STATE OF KERALA, REP. BY THE SECRETARY TO GOVT. , IRRIGATION DEPT. v. YOHANNAN ABRAHAM, GOVERNMENT CONTRACTOR, PADAPPANPARAYIL HOUSE, PIRAVANTHOOR, PUNNALA
2017-02-27
K.HARILAL, RAJA VIJAYARAGHAVAN V.
body2017
DigiLaw.ai
JUDGMENT : Raja Vijayaraghavan, J. 1. These appeals under Section 39 (1) (vi) of the Arbitration and Conciliation Act, 1940 (for brevity "the 1940 Act") are filed against the order of the Principal Sub Judge, Thiruvananthapuram in O.P.(Arb) No.172 of 1994. 2. To appreciate the controversy raised in the present appeals relevant facts may be stated in brief:- The work relating to Kallada Irrigation Project, namely, contract work of Kallada Irrigation and Tree Crop Development Project (KI & TCDP) for formation of Vilangara Distributory from Ch. 0M to 3385 M including CD works Part I, II, TTT, was entrusted with the "Contractor". An agreement dated 23.2.1985 was executed between the parties. The estimated probable amount of contract (PAC) was Rs.6,40,481/-. The agreed PAC was Rs 4,59,632/-, which was 28.5% lower than the estimated PAC. The site was handed over to the contractor on 23/04/1985. The period of contract was 6 months. As per the terms of the agreement, the work ought to have been completed within a period of 6 months. According to the Contractor, he was unable to complete the work as per the time schedule because of major structural changes and delay on the part of the respondents. The respondents taking note of their own lapses condoned the delay occasioned in the execution. Finally, the work was completed and the site was handed over to the respondents on 20.12.1986. When disputes ensued in connection with the work and as regards the modalities of payment, the same was referred to a sole arbitrator. 3. The claimant raised as many as 11 claims on various heads before the Arbitrator. The respondent filed defence statement and also produced exhibits. Replication was filed by the claimant and the respondents have filed reply to the replication. They also produced details of issuance of departmental materials, part payment, copy of final bill and other records. 4. After consideration of the materials, the Arbitrator by award dated 29.11.1994 allowed Claim Nos.(a), (b), (c), (d), (g), (h), (i) and (j) and rejected the rest of the claims. The heads of various claims and the amount awarded are as detailed below. Sl.No. Claim Head Award 1 A Loss of Damages due to breach of Contract Rs. 1,05,000/- 2 B Rates for extra items Rs. 3,11,325/- 3 C Extra work Rs. 1,73,000/- 4 D Compensation expenditure for conveyance to bring earth Rs.
The heads of various claims and the amount awarded are as detailed below. Sl.No. Claim Head Award 1 A Loss of Damages due to breach of Contract Rs. 1,05,000/- 2 B Rates for extra items Rs. 3,11,325/- 3 C Extra work Rs. 1,73,000/- 4 D Compensation expenditure for conveyance to bring earth Rs. 56,000/- 5 E Extra work Rejected 6 F Extra claim Rejected 7 G Idling losses Rs. 62,750/- 8 H Security and retention amount Rs. 13,780/- 9 I Award including the balance in the final bill passed by the Arbitrator Rs. 6,55,648/- 10 J Interest 18% from the commencement of the Arbitration proceedings dtd.6.9.88 11 K Cost Rejected 5. The appellant in Arbitration Appeal No. 20 of 2011 (hereinafter referred to as 'the claimant') filed an application before the court below under Section 17 of the 1940 Act for passing judgment in terms of the award. The respondent State, who is the appellant in Arbitration Appeal No. 1 of 2011 filed a petition to set aside the award under Sections 30 and 33 of the 1940 Act. 6. Both these proceedings were taken up and by order dated 16/12/2009, the court below set aside the award in so far as claim Nos.(a) and (j) raised by the claimant were concerned. In respect of all other claims, the award was upheld. The claimant was held entitled to realise a sum of Rs.5,50,648/- along with retention amount of Rs.1,3780/- together with interest at the rate of 12% per annum from 06/09/1988 till the date of payment. 7. In Arbitration Appeal No.20 of 2011, the challenge raised by the claimant is with regard to the setting aside of the claim under head (a) and interference with the quantum of interest ordered as per head (j). 8. In arbitration Appeal No.1 of 2011, the respondents prays for setting aside the award on all counts. 9. As identical issues are involved and both these matters arise out of the same award, we deem it fit to consider the same and dispose it of together. 10. Heard the learned counsel appearing for the claimant as well as the learned Government Pleader. 11.
