Research › Search › Judgment

Delhi High Court · body

2005 DIGILAW 422 (DEL)

M. L. MAHAJAN v. D. D. A.

2005-04-04

PRADEEP NANDRAJOG

body2005
PRADEEP NANDRAJOG, J. ( 1 ) PRESENT order disposes of IA. No. 13440/92, being objections field by dda under Section 30 of Arbitration Act,1940 to the award dated 22. 5. 1992 published by Shri M. S. Telang, sole arbitrator to decide the disputes and differences between the petitioner and DDA. ( 2 ) IN brief, relevant facts are that on 2. 8. 1982, an agreement was entered into between the petitioner and DDA for construction of flats in Janata Category. Work was to commence w. e. f. 12. 8. 1982 and was to be completed by 11. 8. 1983. Work remained incomplete when completion period lapsed. Superintending Engineer levied compensation on the petitioner under Clause 2 of the agreement alleging failure on the part of petitioner to complete the work. Disputes fell in the lap of arbitrator for the reason contract between the parties contained an arbitration clause. ( 3 ) BEFORE the arbitrator, petitioner raised 8 claims besides claim towards cost of arbitration. DDA raised 3 counter claims. ( 4 ) AGAINST the claims raised by the petitioner, the learned arbitrator has awarded the following :- I. CLAIM NO. I : claim in the sum of Rs. 2,85,792/- was towards final bill for the work done including payment under Clause 10 (c) of the contract. Clause 10 (c) recompensed the contract for statutory increase in the price of bricks and wages of labour. Learned arbitrator has awarded Rs. 1,72,349. 64. II. CLAIM NO. II : claim in the sum of Rs. 1,00,000/- was towards refund of security deposit. Amount has been awarded in toto. III. CLAIM NO. III : claim in the sum of Rs. 5,635/- was towards refund of rebate wrongly deducted. Amount has been allowed in toto. IV. CLAIM NO. IV : claim in the sum of Rs. 73,000/- was predicated on clause 12 and 12 (a) of the contract on the allegation that petitioner had laid PVC pipes having larger diameter than the one provided under the agreement for which petitioner had to be paid extra. Learned arbitrator has awarded Rs. 65,815. 89. V. CLAIM NO. V : Claim in the sum of Rs. 43,000/- has been negated. There being no challenge by the petitioner, I need to note no further on claim No. V. VI. CLAIM NO. VI : claim in the sum of Rs. Learned arbitrator has awarded Rs. 65,815. 89. V. CLAIM NO. V : Claim in the sum of Rs. 43,000/- has been negated. There being no challenge by the petitioner, I need to note no further on claim No. V. VI. CLAIM NO. VI : claim in the sum of Rs. 7,23,000/- was towards escalation in price of work done beyond stipulated date of completion. Learned arbitrator has awarded rs. 2,89,586. 79. VII. CLAIM NO. VII : claim in the sum of Rs. 2,85,000/- was towards overheads towards site office and watch and ward during prolonged period of contract. Learned arbitrator has awarded Rs. 1,96,200/ -. VIII. CLAIM NO. VIII : claim No. VIII was towards pendente lite interest. Learned arbitrator has awarded simple interest @ 12% per annum on the sums awarded under Claims no. I, III and IV effective from 8. 12. 1986. On claim No. II, interest at the same rate has been awarded w. e. f. 11. 4. 1987. Future interest has been awarded from the date of the award till the date of payment or the date when award would be made a rule of the court @ 12% per annum. ( 5 ) ON the counter claims, respondent/dda had a claim of Rs. 50,352/- towards levy of compensation vide decision dated 15. 12. 1988. Compensation claim was predicated on clause 2 of the agreement alleging delay by the contractor. Learned arbitrator has negated the said counter claim. ( 6 ) COUNTER claim No. 2 in the sum of Rs. 1,88,363/- has been negated. Claim was on account of execution of balance work/rectification of defective works. ( 7 ) COUNTER claim No. 3 in the sum of Rs. 1,69,769/- on account of reduction items was held justified to the extent of Rs. 72,979. 32. However, nil was awarded for the reason, learned arbitrator while determining claim No. 1 of the petitioner had taken into account the said reduction items. ( 8 ) COUNTER claim No. 4 in the sum of Rs. 1,62,781/- was held justified in the sum of Rs. 12,124/ -. Claim was for recovery of materials issued but unaccounted for, in that consumption was beyond permissible limits. However, nil was awarded for the reason learned arbitrator while determining claim No. 1 of the petitioner gave effect to the penal recovery. ( 9 ) ESSENTIALLY, dispute between the parties centered around the issue of delay. 