Judgment :- Abdul Gafoor, J. The Appellant – State of Kerala, represented by the Chief Engineer, did not succeed in its application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to the Act), to set aside the Award of the Arbitral Tribunal constituted as per G.O. (Rt) No.26/99/PWD dated 11.1.1999, to decide the dispute between it and the respondent – the Contractor. Hence this Appeal under Section 37(1)(b) of the Act. 2. There was an agreement dated 15.3.1994 between the appellant and the respondent contractor, in relation to road work concerning four laning and strengthening of Vyttila – Aroor and four laning of Aroor – Cherthala stretches of NH 47. The period specified in the agreement for completion of the work was forty-two months. It is common case before us that the work could not be completed within the agreed period, thus warranting extension of time on two occasions, so far as this case is concerned, by 18 and a half months. On account of this extension which the contractors claim to be for no fault of theirs, they had to continue their site office in Cochin, they had to incur additional expenditure in relation to their work at Cochin in the Head Office at New Delhi, they had to incur further expenditure towards equipment ownership charges in respect of the machinery worth crores of Rupees employed for the work and under other attendant heads. Accordingly, on these counts, they raised a claim on 22.2.1998, as is revealed by Ext.A, before the Engineer. The agreement provides that the contractor shall prefer such claim first before the Engineer who is none other than the Project Director in respect of the project in question. According to the contractors, there was a decision by the Engineer in terms of clause 67.1 of the agreement as is revealed by Ext.B dated 23.4.1998 on claim No.1 concerning the equipment ownership charges, site office overheads etc. recommending payment of Rs.13,01,42,462/-. The rest of the claims were referred by the Engineer to the Site Engineer for appropriate orders after consulting the parties concerned. recommending payment of Rs.13,01,42,462/-. The rest of the claims were referred by the Engineer to the Site Engineer for appropriate orders after consulting the parties concerned. As the decision in Ext.B in respect of Claim No.1 recommending payment of Rs.13,01,42,462/- was not implemented and as no decision was forth-coming from the Engineer in respect of the rest of the claims, they sought for reference of the dispute covering claim No.1 to arbitration under clause 67.4 of the Agreement as is revealed by Ext. C dated 31.7.1989 and concerning the reset of the claims, which had not been decided by the Engineer, as is seen from Ext.E dated 30.1.1994. While so, the Chief Engineer who is the employer had, referring to Ext.B, addressed the Ministry of Transport, New Delhi under Ext.J dated 11.5.1998 pointing out that there is a decision by the Engineer in terms of clause 67.1 to pay the amount covered by that decision and to arrange payment, as according to them, the extension of the contract was due to the delay in handing over the site free from the obstructions, delay in approving the Benchmarks, delay in finalization of the proposed road levels, delay in issuing work drawings, delay in finalization of extra items, etc. Later, the State of Kerala, as is revealed by Ext.CH2 G.O. (Rt) No.26/99/PWD dated 11.1.1999, before the date of Ext.E, referred the disputes covering an amount of Rs.26.92 Crores which really includes the claim under Claim No.1 decided by the Engineer in Ext.B and the other claims which were not decided by the Engineer. Accordingly, an Arbitral Tribunal including the nominee of the Chief Engineer the employer, the nominee of the contractor and the nominee of the Ministry of Surface Transport, New Delhi as its Chairman was constituted. This Arbitral Tribunal after hearing the parties and perusing the documents produced by either side, rendered an Award on 20.12.2003 for an amount of Rs.7,61,41,460/- towards claim No.1, an amount of Rs.2,86,985/- under claim No.4B Rs.1,00,26,900/- under Claim No.5 and an amount of Rs.2,31,821/- under Claim No.6 with pendente lite interest at 10 per cent and future interest at 18 per cent on the amount so awarded. This Award was challenged by the appellant filing a petition under Section 34 of the Act before the District Court, to set it aside. It was unsuccessful. Hence this Appeal. 3. This Award was challenged by the appellant filing a petition under Section 34 of the Act before the District Court, to set it aside. It was unsuccessful. Hence this Appeal. 3. Several contentions are urged by the learned Additional Advocate General, Shri V.K. Beeran, assailing the finding of the court below in refusing to set aside the Award. It is submitted that the delay occasioned in completing the work, cannot be attributable to the acts and omissions of the Government. The contractor was also equally liable for such delay as was, in detail, submitted in the Statement of Defence filed before the Arbitral Tribunal, as well as urged before the court below in the petition under Section 34 of the Act. It is submitted that the contract was for widening and strengthening of an existing road and the contractor did not submit the programme chart in time and in the right form, so that the Project Director can act in terms of thereof, locating the portion of the site and giving the necessary drawings, for carrying out the work. Admittedly, some part of the delay was occasioned for fault of neither of the parties, such as, adverse climatic conditions, strikes and bundhs organized by the trade unions and political parties, etc. Therefore, whether the extension was the result of the commissions and omissions of the contractor also, ought to have been considered by the Arbitral Tribunal. It is without considering these, the Arbitral Tribunal has entered into the finding in one sentence that the extension was not on account of any reason attributable to the contractor, without any supporting reason. 