JUDGMENT : ANIL K. NARENDRAN, J. 1. The appellant is the claimant in O.P. (Arb.) No. 14 of 1995 on the file of the Principal Sub Court, Thiruvananthapuram, an application filed under Section 17 of the Arbitration Act, 1940 (hereinafter referred to as the Act) for making the award passed by the arbitrator dated 26.10.1994 for Rs. 4,80,847/- with 18% interest per annum from 3.8.1987 as rule of the court. The respondents have also filed an application under Section 30 of the Act, to set aside the award passed by the arbitrator. The court below by judgment dated 29.9.2006 partly set aside the award passed by the arbitrator, by modifying the award under Claim Nos.16 and 19 to the extent indicated in the judgment and set aside the award under all other claims. The court below held that the appellant is entitled to realise Rs. 87,847/- being the retention amount and security amount with interest at the rate of 6% per annum from 3.8.1987 till the date of payment, from the respondents and their assets jointly and severally. Aggrieved by the said judgment of the court below, the appellant is before this Court in this appeal. 2. We heard the arguments of the learned counsel for the appellant and also the learned Government Pleader for the respondents. 3. The reference before the arbitrator arises out of the contract relating to Kallada Irrigation Project. The work relates to “K.I.P. - L.B.C. - formation of Paravoor Distributory from Ch.5150 to 12552m. Part-I, from Ch.5150 to 7033m. Including C.D. Works”, pursuant to Agreement No.48/SE/KCQ/85-86 dated 31.3.1986 entered into between the appellant and the 1st respondent State, acting through the 2nd respondent, namely, the Superintending Engineer, Kallada Irrigation Project Circle, Kollam. 4. As there arose some disputes and differences between the parties, the matter was referred to arbitration as provided under Clause 52 of the Local Competitive Bidding Specifications of the agreement. Pursuant to the notice issued by the sole arbitrator, the claimant filed claim statement on 12.1.1989. The respondents filed defence statement on 30.6.1989. On the side of the claimant, Exts.C1 to C29 were marked and Exts.R1 to R25 were marked on the side of the respondents. The claimant filed an application for site inspection, pursuant to which the arbitrator inspected the site on 5.5.1990, in the presence of both parties and their counsel. 5. The respondents filed defence statement on 30.6.1989. On the side of the claimant, Exts.C1 to C29 were marked and Exts.R1 to R25 were marked on the side of the respondents. The claimant filed an application for site inspection, pursuant to which the arbitrator inspected the site on 5.5.1990, in the presence of both parties and their counsel. 5. The 1st issue that was considered by the arbitrator was as to whether there is breach of contract and if so who has committed breach of contract and what is the remedy available to the other party. The arbitrator dealt with this issue in paragraph 5 to 14 of his award. After considering the pleadings and materials on record, the arbitrator found that the respondents failed to supply the departmental materials such as cement, steel and copper sheets as per the requirements and agreed conditions. Though the location of the converts were altered and the designs were changed by the respondents, the revised proposals could not be approved during the contractual period. On perusing the departmental files, the arbitrator found that soil tests were not confirmed and the revised proposal for the aqueduct were not finalised by the respondents during the contractual period. Therefore, the arbitrator concluded that, the respondents have failed to discharge their contractual obligations and broken the agreement conditions and as such the appellant is entitled to get damages from the respondents. 6. The arbitrator dealt with the various claims made by the claimant under issue Nos.2 to 20. 7. Issue No.4 considered by the arbitrator was as to whether the appellant is entitled to get payment of damages for re-handling and removing cut earth and if so, what is the amount. The arbitrator dealt with this issue in paragraph 17 to 20 of his award. The appellant contended that, though the field officers instructed him to carry out cutting, initial levels were not approved for filling, which was approved only during January 1987. Even after giving approval of initial levels for filling, the road roller was not available with the department, which they failed to make available till termination of the contract. The appellant contended that, though the field officers instructed him to carry out cutting, initial levels were not approved for filling, which was approved only during January 1987. Even after giving approval of initial levels for filling, the road roller was not available with the department, which they failed to make available till termination of the contract. Since the canal banks were very narrow and there was no land on either side of the canal for dumping, the appellant stacked 4000 cubic meter cut earth in the nearby property and then re-handled to the dumping yard for filling, thereby incurring an additional expenditure of Rs. 31/- per cubic meter. Per contra, the respondents contended that, necessary instructions for carrying out filling work was issued in April 1986 itself and that, re-handling of cut earth became necessary due to the failure of the appellant in carrying out the filling work. The respondents contended further that, the appellant was intimated several times that power roller is not specified to be supplied by the department as per the agreement, as such the appellant should have made available his own arrangement for power roller. After considering the pleadings and materials on record, the arbitrator found that the department was having custody of power roller. The Executive Engineer had sent Ext.C5 letter dated 9.9.1986 to the Asst. Executive Engineer, Sub Division, Kottiyam to issue power roller to the appellant for executing filling work. However, power roller was not issued to him. Thereafter, the Assistant Engineer had sent Ext.C12 letter dated 7.2.1989 to another contractor Mr.V.M.Varkey to transfer the departmental power roller idling at his site to the appellant. Even then power roller was not issued to the appellant. 8. The arbitrator inspected the site in the presence of both parties and found that, there is no open space on the banks of the canal to dump excavated earth and that, the land acquired is only the minimum land required for the formation of the canal. From Exts.C23 to C25 the arbitrator found that, the department has sanctioned and allowed re-handling, negotiated extra rates under Clause 32 of L.C.B. Specifications and executed supplemental agreements in relation to some other contract works of similar nature. From Exts.C23 to C25 the arbitrator found that, the department has sanctioned and allowed re-handling, negotiated extra rates under Clause 32 of L.C.B. Specifications and executed supplemental agreements in relation to some other contract works of similar nature. From Exts.C26 judgment the arbitrator found that, the dispute regarding re-handling and conveyance of cut soil in respect of another work was arbitrated and the respondents made payment to that contract as per Ext.C27 Government order. In such circumstances, the arbitrator came to the conclusion it is only just and reasonable to award extra rates to the appellant under Clause 32 of the L.C.B. Specifications. 