( 1 ) IN these proceedings under Sections 30 and 33 of the Arbitration Act, 1940, the petitioner challenges every bit of the award that it is in favour of the contractor.

( 2 ) THE umpire has awarded Rs. 5 lakh by way of damages to the contractor ; Rs. 50,000/- on account of costs in respect of the Court proceedings ; Rs. 7 lakh on account of costs in the reference and interest at the rate of 18 per cent per annum from March 15,1988 until payment.

( 3 ) IN end-August, 1983 the contractor was engaged for designing, manufacturing, supplying, erecting, testing and commissioning a Process Water reclamation Plant at the Rourkella Steel Plant of the petitioner. The work was to be completed by December, 1984. The arbitrator has found that there was delay on the part of the employer or the engineers engaged by it that resulted in an unsuitable site being allotted. An alternative site was thereafter provided and on the petitioner's instructions found in a writing of March 22, 1984, the work was suspended. The work remained suspended till or about the first week of December, 1984, and after relocation of the plant units, construction activities were taken up in the middle of December, 1984.

( 4 ) BY the beginning of 1987, the contractor instituted proceedings under Section 20 of the Arbitration Act, 1940 and the disputes were ultimately referred to joint arbitrators and an umpire was appointed in the event there was difference between the joint arbitrators. According to the contractor, the disputes referred to arbitration did not include any counter-claim by the employer and the joint arbitrators differed as to whether the counter-claim would be entertained at all. Upon such difference, the matter reached the umpire and the reference culminated in an award running into some 116 pages made on july 16, 2003.

( 5 ) THE contractor claimed a sum of Rs. 2. 5 crore on various heads including on account of idle establishment charges (claim No. 5) and for loss of profit (claim No. 7 ). The umpire held against the contractor on all 11 heads of claim originally made, save in respect of claim No. 7 and awarded a sum of rs. 5 lakh on such count. The umpire rejected the four additional claims made by the contractor in the supplementary statement of claim. The entirety of the counter-claim, of value of Rs. 2. 75 crore, was found unmeritorious.

( 6 ) THE umpire has found that despite the original 16-month tenure of the contract having run out in December 1984, the contract was kept alive by the parties till March 15, 1988. By an order of this Court of February 29,1988, a chance was given to the contractor to complete the work, if not already done, within two weeks from the date thereof. On the basis of such order, the umpire has concluded that the contract remained alive till March 15,1988.

( 7 ) THE petitioner challenges the award for damages on account of loss of profit. The petitioner urges that loss of profit of the nature claimed and awarded can arise only when the contract is terminated before the work contemplated thereunder is complete and such termination of work is not on account of any breach by the contractor. The petitioner complains that the delay in the execution of the work was not for any fault on its part and even if the delay is attributable to the petitioner, as the umpire has held, the petitioner may have been made liable for the delay on account of idling charges. The petitioner asserts that upon the umpire having ruled against the contractor in respect of the claim on account of idling charges, whether on account of labour or equipment, it was not lawful for the umpire to compensate the contractor by awarding damages on account of loss of profit.

( 8 ) ACCORDING to the petitioner, the contract was not terminated by it it stood determined by the order of Court passed in proceedings instituted by the contractor. The delay that the umpire! found had been occasioned by the employer, the petitioner asserts, was more than made u

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