Research › Search › Judgment

Uttarakhand High Court · body

2004 DIGILAW 71 (UTT)

State of U. P. v. Naresh Construction Company

2004-05-22

IRSHAD HUSSAIN, P.C.VERMA

body2004
JUDGEMENT Irshad Hussain, J. This is an appeal under section 39 of the Arbitration Act, 1940. 2. By an agreement entered into between the parties the respondent was awarded the work of excavation of Khara Power Channel (Shakti Nahar) from 5.2 to 6.2 kilometers. The agreement was executed on 15.11.197 and work was to start from 16.12.1979 and was to be completed by 14.6.1981. The work however could not start as was agreed upon and after three extensions it was finally completed on 23.5.1985. During the execution of the work disputes arose between the parties and the respondent raised claims for higher payments to the tune of Rs. 57,40,204/-. The claims submitted vide letter dated 22.2.1983 were rejected by the department on 23-6-1983 whereupon the respondent filed a petition no. 112 of 1984 under section 20 of the Arbitration Act, 1940 and the learned Civil Court by its order dated 23.5.1985 referred the matter to the Arbitrator. 3. The claims submitted by the respondent before the Arbitrator for the aforesaid amount were as under:- (i) Claim for escalation due to rise in cost of labour and material etc. (Rs.45,06,593/-). (ii) Claim for excavation in sand rock. The claimant demanded extra rate of Rs. 36.12 for excavation of 268000 cu.m. of sand rock (Rs. 96,80,160/-). (iii) Earth-work in approach road (Rs. 57,000/-). (iv) Compaction of earth fill in embankment (Rs. 14,750/-). (v) Excavation of boulders more than 600 mm. in size (Rs. 90,000/-) (vi) Transportation and stacking of boulders beyond reach (Rs. 90,000/-). (vii) Disposal of surplus excavated material from power channel. Extra expenditure due to disposal of extra material in river Yamuna (Rs. 43,29,750/- ). (viii) Clearance of silt deposited during flood (Rs. 70,840/-). The claimants also claimed interest @ 24% from the dates given in their claim petition to the date the payment is made. 4. Against the above claims the department submitted objections on 16.8.1988. Counter reply was filed by the respondent on 7.12.1988 and finally the Arbitrator passed an award on 17.7.1991 and awarded a sum of Rs. 30,77,318/ - towards the various claims detailed as below :- 1. The respondents shall pay an amount of Rs. 4. Against the above claims the department submitted objections on 16.8.1988. Counter reply was filed by the respondent on 7.12.1988 and finally the Arbitrator passed an award on 17.7.1991 and awarded a sum of Rs. 30,77,318/ - towards the various claims detailed as below :- 1. The respondents shall pay an amount of Rs. 5,33,080/- to the Claimants for escalation due to rise in cost of labour and materials due to delay in making available the site in time and delay in payments due to shortage of funds which resulted in extension of contract period from 18 months to 65 months. 2. The respondents shall pay an amount of Rs. 13,71,523/- to the claimants as extra cost for excavation of hard sandy rock which Is not covered by the contract. 3. The respondents shall pay an amount of Rs. 81,000/- to the claimants for stacking boulders beyond the stipulated reach. 4. The respondents shall pay an amount of Rs. 9,92,840/- to the claimants for disposal of excavated material from power channel involving extra lead. 5. The respondents shall pay an amount of Rs. 98,875/- to the claimants for clearance of silt deposited during the floods in 1980. 6. The respondents shall pay interest at the rate of 15% per annum from the date of completion of works i.e. 23.5.85 to the date of commencement of arbitration proceedings i.e. 11.5.88. 7. The respondents shall pay to the claimants interest at the rate of 6% per annum from 12.5.1988 to the date previous to the date of award i.e. 16.7.91. 8. The respondents shall pay the claimants interest @ 6% per annum from the date of award i.e. 17.7.91 to the date of actual payment of date of decree, whichever is earlier. 9. Both the parties will bear their own costs in connection with this arbitration. The secretarial and other expenses will be equally borne by both the parties. 5. The appellant challenged the legality and propriety of the award by preferring objections under section 30/33 of the Arbitration Act. Mise. Case No. 89/1991 was registered. The objections were rejected by the learned Civil Judge, Dehradun per judgment and order dated 23.8.1993 and the award was made rule of the court. It is under challenge here. 6. 5. The appellant challenged the legality and propriety of the award by preferring objections under section 30/33 of the Arbitration Act. Mise. Case No. 89/1991 was registered. The objections were rejected by the learned Civil Judge, Dehradun per judgment and order dated 23.8.1993 and the award was made rule of the court. It is under challenge here. 6. Learned Standing Counsel submitted that the impugned award was given against the specific terms and conditions of the agreement and as such the Arbitrator has misconducted in misinterpreting the relevant clauses of the agreement; that the Arbitrator fell into error in not taking into consideration in proper perspective the statements of Sri S.C. Goel Executive Engineer and Sri S.C. Gupta Executive Engineer who was the in-charge of the work on behalf of the department; that the court below has acted illegally in not considering the lapse and the misconduct on the part of the Arbitrator; that the court below failed to consider that the Arbitrator awarded claim for extra work at the rate more than the rate prescribed by the government on the price index and labour charges and the material used; that further the court below failed to consider that the contractor had claimed Rs. 70,840/- under claim no. 