JUDGMENT Jyoti Singh, J. - Both these petitions have been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act") challenging the Award dated 26.05.2017 passed by the Arbitral Tribunal. O.M.P. (COMM) 365/2017 has been filed by Jupiter Rubber Private Limited challenging part of the Award wherein imposition of Liquidated Damages has been upheld by the Arbitrator though with reduction from 10% to 3% as also challenging the rejection of the Claim of interest on delayed payments. 2. Omp(Comm) No. 54/2019 has been filed by the Union of India challenging the Award to the extent it has reduced Liquidated Damages (hereinafter referred to as "LD") from a sum of Rs. 70,79,581/- to Rs. 23,12,875/-. Since both petitions lay a challenge to the same Award and common questions of fact and law arise, they are being disposed of by a common judgment. For the sake of convenience, Jupiter Rubber Private Limited is being referred to as Petitioner in both the petitions and Union of India is being referred to as Respondent. 3. Brief facts shorn of unnecessary details are that Respondent floated a tender on 25.10.2012 for purchase of 1,41,309 Light Weight Ground Sheets. Petitioner is a Registered Small Scale Industry in the business of manufacture of Light Weight Ground Sheets (hereinafter referred to as "Sheets"), out of special fabric, outsourced from the market. Petitioner made an offer on 26.11.2012 to supply @ Rs. 501/- per piece, aggregating to Rs. 7,07,95,809/-. On 13.12.2013, Respondent accepted the offer of the Petitioner, however, at the rates prevailing in 2012, and the Petitioner provided a Bank Guarantee in the sum of Rs. 70,79,581/-, which was initially valid upto 30.06.2015, but subsequently extended, at the instance of the Respondent upto 31.12.2016. 4. Acceptance of Tender also provided for approval of the Sheets through 16 Nos. of advanced sample representing the entire bulk supply, out of which one number each had to be submitted to the Inspecting Officer, Indentor for each of the 14 consignees and 2 Nos. for testing with the DIG (Prov), Director General, CRPF, within 15 days of the receipt of the order for approval of the Sheets by the purchaser. Case of the Petitioner 5. Petitioner submitted the advance sample of Sheets, which was duly approved by the Competent Authority on 10.03.2014 and information in this regard was received by Petitioner on 17.03.2014. for testing with the DIG (Prov), Director General, CRPF, within 15 days of the receipt of the order for approval of the Sheets by the purchaser. Case of the Petitioner 5. Petitioner submitted the advance sample of Sheets, which was duly approved by the Competent Authority on 10.03.2014 and information in this regard was received by Petitioner on 17.03.2014. Delivery period of the Sheets under the Acceptance of Tender (hereinafter referred to as "AT") was 4 months or earlier, from the date of approval of advance samples for the entire quantity. The delivery period was thereafter refixed w.e.f. 10.03.2014 to 09.07.2014 or earlier. 6. At provided for Pre-Dispatch Inspection (hereinafter referred to as "PDI") after approval of advance sample. It was not possible to manufacture and offer the entire quantity of 1,41,300 pieces of the Sheets at a time and thus the Petitioner split the delivery into lots and offered them for PDI. 7. Under the agreed terms, once pre-dispatch intimation of a particular lot was given to the Respondent, the Respondent through its Board of Officers would draw random samples, out of the said lot, and send to a NABL approved Laboratory for testing. Simultaneously, Respondent would seal the remaining Sheets of that lot and keep them in a Bond Room and retain the keys. After receiving confirmation from the Laboratory that the samples tested, met the Tender specifications, the entire lot was forwarded to the Provisional Directorate (Delhi), for giving specific recommendation for acceptance of the lots by the Competent Authority and only thereafter the keys of the room used to be handed over to the Petitioner, for supply. In case of non-confirmation of the samples, the keys and the samples were retained for about a month. 8. Initially, the Petitioner could not offer the Sheets for PDI due to non-availability of the officers of the Respondent to conduct the same as they were involved in Election Duty in 2014. The first lot of 20,447 pieces was offered for PDI on 08.05.2014. Clearance by the Board was given on 30.05.2014, after 22 days. 90% of the payment covered by the Challan was received between 09.07.2014 and 01.10.2014, much after the period for making payment, mentioned under Clause 19 of the AT. 9. Second lot comprising of 32,612 pieces, with aggregate value of Rs.1,63,38,612/- was offered for PDI on 20.06.2014. Clearance by the Board was given on 30.05.2014, after 22 days. 90% of the payment covered by the Challan was received between 09.07.2014 and 01.10.2014, much after the period for making payment, mentioned under Clause 19 of the AT. 9. Second lot comprising of 32,612 pieces, with aggregate value of Rs.1,63,38,612/- was offered for PDI on 20.06.2014. Goods were cleared only on 03.09.2014 i.e. after 75 days. Bond Room keys were handed over on 15.09.2014 i.e. after 87 days and only thereafter the supply of second lot could be effected. On 25.07.2014, the delivery period was extended by four months i.e. upto 01.12.2014 with Denial Clause and LD. 10. Third lot of 32,358 pieces was offered on 17.09.2014 for PDI and clearance was received on 17.11.2014 i.e. after 60 days. Fourth lot of 35,600 Sheets was offered for PDI on 17.11.2014, clearance whereof was received on 27.01.2015 i.e. 87 days thereafter. Final lot of 20,327 Sheets was offered for PDI on 29.01.2015 and was cleared on 31.03.2015 i.e. after 61 days. On 30.12.2014, the delivery period was extended from 02.12.2014 to 11.03.2015. Last consignment admittedly was received by the consignee at Bilashpur on 25.05.2015. 11. Petitioner received 90% payment in respect of Sheets supplied under the first Four lots, but while making 90% payment towards the Fifth lot, Respondent deducted Rs. 70,79,581/- towards Liquidated Damages (LD). Respondent also deprived the Petitioner of the interest on delayed payments under the provisions of Interest on Delayed Payment to Small Scale and Ancillary Industrial Undertakings Act, 1993, which it was entitled being an SSI Unit. 12. Aggrieved by the action of the Respondent, Petitioner took recourse to arbitration and made the following claims before the Tribunal: "(a) An award for Rs.86,14,596/- against Respondent and in favour of Claimant, as pleaded in paragraph 23 hereof; (b) A declaration that the Respondent is not entitled to impose Liquidated Damages of Rs. 70,79,581/- or any part thereof as against the Claimant; (c) Interest; interest pendente lite and interest upon award at the rate of 21.075% per annum." 13. Respondent filed its Statement of Defence. Finally, the Tribunal passed the impugned Award. Claim of the petitioner for interest on delayed payments was rejected. 70,79,581/- or any part thereof as against the Claimant; (c) Interest; interest pendente lite and interest upon award at the rate of 21.075% per annum." 13. Respondent filed its Statement of Defence. Finally, the Tribunal passed the impugned Award. Claim of the petitioner for interest on delayed payments was rejected. Imposition of LD was upheld, but the quantum was reduced from 10% to 3% of the contract value, with directions of refund of the balance amount to the Petitioner within three months from the date of the Award, failing which, it would carry simple interest @ 6% per annum post Award till realization. Case of the Respondent 14. Petitioner offered first lot for PDI on 20.05.2014 i.e. after expiry of more than two and a half months from the date of re-fixation of delivery period, against the stipulated period of four months. PDI was carried out on 29.05.2014 and the Board of Officers (BOO) after drawing 80 Nos. of Sheets as samples found them to be in conformity with the specifications and requested the Petitioner to supply the lot to the consignees. 15. Petitioner on 09.07.2014, intimated dispatch of 20,477 Nos. and further offered second lot of 32,612 Nos. for PDI, also requesting for delivery period extension by four months with LD Clause. Accordingly, Respondent extended the delivery period upto 01.12.2014 with LD charges, vide letter dated 25.07.2014. 16. Boo carried out PDI of the Second lot on 28.06.2014 and randomly selected the samples and dispatched them to NABL Laboratory on 03.07.2014. Test Report was made on 08.08.2014 and the BOO again carried out inspection on 10.08.2014, after receipt of the Report. Report of PDI was accepted by the Competent Authority and the same was conveyed to the Petitioner on 28.08.2014. 17. Petitioner offered the Third lot on 17.09.2014 and PDI was conducted on 19.09.2014. It was again inspected on 24.10.2014, after the Laboratory report and Petitioner was intimated to commence the supply on 17.11.2014. 18. On request of the Petitioner vide letter dated 02.12.2014, delivery period was extended upto 11.03.2015, with LD Clause. Petitioner offered Fourth lot on 17.11.2014, whereupon PDI was conducted on 27.11.2014 and post Laboratory Report Inspection was done on 15.12.2014. Petitioner was intimated to commence supply on 19.12.2014. Likewise, Fifth lot was offered on 29.01.2015 and was inspected on 09.02.2015. 18. On request of the Petitioner vide letter dated 02.12.2014, delivery period was extended upto 11.03.2015, with LD Clause. Petitioner offered Fourth lot on 17.11.2014, whereupon PDI was conducted on 27.11.2014 and post Laboratory Report Inspection was done on 15.12.2014. Petitioner was intimated to commence supply on 19.12.2014. Likewise, Fifth lot was offered on 29.01.2015 and was inspected on 09.02.2015. On 10.03.2015 Post Lab Inspection was done and petitioner was asked to commence supply on 17.03.2015. 19. Last consignment was received by the Consignee on 25.05.2015 i.e. after lapse of more than One year and Five months from the date of placement of supply order. Acting in accordance with Clause 22 of Schedule to the AT read with para 14 (7)(i) of DGS&D - 68 (Revised), Respondent imposed LD to the tune of Rs.70,79,581/- on account of delayed supplies and the same were recovered from the pending bills of the Petitioner. 20. Learned counsel for the Petitioner argued that LD could have been imposed only if the Petitioner was solely or partly responsible for the entire delay in performance of the contract and secondly if the Respondent had actually suffered any monetary loss or damage. However, in the present case, though the petitioner was ready with its supplies, Respondent delayed the inspection, testing and clearing the said supply in lots. It is submitted that a chart to this effect was placed before the Tribunal. The dates in the Chart would show that on the very day when the earlier challans/lots were cleared, Petitioner would offer the next lot. Respondent took 320 days in clearing the Five lots, as against total 100 days under the Contract. Documents to this effect were placed before the Tribunal, but have not even been dealt with. In addition, the Respondent neglected in Inspecting the Sheets on time and retained the keys of the Bond Room, for unreasonably long periods, which each time delayed the offer of the next lot, despite the Sheets being ready. On a complaint made by the petitioner, in this regard, internal Memos were also issued to the concerned officers, in-charge of Inspection. Petitioner could not be blamed for the keys not being handed over on time and major part of the delay was on account of this. On a complaint made by the petitioner, in this regard, internal Memos were also issued to the concerned officers, in-charge of Inspection. Petitioner could not be blamed for the keys not being handed over on time and major part of the delay was on account of this. It was argued that the Arbitrator cannot ignore vital evidence placed before it and this is settled law as held by this Court in Sunil Kukreja vs. North West Sales and Marketing Ltd. in OMP (Comm) 456/2017, decided on 24.04.2018 and Govt. of NCT of Delhi vs. Hurryson Enterprises in OMP 608/2008, decided on 18.12.2018 as well as by the Supreme Court in Associate Builders vs. DDA, (2015) 3 SCC 49 . 