A. K. SIKRI, J. ( 1 ) BECAUSE of disputes between th parties in respect of works awarded by the respondent/dda to the petitioner, matter was referred to the arbitrator for adjudication of those disputes. Sh. S. K. Ahuja, the learned Arbitrator made and signed his award on 30th July 1997. The petitioner filed the present petition under Section 14, 17 and 29 of the Arbitration act, 1940. On this petition the Arbitrator was directed to file the award. After the Arbitrator filed his award and record of the proceedings, notice was given to the parties. The respondent/dda has filed objections which are registered as IA No. 2438/99. Both the parties have been heard on these objections. ( 2 ) FIRST objection of the DDA is in respect of claim No. 3 (b) Item No. (ii ). This claim was for extra for providing shuttering for balcony slab. The Arbitrator has accepted this claim to the extent of Rs. 32,200/- by recording as under:-"the claim is partly justified to the extent of Rs. 32,300/ -. It is an admitted fact that the work of providing shuttering for balcony slab has been actually executed at a height more than 3. 5 mt which according to CPWD specification para 5. 2. 9. 2 at page 105 is payable extra. As regards to extra rates payable, I find that little extra cost staging @ Rs. 40 per Sq. mt. For undisputed quantity of 805 sq. mt. Is reasonable and accordingly allowed for rs. 32,200/- in favour of Claimant. " ( 3 ) OBJECTION of the DDA is that the learned arbitrator could not resort to the specifications contained in the CPWD Manual. Referring to pars 3. 15 and 3. 19 of the agreement it was submitted that these clauses categorically provided that the rates quoted by the contractor were to hold good for works of all heights and depths and no extra was payable. Further centering and shuttering required for double height slab were to be done by the contractor as per the approved drawings without extra payment. 19 of the agreement it was submitted that these clauses categorically provided that the rates quoted by the contractor were to hold good for works of all heights and depths and no extra was payable. Further centering and shuttering required for double height slab were to be done by the contractor as per the approved drawings without extra payment. In these circumstances, it was argued that as per the contractual terms nothing extra was payable for providing shuttering for balcony slab and the award was contrary to the terms of the agreement and, therefore, liable to be set aside in view of the judgments of the Supreme court in the cases of The New India Civil erectors (P) Ltd. Vs. Oil and Natural Gas corporation, 1997 JT (2) S. C. 633 and AIR 1999 SC 3627 wherein the Court held that the Arbitrator was bound by the provisions of the contract and if the Arbitrator acted contrary to the terms of the contract, it amounted to legal mis-conduct. Following observations in para 41 of the latter judgment was specifically referred to:-"in New India Civil Erectors (P) Ltd. Vs. Oil and Natural Gas Corporation (1997) 11 SCC 75 : (1997 SCW 941: air 1997 SC 780), this Court again considered the contention wherein the arbitrator has passed award contrary to the specific stipulation/condition contained in the agreement between the parties. The Court observed thus (Para 7 of AIR SCW and AIR):- "it is axiomatic that the arbitrator being a creature of the agreement, must operate within the four corners of the agreement and cannot travel beyond it. More particularly, he cannot award any amount which is ruled out or prohibited by the terms of the agreement. In this case, the agreement between the parties clearly says that in measuring the built-up area, the balcony areas should be excluded. The arbitrators could not have acted contrary to the said stipulation and awarded any amount to the appellant on that account. " ( 4 ) WHILE there may not be any quarrel with the aforesaid proposition, the factual premise in the present case is totally different. In addition to paras 3. 15 and 3,19 of the agreement, there are special conditions with which contract was to be governed and clause no. 3 of these conditions categorically stated that CPWD specifications were to be followed in this case. In addition to paras 3. 15 and 3,19 of the agreement, there are special conditions with which contract was to be governed and clause no. 3 of these conditions categorically stated that CPWD specifications were to be followed in this case. Therefore, reliance upon CPWD specifications by the Arbitrator cannot be treated as a wrong exercise when contract itself provided so. It could not be disputed that as per these specifications if the height of slab is more than 3. 