JUDGMENT M.Y. Eqbal, J. 1. These appeals under Section 37 of the Arbitration and Conciliation Act, 1996 is directed against the judgments and orders dated 8.1.02 passed by Sub- Judge, Hazaribagh in Miscellaneous (Arbitration) Case No. 2/2001. 3/2001 and 4/2001 whereby he had dismissed the objections filed by the appellant under Section 34 of the said Act and refused to set aside the awards. 2. The brief facts of the case in MA 4 of 2002 are that in response to a notice inviting tender by the appellant the respondent claimant submitted tender for the work of construction of residuary work under Bhairwa Reservoirs scheme and the work was awarded to the respondent and an agreement was drawn on 3.7.1991. Although the construction works started but it could not be completed within the extended period because of various reasons. The parties inter alia alleged their failure in performing their reciprocal obligations. Ultimately dispute arose between the parties and the claimant respondent moved this Court in Request Case No. 4 of 1996 and the dispute was finally referred to the arbitrator for adjudication pursuant to the order passed by the High Court. 3. The salient features of the work assigned are as follows : (i) Agreement value Rs. 3,18,98,949.73 (ii) Stipulated date of commencement 3/7/1991 (iii) Stipulated date of completion (12 months) 2/7/1992 (iv) Extended date of completion 30/6/1995 4. The learned arbitrator after considering the case of the parties gave the following award. __________________________________________________________________ Sl. No. Description of item Amount Awarded __________________________________________________________________ 1. Amount payable as per 6th onaccount bill dated 4/8/1993 Rs. 17,12,384/- 2. Damages and losses suffered due to various breaches and defaults on the part of department Rs. 36,30,600/- (i) Idle plant and machinery : (a) Idle and/or under utilized during the period between 3rd July, 1991 to 6th August 1993 (total 25 months-effective utilization of plantsand equipment 4 months) Rs. 72,61,200/- (b) Fully idle plants and equipments from 7th August, 1993 to 31st August 1995 say 24 months Rs. 2,59,8007- (ii) Idle/Additional over head charges: Rs. 6.49.500/- (a) (a) During the period from 3.7.1991 to 6.8.1993 (b) Fully idle overhead expenses from 7th August, 1993 to 31st August 3. Increased cost of works executed after expiry of original date of completion i.e. works execute between 3.7.1992 to 6.8.1993 Rs. 7.90.481/- 4. 2,59,8007- (ii) Idle/Additional over head charges: Rs. 6.49.500/- (a) (a) During the period from 3.7.1991 to 6.8.1993 (b) Fully idle overhead expenses from 7th August, 1993 to 31st August 3. Increased cost of works executed after expiry of original date of completion i.e. works execute between 3.7.1992 to 6.8.1993 Rs. 7.90.481/- 4. Loss of profit earning capacity and/or abnormally low turn over 1,66 lakhs per months between the period from 3.7.1991 to 31.8.1995 i.e. 50 months with loss turn over of Rs. 19.6 lakhs/months loss. Rs. 23,35,984/- 5. Interest @ 18% p.a. on the amount payable under the 6th on A/c bill 4.8.1993 till payment Rs. 14.55.526/- 6. Interest @ Rs. 18% p.a. as due amount (except claim No. 4 from 1st September, 1995 till payment) Rs. 91.05.814/- __________________________________________________________________ 5. In this way the arbitrator awarded a total sum of Rs. 2,72,26,289/-. The only claim rejected by the arbitrator is with regard to the alleged extra work done up to 1993 but not included in the 6th A/c bill. 6. The case of the claimant respondent was that immediately on receipt of the work order they organize itself and mobilized all resources, plants tools, labourers, finance etc. to carry out its contractual obligations by completing the entire works within fixed time but the appellant was not at all ready and willing to perform their obligations regarding the execution of work in as much as the appellant failed to deliver full site of work fund etc. which was essential for timely completion of work. According to the claimants-respondents the performance of the work was prevented due to various breaches and default on the part of appellant i.e. (i) Failure to arrange necessary fund for completion of work. (ii) Failure to issue necessary drawings in right time. (iii) Failure to issue explosive materials and or cement in right time. (iv) Failure to complete land acquisition process and to prevent objection by erstwhile landowners and/or villagers who prevented the claimant to execute the work. (v) Failure to provide approach road and/or right of way to quarry site and/ or provide the same through borrow area. (vi) Failure to make proper and timely on account payment. 