12,124/ -. Claim was for recovery of materials issued but unaccounted for, in that consumption was beyond permissible limits. However, nil was awarded for the reason learned arbitrator while determining claim No. 1 of the petitioner gave effect to the penal recovery. ( 9 ) ESSENTIALLY, dispute between the parties centered around the issue of delay. Learned arbitrator recorded that site remained encumbered and, therefore, contractor/ petitioner was prevented from completing the work within time. Learned arbitrator has recorded that it was the duty of DDA to remove the obstruction from the site. In other words, learned arbitrator has held that it was the obligation of DDA to handover an unencumbered site, an obligation which was observed in breach by DDA, therefore, delay occasioned could not be attributed to the petitioner. Rather, delay lay squarely on the shoulders of respondent. ( 10 ) AS a finding of fact, learned arbitrator has noted that a road was passing through the site which had to be removed/relocated and till not done, work could not proceed at site. Further, electrical poles were obstructing where flats were proposed to be constructed, which contributed to the delay. Further finding of fact recorded by the learned arbitrator is that DDA delayed issuing some of the drawings, in fact some were issued after the stipulated date of completion. Learned arbitrator recorded that the work was substantially completed by February,1986. DDA did not record completion. Learned arbitrator has further recorded that DDA did not issue the completion certificate and required the contractor to attend to 5 works, which pertained to fixing fittings pertaining to sanitary and water supply and final white wash etc. Learned arbitrator noted that these were kept pending because allotment of flats was expected in the immediate future and there was fear of the fittings being stolen if there was time gap between their affixation and allotment of flats. Learned arbitrator recorded that much after defective liability period was over, compensation under clause 2 was levied on 15. 12. 1988. Learned arbitrator also noted that having completed the work in February,1988, maintenance period expired in August,1986 and since DDA did not take possession of the site, petitioner, after notice, withdrew the watch and ward from 12. 9. 1986. ( 11 ) SHRI Arvind Nayar, learned counsel for the DDA failed to make good the objections except qua claim No. 6 as awarded. 9. 1986. ( 11 ) SHRI Arvind Nayar, learned counsel for the DDA failed to make good the objections except qua claim No. 6 as awarded. Short of conceding that other objections were without substance, learned counsel could hardly make any progress at the hearing held on 22. 3. 2005. Only submission which merited some consideration was to the award pertaining to levy of compensation and qua claim no. 6. ( 12 ) CLAUSE 2 pertaining to levy of compensation reads as under : "clause 2 the items allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be deemed to be of the essence of the contract on the part of the contractor and shall be reckoned from the Tenth day after the date on which the order to commence the work is is issued to the contractor. The work shall through out the stipulated period of contract be proceeded with all due diligence and the contractor shall pay as compensation an amount equal to one percent, or such smaller amount as the Superintending Engineer, Delhi Development authority (whose decision in writing shall be final) may decide on the amount of the estimated cost of the whole work as shown in the tender, for every day that the work remains uncommenced or unfinished, after the proper dates. And further, to ensure good progress during the execution of the work, the contractor shall be bound in all cases in which the time allowed for any work exceeds, one month (save for special jobs) to complete one-eighth of the whole of the work before one-fourth of the whole time allowed under the contract has elapsed, three-eighth of the work, before one half of such time has elapsed, and three-fourth of the work, before three- fourth of such time has elapsed. However, for special jobs if a time-schedule has been submitted by the contractor and the same has been accepted by the Engineer- in-Charge, the contractor shall comply with the said time schedule. However, for special jobs if a time-schedule has been submitted by the contractor and the same has been accepted by the Engineer- in-Charge, the contractor shall comply with the said time schedule. In the event of the contractor failing to comply with the condition, he shall liable to pay as compensation an amount equal to one percent or such smaller amount as the superintending Engineer, Delhi Development Authority (whose decision in writing shall be final) may decide on the said estimated cost of the whole work for every day that the due quantity of work remains incomplete, provided always that the entire amount of compensation to be paid under the provisions of this clause shall be not exceed ten percent, on the estimated cost of the work as shown in the tender. "( 13 ) SUBMISSION made was that being an excepted matter, issue of compensation was non-arbitrable and, therefore, award of the learned arbitrator to that extent is vitiated. ( 14 ) LEARNED arbitrator while dealing with the levy of compensation has noted clause 2 aforesaid. Learned arbitrator has recorded that the clause could be invoked during contract stipulated period. Learned arbitrator has recorded that compensation was levied on 15. 