JUDGMENT (Per Smt. T. Meena Kumari, J.) This appeal is directed against the decree and order dated 28.6.2002 in O.P. No. 549 of 2001 on the file of the Motor Vehicle Accident Claims Tribunal-cum-Additional Special Judge for SPE & ACB cases-cum Additional Chief Judge, City Civil Court, Hyderabad. 2. The appellants are the petitioners in the O.P. whereas the 151 respondent is the contractor and the 2nd respondent is the arbitrator. The appellants filed the aforementioned O.P. before the lower Court under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the A ward passed by the 2nd respondent arbitrator. 3. The brief facts of the case that led to the filing of the present appeal, as projected in the O.P. are as follows: The IS' respondent entered into an agreement with the appellants on 19.2.1990 for doubling of track between Thangadi Chegunta Stations by earth work in formation, construction of major/minor bridges and execution of miscellaneous works from Ch. 39000M to Ch. 43200M, Reach VII for a sum of Rs. 46,22,600/-, which was enhanced to Rs.55,01,253/- by way of additional works. The work was required to be completed by 31.10.1990, but actually it was completed on 20.4.1993. On 26.8.1991, the 15' respondent requested for extension of time without penalty owing to certain difficulties faced by him and the same was extended till 28.2.1992. On 1.10.1991, the 1" respondent made another representation stating that he was facing certain hurdles, such as, resistance of owners of the land due to standing crops; delay in removal of P&T posts and wires; increase in cost of fuel due to gulf crisis and general inflation and, requested that a pre-arbitration committee should be appointed to consider his claim for enhancement of the rates. Subsequently, the Chief Engineer appointed a prearbitration committee to examine the claims of several contractors for enhancement of rates owing to the unprecedented developments. The Committee having considered the matter, recommended for enhancement of the rates at 25%. However, the Committee rejected the claim of the IS' respondent in respect of idling charges for machinery for the period from 9.6.1990 to 31.7.91 and 5.10.90 to 15.3.91. So far as the claim in respect of overhead charges for prolongation of the contract is concerned, the Committee recommended for compensation at 2% per annum for 20 months on the contract value. So far as the claim in respect of overhead charges for prolongation of the contract is concerned, the Committee recommended for compensation at 2% per annum for 20 months on the contract value. Accordingly, a supplementary agreement was entered on 5.3.93 and the 1" respondent was granted extension without penalty to complete the work. It is stated that on completion of the work on 20.4.1993, the work was measured on 26.4.1993 and the final bill was made ready on 30.3.1994 and the payment was made on 31.3.1994. The F.D.Rs., which were given as security, were released only on 29.11.1994. However, on 25.6.1996, the 1st respondent has pointed out to the authorities that certain subsisting claims were not included in the final bill and while listing out five items out of the same, requested that the matter may be referred for arbitration. As no action was taken, the appellant filed an arbitration application before this Court seeking appointment of an arbitrator and this Court by a common order passed in A.A. Nos. 8 and 11 of 1998, appointed the 2nd respondent herein as Arbitrator to decide the disputes arising out of agreement No. 9/CAO/C/SC/90, dated 19.2.1990. Accordingly, parties appeared before the Arbitrator and participated in the proceedings. Through order dated 10.8.1999, the Arbitrator passed an Award in respect of certain claims totalling to Rs.7,90,000/-, payable within three months from the date of passing of the said award, failing which, it was held that the same will carry interest at 18% per annum, compounded quarterly from the date of the Award. Challenging the said Award, the appellants filed the aforementioned O.P. before the Court below. 4. Before the lower Court, it was the contention of the appellants that appointment of arbitrator is contrary to the terms and conditions of the agreement, and it is opposed to public policy. It was further contended that as the contractor failed to return the empty cement bags to the appellants, the department was justified in recovering an amount of Rs.20,000/-. Before the lower Court, it was the contention of the appellants that appointment of arbitrator is contrary to the terms and conditions of the agreement, and it is opposed to public policy. It was further contended that as the contractor failed to return the empty cement bags to the appellants, the department was justified in recovering an amount of Rs.20,000/-. He further contended that the 151 respondent used granite stone in the execution of work instead