ANIL K. NARENDRAN, J.

1. The appellant is the claimant in O.P. (Arb.) No. 14 of 1995 on the file of the Principal Sub Court, Thiruvananthapuram, an application filed under Section 17 of the Arbitration Act, 1940 (hereinafter referred to as the Act) for making the award passed by the arbitrator dated 26.10.1994 for Rs. 4,80,847/- with 18% interest per annum from 3.8.1987 as rule of the court. The respondents have also filed an application under Section 30 of the Act, to set aside the award passed by the arbitrator. The court below by judgment dated 29.9.2006 partly set aside the award passed by the arbitrator, by modifying the award under Claim Nos.16 and 19 to the extent indicated in the judgment and set aside the award under all other claims. The court below held that the appellant is entitled to realise Rs. 87,847/- being the retention amount and security amount with interest at the rate of 6% per annum from 3.8.1987 till the date of payment, from the respondents and their assets jointly and severally. Aggrieved by the said judgment of the court below, the appellant is before this Court in this appeal.

2. We heard the arguments of the learned counsel for the appellant and also the learned Government Pleader for the respondents.

3. The reference before the arbitrator arises out of the contract relating to Kallada Irrigation Project. The work relates to “K.I.P. - L.B.C. - formation of Paravoor Distributory from Ch.5150 to 12552m. Part-I, from Ch.5150 to 7033m. Including C.D. Works”, pursuant to Agreement No.48/SE/KCQ/85-86 dated 31.3.1986 entered into between the appellant and the 1st respondent State, acting through the 2nd respondent, namely, the Superintending Engineer, Kallada Irrigation Project Circle, Kollam.

4. As there arose some disputes and differences between the parties, the matter was referred to arbitration as provided under Clause 52 of the Local Competitive Bidding Specifications of the agreement. Pursuant to the notice issued by the sole arbitrator, the claimant filed claim statement on 12.1.1989. The respondents filed defence statement on 30.6.1989. On the side of the claimant, Exts.C1 to C29 were marked and Exts.R1 to R25 were marked on the side of the respondents. The claimant filed an application for site inspection, pursuant to which the arbitrator inspected the site on 5.5.1990, in the presence of both parties and their counsel.

5. The 1st issue that was considered by the arbitrator was as to whether there is breach of contract and if so who has committed breach of contract and what is the remedy available to the other party. The arbitrator dealt with this issue in paragraph 5 to 14 of his award. After considering the pleadings and materials on record, the arbitrator found that the respondents failed to supply the departmental materials such as cement, steel and copper sheets as per the requirements and agreed conditions. Though the location of the converts were altered and the designs were changed by the respondents, the revised proposals could not be approved during the contractual period. On perusing the departmental files, the arbitrator found that soil tests were not confirmed and the revised proposal for the aqueduct were not finalised by the respondents during the contractual period. Therefore, the arbitrator concluded that, the respondents have failed to discharge their contractual obligations and broken the agreement conditions and as such the appellant is entitled to get damages from the respondents.

6. The arbitrator dealt with the various claims made by the claimant under issue Nos.2 to 20.

7. Issue No.4 considered by the arbitrator was as to whether the appellant is entitled to get payment of damages for re-handling and removing cut earth and if so, what is the amount. The arbitrator dealt with this issue in paragraph 17 to 20 of his award. The appellant contended that, though the field officers instructed him to carry out cutting, initial levels were not approved for filling, which was a