Judgment : S. RAJESWARAN, J. O.P. No. 601/2003: This O.P. has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter called ‘the Act 1996’) to set aside the arbitral award dated 12.12.2002 passed by the 2nd respondent. O.P. No. 602/2003 2. This O.P. has been filed under Section 34 of the Act, 1996 to set aside the award dated 12.12.2002 passed by the 2nd respondent and pass a fresh award allowing all the claims of the petitioner. 3. The petitioner and the respondents are one and the same in both the Original Petitions. The work done by the petitioner for the 1st respondent is also identical under two agreements, namely, agreement No. J/362 dated 23.9.1993 and agreement No. J/404 dated 29.10.1993. The issues raised and decisions made in both the petitions are also the same and in fact a common award was passed by the 2nd respondent on 12.12.2002. Hence a common order is passed in both the above Original Petitions. For the sake of convenience, I am referring to the facts as contained in O.P. No. 4. O.P.No.601/2003 has been filed under Section 34 of the Act, 1996 to set aside the arbitral award dated 12.12.2002 passed by the 2nd respondent in relation to disputes arising out of the contract agreement No. J/404 dated 29.10.1993. The petitioner being a railway contractor, responded to the tender called for by the 1st respondent for the work of Jolarpet-Erode Section-Complete Track Renewal of the existing 90 R-Rails on ST/CST Sleepers with 52 Kg (90 UTS) Rails on PSC SleepersM+ 7 Density between Km. 311/13 to 316/25 by submitting his quotation for the above work and the same was accepted by the 1st respondent by letter dated 3.8.1993. An agreement was entered into on 29.10.1993. The total value of the work was Rs. 4,84,501/-. It is stated that though he was prepared to complete the work as scheduled, he could not do so due to change of method directed by the 1st respondent railway in completing the track renewal works materials and also in not providing necessary Traffic and Power ‘Line Blocks’ in time. According to the petitioner, because of the attitude on the part of the 1st respondent department, he sustained heavy loss and damages. According to the petitioner, because of the attitude on the part of the 1st respondent department, he sustained heavy loss and damages. Therefore the matter was sought to be referred to for arbitration as per clauses 62 to 64 of the General Conditions of the Contract (GCC). Though number of requests were made by the petitioner for referring the matter for arbitration, no steps were taken on the side of the railways. Neither they made the full payment for their bills nor referred the matter to arbitration. Particularly, the petitioner states that for 46 days of night work, he demanded payment which though was promised to be settled was not settled at all. Thereafter the 2nd respondent was appointed by the 1st respondent as sole arbitrator. The petitioner laid 8 claims before the arbitrator, who entered into reference on 3.2.2000 and finally an award was passed on 12.12.2002 and the same is under challenge before this Court in this petition. 5. Learned counsel for the petitioner challenges the award on the following grounds 601/2003. 1) The 2nd respondent/arbitrator failed to consider the fact that by directing the petitioner to do a new method in respect of the new Track Renewal Work, the work became unworkable and the same could not be carried out on the basis of the agreed rate; 2) The 2nd respondent/arbitrator failed to consider that the 1st respondent department failed and neglected to provide necessary Traffic and Power ‘Line Blocks’ in time; 3) The 2nd respondent/arbitrator failed to note that by directing the petitioner to carry out the work in the night time, the petitioner sustained unforeseen and enormous additional expenses towards lighting, labour, enhanced site establishment costs, etc. 4) Insofar as the award of interest is concerned, the 2nd respondent/arbitrator did not take the law in the proper perspective resulting in injustice being caused to the petitioner. 6. Heard the learned counsel for the petitioner and the learned counsel for the 1st respondent. I have also gone through the documents relied by them in support of their submissions. 7. Learned counsel for the petitioner vehemently contended that the arbitral award is not passed on the basis of evidence let in by the parties and in particular, he contended that the 2nd respondent erred in law in rejecting the claim No. 6 which is for the sum awarded by relying on Clause 16(2) of the GCC. 7. Learned counsel for the petitioner vehemently contended that the arbitral award is not passed on the basis of evidence let in by the parties and in particular, he contended that the 2nd respondent erred in law in rejecting the claim No. 6 which is for the sum awarded by relying on Clause 16(2) of the GCC. He relied on the order passed by me in O.P. No. 644/2004 on 18.4.2006. 8. Learned counsel for the 1st respondent while submitting that the award does not warrant any interference under Section 34 of the Act, except the claim No. 6 wherein the second respondent rejected the award of interest by relying on Clause 16(2) of the GCC. 9. Before dealing with the rejection of award of interest under claim No. 6, let me consider whether the petitioner has made out a case to interfere with the award passed by the the 2nd respondent-arbitrator under Section 34 of the Act, 1996. 10. Insofar as first claim under extra rate for night working at 100% of the amount billed under both agreements are concerned, the 2nd respondent held as follows: "“The Sole Arbitrator finds that this claim has arisen due to breaches committed by the respondent in the agreements by forcing the claimant to carryout the work during night time and hence they are liable to compensate the claimant and directs the respondent to pay an amount of Rs.4,950/-(Rupees four thousand nine hundred and fifty only) under Agreement No. J/362 of 23.9.1993 and Rs.9,900/- (Rupees nine thousand nine hundred only) under Agreement No. J/404 of29.10.1993. Award Amount: Rs. 4,950/- (Rupees four thousand nine hundred and fifty only) under Agreement No. J/362 of 23.9.1993 and Rs. 9,900/- (Rupees nine thousand and nine hundred only) under Agreement No. J/404 of 29.10.2003, totalling to Rs.14,850/-(Rupees fourteen thousand eight hundred and fifty only).”" 