21. It is argued that the sole ground on which the Arbitrator has blamed the petitioner for the delay is that there was no condition in the Contract for supplying the Sheets in multiple lots. This finding is in the teeth of the contractual provisions as there was no provision prohibiting supply in multiple lots and the only requirement was supply to be completed within the delivery period of four months. Respondent took almost seven and a half months more, than the period which was actually required, to fulfil its obligations of inspecting, testing and clearing the lots. Respondent was bound by its reciprocal obligations under the law of contracts, more particularly, Sections 50 to 54 of the Indian Contract Act, 1872. 22. It was further argued that it is wrong for the Respondent to contend that the Petitioner had agreed for imposition of LD by seeking extension, inasmuch as the language of the letter indicates that the extension was sought "as per the LD Clause" and there was no agreement towards imposition of LD. This Court in Bharat Sanchar Nigam Limited vs. BWL Ltd., (2011) 2 ArbLR 131 (Delhi) (DB) has rejected a similar contention. 23. It is next contended that the imposition of LD, even otherwise is contrary to law as the respondent neither pleaded nor proved any monetary loss or damage, on account of the alleged delay, in execution of the contract. In the case of Ghanshyam Das Gupta vs. Makhan Lal,MANU/DE/0235/2012 , it has been held by the Court that in the absence of pleading or proof, such a deduction is illegal. In the case of Ghanshyam Das Gupta vs. Makhan Lal,MANU/DE/0235/2012 , it has been held by the Court that in the absence of pleading or proof, such a deduction is illegal. It is settled law that even in case of LD, governed by Section 74 of the Indian Contract Act, the party is required to prove loss. Reliance is placed on the judgment of the Supreme Court in Kailash Nath Associates vs. Delhi Development Authority, (2015) 4 SCC 136 . Even though a party need not prove damage or loss upto the threshold as required under Section 73, however, it if incurs no loss at all, Section 74 cannot come into play. Reliance is placed on BSNL (supra) and Tower Vision India Pvt. Ltd. vs. Procall P. Ltd, (2014) 183 CompCas 364 (Delhi). 24. It is further contended that assuming but not conceding that the deduction of 3% is justified towards LD, then also the amount deducted is ex-facie illegal as this has been done on the entire contract amount whereas should have been only on supplies made beyond the original delivery period i.e. w.e.f. 09.07.2014. Admittedly, the First and the Second lots had been offered for inspection and testing upto 20.06.2014 and thus the value of supply made post 09.07.2014, was worth only Rs. 4.46 Crores and the LD should have been 3% of Rs. 4.46 Crores. 25. The next contention of the learned Counsel for the Petitioner is with respect to the Claim of interest on the delayed payments made by the Respondent. It is argued that even though the Arbitrator held that there was delay in payment, it declined the interest on broadly two grounds: (a) failure to deliver goods on time and (b) no provision in the contract for levy of interest on delayed payments and that the Arbitrator cannot travel beyond the contractual terms. It is argued that the Claim for interest had nothing to do with the alleged delayed supply of the Sheets and consequential deductions, but was a Claim in respect of amounts actually paid, but belatedly. Section 31(7)(a) of the Act permits the Arbitrator to grant interest in all cases, except where there is contract to the contrary, between the parties. Section 3 of the Interest Act, 1978 also enables the Arbitrator to grant interest on delayed payments. Section 31(7)(a) of the Act permits the Arbitrator to grant interest in all cases, except where there is contract to the contrary, between the parties. Section 3 of the Interest Act, 1978 also enables the Arbitrator to grant interest on delayed payments. Reliance is placed on the judgment of the Supreme Court in Assam State Electricity Board & Ors. vs. Buildworth Pvt. Ltd., (2017) 8 SCC 146 and State of Orissa vs. B.N. Agarwalla & Ors., (1997) 2 SCC 469 . Hence the Award to this extent deserves to be set aside. 26. Per contra learned counsels for the Respondent at the outset argued that this Court has a limited jurisdiction under Section 34 of the Act and ought not to interfere in the Award. Arbitrator has declined to award interest on the payments made to the Petitioner and also found recovery on account of LD to be justified, though at a reduced percentage, and this was clearly in the domain of the Arbitrator. Supreme Court in the case of Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (NHAI), (2019) 15 SCC 131 , has held that there must be patent illegality appearing on the face of the Award which goes to the root of the matter, but is not a mere erroneous application of law. 27. On merits, it is argued that the Arbitrator, on appreciation of evidence, on record, found that there was no material which supported the Claim of delayed payment. It is urged that having failed to prove that the payments were delayed, no interest can be sought by the Petitioner. The Arbitrator as a matter of fact found that the Petitioner failed to deliver goods within the contractual delivery period and cannot blame the Respondent and seek interest. The Arbitrator observed that payment of Bills runs after delivery of goods. The other reason for rejection of the Claim was that there was no provision in the AT providing for levy of interest. It is argued that this Court in C.L. Gupta v. Delhi Development Authority, (2006) 88 DRJ 300 has held that it is not necessary that in every case, the Arbitrator should award interest pendente lite and it is a matter within the Arbitrator''s domain and discretion, to be exercised in the facts of each case. It is argued that this Court in C.L. Gupta v. Delhi Development Authority, (2006) 88 DRJ 300 has held that it is not necessary that in every case, the Arbitrator should award interest pendente lite and it is a matter within the Arbitrator''s domain and discretion, to be exercised in the facts of each case. This is evident even from a bare reading of the language of Section 31(7) of the Act. 28. As far as the LD is concerned, the Arbitrator found that the Petitioner failed in supplying the Sheets on time to the Respondent and that there was no condition in the contract which permitted the supply of the Sheets in multiple lots. Petitioner, for his own convenience supplied the Sheets in multiple lots, which delayed the pre-inspection on each occasion. Had the Sheets been supplied in one or two lots only, there would have been no delay in inspections. Extension of time was granted subject to the LD Clause and at each stage, Petitioner had agreed to pay Liquidated Damages. 29. It is further submitted that the Arbitrator relied on a judgment in the case of Ministry of Defence, GOI vs. CENREX, Sp. Z.O.O. & Ors., OMP 408/2007, in which the issue was of supply of parachutes to the Ministry of Defence and this Court held that in cases of supply to the Soldiers, it was impossible to calculate the loss, but surely the delay in supplies resulted in huge logistic problems. The finding of the Arbitrator cannot be termed as "patently illegal" in view of the Law enunciated in the judgments in Construction &Design Services vs. Delhi Development Authority, Civil Appeal Nos. 1440-1441 of 2015, decided on 04.02.2015, ONGC vs. Saw Pipes Ltd., (2003) 5 SCC 705 , Belco Enterprises v. DTC [OMP Nos. 498, 502, 508 and 511/07] and Kailash Nath Associates v DDA & Anr., (2015) 4 SCC 136 . 30. It is further argued that the Law laid down in these judgments clearly is that where damage or loss is difficult or impossible to prove, Liquidated amount mentioned in the Contract, if a genuine pre-estimate of damage or loss, can be awarded. 31. It is next contended that Petitioner failed to offer 3 out of 5 lots, prior to the expiry of original delivery period and this is an undisputed fact. 31. It is next contended that Petitioner failed to offer 3 out of 5 lots, prior to the expiry of original delivery period and this is an undisputed fact. Petitioner was not required to wait for approval from the Respondent for one lot before offering the next lot and had it followed this pattern there would not have been any delay in supplies. Attention is drawn to a letter dated 09.07.2014, whereby extension of delivery period was sought and the Petitioner had admitted that it was unable to complete the supply of entire quantity, within the stipulated period, due to difficulty in procurement of the Yarn, required to manufacture the Fabric. This clearly shows that delay was not attributable to the respondent. 32. Arguing in support of the challenge to the Award by Union of India in OMP (Comm) No. 54/2019, learned counsels for the respondent submit that the Arbitrator has not given any reason for reducing the LD from 10% to 3% and this is clearly contrary to provisions of Section 31(3) of the Act and a Patent Illegality. Reliance is placed on the judgment of the Supreme Court in Union of India vs. Mecano Export Import S.A.,2014 SCCOnlineDel 40 . 33. Learned counsel for the petitioner in reply submits that the judgment in C.L. Gupta (supra) is clearly distinguishable as firstly the judgment has been given under 1940 Act and not under the 1996 Regime. Secondly, the reasoning of the Arbitrator to deny interest is palpably unsustainable and an erroneous understanding that in the absence of a specific provision in a contract permitting grant of interest, no interest can be awarded by an Arbitrator. It is submitted that this Court in Mahalaxmi Light House vs. Chief Electoral Officei & Anr., in FAO(OS) COMM. 152/2017, decided on 20.09.2017, has interfered with the discretion of the Arbitrator where he declined to grant interest. 34. With respect to the Claim of LD, Petitioner reiterates that Respondent has neither pleaded nor proved any loss by the alleged delay in supplying the Sheets. In such a situation, even the Award of 3% of LD in favour of the Respondent is patently illegal and has resulted in unjust enrichment of the Respondent. 34. With respect to the Claim of LD, Petitioner reiterates that Respondent has neither pleaded nor proved any loss by the alleged delay in supplying the Sheets. In such a situation, even the Award of 3% of LD in favour of the Respondent is patently illegal and has resulted in unjust enrichment of the Respondent. In the case of Construction & Design (supra) relied upon by the Respondent, the Court declined to grant the upper limit as provided in the LD Clause and only upheld the Award of reasonable amount. 35. I have heard the learned counsels for the parties and examined their contentions. 36. The first issue that arises is with respect to the Liquidated Damages under Clause 22 of the Agreement. While the Petitioner is aggrieved by the imposition of reduced percentage of Liquidated Damages, Respondent is aggrieved by the reduction from 10% to 3%. The Arbitrator has given a chronology of the dates on which different lots of the sheets were supplied by the Petitioner to the Respondent and which have not been disputed by the Parties. Having noted the dates of supply, the Arbitrator observed that there was no condition in the Contract permitting supplies of the goods in multiple lots and a delivery period was stipulated to complete the supply. Petitioner for its own convenience supplied the goods in multiple lots, which delayed the pre-inspection of the goods. Had the Petitioner supplied the goods in one or two lots only, there would not have a delay. The Arbitrator observed that parties had expressly agreed for recovery of damages, from the contractor, for failure to provide goods, within fixed delivery period, as a pre-estimated sum in the nature of Liquidated Damages. The Arbitrator also observed that the Petitioner in para 17 of the Statement of Claim had admitted that when extension of time was sought, Respondent extended the time, subject to Denial Clause and LD charges. On the aspect of proof of loss, the Arbitrator relied on a judgment of this Court in Ministry of Defence, GOI vs. CENREX (supra) where the Court has held that the loss caused to the Army on account of non-delivery of berets on time and in making alternative arrangement was impossible to calculate and upheld the claim of LD by the Government. The Arbitrator notes that the original delivery period was four months from the date of placement of the Supply Order and the supplies were made well beyond the stipulated period. Parties are bound by the enforceable obligations they enter into and terms of Contract are sacrosanct. Noting the delay in supplies, the Arbitrator concluded that Respondent rightly levied LD on the Petitioner. Relevant part of the Award is as under:- "The Respondent vide letter dated 10.03.2014 communicated to the Claimant about the re-fixation of the delivery period w.e.f. 10.03.2014 to 09.07.2014 or earlier after which claimant started manufacturing of the goods. It is admitted by the both the parities that the stipulated date of the delivery of the store was 9.7.2014, which was re-fixed by both the parties after the approval of the advance samples. It is shown that the parties of the Contract are consented regarding the delivery schedule and other terms of the Contract. Therefore, the parties to the Contract are abiding by the terms of the contract, which are settled after the mutual consent of the parties itself. Accordingly, the Claimant and Respondent are bound by the terms of the Contract and claimant was bound to supply the 1,41,309 Nos. of Goods @ Rs.501.