JUDGMENT Sanjib Banerjee, J. : An award rendered in an arbitral reference pertaining to a works contract is assailed in the present proceedings under section 34 of the Arbitration and Conciliation Act, 1996. The primary ground of challenge is that the award does not give any or adequate reasons in support of the various heads under which the respondent-claimant was found to be entitled. The petitioner also claims that crucial matters that were urged before the arbitrator and noticed by the arbitrator in course of recording the submission of the parties were not taken into account in assessing the claim. 2. The contract was for the construction of one or more buildings in Ulubari, Assam. The same contractor was simultaneously involved in the construction of another set of buildings at nearby Naltoli. The petitioner herein was the employer in either case. The claim carried before the arbitrator comprised several heads ranging from unpaid bills to escalation, extra work, damages, interest and costs. The value of the claim was in the region of Rs.55 lakh. The petitioner herein made a substantial counter-claim in excess of Rs.1.50 crore. But it is evident, and is recorded by the arbitrator, that the counter-claim was more by way of a defence than with any realistic expectation of succeeding therein. 3. The award is broken into several sections. There is a brief paragraph in the nature of a preface recording the circumstances in which the reference came to be made. Over the next nine pages from page 3 of the award, the claimant's case in its statement of claim is noticed. The case run in the counterstatement is recorded between pages 12 and 17 of the award. From page 18 to the top of page 33, the oral and written submission of the parties are collated without any apparent analysis or independent discussion by the arbitrator. From page 33 to 36 of the award the arbitrator has noted the submission on behalf of the employer (the petitioner herein) in course of its rejoinder. The arbitrator's findings are rendered from the bottom of page 36 to the top of page 40. Pages 40 and 41 cover the counter-claim and its rejection. Pages 42-43 detail the heads of claim indicated in the contractor's statement of claim. The arbitrator's findings are rendered from the bottom of page 36 to the top of page 40. Pages 40 and 41 cover the counter-claim and its rejection. Pages 42-43 detail the heads of claim indicated in the contractor's statement of claim. There are ten lines thereafter expended in discussing which of the heads of claim were accepted by the arbitrator and those which were not. There is a paragraph devoted to interest and a further paragraph covering costs. The award is spread over 44 pages. 4. To begin with, the parties agree that there is an obvious error in the award. The contractor suggests that notwithstanding the award recording a principal amount of Rs.10,62,829/- having been found to be due to the contractor, the actual principal quantum awarded should be seen to be Rs.11,64,313/-. The parties agree that there are at least two mistakes in the crucial ten-line paragraph at page 43 of the award which is the basis for allowing the quantum that has been. The parties say that the claim under head No.3A(iv) was rejected and not allowed. Instead, they say, that claim under head No.3A(iii) was allowed even though it is not reflected in the relevant ten lines. The parties further submit that at page 42 of the award, the quantum claimed under head No-3A(i) has been erroneously printed as Rs.1,31,386/- and the correct figure is Rs.1,01,484/-. The parties also accept that the claim against head No.3A(ii) has been altogether missed out in the summary of claims appearing at page 42 of the award though the figure in respect of such head of claim (Rs.1,31,386/-) has been mistakenly attributed to the claim under head No. 3A(i) in the summary. 5. There are, therefore, obvious errors spread over at least two heads of claim both in the summary at page 42 of the award and in the operative part thereof contained in the ten lines at page 43. 6. The petitioner contends that though the arbitrator found in favour of the contractor in respect of the three issues that the arbitrator framed, there is nothing in the award to indicate the basis for the quantum awarded under each head of claim accepted by the arbitrator. 6. The petitioner contends that though the arbitrator found in favour of the contractor in respect of the three issues that the arbitrator framed, there is nothing in the award to indicate the basis for the quantum awarded under each head of claim accepted by the arbitrator. The petitioner reasons that even after the arbitrator found that the petitioner was responsible for the delay in the completion in the project, it was incumbent on the arbitrator to justify the quantum awarded to the contractor by way of damages or otherwise. The petitioner complains that there is nothing in the award to support why the arbitrator accepted the entirety of the amounts claimed by the contractor under several heads and why the arbitrator did not deem it necessary to assess whether the entirety or only parts of the amounts claimed ought to be allowed. 