11. For claim No. 2 which is for the payment not made for work done by the petitioner, the 2nd respondent has rightly held that this claim is an excepted matter in terms of Clause 63 of GCC and the relevant portion in the award is as follows: "“The Sole Arbitrator finds that the Clause 39 of the General Conditions of Contract (GCC) prescribes a procedure for fixing rates for new items of work not included in the original agreement. It covers both the scenario viz., fixing rates before execution of new items of work as well as fixing rates by Engineer in charge after execution of work. It gives powers only to Engineer in charge to fix rates of new items of work. The claim is that of work done not included in the original agreement but rate not fixed. The respondent has also disputed that the claimant had not done the new items of work claimed. As the claim pertains to new item of work done but rate not fixed and as Engineer in charge only has powers to fix the rates of new items of work, the sole arbitrator finds that this claim is an excepted matter in terms of Clause 63 of GCC and hence has no jurisdiction to adjudicate on this claim.”" 12. For claim No. 3 which is for compensation for loss incurred due to working of a truncated agreement, the arbitrator has given reasons for rejecting the claim for compensation, which cannot be easily interfered with by this Court under Section 34 of the Act, 1996. 13. The payment due on final bills for both the agreements claimed in claim No. 4, the 2nd respondent has held as follows: "“17. The Sole Arbitrator finds that there is no risk and cost involved in both the agreements and the recoveries proposed are not sustainable as discussed under counter claim No. 1 of the respondent and, therefore, the payment due on final bills for both the agreements should be released to the claimant. Here an amount of Rs. 9,874/-(Rupees nine thousand eight hundred and seventy four only) is awarded for Agreement No. J/362 of 23.9.1993 and Rs. 1,80,737/- (Rupees One lakhs eighty thousand seven hundred and thirty seven only) is awarded for Agreement No. J/404 of 29.10.1993. Award amount: Rs. 9,874/- (Rupees Nine thousand eight hundred and seventy four only) under Agreement No. J/362 of 23.9.1993 and Rs. 1,80,737/- (Rupees one lakh eighty thousand seven hundred and thirty seven only) under Agreement No. J/404 of 29.10.1993 totalling to Rs. 1,90,611/-(Rupees one lakh ninety, thousand six hundred and eleven only).”" 14. Award amount: Rs. 9,874/- (Rupees Nine thousand eight hundred and seventy four only) under Agreement No. J/362 of 23.9.1993 and Rs. 1,80,737/- (Rupees one lakh eighty thousand seven hundred and thirty seven only) under Agreement No. J/404 of 29.10.1993 totalling to Rs. 1,90,611/-(Rupees one lakh ninety, thousand six hundred and eleven only).”" 14. Similarly for claim No. 5, which is for refund of security deposit for both the agreements, the 2nd respondent awarded as follows: "“The Sole Arbitrator finds that there is no risk and cost involved and the recoveries proposed are not sustainable as discussed under counter claim No. 1 of the respondent and hence directs the respondent to pay the Security Deposit of Rs. 25,832/- (Rupees twenty five thousand eight hundred and thirty two only) in Agreement No. J/362 dated 23.9.1993 and Rs. 25,714/- (Rupees twenty five thousand seven hundred and fourteen only) in Agreement No. J/404 dated 29.10.1993. Award amount: Rs. 25,832 (Rupees twenty five thousand eight hundred and thirty two only) under agreement No. J/362 of 23.9.1993 and Rs. 25,714/-(Rupees twenty five thousand seven hundred and fourteen only) under agreement No. J/404 of 29.10.1993, totalling to Rs. 51,546/- (Rupees fifty one thousand five hundred and forty six only).”" 15. The loss of anticipated profit claimed in claim No. 7 and the legal expenses claimed in claim No. 8 are also rejected by the 2nd respondent giving acceptable reasons and the same cannot be interfered with by this Court under Section 34 of the Act, 1996. 16. Thus the award passed by the 2nd respondent is a reasoned one under claim Nos. 1 to 5 and 7 and 8 and I find no grounds to interfere with the same under Section 34 of the Act, 1996. 17. Now let me consider the award of the 2nd respondent for claim No. 6 which is for interest at 24% per annum on the sums awarded. The 2nd respondent has rejected this claim by relying on Clause 16(2) of the GCC which is clearly illegal and not in consonance with the GCC. Clause 16(2) of GCC only prohibits the railway department from paying any interest to the contractor and it does not prohibit the arbitrator from awarding any interest. The 2nd respondent has rejected this claim by relying on Clause 16(2) of the GCC which is clearly illegal and not in consonance with the GCC. Clause 16(2) of GCC only prohibits the railway department from paying any interest to the contractor and it does not prohibit the arbitrator from awarding any interest. In fact in O.P. No. 644/2004, relied on by the petitioner, I considered the similar issue and held that as there is no prohibition for the arbitrator to award interest, the contractor is entitled to be awarded interest on the sums awarded against claims made by the claimant. 18. Therefore on the basis of the earlier order passed by me on 18.4.2006 in O.P. No. 644/2004, I will have to necessarily hold that the petitioner in both the contracts are entitled to interest for the sums awarded from the day when it became due to till its actual payment. However, the interest payable is restricted only to 14% per annum. 19. In the result, the above two original petitions are disposed of in the above terms. No costs.