4. It is further submitted that going by the agreement, any claim ought to have been urged by the contractor before the Engineer within 28 days. There is a specific stipulation in that regard in clause 53.1 of the Agreement. No such claim was urged in time. Without urging the same in time, it cannot be stated that there was a dispute between the parties referable to Arbitrator, much less an arbitrable dispute. Expatiating this contention, it is submitted by the learned Additional Advocate General that when there is no such arbitrable dispute between the parties, the Arbitral Tribunal did not have any jurisdiction to decide it and to pass an award. 5. Expatiating this contention, it is submitted by the learned Additional Advocate General that when there is no such arbitrable dispute between the parties, the Arbitral Tribunal did not have any jurisdiction to decide it and to pass an award. 5. It is further submitted that the Arbitral Tribunal even did not allow the State a full and fair opportunity to present and pursue its case in so far as it did not accept the additional Defence Statement submitted on 23.3.2001. It is further submitted that Ex.B did not amount to a decision by the Engineer in terms of clause 67.1 of the Agreement. That aspect itself was a bone of contention between the parties. So, the State attempted to adduce oral evidence by examining the Officer who had made Ext.B and the Officer to whom Ext.B was addressed to make the position clarified. In spite of that, the Arbitral Tribunal did not allow that opportunity to adduce evidence. Thus, there was misconduct on the part of the Arbitrator, violating Section 18 of the Act and rendering the arbitral award illegal and it is liable to be set aside. 6. It is further contended that the arbitration was on a dispute between the State and its contractor. It was incumbent on the arbitrators, in public interest, to give reasons for their conclusions before awarding huge amounts as done in the impugned award. It is also a statutory mandate in terms of Section 31(3) of the Act that the Arbitral Tribunal shall give reasons for its conclusions. The impugned award did not contain any reason at all on the contentions of the parties as to whom the delay is attributable. Therefore, there is violation of that statutory provision. It is further submitted that apart from the provisions in the Act, the agreement between the parties as contained in Clause 67(3) as amended subsequently, also provides that the Arbitral Tribunal shall render reasons for its conclusions. The Arbitral Tribunal shall have to follow this condition in the Agreement. But, they failed. It is also statutory requisite that the Arbitrators shall act in accordance with the agreement. Consequently, it is violative of Section 28(3) as well. Therefore, the Award ought to have been set aside on that count as well, submits the learned Additional Advocate General. 7. The Arbitral Tribunal shall have to follow this condition in the Agreement. But, they failed. It is also statutory requisite that the Arbitrators shall act in accordance with the agreement. Consequently, it is violative of Section 28(3) as well. Therefore, the Award ought to have been set aside on that count as well, submits the learned Additional Advocate General. 7. It is further submitted by him that it is violative of Section 73 of the Contract Act as well in so far as the Arbitral Tribunal failed to find who was at breach of the conditions in the Agreement, resulting in extension of time stipulated for performance of the contract. 8. He also submitted that violation as regards to the statutory provisions and mandates, militates against the public policy and therefore, the Award shall have to be interfered with, in terms of Section 34(2)(b) of the Act. 9. Adding to these, it is contended that there was arbitrariness and bias on the part of the Members of the Arbitral Tribunal in placing over emphasized reliance on Ext.RH 6 which is a Report submitted by the Department, pursuant to an order by the Arbitrators and without prejudice to the contentions pursued by the State before the Arbitrators. 10. In answer to these contentions, it is submitted by Shri Aravind Minocha, learned counsel appearing on behalf of the contractors, that in the wake of the decision rendered by the Engineer as revealed by Ext.B, exercising his power under Clause 67.1 of the Agreement, when the claim was first raised before that Engineer as per Ext.A, it was not open for the State, to contend that there was no dispute between the parties. In such circumstances, the State also cannot contend that there was no initiation of a dispute in terms of Clause 53.1 of the Agreement. Even if there was no such preliminary claim under clause 53(1), sub-clause (3) thereof, enables and empowers the contractor, to limit his claim subject to the findings or decision or determination as the case may be of the Engineer with regard to the additional expenditure incurred