Judgment ( 1. ) BEING dissatisfied with the decision dated 21-4-1999 rendered by the learned District Judge, Sidhi, in Civil Suit No. 5-B/97 the appellant, Northern coalfield Limited, has preferred this appeal for setting aside the same. At the very outset, it is pertinent to state that the appeal has been nomenclature to be one under Section 39 (1) of the Arbitration Act, 1940 (hereinafter referred to as the 1940 Act) and the said facet shall be dealt with by us in detail at a later stage whether the aforesaid statute would govern the appeal or the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter called as the 1996 Act) would apply to the fact situation. ( 2. ) THE factual score as has been portrayed and is perceptible from the impugned decision and the pleadings brought on record is that the respondent/company namely, M/s Rajkishan and Company, filed an application under Sections 14 (2), 17 and 29 of the 1940 Act on 23-6-1997 before the Court below for making the award dated 29-5-1997 passed by the sole Arbitrator as the Rule of Court and to pass a decree in that regard. The facts put forth before the learned District Judge are that the respondent (hereinafter referred to as the claimant) had entered into an agreement with the present appellant (hereinafter referred to as the owner) for construction of certain quarters on 4-5-1989 and on the basis of the terms and conditions of the tender as well as the agreement the petitioner/company started the construction work. The work in question was to be completed within 15 months as per the stipulation in the agreement. As prescribed in the agreement the work order was scheduled to be issued on 22-1-1989 and the work was required to be completed by end of 21-4-1990. As pleaded, despite the said population the work orders were issued on 19-7-1989, 25-9-1989 and 19-7-1989 in as phase wise manner, as a consequence of which there was delay in carrying out of the work. As the work in question was not completed within the time frame, i. e. , by 21-4-1990 the owner rescinded the agreement and awarded the contract in favour of another company. In addition to this the amount which was to be paid to the claimant/company was not paid and the machineries were seized. As the work in question was not completed within the time frame, i. e. , by 21-4-1990 the owner rescinded the agreement and awarded the contract in favour of another company. In addition to this the amount which was to be paid to the claimant/company was not paid and the machineries were seized. A dispute arose and the petitioner took recourse to Clause 9 of the agreement and prayed for appointment of the sole Arbitrator for the purpose of adjudication of the dispute that had arisen. The appellant/company appointed one Mr. P. O. Haridas on 6-4-1995 as the sole Arbitrator. The Arbitrator upon hearing the learned Counsel for the parties passed an award on 9-5-1997 for a sum of rs. 52,00,385/- and further awarded interest at the rate of 18% per annum till the amount was paid or till the date of decree which was earlier. The Arbitrator intimated the said factum to the parties. The said aspect came to the knowledge of the petitioner on 1-6-1997 and on receipt of the due intimation it preferred an application for making the award the Rule of the Court. ( 3. ) AFTER receipt of the application the Court below called for the award and the connected papers from the learned Arbitrator. ( 4. The said aspect came to the knowledge of the petitioner on 1-6-1997 and on receipt of the due intimation it preferred an application for making the award the Rule of the Court. ( 3. ) AFTER receipt of the application the Court below called for the award and the connected papers from the learned Arbitrator. ( 4. ) THE owner filed an objection on 24-11-1997 contending inter alia, that the award passed by the sole Arbitrator is wholly illegal and without jurisdiction; that the award has been passed dehors the specific provisions contained in the agreement; that the Arbitrator has misconducted in passing the award; that the Arbitrator has committed material irregularity; that the arbitrator has illegally and arbitrarily disallowed the counter claims filed on behalf of the owner; that the Arbitrator has misconstrued and misinterpreted the evidence led on behalf of the parties; that the amount awarded is excessive without any foundation; that the Arbitrator has failed to consider the documentary evidence brought by the appellant/company on record; that there was ample evidence brought on record by the owner to the effect that the site was handed over in March, 1989 to the claimant; that there were documents namely, C-56 and C-58 to prove the aforesaid fact but the Arbitrator has failed to take into consideration the said documents which make the award vulnerable in law; that no grievance could have been made by the claimant in regard to non handing over of site and in any case on that ground no loss or damage could have been granted; that as no protest/dispute has been made at the time of handing over of site by the claimant the same could not have been raised before the Arbitrator; that the Arbitrator has arrived at the erroneous conclusion in regard to the fact that the claimant suffered loss and sustained damages due to non-furnishing of drawings; that the grievance relating to release of coal was unfounded as is evincible from C-84 and C-95; that the claim of bricks by the claimant was contrary to the documentary evidence brought on record inasmuch as the claimants had already purchased the bricks prior to even writing the letter of issuance of coal; that the Arbitrator misconducted himself by entertaining the claim for damages taking into consideration the non-issue of coal though the same was eventually supplied on 9-1-1990; that the Arbitrator has totally flawed by expressing the opinion that no certificate was issued for procurement of steel when the appellant/company was not at all under obligation to procure but it was a pious assurance to extend assistance for procurement of the material namely, steel; that Arbitrator has not taken note of the facts brought forth in regard to the steel as is perceivable from the documents namely, C-117 and C-131; that Arbitrator has failed to appreciate that there was no delay on the part of the owner in performing its part of the contract; that the Arbitrator failed to take note of the fact that the claimant has abandoned the work; that the allegation in respect of non-pay-payment of the running bills is mercurial in nature as vide Annexure C-46 the claimant had paid and there was running account bill for the work done after 25-3-1990; that he had left the work on 1-6-1990; that the Arbitrator has failed to appreciate the impact and effect of C-14a to C-40; that the Arbitrator has failed in his duty in not taking into consideration the Annexures C-45 and c-101/1 wherein the claimant has admitted that schedule of completion would be 15-6-1990; that the Arbitrator has erred in law as he travelled beyond the stipulation of agreement by granting certain amount taking note of the factum of escalation, though such a feature was not provided for in the agreement; that the Arbitrator should have arrived at the finding that on the face of annexure C-63 the owner was justified in withholding the money; that the arbitrator has totally erred by putting the blame on the owner that there was irregularity in the payment, though there are documents on record to indicate to the contrary; and that the Arbitrator has committed gross illegality in holding that it was claimant who had committed the breach of the contract by leaving the work and in completing the same. ( 5. ) A reply was filed by the claimant to the objections raised by the appellant/company highlighting that the sole Arbitrator was appointed by the owner keeping in view the technical expertise and knowledge of the Arbitrator who on consideration of the material brought on record has passed the award and hence, the award deserve to be made the Rule of the Court. ( 6. ) THE learned District Judge addressed himself to two issues, namely, whether the award was to be accepted as the Rule of the Court and be made a decree or the same is to be nullified having been passed by the arbitrator contrary to the material brought on record and in excess of jurisdiction transgressing the parameters