9. The arbitrator, after considering the materials on record found that, the earth work excavation record by the department is for 37707.597 cubic meter and the embankment filling record by the department is 799.339 cubic meter. From the site conditions the arbitrator found that the appellant has rehandled 4000 cubic meter of earth out of 37,757.339 cubic meter excavated earth, for which he claimed an expenditure of Rs. 31/- per cubic meter. On the other hand, the re-handling charges negotiated by the department as per Exts.C23, C24 and C25 supplemental agreements are 90/- per cubic meter, Rs. 80/- per cubic meter and Rs. 50/- per cubic meter, respectively. After considering the site conditions and the extra rates negotiated by the Department for similar works, the arbitrator concluded that, it is only reasonable and fair to award the appellant Rs. 31/- per cubic meter for re-handling earth. Accordingly, the re-handling charge for 4000 cubic meter of earth at the rate of Rs. 31/- per cubic meter was worked out to Rs. 1,24,000/- and awarded the said amount to the appellant as damages for re-handling earth to the dumping yard and for filling. 10. Issue No.11 considered by the arbitrator was as to whether the appellant is entitled to get damages for retaining establishment, machinery, etc. from the stipulated date of completion till the date of termination and if so what is the amount. Issue No.13 considered by the arbitrator was as to whether the appellant is entitled to get damages for idling skilled workers due to non-supply of departmental materials and if so what is the amount. Issue No.15 considered by the arbitrator was as to whether the appellant is entitled to get prevented gains and if so what is the amount. Issue No.13 considered by the arbitrator was as to whether the appellant is entitled to get damages for idling skilled workers due to non-supply of departmental materials and if so what is the amount. Issue No.15 considered by the arbitrator was as to whether the appellant is entitled to get prevented gains and if so what is the amount. The arbitrator dealt with these issues in paragraphs 30 to 32 of his award. 11. The appellant contended that, the respondents neither allowed him to carry out the work from 31.3.1987, nor extended the time for completion. As such, the entire machinery, tools, implements, establishment, camp labourers, etc. had to be retained at site till 3.8.1987, the date on which the respondents terminated the agreement, and he had incurred an expense of Rs. 3,000/- per day for 125 days; the total expenditure in this regard comes to Rs. 3,75,000/-. The appellant contended further that, as per the agreement a 19 span aqueduct was to be provided between Ch.5545 and 5805m. The field officers fixed the centre line on 27.5.1986 and the work commenced on 28.5.1986. Though earth work was completed, concrete work could not be commenced due to non-supply of cement and steel rods, which was notified to the respondents on 7.7.1986. The respondents issued only 200 bags of cement. The respondents supplied steel rods and copper sheets only on 24.11.1986 and 20.1.1987 respectively. By that time the appellant has lost 170 working days incurring an expenditure of Rs. 500/- per day. The appellant has also contended that, since the execution of the work was frustrated due to unlawful repudiation of agreement by the respondents, he is entitled to be paid prevented gains at least at the rate of 15% for the balance work. 12. Per contra, the respondents contended that though the original time for completion of the work as per the agreement was only upto 31.3.1987, the appellant did not apply for any extension. The appellant had practically abandoned the work several months before and there was no work after 31.3.1987. A registered notice was sent on 15.5.1987 asking the appellant to resume work, but he failed to do so. In such circumstances the contract was terminated as per order dated 3.8.1987 of the 2nd respondent. The appellant had practically abandoned the work several months before and there was no work after 31.3.1987. A registered notice was sent on 15.5.1987 asking the appellant to resume work, but he failed to do so. In such circumstances the contract was terminated as per order dated 3.8.1987 of the 2nd respondent. The respondents would contend further that, the applicant failed to carry out the work in terms of the agreement and that, he has also not taken delivery of cement, steel, copper sheet, etc., which were made available at appropriate time. Since the appellant had abandoned the work without any valid reasons and committed breach of contract, the agreement was terminated at his risk and cost. Therefore, the respondents contended that, the appellant is not entitled for damages for idling or for prevented gains. 13. The arbitrator, after referring to the departmental communications and other materials on record, found that the respondents failed to sanction and approve the changed designs of the aqueduct and culverts during the contractual period and that, the respondents have even reduced the contractual period from 15 months to 12 months and terminated the contract as per Ext.R4 order dated 3.8.1987. The arbitrator noticed that, vide Ext.C4 letter dated 23.7.1986, Ext.C8 letter dated 29.10.1986, Ext.C10 letter dated 13.12.1986, Ext.C11 letter dated 18.1.1987 and Ext.C13 letter dated 9.4.1987, the appellant requested the department to approve the changed design of the aqueduct for executing the work. Ext.R25 is a communication of the 2nd respondent dated 23.10.1986 addressed to the Executive Engineer pointing out that, as the appellant is compelling for further works to be done, the Engineer has to inspect the site for giving instructions and that, any delay will give chance for further claims. 14. Ext.R21 is a communication dated 20.4.1987 of the Executive Engineer addressed to the 2nd respondent to approve revised proposal for aqueduct as the number of spans and piers of the aqueduct are changed since safe bearing capacity test was conducted through the T.K.M. College of Engineering on October 1986 and February 1987, in view of the loose nature of soil. Ext.R21 is a communication dated 20.4.1987 of the Executive Engineer addressed to the 2nd respondent to approve revised proposal for aqueduct as the number of spans and piers of the aqueduct are changed since safe bearing capacity test was conducted through the T.K.M. College of Engineering on October 1986 and February 1987, in view of the loose nature of soil. Ext.R22 is another communication dated 14.4.1987 issued by the Executive Engineer to the 2nd respondent to sanction and approve revised proposal for the culverts since the culverts proposed in the agreement at Ch.6775m and Ch.6943m are to be constructed at Ch.6810m and 6950m respectively, with a cutting of 8m and 5m, with over burden of 4.4m and 5.4m respectively. Ext.C2 is another communication dated 9.4.1986 of the 2nd respondent addressed to the Executive Engineer, with copy to the appellant, stating that the time of completion of the work is 15 months. However, about 4 months after the commencement of work, the 2nd respondent sent Ext.R1 letter dated 22.7.1986 to the appellant stating that the time of completion is only 12 months and not 15 months. It was after referring to the above mentioned departmental communications, the arbitrator arrived at a conclusion that the department had not sanctioned and approved the changed design of the aqueduct and culverts during the contractual period and had even reduced the contractual period from 15 months to 12 months, and terminated the contract as per Ext.R4 order dated 3.8.1987. 