JUDGMENT M. Seetharama Murti, J. 1. The A.P. State Civil Supplies Corporation Limited (hereinafter referred to as 'the appellant Corporation') filed this appeal under Section 37 of the Arbitration and Conciliation Act, 1996 having been aggrieved of the judgment dated 17.11.2005 of the learned XIV Additional Chief Judge (Judge, Fast Track Court), City Civil Court, Hyderabad, passed in O.P. No. 1395 of 2003 and O.P. No. 1422 of 2003 insofar as the said judgment related to the dismissal of O.P. No. 1422 of 2003 filed by the appellant. 2. We have heard the submissions of the learned senior counsel for the appellant. None appeared for the 1st respondent though notice was served. The 2nd respondent is the learned Arbitrator. Before the Tribunal, the 1st respondent is the claimant and the appellant herein is the sole respondent. However, in this appeal, the parties shall hereinafter be referred to as 'the appellant' and 'the 1st respondent'. 3. The case of the appellant, in brief, is follows: The appellant-Corporation is an agent of the State Government for distribution of food grains under the Public Distribution System (PDS) and food for work. The appellant engages contractors for transportation of food grains from the Food Corporation of India (FCI) to Mandal level stockists' points (MLS points). While so, the 1st respondent was appointed as a Contractor for distribution of food grains, which pertained to Mahaboobnagar District. The 1st respondent has to lift the stocks of food grains from FCI and transport them to MLS points within the said District. A concluded contract in the form of an agreement dated 03.04.2001 for the period from 03.04.2001 to 31.03.2002 was reduced into writing and was entered into between the parties. The 1st respondent had deposited Rs. 4,00,000/- with the appellant Corporation towards Security Deposit for due performance of the contract and had also furnished a Bank Guarantee for Rs. 5,00,000/- as stipulated respectively under clauses 4 and 5 of the contract. The 1st respondent started the execution of the said work under the said agreement. The 1st respondent had deposited Rs. 4,00,000/- with the appellant Corporation towards Security Deposit for due performance of the contract and had also furnished a Bank Guarantee for Rs. 5,00,000/- as stipulated respectively under clauses 4 and 5 of the contract. The 1st respondent started the execution of the said work under the said agreement. In the month of March 2002, a Release Order No. 1881 dated 21.03.2002 was issued to the 1st respondent by the District Manager of the appellant Corporation along with the Movement Order for transportation of 12800 MTs of rice from Central Warehousing Corporation (CWC), Mahaboobnagar to 13 MLS points in the said District; and, the same is meant for Food for Work programme. The said total dispatch also included three lorry loads of 250 bags of rice each of a total quantity of 372.62 quintals (=37.262 MTs). While so, on 26.03.2002, the 1st respondent had dispatched the said three truck loads of rice from CWC, Mahaboobnagar to MLS points by Trucks Nos.AP9U 8251, AP04T 5762 and CAA 5302. While so, the 1st respondent had developed a dishonest intention and had, therefore, diverted the stocks; and the trucks have been seized by the Vigilance and Enforcement officials on 26.03.2002 at Madhavi Traders Rice Mill, Mahaboobnagar. In the circumstances, the appellant had claimed that it had suffered loss on account of breach of agreement committed by the 1st respondent in not delivering the stocks to MLS points. As per Clause 10 of the agreement between the parties, the 1st respondent is liable to make good the loss to the appellant corporation at double the economic price. As per the terms of the agreement, the 1st respondent is responsible both quantity-wise and quality-wise for delivery of the stocks lifted by it. From the point of lifting the stocks till the point of delivery, the 1st respondent shall be responsible; and, if there is any loss caused to the appellant in quality or quantity, the 1st respondent shall make good the loss at double the cost/economic price. From the point of lifting the stocks till the point of delivery, the 1st respondent shall be responsible; and, if there is any loss caused to the appellant in quality or quantity, the 1st respondent shall make good the loss at double the cost/economic price. As per clause 8(d) of the agreement, the appellant has the right to forfeit the Security Deposit and also claim from the Bankers, the Bank Guarantee for the sums due for any damages, losses, charges, expenses or costs that may be suffered or incurred by the appellant Corporation due to the 1st respondent's negligence or un-workman like performance of any of the services under the contract. The appellant Corporation has the right to claim from the 1st respondent or to forfeit the security deposit and encash the bank guarantee to recover any dues from the 1st respondent. On 23.04.2002, the appellant had forfeited the Security Deposit and had claimed the bank guarantee given by the 1st respondent and had also blacklisted the 1st respondent. 