by the contractor, on the basis of the records admittedly produced by the contractor before the Engineer and other materials available. It is further contended that Clause 67.1 is independent of clause 53.1 and that was why on the basis of the claim contained in Ext.A, the Engineer had given his decision in Ext.B. That can only be in terms of clause 67.1. If at all any one had any objection to that decision rendered by the Engineer under clause 67.1, it should have been raised within 70 days therefrom. The Government had not raised its little finger against the decision in Ext.B, disputing the computations and quantifications contained therein. Therefore, as regards the claim No.1, Ext.B has become final. It is further pointed out that Ext.B is addressed to the employer and marked to the contractor and the employer had understood it as a decision as is revealed by his letter dated 11.5.1998 (Ext.J) addressed to the Director General, Ministry of Surface Transport and as is discernible from Ext. CH2 Government Order dated 11.1.1999 referring the dispute to the Arbitral Tribunal. Thus, neither the employer, nor the Government can no contend that Ext.B is not a decision. It is further submitted that even the word “recommendation” contained therein pre-supposes a decision as there cannot have any recommendation for payment of a large amount without quantifying the same recommending for payment. So, on any count, the amount quantified in Ext.B had become final and it is because of the non-payment of that amount, that the contractor had referred that dispute as per Ext.C dated 31.7.1998 or arbitration invoking clause 67.4 of the Agreement. Thus, there was a arbitrable dispute as regards payment of the amount as per the decision on Claim No.1 by the Engineer. It is further submitted that as Ext.B contained no decision on any claims other than Claim No.1 and as a decision did not come forth within 84 days from Ext.A, they had rightly urged a claim for reference as is contained in Ext.E. More over, it is submitted that the Government themselves have, considering the matter in its totality in Ext.CH2 Government Order dated 11.1.1999, referred the entire matter for arbitration, covering a dispute for Rs.26.92 Crores. Having adopted this course of action, the Government cannot now say that there was no dispute, nor was there any proper reference of the dispute to the Arbitrator. 11. Having adopted this course of action, the Government cannot now say that there was no dispute, nor was there any proper reference of the dispute to the Arbitrator. 11. It is further submitted that whenever an extension is essential for completion of the work, in terms of the agreement, if the extension is because of the fault of the contractor, the Government shall have to levy a penalty as enjoined in clause 47 of the Agreement. There was no such levy of penalty as enjoined in clause 47 of the Agreement. There was no such levy of penalty or waiver of penalty even. So, it can be easily deducted from the conduct of the employer that the extension was only on account of the commissions of omissions on the part of the employer alone. It is further submitted that the Report given to the Ministry of Surface Transport by the employer as contained in Ext.J dated 11.5.1998 also reveals the real reasons for the extension under five different counts for the extension under five different counts which can be attributable only to the employer. It is further submitted that Ext.RH 5.5 dated 12.1.1999 from the Engineer- Project Director, to the employer – Chief Engineer, also reveals the major reasons for the extension which can only be attributable to the employer. In such circumstances, going by these documents, there cannot have any conclusion other than the one contained in the Award that the reason for extension was not attributable to the contractor. Therefore, this is sufficient reason contained in the Award as regards the point on delay, and adequacy of reasons cannot be subjected to a judicial scrutiny. When there is thus a finding based on reason regarding delay, as attributable to the employer, he alone was at fault and he alone has violated the conditions of the contract. Consequently, the contention of the State on the basis of any violation of Section 73 of the contract Act giving rise to the violation of the public policy or violation of any or the Conditions in the contract, necessitating a reasoned award and consequently violation of the provisions of Sections 28(a) and 31(3) of the Act, is untenable, he submits. 12. It is further submitted that amounts awarded on different counts by the Arbitrators are really admitted or on agreed counts. 12. It is further submitted that amounts awarded on different counts by the Arbitrators are really admitted or on agreed counts. During the proceedings before the Arbitral Tribunal, considering the contention of the appellants/State that several of the claims made by the contractor are not supported by documents, vouchers or entries in the Account Book, the Arbitral Tribunal directed both parties to conduct a physical verification of the accounts. There was a verification which took about six months. After perusing the documents and records produced by the contractor, the entire matter was examined by a team of Officials, and they have filed a Report which has been produced before the Arbitrators by the State as Ext.RH(6) with various Annexures thereto quantifying amounts under different counts. It is only placing