JUDGMENT 1. By this petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the said Arbitration Act”), the petitioner has impugned the arbitral award dated 29th March 2011 in so far as the Claim Nos.1, 4, 6, 8, 12 and 13 are concerned. Some of the relevant facts for the purpose of deciding this petition are as under:- 2. The petitioner was the original respondent in the arbitral proceedings. The respondent was the original claimant in the arbitral proceedings. On or about December 2003, the petitioner invited tenders for the work of providing and installation of false ceiling in its office areas at Cumbala Hill, Telephone Exchange building with the estimated cost of the said work at Rs.21,08,388/- and with the stipulated period for completion of work at three months. Pursuant to the said tenders invited by the petitioner, the respondent submitted its bid at Rs.28,12,500/- which was 33.39% above the estimated cost of the tender. n 1st January 2003, the petitioner awarded the said work of providing and installation of false ceiling in the office areas at Cumbala Hill, Telephone Exchange building, Mumbai to the respondent. Both the parties accordingly executed an agreement. 3. It was the case of the petitioner that though the stipulated date of completion of work was 15th April 2003, the respondent completed the work awarded only on 24th February 2007 i.e. after the period of about four years from the stipulated date of completion. According to the petitioner, the petitioner paid various running accounts bills raised by the respondent from time to time. The respondent, however, never raised any kind of grievance in respect of the said payments of bills and accepted the amounts unconditionally. The respondent did not submit any final bill with the petitioner though under the contract, it was the responsibility of the respondent to submit a final bill. 4. It was the case of the petitioner that after completion of the work on 24th February 2007 and before finalisation of the final bill amount, the respondent addressed a letter dated 17th November 2007 to the Chief Engineer of the petitioner thereby making certain grievances in respect of the alleged disputes occurred in the operation of a contract and invoked arbitration clause no.53 of the General Conditions of Contract requesting for appointment of an arbitrator. The Chief Engineer of the petitioner by an order dated 12th November 2007 appointed the learned arbitrator and forwarded 12 disputes as furnished by the respondent to the learned arbitrator for adjudication. The Chief Engineer also referred one additional claim by his letter dated 9th February 2010. The said arbitrator accepted his appointment as a sole arbitrator. 5. On 14th January 2008, the respondent filed its statement of claim. The petitioner filed its written statement and counter claims before the learned arbitrator. The respondent filed its rejoinder. 6. During the course of hearing, the respondent filed a copy of the final bill before the learned arbitrator. The petitioner filed its comments on the final bill before the learned arbitrator. 7. On or about 29th March 2011, the learned arbitrator rendered an award. By the said award, the learned arbitrator allowed the claim nos.1, 4, 6, 8, 12 and 13 and rejected the remaining claims as well as counter claims. The respondent did not challenge the impugned award by which the learned arbitrator had rejected the remaining claims. 8. Mr.Shimpi, learned counsel for the petitioner submits that in so far as the claim no.1 i.e. the claim arising out of final bill is concerned, the learned arbitrator has awarded a sum of Rs.53,919.48 in favour of the respondent towards recoveries alleged to have been made by the petitioner from the amounts due and payable to the respondent under the final bill. Learned counsel invited my attention to a copy of the final bill which was placed on record before the learned arbitrator and would submit that there was no recovery of Rs.53,919.48 as awarded by the learned arbitrator from the amounts due and payable to the respondent by the petitioner. Though such recovery was proposed by the office of the petitioner, no such recovery was actually effected from the respondent in the final bill. 9. Mr. Samudrala, learned counsel for the respondent, on the other hand, submits that if no such recovery was made by the petitioner as per the final bill, award of the learned arbitrator in favour of the respondent to this extent can be modified. 10. 9. Mr. Samudrala, learned counsel for the respondent, on the other hand, submits that if no such recovery was made by the petitioner as per the final bill, award of the learned arbitrator in favour of the respondent to this extent can be modified. 10. In my view, since no such recovery was effected in the final bill as is apparent on perusal of the final bill, the learned arbitrator could not have awarded the said amount on the premise that the said amount was recovered by the petitioner from the respondent. The amount awarded under claim no.1 is accordingly set aside. 