- to the Respondent within stipulated time fixed by the parties in impugned contract. The facts and circumstances of the case, reveals that the Claimant had offered 1st Lot of goods of 20,477, Nos. of light Weight Ground Sheet for Pre-dispatch inspection on 20.05.2014 i.e. after an expiry of more than two and a half months from the date of re-fixation of delivery period. The Claimant offered the 2nd lot of said goods of 32, 612 nos. on 20.06.2014 for predispatch inspection i.e. after an expiry of one month from the date of submissions of 1st lot of store. The Claimant had offered 3rd lot of store of 32,358 Nos. on 17.09.2014, Pre-dispatch inspection conducted by the detailed CRPF B.O.Os on 19.09.2014 & 24.10.2014 (After lab test). Acceptance of PDI report and intimation to execute the supply was conveyed to the firm on 17.11.2014. The Claimant had offered 4th Lot of 35,600 Nos. 17.11.2014, PDI conducted by the BOO on 27.11.2014 & 15.12.2014 (after lab test). Acceptance of PDI report and intimation to execute the supply was conveyed to the firm on 19.12.2014. The Claimant had offered 5th and final lot of 20.327 Nos. The Claimant had offered 4th Lot of 35,600 Nos. 17.11.2014, PDI conducted by the BOO on 27.11.2014 & 15.12.2014 (after lab test). Acceptance of PDI report and intimation to execute the supply was conveyed to the firm on 19.12.2014. The Claimant had offered 5th and final lot of 20.327 Nos. of 29.01.2015, PDI conducted on 09.02.2015 & 10.03.2015 (after lab test). The last consignment was received by GC CRPF Bilaspur [Chhattisgarh] on 25.05.2015 i.e. after lapse of more than one year and five months from the date of placement of supply order [A.T.] against the stipulated delivery period of four months. Delivery period for supply of the store was re-fixed w.e.f 10.03.2014 to 09.07.2014 whereas the Claimant supplied the full quantity of goods by 25.05.2015. The grounds agitated by the Claimant through its SoC are not justifiable and has not been proved by the Claimant as well. It is cleared that the Claimant was failed to supply the goods to the Respondent on time. After perusal of the case and annexed documents, it reveals that there is no condition in the contract to supply the goods in multiple lots. It is only mentioned that the goods should be supplied within stipulated time (re-fixed) by the parties. The Claimant for his own convenience supplied the goods in multiple lots due to which the pre inspection was delayed. If the Claimant supplied the goods in one or two lot only, the delay would not be caused. So, the consequences of that should be bear by the claimant only. As the goods supplied by the Claimant was in pieces by which the inconvenience caused to the Respondent. When parties have expressly agreed that, recovery of damages from the contractor for breach of the contract or failure to provide Goods within fixed DP, is pre-estimated genuine, liquidated damages duly agreed by the parties, there was on justifiable reason for the Arbitrator to arrive at conclusion that still the purchaser should prove loss suffered by its because of delay in supply of goods. Further, in para 17 of SoC, it was admitted by the Claimant that at the time when Claimant sought extension of time for supply of goods, time was extended by the Respondent for completing the delivery upto 01.12.2014 and thereafter till 11.03.2015 the RR and Denial Clause with LD charges Despite this, claimant had supplied the goods which would indicate that even at that stage, Claimant was agreeable to pay liquidated damages. The Hon''ble High Court in para 13 in the case of Ministry of Defence, GOI vs. CENREX Sp. Z.O.O & ors. (O.M.P. No.408.2007), which dealt with the supply of parachutes to the Ministry of defence held that, "loss cannot be calculated for delay in supply of berets by the Claimant to the Union of India (Ministry of Defence) because how the Army of this country would be affected by non-delivery of the berets on time and what would have been the alternative arrangement made due to delayed deliveries and expenses accordingly which has to be incurred on account of non-availability of berets on time, is impossible to calculate." Hence, invocation of Clause 9 of the A. T. towards liquidated damages is valid and can be enforced. From the foregoing observation, the act of the Respondent regarding the recovery of LD from the Claimant is legally sustainable. It is clearly mentioned in the Accepted Contract that the stores should be delivered within 4 months after placement of AT and approval of advance samples (to be re-fixed) i.e. 10.03.2014 to 09.07.2014 or earlier, which was accurately given by the Claimant to the Respondent and accepted by the Respondent also. It is the settled position of law that, an agreement between two entities, creating an enforceable obligation to do, or to refrain from doing, a particular thing, enforceable by law is termed as ''Contract''. Parties to a contract are bound by the terms to which they have agreed. The binding force of a contract is based on the fact that it evinces a meeting of minds of two parties in good faith. A contract, once formed, does not contemplate a right of a party to reject it. Contracts that were mutually entered into between parties with the capacity to contract are binding obligations and may not be set aside due to the caprice of one party or the other unless a statue provides to the contrary. A contract, once formed, does not contemplate a right of a party to reject it. Contracts that were mutually entered into between parties with the capacity to contract are binding obligations and may not be set aside due to the caprice of one party or the other unless a statue provides to the contrary. From the foregoing observation, it is determined that it was the Claimant who actually delayed the supplies of stores to the Respondent within stipulated time i.e. 10.03.2014 to 09.07.2014 or earlier. Consequently, the amount which was recovered by the Respondent from the Claimant was not by way of any wrong representation but it was legally and justifiably recovered from the Claimant, which is according to the terms of the contract. Therefore, I have no hesitation to come to the conclusion that the Claimant is liable for the levy of LD for the delay of supply of 1,41,309, Nos. Light Weight Ground Sheet to the Respondent within re-fixed period of delivery i.e. 10.3.2014 to 9.7.2014 or earlier." 37. Chapter 16 of Indian Contract Act, 1872 provides for consequences of Breach of Contract. Section 73 provides that the party who suffers by breach of a contract is entitled to receive from defaulting party, compensation for any loss or damage caused, arising in usual course of things, meaning thereby that mere breach of contract is not sufficient, and the party suffering the damage, on account of such breach must prove the loss. On the other hand, Section 74 entitles a party to claim reasonable compensation from the defaulting party, which is a pre-determined compensation, stipulated in the Contract entered into between the parties. This sum called the "Liquidated Damages" is a genuine pre-estimate of damages and does not require the threshold of proof of actual loss as required under Section 73. Only when the amount is "penal" in nature, it is unenforceable. Various Courts have however held that the Claimant would have to prove at least the "legal injury" from the breach. In the case of ONGC v. Saw Pipes, (2003) 5 SCC 705 the Court held as under:- "Under Section 73, when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss caused to him which the parties knew when they made the contract to be likely to result from the breach of it. This Section is to be read with Section 74, which deals with penalty stipulated in the contract, inter alia [relevant for the present case] provides that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, the party complaining of breach is entitled, whether or not actual loss is proved to have been caused, thereby to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named. Section 74 emphasizes that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation whether or not actual loss is proved to have been caused by such breach. therefore, the emphasis is on reasonable compensation. If the compensation named in the contract is by way of penalty, consideration would be different and the party is only entitled to reasonable compensation for the loss suffered. But if the compensation named in the contract for such breach is genuine pre-estimate of loss which the parties knew when they made the contract to be likely to result from the breach of it, there is no question of proving such loss or such party is not required to lead evidence to prove actual loss suffered by him. Burden is on the other party to lead evidence for proving that no loss is likely to occur by such breach." 38. In the case of Tower Vision (supra) the Court held as under:- "24. What follows from the above is that even if there is a clause of liquidated damages, in a given case, it is for the Court to determine as to whether it represents genuine pre-estimate of damages. In that eventuality, this provision only dispenses with the proof of "actual loss or damage". However, the person claiming the liquidated damages is still to prove that the legal injury resulted because of breach and he suffered some loss. In the process, he may also be called upon to show that he took all reasonable steps to mitigate the loss. It is only after proper enquiry into these aspects that the Court in a given case would rule as to whether liquidated damages as prescribed in the contract are to be awarded or not. In the process, he may also be called upon to show that he took all reasonable steps to mitigate the loss. It is only after proper enquiry into these aspects that the Court in a given case would rule as to whether liquidated damages as prescribed in the contract are to be awarded or not. Even if there is a stipulation by way of liquidated damages, a party complaining of breach of contract can recover only reasonable compensation for the injury sustained by him and what is stipulated in the contract is the outer limit beyond which he cannot claim. Unless this kind of determination is done by the Court, it does not result into "debt"." 39. It is thus settled that when a party claims Liquidated Damages, the claim will only be justified if there is a legal injury. It is equally settled that under Section 74 once the parties agree on a particular sum, towards LD, payable when damage is suffered, then, unless it is proved that the LD was not a genuine pre-estimate of damage, but in the nature of penalty, LD can be awarded by a Court or a Tribunal. 40. The questions, however, that arise in this case are whether the loss alleged to have been suffered by the Respondent has to be proved on the threshold of Section 73 and whether in every case the loss can actually be proved. Insofar as the first question is concerned, the same has been answered in various judgments some of which are referred to above. Degree of proof under Sections 73 and 74 of the Contract are of different levels. Under Section 74 party suffering damage need not lead evidence but would have to show legal injury. 