of cement concrete with graded hard stone aggregate and if there are any variations in the rates of granite stone used by the 151 respondent for execution of the contract work, he is bound to comply with the Statutory Conditions of Contract and Clauses of General Conditions of Contract, which he has not done and hence the claim for variation in the rate ought to have been rejected by the arbitrator. It was also the contention of the appellants before the lower Court that as per Clauses 16 and 17 of the General Conditions of the Contract and other conditions of the agreement, arbitrator cannot allow any of the claims of the 151 respondent and since the arbitrator allowed some of the claims of the 151 respondent, he has travelled beyond the jurisdiction. Lastly, it was contended that as per Clause 16(2), no interest would be payable upon Earnest Money or Security Deposit or on the amounts payable to the contractor, but Government securities deposited in terms of sub-clause (1) of this Clause will be repayable with interest accrued thereon and in the instant case the arbitrator has erroneously awarded an amount of Rs.20,000/- towards interest on delayed payments and the arbitrator ought to have rejected the said claim as barred by limitation. 5. The learned Chief Judge, through the impugned order, dismissed the O.P. while confirming the Award of the Arbitrator. Hence, the appellants filed the present appeal. 6. Sri Rajeev Reddy, learned counsel appearing on behalf of Smt. C.V. Vineetha Reddy, learned Standing Counsel for the appellants has contended that the learned Arbitrator has exceeded his jurisdiction while passing the A ward in respect of Claim Nos.1B,IC,ID, 3,4 and 6 and acted beyond the scope of reference which is contrary to the terms and conditions of the agreement. The learned Chief Judge also without taking this fact into consideration has erroneously confirmed the A ward of the learned Arbitrator. The learned Chief Judge also without taking this fact into consideration has erroneously confirmed the A ward of the learned Arbitrator. He further contended that the claim statement filed by the 1st respondent before the High Court is completely different from that of the claim statement filed before the Arbitrator and the Arbitrator is only empowered to adjudicate upon the claims referred to him for arbitration and he is not empowered to adjudicate on all the claims made by the contractor. In support of this contention, he relied upon the judgment of the Apex Court In Rajinder Krishan Khanna and others v. Union of India (1) (1998) 7 SCC 129 . While relying on paras 10 and 11 of yet another judgment of the Apex Court in Orissa Mining Corporation Ltd., v. M/s. Prannah Vishwanth Rawlley and others (2) AIR 1977 SC 2014 , learned counsel sought to contend that the arbitrator cannot enlarge the scope of reference and adjudicate upon the claims which were not referred by the High Court for arbitration, which read thus: "10. On a reading of the plaint, we are satisfied that the claim for transporting the iron ore for the extra distance is limited to Rs.68,582/- and the whole claim after including the claim for construction of the road is confined only to Rs. 93,582/-. The arbitrator having disallowed Rs.25,000/- being the claim for construction of the road should have confined his award only to Rs.68,582/-. The claim of additional Rs. Rs.68,582/- before the arbitrator was clearly beyond the order of reference which incorporated the reliefs prayed for in the plaint by the respondent herein. It would have been different if the entire claim relating to the transport of the iron ore for the extra distance was made without specifying the amount of claim. When the amount has been specified in the plaint and when the reference is confined to the claim made in the plaint, the arbitrator would have to restrict his award only to the claim. We are satisfied that in this case the arbitrator has exceeded his jurisdiction in embarking on the claim that was for the first time put forward before him by the respondent. There is therefore an error apparent on the face of the award. 11. We are satisfied that in this case the arbitrator has exceeded his jurisdiction in embarking on the claim that was for the first time put forward before him by the respondent. There is therefore an error apparent on the face of the award. 