12. 1988, much after the work was completed and even maintenance period was over. Learned arbitrator has, therefore, rejected the counter claim of DDA towards levy of compensation. ( 15 ) IT has to be noted that in the instant case, DDA itself sought justification of the compensation levied and submitted itself to the jurisdiction of the arbitrator. However, this by itself would not be conclusive against DDA for the reason, if the arbitrator had no jurisdiction to decide on the levy of compensation, neither party could confer jurisdiction on the learned arbitrator, ( 16 ) BUT the issue is a little different. It is within the jurisdiction of an arbitrator to interpret a contract between the parties. As held by a learned Single judge of this Court in the decision reported as AIR 1985 Delhi 370, M/s Bindra builders Vs. DDA : ". . . . . . . . . . . It is within the jurisdiction of an arbitrator to interpret a contract between the parties. As held by a learned Single judge of this Court in the decision reported as AIR 1985 Delhi 370, M/s Bindra builders Vs. DDA : ". . . . . . . . . . . The position of law in this regard is well settled that where the test for determining whether the dispute is one arising out of the contract or in connection with the contract is whether recourse to the contract by which both the parties are bound is necessary for the purpose of determining whether the claim of the party is justified or otherwise. If it is necessary to take recourse to the terms of the contract for the purpose of deciding the matter in dispute, it must be held that the matter is within the scope of the arbitration clause and the arbitrators have jurisdiction to decide that dispute. See in this regard the decision of the Supreme court in Union of India Vs. Salween Timber and Construction Co. , AIR 1969 SC 488 . The controversy, therefore, in the present case with regard to the interpretation of different terms and conditions of the contract and further whether in the context of facts which the parties may bring forth, the case would be one of substitution or of reduction is primarily within the domain of the arbitrator. If he finds that the case is of substitution, he would naturally adjudicate upon the same. If, however, he comes to the view that the case is one of reduction, then to that extent he will be bound by the decision of Chief Project Engineer in terms of Cl. 25- b. Thus, I had the occasion to observe in similar circumstances in the case Suit no. 160-A of 1983 M/s Shiv Hari Tandon V. Union of India decided on 22-4-1985 as under : "adverting to the other plea about the expected matters, it need hardly be impressed that the interpretation of the terms of contract is entirely within the domain of the arbitrator. He has to give effect to the same. In case any of the terms envisages that particular authority s decisions on certain matters have to be final, the arbitrator would certainly be bound by those decision and would not question them. He has to give effect to the same. In case any of the terms envisages that particular authority s decisions on certain matters have to be final, the arbitrator would certainly be bound by those decision and would not question them. By doing so he would be only acting in terms of the contract and giving effect to those terms while determining the rights of the parties. This made clear and it is directed that the arbitrator will act accordingly. Whether any particular work could be considered as extra items or not would also depend upon the interpretation of the contract and the arbitrator as such will consider them. His appointment as arbitrator arises from the clause existing in the contract and naturally he acts within the limits of the contract. " ( 17 ) ANOTHER learned Single Judge of this Court in the decision reported as 1997 (II) ALR 369, Bhartiya Construction Co. Vs. DDA held that decision of arbitrator on the levy of compensation was within the jurisdiction of the arbitrator notwithstanding that the clause treated the decision of Superintending Engineer as an excepted matter, when the dispute was to the very applicability of the clause or its enforcement. It was held that the clause remained applicable only if time was