'H' but the Arbitrator allow the claim to the tune of Rs. 98,875/-; that the contractor was not entitled for any compensation for the damages caused due to unforeseen calamities such as floods ect. And the court an error in not considering this aspect of the matter and that the contractor was not entitled to any interest on the amount awarded. 7. 98,875/-; that the contractor was not entitled for any compensation for the damages caused due to unforeseen calamities such as floods ect. And the court an error in not considering this aspect of the matter and that the contractor was not entitled to any interest on the amount awarded. 7. On the other hand learned counsel for the respondent-contractor argued that the work period was abnormally prolonged on account of acts and omissions and breaches of the terms of the agreement on behalf of the department and therefore the Arbitrator was justified in allowing the claim for escalation due to rise in cost of labour and material due to delay; that the claims made where within the purview of the terms of the agreement and these arose out of the work carried out by the Arbitrator under the agreement and the learned court below rightly rejected the contention raised on behalf of the department-State; that the Arbitrator was competent to interpret the agreement after taking into consideration all the provisions of the contract and the award is final and binding on the parties and can not be challenged on merit; that the claim in respect of earth-work beyond agreed quantity at the enhanced rate was justified; that the Arbitrator was fully competent to consider that there was work of excavation in hard rock and to award extra payment thereof; that the Arbitrator has taken into account the defence taken by the department in considering the relevant clauses of the agreement and he has not misconducted the proceedings and that there was no bar for grant of interest on the claim made and allowed by the Arbitrator. 8. The submissions of the learned counsel for the parties give rise to the following points for consideration in this appeal:- (1) Whether the award of Rs. 5,33,080/- to the respondent for escalation due to rise in cost of labour and material on account of delay and extension of contract period was within the power and jurisdiction of the Arbitrator? If so, whether the quantum of the award was reasonable and proper? (2) Whether the award of Rs. 13,71,523/- towards extra cost for excavation of hard sandy rock was in fact an extra work and it was within the jurisdiction of the Arbitrator to allow the claim in that regard? (3) Whether the contractor was not entitled and should not have been awarded Rs. (2) Whether the award of Rs. 13,71,523/- towards extra cost for excavation of hard sandy rock was in fact an extra work and it was within the jurisdiction of the Arbitrator to allow the claim in that regard? (3) Whether the contractor was not entitled and should not have been awarded Rs. 81,000/- for transportation and stacking of boulders beyond reach? (4) Whether under the terms of the agreement extra claim for disposal of surplus excavated material was not admissible and the Arbitrator has no power to award the amount of Rs. 9,92,840/- to the respondent under this head? (5) Whether under the terms of the agreement the contractor was obliged to clean and dress-up the site and also to remove the silt and the Arbitrator has no power to award any amount for clearance of silt deposited during the floods in 1980. (6) Whether claim for interest was not legally admissible? 9. Point No.1 :- In regard to the plea that the claim on account of escalation Is not sustainable, the appellant relied upon the specific clause 1.01.02 of the contract document. The relevant part of the said clause is as below :- "The accepted rate will be incorporated in the bond and shall hold good for the work covered by the contract irrespective of the period within which the work is completed. No market fluctuation on either side shall affect them." 10. The above clause, as submitted, in unequivocal and unambiguous terms prohibits making any claim on account of escalation. Perusal of the record reveal that the appellant had objected to the claim of the respondent right from the very beginning when it was raised and agitated before the Arbitrator and also before the learned Civil Judge under section 30 of the Arbitration Act. 11. It also need to be mentioned that the work was to be completed by 14.6.1981 but it got delayed and after extension it was finally completed on 23.5.1985. Learned counsel for the respondent submitted that the delay was caused due to the fact that entire site of the work was not made available to the respondent in time and that it was the month of December 1980 when the respondent was able to start work on the entire site and it caused delay in completion of the project. It