JUDGMENT :

Surjit Singh, J.

These objections, u/s 34 of the Arbitration and Conciliation Act, 1996, have been filed by the Union of India, against the award dated 30.5.2001 of the Arbitrator, with regard to Claims No. 1, 2 and 4. Prayer has been made for setting aside the award with regard to the aforesaid three claims.

2. Relevant facts may be summed up thus. Executive Engineer, Shimla Central Division No. 1, C.P.W.D., invited tenders for certain prefabricated structures. Respondent was one of the tenderers. The rates quoted by him and one more party were found to be lower than the rates quoted by other tenderers. One of the conditions of the tender, i.e. Condition No. 3 of the Special Conditions was that in case the consumption of the quantity of the steel was found to be less than the quantity indicated in the work schedule, recovery at the rate of Rs. 16,000/-, per ton, would be made from the contractor. The respondent did not specify the quantity of the steel, which he was to use in various types of structures. The tenders were opened on 1.10.1994. It was then that the Executive Engineer noticed that quantity of steel to be used in various items of work had not been specified by the respondent. So the respondent was called upon to specify the quantity of steel to be used by him for various items of the work. He, vide letter dated 25.10.1994, specified such quantities in respect of each item of work. Thereafter negotiations were held with the respondent and the other tenderers, whose rates were found to be lower than those quoted by others. Some correspondence was exchanged with regard to those negotiations. Respondent offered to reduce the rates initially quoted by him. Such rates having been found to be the lowest, work was awarded to him, vide letter dated 22.3.1995.

3. On completion of the work, respondent submitted final bill. He was called upon to intimate the quantity of steel used by him for each item of work to enable the Executive Engineer to verify whether the quantity used by him was as per agreement. He submitted details of the quantity of steel used by him for each item. The quantity used by him was found to be lower than the quantity, which he offered to use, vide letter dated 25.10.1994. Accordingly, Special Condition No. 3, referred to above was invoked and a sum of Rs. 8,12,266/- was worked out as the amount recoverable from the respondent. The final bill of the respondent was not cleared.

4. The dispute having arisen on this score, the matter was referred to Arbitrator in terms of the agreement. The respondent claimed that a sum of Rs. 5,59,759.28P, was due to him. Later on the amount was raised to Rs. 6,00,838.08 P. on account of the value of bolts. After the claim was preferred, the Executive Engineer released a sum of Rs. 1,05,902/-. So the respondent reduced the amount of his claim to Rs. 4,94,936/-. The respondent also claimed interest at the rate of 24% per annum, from the date of the completion of the work to the date of the payment of the amount. A sum of Rs. 2,88,084/- was claimed by him on account of extra work. Another sum of Rs. 5,00,000/-, was claimed on account of money withheld on the plea that there were some defects in the work.

5. The Union of India (the petitioner) claimed that a sum of Rs. 8,12,266/- was due from the respondent on account of use of lesser quantity of steel. Some other counter claims were also made.

6. The Arbitrator, vide award dated 30.5.2001, held that the respondent was entitled to a sum of Rs. 4,11,932.28 paise on account of balance payment (Claim No. 1) and was also entitled to simple interest, at the rate of 14% per annum on this amount from 31.12.1996, the date of invocation of Clause 25 (regarding arbitration) and future interest at the rate of 18% per annum. He was also held to be entitled to a sum of Rs. 36.018.16 P. on account of extra work carried out by him. As regards the claim of Rs. 5,00,000/- for withholding the amount for the alleged defects in the work, th