essence of contract and the compensation was levied during the period contract remained operative. ( 18 ) A perusal of clause 2 reveals that it enjoins upon the contractor as under : "the work shall through out the stipulated period of the contract be proceeded with all due diligence and the contractor shall pay as compensation. . . . . . . " ( 19 ) THE clause operates through out the stipulated period of contract and not there after. Learned arbitrator has recorded a finding of fact, finding being that clause was invoked much after the stipulated period of contract having ceased to exist. Thus, the finding cannot be said to be without jurisdiction. ( 20 ) LEARNED counsel briefly tried to urge that the finding by the learned arbitrator that petitioner was not a defaulting party and entire blame was on the shoulders of DDA was liable to be set aside and as a consequence, all claims of the petitioner had to be rejected and counter claims allowed. ( 20 ) LEARNED counsel briefly tried to urge that the finding by the learned arbitrator that petitioner was not a defaulting party and entire blame was on the shoulders of DDA was liable to be set aside and as a consequence, all claims of the petitioner had to be rejected and counter claims allowed. ( 21 ) A finding of fact by an arbitrator can be challenged only on the ground that the finding is perverse, in that, there is no evidence to sustain the same or no reasonable person would arrive at the finding on the given evidence or that a material document has been ignored. Save and except the three categories above, finding of fact recorded by the learned arbitrator cannot be challenged by requiring this Court to sit as a court of appeal to re-appreciate the evidence. ( 22 ) LEARNED counsel for the DDA could not point out any document or evidence which has been ignored by the learned arbitrator on the issue, save and except qua claim No. 6. ( 23 ) I have briefly noted above the reasoning of the learned arbitrator and the salient features/ facts noted on the issue of delay. The finding of fact on the issue of delay is not only well supported with evidence, to put it negatively, it cannot be said to be a finding which no reasonable person would arrive at or a finding which is based on no evidence. ( 24 ) COMING to various claims and as dealt with the by learned arbitrator, since counsel for DDA broadly touched upon the same while raising a challenge to the award, lest DDA raised a grievance that I have not dealt with the same, I propose to deal with the subject matter of each of the claim as raised by the petitioner and as dealt with by the learned arbitrator. ( 25 ) HOLDING that delay was wholly attributable to DDA, learned arbitrator determined the final amount payable to the petitioner including escalation under clause 10 (c) under claim No. 1. Learned arbitrator has allowed Rs. 1,72,349. 64 as against claim of Rs. 2,85,792/ -. Learned arbitrator has held that in reference to the cement register, it could not be said that complete rectification of the defects was attended to. Learned arbitrator has thereupon reduced the entitlement of the petitioner. Learned arbitrator has allowed Rs. 1,72,349. 64 as against claim of Rs. 2,85,792/ -. Learned arbitrator has held that in reference to the cement register, it could not be said that complete rectification of the defects was attended to. Learned arbitrator has thereupon reduced the entitlement of the petitioner. Learned arbitrator has given benefit of clause 10 (c) of the contract. ( 26 ) LEARNED counsel for the DDA did not dispute that under Clause 10 (c) of the contract, petitioner was entitled to escalation as provided in the contract. On the issue of quantification of the amount payable, it is true that the learned arbitrator has not minutely worked out the defects and thereafter reduction, but that would not vitiate the finding of the learned arbitrator. ( 27 ) FROM the letter referring the dispute to learned arbitrator, I find that the learned arbitrator is a retired Chief Engineer of CPWD. If parties choose experts in the field as an arbitrator, there is an implied faith in the personal judgment of such expert arbitrator. By appointing an expert in the field as an arbitrator, parties rely upon his expertise and, therefore, meticulous reasons are not to be looked into in the decision of such an arbitrator. ( 28 ) A situation similar to the present case (pertaining to claim No. 1) arose before the Apex Court. In the judgment reported as 1995 (22) ALR 1, State of rajasthan Vs. Puri Construction Company, challenge was made to the award of damages without quantifying the same in accordance with any rational principle. The challenge to the award, noted in para 16 of the judgment as under : "16. THE award of damages