reliance on the materials contained in those documents and Report that the Award has been passed. The total award amount is far less than the amount which has become final on the basis of the decision in Ext.B, on Claim No.1. In such circumstances, the award has to be taken as a reasonable and fair one and there is no undue advantage gained by the contractor in the deal. It is further submitted that the total amount awarded will not even come to 8 per cent of the total outlay of the contract, even though the extension of time was more than 25 per cent of the original period of the contract. He, therefore, submits that there is nothing for interference in this case. 13. Now, we have to, in this background of rival contentions, examine the same with reference to the relevant Clauses in the Agreement, documents available on record and the precedents relied on. First of all, we have to decide whether Ext.B is a decision or not. Everything emanates therefrom. 14. 13. Now, we have to, in this background of rival contentions, examine the same with reference to the relevant Clauses in the Agreement, documents available on record and the precedents relied on. First of all, we have to decide whether Ext.B is a decision or not. Everything emanates therefrom. 14. Clause 67.1 of the Agreement provides as follows: 67.1 If a dispute of any kind whatsoever arises between the Employer and the Contractor in connection with, or arising out of, the Contract or the execution of the Works, whether during the execution of the Works or after their completion and whether before or after repudiation or other termination of the Contract, including any dispute as to any opinion, instruction, determination, certificate or valuation of the Engineer, the matter in dispute shall, in the first place, be referred in writing to the Engineer, with a copy to the other party. Such reference shall state that it is made pursuant to this Clause. No later than the eighty-fourth day after the day on which he received such reference the Engineer shall give notice of his decision to the Employer and the Contractor. Such decision shall state that it is made pursuant to this Clause…..” 15. Clause 53.1 provides that notwithstanding any other provisions in the contract, if the contractor intends to claim any additional payment pursuant to any Clause of the Conditions or otherwise, he shall give notice of his intention to the Engineer, with a copy to the Employer, within 28 days after the event giving rise to the claim has first arisen. “Claim” means an amount to be paid by the opposite party to the claimant. In order to urge a claim, there should have been a corresponding right accrued to the claimant. So, the claim will arise only, in the nature of Claim No.1, regarding idling of machinery, equipment ownership charges and overhead of the site office expenditure, at the final stage of the completion of the work. It is not with reference from the date of extension when no additional expenditure was incurred. On that date the claim cannot be quantified as no liability would have been incurred on the date of extension. Admittedly the work was completed on 31.3.1999. The final claim urged was on 22.2.1998 by which time a sizable expenditure had already been incurred. It is not with reference from the date of extension when no additional expenditure was incurred. On that date the claim cannot be quantified as no liability would have been incurred on the date of extension. Admittedly the work was completed on 31.3.1999. The final claim urged was on 22.2.1998 by which time a sizable expenditure had already been incurred. In such circumstances, it cannot be stated that it is belated of the period mentioned in clause 53.1. Moreover, a reading of Ext.A will disclose that a bunch of claim have been enclosed therewith by the contractor to the employer which form part of the records of the Arbitrator. So, the contention that no dispute under clause 53.1 had been raised within 28 days from the date when the claim is said to have first arisen according to the State, cannot be accepted. 16. Over and above that, Clause 53.4 provides as hereunder: “If the Contractor fails to comply with any of the provisions of this Clause in respect or any claim which he seeks to make, his entitlement to payment in respect thereof shall not exceed such amount as the Engineer or any arbitrator or arbitrators appointed pursuant to Sub-Clause 67.3 assessing the claim considers to be verified by contemporary records (whether or not such records were brought to the Engineer’s notice as required under sub-clause 53.2 and 53.3).” Even otherwise, as is revealed in Ext.B, the Engineer who is none other than the Project Director who is designated as Engineer in terms of the Agreement, has given a recommendation as admitted by the Government, though according to them, it does not form a decision. It means that he had been recommending payment of certain amounts not from nowhere, but from the claim referred to therein. So, there was a dispute before him in terms of clause 67.1 to render a decision. Therefore, it is exercising that power he had recommended payment of an amount of Rs.13,01,424/62/= in respect of claim No.1 leaving open the other claims to be considered by the Site Engineer as is reveled by that document. Ext.B is addressed to the Chief – Engineer – employer, with copy to the contractor. It is contended by the learned Additional Advocate General that this is not a decision, but only a recommendation as is worded therein. Ext.B is addressed to the Chief – Engineer – employer, with copy to the contractor. It is contended by the learned Additional Advocate General that this is not a decision, but only a recommendation as is worded therein. Before a responsible Officer proceeds to recommend payment of a substantial amount as aforesaid in the wake of the financial situation in Kerala necessarily, he will have to form a decision by himself. It cannot be taken that an Officer who had been authorized as Engineer in the Agreement will not consider his views and conclusions, before recommending such a fabulous amount to be paid to the contractor. Therefore, a recommendation to pay such amount, pre-supposes a decision. 