41. Insofar as the second question is concerned, the Courts have held that there may be cases where there is a legal injury, but loss cannot be proved and in such cases damage can be automatically awarded to the aggrieved party. In Belco Enterprises (supra) the Court held as under:- "10. The law with regard to the imposition of and a claim towards liquidated damages is now well settled. Liquidated damages are a genuine pre-estimate of the damages under Section 74 of the Contract Act, 1872. In Belco Enterprises (supra) the Court held as under:- "10. The law with regard to the imposition of and a claim towards liquidated damages is now well settled. Liquidated damages are a genuine pre-estimate of the damages under Section 74 of the Contract Act, 1872. Once the parties agree that a particular amount towards liquidated damages is payable, then, unless and until it is alleged and proved that the liquidated damages are in fact not a genuine pre-estimate of damages, but are in fact in the nature of penalty, such liquidated damages can be claimed. When in certain contracts, losses caused can be proved, then, in such cases, in spite of a clause of liquidated damages, a person who is aggrieved, has also to prove the loss/ damages and the figure of liquidated damages would only be the upper limit of damages which can be awarded for breach of the contract. In these latter cases, what are damages to be awarded is to be calculated on the basis that loss suffered has to be proved. However, there are other cases of certain contracts where loss/damages cannot be proved. One example is where damages cannot be calculated on account of breach of contract is when a contractor is given a contract for the construction of a road, which is delayed and on which road toll had to be collected, and consequently it cannot be known how many vehicles would have actually passed on the road and therefore what would be the loss of the toll also cannot be known. Similarly, another example is with respect to construction of an oil rig. If OMP 498/07, 502/07,508/07 & 511/07 Page 7 there is delay in the construction of the oil rig, what would be the amount of the oil rig would have produced if it was made on time cannot be known. Therefore, in both these cases of construction of road as well as oil rig, there is no requirement of an aggrieved party to prove damages as are contemplated in the clause for liquidated damages and such damages are automatically awarded to the aggrieved party. Both the aforesaid examples were considered by the Supreme Court in the judgment of ONGC Vs. Therefore, in both these cases of construction of road as well as oil rig, there is no requirement of an aggrieved party to prove damages as are contemplated in the clause for liquidated damages and such damages are automatically awarded to the aggrieved party. Both the aforesaid examples were considered by the Supreme Court in the judgment of ONGC Vs. Saw Pipes, (2003) 5 SCC 705 , and the relevant paragraphs of this judgment dealing with this issue are paragraphs 46, 66 and 67 of the judgment which read as under: "46. From the aforesaid sections, it can be held that when a contract has been broken, the party who suffers by such breach is entitled to receive compensation for any loss which naturally arises in the usual course of things from such breach. These sections further contemplate that if parties knew when they made the contract that a particular loss is likely to result from such breach, they can agree for payment of such compensation. In such a case, there may not be any necessity of leading evidence for proving damages, unless the court arrives at the conclusion that no loss is likely to occur because of such breach. Further, in case where the court arrives at the conclusion that the term contemplating damages is by way of penalty, the court may grant reasonable compensation not exceeding the amount so named in the contract on proof of damages. However, when the terms of the contract are clear and unambiguous then its meaning is to be gathered only from the words used therein. In a case where agreement is executed by experts in the field, it would be difficult to hold that the intention of the parties was different from the language used therein. In such a case, it is for the party who contends that stipulated amount is not reasonable compensation, to prove the same." 42. In the present case the Arbitrator found that the loss was incapable of proof. The delay in Supplies had adversely effected the logistics of CRPF and functioning of troops and following the judgment in CENREX (supra), the Arbitrator upheld the levy of LD. 43. In the present case the Arbitrator found that the loss was incapable of proof. The delay in Supplies had adversely effected the logistics of CRPF and functioning of troops and following the judgment in CENREX (supra), the Arbitrator upheld the levy of LD. 43. On a careful analysis this Court finds that the facts of the present case are similar to those in CENREX (supra) inasmuch as the present Contract also dealt with goods which were to be supplied to the CRPF and its timely supply was extremely crucial to the Force. As rightly held in CENREX (supra) non-delivery of items required for Forces causes a loss/damage which is impossible to compute in terms of money. This Court does not find any infirmity in the finding of the Arbitrator that the Respondent was entitled to levy LD. Thus the challenge by the Petitioner to imposition of LD must fail. 44. At this stage, I would deal with the objection of the Respondent, with respect to reduction in the percentage of the LD by the Arbitrator from 10% to 3%. The Arbitrator was of the view that the LD @10% was on the higher side and came under the "umbrella of penalty and not as LD". The loss suffered by the Respondent was not so huge so as to justify LD of 10% and therefore reduced it to 3%. In ONGC (supra), Supreme Court has clearly held that under Section 74 of the Act, the emphasis is on reasonable compensation. If the compensation named in the contract is by way of penalty, consideration would be different and the party is only entitled to reasonable compensation for the loss suffered. The Arbitrator correctly applied the law and reduced the percentage of LD from 10% to 3% as in his wisdom the imposition of LD at 10% was a penalty, being on a higher side. This Court cannot substitute the wisdom or the plausible view of the Arbitrator. The judgment relied upon by the Respondent in the case of Union of India vs. Mecano Export Import S.A. (supra) lays down a proposition that can hardly be disputed. Under Section 31 (3) of the Act, the Arbitrator is required to give reasons for the Award and reason is a ground or a motive for a belief or course of action. Under Section 31 (3) of the Act, the Arbitrator is required to give reasons for the Award and reason is a ground or a motive for a belief or course of action. The Arbitrator looking into the facts and circumstances of the case rendered a finding that the loss suffered by the Respondent, which though could not be computed in terms of money, was not enough to justify LD @ 10% and with this reasoning reduced the amount claimed. Thus, it cannot be argued that the Award is bereft of reasons. No ground is made out to interfere with this part of the Award. 45. Insofar as the contention of the Petitioner that LD should be levied on delayed supplies only, is concerned, suffice would it be to notice that the Contract does not contemplate any bifurcation. Petitioner has itself complicated the matter by supplying in lots. This contention only merits rejection. 46. The next issue that arises is with respect to the claim of the Petitioner for interest on delayed payments. The Arbitrator has rejected the claim on two grounds, that there was no provision in the Contract for grant of interest on delayed payments and there was failure to deliver goods in time. A perusal of the several documents filed by the Petitioner before the Arbitrator and the categorical stand taken in the Statement of Claim and the rejoinder indicates that the Petitioner had throughout claimed that the Bills were cleared belatedly. The Arbitrator has himself noticed in page 16 of the Award that the Petitioner had annexed documents to justify the claim, but does not even deal with them. In the later part of the Award, the Arbitrator contradicts himself by observing that the Petitioner failed to put on record any copy of the payment to show that the payment was delayed. Petitioner delivered Two lots out of five within the original delivery period and was entitled to payment as per the terms of AT. The Arbitrator has confused the Claim of Interest on delayed payments with the ultimate completion of supply of all the five lots. No doubt the scope of interference under Section 34 of the Act is limited, but it is equally settled that if the Arbitrator ignores vital evidence, the Award can be interfered with. In Sunil Kukreja (supra), this Court has held as under:- "12. No doubt the scope of interference under Section 34 of the Act is limited, but it is equally settled that if the Arbitrator ignores vital evidence, the Award can be interfered with. In Sunil Kukreja (supra), this Court has held as under:- "12. A bare reading of the above finding of the Arbitrator would clearly show that there is no mention about the admission by the respondent recorded in the MOU regarding the receipt of Rs.5 crores from the petitioner. Equally, there is no discussion on the oral testimony of the witness of the petitioner and the lack of cross-examination by the respondent and its effect. There is also no discussion on the effect of the answer to question no. 5 given by the witness produced by the respondent in support of its claim. In my view, this is a case of total absence of consideration of evidence led before the Arbitrator. It is not a case where an inference is to be drawn on the evidence led before the Arbitrator because in that case, the Court, in exercise of its powers under Section 34 of the Act, would not act as a Court of Appeal to re-appreciate such evidence. The present is the case of total lack of consideration of the evidence by the Arbitrator. 13. In Associate Builders vs. Delhi Development Authority, (2015) 3 SCC 49 , Supreme Court has held that where the Arbitrator based his finding on no evidence or ignores vital evidence in arriving at his decision, the said decision would necessarily be perverse and is foul of the fundamental policy of Indian Law. Paragraph 31 of the judgment is instructive in this regard and is reproduced hereinbelow:- "31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where- (i) a finding is based on no evidence, or (ii) an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or (iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse." 14. In Hindustan Lever Ltd. v. Shiv Khullar and Anr.,2008 SCCOnLineDel 424, this Court had underlined the difference between reappreciating the evidence and considering where material evidence has been ignored. In Hindustan Lever Ltd. v. Shiv Khullar and Anr.,2008 SCCOnLineDel 424, this Court had underlined the difference between reappreciating the evidence and considering where material evidence has been ignored. It was emphasized that whereas the former would be an activity prohibited while considering the objections under Section 34 of the Act, the latter would be an activity to find out whether the learned Arbitrator has acted within his mandate for the reason the mandate of the Arbitrator is to decide on facts after considering all the relevant facts and not ignoring the same. Paragraphs 17 and 20 of the judgment are important and are reproduced hereinbelow:- "17. A commonly held belief that while considering objections under Section 34 of the Act the Court cannot look into the evidence before the arbitrator also needs to be clarified. There is a difference in re-appreciating evidence and considering whether material evidence has been ignored. Whereas the former would be an activity prohibited while considering objections under Section 34 of the Act for the reason an arbitrator is a chosen forum by the parties to conclude rival issues of fact between the parties, the latter would be an activity to find out whether learned arbitrator has acted within his mandate for the reason the mandate of the arbitrator is to decide on facts after considering all the relevant facts and not ignoring the same. xxxx xxxx xxxx 20. Even in the realm of evidence, no doubt the provisions of the Evidence Act, 1872 are not strictly applicable before an arbitral forum, but underlying principles thereof would certainly apply. For example, Section 21 of the Evidence Act, 1872 mandates that an admission made by a party is a relevant fact. The said section underlines a fundamental policy of the law that the best evidence of a party is the admission of the opponent. Suppose an arbitrator ignores an admission made by a party which has not been explained. Would not such an award be liable to be challenged on the plea that by ignoring a material evidence, a fundamental policy of law relating to evidence being violated by the arbitrator, the award is liable to be challenged? Surely, such an award would suffer from the mandate of the arbitrator being violated as also on the ground that the conclusions are perverse." 