( 1 ) THIS appeal under S. 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'act') has been preferred against the judgment and order dated 3rd August, 2002 passed in Arbitration Misc. Case No. 188 of 2001 by the learned District Judge, Khurda at bhubaneswar rejecting the application filed under Section 34 of the Act. ( 2 ) PURSUANT to the tender call notice dated 2-12-1991 issued by the appellant for construction of Vertical Extension to the telephone Exchange building at Koraput the respondent submitted his tender. The tender submitted by the respondent was accepted and an agreement was executed on 5-2-1992 between the parties. The agreement provides that the project should be completed within 15 (fifteen) months apart from other provisions for rescission of contract and adjudication of dispute by way of arbitration. The dispute in this case arose due to rescission of the contract by the appellant on 21-9-1994 and the same was referred to the sole Arbitrator Shri S. B. Lal, Chief engineer (Arbitration) by the appellant for adjudication. The learned Arbitrator on consideration of the materials placed before him awarded a total sum of Rs. 3,95,918. 00 with pendente lite interest at the rate of 15% per annum and further directed that if the award amount is not paid within ninety days from the date of publication of the award, interest would run at the rate of 18% per annum. Challenging the said award the appellant filed an application under S. 34 of the Act before the learned District Judge, khurda at Bhubaneswar and the same having been rejected, this appeal has been preferred. ( 3 ) AS it appears from the award the Arbitrator awarded a sum of Rs. 85,000. 00 in respect of clalm Nos. 1, 2, 3, 4 and 7, Rs. 1,74,360. 00 in respect of clalm item No. 5, rs. 83,603. 00 in respect of clalm item No. 6, rs. 35,000. 00 in respect of clalm item No. 8, rs. 9,330. 00 in respect of clalm item No. 11 and Rs. 9,625. 00 in respect of clalm item No. 14. On perusal of the application filed under S. 34 of the Act, it appears that the appellant challenged the award on the following grounds : (1) Under Clause 25 of the agreement in all cases where the total amount of clalm is rs. 75,000. 9,625. 00 in respect of clalm item No. 14. On perusal of the application filed under S. 34 of the Act, it appears that the appellant challenged the award on the following grounds : (1) Under Clause 25 of the agreement in all cases where the total amount of clalm is rs. 75,000. 00 and above, the Arbitrator has to give reasons for the same and while awarding more than Rs. 75,000. 00 the Arbitrator either has not given any reason or given cryptic reasons and, therefore, the award is vitiated . (2) The Arbitrator has passed a lump sum award of Rs. 85,000. 00, in respect of clalm item Nos. 1, 2, 3, 4 and 7 without giving item-wise reasons as contemplated under clause (25) of the agreement and, therefore there has been violation of the provisions of the agreement. In this respect also the award is challenged on the ground that there are no materials in support of the said award. The award of Rs. 1,74,360. 00 as against clalm item No. 5 is challenged on the ground that the appellant had nowhere admitted such due and the clalmant having not complalned of any hindrance in writing to the appellant within thirty days as contemplated under clause (5) of the agreement no such award could be passed. (3) Award of Rs. 35,000. 00 in respect of clalm item No. 8 is also illegal since in terms of the agreement variation and deviation can only be allowed up to 50% and, therefore the award in this regard is beyond the scope of agreement. (4) Award of Rs. 9,330. 00 against item No. 11 for levy of compensation is beyond the jurisdiction/competency of the Arbitrator and the same being a non-arbitrable clalm, no award could be passed. (5) At the end the rate of interest awarded by the Arbitrator is beyond his jurisdiction. ( 4 ) THE learned District Judge referring to scope of Section 34 of the Act only observed that the ground taken in the application filed under S. 34 of the Act do not come within the purview of the said provision and accordingly rejected the petition without dealing with the grounds taken in the petition. ( 4 ) THE learned District Judge referring to scope of Section 34 of the Act only observed that the ground taken in the application filed under S. 34 of the Act do not come within the purview of the said provision and accordingly rejected the petition without dealing with the grounds taken in the petition. Though the matter could be remitted back to the learned District Judge for fresh disposal in accordance with law, the impugned order having not been passed with reasons, the learned counsel for both the parties submitted that instead of remitting back the matter to the learned District judge, this Court should dispose of the appeal on merit and accordingly the learned counsel for the parties were heard on merit of the case. ( 5 ) SHRI Das, the learned counsel appearing for the appellant referring to Clause 25 of the agreement submitted that when the claim is more than Rs. 75,000. 