17. Moreover, immediately after Ext.B was received by the Chief Engineer – the employer, he intimated the matter to the Ministry of Surface Transport, New Delhi who has to make the payment. Therein he had very categorically mentioned that “the concerned Project Engineer has given decision in terms of the aforesaid clause vide his letter second cited.” The letter is nothing other than Ext.B and the term of the clause mentioned is clause 67.1 of the Agreement. Thus, one of the parties to the Agreement, the Chief Engineer/Employer, has understood Ext.B as the decision. Ext.B has been communicated to the contractor. The contractor also had based on Ext.B placed his claim for arbitration as no payment was forthcoming, as is revealed from Ext.C dated 31.7.1998 wherein he also refers to Ext.B as the decision. He is the other party to the contract. When, thus, both the parties to the contract have understood Ext.B as a decision by the Engineer designated for that purpose in terms of the Agreement, it is not for the Court or anyone-else to construe, any more, that Ext.B is not a decision. 18. The decision so rendered by the Engineer can, of course, be objected to by either of the parties, but within 70 days from the date of the decision as stipulated in clause 67.1. According to the contractor, there was no objection taken by the employer. Thus, it has become final. If no payment is made, under clause 67.1 read with clause 67.4, the matter has to be referred for arbitration with regard to the failure of the party to comply with the decision so rendered. According to the contractor, there was no objection taken by the employer. Thus, it has become final. If no payment is made, under clause 67.1 read with clause 67.4, the matter has to be referred for arbitration with regard to the failure of the party to comply with the decision so rendered. It was at that point of time, the Government also issued Ext.CH2 order dated 11.1.1999 referring the dispute covering the amount mentioned in the decision in Ext.B1 as well for arbitration. After thus having referred the entire dispute for arbitration by the State themselves, it cannot be contended that there was no dispute, nor was there any proper reference for arbitration. If at all there was any violation of any of the provisions of the Agreement or the Act, it shall be taken that such rights or liabilities have been waived in terms of Section 4 of the Act. So, going by Ext.C, from the part of the contractor referring the matter for arbitration under Clause 67(4) and Ext.CH2 on the part of the Government referring the entire dispute also for arbitration, nobody can now contend that thee was no dispute, nor was there any proper reference or that there is any violation of clause 53 of the Agreement as well. As held by the Apex Court in M/s. M.K. Shah Engineers and Contractors v. State of Madhya Pradesh (AIR 1999 (1) SC 950). “the steps preceding the coming into operation of the arbitration clause though essential are capable of being waived and if one party has by its own conduct or the conduct of its officials disabled such proceeding steps being taken, it will be deemed that the procedural pre-requisites were waived. The party at fault cannot be permitted to set up the bar of non-performance of pre-requisite obligation so as to exclude the applicability and operation of the arbitration clause.” 19. In this regard, it is also worthwhile to refer to the recent decision of the Supreme Court in Oil and Natural Gas Corporation Ltd. V. Saw Pipes Ltd. (AIR 2003 SC 2629) wherein it is held that illegality must go to the root of the matter and if the illegality is trivial in nature, it cannot be held that the award is against public policy or opposed to the law. Viewed in that angle, it cannot be contended, as done by the learned Additional Advocate General relying on the decision in Orissa Mining Corporation Ltd. V. M/s. Prannath Vishwanath (AIR 1977 SC 2014), that the claims are not covered by a proper reference. 20. When there is such a reference at the instance of the Government, the other party to the Agreement, as contained in Ext.CH-2 Order dated 11.1.1999, the entire matter was open before the Arbitrator to consider including as to the sustenance of the amount quantified in Ext.B, the decision by the Engineer and to consider it independently. In such circumstances, it was also open for the Arbitrator to decide as to who was at fault, occasioning the extension of the period of the contract. 