7. The claimants further case was that the stipulated date of commencement of work was 3rd July, 1991 and the approved drawings were issued to the claimant in May. 1992. (vi) Failure to make proper and timely on account payment. 7. The claimants further case was that the stipulated date of commencement of work was 3rd July, 1991 and the approved drawings were issued to the claimant in May. 1992. The work was suspended by order dated 30.9.1992 on account of paucity of fund and thereafter the work was resumed in a restricted area and continued upto 10th January, 1993. It is alleged that the work was again suspended from 1st July, 1993 to 9th July, 1993 for non-availability of cement, paucity of fund and the violation and obstructions created by the villagers. The claimants further case was that cement was issued on 9th July, 1993 and the work was resumed from 20th July, 1993 and continued till 5th August, 1993 and again the work was stopped by the appellant on account of non-availability of departmental materials and paucity of fund. The claimants alleged that due to abnormal delay in the execution of the work along with suspension of work it has suffered diverse losses for which it is entitled to damages. 8. The admitted case of the claimants is that the value of the work allowed to be executed till 6th August, 1993 which was included in the 6th A/c bill was of Rs. 68,27,610/-. 9. The case of the appellant Department on the other hand, is that the work could not be completed on account of fault of the claimants who has become guilty of breaches of terms and conditions of the contract. It is alleged that none of the claims are arbitrable under the arbitration proceedings. The claims are absolutely barred by the binding terms and conditions of the tender notice and the special terms and conditions of the agreement. The total value of the work allotted to the claimants was Rs. 3,51,68,621.70 and the said work was not at all completed. The appellants case is that full site of spill way was provided before the commencement of the work to the predecessor contractor i.e. Bihar State Construction. The claimant was awarded further residual work of spill way which was left by the predecessor contractor. Similarly the approved drawing was provided to the claimants within time and therefore, it was obligatory on the part of the claimant to submit the running bill each month or before the date fixed by the Engineer in charge. The claimant was awarded further residual work of spill way which was left by the predecessor contractor. Similarly the approved drawing was provided to the claimants within time and therefore, it was obligatory on the part of the claimant to submit the running bill each month or before the date fixed by the Engineer in charge. But the claimant failed to present the bill in each month. On the failure of the claimant the work was measured in their presence. It is contended that the claimant contractor was responsible to arrange for their own quarry and transport equipment and all other arrangements for working the quarry including approach road, explosives and detonators etc. The appellants further case is that inspite of availability of the approved drawing there was unsatisfactory progress of work and for that a letter dated 25.4.1992 was issued by the department. Similarly there were available sufficient cement supplied as and when needed and therefore the plea that the work was suspended on account of non-issuance of cement and drawing are false. The entire allegations regarding the suspension of work due to non- availability of cement, paucity of fund and obstruction by villagers are false. 10. As noticed above the arbitrator gave his award on all the claims except one as quoted hereinabove. The appellant challenged the said award before the Court below by filing objection under Section 34 of the said Act. The Court below after hearing the parties dismissed the said objection and refused to set aside the award. 11. In addition to the original work two other works were also awarded to the claimant for Earthen Dam by two supplementary agreements. The claimant- respondent also raised dispute and claimed loss and damages which matters were also referred to the arbitrator. The arbitrator also gave two separate awards which are the subject matter of MA 3 of 2002 and MA 5 of 2002. I will deal with both the appeals separately. 