9. As identical issues are involved and both these matters arise out of the same award, we deem it fit to consider the same and dispose it of together. 10. Heard the learned counsel appearing for the claimant as well as the learned Government Pleader. 11. The learned counsel appearing for the claimant would submit that the Arbitrator, who was a retired Superintendent Engineer, had evaluated all the legal and factual aspects and had rendered the award on the basis of a detailed evaluation of the materials adduced before him. According to the learned counsel, the court below while considering objections under Sections 30 and 33 of the 1940 Act does not sit in appeal over the decision of an Arbitrator and the objections are not akin to an appeal from an original decree. It is further urged that the court below without any materials disallowed claim (a) on the ground that there were lapses on the part of the claimant. Expatiating further it is submitted that while allowing the claims on other heads, the court below has held that the respondents were responsible for the delay that was occasioned in completing the work. This is apparent from the fact that it was as per Clause 50 of the Local Competitive Bidding (LCB) that extension was granted. Though no separate agreement was contemplated as per Clause 50 of LCB condition for default of the respondents, he was directed to execute an agreement on threat of non payment of the amount due to him. It is emphatically urged that unless it is shown that there is legal misconduct of the Arbitrator or otherwise or that the award is made in ignorance of law or for failure to grant adequate opportunity of hearing resulting in gross violation of the principles of natural justice, there would be no occasion to set aside the award. According to the learned counsel, the rejection of the claim of Rs.1,05,000/- under the head (a) cannot be sustained. It is further submitted that even a cursory reading of the order passed by the court below would indicate that the approach of the court below was grossly erroneous and against settled legal positions.
According to the learned counsel, the rejection of the claim of Rs.1,05,000/- under the head (a) cannot be sustained. It is further submitted that even a cursory reading of the order passed by the court below would indicate that the approach of the court below was grossly erroneous and against settled legal positions. Reliance is placed on the decisions of the Apex Court in O.P. Pathrose v. State of Kerala and Another [ 2010(12) SCC 100 ], Ravindra Kumar Gupta and Company v. Union of India [ 2010 (1) SCC 409 ], G.Ramachandra Reddy and Company v. Union of India and another [ 2009 (6) SCC 414 ], Bhagavati Oxygen Ltd., v. Hindustan Copper Ltd. [ 2005 (6) SCC 462 ], State of U.P. v Allied Constructions [ 2003 (7) SCC 396 ], Continental Constructions Ltd. v. State of U.P. [ 2003(8) SCC 4 ] and Municipal Corporation of Delhi v. M/s. Jagan Nath Ashok Kumar and Another [ 1987(4) SCC 497 ] to substantiate his contentions. 12. The learned Government Pleader on the other hand submitted that there were gross lapses on the part of the claimant in carrying out the work as per the schedule. When materials revealed that supplementary agreements seeking extension of time were executed at the instance of the claimant, the finding of the court below that the execution of the agreement as regards extra items was not voluntarily made by the claimant was perverse. According to the learned Government Pleader, both these contentions cannot co-exist. It is further urged that the award would reveal that the Arbitrator had awarded Claim (a) on the basis of revised rate of the year 1986 in respect of a work which was contracted in the year 1985. This gross illegality exposes the legal misconduct committed by the Arbitrator rendering the award illegal. It is further argued that the sum of Rs.1,05,000/- under head (a) was rightfully rejected by the court below as it was done on the premise that the person who was at fault cannot be permitted to benefit from the same. The materials, according to the learned Government Pleader, did not reveal that the work was delayed due to the lapses of the respondents. It is further argued that the claims awarded on heads (b), (c),(d), (g), (h) (i) and (j) are unsustainable for the very same reason. 13.