15. The arbitrator has also noticed that, as per the agreement conditions, the appellant furnished the details of plant and machinery, as specified in Proforma-1, and the details of technical and supervisory personnel, as specified in Proforma-2 of L.C.B. Specifications. However, the appellant could not execute the work of aqueduct and culverts, partially at least from 23.10.1986 till 31.3.1987, due to non-approval of revised designs and non-supply of departmental materials. The work could not be fully executed from 1.4.1987 till 3.8.1987, the date on which the contract was terminated by Ext.R4, due to reduction of contractual period by the respondents and also due to non-extension of time. From the pleadings and materials on record the arbitrator found that, the machines, tools, implements, establishment, camp labourers, watch and ward staff, supervisory staff and skilled workers were idled partially from 23.10.1986 till 31.3.1987 and idled fully from 1.4.1987 till 3.8.1987. From the pleadings and materials on record the arbitrator found that, the machines, tools, implements, establishment, camp labourers, watch and ward staff, supervisory staff and skilled workers were idled partially from 23.10.1986 till 31.3.1987 and idled fully from 1.4.1987 till 3.8.1987. In Ext.C26 judgment, which was implemented by Ext.C27 Government order, the respondents awarded damages for idling of the establishment of another contractor. From the materials on record the arbitrator found that, the agreed PAC of the work in question is Rs. 26,00,462- and the value of the work undertaken by the appellant is for Rs. 14,21,281/- as per the final bill prepared by the department. Accordingly, the arbitrator worked out the claim made by any appellant under the head 15% prevented gain for balance work at Rs. 2,13,192/-. The appellant claimed a further sum of Rs. 85,000/- towards partial idling and Rs. 3,75,000/- towards idling the establishment after 31.3.1987. On a finding that, the appellant had maintained the establishment, men, machinery, supervisory staff, skilled workers, etc. for the execution of the work of aqueduct and culverts, the arbitrator found it just and reasonable to award the appellant a total sum of Rs. 2,69,000/- towards damages for idling the establishment, men, machinery, supervisory staff and skilled workers and towards prevented gain for the balance work. 16. Issue No.12 considered by the arbitrator was as to whether the appellant is entitled for a declaration that the balance work shall not be rearranged at his risk and cost. The arbitrator dealt with this issue in paragraphs 27 and 28 of his award. Based on the finding on Issue No.1 that the respondents have failed to discharge their contractual obligations, the arbitrator held that, the termination of the agreement at the risk and cost of the appellant is null and void. For the aforesaid reason, the arbitrator held that the appellant is entitled for a declaration as sought for. 17. Issue No.16 considered by the arbitrator was as to whether the appellant is entitled for release of the security deposit together with interest and also the retention amount. The arbitrator dealt with this issue in paragraph 33 of his award. For the aforesaid reason, the arbitrator held that the appellant is entitled for a declaration as sought for. 17. Issue No.16 considered by the arbitrator was as to whether the appellant is entitled for release of the security deposit together with interest and also the retention amount. The arbitrator dealt with this issue in paragraph 33 of his award. In view of the findings on issue Nos.1 and 12 that, the respondents have broken the contract and as such the balance work could not be rearranged at the risk and cost of the appellant, the arbitrator held that the security deposit and retention amount withheld by the department has to be released to the appellant. The security deposit was shown in the agreement as Rs. 52,200/- in the form of a fixed deposit at Parur Central bank and the retention amount is shown in the final bill prepared by the department as Rs. 36,647/-. Accordingly, the arbitrator held that, the respondent shall release to the appellant a sum of Rs. 87,847/- towards the security deposit and retention amount. 18. Issue 17 considered by the arbitrator was as to whether the appellant is entitled to get the final bill and if so what should be the amount. The arbitrator dealt with this issue in paragraph 34 of his award. Based on the pleadings and materials on record and also taking note of the finding on Issue No.1, the arbitrator limited the recovery towards used and balance departmental materials and other items to the final bill amount of Rs. 2,88,020/- since Exts.R17 and R18 departmental letters indicate that such loss was caused by others. Accordingly the arbitrator held that, the recovery will be limited to the final bill amount and as such, the appellant will not be entitled to get the final bill amount. 19. Issue No.19 considered by the arbitrator was as to whether the appellant is entitled to get interest on the due amount. The arbitrator dealt with this issue in paragraph 36 of his award. The appellant contended that, the work was carried out with borrowed capital and he was paying exorbitant interest. As such he is entitled to get interest at the rate of 18% per annum. Per contra, the respondents contended that, no amount due to the appellant is illegally withheld by the department and as such, there is no question of payment of any interest. As such he is entitled to get interest at the rate of 18% per annum. Per contra, the respondents contended that, no amount due to the appellant is illegally withheld by the department and as such, there is no question of payment of any interest. From the department files the arbitrator found that, the agreement was terminated on 3.8.1987 without settling the accounts and hence the amount becomes due on 3.8.1997. Considering the interest rate for loan prevailing at that point of time, the arbitrator awarded interest at the rate of 18% per annum on the award amount from the date of termination of agreement, i.e., from 3.8.1987 till date of realisation or decree, whichever is earlier. 20. The other claims made by the appellant, which were dealt with by the arbitrator under Issue Nos. 2, 3, 5 to 10, 14, 17 and 20 were rejected, so also the counter claim made by the respondents, which was dealt with under Issue No.18 in the award passed by the arbitrator. 