47. Surely, such an award would suffer from the mandate of the arbitrator being violated as also on the ground that the conclusions are perverse." 47. The second reason for rejecting the claim in my view is against the well-settled law on the discretion of the Arbitrator to grant interest. In the perception of the Arbitrator, the law on interest is that the Arbitrator will have the power to Award interest only when the Contract between the parties so provides. This observation is in the teeth of Section 31 (7) (a) of the Act which clearly stipulates that the Arbitral Tribunal has the power to grant interest on a claim for payment of money, at such rate as it deems reasonable for the whole or any part of the period between the date on which cause of action arose and the date on which the Award is made, unless otherwise agreed by the parties. Thus, when the contract between the parties stipulates a specific bar on the grant of interest, the Arbitrator cannot grant interest. Supreme Court recently in case of Jaiprakash Associates Ltd. (Jal) v. Tehri Hydro Development Corporation India Ltd.,2019 SCCOnLineSC 143 has held as under:- "13. Insofar as power of the arbitral tribunal in granting prereference and/or pendente lite interest is concerned, the principles which can be deduced from the various judgments are summed up below: (a) A Constitution Bench judgment of this Court in the case of Secretary, Irrigation Department, Government of Orissa v. G.C. Roy5 exhaustively dealt with this very issue, namely, power of the arbitral tribunal to grant prereference and pendente lite interest. The Constitution Bench, of course, construed the provisions of the 1940 Act which Act was in vogue at that time. At the same time, the Constitution Bench also considered the principle for grant of interest applying the common law principles. It held that under the general law, the arbitrator is empowered to award interest for the pre-reference, pendente lite or post award period. This proposition was culled out with the following reasoning: "43. The question still remains whether arbitrator has the power to award interest pendente lite, and if so on what principle. We must reiterate that we are dealing with the situation where the agreement does not provide for grant of such interest nor does it prohibit such grant. This proposition was culled out with the following reasoning: "43. The question still remains whether arbitrator has the power to award interest pendente lite, and if so on what principle. We must reiterate that we are dealing with the situation where the agreement does not provide for grant of such interest nor does it prohibit such grant. In other words, we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following principles emerge: (i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator. (ii) An arbitrator is an alternative form (sic forum) for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator has no power to award interest pendente lite, the party claiming it would have to approach the court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings. (iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law. (The proviso to Section 41 and Section 3 of Arbitration Act illustrate this point). All the same, the agreement must be in conformity with law. The arbitrator must also act and make his award in accordance with the general law of the land and the agreement. (iv) Over the years, the English and Indian courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite. (iv) Over the years, the English and Indian courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite. Thawardas [ Seth Thawardas Pherumal v. Union of India, (1955) 2 SCR 48 : AIR 1955 SC 468 ] has not been followed in the later decisions of this Court. It has been explained and distinguished on the basis that in that case there was no claim for interest but only a claim for unliquidated damages. It has been said repeatedly that observations in the said judgment were not intended to lay down any such absolute or universal rule as they appear to, on first impression. Until Jena case, (1988) 1 SCC 418 : (1988) 1 SCR 253 almost all the courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law. (v) Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (pre-reference period). For doing complete justice between the parties, such power has always been inferred." It is clear from the above that the Court decided to fall back on general principle that a person who is deprived of the use of money to which he is legitimately entitled to, has a right to be compensated for the deprivation and, therefore, such compensation may be called interest compensation or damages. (b) As a sequitur, the arbitrator would be within his jurisdiction to award pre-reference or pendente lite interest even if agreement between the parties was silent as to whether interest is to be awarded or not. (c) Conversely, if the agreement between the parties specifically prohibits grant of interest, the arbitrator cannot award pendente lite interest in such cases. This proposition is predicated on the principle that an arbitrator is the creature of an agreement and he is supposed to act and make his award in accordance with the general law of the land and the agreement. This position was made amply clear in G.C. Roy case in the discussion that ensued thereafter: "44. This proposition is predicated on the principle that an arbitrator is the creature of an agreement and he is supposed to act and make his award in accordance with the general law of the land and the agreement. This position was made amply clear in G.C. Roy case in the discussion that ensued thereafter: "44. Having regard to the above consideration, we think that the following is the correct principle which should be followed in this behalf: Where the agreement between the parties does not prohibit grant of interest and where a party claims interest and that dispute (along with the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes - or refer the dispute as to interest as such - to the arbitrator, he shall have the power to award interest. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view." (d) Insofar as 1940 Act is concerned, it was silent about the jurisdiction of the arbitrator in awarding pendente lite interest. However, there is a significant departure on this aspect insofar as 1996 Act is concerned. This distinction has been spelt out in Sayeed Ahmed case in the following manner: "Re: Interest from the date of cause of action to date of award 7. The issue regarding interest as noticed above revolves around Clause G1.09 of the Technical Provisions forming part of the contract extracted below: "G. 1.09. No claim for interest or damages will be entertained by the Government with respect to any money or balance which may be lying with the Government or any become due owing to any dispute, difference or misunderstanding between the Engineer-in-Charge on the one hand and the contractor on the other hand or with respect to any delay on the part of the Engineer-in-Charge in making periodical or final payment or any other respect whatsoever." xxx xxx xxx 14. The decisions of this Court with reference to the awards under the old Arbitration Act making a distinction between the prereference period and pendente lite period and the observation therein that the arbitrator has the discretion to award interest during pendente lite period in spite of any bar against interest contained in the contract between the parties are not applicable to arbitrations governed by the Arbitration and Conciliation Act, 1996."" 48. Therefore, in my view, this part of the Award, declining the relief of interest suffers from patent illegality, and deserves to be set aside. 49. It is settled law that while setting aside whole or part of the Award under Section 34 of the Act, Court cannot modify the Award. In view of this, the Petitioner is at liberty to initiate appropriate legal proceedings for redressal of its claim for interest. 50. Accordingly, OMP (Comm) No. 365/2017 is partly allowed and OMP (Comm) No. 54/2019 is dismissed. No order as to costs. 33. This part of the Award is based on analyses of several documents and evidence on record. As a finding of fact, the Tribunal has found that there were delays and hindrances caused by the Petitioner, resulting in the idling of machinery and manpower. Since there was no contractual formula, the Tribunal has applied the most commonly used CPWD Norms in such Contracts. 34. Petitioner had raised the same argument before the Tribunal, that in the absence of any evidence of the loss suffered, the Contractor is not entitled to idling charges, as is being raised here. The Tribunal took note of this argument in para 212 of the Award and then posed upon itself the task to sift the evidence to adjudicate the idling charges on real figures and rates reasonably assessed. 35. In paras 213 to 216 of the Award, the Tribunal extracts the figures furnished by the Respondent mentioning in detail the date, duration and the equipments along with idling hours to substantiate the Claim. The Tribunal thereafter relies on the cross-examination of the witness of the Respondent and extracts in the Award, some relevant portions therefrom. It is thereafter that the Tribunal concludes that the Respondent was entitled to the said Claim. 36. The Tribunal thereafter relies on the cross-examination of the witness of the Respondent and extracts in the Award, some relevant portions therefrom. It is thereafter that the Tribunal concludes that the Respondent was entitled to the said Claim. 36. In the case of NTPC vs. Patel Engineering (supra), this Court has upheld the applicability of the CWC Guidelines for computing the idling charges, in the absence of a contractual formula. Under Section 34 of the Act, this Court cannot interfere in finding of facts or reappreciate the evidence. This part of the Award is thus upheld. 37. Claim No. 4 was for additional work in the inclined galleries and was based on the plea that the execution of work got delayed due to stoppage of work by local people and for not handing over the site in time, causing an increase in the rate of excavation. Petitioner resisted the Claim by denying that there was any stoppage of work, attributable to the Petitioner and instead claimed that it was the Respondent who had abandoned the work midway and another sub-contractor had to be engaged to execute the work at substantially higher cost. The Tribunal in order to decide the said Claim relies upon Annexure C-72, C-73 being letters written by the Respondent to the Petitioner bringing to its notice the change of methodology by the Petitioner in excavating the galleries, resulting in higher expenses than those envisaged under the Contract, as well as the reasons for delay such as handing over the portals and access roads. The Tribunal also relies on Annexure C-59, letter dated 23.10.2006, whereby Respondent had sought revision of rates for the excavation work in the galleries and had brought out in detail the delay caused by the Petitioner. The response of the Petitioner vide letter dated 16.01.2008 was also taken note of by the Tribunal. The Tribunal then took note of Clause 4 of the LOA whereby the contract price was based on the unit rates and quantities, specified in the "Attachment" to the LOA. It observed that the Petitioner did not dispute the additional costs worked out by the Respondent nor denied the payment of higher cost to M/s Himalaya Constructions, who had completed the balance work. Tribunal also relied on Clause 5 of the LOA dated 10.03.2004 providing that the Contract price was subject to price escalation in accordance with Clause 73 of COPA. Tribunal also relied on Clause 5 of the LOA dated 10.03.2004 providing that the Contract price was subject to price escalation in accordance with Clause 73 of COPA. Tribunal also notes that the petitioner did not join issue with the Respondent on the revision of rates, but took a stand that Respondent had abandoned the work, midway. 