( 1 ) THESE are two appeals directed against the common judgment and decree of the Trial Court. CM A No. 1045 of 1991 arises out of judgment and decree in OP No. 24 of 1989, whereas other CMA No. 1 106 of 1991 arises out of judgment and decree in OP No. 8 of 1989. OP No. 8 of 1989 was filed by dega Ramalinga Reddy, contractor under sections 14 (2) and (3) of the Arbitration act (for short "the Act"), which was allowed and OP No. 24 of 1989 was filed by superintending Engineer under Section 30 of the Act which was dismissed. The parties shall be referred as department and contractor . Since the department lost both the OPs, they have filed these two appeals. Both the appeals were heard together and are being disposed of by this common judgment.

( 2 ) FACTS. The contractor entered into a contract with the department on 7. 10. 1982 for construction of approach road to bridge at M. 48/2 and M. 48/5 of Madras-Calcutta road, N. H. Division under agreement No. 33/ 82/83. The contractor commenced the work, but did not complete, therefore disputes arose between the parties. According to the department, the contractor committed breach of contract, therefore they invoked clause 61 of the preliminary specifications to Andhra Pradesh Standard Specifications, resumed possession of the site and called for fresh tenders to complete the balance of work at the risk and costs of the contractor and got the work completed. The contractor put forward certain claims and sought for settlement of those claims under arbitration. The matter was referred to a panel of arbitrators named in the agreement. As the arbitrators did not enter upon the reference, the contractor filed OP No. 26 of 1985 for appointment of a sole Arbitrator. The Court below, by its order dated 5. 2. 1989, appointed sri T. Krishna Murthy, a retired Chief engineer as the sole Arbitrator to settle the dispute. The Arbitrator entered upon the reference and after due enquiry passed an award on 5. 2. 1989.

( 3 ) THE contractor put forward 12 claims before the Arbitrator. The Arbitrator awarded Rs. 33,542/- under 1st claim, rs. 2,25,020/-under 2nd claim, Rs. 2,00,007/- under 3rd claim, Rs. 3,02,842/- under 4th claim and Rs. 8,000/- under 11th claim. The Arbitrator rejected the Claims 5 to 10. Claim No. 12 related to future interest. According to the Arbitrator, he was not clear about the legal position with regard to the future interest, therefore he refrained from passing any award with regard to future interest. The contractor filed OP No. 8 of 1989 to make the award rule of the court. He also prayed that Claim No. 12 be decided by the Court.

( 4 ) THE department resisted the claim of the contractor made in OP No. 8 of 1989. It also filed OP No. 24 of 1989 for setting aside the award passed by the Arbitrator. The claim of the department was that since the contractor had not completed the work in accordance with the terms and conditions of the agreement, it was entitled to recover the difference of the amount incurred by the department by entrusting the work to another contractor. The arbitrator had failed, to consider the said aspect while passing the award and therefore the award had been visited in material irregularities. It also stated that the Arbitrator was clearly wrong in assuming that the contractor had done some work after the final bill was paid to him on 18. 5. 1984. The arbitrator also failed to note that the total work done by the contractor had been checked, measured and payment had been made to him. The observation of the arbitrator that the site was not handed over to the contractor was also not correct. The entire site had been handed over to him on 29. 11. 1982, although land acquisition proceedings were pending. While the contractor maintained that the Arbitrator had taken all aspects of the claims and come to the conclusion that the procedure followed by the department in invoking the Clause 60 or 61 of the preliminary specifications to Andhra Pra