Judgment S. C. DHARMADHIKARI, J. ( 1 ) THIS appeal is directed against the judgement and order of a learned Single Judge dated 18th january 1996 in Arbitration Petition No. 184 of 1992. The Arbitration Petition invoked Section 30 of the Arbitration Act, 1940 to challenge an award dated 6th August 1992 made by the second respondent, who was appointed as Sole Arbitrator in disputes and differences arising out of a contract awarded by the Appellants in favour of first respondent herein. ( 2 ) BY the order under appeal, the learned single judge dismissed the petition filed by the appellant to challenge the aforesaid award. Aggrieved by refusal to interfere in the award by the learned Single Judge, the Appellate jurisdiction of this Court under Arbitration Act as well as Clause 15 of Letters Patent has been invoked by the Appellant Municipal Corporation of greater Bombay. ( 3 ) THE facts about which there is no dispute, may be now set out. First Respondent is a registered Contractor with the Appellant herein. The appellant proposed to carry out reconstruction of Barrister Nath Pai Marg in cement Concrete. The work was divided into three sections i. e. Part I, Part II and Part III. First respondent submitted its tender pursuant to the offer of the appellant vide their letter dated 5th December 1985. After negotiations between the appellant and first respondent, a formal contract was duly executed for the aforesaid work. The contract was also approved by the Standing Committee vide Resolution no. 1242, dated 11th February 1986. The work was valued at Rs. 1,37,49,417/. According to the terms and conditions of the contract, the work was to be completed within 12 months excluding monsoon i. e. on or about 2nd June 1987. the work was commenced on 23rd February 1986. During execution, scope of the work was increased and a communication to this effect was addressed by the appellant to the first respondent. It appears that this step was taken pursuant to Standing committee Resolution No. 815, dated 19th August 1987. As the scope of the work was increased, the appellant called upon the first respondent to furnish additional deposit of Rs. 1,35,500/ either in cash or in the form of Bank Guarantee. First respondent has also furnished revised bills of quantities. It appears that this step was taken pursuant to Standing committee Resolution No. 815, dated 19th August 1987. As the scope of the work was increased, the appellant called upon the first respondent to furnish additional deposit of Rs. 1,35,500/ either in cash or in the form of Bank Guarantee. First respondent has also furnished revised bills of quantities. In pursuance of the Standing committee Resolution, original contract period of 12 months was revised and the date of completion was stipulated as 12th January 1989. The break up of the revised cost of the contract was rs. 2,24,67,307/. ( 4 ) DURING the course of execution of the work, according to the first respondent, the appellant deducted huge sums from their running account bills. It appears that there was some discussion with the authorities but the appellant took a stand that recoveries should be made from the further bills. This was pursuant to a decision reached to the effect that payment already made is not commensurate with the nature of work. ( 5 ) FIRST respondent disputed the aforesaid stand and vide their letter dated 26th May 1988 contended that all items listed in the corporations letter dated 20th May 1988 are executed as per Engineers instructions and as per bill of quantities, which form part of the agreement. It was contended that payments were made after taking measurements of the work executed. Therefore, stand of the appellant not to make payment of the items, was arbitrary and illegal. It was contended that if recovery, as proposed, is made, it would amount to violation of agreement. The first respondent requested that they may be allowed to proceed with the work according to the terms and conditions of the agreement. Thereafter, a Legal Notice was addressed by first respondent on 3rd June 1988 because first respondent apprehended that the recoveries to the tune of Rs. 10,68,713=10 Ps. would be made. ( 6 ) ACCORDING to first respondent, despite aforesaid correspondence, the appellants persisted with their stand. Intervention of the municipal Commissioner was sought in the matter by the first respondent. A communication to this effect is dated 13th June 1988. In pursuance of the aforesaid communication, a meeting was convened and representatives of first respondent were invited to the same. ( 6 ) ACCORDING to first respondent, despite aforesaid correspondence, the appellants persisted with their stand. Intervention of the municipal Commissioner was sought in the matter by the first respondent. A communication to this effect is dated 13th June 1988. In pursuance of the aforesaid communication, a meeting was convened and representatives of first respondent were invited to the same. It was brought to the notice of the Municipal Commissioner as well as first respondent by the appellant, that recoveries have been made and as far as refund is concerned, the stand would be made clear subsequently. It appears that as far as this aspect is