7. In particular, the petitioner says that there was a letter dated April 1, 1995 on record, that the arbitrator noticed in course of narrating the submission on behalf of the petitioner, which was totally glossed over in making the assessment. The petitioner says that even if the arbitrator found that the defence to the several heads of claim founded on the basis of such letter was untenable, he was obliged to return a finding to such effect. The petitioner suggests that in the arbitrator disregarding the letter dated April 1, 1995 issued by the contractor to the petitioner, he committed a grave error since the agreement between the parties stood modified to such extent at the instance of the contractor. In the arbitrator's failure to take such letter into account for the purpose of assessing the claim, the petitioner argues, the arbitrator committed a palpable error that is amenable to correction under section 34 of the 1996 Act. 8. The letter dated April 1, 1995 pertained to the claims under head Nos. 1A, 1C, part of 3A(i) and 6A. At the relevant time, the Ulubari project had been completed and the buildings thereat handed over by the contractor to the petitioner. The work at the Naltoli project was nearing completion and the contractor faced a financial crunch in carrying out the remaining work. A sum of Rs.4.29 lakh had been furnished by way of a fixed deposit by the contractor on account of the initial security deposit in respect of the Naltoli project. The work at the Naltoli project was nearing completion and the contractor faced a financial crunch in carrying out the remaining work. A sum of Rs.4.29 lakh had been furnished by way of a fixed deposit by the contractor on account of the initial security deposit in respect of the Naltoli project. In the letter, the contractor complained that substantial payment due to the contractor under bills raised by it in respect of the Naltoli project remained unpaid and requested for the release of the deposit of Rs.4.29 lakh. The contractor suggested that a sum of Rs.2.37 lakh due to it in respect of the Ulubari project could be retained towards the security deposit for the Naltoli project. The relevant paragraphs of the letter dated April 1, 1995 read as follows: "In view of the financial crunch which is a bar to the completion of the project; we earnestly request you to kindly release our FDR No. 100766 for Rs.4,29,000/- only duly pledged to your Corporation as Initial Security Deposit for Naltoli Project. It is also to add that for the job of Ulubari which we have completed and handed over with all rectification job done on 13.12.93 (copies enclosed) and the defect liability period is also over; You are having our following deposit with you:- i) Earnest money deposit (EMD) - Rs. 28,000/- ii) Initial Security deposit (ISD) - Rs. 55,000/- iii) Security Deposit @ 6% out of R/A - Rs. 86,000/- Bills iv) Escalation Bill/others - Rs. 68,000/- - Rs.237000/- If you take the above amount of Rs.23,7000/- into consideration; you shall be having even after release of said pleaged FDR of Rs.4,29,000/- only; the following deposits with you to cover 10% of the work value actually executed in respect of the Naltoli job:- (a) Against Ulubari job: Rs. 2,37,000.00 (b) Against Naltoli job: i) Earnest Money deposit (EMD) Rs. 1,00,000.00 ii) Security deposit @ 6% on R/A bill. Rs. 4,72,000.00 Rs.8,09,000.00 Also we hereby propose that you can deduct @ 10% as security deposit from our future R/A bills of Noltoli job so as to reach 10% of the total work executed by us at Naltoli. We further assure you that if you release above FDR of Rs.4,29,000/- to us. We shall put the money completely towards completion of Noltoli job which is expected to be handed over by 30th April 95." 9. We further assure you that if you release above FDR of Rs.4,29,000/- to us. We shall put the money completely towards completion of Noltoli job which is expected to be handed over by 30th April 95." 9. It, thus, appears that some payments perceived to be due to the contractor in respect of the Ulubari project were required to be withheld by the contractor in respect of the Naltoli project in lieu of the initial security deposit for the Naltoli project being released to the contractor. The four heads of payments detailed in the letter dated April 1, 1995 covered the earnest money deposit of Rs.28,000/- and an initial security deposit of Rs.55,000/- totaling to Rs.83,000/-; the security deposit of six per cent deducted from the running account bills amounting to Rs.86,000/-; and, an amount of Rs.68,000/- out of the bills raised by the contractor on account of escalation. Claim No.1A in the contractor's statement of claim was an account of refund of bid security and initial security deposit. The sum claimed under such head was Rs.83,000/- which matched the amount covered by the first two items relating to the Ulubari project detailed in the letter of April 1, 1995. The amount sought under claim No.1C by the contractor was Rs.86,542/- on account of refund of deduction from the bills towards security deposit. Though the