21. There was specific contention from the employer that the delay cannot be attributable to the Department, and pointing out certain instances in the Statement of Defence, it was contended that delay was occasioned for the fault attributable to the contractor as well. There was also the contention that certain circumstances causing the delay were not attributable to either party. In such circumstances, while quantifying the damages or additional expenditure incurred by the contractor by reason of extension due to such delay either on account of the fault of the Government or on account of the fault of the contractor or occasioned because of the fault of none, the Arbitrator would have to give reasons as to how the delay had occurred, necessitating extension of the period of the contract. We had read the award by ourselves and heard the award being read time and again through the learned counsel on either side, as to the reasons and finding on this point of delay and consequent extension aspects contained therein. The only thing that we get from the award is a single sentence as below: “The period of completion was extended by the respondents for 18 and ½ months due to reasons not attributable to the claimant.” A close reading of this sentence will indicate that this is either a reiteration of the contention of the claimant, or that it is the conclusion by the Arbitrators on the point of reason for extension. If it is a reiteration of the contention, there shall be a conclusion on that point and that conclusion is absent. If it is a reiteration of the contention, there shall be a conclusion on that point and that conclusion is absent. On the other hand, if it is a conclusion, it is not supported by any reason at all as to whom the delay was attributable, for the purpose of extension of the contract period. In the nature of the Award, the said sentence forms the conclusion on the point. Thus, according to us, the Arbitral Tribunal had not given any reason at all, to support this finding that “the period of completion was extended by the respondents for 18 and ½ months due to reasons not attributable to the claimant” before a sizable amount has been awarded in Claim No.1 and other counts. 22. Of course, when we find so, we have in our mind the contentions urged by the learned counsel Shri Aravind Minocha appearing on behalf of the Contractor that there are documents to show that the delay was attributable only to the State and that in the absence of imposition of penalty on the contractor in spite of the provisions in the Contract to that effect, the extension can only be due to the reasons on the part of the employer. Even then, the Arbitrators are bound to give that much reason, at least in few words. 23. We have also in mind the contention of Shri Aravind Minocha, learned counsel appearing on behalf of the contractor that any trivial violation of the provisions cannot lead to setting aside of the arbitral award, especially in the light of admission of the amounts awarded as contained in Ext.RH(6) Report. 24. Ext.RH (6) Report is a report made after verification of the Accounts. That does not mean an admission. It is also possible for the State to dispute it by leading appropriate evidence and showing some documents. Whether the State had shown such documents or evidence, has to be considered in the award as a reason supporting their conclusions. Not only that, whatever conclusions on facts contained in Ext.RH(6) have to be given in the award rather than picking and choosing any one or few items mentioned therein, as done in the Award. 25. It is also not a trivial violation because it is the mandate of the statute as contained in Section 31(3) of the Act that an arbitral award shall contain the reasons supporting the conclusions. 25. It is also not a trivial violation because it is the mandate of the statute as contained in Section 31(3) of the Act that an arbitral award shall contain the reasons supporting the conclusions. Over and above, there is specific provisions in the Agreement vide Clause 67.3 thereof that the arbitral award shall contain reasons for the conclusions contained therein. Therefore, an unreasoned award is not only violation of Section 31(3), but also the violation of Section 28(3) as well, which provides that the Arbitrators are bound to decide in accordance with the Agreement, which provides for a reasoned award. Even otherwise, in public interest, while deciding the dispute between the Government and a private contractor, it is always advisable to have a speaking award as held by the Supreme Court in the decision rendered in Raipur Development Authority v. M/s. Chokhamal Contractors (1989 (2) SCC 721). The Apex Court held as follows: “There is, however, one aspect of non-speaking awards in non-statutory arbitrations to which government and governmental authorities are parties that compel attention. The trappings of a body which discharges judicial functions and is required to act in accordance with law with their concomitant obligations for reasoned decisions, are not attracted to a private adjudication of the nature of arbitration as the latter, as we have noticed earlier, is not supposed to exert the State’s sovereign judicial power. But arbitral awards in disputes to which the State and its instrumentalities are parties affect public interest and the matter of the manner in which government and its instrumentalities allow their interest to be affected by such arbitral adjudications involve larger questions of policy and public interest. Government and its instrumentalities cannot simply allow large financial interests of the State to be prejudicially affected by non-reviewable except in the limited way allowed by the statute – non-speaking arbitral awards. Indeed, this branch of the system of dispute