4. Consequently, the 1st respondent had raised a dispute claiming refund of Security Deposit of Rs. 4,00,000/- and bank guarantee amount of Rs. 5,00,000/- encashed by the appellant together with interest at the rate of 24% per annum and had questioned the order dated 23.04.2002, whereby, the security deposit was forfeited and bank guarantee was encashed and the 1st respondent contractor was blacklisted. Therefore, the parties wanted the dispute to be resolved by means of arbitration. 5. Before the learned Arbitrator appointed by this court, the 1st respondent (claimant) had claimed refund of Security Deposit of Rs. 4,00,000/- and bank guarantee of Rs. 5,00,000/- encashed by the appellant together with interest @ 24% per annum and further stated that the order passed by the appellant on 23.04.2002 is null and void. The appellant had filed its counter denying the claim of the 1st respondent by inter alia stating that 1st respondent shall make good the loss at double the cost/economic price as per clause 10 of the contract and that therefore, the appellant has rightly forfeited the security deposit and invoked bank guarantee; and, that the 1st respondent was rightly blacklisted. The 1st respondent had filed a rejoinder denying any collusion between it and the MLS point incharge, Stage-II Contractor and Rice Miller. 6. Taking into consideration the pleadings of the parties, the Tribunal had framed the following issues: 1. The 1st respondent had filed a rejoinder denying any collusion between it and the MLS point incharge, Stage-II Contractor and Rice Miller. 6. Taking into consideration the pleadings of the parties, the Tribunal had framed the following issues: 1. Whether the claimant has diverted the truck CAA 5302 containing 250 bags of Rice to Madhavi Traders Rice Mills instead of unloading at the destination point MLS point Mahaboobnagar? 2. Whether the claimant has diverted the truck AP9U 8251 containing 250 bags of Rice and truck AP 04T 5762 containing 250 bags of Rice to Madhavi Traders Rice Mills without unloading at the destination MLS point Mahaboobnagar in collusion with MLS point in charge, Stage II Transport contractor, owners and drivers of the trucks, FP shop dealer and owner of Rice Mill? 3. Whether the Corporation is entitled to forfeit Security Deposit of Rs. 4,00,000/- and revoke Bank Guarantee of Rs. 5,00,000/-? 4. Whether the Corporation is entitled to recover losses occurred due to non-delivery of stocks at the destination point from the Claimant at double the economic cost? 5. Whether the Corporation is justified in blacklisting the Claimant? 6. Whether the Claimant is entitled to refund of Security Deposit of Rs. 4,00,000/- and Bank Guarantee of Rs. 5,00,000? 7. Whether the Claimant is entitled to interest @ 24% p.a. on the claim of Rs. 9,00,000/- made? Before the Tribunal, the 1st respondent and its supporting witnesses were examined and exhibits C1 to C15 were marked. On behalf of the appellant-Corporation, no oral evidence was adduced, but, exhibits R1 to R9 were marked. 7. On issue No. 1, the Tribunal had held in favour of the appellant and had recorded a finding against the 1st respondent, holding that it is evident that the stocks of rice were diverted to Rice Mill for the purpose of clandestine sale and were not unloaded at MLS point go-down. The Tribunal had also answered issue No. 2 against the 1st respondent holding that the Tribunal is inclined to accept the contention of the Corporation that these stocks also were diverted to M/s. Madhavi Traders Rice Mill where they were seized by the Vigilance officials. Thus, the Tribunal had accepted the contention of the appellant that the three lorry loads of stocks were diverted. While answering issues Nos. Thus, the Tribunal had accepted the contention of the appellant that the three lorry loads of stocks were diverted. While answering issues Nos. 3 and 4 concerning the appellant-Corporation's right to forfeit the Security Deposit and invoke the Bank Guarantee and its right to recover the losses that had occasioned due to non-delivery of stocks at the destination point at double the economic price, the Tribunal had held to the following effect: "The Corporation can only recover the loss suffered by it not exceeding Rs. 9,00,000/- (Security deposit of Rs. 4,00,000/- and Bank Guarantee of Rs. 5,00,000/-) and is not entitled to forfeit security deposit and invoke Bank Guarantee besides claiming loss.' The Tribunal had accordingly held that the appellant is