38. Once the Petitioner did not dispute the additional costs worked out by the Respondent on account of the change in methodology in excavation attributable to the Petitioner, the Tribunal, in my view, rightly allowed the present Claim. Respondent had applied for revision of rates, but the Engineer did not even consider the issue in terms of Clause 73 of COPA. Petitioner had got the balance work executed through M/s Himalaya Constructions and had paid the said Company at a higher rate than the contractual rate between the parties herein. Since the Tribunal found that the Claim for additional cost was not disputed, it adopted the rate approved for M/s Himalaya Construction for the similar excavation work as the revised rate under the present Claim. In my view, the methodology adopted by the Tribunal was really in the domain of the Tribunal, once the Claim to higher rates was not disputed by the Petitioner. 39. In the case of Associate Builders v. DDA, (2015) 3 SCC 49 , the Apex Court categorically held that the decision as to what Formula would be applicable in the particular facts of a case, depending the contractual terms, is the domain of the Arbitrator. It was held: "56. Here again, the Division Bench has interfered wrongly with the arbitral award on several counts. It had no business to enter into a pure question of fact to set aside the arbitrator for having applied a formula of 20 months instead of 25 months. Though this would inure in favour of the appellant, it is clear that the appellant did not file any cross-objection on this score. Also, it is extremely curious that the Division Bench found that an adjustment would have to be made with claims awarded under Claims 2, 3 and 4 which are entirely separate and independent claims and have nothing to do with Claims 12 and 13. The formula then applied by the Division Bench was that it would itself do "rough and ready justice". The formula then applied by the Division Bench was that it would itself do "rough and ready justice". We are at a complete loss to understand how this can be done by any court under the jurisdiction exercised under Section 34 of the Arbitration Act. As has been held above, the expression "justice" when it comes to setting aside an award under the public policy ground can only mean that an award shocks the conscience of the court. It cannot possibly include what the court thinks is unjust on the facts of a case for which it then seeks to substitute its view for the arbitrator's view and does what it considers to be "justice". With great respect to the Division Bench, the whole approach to setting aside arbitral awards is incorrect. The Division Bench has lost sight of the fact that it is not a first appellate court and cannot interfere with errors of fact." Supreme Court in the above judgment also placed reliance on the judgment in McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 , wherein the Court had made the following observations: "106. We do not intend to delve deep into the matter as it is an accepted position that different formulae can be applied in different circumstances and the question as to whether damages should be computed by taking recourse to one or the other formula, having regard to the facts and circumstances of a particular case, would eminently fall within the domain of the arbitrator. 107. If the learned arbitrator, therefore, applied the Emden Formula in assessing the amount of damages, he cannot be said to have committed an error warranting interference by this Court. XXX 109. Sections 55 and 73 of the Indian Contract Act do not lay down the mode and manner as to how and in what manner the computation of damages or compensation has to be made. There is nothing in Indian law to show that any of the formulae adopted in other countries is prohibited in law or the same would be inconsistent with the law prevailing in India. 110. As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. 110. As computation depends on circumstances and methods to compute damages, how the quantum thereof should be determined is a matter which would fall for the decision of the arbitrator. We, however, see no reason to interfere with that part of the award in view of the fact that the aforementioned formula evolved over the years, is accepted internationally and, therefore, cannot be said to be wholly contrary to the provisions of the Indian law." This part of the Award calls for no interference. 40. Claim No. 6 was for release of security deposit of Rs. 4,97,10,698/-. Petitioner resisted the Claim before the Tribunal on the ground that respondent had abandoned the work and the Project could not be completed by the Respondent. Petitioner vide letter dated 20.07.2009 communicated to the Respondent that after crediting all the amounts to which it was entitled, there was a negative balance of Rs. 3.10 Crores on the Respondent and thus the retention money got reduced to Rs. 1.88 Crores as against a contractual requirement of Rs. 4.97 Crores and thus, Respondent was not entitled to refund of the security deposit. The argument today before this Court is that having abandoned the contract, Respondent cannot be permitted the refund of security deposit and that too in the absence of satisfaction of the Engineer on the completion of the Project under Clause 10 of the LOA, read with Clause 67 GCC. Clause 10 of the LOA permits 5% retention from each running bill towards security deposit with a further retention equal to 2.5% on completion of 12 months and a further 2.5% of the running bills after 25 months from the date of the LOA. The said provision also requires a satisfaction by the Engineer-in-Charge that all terms of the contract are duly carried out. As a matter of fact, Petitioner had deducted Rs. 4,48,95,263/- as retention money from the Running Bills between 2004-2008. When the respondent referred the dispute to the Engineer under Clause 67 GCC, the Engineer declined the release of retention money as according to the Engineer, Petitioner had incurred costs on account of breach by the Respondent. Petitioner had also filed a counter Claim for compensation on account of the alleged breach by the Respondent in abandoning the work. When the respondent referred the dispute to the Engineer under Clause 67 GCC, the Engineer declined the release of retention money as according to the Engineer, Petitioner had incurred costs on account of breach by the Respondent. Petitioner had also filed a counter Claim for compensation on account of the alleged breach by the Respondent in abandoning the work. The counterclaim was subsequently withdrawn by the Petitioner and the Tribunal by order dated 03.05.2014 had suspended the proceedings qua the said Counterclaim. Recording this background, the Tribunal observed that once the Counter Claim had been withdrawn and the proceedings were suspended by the Tribunal, at present, Petitioner had no Claim against the Respondent, and therefore, the retention money could not have been set off or adjusted against any Claim. On this basis, the Tribunal concluded that Respondent was entitled to refund of retention money deducted from their running bills towards the work actually done. The Tribunal was of the view that the question of performance or nonperformance was of no relevance to this Claim as the Petitioner had given up all its claims/ counter claims against the Respondent. Relevant para of the Award reads as under: "257. Claim No.6 Release of Security Deposit Rs. 4,97,10,698.00 Claimant's contention is that vide Letter dated 16.02.2008, Claimant demanded pending payment including Security Deposit but the same having not been paid, the clamant is entitled to recover Security Deposit. 258. Respondent resisted the claim pleading that the question of refund of security deposit does not arise when the Claimant has abandoned the work and when the project is not yet completed. Vide their Letter dated 20.07.2009, the Respondent clarified to Claimant that after crediting all the amounts to which the Claimant is entitled, there is still a negative balance of Rs. 3.10 crores on the Claimant and thus the retention money got reduced to Rs.1.88 crores as against the contractual requirement of Rs4.97 crores. The Claimant thus is not entitled to refund of the security deposit as claimed. 259. Clause 10 of the Letter of Award provides as under:- "10.0 Retention: A retention of 5% shall be deducted as security deposit from each running bills. Further retention equal to 2.5% of the running bills will be deduced on completion of 12 months period from the date of this letter. 259. Clause 10 of the Letter of Award provides as under:- "10.0 Retention: A retention of 5% shall be deducted as security deposit from each running bills. Further retention equal to 2.5% of the running bills will be deduced on completion of 12 months period from the date of this letter. A further retention equal to 2.5% of the running bills will be deduced after completion of 24 months from the date of this letter. Thus the final Retention will be 10% (ten percent) of the running bills. The Retention shall be returned to MCM after the Engineer in charge has satisfied himself that all terms of the Contract have been duly and fully carried out by the MCM or after 90 days after the completion of defect liability period and on submission of the documents indicated in the main Contract we have with NTPC under sub-clause 10.1 of conditions of Particular Application:" 260. Pursuant to Clause 10 of LoA, the Respondent deducted Retention Money Rs.4,48,95,263/- from the claimant's Running Bills for the period between 2004 to 2008. The Retention Money therefore is the monies retained by the Respondent otherwise payable to the claimants for the works done between 2004 and 2008. When the claimant referred the dispute to Engineer under Clause 67 GCC, the Engineer decided that ITD cannot release-the Retention Money as ITD has incurred costs as a result of breach of contract by MCM by abandoning the works. The Respondent on the other hand, filed Statement of Claim / Counter Claim for awarding monetary compensation of Rs.184,900,730.36 on account of breach of contract committed by the claimant by abandoning the works. However, the Respondent having withdrawn the Claims / Counter Claims, this Tribunal by order dated 3.5.2014 suspended the arbitral proceedings in respect of the Claims / Counter Claims raised by the Respondent. The order of the Tribunal having attained finality, the Respondent as on today has no claims or counter claims as against the claimant. Had there been any claims or counter claims, the Retention Money would have been set off or adjusted against such claims / counter claims. But there being no claims or counter claims as on today, the claimant is entitled to refund of Retention Money deducted from their Running Bills for the work actually done. Had there been any claims or counter claims, the Retention Money would have been set off or adjusted against such claims / counter claims. But there being no claims or counter claims as on today, the claimant is entitled to refund of Retention Money deducted from their Running Bills for the work actually done. There is no question of performance or non-performance of the contract by the claimant as it has no bearing as the respondent has given up all claims / counter claims against the claimant. The Respondent is therefore, liable to refund the Retention Money Rs.4,48,95,263/- from the claimant's Running Bills." There is no infirmity in this part of the Award and calls for no interference. 