resolution has, of late, acquired a certain degree of notoriety by the manner in which in many cases the financial interests of government have come to suffer by awards which have raised eyebrows by doubts as to their rectitude and propriety. It will not be justifiable for governments or their instrumentalities to enter into arbitration agreements which do not expressly stipulate the rendering of reasoned and speaking awards. It will not be justifiable for governments or their instrumentalities to enter into arbitration agreements which do not expressly stipulate the rendering of reasoned and speaking awards. Governments and their instrumentalities should, as a matter of policy and public interest – if not as a compulsion of law – ensure that wherever they enter into agreements for resolution of disputes by resort to private arbitrations, the requirement of speaking awards is expressly stipulated and ensured. It is for governments and their instrumentalities to ensure in future this requirement as a matter of policy in the larger public interest. Any lapse in that behalf might lend itself to and perhaps justify, the legitimate criticism that government failed to provide against possible prejudice to public interest.” 26. The provision contained in Section 31(3) is a legislative policy at variance from the provisions contained in the Arbitration Act, 1940, which did not mandate a speaking award unless otherwise agreed to by the parties. Therefore, it is a matter of public policy. The provisions contained in the Arbitration and Conciliation Act, 1996 are in consonance with the UNCITRAL Model Rules on Arbitration, which is internationally accepted as basis for the arbitration. So, the Award also offends public policy. 27. Thus, the discussions as above leads to the only conclusion that the award contained no reasons as to whom the reasons for extension of the contract for 18 and ½ months were attributable. Every aspect contained under Claim No.1 springs up and germinates out of the reasons for such extension. There is no supporting reason for the finding on that count in the impugned Award. Consequently, whatever amount awarded under Claim No.1 loses its binding nature. Necessarily, we have to set aside the award on Claim No.1 on the ground that it is violative of Sections 31(3) and 28(3) of the Act. Absolutely, no reason at all to support the finding that the period for completion was extended by the respondent for 18 and ½ months due to reasons not attributable to the claimant, is expressed in at least a single letter from out of the 26 alphabets. That there are documents supporting such conclusion is not a compliance or substitute of Section 31(3), nor to the stipulations contained in the Agreement in that regard, for proper compliance of Section 28(3). We are of the view that the arbitral award contains no reason at all. That there are documents supporting such conclusion is not a compliance or substitute of Section 31(3), nor to the stipulations contained in the Agreement in that regard, for proper compliance of Section 28(3). We are of the view that the arbitral award contains no reason at all. So, the contention regarding judicial scrutiny of inadequacy or insufficiency of reason does not arise for consideration. 28. At any later stage also, it may be possible for the State to contend that they were not rendered a proper opportunity by the Arbitral Tribunal under Section 18, in so far as their additional written statement was not accepted and the request to lead oral evidence was denied. We have perused the additional written statement at length. We find therefrom that the only contentions raised there are as to whether Ext.B is a decision or only a recommendation and also as to the relevancy of clause 53 in the Agreement. On both these points we have rendered our finding supra that Ext.B is a decision and there is a proper raising of a claim and reference and that if at all there was any irregularity or infraction, that has been waived in terms of Section 4 of the Act. Therefore, these points shall not loom large any more. 29. We have also perused the petition filed by the State seeking permission to lead oral evidence by examining two Engineers. The reasons stated in that behalf in the petition was also to substantiate that Ext.B was not a decision. As we have already made our mind clear that Ext.B is a decision, there is no reason to lead evidence on that point. 30. Thus, rejection of the additional Statement of Defence or denial of permission to lead oral evidence, does not amount to denial of sufficient opportunity by the Arbitral Tribunal. The State cannot contend, therefore, that there is any consequential violation or vitiation. There is also the finally signed Minutes indicating that they have been rendered proper and fair opportunity. 31. Another claim allowed by the Arbitrator is under Claim No.4B. The award in respect of the same is as follows: “4B. This claim is of Additional expenditure due to change in foundation from well to open foundation for Puthenhode Bridge. The claim is for Rs.3,33,924.69 as per Claimant’s letter dated 24.4.1997 (page 96 statement of claims Vol.2 Exh.A). 