figure differed somewhat from what was covered under the third item in the letter, the heads were the same and there is no dispute between the parties in such regard. The claim under head No. 3A(i) was Rs.1,01,484/- for escalation. There was no other claim in the contractor's statement filed before the reference on account of escalation save a sum of Rs.9,969/- under claim No. 3A(iii) for escalation in respect of extra costs. Since the arbitrator awarded the full amount as claimed under claim No. 3A (iii) and no dispute in respect thereof has been raised by the petitioner in course of the present proceedings, it appears that the general bills for escalation amounting to a total of Rs.1,01,484/- included bills of value of Rs.68,000/- that had been submitted by the contractor to the petitioner by the time the letter dated April 1, 1995 was issued. It is possible, in the circumstances, that the entire claim of Rs.2,37,000/- covered by claim Nos.1A, 1C and part of 3A(i) was a duplication of the amount that was transferred by the petitioner at the contractor's request to be held to the credit of the contractor in respect of the Naltoli project. As to whether it was so, requires investigation of the kind that is inappropriate to be conducted by Court under section 34 of the 1996 Act. Such assessment could have been possible if this were a regular appeal, but a challenge to an arbitral award, as is all too well established, cannot be treated at par with a regular appeal. 10. It is evident from the letter dated April, 1, 1995 that the contractor had requested the petitioner to adjust the payment of Rs.2.37 lakh due to it for the Ulubari Project towards the Naltoli project, in lieu of the petitioner releasing the contractor's initial security deposit of Rs.4.29 lakh in respect of the Naltoli project. There is, therefore, substantial basis to the petitioner's contention that the amounts claimed by the contractor under head Nos. 1A, 1C, part of 3A(i) and 6A were devoid of substance since payments therefor had been credited by the petitioner, at the request of the contractor, towards the Naltoli project; and it is only upon the assessment of the amount due under the contract for the Naltoli project, for which another reference is pending before the same arbitrator, that the matter can be gauged. Since it is the admitted position that the fixed deposit of Rs.4.29 lakh in respect of the Naltoli project was released by the petitioner to the contractor, it appears that the payments due under claim Nos. 1A, 1C, part of 3A(i) may have already been made by the petitioner; though the money may not have been handed over to the contractor but it was credited to the contractor's account in the Naltoli project. 11. As a consequence, it appears, that there is substantial basis to the petitioner's contention that there could have been no amount awarded under claim No. 6A for Rs.2.37 lakh since such amount out of the payments due under the contract in respect of the Ulubari project had already been credited to the contractor's account in the Naltoli project at the instance of the contractor. If the entire payment of Rs.2,37,000/- in respect of claim Nos. If the entire payment of Rs.2,37,000/- in respect of claim Nos. 1A, 1C, and part of 3A(I) stood satisfied upon the notional transfer of such amount to the credit of the contractor in the Naltoli accounts, as mandated by the contractor, there may have been no ground for the contractor to claim the exact amount of Rs.2.37 lakh by way of damages for breach of contract for the petitioner withholding such sum as security relating to a separate contract. The description of claim No. 6A is, "Damages for breach of contract on account of withholding Rs.2,37,000/- as security relating to an entirely separate contract." 12. It is possible, in the circumstances, to give credence to the petitioner's argument that a sum of Rs.4.74 lakh (Rs.2.37 lakh under claim Nos. 1A, 1C and part of 3A(i) plus Rs.2.37 lakh under claim No. 6A) was allowed by the arbitrator by disregarding the effect of the letter dated April 1, 1995. There is no disagreement between the parties that the contract relating to the Ulubari project did not contain any clause that could have empowered the employer to deduct or adjust any sum due in respect of such project on account of any claim of the employer relating to some other project. Government contracts generally incorporate such a clause, or else the general conditions governing government contracts provide for the same. The contract relevant for the present purpose did not. But equally, and notwithstanding the absence of such clause, if the parties to the contract agreed to adjust any money due under this contract against some other contract between them, they were free to do so. When the contractor required a part of the money due to it under this contract to be credited to the contractor's favour in the accounts pertaining to a different project, such contractor may not now be heard to suggest that since the agreement did not mandate such action, never mind that the contractor obtained the benefit of the payment elsewhere, it was entitled to exact its pound of flesh under this contract. That would be against the law of the land. And, the assessment of the claim was required to be made in accordance with the law of the land. That would be against the law of the land. And, the assessment of the claim was required to be made in accordance with the law of the land. It is made clear, in the light of the order that is proposed to be made, that no final view in such regard need be expressed at this stage. 