11. Section 20(1) of the Arbitration Act, 10 of 1940, provides that where a difference has arisen and where any persons have entered into an arbitration agreement they may apply to the court having jurisdiction in the matter to which the agreement relates; that the agreement be filed in court. Sub-section (4) to 5.20 provides that the court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed by the parties. When an agreement is filed in Court and order of reference is made then the claim as a result of the order of reference is limited to a particular relief and the arbitrator cannot enlarge the scope of reference and entertain fresh claims without a further order of reference from the Court. On a construction of 5.20 of the Arbitration Act the plea on behalf of the appellant will have to be accepted. In the circumstances of the case, we do not think that the award should be set aside as the learned counsel for the appellant has also no objection in accepting the award in so far as it relates to Rs.68,582/-. We feel that the award to the extent of Rs. 68,582/- and interest at the rate of 6 per cent per annum from the date of the award be confirmed. Regarding the direction as to return of security deposit, and earnest money, as it is not the case of the appellant that the respondent is not entitled to the amount, we do not feel called upon to interfere with the order directing the appellant to pay the amount to the respondent with interest at 6% per annum from the date of the award i.e. May 31,1975". 7. While relying upon a judgment of this Court( rendered by one of us, namely, 5mt. Justice T. Meena Kumari) in Hindustan Shipyard Ltd., v. M/s. Essar Oil Limited (3) 2005 (1) ALT 264 (O.B.), learned counsel would contend that the arbitrator has no jurisdiction to go beyond the terms of reference. It is necessary to extract the relevant portion, which reads thus: "68. Justice T. Meena Kumari) in Hindustan Shipyard Ltd., v. M/s. Essar Oil Limited (3) 2005 (1) ALT 264 (O.B.), learned counsel would contend that the arbitrator has no jurisdiction to go beyond the terms of reference. It is necessary to extract the relevant portion, which reads thus: "68. It is well settled law that the Arbitrator has no jurisdiction to go beyond the terms of reference, which is limited to the agreement as he could decide the disputes only arising out of or in connection with the agreement and could not adjudicate upon and decide the matter which falls outside the agreement." 8. Learned counsel further contended that in respect of Claim No.1 B, the contractor has claimed variation in the rates for the granite stone used by him for execution of work instead of cement concrete with graded hard stone aggregate. Even though the contractor has failed to furnish the details as to the quantity of the granite used in execution of the work, the date of purchase of the granite and the vouchers, the arbitrator while taking into account the rate of 159 per cum of another contractor, M/s. Ramakrishna Constructions and also the rate analysis of the 1st respondent at 155 per cum as against 95 per cum for hard stone, awarded an amount of Rs. 1,40,000/- towards differential rate under the said Claim. Lastly, he would contend that Clauses 16(2) of the general Conditions of Contract prohibits grant of interest and the learned Arbitrator without taking this Clause into consideration has granted interest, which ought to have been rejected by the learned Chief Judge. He, therefore, pleaded that the appeal be allowed and the Award of the Arbitrator as confirmed by the learned Chief Judge be set aside. 9. On the other hand, Sri P.Vasudeva Rao, learned counsel appearing on behalf of the pt respondent had filed written arguments in the matter. 10. Now what is to be seen is whether the Award of the Arbitrator as confirmed by the learned Chief Judge is valid and legal and is in accordance with law? 11. 9. On the other hand, Sri P.Vasudeva Rao, learned counsel appearing on behalf of the pt respondent had filed written arguments in the matter. 10. Now what is to be seen is whether the Award of the Arbitrator as confirmed by the learned Chief Judge is valid and legal and is in accordance with law? 11. There is no dispute about the fact that the 1st respondent has entered into an agreement with the appellants on 19.2.1990 for doubling of track between Thangadi Chegunta stations by earth work, in formation, construction/extension of major minor bridges and miscellaneous works and the work was required to be completed within 12 montns from the date of issuance of acceptance letter dated 31.10.1990. There is equally no dispute about the fact that when the 1st respondent failed to execute the work within time, the same was extended without imposing any penalty. Claim No.1-A: interest for delay in final payment: 12. According to the 1st respondent, he has completed the work on 20.4.1993. The final measurement was though taken on 26.4.1993, final bill was paid only on 30.3.1994 and since there is a delay of nearly 12 months in making payment of the final bill, he needs to be compensated for the delay in payment. 