31. Another claim allowed by the Arbitrator is under Claim No.4B. The award in respect of the same is as follows: “4B. This claim is of Additional expenditure due to change in foundation from well to open foundation for Puthenhode Bridge. The claim is for Rs.3,33,924.69 as per Claimant’s letter dated 24.4.1997 (page 96 statement of claims Vol.2 Exh.A). The respondent states in the Defence Statement that the payment for open foundation has been made. The claimant in the Rejoinder replied that they have been paid Rs.46,939,46/= only for the excavation quantity and the other items for the claim are to be paid. After examining all the aspects of the claim on the basis of documents presented, pleading and arguments of both the parties, we find the extra expenditure incurred by the Claimant (3,33,924.69 – 46,939.46) for an amount of Rs.2,86,985.23 is to be paid to the Claimant by the Respondent. We, therefore, award Rs.2,86,985/= in favour of the Claimant and direct the respondent to pay this amount to the Claimant.” 32. No reason in support of allowing this amount of Rs.2,86,985/= is discernible anywhere from the Award. Necessarily, this part of the award also is vitiated for the same reason as in respect of Claim No.1. Therefore, that part of the award also stands set aside. 33. As regards Claim No.5, the Arbitrator had found as follows: “Claim No.5: Compensation for the loss suffered on account of strikes by various Local unions, bundh, and interference by police and other authorities Rs.2,85,93,625/=. The controversy on this claim between the parties is whether clause 12.2 of General Conditions of Contract is applicable in this case or not. After considering the contract provision, pleading and the argument of both the parties, we have found that the word physical conditions mentioned in the clause 12.2 can be man-made also. Therefore, we consider that loss/damages suffered by the Claimant on account of local strike/bundh etc. was unforeseeable and comes under the purview of clause 12.2 which provides not only extension of time, but for compensation of the extra cost.” This really contains a reason as to the physical condition mentioned in Clause 12.2 which can also be man-made, including the strikes and bundhs. was unforeseeable and comes under the purview of clause 12.2 which provides not only extension of time, but for compensation of the extra cost.” This really contains a reason as to the physical condition mentioned in Clause 12.2 which can also be man-made, including the strikes and bundhs. Necessarily, this finding is supported by reason and therefore, the award of an amount of Rs.1,00,26,900/= on the counts under Serial Nos.1, 3, 6 to 13 and 25 per cent of Claim Nos.2 and 4 in Annexure 27 is sustainable. 34. In this regard, we have to mention something in public interest. The contractor has been awarded an amount of more than Rupees One Crore towards the compensation for the loss suffered by him on account strikes and bundhs by various local unions and political parties and on other counts. Serial No.1 is an amount of Rs.6,90,075/= on account of the Kerala Bundh organized on 9.7.1997. Yet another amount awarded on this count is Rs.6,90,075/= due to stoppage of work due to bundh organized on 1.7.1997 by a political party. Yet another count on which an amount of Rs.6,81,600/= had been granted to the contractor from out of the State Coffers is on account of stoppage of work due to lorry and bus strike on 1.4.1997. Equally so, a further amount of Rs.7,83,075/= was awarded to the contractor on account of stoppage of work due to Kerala Bundh on 26.2.1997. Amounts like Rs.34,000/=, Rs.5,67,450/=, Rs.5,67,450/=, Rs.6,44,850/=, Rs.6,44,850/= and Rs.4,05,925/= had also been ordered to be paid from the State Fund on account of loss sustained by the contractor due to stoppage of work due to Kerala Bundh on 26.2.1997, but strike on 2.12.1996, Kerala Bundh on 18.9.1996, another Kerala Bundh on 28.9.1996, still another Bundh on 27.5.1996 and All India Strike organized by a trade union on 23.2.1996 and yet another Bundh on 8.11.1995. Anyhow, this being an Award with supporting reasons, necessarily, we have to sustain that Award. 35. The people of Kerala have to open their eyes that Crores of Rupees are to be pumped out of the State Fund to contractors on account of the loss sustained by them because of the bundhs dates, they are not aware of the consequences arising of it, like this. An amount of more than Rupees One Crore was awarded to one contractor working about 45 kilometres of the road. An amount of more than Rupees One Crore was awarded to one contractor working about 45 kilometres of the road. The total amount to be paid to the contractors on road and other works all over Kerala, can only be imagined. 36. Claim No.6 is in respect of the difference in payment of Provident Fund Contribution from 8.33 per cent to 10 per cent. That being a statutory rate payable, necessarily the award has to be sustained as it contained sufficient reason. It is only a trivial amount of Rs.2,31,821 as compared to the total amount awarded. 37. As regards pendente lite interest, the Arbitral Tribunal has awarded only ten per cent interest and as regards the future interest is concerned, against the claim for 23 per cent, the Arbitral Tribunal awarded only 18 per cent, exercising its discretion going by Section 31. Necessarily, these are also not liable to be interfered with. Consequently, interest at the aforesaid rates shall have to be paid on the counts upheld herein. 38. In short, the Appeal is allowed in part, setting aside the award under Claim Nos.1 and 4B on the ground that the findings thereon do not have supporting reasons and are in violation of Sections 28(3) and 31(3) of the Act and also the interest awarded on those two counts claimed under Claims 7B and 7C. No costs.