13. The body of the award reveals that the arbitrator recorded the petitioner's contention based on the letter dated April 1, 1995. Yet, the arbitrator did not return any finding in such regard while allowing the amounts claimed under the relevant heads. The 1996 Act mandates the arbitrator to give reasons in support of the award. It necessarily follows that reasons are necessary to support a finding of fact and the quantum awarded based on the finding of fact. It is true that the arbitrator found that the petitioner was liable for the delay in the completion in the project. That would justify, in principle, a claim on account of escalation or cost overrun. But the amount awarded must also be supported with reasons and merely because an employer is found to have been responsible for the delay in the completion of the project, it would not follow that the entire claim on account of damages would have to be allowed without any assessment. 14. The contractor says that since the letter dated April 1, 1995 is referred to in the award, there is little room to suspect that the effect of the letter was not taken into account in allowing the claim under the relevant heads. Such argument does not appeal. The 1996 Act commands that reasons be given in support of the award. The reasons are to be discerned with a reasonable approach. Reasons are, as ordinarily prudence would have it, the link between the facts and the conclusion. Juridically, reasons would be such as would indicate why an assertion was accepted or rejected. In all cases, a general overview assigning blame to a party or apportioning it between two or more parties may not, by itself, justify the quantum of claim allowed or disallowed. There is first a ground to be made out for allowing the claim and next the basis indicated for allowing the quantum of the claim. Without the first the second cannot stand. There is first a ground to be made out for allowing the claim and next the basis indicated for allowing the quantum of the claim. Without the first the second cannot stand. Despite the first, the second may not stand if the rationale for the measure is not discernible. That is the mandate of section 31(3) of the Act, in the absence of the parties having agreed to dispense with the reasons in support of the award. 15. The petitioner herein has questioned the award in respect of claim No.3A(ii) for Rs.1,38,386/- though it is mistakenly not included in the heads of claim summarised at page 42 of the award. The petitioner has, however, accepted the award of a sum of Rs.9,969/- in respect of claim No. 3A(iii) though such head of claim is not referred to in the ten lines at page 43 of the award. 16. The petitioner suggests that it is possible for the petitioner to successfully urge that the entirety of the award dealing with the claims of the contractor should be set aside since there is no reason in support of any head of claim that has been awarded. The petitioner demonstrates on the basis of the statement of claim and the chart appended by the contractor thereto that the outstanding amount against the third, fourth and fifth running account bills was Rs.2.54,564/- and not Rs.3,04,564/- as awarded by the arbitrator. The contractor has accepted such position and admits that a sum of Rs.50,000/- that the contractor received in respect of the bills and was indicated both in the chart appended to its statement of claim and its written submission before the arbitrator had not been taken into account by the arbitrator. Since the parties are ad idem on such score, the sum awarded under claim No. 2A is reduced from Rs.3,04,564/- to Rs.2,54,564/-. 17. The petitioner also assails the amount of Rs.2,10,368/- awarded under claim No. 4A on account of work having been done by the contractor but not being taken into account by the employer. The petitioner says that there is no discussion in the award as to the justification for such head of claim and though the submission on such aspect made by the parties finds place earlier in the award, there is no finding rendered thereon by the arbitrator. The petitioner says that there is no discussion in the award as to the justification for such head of claim and though the submission on such aspect made by the parties finds place earlier in the award, there is no finding rendered thereon by the arbitrator. The petitioner is correct in its assertion that the award does not disclose any basis for the arbitrator accepting such head of claim or awarding the entirety of the amount claimed thereunder. 