13. On a perusal of Circular dated 8.5.1968 of the appellants, which deals with the elimination of delays, it is seen that final bill should be prepared within 30 days of measurement. The said circular also provides that a further time of four days should be given for checking and the final bill should be passed within four days thereafter. In the instant case, though the contractor has completed the work on 20.4.1993 and the final measurement was taken on 26.4.1993, the final payment was made to him only on 30.3.1994, i.e., nearly after a period of twelve months. Since there is delay in making final payment of the bills, the Arbitrator was justified in awarding a sum of Rs.20,000/- under the said claim. Hence, we do not find any reason to interfere with the same. CLAIM No. 1-B: Difference of rates for use of grilf1ite instead of hard stone as stipulated: 14. Since there is delay in making final payment of the bills, the Arbitrator was justified in awarding a sum of Rs.20,000/- under the said claim. Hence, we do not find any reason to interfere with the same. CLAIM No. 1-B: Difference of rates for use of grilf1ite instead of hard stone as stipulated: 14. In so far as this claim is concerned, as per Clause 6.2.1 of the Special Conditions of Contract, the contractor was required to execute the work in case of R.C.C. concrete work with granite aggregate and other mass concrete works with either granite or hard stone aggregate. It is relevant to extract the said clause. "6.2.1: Lime stone, quartz stone and shalk are not acceptable for concrete or masonry works. The contractor will have to use granite for RCC items and for other concrete items either granite or hard stone aggregate and quote the rates accordingly." 15. Undisputably, as per the said Clause, the contractor can execute the concrete works either with granite or hard stone. However, in the instant case, the contractor has executed the mass concrete works by using granite aggregate, which is freely available and much cheaper instead of hard stone aggregate which is not locally available and is required to be transported from other place. Therefore, the contractor is not entitled to claim the variation in rate for the usage of granite. 16. That apart, the contractor also failed to furnish the details as to the date of purchase of granite and other supporting vouchers to prove his claim that he has actually used granite aggregate in execution of concrete works, in the absence of which, the Arbitrator was not justified in granting an amount of Rs.1,40,000/- towards the said claim. Hence, the said claim is liable to be set aside and it is accordingly set aside. Claim No.1 C: Value of additional formation of the embankment: 17. It appears, that on 16.4.1990, the contractor has written a letter to the authorities stating that as he is not allowed to carry out the morrum blanketing of the completed formations, he cannot use the extra earth for further stretches and he will be sustaining loss. It was further contended that as the appellants did not allow him to remove the loose earth tr 18. It was further contended that as the appellants did not allow him to remove the loose earth tr 18. The said contention was opposed by the department before the Arbitrator stating that the contractor could not have made use of such a schedule as the railways could wait till the entire stretch is completed before taking it over and the contractor has to find extra earth without banking on surplus soil. 19. However, on a perusal of the award of the arbitrator, it is seen that earthwork embankment was governed by Clause 5.1.3 XII of Special Conditions, which reads as follows: "Extra width of 50 cm., shall be period on either side which after finishing the bank upto final height, shall be dressed by removing the loose earth on account of rollers not able to compact the soil at the edge of the formation width has to be done by the contractor." 20. The department has filed a counter affidavit before the Arbitrator stilting that the contractor while taking into account the aforesaid fact has quoted the rates for earth work and hence, the contractor's claim for removing the earth on the slopes and reusing at some other places is not practicable one, as the bank is one in 30 slope. It is further stated that under Clause No.5.1.3.XI of the agreement, very clear instructions were given that loose earth only should be removed and dressed properly. 21. As the contractor's claim is contrary to Clause 5.1.3.XI of the Special Conditions of the agreement, the claim of the contractor regarding earthwork is untenable. The award of the Arbitrator granting an amount of Rs. 2,00,000/- under the said claim is liable to be set aside and the same is accordingly set aside. Claim No. 1-D: Value of Empty bags: 22. In the instant case, 15530 cement bags were supplied to the contractor and as those bags were not returned to the department, the department has deducted an amount of Rs. 23,300/- from the bill of the contractor. 23. Claim No. 1-D: Value of Empty bags: 22. In the instant case, 15530 cement bags were supplied to the contractor and as those bags were not returned to the department, the department has deducted an amount of Rs. 23,300/- from the bill of the contractor. 