without quantifying the same in accordance with any rational principle has been assailed by contending that in a case of speaking award, the quantification of damages must be based on some principle and cannot be quantified arbitrarily by adopting rule of thumb. " ( 29 ) REPELLING the said argument in para 31 of the judgment, it was held as under : "considering the magnitude of work involving costly machinery and materials, if the two arbitrators in their wide experience have quantified the total damage and has given the award of Rs. " ( 29 ) REPELLING the said argument in para 31 of the judgment, it was held as under : "considering the magnitude of work involving costly machinery and materials, if the two arbitrators in their wide experience have quantified the total damage and has given the award of Rs. 1 crore in favour of the respondent, it cannot be held that such an award is so patently unjust and irrational and shocking to the conscious of the Court, that the same should be interfered with. " ( 30 ) ON the afore stated touchstone of law, decision of the arbitrator pertaining to claim No. 1 needs to be decided. The conclusion is inevitable, the award pertaining to claim No. 1 is legal and valid. ( 31 ) IN view of the finding that delay was attributable to the DDA and that the contractor had completed the work, notwithstanding some defects not being removed for which learned arbitrator while awarding claim No. 1 had effected deductions, hardly any fault could be found with the award pertaining to claim no. 2. Petitioner has been rightly held entitled to refund of security deposit. ( 32 ) LEARNED counsel for DDA urged that since learned arbitrator held that all defects were not removed, security deposit could not be directed to be refunded. Argument though plausible at the first blush, lack depth. DDA was not entitled to be compensated twice. Once arbitrator effected deductions while finalizing claim No. 1, deductions being on account of defects not removed, security deposit was clearly refundable. Would DDA have been satisfied if learned arbitrator had allowed claim No. 1 in toto, but as a consequence of holding that some defects were not removed ordered no refund of security deposit? In my opinion, either process would have resulted in the same end being reached. ( 33 ) ON claim No. 3, learned arbitrator has held that rebate for regular payment was conditional upon DDA making timely payment. Holding that this condition precedent was not complied with, learned arbitrator has held that deduction on account of rebate was wrong. I find no perversity in the reasoning of the learned arbitrator. Indeed, if a right is conditional, it is trite that if the condition precedent is not complied with, right is not enforceable. Holding that this condition precedent was not complied with, learned arbitrator has held that deduction on account of rebate was wrong. I find no perversity in the reasoning of the learned arbitrator. Indeed, if a right is conditional, it is trite that if the condition precedent is not complied with, right is not enforceable. ( 34 ) CLAUSE 12 and 12 (a) of the contract deal with alterations in specifications and variation in quantity beyond deviation limit respectively. Learned arbitrator has noted that agreement provided for laying 110 mm diameter pvc pipes. Learned arbitrator has noted that petitioner executed work in quantity 160 mm and 210 mm diameters. Taking note of the fact that petitioner had complied with clause 12 (a) of the contract, in that, it served upon DDA requisite notice when he was intimated to carry out the works with deviations as aforesaid, arbitrator has held that clause 12 and 12 (a) of the contract stood attracted. Holding so, learned arbitrator has awarded Rs. 65,815. 89 under claim No. 4 as against the claim raised in the sum of Rs. 73,000/ -. It is true that meticulous reasoning are not forthcoming in the award as to how learned arbitrator has arrived at the figure of Rs. 65,815. 89 but that would be irrelevant for the reasons stated in paras 28 and 29 above. ( 35 ) CLAIM No. 6 was on account of escalation in price for work done beyond stipulated date of completion. Taking note of the fact that part escalation was covered under Clause 10 (c) of the contract, learned arbitrator held that said clause recompensed the contractor only in part. Learned arbitrator thereafter has proceeded to award under claim No. 6 a sum of Rs. 2,89,586. 