JUDGMENT 1. The National Insurance Company Ltd. (‘NICL’) has, in this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘Act’), challenged an Award dated 10th July 2002 passed by the Arbitral Tribunal (‘AT’) adjudicating the disputes between it and Oriental Structural Engineers Ltd (Respondent No. 1) arising out of the contract for construction of a runway at Mizoram Airport Lengpui for a total sum of Rs. 44,84,51,953. 2. It is stated that the area in and around the project site at Lengpui experienced heavy rains resulting from a cloud burst between 18th and 25th September 1996. Earth work in filling at various locations of the construction site was eroded by inundation and rapid flow of water. Respondent No. 1 informed the office of the Petitioner of the mishap on 27th September 1996 and simultaneously informed the policy issuing office at Delhi on 3rd October 1996. 3. It is stated that the Aizawl branch of the Petitioner appointed an Engineer as Surveyor and Loss Assessor at Silchar. The Surveyor submitted a preliminary survey report dated 29th May 1997. It is stated that Respondent No. 1 submitted a claim estimating its loss at Rs. 35,96,366 under various heads, including cutting of earth and cartage from the field site, jungle clearance, banking of excavated earth, spreading in layers, watering and rolling. A final survey report was called for from a team of two engineers as Surveyors and Loss Assessors. The final joint survey report was issued on 27th February 1999 estimating the total loss at Rs. 37,86,462.75. In this report, the Surveyors stated that “in order to arrive at rate covering actual cost of repair an amount of 30% on rates as stated in the contract have been deducted”. On 19th August 1999, the Petitioner issued a letter conveying to Respondent No. 1 that its claim had been approved for a sum of Rs. 23,16,050 on the basis of the assessment made by the surveyors estimated on account of loss on earthwork at Rs. 14,30,585 and banking of earth at Rs. 10,15,588. In fact, from the total sum of Rs. 24,46,173 estimated by the Joint Surveyors, they recommended deduction of a sum of Rs. 2,301 towards under insurance and Rs. 4,88,777 towards excess. The net liability of the Petitioner was assessed at Rs. 19,55,098. 4. 14,30,585 and banking of earth at Rs. 10,15,588. In fact, from the total sum of Rs. 24,46,173 estimated by the Joint Surveyors, they recommended deduction of a sum of Rs. 2,301 towards under insurance and Rs. 4,88,777 towards excess. The net liability of the Petitioner was assessed at Rs. 19,55,098. 4. Since the Respondent No. 1 was not satisfied with the amount offered, it sought arbitration under the arbitration clause contained in the insurance policy. The three-member AT formulated the following three issues for consideration:- “(1) Whether the Claimants are entitled to the amount of Rs. 37,86,463/- as claimed or Rs. 23,16,050/- as offered in settlement by the Respondents or any other figure other than these figures? (2) Whether the claimants are entitled to any interest, if so, on what amount at what rate and for what period? (3) Whether any other relief is admissible?” 5. Respondent No. 1 did not produce any witness whereas the Petitioner produced the Surveyor and Loss Assessor as its witness. The said witness was cross-examined by Counsel for the Respondent. 6. The AT, in the impugned Award, came to the following conclusions: (i) That the ad hoc deduction of 30% made by the Surveyors from the rates towards the general overheads and profit was not justified, and in view of the highly competitive environment prevailing in the country, a profit margin of 10% was considered to be fair and reasonable. (ii) As against the sum of Rs. 1,01,833 towards jungle clearance and Rs. 67,366.50 for removal of loose earth, 10% profit margin was deducted from a total of all the aforementioned sums whereas the Petitioner deducted the profit margin from each item of claim. (iii) After deducting the under insurance and excess 5%, the net claim amount was computed at Rs. 31,29,545. After deducting the additional premium of Rs. 7471, the net claim amount was determined at Rs. 31,22,074 together with simple interest at 12% per annum with effect from 1st November 1998 till the date of payment. 7. In effect, therefore, the difference between the sum awarded by the AT and that offered to Respondent No. 1 by the Petitioner worked out to Rs. 8,06,024. 8. This Court has heard the submissions of Mr. Joy Basu, learned Counsel for the Petitioner and Mr. Anil Airi, learned Counsel for Respondent No. 1. 9. Mr. 7. In effect, therefore, the difference between the sum awarded by the AT and that offered to Respondent No. 1 by the Petitioner worked out to Rs. 8,06,024. 8. This Court has heard the submissions of Mr. Joy Basu, learned Counsel for the Petitioner and Mr. Anil Airi, learned Counsel for Respondent No. 1. 9. Mr. Basu relied upon the decisions of the Supreme Court in United India Insurance Co. Ltd. v. Roshan Lal Oil Mills Ltd., (2000) 10 SCC 19 ; Sikka Papers Limited v. National Insurance Company Ltd., III (2009) CPJ 90 (SC)= (2009) 7 SCC 777 ; The Amravati District Central Co-operative Bank Ltd. v. United India Fire and General Insurance Co. Ltd., III (2010) SLT 232=II (2010) ACC 622 (SC)= (2010) 5 SCC 294 , and a decision of the National Consumer Disputes Redressal Commission (‘NCDRC’) in Harsolia Motors v. National Insurance Co. Ltd., I (2005) CPJ 27 (NC). He submitted that the AT erred in interfering with the report of the joint surveyors and substituting its own view in respect of both deductions towards profit margin as well as the individual items of claims. 10. As far as the above submissions are concerned, it is seen that even in the decision in United India Insurance Co. Ltd. v. Roshan Lal Oil Mills Ltd., the Supreme Court observed that the report of the joint surveyors, in terms of Section 64-UM(2) of the Insurance Act, 1938, was an important document, and could not have been overlooked in that case. It was clarified in the subsequent decision in Sikka Papers Limited v. National Insurance Company Ltd., that the surveyor’s report is not the last word and that ‘there must be legitimate reasons for departing from such report’. Going by the said yardstick, it cannot be said that in the instant case AT overlooked the surveyor’s report. The AT has in fact discussed the surveyor’s report at some length. The AT has given cogent reasons why it chose to depart from the surveyor’s report as far as the deduction on account of profit margin was concerned. It is not as if the AT did not deduct any profit margin whatsoever. It only reduced the percentage from 30% as proposed by the surveyors to 10%. The reason offered by the AT for this was that there was a highly competitive environment prevailing in the country. It is not as if the AT did not deduct any profit margin whatsoever. It only reduced the percentage from 30% as proposed by the surveyors to 10%. The reason offered by the AT for this was that there was a highly competitive environment prevailing in the country. The AT was comprised technical members with vast experience in the industry. They could be trusted to have reasonably good knowledge of the prevailing trends in the industry. The view of the AT as regards the profit margin was certainly a plausible one, and cannot be said to be suffering from any patent illegality. In other words, good reasons were offered by the AT for not accepting the surveyor’s report as such. The approach adopted by the AT cannot be faulted. Each item of claim has been discussed in detail and cogent reasons have been given. None of the grounds under Section 34 of the Act can be said to be attracted in the instant case. 11. Lastly, it was submitted by Mr. Basu that the interest at 12% per annum awarded by the AT was excessive. This Court is unable to agree. The said rate of interest awarded by the AT appears to be reasonable. No grounds have been made out for interference. 12. The petition is dismissed, but in the circumstances with no order as to costs. Petition dismissed.