The materials, according to the learned Government Pleader, did not reveal that the work was delayed due to the lapses of the respondents. It is further argued that the claims awarded on heads (b), (c),(d), (g), (h) (i) and (j) are unsustainable for the very same reason. 13. To appreciate the controversy in a proper perspective it will be relevant to initially refer to Section 30 of the 1940 Act which reads as under: "S.30. Grounds for setting aside award. - An award shall not be set aside except on one or more of the following grounds, namely: (a) that an arbitrator or umpire has misconducted himself or the proceedings; (b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under S.35; (c) that an award has been improperly procured or is otherwise invalid. 14. It is by now fairly settled that an award can be set aside only on the grounds specified in sub-clause (a), (b) and (c) of S.30 of 1940 Act and on no other grounds. The grounds such as inadequacy of reasons in support of an award, error committed by the arbitrator on facts, alternate or/and more plausible view, improper appreciation of evidence are not the grounds on which any award much less a reasoned award can be set aside Section 30 of the 1940 Act. (see Harish Chandra and Company (M/s) v. State of U.P. Thr. Superintending Engineer. [ AIR 2016 SC 4257 ]. 15. The scope of interference by courts in reasoned arbitral awards is very limited. In Kwality Manufacturing Corporation v. Central Warehousing Corporation, : [ 2009 (5) SCC 142 ], the Apex Court had held in clear and unambiguous terms that a Court considering an application under S.30 or 33 of the Act, does not sit in appeal over the findings and decision of the arbitrator. Nor can it reassess or re-appreciate 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 S.30 and S.33 of the Act. 16.
Nor can it reassess or re-appreciate 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 S.30 and S.33 of the Act. 16. In the case of Arosan Enterprises Ltd. v. Union of India, [ 1999 (9) SCC 449 ], the Apex Court upon analysis of numerous earlier decisions, held as follows: "Be it noted that by reasons of a long catena of cases, it is now a well – settled principle of law that re - appraisal 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 S.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, 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. 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.........". 17. The question whether the reasonableness of the award passed by the arbitrator, can be examined by the court and the mode in which the jurisdiction has to be exercised came up for consideration before the Apex Court in Sudarsan Trading Co. v. Govt. of Kerala, ( AIR 1989 SC 890 ), wherein it was 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.
v. Govt. of Kerala, ( AIR 1989 SC 890 ), wherein it was 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. 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. 18. In O.P. Pathrose v. State of Kerala [ 2010(12) SCC 100 ], the Apex Court had occasion to observe that the unreasonableness of an award is not a matter for the court to consider unless the award is per se preposterous or absurd. It was held that it is for the arbitrator to appraise the evidence adduced by the parties. Further in G.Ramachandra Reddy and Company v. Union of India and Another [ 2009(6) SCC 414 ] it was held that the interpretation of a contract will fall within the realm of arbitrator. The court while dealing with an award would not re-appreciate the evidence.
