1. Respondent claimant was allotted the work of construction of barbed wire fencing around SM Farm at Padam, Zanaskar, by the appellant No.1, in the year 1986. In continuation to the above work, another work of construction of barbed wire fencing around Animal/Sheep Farm at Padam, Zanaskar, was also allotted to the respondent on 8th of Aug'87. An agreement was executed between the parties in this behalf. The said work allotted to the respondent stood cancelled by the appellants vide letter dt. 14th of Feb'89. Invoking the arbitration clause, the respondent filed a claim petition before this court on 6th of Dec'99. Vide order dt. 15th of March'02, passed by this court, the Chief Engineer, Public Works Department, Srinagar, was appointed as an arbitrator to enter into reference and make the award after following the due procedure. 2. The arbitrator after entering into reference, passed an award dt. 11th of Nov'02 and submitted the same before this court on 16th of Nov'02. Following claims were allowed by the arbitrator: - i/ An amount of Rs. 1.5 lacs with interest @16% with quarterly rest from the date of cause of action till the date of award and further 18% interest with quarterly rest from the date of award till its final payment by the appellants; ii/ release of CDR and security deposit with-held by the department forthwith without interest; iii/ Rs. 2.50 lacs as litigation charges and Rs.50,000 for other expenses incurred by the respondent during the whole process of 15 years; iv/ Rs. 2.5 lacs with 16% interest with quarterly rest from the date of cause of action till the date of award and at the rate of 18% with quarterly rest from the date of award till its final payment in respect of the loss suffered by the respondent claimant due to unilateral cancellation of contract. 3. An application for setting aside the award under Section 34 of the Arbitration & Conciliation Act, 1997, came to be filed before this court, which was transferred to the court of learned District Judge, Kargil. 4. The court below after examining the pleadings of the parties, framed following three issues: "i/ Has the arbitrator mis-conducted himself or the proceedings. ii/ Is the award otherwise invalid. iii/ Relief." 5. 4. The court below after examining the pleadings of the parties, framed following three issues: "i/ Has the arbitrator mis-conducted himself or the proceedings. ii/ Is the award otherwise invalid. iii/ Relief." 5. It is pertinent to mention that during the course of arguments before the trial court, an issue was raised by the appellants that the matter is to be considered in terms of the provisions of Arbitration Act, 1940 and not by the new Act i.e., Arbitration & Conciliation Act of 1997. 6. It seems that the above issue was raised before this court also while the matter was being transferred to the trial court and this court was of the view that the matter is to be considered under the Act of 1997. The court below, after hearing the parties, dismissed the application under Section 34, filed by the present appellants. It is under these circumstances, the present appeal has been filed. 7. Before addressing the controversy involved, it is important to mention that the arbitral award can be set aside only on the grounds mentioned in Section 34 of the Act of 1997. For facility of reference, the aforementioned Section is being reproduced below:- "(1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub section (2) and sub section (3). For facility of reference, the aforementioned Section is being reproduced below:- "(1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub section (2) and sub section (3). (2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that- (i) a party was under some incapacity; or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decision on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that- (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force; or (ii) the arbitral award is in conflict with the public policy of the State." 8. The challenge in the present case is essentially on two grounds:- i/ That the arbitrator has mis-conducted himself as well as proceedings by not allowing a sum of Rs. 2,42,418/- as value of timber with-held by the respondent claimant while executing the other work of the department; and ii/ That the arbitrator has granted pre-reference interest which is not in accordance with the law. 9. While dealing with the above issues, the court below has observed that the plea of appellants regarding withholding of an amount of Rs. 2,42,418/- as value of timber with-held by the respondent claimant while executing the other work of the department; and ii/ That the arbitrator has granted pre-reference interest which is not in accordance with the law. 9. While dealing with the above issues, the court below has observed that the plea of appellants regarding withholding of an amount of Rs. 2,42,418/-, as value of timber is not sustainable on the ground that the arbitrator in this regard has relied upon Annexure B.2, a communication of the District Development Commissioner, Kargil, dt. 16th of Aug'89, which letter was considered while passing the award by the Arbitrator. It has been held by the court below that the money sought to be recovered was not the subject matter before the arbitrator. As a matter of fact, the arbitrator could not have entered into reference on an issue which was not the subject matter of dispute before him. This is clearly barred by Section 34 of the Act of 1997. The arbitrator cannot deal with a dispute not contemplated by or not falling within the terms of submission to arbitration. Admittedly, this amount was sought to be recovered from the claimant on account of a work which was not the subject matter of dispute before the arbitrator. 