JUDGMENT : Prayer: This Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 praying to set aside the Award of the Arbitration dated 07.01.2016 arising out of the argument No.TBM/SG/CN/337/1/87 /CONT/VRI-ATUONT/VRI-ATU dated 27.10.2005 entered into between the Petitioner and the second Respondent as far as the scaling down of the claims of the Petitioner (1) Escalated costs & (2) Cost towards additional works carried out are concerned and set aside the other 4(four) claims of the Petitioner viz., Final bill amount, cost towards the safeguarding of materials during the extended period of contract, disallowing the recovery towards non-return of materials and interest for the various amounts to be awarded from the date of their falling due. 1. The claimant before the Arbitral Tribunal is the Petitioner herein. An Arbitral Award dated 07.01.2016(the Award) is assailed under Section 34 of the Arbitration and Conciliation Act, 1996(the Arbitration Act). 2. The Petitioner was awarded a contract in relation to signalling arrangements at Vridhachalam, Mukhasaparur, Kuttakudi, Pukkiravari, Chinnasalem, Talaivasal and Attur Stations, including LC gates in connection with gauge conversion work on VRI-SA section under Letter of Acceptance dated 01.08.2005 and Agreement dated 27.10.2005. The total contract value was a sum of Rs.2,50,22,267/-. The work was required to be completed within a period of six months from the date of the Letter of Acceptance, i.e. on or before 31.01.2006. According to the Petitioner, the Respondents did not make the site available for execution of work by the Petitioner. Consequently, the Petitioner was constrained to seek extensions of time. Such extensions were granted by the Respondents by way of rider agreements under Clause 17-A(ii) of the General Conditions of Contract. Eventually, the project was commissioned for passenger traffic on 18.11.2007 and physical completion of works in all aspects was achieved by 24.01.2008. The work was inspected between March and August 2008, and the final measurements were recorded in May 2009. In view of the fact that disputes arose between the parties with regard to amounts due and payable to the Petitioner for execution of work, an Arbitral Tribunal was constituted. 3. Before the Arbitral Tribunal, the Petitioner made seven claims. The work was inspected between March and August 2008, and the final measurements were recorded in May 2009. In view of the fact that disputes arose between the parties with regard to amounts due and payable to the Petitioner for execution of work, an Arbitral Tribunal was constituted. 3. Before the Arbitral Tribunal, the Petitioner made seven claims. These claims were: a claim of Rs.32,72,000/- towards price variation or escalation; a claim of Rs.1,64,855/- towards additional work; a claim of Rs.12,51,121/- towards release of Bank Guarantee; a claim of Rs.5,04,000/- towards charges for safeguarding materials at the Petitioner’s work site; a claim of Rs.3,17,865/- towards refund of amounts deducted from the final bill; interest at 18% per annum on the final bill amount and on the other claims; and release of the final bill amount of Rs.35,23,276/-. The Respondents filed a reply statement refuting the claims made by the Petitioner. Upon examining the pleadings, the Arbitral Tribunal framed six points for determination. Both parties adduced documentary evidence before the Arbitral Tribunal. The Petitioner herein exhibited 16 documents, which were marked as Ex.C1 to C16. The Respondents exhibited 27 documents, which were marked as Ex.R1 to R27. As regards the claim for escalation, the Arbitral Tribunal awarded a sum of Rs.2,00,000/-. As regards the deduction made by the Respondents, the claim of the Petitioner was rejected. As regards the claim for additional work, a sum of Rs.50,000/- was awarded. The claim towards charges for safeguarding materials was rejected. The Bank Guarantee was ordered to be returned to the Petitioner. The interest claim was rejected. In sum, the Arbitral Tribunal directed the Respondents to pay a sum of Rs.2,50,000/- to the Petitioner within 30 days from the date of receipt of the Award, failing which to pay interest at 18% per annum thereon from the date of Award till the date of payment. 