The main legal point established in the judgment is that the arbitrator cannot decide contrary to the terms of the contract and must consider the evidence and apply the law in reaching a decision.

1. By this appeal petition filed under section 37 of the Arbitration & Conciliation Act, 1996 (for short “Arbitration Act”), the appellant seeks to challenge an order and judgment dated 12th August, 2004 passed by the learned Joint District Judge, Ratnagiri rejecting Civil Misc. Arbitration Application (7 of 2001) filed by the appellant under section 34 of the Arbitration Act, 1996 challenging the impugned award dated 15th December, 2000 allowing various claims made by the respondent. (The appellant is hereinafter referred to as the “owner” and respondent is referred to as “Contractor”).

2. Some of the relevant facts for the purpose of deciding this appeal are as under:

(a) On 4th June, 1991, the owner invited tenders for the work of construction of major bridge on River Vashshiti at Chiplun. On 12th July, 1991, the contractor submitted a tender. The owner accepted the tender submitted by the contractor on 29th August, 1991 at the cost of Rs.1,59,94,060 with a stipulated date of completion as 28th October, 1992. Both the parties thereafter executed formal contract agreement. The stipulated date of completion was 28th October, 1992. The owner granted extension of contract till 30th June, 1993 in writing. The work was not completed by 30th June, 1993. The contractor continued the work and completed by 18th March, 1995. The dispute arose between the parties. The contractor submitted their claim to the owner on 29th January, 1996 by letter dated 15th March, 1996. The owner vide its letter dated 15th June, 1996 rejected the claims of the contractor. The contractor vide letter dated 17th June, 1996 invoked arbitration clause. The arbitral tribunal was constituted for adjudication fo the disputes. Pursuant to the direction given by the arbitral tribunal, both the parties filed their pleadings and documents. Neither party led any oral evidence before the arbitral tribunal. By award dated 15th December, 2000, the arbitral tribunal allowed some of the claims made by the contractor. The owner impugned the said award by filing arbitration application (7 of 2001) in the court of learned District Judge, Ratnagiri. By order and judgment dated 12th August, 2004, the learned Joint District Judge, Ratnagiri rejected the said arbitration application No. 7 of 2001 filed by the owner under section 34 of the Arbitration Act, 1996. The owner has impugned the said order and judgment dated 12th August, 2004 in this court by filing this appeal under section 37 of the Arbitration Act, 1996.

3. Ms. Kiran Bhagalia, the learned counsel for the owner submits that the claim for compensation for the work carried out beyond the original stipulated date of completion were contrary to and in the teeth of clause 16.3 of the contract which prohibits payment of any damages or compensation in favour of the contractor by the owner. The learned counsel submits that few claims in respect of extra items awarded by the arbitral tribunal are contrary to clause 37 of the contract and in any event without rendering any reasons by the arbitral tribunal. The learned counsel submits that the claim for interest awarded by the arbitral tribunal is also contrary to and in the teeth of clause 15.4 of the contract which prohibits payment of interest on the earnest money or security deposit or any other amount payable to the contractor by the owner. Clause 15.4, 16.3 and 37 of the contract are extracted as under:

“15.4 INTEREST OF AMOUNTS : No interest will be payable upon the earnest money or the security deposit or amounts payable to the Contractor under the contract but Government securities deposited in terms of sub clause 15.1 above will be repayable with interest accrued thereon as paid by the government.

16.3 EXTENSION OF TIME ON CORPORATION'S ACCOUNT : In the event of any failure or delay by the Corporation to hand over to the Contractor possession of the lands necessary for the execution of the Works or to give the necessary notice to commence the works or to provid