21. The appellant filed O.P. (Arb.) No.14 of 1995 before the court below, under Section 17 of the Act, for making the award passed by the arbitrator as rule of the court. The respondents have also filed an application under Section 30 of the Act, to set aside the award passed by the arbitrator. The court below by judgment dated 29.9.2006 modified the award passed by the arbitrator under Claim Nos.16 and 19, entitling the appellant to realise a sum of Rs. 87,847/- being the retention amount and security amount together with interest at the rate of 6% per annum from 3.8.1987 till the date of payment from the respondents and their assets jointly and severally. The award passed by the arbitrator under Claim Nos.4, 11, 13 and 15 were set aside on a finding that the arbitrator travelled beyond the terms of agreement and he has misconduct himself in awarding the amount under those claims. The court below has not dealt with the contention raised by the respondents relying on Section 3 of the Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998, which provides for cancellation of arbitration clauses and revocation of authority of arbitrator, as the operation of the said legislation was stayed at that point of time, by this Court. 22. 22. The main issue that arises for consideration in this appeal is as to whether the court below was justified in interfering with the award passed by the arbitrator, in exercise of its powers under Section 30 of the Act. 23. The law with regard to the scope and ambit of the jurisdiction of the courts to interfere with the award passed by an arbitrator has been settled in a catena of judgments of the Apex Court. In State of Rajasthan v. Puri Construction Co. Ltd. ( 1994 (6) SCC 485 ) the Apex Court held that, the arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts. 24. In Sudarsan Trading Co. v. Govt. of Kerala ( 1989 (2) SCC 38 ) the Apex Court held that, there is a distinction between disputes as to the jurisdiction of the arbitrator and the disputes as to in what way that jurisdiction should be exercised. There may be a conflict as to the power of the arbitrator to grant a particular remedy. One has to determine the distinction between an error within the jurisdiction and an error in excess of the jurisdiction. Court cannot substitute its own evaluation of the conclusion of law or fact to come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. Whether a particular amount was liable to be paid is a decision within the competency of the arbitrator. By purporting to construe the contract the court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a contract, the decision of the arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the court. Where the reasons have been given by the arbitrator in making the award the court cannot examine the reasonableness of the reasons. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. Where the reasons have been given by the arbitrator in making the award the court cannot examine the reasonableness of the reasons. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the arbitrator. 25. In Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar ( 1987 (4) SCC 497 ) the Apex Court held that, appraisement of evidence by the arbitrator is ordinarily never a matter which the court questions and considers. It may be possible that on the same evidence the court may arrive at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground for setting aside the award. In the said decision, the Apex Court held further that, it is difficult to give an exact definition of the word 'reasonable'. Reason varies in its conclusions according to the idiosyncrasies of the individual and the time and circumstances in which he thinks. In cases not covered by authority, the verdict of a jury or the decision of a judge sitting as a jury usually determines what is 'reasonable' in each particular case. The word reasonable has in law prima facie meaning of reasonable in regard to those circumstances of which the actor, called on to act reasonably knows or ought to know. An arbitrator acting as a judge has to exercise a discretion informed by tradition, methodised by analogy, disciplined by system and subordinated to the primordial necessity of order in the social life. Therefore, where reasons germane and relevant for the arbitrator to hold in the manner he did, have been indicated, it cannot be said that the reasons are unreasonable. 26. In Arosan Enterprises Ltd. v. Union of India ( 1999 (9) SCC 449 ) the Apex Court reiterated that, reappraisal of evidence by the court is not permissible and as a matter of fact exercise of power by the court to reappraise the evidence is unknown to proceedings under Section 30 of the Arbitration Act. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event of there being no reasons in the award, question of interference of the court would not arise at all. In the event, however, there are reasons, the interference would still be not available within the jurisdiction of the court unless of course, there exist a total perversity in the award or the judgment is based on a wrong proposition of law. In the event however two views are possible on a question of law as well, the court would not be justified in interfering with the award. In the said decision, the Apex Court held further that, the common phraseology 'error apparent on the face of the record' does not itself, however, mean and imply closer scrutiny of the merits of documents and materials on record. The court as a matter of fact cannot substitute its evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. If the view of the arbitrator is a possible view the award or the reasoning contained therein cannot be examined. 27. In ONGC Ltd. v. SAW Pipes Ltd. ( 2003 (5) SCC 705 ) the Apex Court, after referring to its decision in Arosan Enterprises Ltd's case (supra), held as follows:- “It is true that if the arbitral tribunal has committed mere error of fact or law in reaching its conclusion on the disputed question submitted to it for adjudication then the court would have no jurisdiction to interfere with the award. But, this would depend upon reference made to the arbitrator:- (a) if there is a general reference for deciding the contractual dispute between the parties and if the award is based on erroneous legal proposition, the court could interfere; (b) it is also settled law that in a case of reasoned award, the court can set aside the same if it is, on the face of it, erroneous on the provision of law or its application; (c) if a specific question of law is submitted to the arbitrator, erroneous decision in point of law does not make the award bad, so as to permit it being set aside, unless the court is satisfied that the arbitrator had proceeded illegally." 28. In Kwality Manufacturing Corporation v. Central Warehousing Corporation ( 2009 (5) SCC 142 ) the Apex Court held that, the scope of interference by courts in regard to arbitral awards is limited. A court considering an application under Section 30 or 33 of the Act, does not sit in appeal over the findings and decision of the arbitrator. Nor can it reassess or reappreciate evidence or examine the sufficiency or otherwise of the evidence. The award of the arbitrator is final and the only grounds on which it can be challenged are those mentioned in Sections 30 and 33 of the Act. Therefore, on the contentions urged, the only question that arose for consideration before the High court was, whether there was any error apparent on the face of the award and whether the arbitrator misconducted himself or the proceedings. 