4. The Petitioner assailed the Award by contending that it is patently illegal. The first contention in such regard was that the grant of a sum of Rs.2,00,000/- towards escalation as against a claim of Rs.32,72,588/- is completely arbitrary. The Petitioner pointed out that extensions for time were granted on account of the failure of the Respondents to make the site available to the Petitioner for execution of work. Therefore, extensions of time were granted without imposing liquidated damages for delay. The Petitioner pointed out that extensions for time were granted on account of the failure of the Respondents to make the site available to the Petitioner for execution of work. Therefore, extensions of time were granted without imposing liquidated damages for delay. Since the delay was attributable to the employer, the Petitioner contended that it is entitled to escalation/price variation. The Petitioner pointed out that Clause 46-A of the General Conditions of Contract provides for price variation, and that the claim was made on the basis of the RBI Index. Although such claim was made for the entire extended period by dividing the same into 7 quarters extending from November 2005 to June 2010, the Petitioner contended that the Arbitral Tribunal rejected the said claim on specious grounds. Learned senior counsel for the Petitioner adverted to the analysis and conclusion of the Arbitral Tribunal in respect of Point No.1 and contended that the Arbitral Tribunal rejected the claim by stating that the calculation chart of the Petitioner is not accepted. It was further pointed out that the conclusion that the major part of materials were supplied by the Railways is factually incorrect, as borne out by the documents on record. By referring to Annexure B-1 and B-2 to the Agreement, it was contended that the Respondents were required to supply 16 items, whereas the Petitioner/Contractor was required to supply 106 items. 5. The Petitioner also referred to an earlier award pronounced in a related dispute between the Petitioner and the Respondents. In the said dispute, an escalation claim was made by the Petitioner herein against the Respondents by relying upon the RBI Index. The said claim was admitted by the relevant arbitral tribunal by applying the RBI Index, and the said arbitral award was not challenged by the Respondents. Since the present claim for escalation was also made on the basis of the RBI Index, the Petitioner contended that the Arbitral Tribunal should have accepted the RBI Index as a reasonable basis to compute escalation. Instead, it was contended that the Arbitral Tribunal awarded a sum of Rs.2,00,000/- without indicating the basis for limiting the grant of escalation to Rs.2,00,000/-. Instead, it was contended that the Arbitral Tribunal awarded a sum of Rs.2,00,000/- without indicating the basis for limiting the grant of escalation to Rs.2,00,000/-. By relying on the judgment of the Calcutta High Court in Food Corporation of India v. Gopal Chandra Mukherjea, 2016 SCC Online Cal 4955, it was contended that this claim should have been allowed under Section 70 of the Indian Contract Act, 1872 (the Contract Act). 6. The second contention of the Petitioner was that the claim for payment of sums unlawfully deducted by the Respondents should have been allowed. By referring to the deduction statement of the Respondents and the material reconciliation statement, the Petitioner asserted that the deductions made by the Respondents were completely unjustified. The third contention of the Petitioner was that the award of only a sum of Rs.50,000/- towards additional work against a claim of Rs.1,64,854/- is perverse. On this issue, the Petitioner referred to and relied upon communications relating to the additional work carried out by the Petitioner. In spite of providing such evidence, the Petitioner contended that the Arbitral Tribunal erroneously confined the award to a sum of Rs.50,000/ towards erection of a solar panel. With regard to the rejection of the claim towards safeguarding materials, the Petitioner contended that it was constrained to safeguard the materials for a longer period in view of the repeated extensions of the tenure of the contract due to the failure of the Respondents to provide the site. Therefore, the said claim should have been allowed. As regards the claim for interest, the Petitioner contended that the Arbitral Tribunal is empowered to grant interest under Section 31(7) of the Arbitration Act. By placing reliance on the judgment of the Hon’ble Supreme Court in Ravichee and Company v. Union of India (2018) 7 SCC 664 and of this Court in O.P.Nos.40 and 41 of 2007 dated 18.07.2008, learned senior counsel for the Petitioner contended that interest should have been awarded at least during the pendente lite period. 7. These contentions were refuted by the Respondents. With regard to the escalation claim, the Respondents contended that the contract did not provide for price variation. 