11. In so far as the claim nos.2 and 3 are concerned, learned counsel appearing for the respondent states that the petitioner has already released the said amount to the respondent and thus the said claims do not survive. Statement is accepted. 12. In so far as the claim no.4 is concerned, the learned arbitrator has allowed the said claim at Rs.2,54,539.75 as against the claim for Rs.3,50,000/- made by the respondent. Out of three sub-claims under claim no.4, the learned arbitrator has rejected two sub-claims and has allowed one sub-claim. Learned arbitrator has allowed the said claim towards extra for providing additional GI intermediate section for making drop in the false ceiling. 13. It is submitted by the learned counsel for the petitioner that under clause 13 of the contract, the Engineer-in-charge of the petitioner has power to omit a part of the work or to make any alternation in omissions from, addition to or substitute and the same shall be carried out by the Contractor on the same conditions in all respects including the price on which he agreed to do the main work except in the manner provided in the said clause. It is submitted that under clause 13.1 (ii) of the contract, it provided that the Contractor shall not carry out such works without written instructions from the Engineer-in-charge. Under clause 13.3 of the contract, it provided that the rates for such additional, altered or substituted work shall be determined by the Engineer-in-charge in the manner prescribed therein. The respondent did not comply even with the said provisions for making any claim for extra. Since the respondent carried out the said work without any instructions in writing, the petitioner was not liable to make any payment to the respondent. The respondent did not comply even with the said provisions for making any claim for extra. Since the respondent carried out the said work without any instructions in writing, the petitioner was not liable to make any payment to the respondent. It is submitted that the claim awarded by the learned arbitrator is contrary to clauses 13.1 and 13.3 of the contract. The award is in conflict with the public policy. It is submitted by the learned counsel that before the learned arbitrator the respondent submitted a rate analysis for the said item and demanded a rate of Rs.93.73 per sq. mtr. The learned arbitrator has allowed the said claim in toto as claimed in the rate analysis without any basis. It is submitted that though the petitioner had denied the amount as demanded by the respondent, the learned arbitrator has erroneously rendered a finding that the rate demanded of Rs.180/- per sq. mtr. over and above the quoted rates by the respondent was not controverted or denied by the petitioner during the execution of the work. It is erroneously held that even the rate demanded of Rs.93.73 per sq.mtr. by the respondent as per the rate analysis was neither controverted by the petitioner during the hearing of the case nor the petitioner submitted any other rate analysis for the said item. 14. Mr. Samudrala, learned counsel for the respondent, on the other hand, submits that the architectural drawing on the basis on which the work of false ceiling was to be executed was not attached with the tender documents. The petitioner did not dispute that the work carried out by the respondent was extra. Though the respondent had submitted rate analysis during the execution of the work, the petitioner had never disputed it and has allowed the said claim without any protest. Though the respondent had originally demanded a rate of Rs.180/- per sq.mtr. over and above the quoted rates, the petitioner submitted a rate analysis of Rs.93.73 per sq. mtr. Since the petitioner did not dispute the same nor submitted any rate analysis, the learned arbitrator found that the said rate demanded by the respondent was justifiable and reasonable. This Court cannot interfere with the finding of fact rendered by the learned arbitrator. 15. mtr. Since the petitioner did not dispute the same nor submitted any rate analysis, the learned arbitrator found that the said rate demanded by the respondent was justifiable and reasonable. This Court cannot interfere with the finding of fact rendered by the learned arbitrator. 15. A perusal of clause 13.1 of the contract makes it clear that power to order any deviation or variation was vested with the Engineer-in-charge of the petitioner. Clause 13.1 (ii) provided that the Contractor was bound to carry out work as directed by the Engineer-in-charge of the petitioner on the same conditions including the price on which he agreed to do the main work except as provided in the said clause. It was made clear that the Contractor shall not carry out such work without written instructions from the Engineer-in-charge. Under clause 13.3 (iii) of the contract, it is provided that if the rate for any altered, additional or substituted item could not be determined in the manner specified in sub-paras (i) & (ii) of clause 13.2, the Contractor was under an obligation to inform the Engineer-in-charge of the rate within 15 days from the date of receipt of the order to carry out the said item on which he proposes to claim for such item of work supported by proper detailed analysis of the rates. The Engineer-in-charge was required to give due consideration to the rates on the basis of prevailing market rates. If the Contractor fails to inform the Engineer-in-charge within the stipulated period of time the rate at which he proposes to claim, the rate of such item is required to be determined by the Engineer-in-charge on the basis of the prevailing market rates. 