is disputed that extension was also sought by the respondent. It is disputed that extension was also sought by the respondent. The Arbitrator also took into consideration that some delay in making timely payments to the respondent was also the cause of delay in completion of the project. The above clause of the contract document in fact had taken note of all such eventualities which may result in extension of the contract period and on account of the delay none of the party to the contract was permitted to seek or make any claim on account of escalation and the agreed rates were to be accepted for the contract work. 12. On behalf of the appellant reliance was placed on a recent decision of the Apex Court in the matter of Food Corporation of India Vs. Surendra, Devendra and Mahendra Transport Company; (2003) 4 S.C.C. 80 to bring home the point of view that award passed in respect of the claims which are specifically prohibited by the agreement is in excess of jurisdiction and legally not sustainable. In the reported case the ratio of the decision in the case of Rajasthan State Mines and Minerals Ltd. Vs. Eastern Engg. Enterprises; (1999) 9 S.C.C. 283 wherein it had been held that "if there is a specific term in the contract or the law which does not permit or give the Arbitrator the power to decide the dispute raised by the claimant or there is a specific term in the contract to the raising of the particular claim then the award passed by the Arbitrator in respect thereof would be in excess of jurisdiction" was applied. In the case in hand before the Apex Court there was a specific bar to the raising of a claim regarding transit, demurrage and wharfage charges but the Arbitrator allowed the claim under these heads. The party aggrieved challenged the award. The High Court has, however, upheld the award made by the Arbitrator appointed under the directions of the court. The appellant then filed an appeal before the Apex Court and the appellant's contention challenging the award was accepted and the award in regard to the transit loss, refund of demurrage and wharfage charges was set aside. The High Court has, however, upheld the award made by the Arbitrator appointed under the directions of the court. The appellant then filed an appeal before the Apex Court and the appellant's contention challenging the award was accepted and the award in regard to the transit loss, refund of demurrage and wharfage charges was set aside. The Apex Court held that "entrance of reference by the Arbitrator on disputes which were excluded from reference and the adjudication thereupon would amount to exceeding in the exercise of the jurisdiction as held by this Court in Rajasthan State Mines and Minerals Ltd. case. Since there was a specific bar to the raising of a claim regarding transit, demurrage and wharfage charges, the award made by the Arbitrator in respect thereof would be in excess of jurisdiction." 13. The ratio of the reported decision squarely apply to the facts of the instant case as there is specific clause in the agreement which prohibit making of any claim on account of escalation. The Arbitrator has exceeded his jurisdiction in making an award for escalation and the learned Civil Judge also fell in error in rejecting the contention of the appellant by observing that it was in the domain of the Arbitrator's jurisdiction to entertain the claim for escalation when there is an agreement to refer to dispute arising out of the contract to arbitration. 14. It need to be stated that on facts of the case the reported decisions cited on behalf of the respondent have no bearing at all on the above finding. The reasons are that in M/s Sudarshan Trading Company versus Government of Kerala and another; (1989) 2 SCC 38 the ratio of the decision was that when the award is challenged on the ground that the Arbitrator gave award in excess of jurisdiction it is open to judicial review while the award is not open to judicial review when the same is within jurisdiction. In the instant case the ground challenged was that in the absence of any escalation clause an Arbitrator can not assume any jurisdiction to award any amount towards escalation and since on the basis of the relevant clause of the contract document it had been found that the award is in excess of the jurisdiction of the Arbitrator the decision cited on behalf of the respondent can not be of any help to his cause. In another cited reported decision in the matter of Indu Engg. and Textile Ltd. versus Delhi Development Authority; (2001) 5 S.C.C. 691 the view taken by the Arbitrator in the circumstance of the case was held to be plausible one as in the said case price escalation clause had been included in the tender and which was subsequently revised only to the effect that the price escalation will be applicable when there is statutory enhancement in the price of the commodity. No dispute was also raised before the Arbitrator or the court that the escalated price claimed was not the statutorily enhanced price of hard coal. Therefore the ratio of the said decision also has no application to the facts of the instant case. Reliance was also placed on the decision of the Allahabad High Court in F.A.F.O. 260/1993 decided on 29.11.1994. I have also gone through the copy of the judgment and found that in the said case interpretation of the clause in the agreement was involved and resorted to in view of the claim made in regard to the extra work done and which was not covered under the tender rate. The Arbitrator on interpretation of the agreement and tender items considered the nature of the work and found that there is extra work not covered under the tender item for which it granted rate. The view taken by the Arbitrator was found reasonable. As is evident from the facts these were at variance with the facts of the instant case and therefore question of interpretation of the clause 1.01.02 of the contract document was not at all involved and the ratio of the said decision also can not be of any avail to the respondent. 