V. KAMESWAR RAO, J.

1. The challenge in this petition by the Union of India under Sections 28, 31, 34 of the Arbitration & Conciliation Act is to the award dated December 31, 2002 passed by the learned Sole Arbitrator, whereby the learned Arbitrator has allowed certain claims of the respondent and rejected/not granted certain counterclaims of the petitioner, whereby he has awarded a sum of Rs.6,79,52,084.13 with interest @ 12% p.a. with effect from September 1, 1997 to December 31, 2002 amounting to Rs.4,00,49,812.99 i.e.. a total sum of Rs.10,80,01,897.12 along with interest @10% p.a. with effect from April 1, 2003.

The facts:

2. The facts in brief are, the petitioner had floated a tender for construction of accommodation for Army Hospital (R&R) in the Delhi Cantonment Area. The bids were opened and the respondent was declared successful. The respondent thereafter accepted the terms of the contract on June 29, 1991. The total contract was for Rs.25,00,44,768.40/- less 12% debate amounting to Rs.22,00,39,396.19/-.

3. As per the contract, the construction work of the project was to begin on July 17, 1991 and was supposed to be completed within 27 months of commencement i.