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.e.. October 16, 1993. The respondent completed the construction work on March 25, 1997. The final bill dated March 29, 1997 was considered by the petitioner who found that no amount was due and in fact Rs.1,15,47,711.93/- was to be recovered from the respondent. The respondent initiated arbitration proceedings against the petitioner claiming Rs.46,91,71,288.69/ -along with interest @ 24% raising in total 41 claims. The petitioner herein had also raised counterclaims of Rs.1,88,00,000/- along with 24% interest and the recovery of negative amount arrived in the final bill. The Arbitrator awarded Rs.10,80,01,897.12/- along with 10% future interest with effect from April 01, 2003 to the respondent and Rs.7,50,000/- along with interest towards the counterclaim to the petitioner.

4. The challenge in the petition is to the award of 21 claims of the respondent i.e.. claim Nos. 1, 2, 3, 7, 8, 9, 11, 12, 14, 18, 20, 21, 23, 29, 33, 34, 35, 36, 37, 40 & 41 and rejection/partially allowing counterclaims No. 1, 2 & 5. The following is the conclusion arrived at by the learned Arbitrator, while awarding the aforesaid claims/counter claims.

5. Claim No.1:-Insofar as the claim No. 1 is concerned, the same relates to final bill dated March 29, 1997 as certified by the Assistant Garrison Engineer and forwarded to Garrison Engineer. The claim No. 1 consists of five sub-claims, apart from claim 1(B). They are as under:-

(i) Schedule A‘ items:-The respondent had in the final bill, against Schedule “A” items laimed an amount of Rs. 23,66,29,678.87/-. The petitioner had checked and verified the bill with regard to Schedule “A” items to be Rs. 23,65,11,558.50/-. It was the case of the petitioner that the respondent had not pointed out its disagreement with the changes carried out in the final bill with regard to Schedule A items. The learned Arbitrator has held that the amount of Rs. 23,65,11,558.50/- as checked and verified by the petitioner for Schedule A items, is correct;

(ii) Deviation Orders:-This is a claim wherein, the respondent has claimed certain amounts under various deviation orders issued by the respondent. The learned Arbitrator has awarded the amount against four deviation orders namely, DO No. 59(P); DO No. 30(P), DO No. 70(P), DO No. 6(P-1).

(iii) Recovery for Schedule “B” items:-It was the case of the respondent that while calculating the theoretical consumption, the petitioner has not considered the wastage for cement and free issue materials and has only considered an arbitrary percentage of other material. It was the case of the petitioner that recovery against Schedule “B” material has been worked out correctly as per condition 10(B) of IAFW-2249 forming part of the CA. Wastage of steel has been considered and no wastage of cement has been allowed