16. A perusal of the statement of claim does not indicate that it was the case of the respondent that any order of variation was issued by the Engineer-in-charge. A perusal of the record also does not indicate that the respondent had brought to the notice of the petitioner that certain extra work was carried out by the respondent and he would claim for such extra work at a particular rate which he proposed to make with proper detailed analysis of the rates. A perusal of the record also does not indicate that the respondent had brought to the notice of the petitioner that certain extra work was carried out by the respondent and he would claim for such extra work at a particular rate which he proposed to make with proper detailed analysis of the rates. In the written statement filed by the petitioner, it was pleaded that the respondent vide its letter dated 23rd January 2008 had admitted that 'extra item has been paid only after approval of extra items rates from the competent authority based on condition of contract agreement.' 17. A perusal of the award in respect of claim no.4 indicates that the learned arbitrator did not consider any of these submissions in the impugned award. It was a specific case of the petitioner that no rate analysis was submitted by the respondent. The respondent had also not demanded the rates within 15 days of the alleged variation order from the petitioner. In my view, the learned arbitrator has awarded the said claim contrary to the terms of clause 13.1 read with clause 13.3. Admittedly, there was no variation order in writing issued by the Engineer-in-charge of the petitioner. Even the respondent did not bring to the notice of the petitioner about the variation order issued by the petitioner or about the rates proposed to be claimed by the respondent. Learned arbitrator has, in my view, allowed the prohibited claim and has exceeded his jurisdiction. The findings rendered by the learned arbitrator are without considering the submissions made by the petitioner and overlooking the provisions of the contract. The award of Rs.2,54,539.75 in favour of the respondent is thus in conflict with public policy and deserves to be set aside. 18. In so far as the claim no.6 is concerned, the learned arbitrator has allowed reimbursement of the payment of service tax. It is submitted by the learned counsel for the petitioner that the petitioner was not liable to make any payment of service tax. The respondent was responsible for making payment of service tax under clause 48.3.3 of the contract. 19. It is submitted by the learned counsel for the petitioner that the petitioner was not liable to make any payment of service tax. The respondent was responsible for making payment of service tax under clause 48.3.3 of the contract. 19. Mr.Samudrala, learned counsel for the respondent, on the other hand, submits that the service tax was introduced by enactment of parliament after opening of the tender by the petitioner and thus the said liability was not to be borne by the respondent and the respondent was entitled to be reimbursed by the petitioner. It is submitted that the learned arbitrator has also considered the documentary evidence produced by the respondent showing payment of Rs.47,742/- made by the respondent towards service tax. 20. It is not in dispute that the service tax was levied by virtue of enactment of parliament after opening of the tender and award of the contract by the petitioner to the respondent. The respondent had produced documentary evidence before the learned arbitrator showing the payment of service tax made by the respondent. The learned arbitrator, in my view, has rightly held that in view of the service tax having been introduced after opening of the tender and award of the contract, the petitioner was liable to reimburse the said amount to the respondent. Learned arbitrator has considered the documentary evidence produced by the respondent showing the payment of service tax made by the respondent for the work carried out by the respondent. I do not find any infirmity with that part of the award. In my view, thus there is no merit in the submission of the learned counsel for the petitioner in so far as the said claim is concerned. Award in respect of claim no.6 is accordingly upheld. 21. In so far as the claim no.8 is concerned, the learned arbitrator has allowed the claim at Rs.2,91,200/- in favour of the respondent towards claim for compensation/damage on account of under utilization of over heads due to prolongation of contract. The respondent had made a claim of Rs.10,85,160/-. 