entitled to recover the market price of Rs. 4,39,691/- and that the appellant is entitled to recover this amount from out of Security Deposit of Rs. 4,00,000/-. The Tribunal had also held that the balance amount of Rs. 39,691/- can be recovered by encashment of Bank Guarantee to that extent under clause 11 and that the appellant-Corporation is liable to refund the balance amount of Rs. 4,60,309/- to the 1st respondent. Since the appellant-Corporation is already having monies of the 1st respondent with it, which are to be adjusted against the losses claimed, it was further held that the appellant-Corporation is not entitled to claim interest. On issue No. 7 regarding the claim of interest, the Tribunal had held that the 1st respondent is entitled to interest for the periods covered by arbitration proceedings and post arbitration proceedings, i.e., pendente lite and post lite interest. Accordingly, the reference was answered by the Tribunal holding that the 1st respondent is entitled to recover a sum of Rs. 4,60,309/- from the appellant-Corporation together with interest @ 6% per annum from 22.07.2002 till payment. The Tribunal had also set aside the appellant-Corporation's order dated 23.04.2002 in regard to the blacklisting of the 1st respondent. 8. Since the learned Arbitrator had held that the 1st respondent/Contractor is liable to pay Rs. 4,39,691/- and that the appellant Corporation is entitled to recover the same from the Security Deposit and part of the Bank Guarantee furnished by the 1st respondent, the aggrieved 1st respondent had filed O.P. No. 1395 of 2003 before the court below. 8. Since the learned Arbitrator had held that the 1st respondent/Contractor is liable to pay Rs. 4,39,691/- and that the appellant Corporation is entitled to recover the same from the Security Deposit and part of the Bank Guarantee furnished by the 1st respondent, the aggrieved 1st respondent had filed O.P. No. 1395 of 2003 before the court below. As the Tribunal had held that the appellant-Corporation is not entitled to double the economic price as per clause (10) of the contract and that the appellant-Corporation is only entitled to the above said amount and is liable to refund Rs. 4,60,309/- to the 1st respondent with interest, the appellant Corporation had preferred O.P. No. 1422 of 2003 before the court below. On merits, by the impugned judgment, the Court below had dismissed both the original petitions filed by the 1st respondent and the appellant-Corporation and had accordingly confirmed the award of the Tribunal. 9. Aggrieved of the said judgment insofar as the same related to the dismissal of the O.P. No. 1422 of 2003 of the appellant Corporation, the present appeal is preferred. Be it noted that the 1st respondent/claimant did not prefer any appeal or cross-appeal. 10. The learned senior counsel for the appellant-Corporation would contend as follows: The order of the court below dismissing O.P. No. 1422 of 2003 and confirming the order of the learned Arbitrator is contrary to the substantive law of the country. The court below ought to have seen that the claim of the appellant Corporation is directly covered by the decision of the Supreme Court of India. The Court below, having held in favour of the appellant that the 1st respondent/claimant did not deliver the goods, ought to have held that double the price of the quantity is payable to the appellant-Corporation in view of the said breach of the contract and therefore, the court below ought to have passed orders in favour of the appellant Corporation by setting aside the award of the Tribunal. The learned Judge of the court below had erroneously followed the decisions in Fateh Chand v. Balkishan Dass AIR 1963 Supreme Court 1405 and Maula Bux v. Union of India AIR 1970 SUPREME COURT 1955, without referring to the correct legal position applicable to the facts of the case. The learned Judge of the court below had erroneously followed the decisions in Fateh Chand v. Balkishan Dass AIR 1963 Supreme Court 1405 and Maula Bux v. Union of India AIR 1970 SUPREME COURT 1955, without referring to the correct legal position applicable to the facts of the case. The Court below had erred in holding that the appellant Corporation is entitled to recover only the actual loss suffered and that it is not entitled to recover double the economic price. The finding that where the loss in terms of the money can be determined, the party claiming compensation must prove the loss suffered by it is erroneous. The court below had erroneously upheld the finding of the Tribunal that the Corporation can recover only the value of the rice and not the double economic price. As per clause 10 of the contract, which deals with Safety of goods, the value of the loss shall be recovered from the transport contractor from the