5 mtrs. , it has to be payable as extra item. The measurements taken by the Arbitrator are on the basis of final bill. Therefore, the Arbitrator was perfectly justified in awarding this claim. In Shiv Kumar wasal and Co. Vs. Delhi Development authority, 1990 (1) Arbitration Law Reporter 101 the Court dealt with this issue in the following manner:-"7. If the arbitrator has jurisdiction to go into the question whether the claimant is entitled to damages, as a consequence of the delay in execution of the contract, the Arbitrator has also jurisdiction to decide whether increase in prices should be taken into account in assessing quantum of the damages. In this case, the Arbitrator has held that there was delay in* handing over site for construction and that the superintending Engineer has committed default in supply materials. It is not disputed that the arbitrator was well within his competence to decide all those questions. Hence it cannot be held that the arbitrator has over stepped his jurisdiction by estimating the quantum of damages taking into consider the increase in prices of rates. ( 5 ) THEREFORE, I do not find any merit in this petition. ( 6 ) NEXT objection is with respect to Item no. (iv) which was for providing two coat cement slurry in agreement with item no. 9. 5. Objection of DDA is that: (a) providing of extra coat of cement slurry is not proved by the petitioner; (b) claim is not admissible as per the contract; (c) in any case, there was no basis or reason for arriving at the figure of rs. 72,962/- as no reasons are given in support thereof. He referred to the judgment of this Court in the case of AIR College of vocational Studies Vs. S. S. Jaitley, AIR 1987 Delhi 134 in support. ( 7 ) WE may note that Item No. 9. 72,962/- as no reasons are given in support thereof. He referred to the judgment of this Court in the case of AIR College of vocational Studies Vs. S. S. Jaitley, AIR 1987 Delhi 134 in support. ( 7 ) WE may note that Item No. 9. 5 was for providing 15 mm thick cement plaster 1:5 (1 cements coarse sand) finished rough with sponge. This item did not include providing for cement slurry. However, it transpired that for proper execution of this item, before applying cement mortar to wall, one coat of cement slurry was applied so that proper sticking and adhesion between the masonry and the cement plaster. Another coat of cement slurry was required (and applied) after plastering with cement mortar but before sponge work. It was for this reason that the learned Arbitrator opined that one coat of cement slurry was essentially required for the execution of the item and, therefore, when the contractor was asked to provide two coat cement slurry, he was entitled to provide for second coat in view of agreement item 7. 11 of the agreement and thus, allowed a claim of Rs. 72,962/- against this item. This is a finding of fact, supported by reason, arrived at by the learned Arbitrator and allowing the claim for extra cement slurry was, therefore, not unjustified. In so far as cement is concerned, it is clear from the award that the same is arrived at on the basis of Item No. 7. 11 of the agreement which is for applying cement slurry under floors. Learned counsel for the respondent pointed out that the rate awarded and arrived at by the learned arbitrator is Rs. 1. 81 plus contractor s enhancement of 50. 75%, i. e. Rs. 2. 74 per sq. meter against demanded rate of Rs. 7. 34 per sq. meter. Therefore, there is no force in this objection either. ( 8 ) NEXT objection is to sub-claim No. Ill of item No. (vi) of claim No. 3, which was for supplying Jamuna Sand in plinth under floor. The concerned item number is 1. 4 of the agreement. Contention of the learned counsel for the DDA was that agreement condition no. 1. 4 is very clear and includes cost of sand and therefore, no payment was admissible for supplying Jamuna Sand. The concerned item number is 1. 4 of the agreement. Contention of the learned counsel for the DDA was that agreement condition no. 1. 4 is very clear and includes cost of sand and therefore, no payment was admissible for supplying Jamuna Sand. In order to appreciate this contention, we may first take note of Item No. 1. 