concerned, the appellant directed the first respondent to get in touch with the director (Engineering, Services and Projects) of the appellant. First Respondent thereafter followed up the matter with him. There is detailed correspondence to this effect. ( 7 ) SINCE the matter could not be resolved at his end, first respondent once again approached the municipal commissioner. By letter dated 19th february 1990 addressed to the Municipal commissioner, first respondent brought to his notice alleged breaches of the terms and conditions of the contract committed by the corporation. It was their case that recoveries have been made from bills wrongfully and illegally. Similarly, subsequent payments were made at lesser rates. It was also their case that construction of Central Divider was wrongfully withdrawn from the scope of the contract. It is their case that on account of the aforesaid they suffered losses. Since the grievances were not redressed, the Municipal commissioners intervention was sought and he was informed that said disputes and differences now ought to be resolved by Arbitration. Prior to this communication, it appears, that there was a letter addressed by the Corporation communicating three names which were acceptable as Arbitrators in the matter. Initially, it appears that one s. K. Dharap was to be appointed as Sole arbitrator. It is in this background that claims came to be forwarded vide the aforesaid letter. ( 8 ) IT also appears from the record that attempts have been made by the first respondent to get the matters resolved through the intervention of the municipal Commissioner. It appears that detailed representation was addressed to him. It appears that pursuant to the representation, a hearing was held and the then Municipal Commissioner was to communicate his response. ( 8 ) IT also appears from the record that attempts have been made by the first respondent to get the matters resolved through the intervention of the municipal Commissioner. It appears that detailed representation was addressed to him. It appears that pursuant to the representation, a hearing was held and the then Municipal Commissioner was to communicate his response. However, the municipal Commissioner changed and initially it was thought that the new incumbent would be requested to hold a fresh hearing. However, it was brought to the notice of the appellant by the first respondent that a decision was already taken to appoint an Arbitrator and, therefore, the matter should be referred to him. The corporation took a stand that first respondent had forfeited its rights to get the matter resolved through Arbitration, as it sought intervention of the Municipal Commissioner. Therefore, if first respondent is desirous of having the dispute resolved through Arbitration, it would be necessary for it to make a fresh application. Reliance was placed on Clause 97 of the Terms and Conditions of the contract. ( 9 ) IT is in pursuance of the aforesaid that the matter was eventually referred to the Sole arbitration of the second respondent. Accordingly, he entered upon reference. ( 10 ) IN pursuance of the directions issued to file statement of claims and documents in support, first respondent presented their statement of claims before the learned Arbitrator on 6th February 1992. The record shows that in all six claims were made under separate and distinct heads. Claim no. 1 pertains to refund of wrongful and illegal deductions made and/or amounts withheld wrongfully. Claim no. 2 arises out of compensation for loss suffered on account of wrongful omission of an item of work. Claim no. 3 is for compensation for loss suffered on account of over heads and profits. Claim no. 4 is again of compensation for loss suffered on account of extra expenditure incurred on labour, materials etc. . Claim no. 5 is for interest and claim no. 6 is for arbitration costs. ( 11 ) UPON being served with the statement of claim, a reply was filed by the appellant wherein after dealing with the statement of claim certain counter claims were raised. The claimants compilation of documents is termed by the learned arbitrator as "cd I" and "cd II". 5 is for interest and claim no. 6 is for arbitration costs. ( 11 ) UPON being served with the statement of claim, a reply was filed by the appellant wherein after dealing with the statement of claim certain counter claims were raised. The claimants compilation of documents is termed by the learned arbitrator as "cd I" and "cd II". To the reply furnished by the appellant, first respondent submitted their rejoinder and relied upon further documents which were taken on record under compilation CD III. Appellants examined witnesses and made oral submissions through their counsel. The date of making of award was extended up to 30th September 1992. The learned arbitrator made his award much prior to this date. The award which contains brief reasons, directs that the appellant shall pay to the first respondent a net sum of Rs. 66,56,991=20 Ps. rounded up as Rs. 66,56,991/ with interest @ 18% p. a. with effect from 7th August 1992 till the date of payment or Decree by the competent Court, whichever is earlier. The aforesaid sum was arrived at in the following manner :