transport bills, security deposit, bank guarantee and other sums due to the contractor at single economic price prevailing at the time of loss for the losses up to 0.25% of the total quantity of stocks in each delivery order entrusted to the contractor and at double the economic price for the loses exceeding 0.25% per cent. The parties are bound by the terms of the contract. The Arbitrator is also bound by the terms of the contract while resolving the dispute. The learned Arbitrator cannot act contrary to the terms of the agreement while granting the relief. The learned Arbitrator, having held that there is a breach committed by the 1st respondent, ought not to have held against the terms of the contract. When once a breach is committed, the appellant Corporation should have been compensated as per the terms stipulated in the contract. The Arbitrator's powers are limited and are controlled by the terms of the contract between the parties. The findings of the Arbitrator on issues 3, 4 and 6 are beyond his jurisdiction. In Fateh Chand v. Balkishan Dass AIR 1963 Supreme Court 1405 (supra), which was relied upon by the learned Arbitrator, there were two stipulations in the contract which were considered by the Supreme Court and it was held that the clause for forfeiture of earnest money is different from stipulation by way of penalty. In Fateh Chand v. Balkishan Dass AIR 1963 Supreme Court 1405 (supra), which was relied upon by the learned Arbitrator, there were two stipulations in the contract which were considered by the Supreme Court and it was held that the clause for forfeiture of earnest money is different from stipulation by way of penalty. Therefore, in that decision, the Supreme Court had pointed out the difference between forfeiture of earnest money and stipulation by way of penalty. The security Deposit and bank guarantee are to be taken into consideration in the instant case. The Supreme Court in Fateh Chand AIR 1963 Supreme Court 1405, (supra) has categorically held that "We are in the present case not concerned to decide whether a contract containing a covenant of forfeiture of deposit for due performance of a contract falls within the first class." i.e., the first class being - 'where the contract names a sum to be paid in case of breach'. Similarly, in Maula Bux v. Union of India, AIR 1970 SUPREME COURT 1955, (supra), it was held that forfeiture of earnest money under a contract for sale of property movable or immovable if the amount is reasonable does not fall within Section 74. It was not a case where an arbitrator was deciding the dispute within the four corners of the agreement conditions. In the said case, the civil court was called upon to decide the issue. Hence, on facts, the decisions relied upon by the Court below are not applicable to the facts of the present case. The ratios in the decisions of the Supreme Court in Bharat Sanchar Nigam Limited v. Reliance Communication Limited (2011) 1 Supreme Court Cases 394 and Surjit Kaur v. Naurata Singh AIR 2000 SUPREME COURT 2927, support the case of the appellant. The learned Arbitrator had erroneously set aside the order of the appellant-Corporation insofar as it related to blacklisting the 1st respondent. The appellant corporation had acted according to the terms of the contract while blacklisting the contractor/1st respondent. The court below had erroneously upheld the award of the learned Arbitrator without properly appreciating the facts and the applicable legal principles. The learned Arbitrator had erroneously set aside the order of the appellant-Corporation insofar as it related to blacklisting the 1st respondent. The appellant corporation had acted according to the terms of the contract while blacklisting the contractor/1st respondent. The court below had erroneously upheld the award of the learned Arbitrator without properly appreciating the facts and the applicable legal principles. The Court below and the learned Arbitrator ought to have seen that as per the terms of the contract, the 1st respondent had committed breach of the contract resulting in loss to the appellant Corporation and therefore, has to suffer the consequential black listing. While dismissing the OP filed by the 1st respondent/claimant, very rightly, the Court below ought to have allowed the OP filed by the appellant corporation. 11. Now, the points for consideration are: (1) Whether the appellant corporation, as per Clause (10) of the Contract, is entitled to recover the value of the loss at double the economic price since the loss exceeded 0.25%? (2) Whether the order impugned confirming the Award is liable to be set aside? And, if so, the appeal is to be allowed upholding the order dated 23.04.2002 of the appellant-Corporation? 