4 which is in the following words:-"filling in plinth with Jamuna Sand under floors including, watering, ramming, consolidation and dressing complete. "the argument of the contractor before the learned Arbitrator was that the above nomenclature is limited only to filling Jamuna Sand under floor whereas the contractor provided the Jamuna sand in addition to filling the same. The arbitrator, after hearing the parties, concluded that at page 51 of the agreement a specific provision exists where wording of the item have the precedence over the specification and schedule and going by the aforesaid nomenclature he held that the item does not include the cost of Jamuna sand and, therefore, awarded that dost of Jamuna Sand in favour of the claimant. The view taken by the learned arbitrator while interpreting the item is a plausible view and this Court cannot substitute its view for that taken by the Arbitrator. ( 9 ) ANOTHER objection was in respect of Item no. (vii) of sub-claim No. (iii) of claim No. 3. Under this item the contractor claimed extra for cutting and straightening of steel bar. Submission of the learned counsel for the dda was that award of claim is in contravention of the clear provision of the agreement between the parties as clause 3. 7 of the agreement provides that "reinforcement for RCC 2 including bending, binding and placing in position complete" and thus, the expression "bending, binding and placing in position complete" would include the work of straightening and cutting of the steel bars. The work of bending, binding and placing cannot be done unless there is cutting and straightening of the steel bars. A perusal of the award would show that the Arbitrator rejected this contention in view of specific provision existing at page 51 of the agreement to the effect that specific provision in the wording of the item in schedule of quantities shall have precedence over CPWD specification and IS Code. A perusal of the award would show that the Arbitrator rejected this contention in view of specific provision existing at page 51 of the agreement to the effect that specific provision in the wording of the item in schedule of quantities shall have precedence over CPWD specification and IS Code. According to him, the nomenclature "bending, binding and placing in position" did not contain the cost element of cutting and straightening. For the reasons given above, such an interpretation on this claim as given by the Arbitrator is not open to challenge and would not come within the scope of Section 30 of the Arbitration act, 1940. ( 10 ) SAME would be the position in respect of claims No. 8, 10, 14, 15, 20 and 22 of sub-claim (iii) of Claim No. 3. ( 11 ) LEARNED counsel for the DDA, then, vehemently contended that sub-claim No. (iv) of claim No. 3, which was for difference payable on account of clause 10 CC was not warranted and the learned Arbitrator misconducted in granting this claim. His submission was that findings of the Arbitrator are absolutely contrary to the clear provisions of the agreement. He took pains to explain that the arbitrator has awarded Rs. 4,58,993/- as payment under clause 10 CC to the claimant. This payment is divided into two parts. Part I is Rs. 1,69,090/- which has been worked out by wrongly taking the base index in contravention of the provisions of the agreement. It is pointed out that the respondent had already paid full amount under clause 10 CC to the claimant in accordance with the formula under clause 10 cc. The arbitrator has modified the formula and has changed the base index in contravention of the provisions of the agreement. The 2nd part of this claim is rs. 2,89,903/- which has been worked out on a sum of Rs. 7,72,057/- which is the total amount of the award given in sub-claim III of claim No. 3 under the award. This, according to the DDA, is in contravention of clause 10 cc. Contention of the learned counsel for the respondent/contractor, on the other hand, was that following principles shall be followed while working out indices mentioned in sub-para 4 above:- (a) Index relevant for any month will be the arithmetical average of the indices relevant to the three calender months preceding the month in question. Contention of the learned counsel for the respondent/contractor, on the other hand, was that following principles shall be followed while working out indices mentioned in sub-para 4 above:- (a) Index relevant for any month will be the arithmetical average of the indices relevant to the three calender months preceding the month in question. (b) The base index will be the one relating to the month in which tender was stipulated to be received. (c) The composition for escalation shall be worked out at quarterly intervals and shall be