Aggrieved of the final order dated 27.06.2007 passed in Arbitration Misc. Case No. 13 of 2006 by which challenge to the award dated 31.01.2006 by the appellant-State of Jharkhand (hereinafter referred to as the ‘Department’) has failed, this arbitration appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996 has been filed.

2. Briefly stated, the claimant-M/s Sutlej Construction Limited was allotted the construction work of “Open channel from 0.00 K.M to 0.652 K.M and tunnel from 0.652 K.Ms to 0.762 K.Ms under Konar Cannel Irrigation Project at Banaso, district-Hazaribagh” vide letter dated 10.04.1989 and Agreement No. IF2 of 1989-90 was executed on 16.08.1989. The total value of the work was Rs. 3,66,00,000/- and the schedule completion period for the work under the contract was 3 years, that is, by 15.08.1992; time was essence of the contract. Before 10.08.1992, the claimant, which had informed the Department through letter dated 18.09.1989 that its men and machinery have arrived at the site for the work, has written several letters for allotment of land for construction of colony for its workers, provision for cement, G.I. sheet, track line, approved drawing, temporary electric connection at the site and the difficulties faced by it on account of high water level of Konar Dam, explosive license and objection by the Circle Officer to the construction of colony for the workers. By a letter dated 10.08.1992 the claimant made its intention to raise bills and claim damages with interest at the rate of 24% per annum known to the Department, however, no claim was in fact raised. It was in response to letter dated 23.03.1999 by which the claimant was asked for final measurement followed by letter dated 05.04.1999, the claimant hit back through telegram dated 16.04.1999 raising an objection that measurement after so many years would not serve any purpose.

3. About three years thereafter, the claimant wrote letter dated 13.04.2002 and finally raised a claim through letter dated 08.07.2002 which for the first time was accompanied by a statement of claims. On 23.08.2002 the claimant approached the Superintending Engineer, Tenughat Dam Circle to enter into arbitration and a reminder for arbitration was sent on 14.11.2003. By an order dated 02.03.2005 passed in Arbitration Application No. 06 of 2004 this Court appointed a retired Judge of the High Court as the Arbitrator; the learned Arbitral Tribunal entered into the reference on 30.04.2005. The claimant has raised claim under 10-heads, the 10th claim pertains to interest at the rate of 24% from the date of award to the date of payment. These claims were resisted by the Department by filing a counter-affidavit on 20.11.2005 and a counter-claim for Rs. 28,04,526/- with compound interest at the rate of 12% per annum alleging breach of contract and excess payment to the claimant-contractor was filed by the Department on 30.11.2005. The claimant has objected to the counter-claim by filing its reply on 23.12.2005.

4. An objection to the maintainability of the claims was raised by the Department on the ground that those were time-barred. In its written statement of defence, the Department took a stand that vide letter dated 16.07.1991 the Executive Engineer, Banaso was directed to terminate the agreement on the ground that the claimant was black-listed by the Water Resources Department, Government of Bihar vide letter no. 1049 dated 10.06.1991. The Department has pleaded that the claimant after completely stopping the work never turned up inspite of repeated reminders, in fact abandoned the contract and there was no correspondence by it after August, 1992 and the various claims raised by the claimant are all barred under the specific clauses of the general conditions of contract. It is pleaded that the contractor committed several irregularities and fled away fr