12. POINTS: There is no dispute about the facts, which are narrated supra, in detail. We have given earnest consideration to the facts and the submissions and also the legal position which is relied upon. 12.1 The learned Arbitrator, as already noted, had held under issues Nos. 1 and 2 as under: Issue No. 1: 'The stocks of rice were diverted to Rice Mill for the purpose of clandestine sale and were not unloaded at MLS point go-down.' Issue No. 2: 'I am inclined to accept the contention of the Corporation that the stocks were also diverted to Madhavi Traders Rice Mill, where they were seized by the Vigilance Officials. The MLS point in-charge who could have explained the matter is not available for examination as it is stated by the counsel for Claimant that he is absconding. Determination of persons responsible for the entire fraud does not come within the purview of this Tribunal. I am told that the criminal proceedings are pending against the claimant, Stage II Contractor, MLS point in-charge and others.' Therefore, there is a categorical finding by the learned Arbitrator that there is a breach by the 1st respondent/claimant and that the stocks of rice were diverted. I am told that the criminal proceedings are pending against the claimant, Stage II Contractor, MLS point in-charge and others.' Therefore, there is a categorical finding by the learned Arbitrator that there is a breach by the 1st respondent/claimant and that the stocks of rice were diverted. The learned Arbitrator had also determined the actual loss as Rs. 4,39,691/-. The said findings were confirmed by the court below and were not challenged by the 1st respondent/claimant. Admittedly, the appellant-Corporation is having with it the Security Deposit of Rs. 4,00,000/-. A Bank Guarantee was also furnished by the 1st respondent for Rs. 5,00,000/-. Now, the short, but, incidental and vital question is as to whether the appellant Corporation is entitled to claim only the actual loss, which had occasioned due to non-delivery of stocks or whether the appellant corporation is entitled to recover double the economic price for the loss as per clause (10) of the contract. 12.2 In the background of what all has been stated supra, it is necessary to refer to Section 74 of the Indian Contract Act, which reads as follows: "74 Compensation for breach of contract where penalty stipulated for:--[When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Explanation.--A stipulation for increased interest from the date of default may be a stipulation by way of penalty." 12.3 It is also advantageous to refer to infra the relevant portion of Clause (10) of the contract, which deals with 'safety of goods'. The contractor shall be responsible for all the losses arising in the transportation. Explanation.--A stipulation for increased interest from the date of default may be a stipulation by way of penalty." 12.3 It is also advantageous to refer to infra the relevant portion of Clause (10) of the contract, which deals with 'safety of goods'. The contractor shall be responsible for all the losses arising in the transportation. The value of the loss shall be recovered from the transport contractor from the transport bills, security deposit, bank guarantee and other sums due to the contractor at single economic price prevailing at the time of loss for the losses up to 0.25% of the total quantity of stocks in each delivery order entrusted to the contractor and at double the economic price for the loses exceeding 0.25% per cent. A plain reading of the Clause (10) would show that the appellant Corporation is entitled to recover double the economic price for the loss in the instant case and not the actual loss. Now, the question is whether the law permits the appellant Corporation to rely upon the said clause in the contract and recover double the economic price from the 1st respondent. Now, it is necessary to refer to the current and relevant legal proposition on the point. 12.4 In ONGC Ltd. V. Saw Pipes Ltd. (2003) 5 Supreme Court Cases 705, the Supreme Court had noted in the cited case that the agreement between the parties had specifically provided that without prejudice to any other right or remedy if the contractor fails to deliver the stores within the stipulated time, the appellant will be entitled to recover from the contractor, as agreed, liquidated damages equivalent to 1% of the contract price of the whole unit per week for such delay and that such recovery of liquidated damages could be at the most up to 10% of the contract price of the whole unit of stores. The Supreme Court had also noted that in the agreement between the parties, it was further agreed that: (a) liquidated damages for delay in supplies will be recovered by paying the authority from the bill for payment of cost of material submitted by the contractor; (b) liquidated damages were not by way