with respect to the cost of work done during the previous three months. The first such payment will be made at the end of three months intervals. "his submission is that the tenders were stipulated to be received in the month of February 1984 (specifically 17th february 1984 ). As per provision in (a) and (b) above the base index should be arithmetical average of three months preceding February 1984, i. e. arithmetical average of indices for the month November 1983, December 1983 and January 1984. The DDA (Respondent), however, adopted different formula and preferred to adopt the base index only for February 1984. The learned Arbitrator has upheld the contention of the claimant and has held that the Base Index should have been adopted as per (a) and (b) above, i. e. arithmetical average of preceding three months for base index also. The awarded amount of Rs. 1,69,090/- is, therefore, the difference of 10 CC (Escalation) calculated based upon the adoption of base index as average of indices for November 1983, December 1983 and January 1984, instead of the base index wrongly considered as index of February 1984 only, by the DDA. The learned Arbitrator has also awarded 10 CC (Escalation) on the amount awarded under Claim No. 3, sub-claim no. (iii) of Item No. (i to xxv) i. e. awarded amount of Rs. 7,72,057/ -. The 10 CC (Escalation) awarded by the learned Arbitrator on Rs. 7,72,057/- is Rs. 2,89,903/ -. Total 10 CC awarded is therefore Rs. 1,69,090/- rs. 2,89,903/- rs. 4,58,993/- ( 12 ) WHEN seen in the aforesaid perspective I do not find any contravention in clause 10cc or any other provisions of the agreement in awarding the claim before the Arbitrator. ( 13 ) THE contractor had also preferred claim no. 7,72,057/- is Rs. 2,89,903/ -. Total 10 CC awarded is therefore Rs. 1,69,090/- rs. 2,89,903/- rs. 4,58,993/- ( 12 ) WHEN seen in the aforesaid perspective I do not find any contravention in clause 10cc or any other provisions of the agreement in awarding the claim before the Arbitrator. ( 13 ) THE contractor had also preferred claim no. 3, sub-claim No. (v) where it had claimed back the amount of rebate deducted by the dda. Conditional rebate was offered by the claimant at the time of tender which was on fulfilling certain conditions by the DDA. The learned Arbitrator after going through the records, has opined that the DDA had never sanctioned the extra and substituted items as per the contract and has, therefore, wrongly availed the rebate on this account. Similarly, the learned Arbitrator has opined that the DDA has not made monthly payment strictly in terms of the contract and that final bill was not paid on time (it was submitted by dda during the arbitration proceedings) has, therefore, wrongly availed the rebated for monthly payment and final bill also. On these findings, the learned Arbitrator has awarded Rs. 41,939/- being the amount deducted by DDA from the bills of the claimant on the pretext of rebates. The award on this account, therefore, cannot be faulted with. ( 14 ) LEARNED counsel for the DDA also raised objection to award in respect of claim No. 5. Under this claim the claimant demanded a sum of Rs. 35 lacs for work done in extended period of the contract. The learned Arbitrator found as a fact that on the part of the DDA delay has been caused on account of non- provision of drawings, decision, non-supply of stipulated material, non-payment and other miscellaneous hindrances at the time of performance of the contract which led to delay in the work. The arbitrator awarded a sum of Rs. 8,86,942/- against this claim. Submission of the learned counsel for the dda was that there was no basis for applying 22. 5% above the estimated cost and actual cost incurred by the contractor was not proved by him. This objection essentially is with regard to the quantum. The Arbitrator has quantified the claim in the following manner:-"as regards to quantum of escalation in rates, I find that claimant at first has demanded @ 65% vide C-23 followed by. 5% above the estimated cost and actual cost incurred by the contractor was not proved by him. This objection essentially is with regard to the quantum. The Arbitrator has quantified the claim in the following manner:-"as regards to quantum of escalation in rates, I find that claimant at first has demanded @ 65% vide C-23 followed by. 80% above "vide C-34 over the estimated cost. i. e. an average increase of above to the extent of 22. 5% above the estimated cost. Which is also justified by the claimant as per various alternatives worked out in his letter dated 26. 