( 1 ) THIS is an application under Section 34 of the Arbitration and conciliation Act, 1996 (hereinafter referred to as the 1996 Act) praying for the setting aside of the award dated 07. 05. 1998 published by the respondent no. 2 (Mr H. C. Bhardwaj) who was the sole arbitrator.

( 2 ) THE applicant, Tehri Hydro Development Corporation (THDC) called for bids for the work of Coffer Dam, Package B for quarrying, transporting and placement of shell materials. The bids were received by THDC on 20. 01. 1994. Lanco Construction Limited (LCD (respondent No. 1 herein)was one of the parties who responded to the tender. LCL's bid was accepted by THDC. A letter of Intent was issued to LCL by THDC on 10. 11. 1994. Thereafter, certain other letters were issued. The formal contract was entered into between the parties on 05. 01. 1995 for initial amount of Rs 8. 38 crores. The schedule of items covered under the contract included item 3 which was as under :-

"3. Quarrying from Dobata borrow area, transporting and spreading shell material in uniform layers of specified thickness in shell zone including dressing, watering compacting upto required density with all leads and lifts etc. complete as per specification. "

Clause 7 of the Informations and Instructions to Tenderers was as under :-

"7. The Contractor shall be deemed to have satisfied himself before tendering as to the correctness and sufficiency of his tender for the works and of the rates quoted in the Schedule of Quantities and rates which shall (except as otherwise provided in the tender) cover all his obligations under the contract and all matters and things necessary for the proper execution and completion for the works in accordance with the provisions of the contract and its maintenance during construction. "

Clause 24 of the Informations and Instructions to Tenderers is the bone of contention in this application and it reads as under:-

"24. Borrow Area for shell material: the shell material for dam fill (Zone 2a) shall be obtained from Dobata borrow area which lies approximately 5 km. upstream of dam site on the right bank of Bhagirathi river with existing level at 705m from MSL. The material for (Shell zone 2a) shall be obtained from this borrow area by selective borrowing and would in general require and proceeding except stripping top soil and removal of particles larger than 600mm. size in borrow area. "

The following clauses of the General Conditions of Contract which govern the parties are relevant:-

"5. 0 (ii) The drawings and technical specifications are to be considered as explanatory of each other and should anything appear in the former but is not described in the later, no advantage shall be taken by the contractor of any such omissions. In case of disagreement between technical provisions and drawings, the technical provisions shall govern the contract. Should any discrepancies however appear or should any misunderstandings as to the meaning and interpretation of the technical provisions or drawings or dimensions or the quality of the materials for the proper execution of the work or as to the measurements of quantity and valuation of the work executed arise under this contract or in respect of extra item, the same shall be clarified by Engineer-in-Charge. The decision of the Engineer-in-Charge regarding the true intent and meaning of the drawings and Specifications shall be final and binding. "

xxxxxxxxxxxx "34. 0 (iii) Valuation of Variation If, on certified completion of the whole of the works it shall be found that a reduction or increase is more than thirty percent of the contract value as awarded resulting from:- (a) the aggregate effect of all variation orders and (b) all adjustments upon measurement of the estimated quantities set out in the Bill of Quantities or Schedule of Items and adjustment of price made under Price Adjustment clause. The value of payment for the work beyond this limit will be varied by the percentages shown hereinaf