23. While relying on Clause 11.7 of the Special Conditions of the agreement, it was contended by the 1st respondent-contractor before the Arbitrator as well as before the lower Court that since the department supplied the cement in paper and polythene bags, the same are not reusable and are susceptible to wear and tare and the department was not justified in deducting an amount of Rs. 22,300/- under this head. 24. Admittedly Clause 11.7 of the Special Conditions of the agreement very clearly states that "the empty cement bags for the supply of cement by the railways shall be the property of the contractor and the cost of the same shall be recovered at Rs.150/for 100 empty cement bags. However, the said clause also specifies that railways reserves the right to take back empty cement bags which are in good condition. However, in that case, no recovery will be made for bags so taken while taking the serviceable empty cement bags". 25. The learned Arbitrator while taking into account the aforesaid clause, opined that the department supplied the cement in polythene bags instead of jute bags and as such bags are handled very badly during the supply itself, they lose their value. It was further observed that the accepted meaning of empty cement bags in the context of the agreement would only mean jute bags which are capable of reuse and not the plastic bags which disintegrate in handling. He, accordingly granted an amount of Rs.20,000/- under this head. Since the cement bags which are supplied to the contractor are polythene bags and not jute bags and since the same are not in good condition, the leaned Arbitrator was justified in awarding the said amount. Hence, we do not find any reason to disallow the claim. Claim No.2: Head office expenditure to realise the amount due: 26. Under this particular head, the 151 respondent-contractor claimed compensation of Rs.14,347/- towards infructuous establishment charges at the head office to follow up the final bill. However, on a perusal of the A ward, it is seen that the Arbitrator has rejected the claim. Claim No.2: Head office expenditure to realise the amount due: 26. Under this particular head, the 151 respondent-contractor claimed compensation of Rs.14,347/- towards infructuous establishment charges at the head office to follow up the final bill. However, on a perusal of the A ward, it is seen that the Arbitrator has rejected the claim. of the contractor on the ground that the contractor was having a running business and the head office was being maintained for the business that was being transacted by him as a whole and there was no evidence placed before the Arbitrator to show that the office would be downsized on completion of a particular contract. It is also seen from the record that the contractor has not filed any appeal against rejection of such claim and hence, we do not find any reason to interfere with the same. Claim No.3: Interest on the amount awarded upto date of award: 27. In so far as this claim is concerned, the contractor has contended before the Arbitrator stating that since the work was completed on 26.4.1993 and after giving the admissible period for measurement and passing of final bill the amount should have been settled at least by 31.7.1993. 28. Since there is a delay in payment of the amounts due, the contractor claimed simple interest at 10% per annum on the amounts due and thus claimed an amount of Rs. 3,47,760/- under the said claim. 29. However, the learned Arbitrator has awarded an amount of Rs.2,90,000/- under the said claim from 1.8.1993 till 1.8.1999. 30. Sri Rajeev Reddy, learned counsel has contended that since the Arbitrator had already granted an amount of Rs. 20,000/-. towards interest on delayed payments under Claim 1A, the contractor was not entitled to claim further interest at 10% per annum on the due amount. 31. In view of the fact that the learned Arbitrator has granted interest on delayed payments under Claim 1A, we are of the opinion that the Arbitrator was not justified in granting further interest at 10% per annum on the due amounts. Hence, the said claim is liable to be set aside and it is accordingly set aside. Claim No.4: Compensation for infructuous overheads due to delay: 32. Hence, the said claim is liable to be set aside and it is accordingly set aside. Claim No.4: Compensation for infructuous overheads due to delay: 32. As far as this claim is concerned, the contractor has contended that he had to maintain site office at Raichur by paying rent at Rs.1500/- per month; employ an engineer at Rs.5000/- per month and a supervisor at Rs.2,000/- p.m., besides travelling expenses awaiting the final measurement and making of final bill and claimed an amount of Rs. 8,26,679/- under this head. 33. The said claim was opposed by the department stating that the contractor was not required to maintain a site office after the work was completed and as he had been undertaking some other works in that area, he was maintaining the site office. 