08. 95 based on cost indices. Thus 22. 5% increase over the estimated cost for the work executed beyond the stipulated date of completion is found to be very reasonable and allowed in favour of the claimants. While calculating this amount I have considered that the 10 CC clause provided into the contract is only limited to cost adjustment. In addition to the above I hold that the 10 CC clause cannot cater the losses what has been stated hereinabove and accordingly after deducting the amount of 10 CC paid by the respondent I award as per below:- 1) The amount of work executed and paid from 1. 1. 86 to 15. 6. 89 (as estimated by respondent during hearing) rs. 2,16,30,178. 00 2) Corresponding estimated amount for the above based on 50. 75% above rs. 1,43,48,377. 00 3) Increase in the amount @ 22. 5% above the. estimated cost rs. 32,28,385. 00 "4) Deduct this amount paid by respondent under cl. 10 CC during the extended period (-) rs. 23,41,443. 00 5) Net increase is amount found justified rs. 8,86,942. 00" ( 15 ) IT is clear that according to the learned arbitrator, 22. 5% increase over the estimated cost for the work executed beyond stipulated date of completion is found. to be very reasonable. There are plethora of judgments whereby such an escalation in this manner has been provided. In the preceding para, i. e. para above the afore-quoted portion, the learned Arbitrator specifically stated that various judgments were cited by the claimant in support of this submission and applying the ratio of those judgments, formula of 22. 5% increase over the estimated cost was applied by the learned Arbitrator which seems to be justified. In the preceding para, i. e. para above the afore-quoted portion, the learned Arbitrator specifically stated that various judgments were cited by the claimant in support of this submission and applying the ratio of those judgments, formula of 22. 5% increase over the estimated cost was applied by the learned Arbitrator which seems to be justified. ( 16 ) QUA claim No. 6, which was for loss and damage due to under utilization of staff, the objection of the learned counsel for the DDA was that this was the same as compensation granted under clause 10cc and, therefore, such a claim was not admissible. This claim was taken up along with claim No. 8. Both claims No. 6 and 8 were for Rs. 5,11,965/- and Rs. 5,10,928/- respectively and total amount of Rs. 2,59,780/- is awarded against these two claims. The learned arbitrator has applied the principles of Section 73 of the contract Act and has stated that if loss is suffered due to under utilisation and has stated that if loss is suffered due under utilisation of staff and machinery claimant would be entitled to the same. It may be noted that clause 10 cc is an escalation clause which would not meet such an eventuality and, therefore, cannot be said that by making payment of escalated rate under clause 10 CC, loss suffered by the contractor for under utilisation of staff is taken care of (Ref. Bengal Traders vs. West Bengal State Electricity Board, 2001 (Suppl.) Arb. Law Reporter 7 (SC ). ( 17 ) AT this stage, I may refer to few judgments dealing with the scope of Section 30 of the arbitration Act, 1940 dealing with such objections. First is the case decided by a single Judge of this Court in Ground Engg. Company Ltd. ltd. Vs. DDA, 2004 (3) Arb. Law Reporter 404 wherein the position of various cases decided by the Supreme Court was summarised as under:- (a) In Union of India Vs. Rallia Ram reported as AIR 1963 SC 1685 (3j), it was held as under:- "the award is the decision of a domestic tribunal chosen by the parties, and the civil Courts, which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Rallia Ram reported as AIR 1963 SC 1685 (3j), it was held as under:- "the award is the decision of a domestic tribunal chosen by the parties, and the civil Courts, which are entrusted with the power to facilitate arbitration and to effectuate the awards, cannot exercise appellate powers over the decision. Wrong or right the decision is binding if it be reached fairly after giving adequate opportunity to the parties to place their grievances in the manner provided by the arbitration agreement. " (b) In M/s Sundarshan Trading Co. Vs. Government of Kerala reported as 1989 (2) SCC @ Pages 38,56 and 58, it has been observed that: "this is our opinion, the Court had no jurisdiction to do, namely, substitution of its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. It may be stated that if on a view