15. Apex Court's decision in U.P. Hotels and others versus U.P. Electricity Board; (1989) 1 S.C.C. 359 was also pressed into service on behalf of the respondent. 15. Apex Court's decision in U.P. Hotels and others versus U.P. Electricity Board; (1989) 1 S.C.C. 359 was also pressed into service on behalf of the respondent. We found that the ratio of the reported decision also can not be of any help to the cause of the respondent because in the said case specific question of law pertaining to the provision of section 48 of the Electricity (Supply) Act, 1948 had been referred to the umpire and his decision being possible one on the question of construction of the provision was upheld and the award was not found to be open to challenge on the ground that the Arbitrator has reached a wrong conclusion. However as stated above in the instant case the question involved was that the award was in excess of the jurisdiction in view of the specific clause of the contract document and therefore the award could not be legally justified by saying it that the view taken by the Arbitrator was the possible one. 16. In view of above the award of Rs. 5,33,080/- to the respondent on account of escalation being against the specific term of the contract as provided in clause 1.01.02 the same being in excess of the jurisdiction is not legally sustainable. Point is answered accordingly. 17. Point No.2 :- The respondent's claim for excavation of sand rock was also accepted by the Arbitrator despite the objection of the appellant. The learned Civil Judge also did not accept the submission of the appellant by observing that it was within the jurisdiction of the Arbitrator to interpret the relevant clause of the contract document. Learned counsel for the appellant submitted that the Arbitrator accepted the claim of the respondent in excess of his jurisdiction and the learned Civil Judge also fell in error in not considering the true import of the contract document and relevant clause and schedule of the same. Schedule "C" of the contract document is as follows:- "Excavation in all type of strata mixed with sand shingle, boulder, clay shale, conglomerate and all type of rock only etc. dry, wet and its disposal within reach including all leads and lifts as per enclosed specifications." 18. The above schedule make it clear that excavation of the sand rock was included in the contract document. dry, wet and its disposal within reach including all leads and lifts as per enclosed specifications." 18. The above schedule make it clear that excavation of the sand rock was included in the contract document. To elaborate the work a specific clause 4.01 was also inserted in the contract document and as per it the quantity of the work to be undertaken was as below:- "4.01 Quantities noted in schedule "C" are only approximate and it may vary. No claim shall be entertained by the Department on account of variation in quantities on either side." 19. Further the clauses 7.06 and 7.07 are also very relevant in regard to the said dispute and these are reproduced as under:- "7.06 The contractor shall do all excavations of whatsoever substance dry or wet encountered up to the bed level of power claimed. It may, however, be stated that the earth work in excavation comprises generally of sand, clay, shingle, boulder and bajri and or any combination of soil dry or wet formation enumerated above. The tendered rate shall include all material met with during excavation of the channel section including clay shale and rock etc. and no claim on account of the nature of strata or on account of difficulties met with in the excavation and disposal of the excavated material shall be entertained. 7.07 Nothing extra will be paid for drilling, blasting and any other technique used for rock excavation, which shall be included in the unit rates. The drilling and blasting if required shall be done by the contractor such that no damage occurs to other works or property or lives and shall be subject to approval of the Engineer in-charge. Such approval shall, however, not relieve the contractor of his responsibility for any damage or loss of other works property and lives." 