ORDER/JUDGMENT :

1. This appeal has been preferred by the South Eastern Coal Fields Limited (hereinafter referred to as the S.E.C.L.) under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act, 1996') questioning the legality and propriety of the order dated 31.03.2006 passed by the District Judge, Bilaspur in MJC No.73/2005, whereby the claim of the Respondent as accepted by the sole Arbitration vide order dated 03.04.2005 has been upheld.

2. Briefly stated the facts of the case are that the work of Bijuri Water Supply Scheme was awarded to the Respondent-Contractor, namely, M. S. Nainan (hereinafter referred to as the 'Contractor') for providing, laying, jointing and testing of raw water, clear water, rising and distribution mains of Hasdeo Area for a total cost of Rs.4,29,875/- vide agreement No. C.E. (C)/BSP/AGT/2/97 dated 16.03.1990. According to the terms and conditions stipulated therein, the Contractor was required to complete the work within a period of 4 months, which was to be reckoned from 10th day of the issuing of work order dated 15.10.1988 or from the date of handing over of site whichever was later. At the time of issuing of work order, the land for construction was not possessed by the S.E.C.L., the agreement was, therefore, signed on 16.03.1990.

3. When a dispute arose between the parties in relation to the final amount, the Contractor has submitted an application under Clause 9 of the General Terms and Conditions of the agreement for its reference to the Arbitrator to resolve the dispute for due amount of compensation amounting to Rs.7,93,018/- which was opposed by the S.E.C.L. The Contractor has, therefore, moved an application under Section 11 of the Act, 1996 before the learned District Judge for appointment of an Arbitrator and, accordingly Shri C. P. Singh was appointed as the Sole Arbitrator on 24.07.2003.

4. The Sole Arbitrator so appointed entered into the reference and arrived at a conclusion vide its award dated 03.04.2005 based upon the documentary evidence led by the parties that the arbitrable dispute survived between the parties after the final payment on the ground that the Contractor had, while signing the final bill on 03.12.1997, put a rider “subject to my claims” and observed further that the final bill was kept pending for a month and signed by Executive Engineer-in-charge on 03.01.1998 where the alleged rider was got scored out and in view thereof, it was held that the Contractor was coerced and pressurized by the S.E.C.L. to score out the said rider. The Arbitrator has accordingly passed the award as under:-

(I) (a) Interest @ 12% per annum due to delayed payment of Rs.2,47,380/- from 01.08.1992 to 02.04.2005; (b) Interest @8% per annum from 03.04.2005 till date of payment on Rs.2,47,380/-

(II) Extra overhead @5%, i.e., Rs.5,373/- per month from 13.04.1989 (date of issue of first lot of pipes) to 31.07.1992 (date of completion);

(III) Labour escalation : since the labour escalation was paid as per Agreed formula the claim for labour escalation of Rs.62,882/- is rejected.

5. The aforesaid award has been questioned by S.E.C.L. before the learned District Judge, Bilaspur in appeal under Section 34 of the Act, 1996 by submitting inter alia that the Sole Arbitrator has ignored the fact that the dispute was not survived owing to issuance of “No Claim Certificate” by the Contractor and alleged further that the procedure as adopted by the Arbitrator was not fair as no effective opportunity of hearing was provided to the S.E.C.L. and that by exceeding his authority has erred further in awarding the interest by ignoring the provision and terms and conditions of the agreement.

6. The appellate Court, while considering the aforesaid contention of the counsel for the S.E.C.L., has dismissed the appeal on finding that the Contractor has not signed the “No Claim Certificate” as well as a certificate of final bill to the full of his satisfaction voluntarily while examin