Further in G.Ramachandra Reddy and Company v. Union of India and Another [ 2009(6) SCC 414 ] it was held that the interpretation of a contract will fall within the realm of arbitrator. The court while dealing with an award would not re-appreciate the evidence. An award containing reasons may not be interfered unless they are found to be perverse or based on a wrong proposition of law. If two views are possible, it is trite, the court will refrain itself from interfering. 19. In the backdrop of the above indisputable legal position, we shall evaluate the materials to consider whether any interference is warranted. 20. We have gone through the award minutely. It is evident that the original agreement, supplemental agreements, M. Books, Correspondence file, LF books, plotted sheets estimate, data etc. were placed before the arbitrator by the contesting parties. The arbitrator has also conducted a site visit in the presence of the parties. 21. The Arbitrator has noted after referring to the communication issued by the Executive Engineer to the Superintending Engineer dated 3.8.1985 that initial levels were submitted for approval belatedly. Materials produced also clinchingly established that the work for which time of completion was fixed originally at six months consumed more time because of the delay in submitting the initial proposal for approval and the said delay was attributed to the respondents. The site visit conducted by the arbitrator pointed to the fact that there was no vehicle access to the alignment except through the alignment itself. After the commencement of the excavation, said facilities also ceased to exist. Both the contesting parties were unanimous that the materials were brought to the site utilising human labor. The communications between the officers of the respondents which were produced before the Arbitrator made it amply clear that the reasons for delay was on account of execution of additional works and non availability of cement and other materials. After considering the communications between the parties, the Arbitrator has concluded that there was breach of contract and also omission and commission on the part of the respondents. The reasons for arriving at such a conclusion is also clearly enumerated. The Arbitrator took note of the fact that the supplemental agreement for extension of time was executed based on Clause 50 of LCB condition.
The reasons for arriving at such a conclusion is also clearly enumerated. The Arbitrator took note of the fact that the supplemental agreement for extension of time was executed based on Clause 50 of LCB condition. Clause 50 is invoked, when the failure of the contractor to complete the work was on account of delay on the part of the respondents in supplying the materials or equipment it had undertaken to supply or on account of delay in handing over sites or for increase in the quantity of work to be done under the contract. The extension of time invoking the said clause does not require the claimant to execute an agreement. The arbitrator accepted the contention of the claimant that he was coerced to execute the agreement on threat of non payment for the works already executed and withholding of departmental materials. The Arbitrator accepted the version of the claimant that he had executed the supplemental agreement for extension of time as payment from the respondents were essential to maintain the tempo of the progress of the work and also to ensure the presence and guidance of the departmental officers. The Arbitrator has also found that the clauses of the supplemental agreement would not bind the claimant. After going through the materials, the Arbitrator found that substantial quantum of work had been completed by the claimant. It was after considering all these aspects that it was held that the respondents had committed breach. It was further held on facts that the cumulative effect of the breaches committed by the respondents resulted in protraction of execution of the contract. The Arbitrator has gone through the Measurement Books and it was held that there was no dispute regarding the number of extra items executed or quantity done. It was also admitted by the respondents that there were changes in the design of the structure. The Arbitrator also took note of the fact that substantial payment was due to the claimant towards extra works which were done by him. It was in the said circumstances that claims (a), (b), (c), (d) (g), (h) and (i) were allowed as detailed in paragraph No.4 above and interest was allowed at 18% from 6.9.1988. 22. We shall now consider the rejection of claim (a) which is the subject matter of Arbitration Appeal No. 20 of 2011.
It was in the said circumstances that claims (a), (b), (c), (d) (g), (h) and (i) were allowed as detailed in paragraph No.4 above and interest was allowed at 18% from 6.9.1988. 22. We shall now consider the rejection of claim (a) which is the subject matter of Arbitration Appeal No. 20 of 2011. We have no doubt in our mind that the court below has rejected the amount awarded under Claim (a) on unsustainable reasons. It appears that the court below relying on Clause 15 of the LCB condition has concluded that time of completion can be extended. The reference to Clause 15 of the LCB condition can only be an error as the said clause relates to 'Evaluation of Tenders'. What was intended can only be Clause 50 of the LCB condition which relates to 'Extension of Time'. The court below has erroneously concluded that the claimant had executed supplementary agreement due to his own delay in completing the work in time. Holding that the claimant cannot benefit from his own laches, his claim was rejected. There is no dispute from either side that the period of completion of work was extended on the basis of clause 50 of LCB General condition of contract. The same reads as follows: Clause 50: Extension of time: Time shall be considered as the essence of the contract. If, however, the failure of the contractor to complete the work as per the stipulated dates referred above arises from delay on the part of the Government in supplying the materials or equipment it has undertaken to supply under the contract or from delays in handing of sites, or from in crease in the quantity of work to be done under the contract, or force majeure an appropriate extension of time will be given. The contractor shall request such extension within 1 month of the cause of such delay and in any case before the contract period." (emphasis supplied). 23. Clause 50 contemplates extension of time for reasons which cannot be attributed to the contractor. It clearly accounts for delay on the part of the Government in supplying the materials or equipment it has undertaken to supply under the contract or from delays in handing over of sites or from increase in the quantity of work to be done under the contract or force majeure.