20. Further to make the things very clear and to let the tenderers to acquaint themselves with the site of the work in order to understand the true nature of the work to be undertaken under the contract the tenderers were also advised In their over all interest to fully inspect the site of the work etc. Further to make the things very clear and to let the tenderers to acquaint themselves with the site of the work in order to understand the true nature of the work to be undertaken under the contract the tenderers were also advised In their over all interest to fully inspect the site of the work etc. The relevant clause 7 of the tender notice was also unambiguous in its terms in that regard and it was to the following effect :- "7 Tenderer, in their own interest, are advised to see the site of work and acquaint themselves with the position of labour, soil and material, study conditions of contract, i.e. J.D. Form no. 111 and drawing etc. before tendering as no claim on this account will be entertained later." 21. Apart from the above obligation to inspect the site etc. further words of caution were included in the contract document per clause 1.38 which is reproduced as below:- "1.38 It is presumed that the contractor has made itself thoroughly conversant with the site conditions before tendering for the work. If he requires the strata chart, he shall bore near the work site at his own cost for his satisfaction but no claims on account of any variations as found in strata shall be entertained." 22. For the purposes of the question in issue clause 1.04 has also specific relevance and it is reproduced as below:- "1.04 It shall be understood that the contractor has satisfied himself as to the nature and location of work, the general and local conditions, including those bearing upon transportation disposal, handling and storage of materials, availability of labour, water, etc. or similar physical conditions at the site the conjursion and condition of the ground, the character, quality and quantity of the surface and the sub surface material to be encountered, the character of equimanend facilities needed, preliminary to and during execution of the work and all other matters which can in any way effect the work or cost thereof under the contract any default or failure by the contractor to acquaint himself with all the information concerning the those conditions will not relieve him from responsibility for the execution of this contract." 23. The Arbitrator while dealing with the point in issue adverted to the relevant specific provisions, conditions and pre-cautions referred above while accepting the claim of the respondent by observing that "however during the short period of few days allowed between the sale of tender papers and opening of tenders the prospective tenderers are not expected to carry out their own surface or sub surface explorations. The department executed some pits in this reach of the power channel for sub surface explorations and these pits were available for examination by the tenderers. These pits were 3-4 meters deep and strata were encountered in this reach. The tenderers were therefore have no option but to base the rate on the strata as revealed by the pits. As per cross-sections enclosed with the tender document the general depth of the excavation is 18 to 20 meters. Thus the department should have explored the strata up to the bed level of channel instead of making 3-4 meters deep pits which altogether gave a wrong picture." 24. The above reasoning given by the Arbitrator run counter to the specific conditions of the contract work and precautionary provisions made therein as detailed above. It however need to be repeated that the clause 1.38 of the special condition of the contract is very clear in terms that the tenderer was obliged to make himself thoroughly conversant with the site conditions before submitting tender for the work. If he requires the strata chart he shall bore near the work site at his own cost for his satisfaction but no claim on account of any variation as found in strata shall be entertained. The respondent having been given the option to bore the work site much more than the pits provided for inspection, he could not have later on claimed that he could not anticipate any variation in the strata on excavation up to the depth of 18 to 20 meters. In this connection it shall also be relevant to mention that the respondent-contractor Ramji Lal in his statement claimed that in the contract work excavation of hard rock was not included. He also claimed that in the description of the work in schedule "C" of the contract document all type of strata and rock was not included. In this connection it shall also be relevant to mention that the respondent-contractor Ramji Lal in his statement claimed that in the contract work excavation of hard rock was not included. He also claimed that in the description of the work in schedule "C" of the contract document all type of strata and rock was not included. As is evident from the reproduction of the relevant schedule above the statement of the contractor was untrue and his entire statement does not indicate that he was misled by the department regarding the true nature of the strata to be encountered during the excavation. 