29. In Madhya Pradesh Housing Board v. Progressive Writers and Publishers ( 2009 (5) SCC 678 ) the Apex Court reiterated that, the award of the arbitrator is ordinarily final and the courts hearing applications under Section 30 of the Act do not exercise any appellate jurisdiction. Reappraisal of evidence by the court is impermissible. In the above decision, the Apex Court noticed its earlier decision in Ispat Engineering & Foundry Works v. Steel Authority of India Limited ( 2001 (6) SCC 347 ) wherein it was held that, reappraisal of evidence by the court is not permissible and as a matter of fact, exercise of power to reappraise the evidence is unknown to a proceeding under Section 30 of the Arbitration Act, 1940. After referring to the observations of Lord Dunedin in Champsey Bhara & Co. v. Jivraj Balloo Spinning & Weaving Co. Ltd. ( AIR 1923 PC 66 ), which stands accepted and adopted by the Apex Court in Union of India v. Bungo Steel Furniture (P) Ltd. ( AIR 1967 SC 1032 ) that, the court had no jurisdiction to investigate into the merits of the case or to examine the documentary and oral evidence in the record for the purposes of finding out whether or not the arbitrator has committed an error of law, the Apex Court reiterated that, the court as a matter of fact, cannot substitute its own evaluation and come to the conclusion that the arbitrator had acted contrary to the bargain between the parties. 30. 30. Following the principles laid down in the decisions referred to supra, the Apex Court restated the law with regard to the scope and ambit of the jurisdiction of court to interfere with the award passed by an arbitrator, in Ravindra Kumar Gupta & Co. v. Union of India ( 2010 (1) SCC 409 ), holding that it is impermissible for the court to re-appreciate the evidence led by the parties before the arbitrator. When the arbitrator has duly scrutinised and evaluated the evidence and given elaborate reasons with regard to the claim in question, the findings recorded by the arbitrator cannot be said to be either perverse or based on no evidence. The conclusions so made by the arbitrator cannot be substituted by the court with its own opinion on appreciation of the evidence, which course is not permissible while examining objections to the award under Section 30 of the Act. 31. In Maharashtra State Electricity Board v. Sterilite Industries (India) and another ( 2001 (8) SCC 482 ), a decision relied on by the learned counsel for the appellant, the Apex Court reiterated that, the award of the arbitrator both on facts and law is final; that there is no appeal from his verdict; that the Court cannot review his award and correct any mistake in his adjudication, unless the objection to the legality of the award is apparent on the face of it. However, where the error of finding of fact having a bearing on the award is patent and is easily demonstrable without the necessity of carefully weighing the various possible viewpoints, the interference in the award based on erroneous finding of fact is permissible and similarly, if an award is based by applying a principle of law which is patently erroneous, and but for such erroneous application of legal principle, the award could not have been made, such award is liable to be set aside by holding that there has been a legal misconduct on the part of the arbitrator. 32. 32. In U.P. State Electricity Board v. Searsole Chemicals Ltd. ( 2001 (3) SCC 397 ), another decision relied on by the learned counsel for the appellant, the Apex Court held that, when the arbitrators have applied their mind to the pleadings, the evidence adduced before them and the terms of the contract, it is not within the scope of the Court to reappraise the matter as if in an appeal. Where two views are possible in a case, the view taken by the arbitrators would prevail. In State of U.P. v. Allied Constructions ( 2003 (7) SCC 396 ), a Three- Judge Bench of the Apex Court, after referring to the decisions in Sudarsan Trading Co. (supra), Searsole Chemicals Ltd. (supra) and Ispat Engg. & Foundry Works (supra), held that an award made by an arbitrator can be set aside only if one or the other term specified in Section 30 and Section 33 of the Arbitration Act, 1940 is attracted. An award made by an arbitrator may be wrong either on law or on fact and error of law on the face of it could not nullify an award. 33. In Associated Engineering Co. v. Government of A.P. ( 1991 (4) SCC 93 ), a decision relied on by the learned Government Pleader, the Apex Court held that, the arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract. His sole function is to arbitrate in terms of the contract. He has no power apart from what the parties have given him under the contract. If he has travelled outside the bounds of the contract, he has acted without jurisdiction. But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it. 34. In Rajasthan State Mines and Minerals Ltd. v. Eastern Engg. Enterprises ( 1999 (9) SCC 283 ) the opinion expressed in Associated Engineering Company's case (supra) was followed and the Apex Court observed that, if the conclusion is reached that the Umpire/Arbitrator has travelled outside the permissible territory, not by the construction of the contract but by merely looking at the contract, the Award can be interfered with. Enterprises ( 1999 (9) SCC 283 ) the opinion expressed in Associated Engineering Company's case (supra) was followed and the Apex Court observed that, if the conclusion is reached that the Umpire/Arbitrator has travelled outside the permissible territory, not by the construction of the contract but by merely looking at the contract, the Award can be interfered with. In other words, if only one understanding is possible from a reading of the relevant clauses of a contract, and this understanding is at variance with that preferred by the Arbitrator, the Courts may step in and modify the Award. Where, however, multiple understandings and interpretations are possible on a perusal of the contract, the Court cannot impose its own interpretation on that of the Arbitrator. It would be transgressing its own boundaries, and interloping upon those of the Arbitrator, in substituting the view preferred by it for that for the latter. 35. In State of Rajasthan v. FERRO Concrete Construction (P) Ltd. ( 2009 (12) SCC 1 ), another decision relied on by the learned Government Pleader, the Apex Court held that, Section 30 of the Arbitration Act, 1940, inter-alia, provides that an award can be set aside on the ground that an arbitrator had misconducted himself or the proceedings, or that the award had been improperly procured or is otherwise invalid. An error apparent on the face of the award, is a ground for setting aside the award under Section 30 or for remitting the award to the Arbitrator under Section 16(1)(c) of the Act. The Apex Court held further that, in a reasoned award if the claim of a contractor is equated to proof of the claim, then it is obviously a legal misconduct and an error apparent on the face of the award. While the quantum of evidence required to accept a claim, may be a matter within the exclusive jurisdiction of the arbitrator to decide, if there was no evidence at all and if the arbitrator makes an award of the amount claimed in the claim statement, merely on the basis of the claim statement without anything more, it has to be held that the award on that account would be invalid. 