22. Learned counsel for the petitioner submits that delay in carrying out the work was attributable to the respondent. The work was prolonged solely due to delay on the part of the respondent. In any event, there was no Engineering or Supervisory staff employed by the respondent. The respondent had made a claim of Rs.10,85,160/-. 22. Learned counsel for the petitioner submits that delay in carrying out the work was attributable to the respondent. The work was prolonged solely due to delay on the part of the respondent. In any event, there was no Engineering or Supervisory staff employed by the respondent. Three different works under three separate contracts of the respondent were going on in the same building. There was only one person who was employed by the respondent to look after the office work for all the three works of the respondent in the same building. The petitioner denied this claim vehemently in the written statement. 23. It is submitted by the learned counsel that the learned arbitrator in the impugned award did not consider the defence of the petitioner raised in the written statement. It is submitted that claim no.9 which was under utilization of labour force demanded by the respondent has been rejected by the learned arbitrator for want of evidence. Though there was no evidence led for claim no.8 also, the learned arbitrator has, however, allowed the said claim at Rs.2,91,200/- without any evidence. 24. Mr. Samudrala, learned counsel for the respondent, on the other hand, submits that delay was attributable on the part of the petitioner and was not on the part of the respondent. The petitioner had granted extension of time to the respondent. There was a prolongation of contract period of 44.8 months. Learned arbitrator has rendered a finding of fact and has allowed the said claim by considering the salary of half Engineer @ Rs.5,000/- per month and one supervisor @ Rs.4,000/- per month for the said prolongation period of 44.8 months. It is submitted that under the contract, the respondent was liable to deploy the requisite number of employees on the site. If according to the petitioner, the respondent had not deployed requisite number of employees on the site, the petitioner was entitled to levy penalty against the respondent which the petitioner did not. It is submitted that the petitioner thus cannot be permitted to urge that there were no sufficient number of staff available on site during the prolongation period. It is submitted that the amount of Rs.2,91,200/- awarded by the learned arbitrator is thus reasonable and this Court cannot re-appreciate the evidence. 25. It is submitted that the petitioner thus cannot be permitted to urge that there were no sufficient number of staff available on site during the prolongation period. It is submitted that the amount of Rs.2,91,200/- awarded by the learned arbitrator is thus reasonable and this Court cannot re-appreciate the evidence. 25. A perusal of the record indicates that the learned arbitrator has rendered a finding that under clauses 29 and 30 of the contract, the respondent was required to maintain a minimum and skeleton staff at the site of work during the extended period of contract. However, it was not required that Engineer should always be present at the site of work. One Engineer could look after more than one work. Learned arbitrator considered the cost of half Engineer/Supervisor as reasonable. A perusal of the record indicates that in respect of claim no.9 which was for compensation on account of alleged under utilisation of labour force due to prolongation of the contract, the learned arbitrator has rejected the said claim on the ground that the respondent failed to substantiate the said claim and had not produced any documentary evidence to show that the labours engaged by the respondent remained idle at the site of work and on the ground that the respondent was also required to minimize its losses under Section 73 of the Contract Act, 1872. Learned arbitrator also rejected claim no.10 which was for compensation/damage on account of alleged under utilization of tools & plants and scaffoldings due to prolongation of contract period on the similar ground. 26. In my view, even if the finding of the learned arbitrator that the petitioner was solely responsible for delay in prolongation of the contract, unless and until the respondent would have proved the actual loss suffered in view of such delay, the learned arbitrator could not have allowed any claim for damages without any proof. Learned arbitrator, however, allowed the said claim without any evidence and even without considering the submission made by the petitioner in the written statement taking a positive stand that the respondent had deployed only one person to look after three contracts in the same building. Learned arbitrator, however, allowed the said claim without any evidence and even without considering the submission made by the petitioner in the written statement taking a positive stand that the respondent had deployed only one person to look after three contracts in the same building. A perusal of the award and more particularly in respect of