25. Learned counsel for the respondent submitted that the award given by the Arbitrator is reasoned one and that the Arbitrator who is an Engineer himself has inspected the site and on the basis of the cross-section of the strata of the pits found that the respondent had to encounter excavation of the hard rock which was an extra work and that the reasonable finding of the Arbitrator can not therefore be challenged. Reliance was placed on a decision of Division Bench of Allahabad High Court in F.A.F.O. No. 260/1993 decided on 29.11.1994 copy of which has been produced at the bar to bring home the point of view that where the works were found to be extra not covered under the tender items Arbitrator can award amounts for the extra work and the relevant clauses of the contract document can very well be interpreted by the Arbitrator in that way. We are not impressed by the argument of the learned counsel because as is evident from the specific conditions and relevant clauses of the contract document it had been made known to the tenderers that they will encounter all type of strata with the sand, shingle, boulder, and all type of rock etc. dry or wet during the excavation. We are, therefore, of the view that the respondent-contractor had not undertaken any extra work in the form of excavation of hard rock etc. and the Arbitrator was not justified in accepting the claim In this regard. The learned Civil Judge also tried to repel the submission of the appellant by merely stating that the Arbitrator was within his jurisdiction to Interpret the relevant clauses of the contract document to find favour with the claim of the contractor that he had to encounter hard rock also in excavation. The learned Civil Judge also tried to repel the submission of the appellant by merely stating that the Arbitrator was within his jurisdiction to Interpret the relevant clauses of the contract document to find favour with the claim of the contractor that he had to encounter hard rock also in excavation. The view can not be sustained when all type of rock was mentioned in the strata in the contract document and the respondent-contractor has also inspected the site before submitting tender. 26. For the reasons aforesaid we are of the view that the award of the Arbitrator towards excavation of the sand rock is unsustainable. 27. Point No.3 :- Respondent had raised the claim of Rs. 90,000/- in regard to the transportation and stacking of boulders beyond reach and the Arbitrator awarded Rs. 81,000/- on the basis of a finding that the stone stacked upper stream of 5.2 km. was excavated from beyond kilometer 5.8 and thus is involved extra lead of about 0.5 km. The extra amount involved thus was calculated as per schedule of rates i.e Rs. 9.00 per cum up to 1/2 km and this way Rs. 81,000/- was awarded. 28. Learned counsel for the appellant submitted that the Arbitrator while passing the award did not take into consideration clause 7.09 of the contract which is relevant in regard to the claim made by the respondent and that the Arbitrator wrongly relied up clause 8.05 of the agreement in making the said award. The contention of the respondent was that he had to stack the boulders out side the power channel as per clause 8.05 of the agreement i.e. 10 m away from the toe of the bank. The respondent also submitted that the department has instructed him to stack the boulders excavated from the power channel reach at the site indicated at about 1.0 km down stream of power channel at chainege 5.20 km or upper stream for the reach of other contractor. 29. It need to be mentioned that clause 8.5 of the agreement require that boulders of more than 15 cm dimension shall not be permitted for the embankment unless specifically approved and shall be stacked by the contractor 10 m away from the toe of the bank and nothing extra shall be paid to the contractor for this work. 29. It need to be mentioned that clause 8.5 of the agreement require that boulders of more than 15 cm dimension shall not be permitted for the embankment unless specifically approved and shall be stacked by the contractor 10 m away from the toe of the bank and nothing extra shall be paid to the contractor for this work. In their objection the appellant have submitted that the claimant- respondent have wrongly cited the reference of clause 8.05 of the agreement because as per clause 7.09 of the agreement the boulders were to be stacked by the claimant and nothing extra was agreed to be paid for the same. Clause 7.09 of the agreement reads as under :- "7.09 : On completion of the excavation to the desired levels, the entire sections including the bank of the channel section shall be neatly dressed true to the specified profile. The top of the banks shall be finished slopping out-ward from the channel section at a slope of 10x100. In excavation of boulders of size more than 150 mm shall be sorted out from the earth work and stacked properly as provided by the Engineer-in-charge. Nothing extra shall be paid to the contractor for the same." 30. From perusal of the above clause of the agreement it is evident that it does not specify the distance where the boulders were required to be stacked and therefore the clause relevant for the purpose is 8.05 referred by the Arbitrator. By virtue of the provision of clause 8.05 the respondent was expected to stack the boulders 10 m away from the toe of the bank but the respondent had to stack the boulders under stream of 5.2 km as per the instructions of the Engineer-in-charge (department) and there can be no doubt that the contractor had to incur extra expenses in accomplishing the stacking of the boulders beyond reach. The Arbitrator had taken into consideration the letters of the c1aimantrespondent sent on 4.10.1980 and 19.12.1980 wherein the above fact of the boulders being stacked under stream of 5.2 km as per the instructions of the department. This fact was not denied by the appellant in any document or during the oral evident and therefore the learned Arbitrator was justified in making award of Rs. 81,000/- towards the aforesaid claim. 