of the agreement. The Court below took note of the fact that the Arbitrator had held number of sittings, taken note of the documents brought on record and passed the award in respect of individual claims. It has referred to the decisions cited by the owner, how the Arbitrator has not adverted to the relevant issues and awarded an interest at the rate of 18% per annum which transgress the conditions stipulated in the agreement. The Court below referred to the decisions cited before it and came to hold that the Arbitrator had not legally misconducted himself; that the Arbitrator had passed the award based on material on record and, there was no perversity of approach and that the Arbitrator had not exceeded his jurisdiction. Being of this view he directed the award to be made Rule of the Court and further directed that the claimant/company would be entitled to 6% interest from the date of decree. ( 7. ) WHEN this appeal was taken up for hearing a question arose whether the proceedings would be governed by the 1940 Act or the 1996 Act. We wanted the learned Counsel for the parties to address us in this regard so that we could proceed accordingly. Before us it was admitted that this aspect gathers significance as the facet would govern the factum pertaining to the grant of rate of interest. We may note here that Mr. Moitra, learned Counsel for the respondent alternatively argued that even if the award is treated to be one under the old act there is no scope for inference. Before us it was admitted that this aspect gathers significance as the facet would govern the factum pertaining to the grant of rate of interest. We may note here that Mr. Moitra, learned Counsel for the respondent alternatively argued that even if the award is treated to be one under the old act there is no scope for inference. In this backdrop we shall first proceed to deal with the aspect whether the award in question has been passed under the 1940 Act or under the 1996 Act. In this context we think it is apposite to refer to Section 85 of the 1996 Act. The said provision deals with repeal and savings. It reads as under:- "85. Repeal and Savings.- (1) The Arbitration (Protocol and convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed. (2) Notwithstanding such repeal- (a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force; (b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act. " ( 8. ) SECTION 86 of the 1996 Act deals with repeal of Ordinance 27 of 1996 and Saving. The said provision reads as under:- "86. Repeal and Ordinance 27 of 1996 and Saving.- (1) The arbitration and Conciliation (Third) Ordinance, 1996 (27 of 1996) is hereby repealed. (2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance shall be deemed to have been made, done or taken under the corresponding provisions of this Act. " Sub-section (2) (a) of Section 85 is of paramount importance in regard to the present controversy. Submission of Mr. Moitra is that the proceedings under 1940 Act had not commenced before the 1996 Act had come into force, therefore, it commenced after this Act came into force and the 1996 Act would be applicable. " Sub-section (2) (a) of Section 85 is of paramount importance in regard to the present controversy. Submission of Mr. Moitra is that the proceedings under 1940 Act had not commenced before the 1996 Act had come into force, therefore, it commenced after this Act came into force and the 1996 Act would be applicable. The learned Counsel put forth that at a glance at the beginning of the award it is perceivable that the Arbitrator was appointed vide letter No. CMD/arbitration/95/917, dated 6-4-1995 by he Chairman -cum -Managing director, Northern Coalfield Limited and he entered upon reference on 26-2-1996. The Arbitration and Conciliation (Third) Ordinance came into force on 25-1-1996. The Arbitrator, as is noticeable entered upon reference on 26-2-1996. The Division Bench of this Court in the case of Mohammad Akil khan Vs. M. P. Film Development Corporation Ltd. , AIR 1999 MP 255 : 2000 arb. W. LJ. 353 (MP), has ruled that where Arbitrator had entered into reference before the 1996 Act came into force the proceedings would be governed by 1940 Act and not by the 1996 Act. In the case of Rajputana Hotels vs. Pradeep Kumar Sriya, AIR 1999 Rajasthan 312, it has been held that section 85 (1) (a) does not operate retrospectively and hence, the arbitration proceedings initiated and commenced before coming into effect of the 1996 act, but terminating thereafter would be governed by 1940 Act. ( 9. ) THE Arbitration and Conciliation Ordinance, 1995 was originally promulgated on 25-1-1996. It was replaced on 26-3-1996 by the Arbitration and Conciliation (Second) Ordinance, 1996. The said ordinance was replaced by the Arbitration and Conciliation (Third) Ordinance, 1996 on 26-6-1996. The 1996 Act came into force with effect from 22-8-1996 and is made applicable from 26-1-1996. Sub-section (2) of Section 86 contains the saving clause. As admitted the Arbitrator entered into reference after the Ordinance was promulgated. ( 10. ) THE Arbitrator enters upon reference when he applies his mind to the controversy before him. In this context we may profitably refer to the decision rendered in the case of Soneylal Thakur Vs. Lachhminarain Thakur and another, AIR 1957 Patna 395, wherein it has been held as under:- "an Arbitrator does not enter upon a reference the moment he accepts to work as an Arbitrator, nor can it be said that he enters upon a reference only when he actually hears the reference. Lachhminarain Thakur and another, AIR 1957 Patna 395, wherein it has been held as under:- "an Arbitrator does not enter upon a reference the moment he accepts to work as an Arbitrator, nor can it be said that he enters upon a reference only when he actually hears the reference. An arbitrator enters upon a reference when, after having accepted the reference, he applies his mind and does something in furtherance and execution of the work of arbitration. The exact date as to when an Arbitrator enters on a reference in a particular case however, has to be determined on the facts and circumstances of the case. " ( 11. ) IN the case of Ramsahai Sheduram Vs. Harischandra dunchandji and another, AIR 1963 MP 143 , it has been laid down as under:- "it is always a question of fact, on what date the Arbitrator or the umpire as the case may be, actually entered on the reference, to be answered in accordance with the circumstances of each case. It is not necessarily the date on which the Arbitrator has before him the versions of the different parties of the subject matter of the controversy in the form of written statements or affidavits or oral depositions though immediate entry on the reference is not inconceivable. It would be the date on which the arbitrator (or umpire) does the first appropriate judicial act in connection with the controversy referred to him, by way of examining witnesses, hearing arguments and the like. " ( 12. ) SIMILAR view has been taken in the cases of M/s Kalinga Otto (P)Ltd. Vs. M/s Charanjit Kochhar, AIR 1972 Orissa 172, M/s Bright Wire and Steel industry Vs. Union of India, AIR 1985 Calcutta 298. ( 13. ) IN this context Mr. Moitra, learned Counsel for the respondent has commended us to a Division Bench judgment of the Calcutta High Court rendered in the case of Union of India and another (E. Rly.) Vs. Monoranjan mondal and others, 2000 (1) Arb. LR 326 (Calcutta ). In the said case the division Bench dwelled upon when an arbitration proceeding commences. In paragraphs 10 and 11, it has been ruled thus:- "10. Monoranjan mondal and others, 2000 (1) Arb. LR 326 (Calcutta ). In the said case the division Bench dwelled upon when an arbitration proceeding commences. In paragraphs 10 and 11, it has been ruled thus:- "10. In order to properly understand the true import of the argument raised by the learned Advocate for the appellant about the non-applicability of 1996 Act and the application of Arbitration Act, 1940 we have to actually refer to the judgment of the supreme Court in the case of The Secretary to the Govt. of Orissa and another Vs. Sarbeshwar Rout, wherein Their Lordships while referring to the commencement of arbitral proceedings in terms of Arbitration Act, 1940 held as under:-so far an action in a Court of law is concerned, it must be held that it commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same. If a plaint, drawn up in accordance with the prescribed law, is filed before a Civil Court, the suit must be deemed to have been instituted on that date, and not on a later date when the Court takes up the plaint and applies its mind. Ordinarily the plaint is examined by stamp reporter of the Court who scrutinises whether proper Court-fee has been paid or not, and then makes a report. The Court generally takes up the plaint only later. Similar is the position with respect to other applications and memoranda of appeal. It must, therefore, be held that the proceeding is instituted when the claimant filed his claim. We do not see any reason to apply a different approach in the case of an arbitration proceeding. As seen as the Arbitrator indicates his willingness to act as such, the proceeding must be held to have commenced. This aspect did not arise for decision in the cases Executive Engineer (Irrigation) Vs. Abhaduta Jena, (1988) 1 SCC 418 = AIR 1988 SC 1520 or Gujrat Water Supply and Sewerage Board Vs. Unique Erectors (Gujrat) Pvt. Ltd. , (1989)1 SCC 532 = AIR 1989 SC 973 and no assistance from them can be taken in the present appeal. The learned Counsel for the appellant is, therefore, right in saying that the Arbitrator in the present case, by directing on 20-4-1982 the parties to file their statements of claim, clearly indicated that he accepted the offer to arbitrate. The learned Counsel for the appellant is, therefore, right in saying that the Arbitrator in the present case, by directing on 20-4-1982 the parties to file their statements of claim, clearly indicated that he accepted the offer to arbitrate. The proceedings must, therefore, be deemed to have been instituted not later than this date. We according held that the award so far it allowed interest for the period after 20-4-1982, is without jurisdiction and must be excludes. The appeal is accordingly allowed in part. The parties shall bear their own costs. Appeal partly allowed. 11. In order therefore to find out as to whether arbitral proceeding as indicated in Section 85 of 1996 Act had commenced prior to the coming into force of 19% Act we have to find out whether prior to 26th January, 1996 when 1996 Act had come into force, in terms of the ratio laid down in the judgment of the Supreme court in Sarbeshwar Rout (supra) the Arbitrators had entered upon the reference by indicating their willingness to act as such. Applicability of Section 21 of 1996 Act is not relevant in our case for determining the commencement of arbitral proceedings because Section 21 of 1996 Act relates to and deals with the commencement of arbitral proceedings under 1996 Act. The definition of "commencement of arbitral proceedings" as occurring in Section 21 of 1996 Act will have a bearing only to a point of time after 1996 Act had come into force and will have no relation to the commencement of arbitral proceedings at a point of time before 1996 Act had come into force. We are saying so because Section 21 does not deal with the scope of commencement of arbitral proceedings under Arbitration Act, 1940. On the other hand when Section 85 of 1996 Act talks about the commencement of arbitral proceedings before the coming into force of 1996 Act, it clearly means that the arbitral proceedings should have commenced before the coming into force of 1996 act, in the manner such commencement is understood under the Arbitration Act. On the other hand when Section 85 of 1996 Act talks about the commencement of arbitral proceedings before the coming into force of 1996 Act, it clearly means that the arbitral proceedings should have commenced before the coming into force of 1996 act, in the manner such commencement is understood under the Arbitration Act. The expression used in Section 85, vis "which commenced before this Act come into force" clearly and conclusively suggests that the principles governing the scope of commencement of arbitral proceedings as were applicable under 1940 Act were to be applied for understanding as to whether 1996 Act would have repealed 1940 Act with respect to such proceedings or not. We are therefore, clearly of the opinion that Section 21 of 1996 Act will have no manner of application to decide and determine whether the arbitral proceedings had commenced before the coming into force of 1996 Act or not. We are saying so far a very logical and valid reason. If arbitral proceeding as contemplated under the Arbitration Act, 1940 had commenced before the coming into force of 1996 Act, in terms of Section 85 thereof, this Act will have no application and the provisions of the Arbitration Act, 1940 will have applicability. But if the proceedings in terms of and as contemplated under the Arbitration Act, 1940 had not commenced before the coming into force of 1996 Act, undoubtedly, 1996 Act would apply. With utmost respect therefore, we have no hesitation in saying that Their Lordships of the Supreme Court in the case of Shettys Construction (P) Ltd. (supra); while noticing section 21 of 1996 Act had no occasion to deal with this particular aspect of the matter, peculiar to the facts of our case because of the claim of the appellants that the provisions of arbitration Act, 1940 are attracted in this case. On the other hand the judgment by a Larger Bench of three Honble Judges in the case of Sarbeshwar Rout (supra) is apposite to this case and the ratio as laid down in Para 8 of the judgment regarding the stage when arbitral proceedings are deemed to commence under the Arbitration Act, 1940 is fully applicable to the facts of our case. " ( 14. ) IN the present case the Arbitrator has clearly stated that he entered into reference on 26-2-1995. " ( 14. ) IN the present case the Arbitrator has clearly stated that he entered into reference on 26-2-1995. We have been apprised at the Bar, notices were issued after appointment on that date. Thus, there is no dispute that the Arbitrator entered into reference on that date. The arbitration proceeding commenced only when the Arbitrator entered into reference. Thus, it is graphically clear that the Arbitrator entered upon reference after the first Arbitration Ordinance had come into force. Thus in our considered view the proceedings are to be governed by the 1996 Act. ( 15. ) IN view of the aforesaid factual backdrop we will address ourselves to the issue whether the award passed by the Arbitrator withstand the test laid down under the 1996 Act. We shall also, as alternatively as urged by Mr. Moitra also scrutinise the award in regard to its tenability in the backdrop of 1940 Act inasmuch as the Court below had tested on the anvil of 1940 Act. We may state at this juncture the parameters may not be distinctive and sometimes overlap as the challenge on both scores are intrinsically connected. ( 16. ) NOW we shall proceed to deal with respective contentions canvassed at the Bar. In support of the appeal it is submitted by Mr. N. S. Kale, learned Senior Counsel for the appellant that the decision rendered by the learned Trial Judge is sensitively susceptible as the Court below has not really appreciated the objections raised by the appellant in proper perspective. It is put forth by him that time was essence of the contract and when the owner placed reliance on the time factor the Arbitrator could not have put the blame on the appellant. To buttress this facet he has referred to Clause 6 of the contract. It is his further submission that Clause 13 of the contract by no stretch of imagination lays as a postulate that owner would do a particular act, but on the contrary the language envisaged therein is only indicative of the fact that there has been some assurance of help and such an assurance can not be treated as a stipulation under the contract to be categorical and unequivocal terms. Mr. Mr. Kale has further submitted that if the reasonings given by the arbitrator are scrutinised it would be clear as day that there was no justification by the contractor for abandoning the work and the person who had left the work unfinished can not claim the benefit and as the same as been done in the instant case the award is vitiated and the decision making it the Rule of Court, as a necessary corollary, is vulnerable. The learned Counsel for the appellant has propound that the Arbitrator has travelled beyond the scope of the agreement