JUDGMENT/ORDER :

Hanchate Sanjeevkumar, J.

The present appeal is filed under Section 37(b) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') calling in question the order passed in Arbitration Case No.04/2002 clubbed with Arbitration Case No.05/2002 dated 11.09.2009 passed by the court of the Principal District Judge, Raichur.

2. Brief facts of the case are as follows :-

The appellant-Company is a Karnataka State Government undertaking Company, carrying activities of mining of gold and was established for treating 900 tons of gold per day. The appellant-Company has decided to increase its production from the existing 900 tons of gold per day to 2000 tons per day and the main source of gold are from Hatti unit and UTI unit. Therefore, it was planned to produce 800 metric tons and remaining 400 tons of gold ore was planned from UTI mines. Therefore, the appellant-Company started mining activities at UTI mines and called tender for transporting gold ore and then contract of transportation was allotted to respondent No.1-Contractor after following the procedure of tender and respondent No.1-Contractor started the work after getting the work order dated 24.04.1998 for transportation of gold ore from UTI into to Hatti unit.

It is further submitted that one of the stipulation as per the said work order is that the respondent No.1Contractor shall transport daily 400 tons of gold ore from UTI gold mines to Hatti with variation of (+ or -) of 10% for a period of 12 months and the total quantity was fixed at 1,40,000 tons in that year.

3. It is the allegation against respondent No.1Contractor by the appellant-Company that respondent No.1-Contractor had failed to transport gold ore as per the terms and conditions in the work order and was transporting lesser quantity of gold ore than what has been stipulated in the terms and conditions in the contract and it is the contention of the appellant-Company that due to lesser quantity of transportation of gold core then what is stipulated as per terms and conditions of contract, the appellant-Company was not able to produce gold as per their target and therefore sustained loss and hence as per the stipulation in the contract the appellant Company had raised dispute for resolving the same by appointing an arbitrator who is respondent No.2 herein.

4. In this regard, it is contended that the appellant-Company has issued several notices to respondent No.1-Contractor but the respondent No.1Contractor in spite of rectifying himself for transportation of 400 tons of gold ore per day but continued the transportation of lesser quantify of gold ore to the appellant-Company and therefore it is contended that the appellant-Company was not able to produce the expected target of the production of the gold. Therefore, in this regard a dispute arose between the appellant-Company and respondent No.1-Contractor. Hence, as per the stipulations in the said contract for resolving the said dispute, it was referred to the Arbitrator who is respondent No.2 herein. Accordingly, the respondent No.2 is appointed as an Arbitrator resolving the issue.

5. The respondent No.2 sole Arbitrator had conducted proceedings and passed an award on 30.01.2002. By the said award the respondent No.2- Arbitrator has disallowed the claim of the appellant-Company but allowed the counter claim made by respondent No.1-Contractor.

6. The appellant-Company being aggrieved by the said award dated 30.01.2002 passed by respondent No.2Arbitrator has invoked Section 34 of the Act challenging the award filed Arbitration Case No.5/2002 before the Court of Principal District Judge, Raichur.. At the same time respondent No.1-Contractor has also filed an Arbitration Case No.4/2002 as per Section 33(1)(a) of the Act, calling in question the said award so far as non granting of future interest at the rate of 12% per annum by respondent No.2-Aarbitrator.

7. The learned Principal District Judge, Raichur has dismissed the Arbitration application fil