This appeal is directed against the decree and order dated 28.6.2002 in O.P. No. 549 of 2001 on the file of the Motor Vehicle Accident Claims Tribunal-cum-Additional Special Judge for SPE & ACB cases-cum Additional Chief Judge, City Civil Court, Hyderabad.

2. The appellants are the petitioners in the O.P. whereas the 151 respondent is the contractor and the 2nd respondent is the arbitrator. The appellants filed the aforementioned O.P. before the lower Court under Section 34 of the Arbitration and Conciliation Act, 1996 seeking to set aside the A ward passed by the 2nd respondent arbitrator.

3. The brief facts of the case that led to the filing of the present appeal, as projected in the O.P. are as follows:

The IS' respondent entered into an agreement with the appellants on 19.2.1990 for doubling of track between Thangadi Chegunta Stations by earth work in formation, construction of major/minor bridges and execution of miscellaneous works from Ch. 39000M to Ch. 43200M, Reach VII for a sum of Rs. 46,22,600/-, which was enhanced to Rs.55,01,253/- by way of additional works. The work was required to be completed by 31.10.1990, but actually it was completed on 20.4.1993. On 26.8.1991, the 15' respondent requested for extension of time without penalty owing to certain difficulties faced by him and the same was extended till 28.2.1992. On 1.10.1991, the 1" respondent made another representation stating that he was facing certain hurdles, such as, resistance of owners of the land due to standing crops; delay in removal of P&T posts and wires; increase in cost of fuel due to gulf crisis and general inflation and, requested that a pre-arbitration committee should be appointed to consider his claim for enhancement of the rates. Subsequently, the Chief Engineer appointed a prearbitration committee to examine the claims of several contractors for enhancement of rates owing to the unprecedented developments. The Committee having considered the matter, recommended for enhancement of the rates at 25%. However, the Committee rejected the claim of the IS' respondent in respect of idling charges for machinery for the period from 9.6.1990 to 31.7.91 and 5.10.90 to 15.3.91. So far as the claim in respect of overhead charges for prolongation of the contract is concerned, the Committee recommended for compensation at 2% per annum for 20 months on the contract value. Accordingly, a supplementary agreement was entered on 5.3.93 and the 1" respondent was granted extension without penalty to complete the work. It is stated that on completion of the work on 20.4.1993, the work was measured on 26.4.1993 and the final bill was made ready on 30.3.1994 and the payment was made on 31.3.1994. The F.D.Rs., which were given as security, were released only on 29.11.1994. However, on 25.6.1996, the 1st respondent has pointed out to the authorities that certain subsisting claims were not included in the final bill and while listing out five items out of the same, requested that the matter may be referred for arbitration. As no action was taken, the appellant filed an arbitration application before this Court seeking appointment of an arbitrator and this Court by a common order passed in A.A. Nos. 8 and 11 of 1998, appointed the 2nd respondent herein as Arbitrator to decide the disputes arising out of agreement No. 9/CAO/C/SC/90, dated 19.2.1990. Accordingly, parties appeared before the Arbitrator and participated in the proceedings. Through order dated 10.8.1999, the Arbitrator passed an Award in respect of certain claims totalling to Rs.7,90,000/-, payable within three months from the date of passing of the said award, failing which, it was held that the same will carry interest at 18% per annum, compounded quarterly from the date of the Award. Challenging the said Award, the appellants filed the aforementioned O.P. before the Court below.

4. Before the lower Court, it was the contention of the appellants that appointment of arbi