36. In the instant case, a reading of the award passed by the arbitrator would show that, the arbitrator dealt with in detail Issue No.1 in paragraphs 5 to 14 of the award. 36. In the instant case, a reading of the award passed by the arbitrator would show that, the arbitrator dealt with in detail Issue No.1 in paragraphs 5 to 14 of the award. After considering the pleadings and materials on record, the arbitrator concluded that, the respondents have failed to discharge their contractual obligations and broken the agreement conditions and as such the appellant is entitled to get damages from them. The said conclusion in the award is supported by elaborate reasons. Similarly, the arbitrator dealt with in detail Issue No.4 in paragraphs 17 to 20 of the award and worked out the damages payable to the appellant for re-handling earth to the dumping yard and for filling. The arbitrator has stated elaborate reasons in paragraphs 19 and 20 of the award for awarding the appellant Rs. 1,24,000/- under this head for re-handling 4000 cubic meter of cut earth at the rate of Rs. 31/- per cubic meter. The reasoning of the arbitrator in this regard is supported by Exts.C23 to C25 supplemental agreements, in which the department has sanctioned and allowed re-handling at the rate of Rs. 90/- per cubic meter, Rs. 80/- per cubic meter and Rs. 50/- per cubic meter respectively, in respect of some other contract works. On the other hand, the re-handling charges claimed by the appellant was only Rs. 31/- per cubic meter. The arbitrator has also noticed that, in Ext.C26 judgment, the dispute regarding re-handling and conveyance of cut soil in respect of another contract work was arbitrated and the respondents made payment to that contractor based on Ext.C27 Government order. 37. In paragraphs 30 to 32 of the award, the arbitrator dealt with in detail Issue Nos.11, 13 and 15 and awarded the appellant Rs. 2,69,000/- as damages for idling the establishment, men, machinery, supervisory staff and skilled workers and 15% prevented gain for the balance work. In paragraph 32 of the award the arbitrator has stated elaborate reasons for awarding the appellant Rs. 2,69,000/- under those heads. The arbitrator, after referring to the departmental communications, concluded that the respondents failed to sanction and approve the changed designs of the aqueduct and culverts during the contractual period and that, they have even reduced the contractual period from 15 months to 12 months and terminated the contract as per Ext.R4 order dated 3.8.1987. 2,69,000/- under those heads. The arbitrator, after referring to the departmental communications, concluded that the respondents failed to sanction and approve the changed designs of the aqueduct and culverts during the contractual period and that, they have even reduced the contractual period from 15 months to 12 months and terminated the contract as per Ext.R4 order dated 3.8.1987. The arbitrator found that, the appellant could not execute the work of aqueduct and culverts, partially at least from 23.10.1986 till 31.3.1987, due to non-approval of revised designs and non-supply of departmental materials. The work could not be fully executed from 1.4.1987 till 3.8.1987, the date on which the contract was terminated by Ext.R4, due to reduction of contractual period by the respondents and also due to non-extension of time. From the pleadings and materials on record the arbitrator found that, the machines, tools, implements, establishment, camp labourers, watch and ward staff, supervisory staff and skilled workers were idled partially from 23.10.1986 till 31.3.1987 and idled fully from 1.4.1987 till 3.8.1987. The arbitrator has also noticed that, in Ext.C26 judgment, which was implemented by Ext.C27 Government order, the respondents awarded damages for idling of the establishment of another contractor. Based on the materials on record, the arbitrator worked out the claim made by any appellant under the head 15% prevented gain for the balance work at Rs. 2,13,192/-. Awarding damages for idling the establishment, the arbitrator fixed a sum of Rs. 2,69,000/- as damages for idling the establishment, men, machinery, supervisory staff and skilled workers and 15% prevented gain for the balance work. 38. In Union of India v. Sugauli Sugar Works (P) Ltd. ( 1976 (3) SCC 32 ), a Three-Judge Bench of the Apex Court held that, one of the principles for award of damages is that as far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, the principle is that as far as possible the injured party should be placed in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, the principle is that as far as possible the injured party should be placed in as good a situation as if the contract had been performed. In other words, it is to provide compensation for pecuniary loss which naturally flows from the breach. 39. In Mohd. Salamatullah v. State of A.P. ( 1977 (3) SCC 590 ) the Apex Court was dealing with a case of breach of contract wherein the trial court awarded 15% of the contract price as damages, which the High Court reduced to 10%. The Apex Court held that, the appellate court should not have interfered with the finding of the trial court unless some reason, based on some fact, is traceable on record. There being none, the Apex Court set aside the judgment of the appellate court in regard to assessment of damages for breach of contract at the reduced rate of 10%. 40. In M/s. A.T. Brij Paul Singh v. State of Gujarat ( 1984 (4) SCC 59 ), a decision relied on by the learned counsel for the appellant, the Apex Court upheld award of 15% of the value of the remaining work towards damages for loss of profit, upholding the reasoning of the High Court that, loss of profit at 15% of the price of the balance of works contract would provide a reasonable measure of damages if the State is guilty of breach of contract. The Apex Court held that, what would be the measure of profit would depend upon facts and circumstances of each case. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract cannot be gainsaid. 41. In the instant case, based on the materials on record, the arbitrator worked out the claim made by any appellant under the head 15% prevented gain for the balance work at Rs. 2,13,192/-. The arbitrator has stated elaborate reasons for awarding the said amount and also damages for idling the establishment, men, machinery, etc. In the absence of any vitiating circumstances pointed out by the respondents, the court below should not have interfered with the assessment so made by the arbitrator. 42. 2,13,192/-. The arbitrator has stated elaborate reasons for awarding the said amount and also damages for idling the establishment, men, machinery, etc. In the absence of any vitiating circumstances pointed out by the respondents, the court below should not have interfered with the assessment so made by the arbitrator. 