18. The parties have dwelt at length on the interest and costs awarded by the arbitrator. The petitioner suggests that in view of section 3 of the Interest Act, 1978, interest should have been awarded, at the highest, from the date on which the notice for arbitration was issued by the contractor on June 9, 1997. The petitioner also questions the rate of 15% as awarded by the arbitrator. The petitioner has referred to a judgment reported at 2007(2) SCC 720 , Krishna Bhagya Jala Nigam Ltd vs. G. Harischandra Reddy for the Supreme Court view that interest at the rate of 9% per annum was appropriate in the changed economic scenario in the country. Another judgment reported at AIR 2011 SCC 2979, MSK Projects (I) (JV) vs. State of Rajasthan is cited for the same purpose. The petitioner contends that in view of section 2(a) of the Interest Act, that includes an arbitrator within the definition of court, the conditions attached under section 3 of that Act would apply to an arbitral reference. The petitioner has relied on a judgment reported at 2009(12) SCC 1 , State of Rajasthan vs. Ferro Concrete Construction Pvt. Ltd., for the applicability of the provisions of the Interest Act to an arbitral reference. That matter was under the Arbitration Act, 1940. Both parties have referred to a judgment reported at 2009(12) SCC 26 , Sayeed Ahmed and Company vs. State of Uttar Pradesh, where the award of interest under section 31(7) of the 1996 Act is discussed. 19. It is of significance that in the absence of any specific provision in such regard, the 1940 Act was construed to cover three distinct periods relating to a claim of interest – the pre-reference stage, pendente lite and from the date of the award. 19. It is of significance that in the absence of any specific provision in such regard, the 1940 Act was construed to cover three distinct periods relating to a claim of interest – the pre-reference stage, pendente lite and from the date of the award. Though for considerable period there was divergence of judicial opinion on the arbitrator's authority to award interest for all three periods, the matter was settled upon a 1992 pronouncement of the Supreme Court in G.C. Roy, 1992(1) SCC 708. Clause (a) of sub-section (7) of section 31 of the 1996 Act telescopes the first two periods that were perceived to be distinct under the 1940 Act. Such clause recognises that, unless otherwise agreed by the parties, an arbitral award for payment of money may include interest "at such rate as it (arbitral tribunal) deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made." Clause (b) of the same provision provides for post-award interest and mandates that the award would carry interest at 18% per annum if no specific order in such regard were contained therein. 20. There is some basis to the petitioner's suggestion that there may be an anomaly in both section 3 of the Interest Act and section 31(7) of the 1996 Act coexisting. The petitioner contends that section 31(7) of the 1996 Act merely makes it permissible for an arbitral tribunal to award interest on the whole or any part of the principal sum a warded, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. Implicit in the petitioner's argument is that the permissive provision of section 31 (7) of the 1996 Act cannot undo the statutory precondition stipulated in section 3 of the Interest Act. Implicit in the petitioner's argument is that the permissive provision of section 31 (7) of the 1996 Act cannot undo the statutory precondition stipulated in section 3 of the Interest Act. In the alternative, the petitioner's suggestion is that the expression "cause of action" in section 31 (7) (a) of the 1996 Act would imply cause of action for claiming interest, which would make the permissive provision of the 1996 Act subservient to the substantive provision of section 3 of the Interest Act, and the expression "cause of action" in the relevant cause of the 1996 Act should not be equated with the cause of action relating to the claim in the reference. The respondent is quick to refer to section 4 of the Interest Act that carves an exception out of section 3 and provides that notwithstanding section 3, "interest shall be payable in all cases in which it is payable by virtue of any enactment or other rule of law or usage having the force of law." But section 4 of the Interest Act may not be a complete answer to the point made by the petitioner that section 31(7)(a) is only permissive but its operation has to be governed by the special law on interest as codified in the Interest Act. 21. The more conclusive answer to the petitioner's submission may be in recognising that the Arbitration and Conciliation Act, 1996 is a self-contained code. Indeed, the Arbitration Act, 1940 was also regarded as a complete code. The 1996 Act consolidates and amends the entire body of the law on arbitration in the country and is the complete repository thereof. In the context of whether a Letters Patent appeal would be maintainable against an order pertaining to an arbitration matter for which no provision is made in the 1996 Act, the Supreme Court reasoned in the judgment reported at 2011 (8) SCC 333 , Fuerst Day Lawson Ltd vs. Jindal Exports Ltd., that there was no room for any appeal pertaining to an arbitration matter de hors the appellate provision contained in the Act since the 1996 Act is a "self-contained and exhaustive code in itself." Section 31(7)(a) has, therefore, to be seen as a substantive provision providing for interest in the 1996 Act and not merely as permissive and being subject to section 3 of the Interest Act. 22. 