79. The reasoning of the learned arbitrator reads as under : "as stated in the findings and Reasons above, the respondents were in breach of the contractual obligations, as a result of which, there was delay in the completion of the work. The claimants gave notice to the respondents, at the relevant time about their intention to claim market rates for the work to be executed in the extended period. I hold that the claimants are entitled to receive reasonable compensation towards the increase in the market prices of the materials of construction, and for the increased labour wages during that period. The claimants gave notice to the respondents, at the relevant time about their intention to claim market rates for the work to be executed in the extended period. I hold that the claimants are entitled to receive reasonable compensation towards the increase in the market prices of the materials of construction, and for the increased labour wages during that period. The claimants sought to justify their claim of 15% over the contract rates, for which they had given the respondents notice at the relevant time, on the basis of the cost-indices published by the Central Public Works Department, from time to time, for works to be executed at delhi. The cost indices are based on some of the important ingredients of the construction activities, such as prices of bricks, sand, cement, aggregate, timber, steel and the wages of labour like mason, carpenter and unskilled beldar, from time to time. In the instant case, I find that the respondents have supplied to the claimants construction materials like cement, steel, SCI Pipes, timber-shutters, PVC pipes, etc. at fixed rates, for the entire period of contract. The claimants also stand reasonably compensated for the statutory in crease in the labour wages (beyond initial 10%), as per their claim agitated in claim No. 1 above. Thereby part of the increase in labour wages stands nutralised. In these circumstances, the basis of computing the compensation on the cost-indices published from time to time, would lead to erroneous results. Therefore, I hold that the claim as made out is partly justified. I award Rs. 2. 89,586. 79 p, against this claim to be paid by the respondents to the claimants. In these circumstances, the basis of computing the compensation on the cost-indices published from time to time, would lead to erroneous results. Therefore, I hold that the claim as made out is partly justified. I award Rs. 2. 89,586. 79 p, against this claim to be paid by the respondents to the claimants. " ( 36 ) CLAUSE 10 (c) of the contract reads as under : "clause 10c if during the progress of the works, the price of any material incorporated in the works, (not being a material supplied from the Engineer-in-Charge s store in accordance with clause 10 hereof) and/or wages of labour increases as a direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase exceed ten percent of the price and/or wages prevailing at the time of receipt of the tender for the work, and contractor thereupon necessarily and properly pays in respect of the material (incorporated in the work) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied provided always that any increase so payable is not, in the opinion of the superintending Engineer (whose decision shall be final and binding) attributable to delay in execution of the contract within the control of the contractor. Provided, however, no reimbursements shall be made if the increase is not more than 10% of the said prices/wages and if so the reimbursements shall be made only on the excess over 10% and provided further that any such increase shall not be payable if such increase has become operative after the contract or extended date of completion of the work in question. If during the progress of the works, the price of any material incorporated in the works (not being a material supplied from the Engineer-in-Charge s stores in accordance with clause 10 hereof) and/or wages of labour is decreased as a direct result of the coming into force of any fresh law or statutory rule or order (but not due to any changes in sales tax) and such decrease exceeds ten percent of the prices and/or wages prevailing at the time of receipt of the tender of the works. Delhi Development authority shall in respect of materials incorporated in the work (not being materials supplied from the Engineer-in-Charge s stores in accordance with clause 10 hereof) and/or labour engaged on the execution of the work after the date of coming into force of such law statutory rule or order be entitled to deduct from the dues of the contractor such amount as shall be equivalent to difference between the prices of materials and/or wages as they prevail at the time of receipt of tender for the work minus ten percent thereof and the prices of materials and/or wages of labour on the coming into force of such law, statutory rules or order. The contractor shall for the purpose of this condition keep such books of accounts and other documents as are necessary to show the amount of any increase claimed or reduction available