41. With respect to the contention of the parties under Claim No. 7, having perused the Award, it is seen that the Tribunal has examined the contentions of the parties and the plethora of documents and calculations placed on record, before arriving at the figure due to the Respondent. The Tribunal has taken note of the Claim of the Respondent from the Statement of Claim as well as the rejoinder and has also analysed the stand of the petitioner in the Statement of Defence. In addition, the amended pleadings have also been taken note of. Averments of the Petitioner in reply to the application for discovery and interrogatories is also analysed by the Tribunal. The Tribunal based on these documents records the value of the claims and the approved quantities and their differences. Reconciliation statements have been perused. The Tribunal also deals with the issue raised that the Claim was not referred to the Engineer and negatives it in para 271 which reads as under: 271. Admittedly, the Engineer vide his decision dated 17.04.2009 rejected the claim for Balance Payment and Escalation stating that there is no balance due and on the other hand there is negative accumulative account i.e. amount due from claimant to the Respondent to the tune of Rs. 1.40 crores. The claim for Balance Payment and Escalation was thus subjected to the decision of the Engineer who rejected the claim stating that there is a negative accumulated account to the tune of Rs. 1.40 crores due from claimant to the Respondent. Therefore, it cannot be said that the claim has not been referred to Engineer's decision. 1.40 crores. The claim for Balance Payment and Escalation was thus subjected to the decision of the Engineer who rejected the claim stating that there is a negative accumulated account to the tune of Rs. 1.40 crores due from claimant to the Respondent. Therefore, it cannot be said that the claim has not been referred to Engineer's decision. The Respondent's contention that the claim is not maintainable as the same having not been referred to Engineer's decision under Clause 67 GCC is therefore, liable to be rejected." 42. In para 274, the stand of the Petitioner with regard to the balance payments with detailed figures is noted by the Tribunal and in para 276, the Tribunal renders a finding that the Petitioner worked out the total value of work only upto RA Bill No. 50, but did not take into account the subsequent bills for May 2008 and June 2008. Calculating the amounts due in the subsequent bills, the Tribunal arrives at a computation. In para 277, the Tribunal takes note of the admitted amounts received by the Respondent. Detailed tables showing the deduction towards contractual retention and other advances towards cement, store material, TDS, WCT, etc. are noted. Finally, taking into account all these payments / deductions and balance, the Tribunal has arrived at a computation in para 277 towards the amount due to the Respondent, along with escalation. 43. It is thus, not open to the Petitioner to contend that this part of the Award suffers from non-application of mind. The contention that the Claim was not referred to the Engineer is also not correct as the Engineer rejected the Claim under Clause 67 GCC. Needless to state that this Court while examining the Award under Section 34 of the Act, cannot interfere in pure findings of fact and the methodology adopted for calculation. No interference is called for in the Award under Claim No.7. 44. Under Claim No. 9, the Tribunal has awarded simple interest to the Respondent @ 1 % over and above the RBI Time Lending Rates as pendente lite interest from 20.04.2009. The principal contention of the Petitioner herein is that the award of interest is in complete contravention of the terms of the Contract, whereby the payment of interest is explicitly prohibited in case of any outstanding due or delayed payment. The principal contention of the Petitioner herein is that the award of interest is in complete contravention of the terms of the Contract, whereby the payment of interest is explicitly prohibited in case of any outstanding due or delayed payment. Clause 78 according to the Petitioner bars any payment of interest on any amount which remains with the employer on account of any dispute between the parties. Respondent has, on the other hand, defended the Award by arguing that Clauses similar to Clauses 77 and 78 in the present Contract, have been interpreted in three earlier judgments and it is not open to the Petitioner to place any other interpretation and the Claim has been rightly allowed. Both sides have cited their respective judgments which have been referred to in the earlier part of this judgment. Clauses 77 and 78 as referred to above, were considered by a Coordinate Bench of this Court in the case of NTPC Limited vs. Hindustan Construction Company Ltd.,2017 SCCOnLineDel 6652 . The Court has interpreted the clauses as under: "51. As far as Clause 77 is concerned, the Court fails to appreciate how the said Clause would be relevant for deciding whether the contractor is entitled to pendent lite interest. It talks of the "interest upon any guarantee" or "payment of arrears" or "any balance which may on the final settlement of his account, be due to him" on account of omission on the part of the Engineer to pay the amount. The Court is unable to read the above Clause as prohibiting an AT from paying interest pendent lite to a secondary claim. 52. As far as Clause 78 is concerned, it only applies to "any amount or balance which may be lying with the employer". The above balance amount could be lying as a result of two contingencies: (i) on account of any dispute or difference between the parties or (ii) on account of any delay or omission on the part of the Engineer in making interim or final payment. It is in the above specific conditions that no interest is payable. The sum and substance are not in the nature of sums that are yet to be determined as being payable. It is in the above specific conditions that no interest is payable. The sum and substance are not in the nature of sums that are yet to be determined as being payable. Again, this is not a Clause which prohibits payment of pendent lite interest in the manner contemplated in Union of India v. Ambika Construction (supra) or Union of India v. Bright Power Projects (India) (P) Ltd. (supra). Therefore, in the considered view, there was no prohibition against the AT awarding interest in the manner it has in the impugned Award." 45. This is the judgment which has been relied upon by the Respondent in its favour. 46. It needs a mention at this stage that clauses similar to these two clauses came up for consideration before the Supreme Court in a recent judgment in the case of Jaiprakash Associates Ltd. vs. Tehri Hydro Development Corporation Ltd. (THDC),2019 SCCOnLine 143 . The relevant clauses in the said case which, in my view, are pari materia to clauses 77 and 78 are as under: "Clause 50.0 Interest on money due to the contractor No omission on the part of the Engineer in charge to pay the amount due upon measurement or otherwise shall vitiate or make void the contract, nor shall the contractor be entitled to interest upon any guarantee or payments in arrears nor upon any balance which may on the final settlement of his account, be due to him. Clause 51.0 No claim for delayed payment due to dispute etc. No claim for interest or damage will be entertained or be payable by the corporation in respect of any amount or balance which may be lying with the corporation owing to nay dispute, different or misunderstanding between the parties or in respect of any delay or omission on the part of he Engineer in charge in making intermediate or final payments on in any other respect whatsoever." 47. In the said case, the Arbitral Tribunal had granted interest @ 10% per annum as interest pendente lite apart from future interest. The Award was challenged in the High Court and a Single Judge of this Court quashed the Award, limited to the interest, awarded by the Arbitrators. In an intra-court appeal, the Division Bench upheld the Judgment of the Single Judge. The Award was challenged in the High Court and a Single Judge of this Court quashed the Award, limited to the interest, awarded by the Arbitrators. In an intra-court appeal, the Division Bench upheld the Judgment of the Single Judge. The litigation was carried further to the Supreme Court by Jaiprakash Associates Limited to the question, whether the Arbitrators could have awarded interest in view of Clauses 50 and 51 of the GCC which governed the terms between the parties. The High Court had taken a view that if the interest was prohibited by the express terms of the Contract between the parties, the Tribunal has no jurisdiction to award the interest. On the interpretation of the Clauses, the High Court was of the view that they were pari materia to Clauses 1.2.14 and 1.2.15 of the Contract being subject matter of the judgment in Tehri Hydro Development Corpn. Ltd. v. Jai Prakash Associates Ltd., (2012) 12 SCC 10 , wherein the Supreme Court had interpreted the clauses to mean that no interest is payable on claim for delayed payment to the Contractor. 48. The Supreme Court culled out the broad principles with regard to the grant of pre-reference and pendente lite interest by an Arbitral Tribunal. Insofar as pendente lite interest is concerned, the Court observed that the 1996 Act had made a significant departure on the grant of pendente lite interest from the law under the 1940 Act. This distinction according to the Court was summarized by the Supreme Court in an earlier judgment in Sayeed Ahmed & Company vs. State of Uttar Pradesh, (2009) 12 SCC 26 . Relevant part of the judgment in Sayeed Ahmed (supra) is as under: "14. The decisions of this Court with reference to the awards under the old Arbitration Act making a distinction between the pre-reference period and pendente lite period and the observation therein that the arbitrator has the discretion to award interest during pendente lite period in spite of any bar against interest contained in the Contract between the parties are not applicable to arbitrations governed by the Arbitration and Conciliation Act, 1996." 49. The Supreme Court then relied upon the judgment in Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat, (2010) 8 SCC 767 and Union of India vs. Bright Power Projects (India) Private Limited, (2015) 9 SCC 695 , the later being a judgment by a Bench of three Judges, where this position of law was reiterated. The Court noted that again in the case of Sri Chittaranjan Maity v. Union of India, (2017) 9 SCC 611 , the same question fell for consideration. Relevant part of the judgment in Sri Chittaranjan Maity (supra) is as under: "16. Relying on a decision of this Court in Ambica Construction v. Union of India [ Ambica Construction v. Union of India, (2017) 14 SCC 323 ] , the learned Senior Counsel for the appellant submits that mere bar to award interest on the amounts payable under the contract would not be sufficient to deny payment on pendente lite interest. Therefore, the arbitrator was justified in awarding the pendente lite interest. However, it is not clear from Ambica Construction [ Ambica Construction v. Union of India, (2017) 14 SCC 323 ] as to whether it was decided under the Arbitration Act, 1940 (for short "the 1940 Act") or under the 1996 Act. It has relied on a judgment of Constitution Bench in State of Orissa v. G.C. Roy [ State of Orissa v. G.C. Roy, (1992) 1 SCC 508 ] . This judgment was with reference to the 1940 Act. In the 1940 Act, there was no provision which prohibited the arbitrator from awarding interest for the prereference, pendente lite or post-award period, whereas the 1996 Act contains a specific provision which says that if the agreement prohibits award of interest for the pre-award period, the arbitrator cannot award interest for the said period. Therefore, the decision in Ambica Construction [ Ambica Construction v. Union of India, (2017) 14 SCC 323 ] cannot be made applicable to the instant case." 50. Significantly, the Supreme Court refers to the