Judgment

RANGANATHAN, J.:- The appellant company entered into a contract with the Public Works Department of the Jammu and Kashmir Government for the construction of a bridge on the River Chenab at Baradari. Certain disputes arose between them which were referred to arbitration in pursuance of a clause therefor contained in the contract. The two joint arbitrators made an award on 24th October, 1972. There were eight items of claim by the contractor which were put up for their consideration. They allowed fully the entire claim of the appellant on items Nos. 1 and 2 and totally rejected the claims under items Nos. 3 and 7. The rest of the claims were allowed in part.

2. There were further proceedings before the Jammu and Kashmir High Court under Ss. 30 and 33 of the Arbitration Act. The learned single Judge made the award in respect of item Nos. 1, 4, 6 a Rule of Court but set aside the award in respect of items Nos. 2 and 5. The rejection of the claims. under items Nos. 3 and 7 was not challenged before him. On item 8, he held that the arbitrators could not have awarded future interest up to the date of payment of the amounts awarded. The contractors filed an appeal before the Division Bench. and the state preferred a memorandum of cross-objections. Both the appeal and the cross Objections were dismissed by the Division Bench. Hence the present two appeals.

3. The contractors are aggrieved by the High Courts order on three of the claims made by them:

Amount

Item No. Subject Claimed Awarded

Rs. Rs.

2 Dewatering of piers by more than one pump 1,26,376.62 1,26,376.62

5 Refund of Toll Tax payment 2,49,595.39 2,39,204.67

8 Interest on the total amount of claim remaining unpaid at 9% p.a. 6% p.a. from date of reference (6-12-68) to date of payment or decree, whichever is earlier.

The High Court as mentioned earlier, set aside the award on items Nos. 2 and 5 and also set aside the grant of future interest. These are the three issues before us.

4. In regard to item No. 2 above, the arbitrators had accepted the contractors claim in full. The Division Bench, agreeing with the single Judge, has set aside the award on this issue on the ground that it is in violation of an express clause of the contract between the parties which read thus:

"19. The foundation wells will be sunk by open dredging methods only. If the grabs persistently done less than half full (i.e. not less than half a yard) dewatering of wells and removing the stratum by putting men inside will be resorted to only if the wells can be dewatered by 1 No. 6" x 6" pump without blowing. For sinking well in this manner the contractor will be paid extra rupees three per eft. of sinking done. If complete dewatering by 1 No. 6" x 4" (sic) pump without blowing of sand is not possible, pneumatic sinking will be permitted for further sinking of the wells for which the contractors will be paid extra at rates quoted by them."

Likewise, in regard to item No. 5, the Court set aside the award on the ground that it violates the terms of clause 1.28 and condition 32 of the contract which were in the following terms:

"1.28 Tender amount shall exclude all quarry fees, royalties, terminal taxes and octroi duty if any payable for materials to be consumed on the work. No sales tax is payable by the contractor on constructional works. Any payments made by the contractor on this account shall be reimbursed by the department on production of proper original vouchers.

Condition 32. Tender amount will exclude all quarry fees, royalties, terminal taxes and octroi duty if any. No sales tax is payable by the contractor on the constructional works. Any payments made by the contractor can such account shall be reimbursed by the department on production of proper original vouchers.

"On the issue of interest (claim No. 6) the Court held that the power to award future interest i.e. from the date of the award to the date of payment was available only to the Court and not the arbitrator.

5. The question of interest can be