34. However, the learned Arbitrator has awarded an amount of Rs.1,00,000/- under this head. 35. Learned counsel for the appellant has contended that even though the said claim was already recommended by the Pre Arbitration Committee in its report for payment, the Arbitrator has once again allowed the said claim. While relying on Clause 17(3) of the General Conditions of Contract, learned counsel would contend that the contractor is not entitled to claim any compensation/damages. In support of this contention, he relied upon the judgment of the Apex Court in Indersingh Rekhi v. Delhi Development Authority and others (4) AIR 1988 SC 1007 . In para-4 of the said judgment, the Apex Court observed thus: "4. Therefore, in order to be entitled to order of reference under 5.20, it is necessary that there should be an arbitration agreement and secondly, difference must arise to which this agreement applied. In this case, there is no dispute that there was an arbitration agreement. There has been an assertion of claim by the appellant and silence as well as refusal in respect of the same by respondent. Therefore a dispute has arisen regarding nonpayment of the alleged dues of the appellant. The question is for the present case when did such dispute arise. The High Court proceeded on the basis that the work was completed in 1980 and, therefore, the appellant became entitled to the payment from that date and the cause of action under Art.137 arose from that date. The question is for the present case when did such dispute arise. The High Court proceeded on the basis that the work was completed in 1980 and, therefore, the appellant became entitled to the payment from that date and the cause of action under Art.137 arose from that date. But, in order to be entitled to ask for a reference under 5.20 of the Act, there must not only be an entitlement to money, but there must be a difference or a dispute must arise. It is true that on completion of the work a right to get payment would normally arise but where the final bills as in this case have not been prepared as appears from the record and when the assertion of the claim was made on 28th Feb.1983 and there was non-payment, the cause of action arose from that date, that is to say, 28th of Feb.1983. It is also true that a party cannot postpone the accrual of cause of action by writing . reminders or sending reminders but where the bill had not been finally prepared, the claim made by a claimant is the accrual of the cause of action. A dispute arises where there is a claim and a denial and repudiation of the claim. The existence of dispute is essential for appointment of an arbitrator under 5.8 or a reference under 5.20 of the Act. See Law of Arbitration by R.S. Bachawat 1st Edition, page 354. There should be dispute and there can only be a dispute when a claim is asserted by one party and denied by the other on whatever grounds. Mere failure or inaction to pay does not lead to the inference of the existence of dispute. Dispute entails a positive element and assertion in denying, not merely inaction to accede to a claim or a request. When in a particular case a dispute has arisen or not has to be found out from the facts and circumstances of the case." 36. He also relied upon para-21 of the judgment of this Court in Union of India v. M/s. Satyanarayana Construction Co. When in a particular case a dispute has arisen or not has to be found out from the facts and circumstances of the case." 36. He also relied upon para-21 of the judgment of this Court in Union of India v. M/s. Satyanarayana Construction Co. and others (5) 2005 (3) ALT 460 (D.B.), (rendered by one of us, namely Justice T. Meena Kumari), which reads thus: "It is also to be seen that as per Clause No.45(a) of the General Conditions of Contract, a tenderer can dispute the classification of soil within seven days. As seen from the material on record, the first respondent never raised any such dispute within the time of seven days and hence the first respondent shall not be permitted to raise any such dispute after lapse of seven days as per conditions of Clause No.45(a) of the General conditions of Contract. All these factors have not been taken into consideration by the learned I Addl. Chief Judge, Secunderabad. More over, the first respondent did not produce any material in support of his claim that he spent more than Rs.110/- per cubic meter while carrying out the work mentioned in Claim No.4. Further, Clause17(3) of the General Conditions of Contract prohibits grant of compensation or damages. In view of the above circumstances, the relief granted to his claim by the second respondent has to be set aside." 