and, therefore, the award can not withstand scrutiny as the Arbitrator being the creature of agreement is under strict obligation to decide the controversy within the parameters of the agreement and travelling beyond it takes him into the arena where he has no jurisdiction to entrench decide. According to Mr. Kale the reasonings ascribed by the Arbitrator are perverse and perverse reasonings should not have been given the stamp of approval by the court below. It is propounded by him that the Arbitrator has committed legal misconduct by erroneously interpreting the clauses of the agreement and hence, the award is absolutely indefensible. Criticising further the learned counsel has argued that there are errors apparent on award and hence, the same should not have been made Rule of the Court. To bolster his submissions on various aspects he has placed reliance on the decisions rendered in the cases of M/s Hind Construction Contractors by its sole proprietor Bhikamchand mulchand Jain (dead) by L. Rs. Vs. State of Maharashtra, AIR 1979 SC 720 ; state of Maharashtra and another Vs. Digambar Balwant Kulkarni, AIR 1979 sc 1339 ; State of Rajasthan Vs. Puri Constructions Co. Ltd. , (1994) 6 SCC 485 : 1994 ATLR 481 (SC ). ( 17. ) MR. Moitra, learned Counsel appearing for the respondent/contractor, sounding a contra note, has submitted that if the award is scanned or discussed from all possible angles it does not suffer from perversity of approach but on the contrary, clearly shows that there has been proper application of mind by the Arbitrator which is reasonable. ( 17. ) MR. Moitra, learned Counsel appearing for the respondent/contractor, sounding a contra note, has submitted that if the award is scanned or discussed from all possible angles it does not suffer from perversity of approach but on the contrary, clearly shows that there has been proper application of mind by the Arbitrator which is reasonable. It is contended by him that the stand taken by the owner that time is the essence of the contract, has no legs to stand upon as such a stipulation does not flow from the agreement and the circumstances fresco altogether a different picture. The learned Counsel has referred to Paragraphs 2 to 5 of the award to highlight that there was delay in handing over the site, designs and drawings and that apart, revised drawings were issued and giving progress of work and the contract was rescinded and on the base of the aforesaid facts the Arbitrator has come to hold that the rescission of the contract is bad and accordingly passed the award considering various claims. He has referred to the arbitration clause to show that the arbitrator has acted within the ambit and sweep of the agreement and there is no question of travelling beyond the agreement. The learned Counsel has also contended that there is no apparent error perceivable on the face of the award and the legal misconduct on the bedrock of perversity of approach is a misconceived me. It is further canvassed by Mr. Moitra that as the entire proceeding is governed by the 19% Act, grant of interest at the rate of 6 per cent per annum by the Court below is untenable and this Court while passing the decision should take recourse to Order 41 Rule 43 of the Code of Civil procedure and pass an appropriate decree in that regard. ( 18. ) AS we have indicated earlier, we would like to deal with the sustainability of the award and the impugned decision of the Court below on the anvil of the 1996 Act as well as on the 1940 Act. Section 34 of the 1996 Act deals with recourse against arbitral award. The said provision reads as under:- "34. ( 18. ) AS we have indicated earlier, we would like to deal with the sustainability of the award and the impugned decision of the Court below on the anvil of the 1996 Act as well as on the 1940 Act. Section 34 of the 1996 Act deals with recourse against arbitral award. The said provision reads as under:- "34. Application for setting aside arbitral award.- (1)Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3 ). (2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that- (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an Arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submissions to arbitration: provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only the part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the Arbitral Tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this part from which the parties can not derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that- (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with he public policy of India. Explanation :- Without prejudice to the generality of subclause (ii) of clause (b), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received that arbitral award or, if a request had been made under Section 33, from the date on which that request had been disposed of by the Arbitral Tribunal: provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months, it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the Arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of Arbitral Tribunal will eliminate the grounds for setting the arbitral award. " ( 19. ) ON a scrutiny of the aforesaid provision it is perceivable that the aforesaid provision lays down a basic scheme with regard to judicial intervention in the arbitral proceeding. To set aside an award a party is required to file an application before the Court on one or more grounds referred to in subsection (2) and within the time specified. The aforesaid provision is mandatory in nature. In that sense no other grounds or no other methods are permissible. Sub-section (2) (a) enumerates the grounds on which a party may seek setting aside of the award by the Court. Onus is on him to furnish the proof. The grounds are enumerated in sub-section (2) (a) (i) to (v ). The aforesaid provision is mandatory in nature. In that sense no other grounds or no other methods are permissible. Sub-section (2) (a) enumerates the grounds on which a party may seek setting aside of the award by the Court. Onus is on him to furnish the proof. The grounds are enumerated in sub-section (2) (a) (i) to (v ). The grounds enumerated thereon relate to some incapacity of party, validity of the agreement under the law to which the parties are subject to it or, the party making the application was not given the proper notice on appointment of an Arbitrator, there was inability to present his case; the arbitral award deals with certain disputes not contemplated by or not falling within the terms of the submission to arbitration, or it contains decision on matter beyond the scope of the submission to arbitration; and composition of the Arbitral Tribunal. Sub-section (2) (b) empowers and authorises the Court to set aside an award if the subject-matter of dispute is not capable of settlement by arbitration under the law for the time being in force, or the arbitral award is in conflict with the public policy in India. The explanation further clarifies that the award is conflict with the public policy of India if the making of the award induced or affected by fraud or corruption or in violation of Section 75 or Section 81. Sections 75 and 81 of the Act reads as under:- "75. Confidentiality.- Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement. 81. Admissibility of evidence in other proceedings.