taken of a contract, the decision of the arbitrator on certain amounts awarded, is a possible view though perhaps not the only correct view, the award cannot be examined by the court in the manner done by the High Court in the instant case. " (c) It has further been held in Hind builders Vs. Union of India reported as 1990 (3) SCC 338 that:"in a matter on which the contract is open to two equally plausible interpretations, it is legitimate for the arbitrators to accept one or the other of the available interpretations and, if the Court may think that the other view is preferable, the Court will not and should not interfere. " (d) In Jawahar Lal Wadhwa Vs. Haripada Chakrobety reported as 1991 (1) SCC 76 , it has been observed: "the Court reiterated that it was now firmly established that an award was bad on the ground of error of law on the face of it only when it the award itself or in a document actually incorporated in it, there was found some legal proposition which was the basis of the award and which was erroneous. " (e) In a recent judgment of the Hon ble supreme Court reported as B. V. Radhakrishna Vs. Sponge Iron India ltd. " (e) In a recent judgment of the Hon ble supreme Court reported as B. V. Radhakrishna Vs. Sponge Iron India ltd. reported as 1997 (4) SCC 693 , it has been held that the Court cannot sit in appeal and cannot re-appraise or reassess the evidence in respect of an award. (f) The same view is taken in State of orissa vs Kalinga Construction reported as 1970 (2) SCC 861 (3j); municipal Corporation of Delhi Vs. Jagannath Ashok Kumar reported as 1987 (4) SCC 497 (23); Indian Oil corporation Vs. Indian Carbon Ltd. reported as 1988 (3) SCC 36 ; Puri construction Pvt. Ltd. Vs. Union of india reported as 1989 (1) SCC 411 ; food Corporationof India Vs. Joginderpaln Mohinderpall reported as 1989 (2) SCC 347 . (g) The Hon ble Supreme Court in Army welfare Housing Organisation Vs. M/s Gautam Construction and fisheries Ltd. reported as 1998 (7) AD sc 184 = 1998 (5) Scale 296 has held that:-". . . . . . it is not possible for the Court to reappreciate the evidence produced before the Arbitrator and thus come to a conclusion whether a certain amount claimed was towards one head or the other. " (h) In Trustees of the Port of Madras vs. Engineering Construction corporation Ltd. reported as 1995 (5) SCC 531 , it has been held as follows:-"the above decisions make it clear that the error apparent on the face of the award contemplated by Section 16 (1) (c) as well as Section 30 (c) of the Arbitration Act is an error of law apparent on the face of the award and not an error of fact. " ( 18 ) A Division Bench of this court in DDA Vs. Bhagat Construction Co. (P) Ltd. and anr. , 2004 (3) Arb. Law Reporter 548 (Delhi) (DB) after taking note of as many as 11 judgments took the view that if award shows application of mind, it is to be taken as correct and the arbitrator need not disclose mathematical calculations in the award, more particularly when the Arbitrator was a retired chief Engineer of CPWD and well conversant with the kinds of dispute on which he was adjudicating. ( 19 ) OTHER objection is to the award of interest and it is submitted that awarding of interest @ 18% per annum is. quite excessive. ( 19 ) OTHER objection is to the award of interest and it is submitted that awarding of interest @ 18% per annum is. quite excessive. In view of judgment of the Supreme Court in the case of State of Rajasthan Vs. Nav bharat Construction Co. , 2001 IX AD (S. C.) 612 = (2002) 1 SCC 659 and having regard to the prevailing interest rates, award of interest @ 18% per annum appears to be excessive. Learned counsel for the contractor conceded that the interest may be reasonably reduced. I am, therefore, of the opinion that the pendente lite interest which is granted @ 18% per annum with effect from 3rd January 1992 till the date of award as well as future interest from the date of award till the date of decree should be paid @ 9% per annum. The award is modified to this extent. Decree in terms of the award. Other objections are dismissed. CS (OS) 1780a/97 the award as modified is made rule of the court. Learned counsel for the claimant further agreed that in case payment is made within 60 days, no future interest from the date of decree would be claimed. It is ordered accordingly. However, in case payment is not made within 60 days, the decree holder shall be entitled to future interest as well @ 9% per annum from the date of decree till the date of payment. Decree be drawn accordingly. .