42. In paragraphs 27 and 28 of the award the arbitrator dealt with Issue No.12 and concluded that, the termination of the agreement at the risk and cost of the appellant is null and void and that, he is entitled for a declaration that the balance work shall not be rearranged at his risk and cost. The said reasoning of the arbitrator is based on his finding on Issue No.1. Similarly, in paragraph 33 of the award the arbitrator dealt with Issue No.16 and concluded that, the security deposit and retention amount withheld by the department has to be released to the appellant, and accordingly directed the respondents to release to the appellant a sum of Rs. 87,847/- under this head. The said reasoning of the arbitrator is based on his findings on Issue Nos.1 and 12. On Issue No.17, the arbitrator held that, the recovery will be limited to the final bill amount of Rs. 2,88,020/- and as such, the appellant will not be entitled to get the final bill amount. The said reasoning of the arbitrator is based on his findings on Issue No.1. 43. Though the court below accepted the award passed by the arbitrator in respect of Claim No.16, the award under Claim Nos. 4, 11, 13 and 15 were set aside stating that, while awarding amounts under those heads the arbitrator travelled beyond the terms of the agreement and misconducted himself. At the same time, the finding of the arbitrator on Issue No.1 that, the respondents have failed to discharge their contractual obligations and broken the agreement conditions and as such the appellant is entitled to get damages from the respondents is not interfered with by the court below. Similarly, the finding of the arbitrator on Issue No.12 that, the termination of the agreement at the risk and cost of the appellant is null and void and that, he is entitled for a declaration that the balance work shall not be rearranged at his risk and cost is also not interfered with. 44. Similarly, the finding of the arbitrator on Issue No.12 that, the termination of the agreement at the risk and cost of the appellant is null and void and that, he is entitled for a declaration that the balance work shall not be rearranged at his risk and cost is also not interfered with. 44. In view of the law laid down by the Apex Court in the decisions referred to hereinbefore, it is impermissible for the court to re-appreciate the evidence led by the parties before the arbitrator. When the arbitrator has duly scrutinised and evaluated the evidence and given elaborate reasons with regard to the claims in question, the findings recorded by the arbitrator cannot be said to be either perverse or based on no evidence. The conclusions so made by the arbitrator cannot be substituted by the court with its own opinion on re-appreciation of the evidence, which course is not permissible while examining objections to the award under Section 30 of the Act. 45. It is trite law that, where reasons have been given by the arbitrator in making the award the court cannot examine the reasonableness of the reasons. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the court to take upon itself the task of being a judge on the evidence before the arbitrator. It may be possible that on the same evidence the court may arrive at a different conclusion than the one arrived at by the arbitrator but that by itself is no ground for setting aside the award. 46. In Ram Nath International Construction Pvt. Ltd. v. State of U.P. ( 1997 (11) SCC 645 ) the Apex Court held that, when the dispute was expressly referred to arbitration and both parties argued the question before the arbitrator and the arbitrator has given a speaking award giving detailed reasons why he considers the work as extra work for which payment is required to be made to the contractor, the award cannot be challenged on the ground that the decision on this dispute by the arbitrator is beyond the scope of the reference. It is a matter of interpretation of the contract and was referred by the parties to arbitration. 47. It is a matter of interpretation of the contract and was referred by the parties to arbitration. 47. In view of the law laid down by the Apex Court in the decision referred to above, the finding of the court below that, while awarding amounts under Claim Nos.4, 11, 13 and 15 the arbitrator travelled beyond the terms of the agreement and misconducted himself cannot be sustained. In view of the fact that the disputes were expressly referred to arbitration, it cannot be said that the decision on such disputes by the arbitrator is beyond the scope of the reference. 48. Section 30 of the Arbitration Act, 1940, inter-alia, provides that an award can be set aside on the ground that an arbitrator had misconducted himself or the proceedings, or that the award had been improperly procured or is otherwise invalid. An error apparent on the face of the award, is a ground for setting aside the award under Section 30 or for remitting the award to the Arbitrator under Section 16(1)(c) of the Act. In an application under Section 30 of the Act, the court has no jurisdiction to investigate into the merits of the case or to reexamine the documentary and oral evidence on the record for the purposes of finding out whether or not the arbitrator has committed an error of law. 49. However, as held by the Apex Court in FERRO Concrete Construction's case (supra), in a reasoned award if the claim of a contractor is equated to proof of the claim, then it is obviously a legal misconduct and an error apparent on the face of the award. While the quantum of evidence required to accept a claim, may be a matter within the exclusive jurisdiction of the arbitrator to decide, if there was no evidence at all and if the arbitrator makes an award of the amount claimed in the claim statement, merely on the basis of the claim statement without anything more, it has to be held that the award on that account would be invalid. 50. In State v. Jolly (1992 (1) KLT 240) a Full Bench of this Court held that, if the arbitrator acts in violation of the terms of the main contract between the parties, such action would be without jurisdiction. 50. In State v. Jolly (1992 (1) KLT 240) a Full Bench of this Court held that, if the arbitrator acts in violation of the terms of the main contract between the parties, such action would be without jurisdiction. For the purpose of finding out whether the arbitrator has so acted, it is open to the Court to look outside the award, including affidavits, pleadings and terms of the contract. However, in that case, there was delay in execution of the work by the contractor. Time was extended and for that purpose a supplemental agreement was executed between the parties in which the contractor agreed not to claim additional compensation and extra rates. In spite of the above the contractor raised a dispute claiming extra compensation and higher rates. Though the State took up the specific contention that as per the terms of the agreement the contractor is not entitled to claim any extra amount, the arbitrator without referring to such contention passed a non-speaking award in favour of the contractor. This Court took the view that such action of the arbitrator would amount to misconduct coming under Section 30 of the Arbitration Act, 1940. Therefore, the judgment of the Full Court in Jolly's case (supra) is on an entirely different factual matrix and has no application to the facts of the instant case. 51. In such circumstances, the conclusion is irresistible that, while setting aside the award passed by the arbitrator under Claim Nos.4, 11, 13 and 15 on the ground that, while awarding amounts under those heads the arbitrator travelled beyond the terms of the agreement and misconducted himself, the court below has exceeded its jurisdiction under Section 30 of the Act. In that view of the matter, we find absolutely no grounds to sustain the impugned judgment of the court below to the extent of setting aside the award passed by the arbitrator under Claim Nos.4, 11, 13 and 15. 