of penalty and it was agreed to be genuine pre-estimate of damages duly agreed by the parties; (c) this pre-estimate of liquidated damages is not assailed by the respondent as unreasonable assessment of damages by the parties. In this background, the Supreme Court had considered the interpretation that was placed on the provisions of Sections 73 and 74 of the Indian Contract Act in various earlier decisions including the decisions in Fateh Chand and Maula Bux (already referred to supra) and had finally held as follows: "68. From the aforesaid discussions, it can be held that: (1) Terms of the contract are required to be taken into consideration before arriving at the conclusion whether the party claiming damages is entitled to the same. (2) If the terms are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty; party who has committed the breach is required to pay such compensation and that is what is provided in Section 73 of the Contract Act. (3) Section 74 is to be read along with Section 73 and, therefore, in every case of breach of contract, the person aggrieved by the breach is not required to prove actual loss or damage suffered by him before he can claim a decree. The court is competent to award reasonable compensation in case of breach even if no actual damage is proved to have been suffered in consequence of the breach of a contract. (4) In some contracts, it would be impossible for the court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or unreasonable, the court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation." 12.5 Further, in the decision in Surjit Kaur AIR 2000 SUPREME COURT 2927, (supra), the facts show that the suit was filed for specific performance or in the alternative for a sum of Rs. 40,000/- as compensation. 40,000/- as compensation. The said sum was claimed as the suit agreement inter alia provided as follows: "Due to any reasons, if I don't get Sale Deed executed then purchaser can get it done through Court of law or he can claim double the advance amount paid to me." In this background of facts, the Supreme Court, while considering whether alternative relief can be granted, had held as follows: "No reasons have been given by the trial court as to why this term of the suit Agreement should not be given effect to. No reasons have been given as to why compensation of only Rs. 8800/- was awarded when what was to be returned, if Appellant could not get Sale Deed executed, was double the amount. Trial Court has held that the 1st respondent was ready and willing to perform the whole of the Agreement. Trial Court has noted that the Appellant could not perform the Agreement in its entirety inasmuch as she could not deliver possession. As 1st respondent had elected not to accept performance in part the trial Court held that the Agreement could not be specifically enforced. However, in such an event trial court should have directed payment of Rupees 40,000/- as provided in the Agreement. We accordingly vary the decree granted by the trial Court to the extent that the Appellant shall repay Rs. 20,000/- with interest thereon at 12% p.a. from 30th June 1981 till payment and also pay another sum of Rs. 20,000/- with interest thereon at 12% p.a. from date of decree till payment." 12.6 In BSNL v. Reliance Communication Ltd. (2011) 1 Supreme Court Cases 394, the Supreme Court had referred to a clause 6.4.6.' concerning 'wrongly routed calls' in the agreement between the parties and had then considered the question whether the said clause represents penalty or pre-estimate of reasonable compensation for the loss and had held in paragraph 53 of the judgment as follows: "Lastly, it may be noted that liquidated damages serve the useful purpose of avoiding litigation and promoting commercial certainty and, therefore, the court should not be astute to categorise as penalties the clauses described as liquidated damages. This principle is relevant to regulatory regimes. This principle is relevant to regulatory regimes. It is important to bear in mind that while categorizing damages as "penal" or "liquidated damages", one must keep in mind the concept of pricing of these contracts and the level playing filed provided to the operators because it is on costing and pricing that the loss to BSNL is measured and, therefore, all calls during the relevant period have to be seen. (See Communications Law in India by Vikram Raghavan at p.639). Since clause 6.4.6 represented pre-estimate of reasonable compensation, Section 74 of the Contract Act is not violated. Thus, it is not necessary to discuss various judgments of this Court under Section 74 of the Contract Act." 12.7 In the case on hand, the commodity is rice and it is an essential commodity. It is intended for Public Distribution and food for work programme. The contract