12. MA 3 of 2002.--This appeal arose out of the order confirming the award given by the arbitrator in respect of the agreement for the construction of Earthen Dam on river portion under Bhairwa reservoir scheme. The total value of the agreement was Rs. 2,23,33,395/- and as against the said agreement the claimant contractor claimed by way of loss and damages, Rs. 4,47,85,509/-. The arbitrator awarded Rs. 2,23,70.268/-. The total value of the agreement was Rs. 2,23,33,395/- and as against the said agreement the claimant contractor claimed by way of loss and damages, Rs. 4,47,85,509/-. The arbitrator awarded Rs. 2,23,70.268/-. The details of the amount awarded by the arbitrator are as follows : __________________________________________________________________ Details of Claims Amount Awarded __________________________________________________________________ (i) Amount payable for the work done but not included In the 3rd bill Rs. 2,88,955.00 (ii} Damages and loss suffered due to the breach and default (a) Idle and unutilized plant and machinery from March 1991 to October 1992 Rs. 29.88,250.00 (b) For Idle, plant and equipments from October 1992 to August 1995 Rs. 81,28,040.00 (iii) (a) For additional overheads charge of idle machineries from March 1991 to October 1992 Rs. 60,000.00 (b) Overhead charges from October 1992 to August 1995 Rs. 2,04,000.00 (iv) For loss of profit earning capacity and low turnover Rs. 22,33,339.00 (v) Interest on the aforesaid amount Rs. 2,74,507.00 (vi) Further interest on the due amount & 18% __________________________________________________________________ In this way arbitrator award a total sum of Rs. 2,23,70,268/- when the value of the agreement was Rs. 2,23,33,395/- admittedly the work could not be executed and the claim for loss and damages was expressly bared under the special terms and conditions of the agreement. 13. MA 5/2002.--This appeal arose out of Misc. Case No. 4/2001 which relates to the award passed in Arbitration Proceeding No. 5/98. The Arbitration proceeding was in respect of agreement for construction of residuary Earthen Dam under Bhairwa Reservoir Scheme. The total value of the agreement F-2-8 was Rs. 97,88,147.00. Admittedly the work could not be completed and ultimately the contract was closed. The claimant submitted list of its dues and also claimed loss and damages. Under this agreement the claimant claimed a sum of Rs. 3,53,116.00 payable as per the bill. The rest of the claims amounting to Rs. 1,85,383.00 is by way of loss and damages. The claimant claimed loss and damages for idle plant and machineries, additional over head charges, increased cost of work, loss of profit earning capacity and interest on the said amount which was claimed by way of damages. The arbitrator awarded Rs. 1,00,87,570.00 under different heads as under : __________________________________________________________________ Sl. No. Description of item Amount awarded __________________________________________________________________ 1. Amount payable as per 1st on a/c bill dated 29.5.1993 prepared by the department. Rs. 3,00148/- 2. The arbitrator awarded Rs. 1,00,87,570.00 under different heads as under : __________________________________________________________________ Sl. No. Description of item Amount awarded __________________________________________________________________ 1. Amount payable as per 1st on a/c bill dated 29.5.1993 prepared by the department. Rs. 3,00148/- 2. Damages and tosses suffered to various Breaches defaults on the part of the department : (i) Idle Plant and Machinery. (a) Idle and/or under utilized during the period during 10th October, 1992 to 16th May, 1993 (Total 7 months effective utilization of plants and equipments 0.4 months) 6.6. months @ Rs. 4,31,100 Rs. 2,58,660.00 (b) Fully idle plants and equipments from 17th May, 1993 to 31st August, 1995 say 27 months, 27 months 8 4,31,100/p.m. (details of idle plants and equipments enclosed marked Annexure-A) Rs. 44,83,440.00 (ii) Idle/Additional overhead charges (a) Idie and/or under utilized during the period from 10.10.1992 to 16.5.1993 6 months 9 Rs. 9,0007/- p.m. Rs. 54,000.00 (b) Fully idle over head expensesfrom 17,5.1993 to 31.8.1995 27 months @ Rs. 9,000/- p.m. Rs. 1,17,000.00 (iii) Increase cost of works executed after expiry of original date of completion i.e. works executed between 8,11.1992 to 16.5.1993 (Recorded) from 1st on a/c bill) due to rise in prices of labour and materials 20% of Rs. 3,53,116 Rs. 45,022.00 (iv) Loss of profit earning capacity and/or abnormally low turnover of Rs. 10,385 per months in average in place of contemplated average turnover Rs. 10,87,349 per month between trie period from 10.10.1992 to31 .8.1995 i.e. 34 months with loss turnover of Rs. 10.76 lakhs per month @ 10% for 34 months Rs. 1.076 lakhs per month Rs. 9,43,303.00 3. Interest @ 18% on the amount payable under 1st on a/c bill 29.5.1993 from 1.7.1993 till payment Rs. 2,81,128.00 4. Interest on the due amount (except Claim No. 3) 18% p.a. from 1.9.1996 till payment Rs. 35,99,869.00 5. Cost Rs. 25,000/- __________________________________________________________________ 14. It is therefore, evident that the total value of the work was Rs. 97,88,147.00 and only a portion of work was executed and a bill was submitted for Rs. 3,53,116.00 and arbitrator awarded a sum of Rs. 3,00,148.00. The balance amount of Rs. 97,87,570/- has been awarded by way of loss, damages, interest and cost. In other words against the total value of the work being Rs. 97,86,147,00/-only a sum of Rs. 1,00,87,570,00/- has been awarded by way of loss, damages and interest on account of idle machineries, labourers and overhead charges. 3,00,148.00. The balance amount of Rs. 97,87,570/- has been awarded by way of loss, damages, interest and cost. In other words against the total value of the work being Rs. 97,86,147,00/-only a sum of Rs. 1,00,87,570,00/- has been awarded by way of loss, damages and interest on account of idle machineries, labourers and overhead charges. Admittedly the claimant did not execute the work but the arbitrator allowed damages by applying principle of fundamental breach of agreement. 15. Mr. Shamim Akhtar, learned Standing Counsel No. II assailed the impugned awards of the Arbitrator as being illegal and wholly without jurisdiction. Learned counsel at the very outset submitted that admittedly no work was done by the respondents on the ground that the essentials for the execution of the work had not been provided by the appellant and in spite of that the Arbitrator has awarded exorbitant amount under different heads which were not even arbitrable in terms of the agreement. It is contended that there was no hurdle in starting the work inasmuch as land was provided, materials were supplied and other facilities were also provided to the claimant for the completion of work but the claimant deliberately did not complete the work. Learned counsel submitted that Arbitrator has committed grave error of law in awarding very exorbitant amount although the claim itself was not entertainable under various clause of the special terms and conditions of the agreement. Learned counsel lastly submitted that in any view of the matter, the impugned award given by the Arbitrator is against the public interest and against the public policy and therefore, it is liable to be set aside. Learned counsel relied upon the decisions of the Supreme Court in the case of Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan, AIR 1999 SC 2102 , in the case of Food Corporation of India v. Surendra, Devendra and Mahendra Transport Co., (2003) AIR SCW 845, in the case of Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd., (2003) 2 Civil Law Times 242. Learned counsel also relied upon the decision of the Supreme Court in the case of Sikkim Subha Associates v. State of Sikkim, AIR 2001 SC 2062 . 16. On the other hand Mr. S. Pal, Senior Advocate and Mr. S.J. Roy, advocate argued on behalf of the respondent/claimant in support of the Award. Learned counsel also relied upon the decision of the Supreme Court in the case of Sikkim Subha Associates v. State of Sikkim, AIR 2001 SC 2062 . 16. On the other hand Mr. S. Pal, Senior Advocate and Mr. S.J. Roy, advocate argued on behalf of the respondent/claimant in support of the Award. Learned counsel contended that the Arbitrator rightly gave the Award on the ground of fundamental breach of the terms of the agreement as a result of which claimant sustained serious loss and damages. Learned counsel submitted that claimant had mobilized heavy machinery, both skilled and unskilled labourers, staff, financial planning and investing heavy amount and thereby incurred great expenses. In any view of the matter Clause 1.2.1.1 to 1.2.1.4. cannot be a bar for awarding compensation/damages. 17. Before going into the merit of the contention made by the learned counsel, I would first like to discuss the decisions relied upon by the learned Standing Counsel. 18. In the case of Olympus Superstructures Pvt. Ltd. (