00 the Arbitrator has to give reasons for passing an award. Clause 25 of the agreement provides that in all cases where the total amount of claim is Rs. 75,000. 00 and above the Arbitrator shall give reasons for the award. In view of such clause contained in the agreement and in view of the fact that the Claim of the respondents was much more than Rs. 75,000. 00, the Arbitrator is required to give reasons for passing an award. The learned counsel for the appellant submitted that in respect of some items of Claim no reason has been assigned and in respect of certain claims, cryptic reason has been assigned by the Arbitrator and, therefore, it violates clause 25 of the agreement. ( 6 ) FROM the award, it appears that claim item Nos. 1, 2, 3, 4 and 7 were clubbed together and an award of Rs. 85,000. 00 was passed. It was contended by Shri Das, the learned counsel appearing for the appellant that five items of Claim could not have been clubbed together for consideration and such conduct of the learned Arbitrator is beyond the scope of agreement. Claim item No. 1 relates to Claim of compensation on account of additional/extra off-site expenses due to prolongation of the work. It was contended by Shri Das, the learned counsel appearing for the appellant that five items of Claim could not have been clubbed together for consideration and such conduct of the learned Arbitrator is beyond the scope of agreement. Claim item No. 1 relates to Claim of compensation on account of additional/extra off-site expenses due to prolongation of the work. Claim item No. 2 relates to compensation towards loss of profit/earning capacity and/or business loss and/or extended stay compensation for being retained longer time than what had been provided in the agreement. Claim No. 3 relates to compensation on the ground of maintenance of establishment at site during the enlarged/overrun/spill-over period due to prolongation of work. Claim No. 4 relates to compensation on account of depreciation of tools and plants on un-con-sumable materials engaged at the site of the work and blocked up to the extended period and Claim No. 7 relates to compensation on account of idle, barren labour, detained at the site of work due to suspension of the job from time to time. As is evident from all items of Claim as stated above they relate to the extended period and, therefore I am of the view that there is nothing wrong in clubbing the aforesaid Claims for the purpose of adjudication. Now coming to the allegation as to whether the Arbitrator has given any reason for passing an award by clubbing the five items of Claim or not, it appears from the award that 8th running bills and 9th and final bill had not been entertained by the appellant in terms of the agreement and, therefore there was a serious breach on the part of the appellant resulting in non-completion of the work in time. There being no dispute that time extension was granted for completion of the work, the Claimant was entitled to compensation on the different heads of Claim as stated earlier and the learned arbitrator awarded an amount of Rs. 85,000. 00 as against Claim of Rs. 12,77,500. 00, i find that the learned Arbitrator has given reasons for passing this award and, therefore there is hardly any scope in this appeal to interfere with the same. ( 7 ) SO far as Claim No. 5 is concerned, the Arbitrator has awarded Rs. 1,74,360. The Claimant in respect of this Claim prayed for compensation of Rs. 1,91,223. 12,77,500. 00, i find that the learned Arbitrator has given reasons for passing this award and, therefore there is hardly any scope in this appeal to interfere with the same. ( 7 ) SO far as Claim No. 5 is concerned, the Arbitrator has awarded Rs. 1,74,360. The Claimant in respect of this Claim prayed for compensation of Rs. 1,91,223. 00 on account of increased cost of both materials and labour/additional cost of execution of the work during the extended period. Referring to the reasons given in respect of item Nos. 1, 2, 3, 4 and 7 the learned Arbitrator has awarded a sum of Rs. 1,74,360. 00. Shri Das, the learned counsel appearing for the appellant submitted that no reason whatsoever has been given by the Arbitrator in respect of these Claims. However, it appears that the Arbitrator while passing an award in respect of this Claim referred to the reasons already given by him in respect of Claim nos. 1, 2, 3, 4 and 7 and, therefore it was not necessary for him to repeat the same reasons. I am, therefore of the view in respect of this Claim also there is nothing for this Court to interfere. ( 8 ) THE award in respect of Claim No. 8 is challenged by Shri Das, the learned counsel appearing for the appellant on the ground that the said award is imaginary and could not have been allowed. In respect of the said claim, the Claimant had prayed for compensation of Rs. 45,395. 