The Civil Miscellaneous Appeal is directed against the order and decree dated 21.3.2003 in Arbitration Original Petition No.19 of 2000 on the file of the Principal Senior Civil Judge, Tirupati, whereas the Civil Revision Petition is directed against the judgment and decree dated 21.3.2003 in Original Suit No.165 of 2000 on the file of the Principal Senior Civil Judge, Tirupati.

2. Since both the cases arise of same Award passed by the first respondent, they are being taken up for disposal together.

3. For better appreciation of facts, the appellants/petitioners are hereinafter referred to as ‘the Department’, the first respondent is referred to as ‘the Arbitrator’, and the second respondent is referred to as ‘the Contractor’.

4. The brief facts that are necessary for disposal of these cases may be stated as follows:

The Department invited tenders vide notice No.17/Cable/87-88/82, dated 1.6.1990 for execution of work of excavation of trenches at Tirumala and other places for laying cables. As the amount quoted by the Contractor was the lowest, his tender was accepted by the Department and Ex.C3-Work Order dated 21.6.1990 was issued by the Department. The works entrusted to the Contractor under the above said order consist of- (i) excavating trenches of required width and depth in soils of different nature, in metal roads, in tar roads and concrete roads; (ii) recovery/laying of cables of all sizes in trenches, and (iii) covering the cables of all sizes with ‘U toughs or bricks or Cuddapah slabs as supplied by the Department. In the work order, different rates were fixed for excavating trenches in various types of soils viz. ordinary soils, hard soils, rocky soils, metal roads, tar roads and cement concrete roads. After handing over site to the Contractor, he made all necessary arrangements to complete the work. On 2.7.1990, he commenced the work. While excavating the trenches in Tirumala, it had become necessary for the Contractor to cut some of the trenches in hard rock, which was not contemplated at the time of issue of work order by the Department. Neither the tender schedules supplied to the Contractor nor the tender acceptance letter issued by the Department provided for any rate for cutting trenches in hard rock. Cutting trenches in hard rock requires greater effort involving more labour and blasting material, and blasting also cannot be resorted to freely and the rock had to be cut and removed by chiseling. So, the cost of cutting trenches in hard rock is very high when compared to the rates of excavation in hard soils. The Contractor made a representation on 8.10.1990 to the Department for fixing a reasonable higher rate for cutting hard rock. In pursuance of the same, the Divisional Engineer (Telecom), on behalf of the District Manager (Telecom), Tirupati, called for a report from the Assistant Divisional Engineer, who submitted a report dated 24.4.1991 requesting for approval of an appropriate rate for cutting in hard rock. It is also stated in the said report that the Telecom District Manager, Tirupati had also inspected the cable laying work in Tirumala during execution of the work and observed the cable trench passing through hard rock. The Contractor completed the work including rock cutting. The Contractor submitted bills claiming additional payment for the extent of cutting carried out by him in hard rock in various reaches, and the Assistant Divisional Engineer, Telecom (cables), while forwarding the Contractor’s letter dated 19.8.1991, stated that the Contractor was assured of payment for cutting in hard rock at appropriate rate by the Telecom District Manager. But, the Department did not settle the claim giving additional payment for the work done in hard rock cutting. The Department also did not release the earnest money deposit. After waiting for substantial period, the Contractor sent representation dated 28.7.1992 to the Telecom District Manager, Hyderabad, requesting him to settle the claim.