7. These contentions were refuted by the Respondents. With regard to the escalation claim, the Respondents contended that the contract did not provide for price variation. The Respondents referred to the statement of defence filed before the Arbitral Tribunal and pointed out that the Respondents had contended before the Arbitral Tribunal that Clause 19A(ii) of the General Conditions of Contract prohibits the payment of compensation during the extended contract period, and that the contract is required to be executed during the extended period on the same terms on which the contract was executed during the original period. The Petitioner also referred to Clause 24 of the Special Conditions of Contract which prohibits the grant of escalation. With regard to additional work, the Respondents relied upon the statement of defence and contended that the only additional work which was authorised by the Respondents was the erection of a solar panel. Therefore, the rejection of the additional work claim as regards other alleged items of additional work is justified. In fact, the Respondents contended that the other items do not qualify as additional work as they are within the original scope of work. As regards the claim towards safeguarding of materials, the Respondents contended that Clause 25 of the General Conditions of Contract imposes an obligation of the contractor to set up sheds, store houses and yards at his expense to safeguard the materials. Therefore, the claim towards safeguarding charges was liable to be rejected. With regard to the claim for interest, the Respondents referred to and relied upon several judgments of the Hon’ble Supreme Court, such as Bharat Heavy Electricals Ltd. v. Globe Hi-Fabs Ltd. (2015) 5 SCC 718 and Sree Kamatchi Amman Constructions v. Divisional Railway Manager (Works), Palghat, (2010) 8 SCC 767 , and contended that all the above judgments conclude that interest cannot be granted if the relevant contract prohibits the grant of interest. The Respondents finally contended that all the bills raised by the contractor were duly processed and paid. Therefore, the Award is not liable to be interfered with. 8. The first issue to be addressed is the refusal to accept the escalation claim of Rs.32,72,588/-. On this issue, the Petitioner relied upon the RBI Index. Clause 46-A of the General Conditions of Contract was placed in support of the contention that the contract provides for price variation. Therefore, the Award is not liable to be interfered with. 8. The first issue to be addressed is the refusal to accept the escalation claim of Rs.32,72,588/-. On this issue, the Petitioner relied upon the RBI Index. Clause 46-A of the General Conditions of Contract was placed in support of the contention that the contract provides for price variation. On the contrary, the Respondents referred to Clause 24 of the Special Conditions of Contract, which provides that price variation either towards materials or labour has not been agreed to by the Railways. The law on escalation is that it may be granted either if the contract provides for it or if the contract is silent on the issue. To put it differently, escalation cannot be granted if the relevant contract prohibits the grant of escalation. Clause 24 of the Special Conditions of Contract reads as under:- “24. Price/wage variation clause: Railway is not agreeable to any price/wage escalation clause” 9. The above clause is terse. However, it indicates the intention of the Respondents not to grant escalation. Whether such clause prohibits the grant of escalation during the extended period of the contract is debatable. In any event, the Respondents herein have not challenged the Award by which a sum of Rs.2,00,000 was awarded towards escalation. Therefore, it is not necessary to enter a finding on whether the grant of escalation is prohibited under the contract; instead, it is sufficient to examine whether limiting escalation to Rs.2,00,000/- is liable to be interfered with. The Petitioner relied upon an RBI Index. There is no doubt that the contract does not provide for the adoption of the RBI Index to compute price variation. Indeed, the RBI publishes several indices with respect to escalation. For instance, the Wholesale Price Index (WPI)(All Commodities), the Consumer Price Index(CPI) for Industrial Workers and the like. Moreover, many of these indices are published periodically as a series [such as WPI (All Commodities), base year 2011-2012] and there is significant variation from series to series. These indices are appropriate for use in particular types of contract. The most widely used indices in construction contracts use four key elements or variables, namely, labour, fuel, cement and steel to determine escalation, and are, therefore, appropriate in large construction contracts wherein a wide range of materials are used, but the above mentioned four elements are dominant. These indices are appropriate for use in particular types of contract. The most widely used indices in construction contracts use four key elements or variables, namely, labour, fuel, cement and steel to determine escalation, and are, therefore, appropriate in large construction contracts wherein a wide range of materials are used, but the above mentioned