22. Since it was within the domain of the arbitrator to award interest from the date when the cause of action accrued to the contractor and since the date of January 1, 1995 has not been questioned as the buildings were taken over by the petitioner from the contractor by such time, the basis for the arbitrator awarding interest at such rate as he has and for such period cannot be questioned in this jurisdiction even though the court may have taken a different view of the matter if the original decision on such score were to be rendered by the Court itself. 23. The parties have also have had a lot to say on the costs awarded by the arbitrator. The petitioner asserts that since only about a fifth of the claim originally made by the contractor succeeded, the arbitrator should have taken such matter into consideration without foisting the entire burden of the costs on the petitioner. The petitioner refers to the principles governing costs in commercial matters. The contractor relies on passages from Civil Litigation (5th Ed) by John O' Hare and Robert N. Hill to suggest that the general principle is, as the arbitrator here held, that costs follow the event. The respondent claims that the arbitrator has done no more than to follow the principle and require the loser to bear the winner's costs and be left to bear its own. The respondent has also relied on passages from the text in cases where there are both claims and counter-claims and in other cases where a party partially succeeds. 24. There are several factors that ought to weigh with an arbitrator or court in awarding costs in a commercial litigation. It may be presumptuous to elaborate on the various principles which come to bear on the aspect of costs, particularly given the status of the venerable arbitrator and the context of the order proposed to be made herein. Since the award cannot be sustained in respect of several heads of claim and stands reduced now to about a fifth of the principal sum awarded, the aspect of costs also needs to be revisited by the arbitrator along with the other heads of claim that are set aside and remanded for reconsideration. 25. The parties have referred to several other judgments. 25. The parties have referred to several other judgments. On the general principles involved in deciding a challenge to an arbitral award the parties have referred to the judgments reported at 2009(17) SCC 796 , Fiza Developers and Inter-Trade Pvt. Ltd vs. AMCI (India) Pvt. Ltd.; 2008(16) SCC 128, Associated Construction vs. Pawanhans Helicopters Ltd.; 2003(8) SCC 593 , Pure Helium India (P) Ltd. vs. Oil & Natural Gas Commission); and, 2011(2) SCC 400 , R.L. Kalathia and Company vs. State of Gujarat. On costs they have relied on judgments reported at 2005 CWN 512, Steel Authority of India Ltd vs. Shyam Sundar Choudhury and 2008(2) CHN 227 , Steel Authority of India Ltd. vs. New Central Power & Process Pvt. Ltd.). 26. The award is upheld for the principal sums of Rs.2,54,564/- under claim No. 2A and Rs.9,969/- under claim No. 3A(iii) along with the award of interest. The award is set aside in respect of claim Nos. 1A, 1C, 3A(i), 3A(ii), 4A and 6A. The arbitrator is respectfully requested to reconsider such heads of claim and make such award as deemed fit. Nothing in this order will stand in the way of the arbitrator awarding the same amounts as have been set aside if sufficient reasons in support therefor are found. Whatever amount is awarded by the arbitrator in respect of the several heads of claim sent back for reconsideration will carry interest at the same rate and from such date as indicated in the award dated June 13, 2005. The award on costs is also set aside and sent back for reconsideration in accordance with law. 27. It will be open to the arbitrator to not entertain any further submission and render a decision on the various heads of claim sent back for reconsideration on the basis of the records of the reference. However, since the reference is of some vintage and the matter has remained pending in court for more than six years, it will be open to the arbitrator to seek the assistance of the parties in making an assessment on the matters sent back for reconsideration. In such event, the parties will not be obliged to pay the fees of the arbitrator but it will be open to them to volunteer to pay the fees without being entitled to recover the same by way of costs. 28. In such event, the parties will not be obliged to pay the fees of the arbitrator but it will be open to them to volunteer to pay the fees without being entitled to recover the same by way of costs. 28. AP No. 250 of 2005 and GA No. 3760 of 2006 are disposed of on such basis without, in the circumstances, any order as to costs. 29. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.