31. Point No.4 :- The Claimant-respondent demanded Rs. This fact was not denied by the appellant in any document or during the oral evident and therefore the learned Arbitrator was justified in making award of Rs. 81,000/- towards the aforesaid claim. 31. Point No.4 :- The Claimant-respondent demanded Rs. 43,29,850/-for disposal of surplus excavated material and the Arbitrator awarded Rs. 9,92,840/ -. According to schedule-'C' of the contract document the respondent had to dispose of surplus excavated material according to the disposal plan and ail leads and lifts are included in the rate given by him. The disposal plan was also part of the agreement and the respondent was well aware of the site where the surplus excavated material was required to be disposed of. Pointing out to this aspect the learned counsel for the appellant argued that the Arbitrator has had no jurisdiction to award extra payment against the provisions of the agreement and that the learned Civil Judge also did not consider that the claim entertained was not legally sustainable. 32. It need to be stated that the Arbitrator has himself mentioned that as per clause 7.01 of the agreement the excavated material was to be used in making banks of upper channel. The remaining quantity was to be disposed of in the disposal area marked in the drawing forming part of the agreement. According to the respondent the excess quantity of excavated material i.e. 3,76,500 cu.m. was disposed of in the Yamuna river at a distance of about one kilometer near Gujarwal Dera village. It was also submitted by the respondent that the straight rout as shown in the map of the disposal plan could not be used as there were thick forests and the forest department did not allow cutting the trees or haulage of material through the forest area. As a result of this the route taken for disposal of the material was at 50 meters instead of straight route 480 meters through the forest area. The Arbitrator on the basis of the oral evidence inferred that disposal of the extra material was done by a longer route and the reach was 700 meters as against 400 meters by straight route. The Arbitrator on the basis of the oral evidence inferred that disposal of the extra material was done by a longer route and the reach was 700 meters as against 400 meters by straight route. Learned counsel for the respondent urged that the award was given on the basis of the evidence and therefore there was no illegality in accepting the claim in this regard and further that the objection was rightly rejected by the learned Civil Judge. Having considered the material on record we are not inclined to accept the submission of the learned counsel for the respondent. 33. The reasons are- (a) as per schedule- 'C' of the agreement the disposal of surplus material was to be done according to the disposal plan which was also part of the agreement and the respondent was made known as to what will be the route and the lead for disposal of extra excavated material; (b) as stated in the earlier part of the judgment it had been clearly mentioned in the tender notice that before submitting tender the tenderer should inspect the site and study the condition and drawings etc. and that no claim will be entertained later on the basis of alleged extra expenditure. and that no claim will be entertained later on the basis of alleged extra expenditure. (C) That by virtue of the clause 1.32.01 of the agreement the tenderer also had an opportunity to point out any omission or inconsistency in the drawings, specifications and instructions before undertaking the work and since no inconsistency or omission was pointed out the respondent-contractor can not claim any extra amount on the ground that longer route was taken for disposal of the material; (d) that clause 13.01 and 13.02 further prescribed that the rates entered in the agreement shall be for the complete work of all types and shall be inclusive of tree clearance in the forest etc and also the disposal of the earth within reach including all leads and lifts as per enclosed specifications; (e) that clause 7.09 further contained the direction to the contractor-respondent to dispose of the entire excavated material as per the directions of the Engineer-in-charge of the work; (f) that there was no order in writing by the Engineer-in-charge/ department as is required under clause 1.33 of the contract document requiring the respondent to take longer route for disposal of surplus material and (g) that clause 1.04 is also relevant as it provided that it shall be understood that the contractor has satisfied himself with the nature and site of the work, local conditions which the contractor had to face during the execution of the contract work including those having bearing on the transportation, disposal and all other relevant matters pertaining to the work and its cost. 34. In view of above the award of Rs. 9,92,840/- for disposal of surplus excavated material was beyond the jurisdiction of the Arbitrator and the learned Civil Judge should have accepted the objection of the appellant in this regard. In