four elements are dominant. The present contract is for the provision of signalling systems. Therefore, the components and materials used for such purpose are different. Hence, even the appropriateness of the particular RBI Index, which the Petitioner relies on, is open to serious doubt. On this issue, it bears repetition that the contract clearly does not provide for the application of the RBI Index. Besides, it is unclear from the materials on record as to the particular RBI Index which the Petitioner relied on. Indeed, the Award sets out the documents marked by the parties, and the relevant RBI Index was not marked as one of the exhibits on behalf of the Petitioner herein. The Petitioner also relied on Section 70 of the Contract Act in this context, but quasi-contract principles such as quantum meruit have no place when there is an elaborate contract in place. Besides, the applicability of such principles to a price variation or escalation claim is doubtful. When these facts and the legal position are considered cumulatively, the refusal of the Arbitral Tribunal to apply the RBI Index is justified. Although the award of a sum of Rs.2,00,000/- appears to be without basis, since the Respondents have not challenged the Award, there is no reason to interfere with that part of the Award. 10. As regards the rejection of the claim towards deductions made by the Respondents, the Arbitral Tribunal recorded a factual finding that the claimant did not produce any documents to substantiate that it returned the materials. The claim was rejected on such basis. On this issue, the Petitioner relied upon the deduction statement of the Railways and the material reconciliation statement. The material reconciliation statement does not establish the Petitioner’s claim. In any case, the material reconciliation statement was marked as an exhibit before the Arbitral Tribunal and the factual finding of the Arbitral Tribunal based on appraisal of the documents on record does not warrant interference under Section 34 of the Arbitration Act. 11. The material reconciliation statement does not establish the Petitioner’s claim. In any case, the material reconciliation statement was marked as an exhibit before the Arbitral Tribunal and the factual finding of the Arbitral Tribunal based on appraisal of the documents on record does not warrant interference under Section 34 of the Arbitration Act. 11. As regards the claim towards additional work, the Respondents admitted that the erection of the solar panel was authorised. On such basis, the Arbitral Tribunal awarded a sum of Rs.50,000/-. With regard to the other items of additional work, the Respondents denied that the same constituted additional work. While the reasoning of the Arbitral Tribunal that the Respondents provided some materials is not entirely convincing, it is clear that the Petitioner failed to adduce credible evidence to establish that it executed additional work and was entitled to the amounts claimed in such regard. Turning to the rejection of the claim for safeguarding materials, the Respondents relied upon Clause 25 of the General Conditions of Contract. The Arbitral Tribunal recorded that both parties are responsible for safeguarding materials and therefore rejected the claim. Once again, although the reasoning of the Arbitral Tribunal is not completely convincing, no case is made out for interference both because the contract appears to impose the safeguarding obligation on the Petitioner and the Petitioner did not adduce credible evidence of the expenditure incurred for such purpose. 12. The last issue to be considered is the grant of interest. On this issue, the Respondents relied upon Clause 64 of the General Conditions of Contract which prohibits the grant of interest on any sums due to the contractor. Several judgments of the Hon’ble Supreme Court were relied upon in this regard. If a contractual clause prohibits the grant of interest, interest cannot be granted in the pre-reference period. As regards the grant of interest in the pendente lite period, discretion is vested on the Arbitral Tribunal. In the case at hand, the Arbitral Tribunal exercised discretion and refused to grant interest by taking note of the judgments of the Hon’ble Supreme Court. Interest has, however, been granted in the post-Award period. On balance, the conclusion of the Arbitral Tribunal on this ground does not warrant interference. 13. As a result, the Petitioner has failed to make out a case to interfere with the Award. Interest has, however, been granted in the post-Award period. On balance, the conclusion of the Arbitral Tribunal on this ground does not warrant interference. 13. As a result, the Petitioner has failed to make out a case to interfere with the Award. In fine, O.P.No.968 of 2018 is dismissed without any order as to costs.