10. So far as awarding of an amount of Rs. 2.50 lacs as litigation charges and an amount of Rs. 50,000/- as other expenses is concerned, the same has been assessed by the arbitrator keeping in view the facts and circumstances of the case. He has also awarded an amount of Rs. 2.5 lacs as compensation on account of actual loss suffered by the respondent from 1987 to 1991. It is well settled proposition of law that the arbitrator is the master of facts and procedure. The conclusion drawn on a question of fact is the sole and exclusive domain of the arbitrator. The courts while reviewing the award passed by the arbitrator cannot re-appreciate the evidence. 11. Having said so, I am of the opinion that none of the grounds taken in the appeal are covered under Section 34 of the Act of 1997, which could warrant interference by this court. 12. In respect of grant of pre-reference interest, the same is specifically permissible in terms of Section 31(7)(a) of the Act of 1997. 11. Having said so, I am of the opinion that none of the grounds taken in the appeal are covered under Section 34 of the Act of 1997, which could warrant interference by this court. 12. In respect of grant of pre-reference interest, the same is specifically permissible in terms of Section 31(7)(a) of the Act of 1997. It clearly contemplates grant of pre-reference interest with a rider that such an interest would not be paid if agreed by the parties. In the present case, it is not the case of the appellants that the grant of pre-reference interest was specifically barred by an agreement between the parties in this behalf. There is no stipulation in the agreement which debars the parties from claiming pre-reference interest. In absence of any such bar, the arbitrator was well within his rights to award interest in this behalf. Reliance in this regard has rightly been placed by the court below on the judgment of the Apex Court reported as AIR 2001 SC 626 , Executive Engineer, DMI Division, Orissa v. N.C. Budharaj. The relevant observations made by the Apex Court in this regard, may be noticed as under- "....The submission that the arbitrator cannot have jurisdiction to award interest for the period prior to the date of his appointment or entering into reference which alone confers him power is too stale and technical to be countenanced in our hands, for the simple reason that in every case the appointment of an arbitrator or even resort to court to vindicate rights could be only after disputes have cropped up between the parties and continue to subsist unresolved and that if the arbitrator has power to deal with an decide disputes which cropped up at a point of time and for the period prior to the appointment of an arbitrator. It is beyond comprehension as to why and for what reason and with what justification the arbitrator should be denied only the power to award interest for the pre-reference period when such interest becomes payable and has to be awarded as an accessory or incidental to the sum awarded as due and payable, taking into account the deprivation of the use of such sum to the person lawfully entitled to the same." 13. In view of the above, the only question which is required to be considered in this case is regarding the rate at which the interest is allowed. As noticed above, the arbitrator has awarded 16% interest with quarterly rest from the date of cause of action till the date of award and further at the rate of 18% with quarterly rest from the date of award till its final payment. 14. After holding that the arbitrator has the power to award interest on both the contingencies, the same has to be reasonable. The arbitrator, as indicated above, has awarded interest @16% with quarterly rest from the date of cause of action i.e. the date of allotment of work till the date of award and further at the rate of 18% with quarterly rest from the date of award till its final payment, which in my view, is excessive both pre-reference and post-reference. I accordingly modify the award to the extent that the claimant-respondent shall be entitled to simple interest @15% from the date of cause of action till the date of award and simple interest @18% from the date of award till its final payment. The said interest is awarded keeping in view the provisions of Section 31 of the Act of 1997. For the reasons mentioned above, this appeal is partly allowed with the modification to the extent as indicated here-in-above.