judgment of the Court in Reliance Cellulose Products Limited v. Oil and Natural Gas Corporation Limited, (2018) 9 SCC 266 , where the entire law on the subject was revisited. Significantly, the Supreme Court refers to the judgment of the Court in Reliance Cellulose Products Limited v. Oil and Natural Gas Corporation Limited, (2018) 9 SCC 266 , where the entire law on the subject was revisited. In the case of Reliance Cellulose (supra), the Supreme Court had contrasted a Clause relating to grant of interest as in second Ambika Construction case i.e. Ambica Construction v. Union of India, (2017) 14 SCC 323 , with the Clause in Tehri Hydro (supra). The Supreme Court in the case of Reliance Cellulose (supra) held as under: "24. A conspectus of the decisions that have been referred to above would show that under the 1940 Act, an arbitrator has power to grant pre-reference interest under the Interest Act, 1978 as well as pendente lite and future interest. However, he is constricted only by the fact that an agreement between the parties may contain an express bar to the award of prereference and/or pendente lite interest. Since interest is compensatory in nature and is parasitic upon a principal sum not having been paid in time, this Court has frowned upon clauses that bar the payment of interest. It has therefore evolved the test of strict construction of such clauses, and has gone on to state that unless there is a clear and express bar to the payment of interest that can be awarded by an arbitrator, clauses which do not refer to claims before the arbitrators or disputes between parties and clearly bar payment of interest, cannot stand in the way of an arbitrator awarding prereference or pendente lite interest. Thus, when one contrasts a clause such as the clause in Second Ambica Construction case [ Ambica Construction v. Union of India, (2017) 14 SCC 323 : (2018) 1 SCC (Civ) 257] with the clause in Tehri Hydro Development Corpn. Ltd. [ Tehri Hydro Development Corpn. Thus, when one contrasts a clause such as the clause in Second Ambica Construction case [ Ambica Construction v. Union of India, (2017) 14 SCC 323 : (2018) 1 SCC (Civ) 257] with the clause in Tehri Hydro Development Corpn. Ltd. [ Tehri Hydro Development Corpn. Ltd. v. Jai Prakash Associates Ltd., (2012) 12 SCC 10 : (2013) 2 SCC (Civ) 122] , it becomes clear that unless a contractor agrees that no claim for interest will either be entertained or payable by the other party owing to dispute, difference, or misunderstandings between the parties or in respect of delay on the part of the engineer or in any other respect whatsoever, leading the Court to find an express bar against payment of interest, a clause which merely states that no interest will be payable upon amounts payable to the contractor under the contract would not be sufficient to bar an arbitrator from awarding pendente lite interest under the 1940 Act. As has been held in First Ambica Construction case [ Union of India v. Ambica Construction, (2016) 6 SCC 36 : (2016) 3 SCC (Civ) 36] , the grant of pendente lite interest depends upon the phraseology used in the agreement, clauses conferring power relating to arbitration, the nature of claim and dispute referred to the arbitrator, and on what items the power to award interest has been taken away and for which period. We hasten to add that the position as has been explained in some of the judgments above under Section 31(7) of the 1996 Act, is wholly different, inasmuch as Section 31(7) of the 1996 Act sanctifies agreements between the parties and states that the moment the agreement says otherwise, no interest becomes payable right from the date of the cause of action until the award is delivered." 51. Having traversed the various judgments on the subject, Supreme Court finally examined clauses 50 and 51 which were subject matter of controversy between the parties. Court was of the view that clauses 50 and 51 of the GCC being pari materia with the Clauses in the Tehri Hydro (supra) had been interpreted by holding that no interest was payable on delayed payments due to the contractor, and therefore, the same construction was adopted for interpreting clauses 50 and 51. Court was of the view that clauses 50 and 51 of the GCC being pari materia with the Clauses in the Tehri Hydro (supra) had been interpreted by holding that no interest was payable on delayed payments due to the contractor, and therefore, the same construction was adopted for interpreting clauses 50 and 51. The Supreme Court then examined the contention of the Appellant that this construction was contrary to the judgment in Harish Chandra (supra). It may be noted here that even in the present case reliance has been placed by the Respondent on the judgment in Harish Chandra's case (supra). To answer this question, the Court placed reliance on the discussion in the case of Reliance Cellulose (supra), relevant para of which is as under: "25. ...Also, unlike the clause in Tehri Hydro Development Corporation Ltd. (Supra), clause 16 does not contain language which is so wide in nature that it would interdict an arbitrator from granting pendente lite interest. It will be remembered that the clause in Tehri Hydro Development Corportation Ltd. (supra) spoke of no claim for interest being entertained or payable in respect of any money which may be lying with the Government owing to disputes, difference or misunderstanding between the parties and not merely in respect of delay or omission; Further, the clause in Tehri Hydro Development Corporation Ltd. (supra) goes much further and makes it clear that no claim for interest is payable "in any other respect whatsoever" 52. Finally, the Supreme Court held as under: "21. It is pertinent to mention that the aforesaid judgment also discusses and analysis Harish Chandra case. In the first place, the judgment in Harish Chandra case is under the 1940 Act. More pertinently, this judgment is explained and distinguished in Sayeed Ahmed and Company case in the following paragraphs: "17. The appellant strongly relied upon the decision of this Court in State of U.P. v. Harish Chandra & Co., (1999) 1 SCC 63 to contend that Clause 1.09 of the contract did not bar the award of interest. The clause barring interest that fell for consideration in that decision was as under: (SCC p. 67, para 9) "1.09. The appellant strongly relied upon the decision of this Court in State of U.P. v. Harish Chandra & Co., (1999) 1 SCC 63 to contend that Clause 1.09 of the contract did not bar the award of interest. The clause barring interest that fell for consideration in that decision was as under: (SCC p. 67, para 9) "1.09. No claim for delayed payment due to dispute, etc.-No claim for interest or damages will be entertained by the Government with respect to any moneys or balances which may be lying with the Government owing to any dispute, difference; or misunderstanding between the Engineer-in-Charge in making periodical or final payments or in any other respect whatsoever." This Court held that the said clause did not bar award of interest on any claim for damages or for claim for payment for work done. We extract below the reasoning for such decision: (SCC p. 67, para 10) "10. A mere look at the clause shows that the claim for interest by way of damages was not to be entertained against the Government with respect to only a specified type of amount, namely, any moneys or balances which may be lying with the Government owing to any dispute, difference between the Engineerin-Charge and the contractor; or misunderstanding between the Engineer-in-Charge and the contractor in making periodical or final payments or in any other respect whatsoever. The words "or in any other respect whatsoever" also referred to the dispute pertaining to the moneys or balances which may be lying with the Government pursuant to the agreement meaning thereby security deposit or retention money or any other amount which might have been with the Government and refund of which might have been withheld by the Government. The claim for damages or claim for payment for the work done and which was not paid for would not obviously cover any money which may be said to be lying with the Government. Consequently, on the express language of this clause, there is no prohibition which could be culled out against the respondent contractor that he could not raise the claim for interest by way of damages before the arbitrator on the relevant items placed for adjudication." (emphasis supplied) 18. In Harish Chandra [ (1999) 1 SCC 63 ] a different version of Clause 1.09 was considered. In Harish Chandra [ (1999) 1 SCC 63 ] a different version of Clause 1.09 was considered. Having regard to the restrictive wording of that clause, this Court held that it did not bar award of interest on a claim for damages or a claim for payments for work done and which was not paid. This Court held that the said clause barred award of interest only on amounts which may be lying with the Government by way of security deposit/retention money or any other amount, refund of which was withheld by the Government. 19. But in the present case, Clause G1.09 is significantly different. It specifically provides that no interest shall be payable in respect of any money that may become due owing to any dispute, difference or misunderstanding between the Engineer-in-Charge and contractor or with respect to any delay on the part of the Engineer-in-Charge in making periodical or final payment or in respect of any other respect whatsoever. The bar under Clause G1.09 in this case being absolute, the decision in Harish Chandra [ (1999) 1 SCC 63 ] will not assist the appellant in any manner." 22. It is also pertinent to note that the judgment in Sayeed Ahmed and Company distinguishing the restrictive wording in Harish Chandra has been consistently followed by this Court in number of cases thereafter. In this scenario, when we find that Harish Chandra case which is of the vintage of 1940 Act and is distinguished in Sayeed Ahmed and Company coupled with the fact that the ratio of Sayeed Ahmed and Company has been consistently followed, there is no reason to deviate from the construction to Clauses 50 and 51 of the GCC given by the arbitral tribunal in the first instance as well as the High Court. Above all, these clauses is pari materia with with Clauses 1.2.14 and 1.2.15 of GCC in THDC case which was a judgment between the same parties." 53. It may be noted here that Clause 78 in the present case is exactly similar to the clauses in Jaiprakash (supra) and Tehri Hydro (supra) and the words of the Clauses which distinguished these cases from second Ambika were "in any other respect whatsoever". It may be noted here that Clause 78 in the present case is exactly similar to the clauses in Jaiprakash (supra) and Tehri Hydro (supra) and the words of the Clauses which distinguished these cases from second Ambika were "in any other respect whatsoever". Therefore, relying on the judgments as referred to above, in my opinion, learned Senior Counsel for the Petitioner is right in arguing that there was a clear bar in Clauses 77 and 78 for grant of interest on account of the eventualities mentioned therein. The judgment of Jaiprakash (supra) is a judgment by three Judges Bench and has considered the judgment in the case of Harish Chandra (supra) and in this view, the contention of the Respondent cannot be accepted. 54. It is also important to see the paradigm shift in law with regard to the grant of pendente lite interest from the position that inured under the 1940 Act to the position under the 1996 Act. The Legislature in its wisdom has clearly sanctified the party autonomy and agreements between the parties by introducing Section 31(7) in the 1996 Act and has made the power of the Arbitrator to grant pendente lite interest, subject to any agreement between the parties to the contrary. In this view of the matter, it was not open to the Arbitrator to have allowed the present Claim and granted pendente lite interest as the parties had under Clauses 77 and 78 agreed that there would be a bar to grant of interest. This part of the Award therefore, deserves to be set aside. 55. Accordingly, the Petition is partly allowed. The Impugned Award only to the extent of grant of pendente lite interest is set aside. No orders as to costs.