for not adhering to the original delivery schedule were beyond the control of respondent. He has further observed that when re-scheduling for delivery of the remaining 1091 of Transformers was done, there was no reason why the delivery of 409 transformers already made should not have been regularised. 17. So far as the special excise duty is concerned, the price was exclusive of excise duty. This can be found from clause (6) of the Purchase agreement which relates to be paid by the purchaser (appellant). 18. The findings arrived at by the arbitrator are not shown to be illegal. 19. In view of the above reasons, the bank guarantee could not have been encashed by the appellant and the Arbitrator has ordered the release of the same. So far as the costs are concerned, it cannot be said to be unreasonable. 20. Regarding the powers of the Arbitrator, learned counsel for the respondent has relied on the case of Municipal Corporation of Delhi v. M/s Jagan Nath Ashok Kumar and another, AIR 1987 SC 2316. So far as the costs are concerned, it cannot be said to be unreasonable. 20. Regarding the powers of the Arbitrator, learned counsel for the respondent has relied on the case of Municipal Corporation of Delhi v. M/s Jagan Nath Ashok Kumar and another, AIR 1987 SC 2316. It has been observed by their Lordships that when the reasons germane and relevant for the arbitrator to hold in the manner he did have been indicated, it cannot be said that it was unreasonable. 21. In the case of M/s Sudarsan Trading Co. v. Government of Kerala and another, AIR 1989 SC 890, it has been held that even when the reasons for making the award are not given by the arbitrator, the Court cannot interfere with the award. It is held as under :- "But, in the instant case the court had examined the different claims not to find out whether these claims were within the disputes referable to the arbitrator, but to find out whether in arriving at the decision, the arbitrator had acted correctly or incorrectly. This, in our opinion, the court that no jurisdiction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid or damages liable to be sustained was a decision within the competency of the arbitrator in this case. By purporting to construe the contract the Court could not take upon itself the burden of saying that this was contrary to the contract and, as such, beyond jurisdiction. It has to be determined that there is a distinction between disputes as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be a conflict as to the power of the arbitrator to grant a particular remedy." 22. Learned counsel for the respondent has also relied on the case of Food Corporation of India v. Joginderpal Mohinderpal and another, AIR 1989 SC 1263. It has been held therein that the Court cannot sit over the finding by the Arbitrator for examining and re-assessing the material. Learned counsel for the respondent has also relied on the case of Food Corporation of India v. Joginderpal Mohinderpal and another, AIR 1989 SC 1263. It has been held therein that the Court cannot sit over the finding by the Arbitrator for examining and re-assessing the material. It has also been held that the Arbitrators award may be set aside for error of law appearing on the face of it though this jurisdiction is not to be lightly exercised. It has been further observed that the award can also be set aside if inter alia, the arbitrator has misconducted himself or the proceedings and it is difficult to give an exhaustive definition as to what may amount to a misconduct on the part of the Arbitrator. However, it has been specifically observed that it is not misconduct on the part of an arbitrator to come to an erroneous decision, whether his error is one of fact or law and whether or not his findings of fact are supported by evidence. 23. Counsel for the appellant has relied on the case of Steel Authority of India Ltd. v. J.C. Budharaja, Government and Mining Contractor, 1999(4) RCR(Civil) 141 (SC). It is regarding the misconduct of the Arbitrator and commission of jurisdictional error. It is held that the award passed by the Arbitrator in disregard of express terms of the contract would be arbitrary, capricious and without jurisdiction. However, in view of the above reasons, the facts of the said case can be said to be different and that case is not applicable to the facts of the present case. 24. In the present case, the arbitrator cannot be said to have come to his conclusion basing the same on reasons not legal. It is also not shown that he has exceeded his jurisdiction. Moreover, he cannot be said to have substituted his own thinking to the terms of contract. 25. It is also not shown as to how the arbitrator can be said to have misconducted himself. The findings of an arbitrator cannot be challenged in a court in the manner in which a finding of a court can be challenged in appeal. 26. I, therefore, do not find it proper to disturb the order of the Court below or the finding of the Arbitrator. This appeal, in view of above reasons, deserves to be dismissed and is hereby dismissed. Appeal dismissed.