- The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings- (a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute; (b) admissions made by the other party in the course of the conciliation proceedings; (c) proposals made by the conciliator; (d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator. " ( 20. " ( 20. ) IN this backdrop the present award and the impugned decision are to be tested. Before we proceed to deal with the contentions of Mr. Kale and Mr. Moitra, it is apposite to refer to certain decisions under the New Act. In the case of Olympus Superstructures Pvt. Ltd. Vs. Meena Vijay Khetat and others, JT 1999 (3) SC 514 :2001 Arb. W. LJ. 324 (SC), a two Judge Bench of the Apex Court after stating the facts in Paragraph 10 noted the points which read as under :- "10. On these contentions, the following points arise for consideration :- (1) Whether the appellant is right in contending that the arbitration Clause 39 in the main agreement did not permit the arbitrator to deal with the disputes relating to the Interior Design agreement which contained a different arbitration clause and whether the award, in respect of the Interior Design Agreement was void ? (2) Whether the appellant who did not raise any question of jurisdiction under Section 16 of the Act in relation to the disputes under the Interior Design Agreements, could have raised a question of jurisdiction of the Arbitrator or of his power to deal with issues arising under the said Agreements at the stage of section 34 ? (3) Whether an Arbitrator is not entitled to pass an award directing specific performance of an agreement of sale and the subject-matter of the dispute is not capable of arbitration under section 34 (2) (b) (i) of the Act ? (4) Whether the appellant could question factual findings relating to default, time being essence, readiness and willingness etc. before the Arbitrator under Section 34 of the Act ? ( 21. ) THEREAFTER Their Lordships in Paragraph 13 referred to Section 16 of the 1996 Act which deals with competence of Arbitral Tribunal to rule on its jurisdiction. After so holding in Paragraphs 14 and 15 Their Lordships held as under:- "14. before the Arbitrator under Section 34 of the Act ? ( 21. ) THEREAFTER Their Lordships in Paragraph 13 referred to Section 16 of the 1996 Act which deals with competence of Arbitral Tribunal to rule on its jurisdiction. After so holding in Paragraphs 14 and 15 Their Lordships held as under:- "14. It will be noticed that under the Act of 1996 the Arbitral tribunal is now invested with power under sub-clause (1) of section 16 to rule on its own jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement and for that purpose, the arbitration clause which forms part of the contract shall be treated as an agreement independent of other terms of the contract and any decision by the Arbitral Tribunal that the contract is null and void shall not entail ipso jure affect the validity of the arbitration clause. This is clear from sub-clause (b) of Section 16 (1) which states that a decision by the Arbitral Tribunal that the main contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. 15. In the present context sub-clauses (2) and (3) of Section 16 are relevant. They refer to two types of pleas and the stages at which they can be raised. Under sub-clause (2) a plea that the arbitral Tribunal does not have jurisdiction shall be raised not later than the submissions of the statement of defence: however, a party shall not be precluded from raising such a plea merely because he has appointed or participated in the appointment of an Arbitrator. Under sub-clause (3) a plea that the Arbitral tribunal is exceeding the scope of its authority shall be raised during the arbitral proceedings. These limitations in sub-clauses (2) and (3) are subject to the power given to the Arbitrator under sub-clause (4) of Section 16 that the Tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3) admit a later plea if it considered the delay justified. Sub-section (5)requires the Arbitral Tribunal to decide on the pleas referred to sub-section (2) or sub-section (3) at that stage itself. Sub-section (5)requires the Arbitral Tribunal to decide on the pleas referred to sub-section (2) or sub-section (3) at that stage itself. It is further provided that if either of the pleas is rejected and the Arbitral tribunal holds in favour of its own jurisdiction, the Tribunal will continue with the arbitral proceedings and proceed to make the arbitral award. Then comes sub-clause (6) which states that the party aggrieved by such amarbitral award may make an application for setting aside such an arbitral award in accordance with section 34. " ( 22. ) AFTER so holding Their Lordships referred to Section 34 of the act and in Paragraphs 18 and 19 expressed thus :- "18. It will be noticed that under sub-clause 2 (a) (iv) of Section 34, the arbitral award may be set aside by the Court if the award deals with a dispute not contemplated by or not falling within the terms of the submission to Arbitrator or if it contains a decision on matters beyond the scope of the submission to arbitration. The proviso to clause (iv) deals with severability. 19. The word terms of the submission to arbitration in Section 34 (2) (a) (iv) in our view, refer to the terms of the arbitration clause. This appears to be the meaning of the word if one refer to Section 28 which uses the word dispute submitted to arbitrator and to Section 43 (3) which uses the word submit future dispute to arbitration. " ( 23. ) AS has been indicated earlier, the Arbitrator entered into a reference after the 1996 Act came into force and nothing has been brought on record to dispute the said factum indicating that the Arbitrator prior to the said Act ever indicated his willingness to act. Thus, we unhesitatingly hold that the 1996 Act would apply. ( 24. ) MR. Kale, learned Senior Counsel appearing for the appellant assailing the defensibility of the impugned decision contended that the Arbitrator has travelled beyond the scope of the agreement. It is his submission that the reasons ascribed by the Arbitrator are perverse and there are errors on the face of record. It is further urged by him that there has been erroneous interpretation of the clause of the agreement and there has been legal misconduct. It is his submission that the reasons ascribed by the Arbitrator are perverse and there are errors on the face of record. It is further urged by him that there has been erroneous interpretation of the clause of the agreement and there has been legal misconduct. agreement stipulates that time is the essence of the contract but the said aspect has not been kept in view by the learned Arbitrator. The learned Senior counsel has also commended us to the decisions rendered in the cases of digambar Balwant Kulkarni (supra) and M/s Hind Construction Contractors (supra ). The said decisions have been rendered in a totally different context. In the instant case it to be seen whether the Arbitrator has misinterpreted or travelled beyond the scope of the agreement. In this context it is profitable to refer to Clause 6 of the contract : "6. Date of commencement, rate of progress, delays, forfeiture and penalties.-The contractor/contractors shall submit a construction schedule showing the order in which he/they propose (s) to carry out the work, the date on which he/they will start the several salient feature (including procurement of materials, plant and the contemplated dates for completing the same ). For the purpose of preparing the schedule the work shall be deemed to have commenced on expiry of 10th day from the date of issue of letter of intent or from the date of handing over the site for the work whichever is later. The contractor shall have to keep cement and all other materials issued by the company in a Godown constructed by the contractor near the work site. The articles kept in this godown will be subject to checks and inspection by the N. C. L. Officers authorized for the purpose. The contractors shall have to maintain proper accounts of the materials issued to them by the NCL authorities and the stock and issue Registers to be maintained by the contractor will be liable to be checked by the NCL authorities as and when required. The contractors shall have to maintain proper accounts of the materials issued to them by the NCL authorities and the stock and issue Registers to be maintained by the contractor will be liable to be checked by the NCL authorities as and when required. The work should be commenced within 10 days from the issue of the letter of acceptance from the Administration or from the date of handing over the site for the work whichever is later and completed on or before the date of completion specified in the agreement- (a) The time allowed for carrying out the work as entered in contract Agreement shall be strictly observed by the contractor/contractors and the time of completion of the work shall be reckoned from ten days after the issue of the letter of the acceptance of tenders or from the date of handing over the site for the work whichever is later. The work shall throughout the stipulated period of the contract be carried on with all due diligence (time being deemed to be the essence of the contract on the part of the contractor/contractors) and the contractor/contractors shall