specifically fixed the responsibility on the contractor/1st respondent for all the losses arising in the transportation. Clause (10) of the contract had also provided that the value of the loss exceeding 0.25% of the total quantity of stocks in each delivery order entrusted to the contractor shall be recovered from the transport contractor at double the economic price. In the facts and circumstances of the case, the pre-estimated damage cannot be termed as either unreasonable or penal. Further, considering the background of the contract, the pre-estimate made in the contract can only be considered as reasonable compensation. Thus, the principles of law in the above decisions of the Supreme Court squarely apply to the facts of the case. Having regard to the facts of the case, the damages which are stated in clause 10 of the agreement in the instant case between the parties only serve useful purpose of avoiding litigation and promoting certainty. Further, this is a matter where public interest is also involved. Therefore, under facts and in law, the 1st respondent is liable to pay double the economic price and the appellant/corporation is entitled to recover the same. The pre-estimate in clause (10) of the contract cannot be categorised as penalty but can only be categorised as reasonable pre-estimated/liquidated damages. However, the learned Arbitrator passed the award without considering accurately the facts and the correct legal position applicable and had traveled beyond the terms of contract between the parties. The pre-estimate in clause (10) of the contract cannot be categorised as penalty but can only be categorised as reasonable pre-estimated/liquidated damages. However, the learned Arbitrator passed the award without considering accurately the facts and the correct legal position applicable and had traveled beyond the terms of contract between the parties. Such an award was confirmed by the court below without adverting to the various factual and legal aspects involved in the matter. Therefore, the order of the court below confirming the award is liable to be set aside. 12.8 The settled principles for interference with an Arbitral Award under Section 34(2) of the 1996 Act as per the decision of the Supreme Court in Delhi Development Authority v. R.S. Sharma and Company, New Delhi (2008) 13 SCC 80 , are as follows: (a) An award, which is (i) contrary to substantive provisions of law; or (ii) the provisions of the Arbitration and Conciliation Act, 1996 or (iii) against the terms of the respective contract; or (iv) patently illegal; or (v) prejudicial to the rights of the parties; is open to interference by the court under Section 34(2) of the Act. (b) The award could be set aside if it is contrary to: (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality. (c) The award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. (d) It is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India. 12.9 Having regard to the reasons assigned, we are of the well considered view that the appellant Corporation is entitled to recover from the 1st respondent/claimant, double the economic price for the loss that had occasioned due to the breach of the contract committed by the 1st respondent/claimant. As a sequel, it must be held that the appellant corporation is entitled to forfeit the Security Deposit and also encash Bank Guarantee towards the recovery of the loss as per the terms of the contract. As a sequel, it must be held that the appellant corporation is entitled to forfeit the Security Deposit and also encash Bank Guarantee towards the recovery of the loss as per the terms of the contract. Coming to the aspect of black listing of the 1st respondent-contractor, it is to be noted that the contract deals with transportation of food grains which pertain to Public Distribution System and food for work programme and therefore, any breach of the contract and diversion of the food grains into the black market should be dealt with severely. Therefore, it follows that the order dated 23.04.2002 passed by the appellant-corporation forfeiting the Security Deposit, invoking the Bank Guarantee and blacklisting the contractor is valid. Hence, the 1st respondent is not entitled to refund of any amount from the appellant Corporation. 13. Viewed thus, we find that the order of the court below, which is impugned insofar as it related to dismissal of O.P. filed by the appellant Corporation is liable to be set aside and accordingly, we set aside the same. As a sequel, the order of the Arbitral Tribunal is also set aside upholding the validity of the order dated 23.04.2002 passed by the appellant-Corporation. 14. The appeal is allowed accordingly. There shall be no order as to costs. Miscellaneous petitions, if any, pending in this appeal shall stand closed.