The main legal point established in the judgment is the limited scope for interference with arbitral awards under the Arbitration and Conciliation Act, 1996, and the discretion of the Arbitrator in awarding future interest.

JUDGMENT :

A.S. Chandurkar, J.

1. These appeals filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, the Act of 1996) take exception to the judgment of the learned Principal District Judge, Chandrapur in Misc. Civil Application (Arbitration) No.63/2004 dated 15/12/2006. By that judgment the application filed by the appellant in First Appeal No.240/2007 under Section 34 of the Act of 1996 challenging the award passed by the sole Arbitrator on 04/03/2004 came to be partly allowed by maintaining the award of the Arbitrator dated 04/03/2004 on all counts except one. The only modification directed by the learned Principal District Judge was in the rate of future interest which was reduced from 25% per annum to 18% per annum from the date of the award till realization. The original applicant being aggrieved by the judgment of the learned Principal District Judge in so far as it maintained the award passed by the Arbitrator has preferred First Appeal No.240/2007. The original claimant being aggrieved by the reduction in the rate of interest from 25% per annum to 18% per annum has challenged that part of the judgment by preferring First Appeal No.213/2007.

2. The facts in brief giving rise to these appeals are that the State of Maharashtra through its Public Works Department represented by its Executive Engineer (hereinafter referred to as the applicant) had invited tenders for construction of two bridges on BOT (Build, Operate and Transfer) basis. M/s Khare and Tarkunde Infrastructure Private (Ltd.) (hereinafter referred to as the claimant) submitted its bid which came to be accepted on 01/09/1997. As per the tender document the claimant was entitled to collect toll for a concession period of sixty one months. Accordingly on 01/10/1997 a Work Order was issued to the claimant under which two bridges were to be constructed within a period of twenty four months. While the estimated cost of construction was Rs.226.86 lakhs, the claimant had quoted the cost of construction to be Rs.340 lakhs. The work of construction was completed on 21/10/1998. On 07/08/2003 the toll booths were handed over to the applicant. In terms of the tender document the claimant raised a claim for grant of compensation as well as for extension of concession period on various grounds. This claim was considered by the applicant and it was found that the claimant would be entitled to compensation of an amount of Rs.1,99,24,313/-. In lieu of this amount of compensation the concession period of toll collection was extended for a further period of nine months and seven days. The claimant however was not satisfied with the compensation as awarded by the applicant. The arbitration clause was accordingly invoked by the claimant and Shri R. H. Tadvi was appointed as sole Arbitrator on 11/09/2003. On the basis of the documentary material relied upon by the parties before the Arbitrator he passed an award on 04/03/2004. He found that the claimant was entitled to the amount of Rs. 5,71,03,932/-. This was after taking into consideration the extended period of concession of nine months and seven days. The amount of compensation determined was directed to be paid with interest at the rate of 25% per annum (compounded monthly). On the basis of the amount of compensation to which the claimant was found entitled the Arbitrator evaluated the same in terms of the concession period which was twenty four months and twenty seven days.

3. The applicant being aggrieved by the aforesaid award filed an application under Section 34 of the Act of 1996 before the District Court at Chandrapur. According to the applicant the arbitral award was contrary to the provisions of Section 34(2)(a)(iv) as well as Section 34(2)(b)(ii) of the Act of 1996. It was the grievance of the applicant that the Arbitrator had travelled beyond the scope of the dispute referred for arbitration and had thus exceeded jurisdiction. It was also stated that the award was liable to be set aside on th