pay as compensation an amount up to 1 per cent of the estimated cost of the whole work as shown by the tender for every day that the work remains uncoerced or unfinished after the proper dates in the event of the contractor/contractors failing to comply with the rate of progress specified in the agreement they shall be liable to pay as compensation an amount up to 1% of the said estimated cost of the whole work for every week that the due quantity of work remains incomplete. Provided always that the entire amount of compensation to be paid under the provision of this clause shall not exceed 10 per cent of the estimated cost of the work as shown by the tender. Provided always that the entire amount of compensation to be paid under the provision of this clause shall not exceed 10 per cent of the estimated cost of the work as shown by the tender. If the progress of any particular portion of the work is unsatisfactory the Executive Engineer shall not with standing that the general progress is satisfactory in accordance with Clause 6 (a) be entitled to take action under the Clause 6 (b) after giving contractor/contractors 10 days notice in writing and the contractor/contractors will have no claim for compensation for any loss sustained by them owing to such action, (b) To employ another agency for executing the job or labour paid by the company and to supply materials to carry out the work or any part of the work debiting the contractor/contractors with the cost involved in engaging another agency or the cost of the labour and prices of the materials or the amount of which cost and price certificate of the Executive Engineer shall be final and conclusive against the contractor/contractors as the case may be and crediting them with the value of work done. In all respect in the same manner and at the same rates of the contract the certificate of the Executive Engineer as to the value of the work one shall be final and conclusive against the contractor/contractors. " ( 25. ) SUBMISSION of Mr. Kale is that if the clause is read in stric to sensu, it does unequivocally convey the meaning that the time is the essence of the contract and as work has not been done during the said period the question of allowing any claim at the instance of the claimant is totally unjustified and unsustainable. The Arbitrator has dealt with this facet while dealing with the claim item No. 1. The claimant had pleaded that the work had been delayed due to failure on the part of the company to provide exclusive possession of the entire site on the date of work; failure to provide drawings on the date of start itself; failure to provide the coal for bricks supply; failure to provide required help in procuring materials; failure to make monthly payment; failure to provide decisions for smooth execution of work; failure to provide power; and failure to provide the stipulated materials. While dealing with these facets the Arbitrator has come to hold that the appellant/company had failed in handing over the site on the date of signing the agreement; that there was delay in giving the designs; and the company had failed to supply coal in time. The learned Arbitrator has also recorded the finding as under:- "i have carefully gone through the contention of both the parties in respect of the delay in issue of essentiality certificate to enable the claimant to procure the steel. The claimant in their written arguments dated 27-9-19% and 17-11-1996 as also with the help of documents contended that there was delay in providing help such as issue of essentiality certificate for procurement of steel which obligation the respondent can not get away from. The respondents argument that they are not contractually responsible nor obliged to procure the material and it was only a pious wish that the respondent will help the claimant in procuring the materials viz. steel will not fully absolve the respondents from their obligation to provide necessary authorisation for procurement of steel as is evident from Clause 13 (1) of the General terms and conditions annexed to the agreement wherein the respondent has agreed to provide all possible help in the form of permit, authorisation etc. for procurement of materials, although clause (1) of special items and conditions is silent about this. The argument of the respondent also give sufficient indication of the respondents willingness to issue the essentiality certificate which they did finally issue. The action of the respondent of issuing the essentiality certificate is a tacit acceptance of the obligation and as such the contention of the claimant merit consideration. " ( 26. ) AFTER so holding the learned Arbitrator has held that the respondent was responsible for breach in respect of six items, namely not providing site, drawings, delayed supply of coal, not providing help in time for procurement of steel (ie. , issue of essentiality certificate) delay in making payment, and failure to provide decision for smooth execution of work. Mr. Kale, learned senior Counsel has referred to Clause 13 of the agreement to show that the said clause only provides for a helping hand and is not binding in nature. We think it appropriate to reproduce the said clause as this clause has been interpreted by the learned Arbitrator: "13. Mr. Kale, learned senior Counsel has referred to Clause 13 of the agreement to show that the said clause only provides for a helping hand and is not binding in nature. We think it appropriate to reproduce the said clause as this clause has been interpreted by the learned Arbitrator: "13. Supply of Materials.- (1) The contractor (s) will himself themselves will be responsible to arrange all materials required for the work except cement. However, wherever possible the company will provide him/them all possible help in the form of permit authorisation etc. for the procurement of the same. (2) The company will supply the cement to the contractor (s) at the colliery store at Rs. 58=55 per bag, on requisition well in advance. No claim will be entertained in case of delay in supply of cement to the contractor (s ). (3) Coal, if required for brick burning purpose for the work will be supplied at top at the prevalent rates from time to time on payment of the cost there of as per prevalent practice/norms of singrauli Area. Non issue of coal will not be considered as claim for non-completion of work. (4) The stores materials if any, obtained by the contractor (s)from the company store in excess of the actual requirement for the work the company will charge the contractor (s) the cost at double the rates for such materials as per contract for the quantity in excess over the actual requirement thus drawn. " ( 27. ) AS quoted hereinbefore the respondents indicated willingness to issue essentiality certificate and they did finally issue the same. The Arbitrator has interpreted this action of the respondent as the tacit acceptance of obligation. Quite apart from the above, the learned Arbitrator has taken note of various aspects to arrive at the conclusion that there has been breach of conditions by the owner and in view of this, the colossus complaint made by the learned Senior Counsel that the time is the essence of contract and the contractor did not work within the time frame, no claim is tenable and pales into insignificance inasmuch as per the finding of the learned Arbitrator the owner was at fault. ( 28. ) MR. ( 28. ) MR. Kale has submitted that the respondent had no justification to abandon the work and the Arbitrator has committed legal misconduct by allowing the claims as by such allowance/grant of claims perversity of approach is manifest. To fortify the aforesaid contention Mr. Kale has taken us through various items of claim and award passed in respect of the same. ( 29. ) BEFORE we comment on the said aspects we think it necessary to refer to certain decisions how the award of an Arbitrator is to be dealt with. We may hasten to state here that we are not going to enter into the arena of the scope of interference under 1996 Act in detail, as we have already indicated earlier, we would also test the tenability of the award under the old Act. In this context we may profitably refer to the decision rendered in the case of M/s allen Berry and Co. Private Ltd. Vs. The Union of India, AIR 1971 SC 696 , wherein the Apex Court in Paragraph 9 has held