00 and the learned Arbitrator has given an award of Rs. 35,000. 00. This item of Claim relates to compensation on account of loss of expected profit on the unexecuted portion of the contract. The learned Arbitrator has observed that the tendered amount for the work was Rs. 20,48,486 and the total gross amount of the final bill was 17,38,686. 00. On the above basis, the learned Arbitrator has further observed that the Claimant was denied of his expected profit due to reduction in the work for no fault on his part and, therefore, is entitled to reasonable profit which he would have received had he been allowed to complete the work and passed an award of rs. 35,000. 00. A reasonable profit of Rs. 35,000. 00 in respect of unexecuted work of about Rs. 3,00,000. 35,000. 00. A reasonable profit of Rs. 35,000. 00 in respect of unexecuted work of about Rs. 3,00,000. 00 is not unreasonable and, therefore, the award in respect of said item of Claim cannot be said to be imaginary. I, therefore, do not find any justification to interfere with the award in respect of the said item of Claim. ( 9 ) CLAIM item No. 11 relates to refund of rs. 9,330. 00 which had been withheld towards levy of compensation. The learned arbitrator has awarded the said amount on the ground that no notice under Clause (2)of the agreement was issued by the competent authority for more than one year after the actual date of competition. In paragraph-3 of the reasons given it is stated that the issue regarding levy of compensation under clause (2) is beyond the scope of the arbitration clause and no decision in relation to the same can be rendered either way and that the issue is to be adjudicated in the appropriate forum. While holding thus, the arbitrator has allowed the Claim. I am of the view that once the Arbitrator holds that the dispute in this respect is beyond the jurisdiction of the Arbitrator, he could not have allowed the Claim. Therefore, there is sufficient force in the contention of the learned counsel for the appellant that the award in respect of the Claim No. 11 is unjustified. Accordingly, the award in respect of the aforesaid Claim No. 11 is set aside. ( 10 ) THE last ground of challenge is item no. 16 under which interest at the rate of 24% per annum is Claimed by the respondent. The Arbitrator has granted 15% simple interest per annum from the date of rescission of the contract till the date of payment of the award. The learned counsel for the appellant challenged the said award on the ground that 15% interest per annum is on the higher side. The award was passed in the year 2000 when the rate of interest was much more than what it is now. I, therefore do not find any illegality in awarding 15% simple pendente lite interest. The further direction of the Arbitrator for payment of interest at the rate of 18% per annum for nonpayment of the award within ninety days from the publication of the award does not appear to be justified. I, therefore do not find any illegality in awarding 15% simple pendente lite interest. The further direction of the Arbitrator for payment of interest at the rate of 18% per annum for nonpayment of the award within ninety days from the publication of the award does not appear to be justified. I am of the view that simple interest at the rate of 15% per annum towards pendente lite and future interest would meet the ends of justice. Therefore, the direction contained under Claim no. 17 to the above effect also stands modified. ( 11 ) THE learned counsel for the parties had referred to several decisions of the Apex court, this Court and other High Courts with regard to scope of interference in an award under Section 34 of the Act. In the case of oil and Natural Gas Corporation Ltd. v. SAW pipes Ltd. , reported in AIR 2003 SC 2629 , the Apex Court has clearly Lald down the guidelines and if the present case is examined in the light of the guidelines Lald down by the Apex Court, this Court should not interfere in respect of most of the Claim items. Only in respect of Claim item No. 8 as stated earlier, the award is beyond the scope of agreement as held by the Arbitrator himself and, therefore the award against the said claim is liable to be set aside. So far as interest is concerned the Arbitrator having allowed 15% simple interest, this Court finds it reasonable and also has observed earlier that in respect of future interest the same rate of interest would be reasonable. I have, therefore, not referred to all the decisions cited by the learned counsel appearing for the parties, since most of the decisions are guided by the decision of the Apex Court in the aforesaid case. ( 12 ) THE appeal is accordingly partly allowed. Award in respect of Claim No. 8 is set aside and it is directed that the respondent shall be entitled to 15% pendente lite and future interest. Appeal partly allowed. .