Judgment

GROVER, J.: This is an appeal by certificate from a judgment of the Orissa High Court relating to an award given by Shri A. V. Viswanatha Sastri an Ex-Judge of the Madras High Court in a dispute which arose between the respondent and the Union of India in respect of a claim made by the former for a sum of Rs. 35,45,080.91 which was stated to be due for earthwork done on the right dyke of the Hirakud Dam.

2. The Chief Engineer, Hirakud Dam, invited tenders on behalf of the Union of India for execution of work specifying certain details as to how tenders were to be submitted. It appears that before the tenders were invited certain estimates were prepared in the office of the Chief Engineer. The intending contractors were to submit tenders stating the rate for depositing earth on the Right Dyke site including all lifts and leads. The respondent company submitted a tender which according to the Chief Engineer, was not in the form invited by him as certain extraneous matters were stated to have been introduced. The Chief Engineer and the representatives of the respondent company held a conference at which certain agreements were arrived at. The tender of the contractor was provisionally accepted on December 28, 1951; the formal contract was executed much later on March 21, 1953. The work started in February 1952 and took four years for completion. The earthwork was done by the company by manual labour for a year in the beginning and thereafter it was done to a large extent by machinery. The earth required to erect the dyke was dug up from certain areas demarcated by the Engineering Department near the site of the dyke. The places from which the earth had to be taken were called "borrow pits" or "borrow areas". The company dug up earth from the "borrow pits" and dumped it on the site of the dyke upto the required specifications. This involved movement of the loose earth both vertically and horizontally from the borrow pit to the dyke. The vertical movement was styled as "lift" and the horizontal movement as "lead". When the company started employing the heavy machinery from the beginning of 1953 onwards a number of ramps had to be constructed to enable the machinery to go up from the borrow pits to the dyke.

3. It has not been disputed that for the earthwork done by the company it received payment from the Government of an amount aggregating Rs.1,08,19,543.00. This amount was paid in accordance with the rate in item 1-A of the contract (Ex. P-69). According to that rate Rs. 45/- were to be paid for 100 cubic feet of "earthwork of all kinds of soil laid in 6" layers with rough dressing including all lifts and average lead not exceeding 10". According to the company an additional sum of Rs. 28,20,796.75 was due in addition to the amount already paid in respect of extra leads including lifts. An amount of Rs. 2 lakhs was claimed on account of the construction of ramps. The company further claimed a sum of Rs. 5,34,282.16 on account of interest on the aforesaid two amounts. This claim was disputed by the Union of India and it was maintained on its behalf that the company had been fully paid for the earthwork done by it according to the terms of the contract and that the company was not entitled to payment for lifts nor was there any occasion for leads in excess of an average of 10 and further that the ramps in so far as they were outside the dyke were not to be paid for while those which had been incorporated in the dyke had already been paid for as a part of the dyke.

4. The agreement by which reference was made to the arbitrator was as follows: -

"The disputes and difference between the parties relating to payment of lift equivalent and leads for machine route are referred to the arbitration of Shri A. V. Viswanatha Sastri, retired High Court Judge, Madras and his award shall be final and binding on the parties."

5. On November 16, 1958 the following issues were framed by the Arbitrator by the consent of both the parties:

"(i) Is th