as under:- ". . . . . . The rule thus is that as the parties choose their own arbitrator to be the Judge in the dispute between them they can not, when the award is good on the face of it, object to the decision either upon the law or the facts. Therefore, even when an Arbitrator commits a mistake either in law or in fact in determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake. " ( 30. ) IN the case of M/s. Tarapore and Company Vs. Cochin Shipyard ltd. and another, AIR 1984 SC 1072 , after referring to certain earlier decisions the Apex Court in Paragraph 32 expressed the view as under:- "32. " ( 30. ) IN the case of M/s. Tarapore and Company Vs. Cochin Shipyard ltd. and another, AIR 1984 SC 1072 , after referring to certain earlier decisions the Apex Court in Paragraph 32 expressed the view as under:- "32. On a conspectus of these decisions, it clearly transpires that if a question of law is specifically referred and it becomes evident that the parties desired to have a decision on the specific question from the Arbitrator about that rather than one from Court, then the Court will not interfere with the award of the Arbitrator on the ground that there is an error of law apparent on the face of the award even if the view of law taken by the Arbitrator does not accord with the view of the Court. This view of law taken in england was stated by this Court to be the same in this country and since the decision in Thawardass case ( AIR 1955 SC 468 )which follows earlier decisions in England and India, it has not been departed from. The view canvassed for by Mr. Pai that common law Courts were very reluctant to part with its jurisdiction has hardly any relevance where a specific question of law including the one touching the jurisdiction of the Arbitrator is referred to the Arbitrator for his decision. Even if the decision of the Arbitrator does not accord with the view of the Court, the award can not be set aside on the sole ground that there is an error of law apparent on the face of it. " ( 31. ) IN the case of M/s Hindustan Tea Co. Vs. M/s K Shashikant and co. and another, AIR 1987 SC 81 , while dealing with reasoned award Their lordships ruled thus :- "2. The award is reasoned one. The objections which have been raised against the award are such that they can not indeed be taken into consideration within the limited ambit of challenge admissible under the scheme of the Arbitration Act. Under the law, the Arbitrator is made the final arbiter of the dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. . . . . " ( 32. ) IN the case of Municipal Corporation of Delhi Vs. Under the law, the Arbitrator is made the final arbiter of the dispute between the parties. The award is not open to challenge on the ground that the Arbitrator has reached a wrong conclusion or has failed to appreciate facts. . . . . " ( 32. ) IN the case of Municipal Corporation of Delhi Vs. M/s Jagan Nath ashok Kumar and another, AIR 1987 SC 2316 , dealing with the role of an arbitrator the Apex Court spoke thus:- "4. . . . . . . The Arbitrator in our opinion is the sole Judge of the quality as well as quantity of evidence and it will not be for this court to take upon itself the task of being a judge of the evidence before the Arbitrator. It may be possible that on the same evidence the Court might have arrived at a different conclusion than the one arrived at by the Arbitrator but that by itself is no ground in our view for setting aside the award of an Arbitrator. " ( 33. ) IN the case of U. P. Hotels etc. Vs. U. P. State Electricity Board, air 1989 SC 268 , in Paragraph 17 Their Lordships expressed the view as under:-"17. . . . . . . Even assuming, however, that there was an error of construction of the agreement or even that there was an error of law in arriving at a conclusion, such an error is not an error which is amenable to correction even in a reasoned award under the law. Reference may be made to the observations of this court in Coimbatore Distt. P. T. Samagam Vs. Bala Subramania foundry, AIR 1987 SC 2045 , where it was reiterated that an award can only be set aside if there is an error on its face. Further, it is an error of law and not mistake of fact committed by the arbitrator which is justiciable in the application before the court. Where the alleged mistakes or errors, if any, of which grievance were made were mistakes of facts if at all, and did not amount to error of law apparent on the face of the record, the objections were not sustainable and the award could not be set aside. " ( 34. ) IN the case of M/s. Sudarshan Trading Co. Vs. The Govt. " ( 34. ) IN the case of M/s. Sudarshan Trading Co. Vs. The Govt. of Kerala and another, AIR 1989 SC 890 , in Paragraph 31, it has been held as follows :-"31. . . . . . . This, in our opinion, the Court had 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 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. " ( 35. ) THE limited jurisdiction of the Court was dealt with in the case of Puri Construction Pvt. Ltd. Vs. Union of India, AIR 1989 SC 777 . In the said case the Apex Court unequivocally stated that the Court has no jurisdiction to sit in appeal and examine the correctness of the award on merits. Similar view was expressed in the case of Food Corporation of India Vs. Joginderpal mohinderpal and another, AIR 1989 SC 1263 . ( 36. ) IN this context we may refer with profit to the decision rendered in the case of Hindustan Construction Co. Ltd. Vs. State of Jammu and Kashmir, air 1992 SC 2192 : 1992 A. T. L. R. 417 (SC), wherein the view has been expressed thus:- "8. . . . . . . . Even if, in fact, the Arbitrators had interpreted the relevant clauses of the contract in making their award on the impugned items and even if the interpretation is erroneous, the court can not touch the award as it is within the jurisdiction of the Arbitrators to interpret the contract. . . . . . . . Even if, in fact, the Arbitrators had interpreted the relevant clauses of the contract in making their award on the impugned items and even if the interpretation is erroneous, the court can not touch the award as it is within the jurisdiction of the Arbitrators to interpret the contract. Whether the interpretation is right or wrong, the parties will be bound, only if they set out their line of interpretation in the award and that is found erroneous can the Court interfere. " ( 37. ) WHILE dealing with the concept of reasonableness of reasons the apex Court in the case of Bijendra Nath Shrivastava (Dead) through L. Rs. Vs. Mayank Shrivastava and others, AIR 1994 SC 2562 :1994 A. T. L. R. 527 (SC), in Paragraph 22 ruled thus:- ". . . . . . If the Arbitrator or umpire chooses to give reasons in support of his decision it would be open to the Court to set aside the award if it finds that an error of law has been committed by the Arbitrator or umpire on the basis of the recording of such reasons. The reasonableness of the reasons given by the Arbitrator can not, however, be challenged. The Arbitrator is the sole 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 Arbitrator. The Court should approach an award with a desire to support it, if that is reasonably possible, rather than to destroy it by calling it illegal. . . . . . " ( 38. ) IN this context we may usefully refer to the decision rendered in the case of U. P. State Electricity Board Vs. M/s Searsole Chemicals Ltd. , AIR 2001 SC 1178 , wherein the Apex Court expressed the view as under:- ". . . . . . When the Arbitrators have applied their mind to the pleadings, the evidence adduced before them and the terms of the contract, we do not think, it is within our scope to re-appraise the matter as if this were an appeal, and it is clear that where two views are possible in this case there is no such scope the view taken by the Arbitrators would prevail. " ( 39. " ( 39. ) IF the present factual matrix is tested on the touchstone of the aforesaid principles laid down by the Apex Court we are of the considered opinion that the claims granted by the Arbitrator can not be found fault with. We say so inasmuch as the Arbitrator has referred to the pleadings, the material brought on record and dealt with each and every aspect as put forth before him. What is broadly contended before us that there has been erroneous interpretation of the agreement, perversity of approach and transgression