It clearly accounts for delay on the part of the Government in supplying the materials or equipment it has undertaken to supply under the contract or from delays in handing over of sites or from increase in the quantity of work to be done under the contract or force majeure. No one has a case that the delay was occasioned due to force majeure. If that be the case, we fail to understand as to why the court below came to the conclusion that it was due to the delay on the part of the claimant to complete the work in time that supplementary agreement was executed. No such conclusion could have been arrived at on facts. The Arbitrator had recorded cogent and convincing reasons to support his conclusions and had worked out the claim due to the claimant. He had concluded that the amount calculated was towards compensation for the loss sustained by the claimant as a natural consequence of the breach committed by the respondents. As rightly contended by the claimant and admitted by the respondents, the work was undertaken by the claimant by quoting an amount which was Rs.2,31,568/- below the amount estimated by the department. This aspect was also taken note of by the Arbitrator. While awarding a sum of Rs.1,05,000/- towards compensation for breach of contract committed by the respondents excluding extra/additional work, the arbitrator had ascertained the wages prevalent in the locality at the time of execution and also during the site inspection. The amount in the facts and circumstances, cannot be said to be excessive. We are of the view that the court below was not justified in interfering with the amount awarded under Claim (a). 24. The second ground on the basis of which the amount awarded under Claim (a) was rejected was on the basis of a typographical error in page No.4 of the award. While discussing the case of the claimant, the Arbitrator had stated that the estimate was prepared on the basis of schedule rate of 1986. For some obscure reason, the court below has concluded that the quantum of compensation was arrived at on the basis of 1986 rate. We have anxiously perused the claim statement as well as the objection and also the award.
For some obscure reason, the court below has concluded that the quantum of compensation was arrived at on the basis of 1986 rate. We have anxiously perused the claim statement as well as the objection and also the award. In clause (a) of paragraph No. 16 of the Claim Statement, it is stated that the estimate is prepared on the basis of schedule rate of 1982. In the Defence statement filed by the 2nd respondent, in response to the averment in paragraph No.16(g) it has been stated that the estimate has been prepared on the 1982 schedule of rates. In that view of the matter, the mentioning of the year 1986 in the initial portion of the award is clearly a typographical error. Further more, the Arbitrator in the award has clearly stated that the amount towards compensation for breach of contract was arrived at on the basis of wages prevalent in the locality at the time of execution during site inspection. The decision of the Arbitrator on the quantum of compensation is a possible view and the court below has interfered with the same by mis-appreciating the terms of the contract and on the basis of irrelevant materials. We hold that the court below while setting aside the original award in respect of claim (a) has exceeded in its jurisdiction under Section 30 of the Act. 25. Insofar as Arbitration Appeal No.1 of 2011 is concerned, the challenge is with regard to the upholding of claim by the Arbitrator under heads (b), (c), (d), (g), (h), (i) and (j). 26. Claim (b) related to fixation of rates in respect of extra items. The Arbitrator after elaborately considering the available materials and after going through the supplemental agreements, Measurement Books and also clause 32 of the LCB condition came to the conclusion that the claimant was entitled to additional payment. For arriving at the amount, the Arbitrator had considered the rates claimed by the claimant, the local rates, nature of work and wages and cost of materials. The court below has taken note of this aspect and had concluded that the amount ordered under Claim (b) does not warrant any interference. We concur with the said findings. 27. Claim (c) related to payment of expenditure incurred by way of headload conveyance. Claim (d) related to compensation of expenditure incurred in respect of conveyance charges of earth brought for filling.