52. Issue No.19 considered by the arbitrator was as to whether the appellant is entitled to get interest on the due amount, which the arbitrator has dealt with in paragraph 36 of the award. The arbitrator found that the agreement was terminated on 3.8.1987 without settling the accounts and hence the amount becomes due on 3.8.1997. 52. Issue No.19 considered by the arbitrator was as to whether the appellant is entitled to get interest on the due amount, which the arbitrator has dealt with in paragraph 36 of the award. The arbitrator found that the agreement was terminated on 3.8.1987 without settling the accounts and hence the amount becomes due on 3.8.1997. Considering the interest rate for loan prevailing at that point of time, the arbitrator awarded interest at the rate of 18% per annum on the award amount of Rs. 4,80,847/- from the date of termination of agreement, i.e., from 3.8.1987 till date of realisation or decree, whichever is earlier. The court below held that, the rate of interest at 18% per annum awarded by the arbitrator is exorbitant and accordingly modified the rate of interest as 6% per annum from 3.8.1987 till date of realisation. 53. In Bhagawati Oxygen Ltd. v. Hindustan Copper Ltd. ( 2005 (6) SCC 462 ), a decision relied on by the learned counsel for the appellant, the Apex Court upheld award of interest by the arbitrator at 18% per annum for all the three stages, namely, pre-reference period, pendente lite and postaward period, after noticing the fact that, the arbitrator granted interest at 18% on the ground of loan so advanced by Hindustan Copper Ltd. to Bhagawati Oxygen Ltd. 54. However, in State of Rajasthan v. FERRO Concrete Construction (P) Ltd. ( 2009 (12) SCC 1 ), the Apex Court has reiterated that, in the absence of any specific contract in regard to rate of interest, pendente lite and future interest should not normally exceed 9% per annum. In that case, the Apex Court was dealing with an award passed by the arbitrator under the provisions of the Arbitration Act, 1940. The principle laid down in FERRO Concrete Construction's case (supra) was followed in the judgment of the Apex Court in A.P. State Trading Corporation Ltd. v. G.V. Malla Reddy (AIR 2010 SCW 6337). 55. In view of the law laid down by the Apex Court in FERRO Concrete Construction (P) Ltd. (supra) and A.P. State Trading Corporation Ltd. (supra), the award of interest at the rate of 18% per annum made by the arbitrator was an error apparent on the face of the award. In such circumstances, the court below cannot be found fault with in interfering with the rate of interest awarded by the arbitrator. In such circumstances, the court below cannot be found fault with in interfering with the rate of interest awarded by the arbitrator. We hold that the appellant will be entitled for interest on Rs. 4,80,847/- awarded by the arbitrator at the rate of 9% per annum, from 3.8.1987 till date of realisation, as against interest at the rate of 6% per annum awarded by the court below. 56. The learned Government Pleader would then point out the promulgation of Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, 1998 by the Government of Kerala. Section 3 of the said Act provides for cancellation of arbitration clauses and revocation of authority of arbitrator. It was brought to our notice by the learned counsel for the appellant that, the provisions of the said Act were declared as unconstitutional by a Division Bench of this Court in James Varghese and another v. State of Kerala and others ( 2013 (3) KLT 605 ). The said judgment is under challenge in S.L.P.(Civil)No.8491 of 2014 and connected cases pending before the Apex Court, in which the Apex Court granted an interim suspension of the judgment. However, it was ordered that, during the pendency of the appeal the State shall not take any coercive steps against the respondents therein, who have already been paid amounts due under various arbitral awards. 57. In the instant case, the award passed by the arbitrator is one dated 26.10.1994. As per sub-section (1) of Section 3 of the Kerala Revocation of Arbitration Clauses and Reopening of Awards Act, the arbitration clause in every agreement executed in terms of the Local Competition Bidding specification for various works of the Government of Kerala shall stand cancelled; the authority of an arbitrator appointed under an agreement referred to above shall stand revoked; and any agreement referred to above shall cease to have effect in so far as it relates to the matters in dispute or difference referred, with effect from the commencement of the Act, i.e., with effect from 14.11.1997. Sub-section (2) of Section 3 of the said Act provides further that, nothing in sub-section (1) shall be a bar for any party to an agreement to file a suit in the court having jurisdiction in the matter to which the agreement relates and all questions regarding the validity or effect of the agreement between the parties to the agreement or persons claiming under them and all matters in dispute or difference between the parties to the agreement shall be decided by the court, as if the arbitration clause had never been included in the agreement. The period of limitation for filing such suits, as prescribed in Section 4 of the said Act, is within six months from the date of commencement of the said Act or within such period as is allowed by the provisions of the Limitation Act, 1963, in relation to such suits, whichever is later. Section 5 of the said Act deals with the power of the Government to file appeal against certain awards. Going by Section 5, where it appears to the Government that any award passed is not in accordance with the terms of the agreement or there was failure to produce relevant data or other particulars before the arbitrator before passing the award or the award is passed for unconscionable amounts, they may file appeal against such award within ninety days of the date of commencement of the Act. We are of view that, the pendency of the appeals and the interim order granted by the Apex Court as stated above will not stand in the way of this Court considering the merits of this appeal. In the result, this appeal is allowed setting aside the impugned judgment of the court below dated 29.9.2006 in O.P. (Arb.) No. 14 of 1995, thereby restoring the award passed by the arbitrator dated 26.10.1994 awarding Rs. 4,80,847/- under different heads; however reducing the rate of interest for the amount awarded to 9% per annum, for the period from 3.8.1987 till date of payment. No order as to costs.