of the terms of the agreement. In addition to the aforesaid it is contended that the Arbitrator has awarded certain claims which should not have been allowed. On an X-ray of the award it is clearly perceivable that the arbitrator has referred to series of documents and passed an item-wise award. We perceive no perversity of approach. We also do not see that the reasons given by the Arbitrator are anyway based on no evidence or no material thereby attracting the concept of perversity. The learned Trial Judge has dealt with this aspect and given the stamp of approval to the award by making it Rule of the Court. We have also ourselves scanned the award and the objections raised. The claim item No. 1 relates to grant of damages due to delay in handing over site, drawings etc. We have already discussed this aspect hereinbefore. Claim item No. 2 relates to grant of damages due to increase in prices of material, labour due to prolongation of the contract; claim item No. 3 pertains to wastage/damage etc. of materials illegally confiscated by the respondents; claim item No. 4 is in the sphere of grant of damage due to illegal confiscation of construction equipments etc. and other items; claim item No. 5 is in the spectrum of realisation of balance amount of escalation; claim item No. 6 has nexus with the balance payment illegally not paid/withheld by the respondent; claim item No. 7 is relatable to loss of profit; and the claim item No. 8 is with regard to grant of interest. The learned Arbitrator has discussed in detail the scope of the claims documents produced and how they are arbitrable and passed the award by giving reasons and quantified the same. The learned Arbitrator has discussed in detail the scope of the claims documents produced and how they are arbitrable and passed the award by giving reasons and quantified the same. We perceive no reason to come to the conclusion that reasons are based on no evidence or there is perversity of approach. That apart, we also do not find that neither the subject-matter of dispute is not capable of settlement by the Arbitrator under the Jaw for the time being in force nor the award is in conflict with the public policy of India. Hence, we have no difficulty in concurring with the view taken by the learned Arbitrator. ( 40. ) ANOTHER aspect of submission which has been strenuously urged before us by Mr. Moitra, learned Counsel for the respondents is that as the award has been passed under 1996 Act, Section 31 (7) (b) would have full play. The aforesaid provision reads as under :- "31 (7) (b ). A sum directed to be aid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per cent per annum from the date of the award to the date of payment. " ( 41. ) IT is submitted by Mr. Moitra that the learned Arbitrator has granted 18% interest and that being the statutory the same should be rectified in exercise of power under Order 41 Rule 33 of the CPC and this Court should pass a decree by modifying the decree passed by the Court below by granting interest at the rate of 18%. It is in his submission that the Arbitrator has declined to grant interest in respect of pre reference and pendente lite period solely on the basis that the notices issued by the claimants do not specify the sum due on that date. It is urged by him that even in terms of Interest Act, 1978 the notices need not specify the sum due and more so, in any case the same is not required for grant of pendente lite interest. He has pressed into service Section 4 of the Interest Act, 1978. He has also relied on the decisions rendered in the case of Hakam Singh Vs. Gammon (India) Ltd. , (1971) 1 SCC 286 , to show that the Code of Civil Procedure is applicable to the Arbitration act. He has pressed into service Section 4 of the Interest Act, 1978. He has also relied on the decisions rendered in the case of Hakam Singh Vs. Gammon (India) Ltd. , (1971) 1 SCC 286 , to show that the Code of Civil Procedure is applicable to the Arbitration act. The learned Counsel has also placed reliance on the decision rendered in the case of K Muthuswami Gounder Vs. N. Palaniappa, (1998) 7 SCC 327 . To pyramid his contention he has submitted that power under Order 41, Rule 33 of the CPC though discretionary should not be declined to be exercised merely on the ground that the party has not filed any appeal. He has also placed reliance on the decision rendered in the case of State ofjandkand another Vs. Dev Dutt Pandit, (1999) 7 SCC 339 :1999 Arb. W. LJ. 704 (SC), to buttress his contention that interest pendente lite should be granted and the judgment passed by the District Judge should be modified in respect of the post-decretal period interest from 6% to 18% per annum. To appreciate the aforesaid submission we have perused the claim item No. 8 which deals with the claim of the claimant for grant of 18% per annum in relation to the period pertaining to pre reference, pendente lite and future. The Arbitrator has recorded the following reasons:- "after perusing the record, pleadings and also after hearing both the party I am of the opinion that the claimant is entitled only to future interest. The respondents argument that it is beyond the scope of the agreement can not be accepted in view of judgments of Honble Court referred to by the claimant and on principle of natural justice. The respondents denial of the claim as stated in their written submission dated 29-10-1996 is on the assumption that nothing,is payable to the claimant. I therefore, award interest as under:- (1) No pre suit and pendente lite interest is awarded in favour of the claimant as the notices issued by the claimant do not specify the sum due on that day. (2) I award future interest @ 18% p. a. on the awarded amount from date of award till the date of payment or decree whichever is earlier. " ( 42. (2) I award future interest @ 18% p. a. on the awarded amount from date of award till the date of payment or decree whichever is earlier. " ( 42. ) IN view of the aforesaid we are of the considered opinion, as the arbitrator had not granted pre reference and pendente lite interest in favour of the claimant the same is not payable. ( 43. ) AS far as grant of interest at the rate of 18 per cent per annum is concerned it is perceivable that the Arbitrator had granted pendente lite interest at the rate of 18 per cent on the awarded amount from the date of the award till the date of payment or decree whichever is earlier. On a perusal of the judgment passed by the learned District Judge we find that he has not reduced the interest from 18 per cent to 6 per cent till the date of the decree. He has only granted 6 per cent interest from the date of the decree till the date of payment. Though Mr. Moitra has strenuously urged before us that Section 31 (7) (b) clearly postulates that the award shall carry interest at the rate of 18 per cent per annum from the date of award to the date of payment, we need not go into the aspect whether this Court can exercise power under Order 41 rule 33 of the CPC inasmuch as the said contention can be repelled solely by referring to the award which we have done hereinbefore. The Arbitrator in clear-cut terms has stated that the interest at the rate of 18 per cent shall be paid by the owner from the date of the award till the date of payment or decree whichever is earlier. Section 31 (7) (b) that has a qualifier, namely, "unless the award otherwise directs" and in the case at hand there is otherwise direction by the Arbitrator inasmuch as he has directed 18 per cent till the date of payment or decree whichever is earlier. Therefore, 18 per cent is payable till the date of decree which has not been modified by the learned District Judge. He has only stipulated the rate of interest from the date of decree till the date of payment. Therefore, 18 per cent is payable till the date of decree which has not been modified by the learned District Judge. He has only stipulated the rate of interest from the date of decree till the date of payment. Thus, we are of the considered view, there has been no violation of Section 31 (7) (b) and there is no error in the judgment of the learned district Judge on that score. ( 44. ) CONSEQUENTLY, the appeal, being sans substance stands dismissed. The parties shall bear their respective costs. Misc. Appeal dismissed.

NORTHERN COALFIELDSLIMITED v. RAJKISHAN AND COMPANY