This First Appeal filed under Section 37 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act) challenges the judgment and order dated 16/6/2007 delivered by learned District Judge, (Nagpur in Misc. Civil Application No.531 of 2003 whereby the learned District Judge has allowed application under Section 34 thereof filed by present Respondent. Appellant had stated that controversy herein is covered by the judgment dated 23/12/2005 in First Appeal No.60l/2005 and hence both parties had agreed to address the court finally at the stage of admission itself. On one date, Respondent stated that another matter vide F.A. No.284/2007 between parties involving similar point was already closed for judgment and therefore it was thought fit to await such judgment. The said Appeal was decided on 20/12/2007. In the meanwhile record & proceedings from Court of District Judge were called for and thereafter, parties were heard on 11th, 12th and 13th February, 2008 in this Appeal.

2. Admitted for immediate final hearing. Heard Advocate R. R. Shrivastava for Appellant, Advocate R. G. Agrawal for Respondent Union of India. Perused R & P of lower court.

3. Advocate Shrivastava points out that in present matter 3 claims raised before Arbitrators by the Appellant are only relevant.

Claim number 4 was for recovery of loss of Rs.1,86,570/- on account of underutilisation of labour force. Arbitrators allowed sum of Rs.93,285/- only under this head. Claim number 5 was for recovery of loss of Rs.63,000/sustained on account of underutilisation of overheads. Amount awarded by Arbitrators under this head is Rs.31,500/- only. Claim number 11 was to recover loss of anticipated profit of Rs.22, 183/- on account of work which Appellant could not complete. Unexecuted work was worth Rs.71,293/- and 25% thereof was claimed as loss of profit. The Arbitrators granted only Rs.17,723/- on this account. He invites attention to consideration of these claims by the Arbitrators and thereafter by learned District Judge. According to him stand not taken in defence by present Respondent before Arbitrators and not even raised before District Court has been treated as valid defence by learned Lower Court to deny any amount to present Appellant. He states that clauses in contract i.e. General Conditions of Contract (GCC) have been invoked by lever court without even any notice to or opportunity to present Appellant. He therefore states that a totally new case has been made out for Respondent by learned District Court and its application under Section 34 of Act has been allowed. He invites attention to clause 17(3), 19(1), 61 & 62 of GCC for this purpose. According to him Learned District Judge has treated the appeal as one under Section 96 of Civil Procedure Code and ignored limits of Section 34 of Act. The appreciation of evidence undertaken by District Court is prohibited and recourse to GCC or Indian Contract Act was not permissible. He further argues that absolutely no reason has been assigned to reduce the costs of Rs 40,000/- awarded by Arbitrators to Rs.25,000/- only by District Court.

4. Advocate R. G. Agrawal for Respondent Union of India states that the learned District Judge has rightly appreciated the controversy in the light of contract between parties and its terms and conditions. He points out that Arbitrators were duty bound to find out whether claim as lodged is within four corners of GCC and learned District Court has found that Arbitrators did not undertake any such scrutiny and thereby mis-conducted the proceedings. He fully supports the impugned judgment and order and prays for dismissal of appeal. He points out that learned District Judge has only interpreted various clauses in GCC and as such the other two judgments are not at all relevant for consideration in present matter.

5. Judgment dated 23/1212005 in First Appeal No.60l/2005 is being relied upon by Appellant to show that contractor there was found entitled to damages on acc