other words the Arbitrator was not justified in making award of the said sum. 35. Point No.5 :- The respondent has claimed a sum of Rs. 70,840/- on account of clearance of silt deposited as a result of the flood. The Arbitrator however awarded a sum of Rs. 98,875/- on the basis of the vouchers produced by the respondent-contractor. In other words the Arbitrator was not justified in making award of the said sum. 35. Point No.5 :- The respondent has claimed a sum of Rs. 70,840/- on account of clearance of silt deposited as a result of the flood. The Arbitrator however awarded a sum of Rs. 98,875/- on the basis of the vouchers produced by the respondent-contractor. Learned counsel for the appellant submitted that no claim was entertainable in view of the condition of the clause 1.01.09, which reads as under: "1.01.09 : No claim shall be entertained for damage to work or material or the loss suffered by the contractors owing to floods, rains or any other reason occurring prior to the final measurement, the taking over of the work or part thereof by the Engineer-in-charge". 36. It need to be mentioned that the above clause referred particularly to the damage to work or material or the loss suffered owing to floods. However the claim made by the respondent was in regard to the clearance of silt deposited by the flood and therefore the said clause of the agreement will be of no help to the cause of the appellant. Another relevant clause referred is 16.01, which provide that no extra amount shall be paid to the contractor for clearance of the silt etc. This clause pertain to the normal clearance of the silt but has no reference to any extraordinary condition created by unexpected flood as result of which silt and slush got accumulated and the site needed to be cleared of it by incurring extra expenses. In the face of the material considered by the Arbitrator the claim for extra amount for clearance silt deposited by flood was justified. However the Arbitrator exceeded his jurisdiction in awarding amount excess of the amount claimed by the respondent and therefore we accept the contention of the appellant to the extent that the claim of the respondent was legally entertainable to the extent of Rs. 70,840/- although vouchers exceeding the said amount were furnished by the respondent. The learned Civil Judge has erred in not considering this aspect of the matter in proper perspective and to that extent also the respondent will be entitled to relief. 37. 70,840/- although vouchers exceeding the said amount were furnished by the respondent. The learned Civil Judge has erred in not considering this aspect of the matter in proper perspective and to that extent also the respondent will be entitled to relief. 37. Point No.6 :- The Arbitrator has awarded the interest at the rate of 15% from the date of completion of the work i.e. 23.5.1985 to the date of the commencement of the arbitration proceedings i.e. 11.5.1988; pendentelite interest at the rate of 6% and interest at the rate of 6% from the date of the award till the date of the payment. Learned counsel for the appellant submitted that the Arbitrator awarded the interest despite the prohibition contained in clause 1.09 of the agreement which reads as under: - "1.09 : No claim for interest or damages will be entertained by the government with respect to any moneys or balances which may be lying with government owing to any dispute, difference or misunderstanding between the Engineer-in-charge in making periodical or final payments or in other respect whatsoever." 38. A plain reading of the clause make it clear that the prohibition does not relate to any extra claim to be made by the contractor for the extra work done and which was not paid by the department. Moreover similar prohibition clause came to be interpreted by the Apex Court in civil appeal no. 7643 of 1995 with civil appeal no. 5677 of 1998 between State of U.P. and Harish Chandra and Company and the similar argument as raised by the appellant was repelled. The judgment in the appeals referred was delivered by the Apex Court on 11.11.1998, copy of which had been furnished as Annexure-2 to the written argument of the respondent. Considering the legal aspect of the matter we are inclined to find favour with the contention of the appellant and in our view the Arbitrator was Justified In awarding interest in the above manner. 39. For the reasons and answers to the points under consideration the appeal is partly allowed. The judgment and order dated 23.8.1993 of the learned Civil Judge, Dehradun and making the award 'rule of the court' is set aside in regard to the award of the Arbitrator on point no. 1, 2,4 in toto and partly in regard to point no. 5 confirming the award to the extent of Rs. The judgment and order dated 23.8.1993 of the learned Civil Judge, Dehradun and making the award 'rule of the court' is set aside in regard to the award of the Arbitrator on point no. 1, 2,4 in toto and partly in regard to point no. 5 confirming the award to the extent of Rs. 70,840/- (seventy thousand eight hundred and forty) and further confirming the award in regard to point no. 3 for the amount of Rs. 81,000/- (eighty one thousand) together with Interest at the rate as given in the award. The 'rule of the court' is modified accordingly. There shall be no order as to costs.