and shall allow inspection of the same by a duly authorized representative of Delhi Development Authority and further shall, at the request of the engineer-in-Charge furnish, verified in such a manner as the Engineer-in-Charge may require any document so kept and such other information as Engineer-in-Charge may require. Contractor shall within a reasonable time of his becoming aware of any alteration in the prices of any such materials and/or wages of labour, give notice thereof to the engineer-in-Charge stating that the sale is given in pursuant to this condition together with all informations relating thereto which he may be in a position to supply. " ( 37 ) LEARNED arbitrator has recorded a patent erroneous assumptive finding that clause 10 (c) recompensed the contractor only in respect of increase in cost of labour. A perusal of clause 10 (c) reveals that contract stipulates increase in amount payable due to : (a) increase in price of any material incorporated in the works; and (b) wages of labour being increased. ( 38 ) UNFORTUNATELY, as would be noted from the discussion on claim No. 1, learned arbitrator has not worked out the basis on which claim No. 1 has been awarded and, therefore, it would not be possible for this Court to analyse the formulation of the process of reasoning in claim No. 1 with exactness. Notwithstanding that I have upheld the award pertaining to claim No. 1 based on a decision of Supreme Court, issue pertaining to award under claim no. Notwithstanding that I have upheld the award pertaining to claim No. 1 based on a decision of Supreme Court, issue pertaining to award under claim no. 6 viz-a-viz claim No. 1 assumes significance inasmuch as finalisation of the bill under claim no. 1 had an element of escalation. Claim No. 6 is also based on escalation. ( 39 ) SINCE learned arbitrator has totally ignored the language of clause 10 (c) of the contract in so far as he has recorded that said clause only compensated for increase in labour wages, the award pertaining to claim No. 6 is patently erroneous, and hence is liable to be set aside. It may further be noted that learned arbitrator, while awarding Rs. 2,89,586. 79 under claim No. 6, has himself recorded that it would not be possible to rely on cost indices for the reason some material was supplied at the fixed rate by DDA and arbitrator has noted that under clause 10 (c) contractor stood compensated. Holding so, learned arbitrator has immediately jumped to sustain a finding for compensation under claim No. 6 as awarded. ( 40 ) OBVIOUSLY, learned arbitrator had led himself in a tight situation when he noted that some material was supplied by DDA at fixed rates and increase in labour wages stood recompensed under clause 10 (c ). Had the learned arbitrator noted that compensation under clause 10 (c) was not limited to increase in wages but included materials as well, dilemma faced by learned arbitrator would not have been so. I accordingly set aside the award pertaining to claim No. 6. ( 41 ) CLAIM No. 7 partly allowed, is on account of site and overhead expenses as also ward and watch due to prolonged period of contract. I find nothing objectionable or perverse in the award pertaining to claim No. 7. Indeed, petitioner had to incur office overhead expenses as also site maintenance overhead expenses due to prolongation of the contract due to defaults of DDA. Further, once work was completed, DDA did not take charge of the site till contractor, after notice, vacated site. Award is just and reasonable on issue No. 7. ( 42 ) AS noted above, claim No. 8 recompensed the contractor by way of interest. As noted, interest awarded is simple interest @ 12% per annum effective from 18. 12. Further, once work was completed, DDA did not take charge of the site till contractor, after notice, vacated site. Award is just and reasonable on issue No. 7. ( 42 ) AS noted above, claim No. 8 recompensed the contractor by way of interest. As noted, interest awarded is simple interest @ 12% per annum effective from 18. 12. 1986 qua claims No. 1, 3 and 4 and 11. 4. 1987 pertaining to claim No. 2. It is settled law that an arbitrator has power to award pre-suit, pendente lite and future interest till award is made a rule of the court unless contract prohibits that no interest whatsoever is payable. ( 43 ) EXCEPT the award pertaining to claim No. 6, I find no merits in the objections. ( 44 ) THE award dated 22. 5. 1992 published by Mr. M. S. Telang, sole arbitrator is accordingly modified, in that, award pertaining to claim No. 6 is set aside. Remaining award is made a rule of the court. Petitioner would be entitled to post decretal interest from the date of decree till the date of realization @ 12% per annum simple interest. ( 45 ) NO costs. --- *** --- .