We concur with the said findings. 27. Claim (c) related to payment of expenditure incurred by way of headload conveyance. Claim (d) related to compensation of expenditure incurred in respect of conveyance charges of earth brought for filling. The Arbitrator took note of the communication by the Executive Engineer dated 10.9.1985 as regards lack of accessibility. He has assessed the quantity of materials brought to the site from the M book, the labour contents, wages and other materials to award a sum of Rs.1,73,000/- towards claim (c). In the same manner, towards claim (d) a sum of Rs.56,000/- was ordered. The court below has upheld the amount ordered under both these heads. We do not find any reason to interfere with the same. 28. Claim (g) related to payment of compensation for idling losses. The Arbitrator has scrutinized the correspondence and verified the Cement issue Register and also took note of the fact that there was execution of additional items as well as changes in the design of the structure. The learned Arbitrator has also taken note of the delay in taking of decision by the respondents. The proceedings of the Executive Engineer revealed that there was delay due to non-availability of cement. Taking note of all these aspects, the Arbitrator has concluded that the claimant has incurred idling expenses and awarded a sum of Rs.62,750/-. The court below after evaluating the materials has concluded that there is no reason to interfere with the finding of the Arbitrator with regard to claim (g). We concur with the said finding. 29. Claim (i) related to passing of final bill. The court below has upheld the claim and we also do not find any reason to interfere. 30. Claim (j) relates to payment of interest. The Arbitrator has awarded interest at 18% per annum. For arriving at the said amount, the Arbitrator has concluded that bank rate is much more than 18% per annum and held that the claimant is entitled to interest at the above rate from 6.9.1988, the date on which the Arbitration proceedings have been commenced till the date of realisation. The court below has interfered with the rate of interest and has awarded interest at the rate of 12% per annum. 31.
The court below has interfered with the rate of interest and has awarded interest at the rate of 12% per annum. 31. In State of Rajastan and Another v. M/s. Ferro Concrete Construction (P) Ltd. [ 2009 (12) SCC 1 ], the Apex Court has held as follows: In regard to the rate of interest, we are of the view that the award of interest at 18% per annum, in an award governed by the old Act (Arbitration Act, 1940), was an error apparent on the face of the award. In regard to award of interest governed by the Interest Act, 1978, the rate of interest could not exceed the current rate of interest which means the highest of the maximum rates at which interest may be paid on different classes of deposits by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act. Therefore, we are of the view that pre - reference interest should be only at the rate of 9% per annum. It is appropriate to award the same rate of interest even by way of pendente lite interest and future interest upto date of payment. The above view was reiterated in A.P. State Trading Corporation Ltd. v. G.V. Malla Reddy Co. [AIR 2010 SCW 6337]. 32. Having regard to the above, we are of the view that the award of interest at 18% per annum is an error apparent on the face of the record. The court below has reduced the interest to 12% per annum. We hold that the claimant will be entitled to payment of interest at 9% per annum till date of realisation. 33. In the result, we dispose of the appeals in the following manner: (a) Arbitration Appeal No. 20 of 2011 will stand allowed. We set aside the order dated 16.12.2009 in Arbitration O.P. No. 172 of 1994 on the file of the Principal Sub Judge, Thiruvananthapuram thereby restoring the award passed by the Arbitrator dated 5.12.1994 awarding a sum of Rs.6,55,648/- together with retention amount of Rs.13,780/- besides release of security with interest thereon at the rate of 9% per annum from 6.9.1988 till date of realisation. (b) Arbitration Appeal No. 1 of 2011 is partly allowed.
(b) Arbitration Appeal No. 1 of 2011 is partly allowed. The interest ordered by the Arbitrator as per claim (j) at 18% per annum from 6.9.1988 till the date of realisation and modified by the court below at 12% per annum is set aside. The claimant shall be entitled to interest at the rate of 9% per annum for the amount ordered as above. In respect of all other claims, the appeal is dismissed. No order as to costs.