An arbitrator's failure to consider a vital document and denial of an opportunity to a party to inspect the document amounts to misconduct and denial of natural justice, warranting the setting aside of the award.

( 1 ) THERE is an appeal by the Union of India from the Judgment of a learned single Judge of this court (reported in AIR 1977 Del. 231) setting aside an arbitration award in so far as it directed the respondent, a firm of contractors (M/s. Mehta Teja Singh and Go.) to pay to the appellant (the Union of India) a sum of Rs. 14,674. 00.

( 2 ) THE respondent firm had executed a contract for the construction of an irrigation channel at Hissar. This involved, inter alia, rough excavation in any soil (ordinary or hard) getting out and removal of spoil to a distance not exceeding 440 yards all as specified" (vide item 4 of Schedule A to the contract ). For this item of work the contractual rate agreed upon was Rs. 4. 50 per cubic metre (as against a rate of Rs. 4. 24 mentioned in the standard specification rates: "ssr". for short ). When, at the end of the contract, the contractor firm claimed a sum of Rs. 12,782. 09 as due to it under the final bill, the Union, relying upon the report of a technical examiner made under Cl. 67 of the contract, claimed that the contractor had been overpaid to the extent of Rs. 50,478. 15 and that the Union was entitled to recover this amount from the contractor.

( 3 ) THE basis for the above claim was briefly this. It was said that the contractor was entitled to be paid at the rate of Rs. 4. 50 per cubic metre in regard to the item of work referred to above only where it did the excavation work and transported the removed spoil to a distance of 440 yards or more, but that, as the contractor had dug the borrow pits in such manner that it had to remove the soil over a distance of only 50 yards or even less the rates of payment to him called for reduction.

( 4 ) LEARNED counsel for the appellant has elucidated the basis of the claim as consisting of three steps. He first drew our attention to certain items specified in the SSR : (a) under item 78, a rate of Rs. 0. 98 per cubic metre is specified for excavation ; (b) under item 108, a rate of Rs. 2. 55 per cubic metre is specified for removing the spoil to a distance not exceeding 410 yards ; (c) under item 106, the rate for removing the spoil to a distance not exceeding 50 yards is Rs. 1. 20 and (d) under item 509, the contractor is entitled to an increase of the above by 20%. Thus, he says under the SSR, if the contractor firm had dug the borrow pits and removed the spoil to a distance not exceeding 440 yards, it would have been entitled to be paid at the rate of Rs. 4. 24 per cubic metre as follows :- Specified item No. 78 0. 98 Specified item No. 108 2. 55 3. 53 Specified item No. 509 0. 71 Likewise, under the SSR, if the contractor had dug pits and removed the soil to a distance not exceeding 50 yards his rate would have been only Rs. 2. 62 per cubic metre : Specified item No. 78 0. 98 Specified item No. 106 1. 20 The second step in the argument is that the contract with the present respondent envisaged the removal of soil to a distance not exceeding 440 yards and for this fixed the rate of Rs. 4. 50 per cubic metre as against Rs. 4. 24 that would have been payable under the SSR. The third step in the argument is that, since the Contractor removed the soil to a distance not exceeding fifty yards for which the SSR specified only Rs. 2 62, the rate at which the contractor would claim payment for the work done by it would be the amount which bears to Rs. 2. 62 the same proportion that Rs. 4. 50 bears to Rs. 4. 24 (i. e. Rs. 2. 78 ). Hence, by paying the contractor at Rs. 4. 50 per cubic metre for the work done by it, there had been an excess payment of Rs. 1. 72 per cubic metre.

( 5 ) IN support of the allegation that the contractor had done less work than it was bound to do under the contract and in respect of which it had been paid, reliance was placed on a technical examination report under Cl. 67 of the contract dated 8-9-1971 which said :

"during site inspection it was noticed that the borrow pits have been dug along channel Nos. 1 and