claim nos.9 and 10 clearly indicates that though those claims were also for damages for the same prolongation period, the learned arbitrator has rejected those claims on the ground that the respondent had not mitigated the loss and failed to produce any documentary evidence to show that the labours engaged by the respondent remained idle at site of work and failed to produce any documentary evidence in support of the claim for compensation on account of under utilization of tools & plants and scaffoldings due to prolongation of contract period, the learned arbitrator has applied different yardstick of requirements of proof while dealing with the claim nos.9 and 10 on one hand and claim no.8 on the other hand. Learned arbitrator has rightly rejected the claim nos.9 and 10. In view of the fact that the respondent did not substantiate those claims by producing any evidence, the learned arbitrator could not have allowed the claim no.8 based on presumption and surmises. The award is based on no evidence and deserves to be set aside. 27. In so far as the claim no.12 is concerned, the learned arbitrator has awarded interest @10% p.a. with effect from 3rd November 2007 upto 23rd April 2010 i.e. amount paid in final bill and with effect from 3rd November 2007 upto 15th May 2010, on Rs.1,52,000/- towards the security deposit though actually released belatedly and with effect from 3rd November 2007 upto 14th October 2009 on Rs.1,00,000/- i.e. withheld amount and with effect from 3rd November 2007 on the amount of award made under claim nos.1 & 4 upto the date of award. Learned counsel appearing for the petitioner submits that the learned arbitrator could not have awarded interest since there was no provision in the contract for payment of interest. It is submitted that the performance guarantee was required to be released only after completion of the work. The respondent had not cured defects and thus, till such defects were cured, the petitioner was not liable to return the security deposit. It is submitted that the performance guarantee was required to be released only after completion of the work. The respondent had not cured defects and thus, till such defects were cured, the petitioner was not liable to return the security deposit. It is submitted that the learned arbitrator, therefore, could not have awarded any interest on the said amount. Mr. Samudrala, learned counsel for the respondent, on the other hand, submits that there is no prohibition under the contract for awarding claim for interest. Since the petitioner had withheld the amount due and payable by the petitioner to the respondent, under Section 31 (7) (a) of the said Arbitration Act, the learned arbitrator has discretion to award interest from the due date till payment and at such rate as the learned arbitrator may deem fit. 28. A perusal of the contract indicates that there is no prohibition either for making a claim for interest or for awarding any interest in case of a money claim. Under Section 31(7)(a) of the said Arbitration Act, the learned arbitrator is empowered to award interest if the award is for the payment of money at such rate as he 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. A perusal of the award indicates that the learned arbitrator has allowed the claim for interest @10% p.a. In my view, the rate of interest awarded by the learned arbitrator is reasonable and no interference is warranted in so far as the rate of interest is concerned. Learned arbitrator has awarded interest on the final bill amount paid on 23rd April 2010 for Rs.1,81,042/- from 3rd November 2007. It is not in dispute that the petitioner had paid the said amount according to the final bill prepared by the petitioner itself on 23rd April 2010. Though the work was already completed admittedly as far back as on 24th February 2007, the petitioner could not justify the delay as to why the said amount of Rs.1,81,042/- which was payable even according to the petitioner was not paid till 23rd April 2010. Similarly, the petitioner released the security deposit on 15th May 2010 which was required to be released upon completion of the work. Similarly, the petitioner released the security deposit on 15th May 2010 which was required to be released upon completion of the work. I do not find any infirmity with that part of the award granting interest on final bill and on security deposit. It is made clear that the petitioner would not be liable to pay any interest on the amount in respect of the claims which are set aside by this order such as claim nos.1, 4 and 8. 29. In so far as the claim no.13 i.e. award in the sum of Rs.25,000/- as cost of arbitration is concerned, since the respondent was forced to file arbitration proceedings for recovery of dues and succeeded partly, the award of cost of arbitration in the sum of Rs.25,000/-, in my view, is reasonable and no interference is warranted against the award in so far as that part of the claim is concerned. 30. In the result, I pass the following order :- a) Petition is partly made absolute in the aforesaid terms. b) There shall be no order as to costs.