37. He also relied upon the judgment of the Supreme Court in Union of India v. Chandalavada Gopala Krishna Murthy and others (6) 2008 (4) SCJ 849=2009 (1) ALT 19.1 (ON sq. 38. That apart, the Pre-Arbitration Committee, which was constituted for the purpose of settling the various claims made by the contractor before the matter was referred for arbitration, has recommended for payment of compensation at 2% per annum for 20 months of the contract value at Rs. 1,54,087/- in respect of the claim made by the contractor with regard overhead charges. It is necessary to extract the relevant portion, which reads thus: "3.4.0. Claim No.4: Rs.7,70,433: The fourth claim of the contractor is that he be paid Rs.7,70,433/- as overhead charges at 10% per annum for 20 months prolongation of contract from 1.11.1990 to 30.6.1992 on the contract value of Rs.46,22,600/-. It is necessary to extract the relevant portion, which reads thus: "3.4.0. Claim No.4: Rs.7,70,433: The fourth claim of the contractor is that he be paid Rs.7,70,433/- as overhead charges at 10% per annum for 20 months prolongation of contract from 1.11.1990 to 30.6.1992 on the contract value of Rs.46,22,600/-. 3.4.1: the Committee does recognize that contractor would have to bear an additional expenditure on account of overhead charges due to prolongation of the contract for more than 20 months beyond the stipulated date of completion. However the Committee cannot asses the exact amount of extent of expenditure that the contractor had to incur on this account. Moreover, it cannot be expected that the Rly. Admn., shall fully compensate the contractor on this account. The Committee therefore, opines that it is reasonable to pay a compensation of 2'1'0 per annum for 20 months on the contract value. Rs.46.22.600 x 2 x 20: = 1,54,087/-" 100 x 12 39. Keeping in view the law laid down by the Supreme Court and this Court in the aforesaid judgments and in view of the aforesaid recommendation of the Pre Arbitration Committee (at page 253 of the paper book filed as material papers), the contractor cannot claim any further amount towards compensation. 40. That apart, the contractor never raised the said claim in the arbitration applications filed by him before this Court and he raised the said claim for the first time before the Arbitrator. In view of the fact that the arbitrator cannot adjudicate upon fresh claims, which do not form part of the arbitration application and which were not referred by this Court for arbitration, we are of the opinion that the arbitrator ought not to have awarded an amount of Rs.1,00,000/- under the said claim. Even on this ground also, the amount awarded under this claim is liable to be set aside and it is accordingly set aside. Claim No.5: Interest on amount awarded from date of Award: 41. In so far as this claim is concerned, the contractor has claimed interest on the total awarded amount at 24% from the date of award till the date of payment. 42. Claim No.5: Interest on amount awarded from date of Award: 41. In so far as this claim is concerned, the contractor has claimed interest on the total awarded amount at 24% from the date of award till the date of payment. 42. The learned Arbitrator, while allowing the award, however, directed the appellants to pay the total awarded amount of Rs.7,90,000/- to the 1st respondent within three months from the date of passing of the Award, failing which, it was held that the awarded amount shall carry interest at 18% per annum compounded quarterly from the date of award. 43. In view of the judgment of the Apex Court in Krishna Bhagya Jata Nigam Ltd., v. G. Harischandra Reddy and others (7) 2007 (4) SCJ 948 = (2007) 2 SCC 720 = 2008 (1) AL T 1.4 (DN SC), the rate of interest as awarded by the arbitrator at 18% is reduced to 9%. Claim No.6: Share of Arbitrator's fees: 44. In the instant case, as directed by this Court, the arbitrator's fees was fixed at Rs. 40,0001- and the same was directed to be shared equally by both the parties. 45. The learned Arbitrator, through the impugned award, while directing the appellants to pay a sum of Rs. 20,000/- towards their share under this claim, awarded a total sum of Rs.7,90,000/- to the 1st respondent. 46. The 1st respondent is, therefore, awarded an amount of Rs. 20,000/- under claim No.1-A; Rs. 20,000/- under Claim No.1-0 and Rs.20,000/- under Claim No 6. Since no amount was granted under Claim No.2, the same needs no interference. The award of the learned Arbitrator in respect of the remaining claims, namely, Claim Nos. 1-B, 1-C, 3, 4 and 5 is set aside. The appellants are directed to pay a total sum of Rs. 60,000/- (Rupees Sixty Thousand Only) to the 1" respondent instead of Rs.7,90,000/-, as awarded by the learned Arbitrator. 47. The appeal is allowed to the extent indicated above. 48. The fee of the learned counsel for the appellants is fixed at Rs.50,000/- (Rupees Fifty Thousand Only).