Anugraha Engineers & Contractors, represented by its Managing Director (hereinafter referred to as 'contractor'), is the appellant in both the Civil Miscellaneous Appeals. The Union of India, represented by the Chief Secretary to the Government of Puducherry (hereinafter referred to as 'Government') and the Executive Engineer, Buildings and Road Division are respondents 1 and 2 in both the civil miscellaneous appeals. Both the appeals have been preferred against the common order of the learned Additional District Judge, Puducherry at Karaikal dated 31.08.2010 made in Arbitration O.P.No.1/2008 and Arbitration O.P.No.1/2009 respectively. Arbitration O.P.No.1/2008 came to be preferred by the respondents herein, whereas Arbitration O.P.No.1/2009 came to be preferred by the appellant herein. The learned Additional District Judge, after hearing, by a common order dismissed the Arbitration OP preferred by the appellant herein, namely Arbitration O.P.No.1/2009 and allowed the Arbitration OP preferred by the respondents herein, namely Arbitration O.P.No.1/2009. The Common Order is challenged in C.M.A.No.2829/2012 so far as it relates to Arbitration O.P.No.1 of 2008 and C.M.A.No.2830/2012 has been filed against the common order relating to Arbitration O.P.No.1/2009.

2. The facts leading to the filing of these appeals, can be narrated in brief, which are as follows:-

i) The appellant (contractor) was awarded a contract for the construction of a bridge across the Arasar River on the downstream side of the existing old bridge at Karaikal. The agreement incorporates provision for several extra items, substituted items and deviated items of work regarding which, adjustments are to be made in passing the bills and making payments. An arbitration clause has also been incorporated in the agreement to the effect that in case of difference of opinion regarding the extra cost to be paid by the Government or the amount to be deducted from the contract amount depending upon the quantity of work and the quality of materials used with the permission of the Government, the same shall be referred for arbitration.

ii) The agreement contained a stipulation that the contractor should use 'HYSD bars' for the construction of the bridge and that the said bars should be purchased only from SAIL or VIZAG or TISCON. Out of the three companies, SAIL and VIZAG are public sector companies. The contract came to be finalised on the assumption that 'HYSD bars' would be available from all or any one of these companies. But, unfortunately, it transpired that all the three companies stopped manufacturing 'HYSD bars' eight years prior to the date on which the contract between the Government and the contractor came to be entered into. When the said companies were addressed for supply of 'HYSD bar', the contractor received a reply informing that the manufacture of HYSD bars had been stopped 8 years back and only 'TMT bars' were available. Besides offering 'TMT bar', it was made clear that it was of higher quality than 'HYSD bar' and hence the same was available at a higher rate than the rate quoted in the agreement for HYSD bars. When the same was brought to the notice of the Government by the contractor and their permission was sought to use 'TMT bars' instead of 'HYSD bars' for the construction of the bridge, permission was granted. While seeking permission, it was made clear by the contractor that the 'TMT bars' were of superior quality and the cost of the same was higher than 'HYSD bars'. Still the Government permitted the contractor to proceed with the construction. Accordingly, the contractor took up the construction work and completed the same.

iii) When bills were prepared for the payment for the contract work, the contractor made a claim for the difference between the price of 'TMT bar' and the price quoted in the agreement for 'HYSD bar' as additional expenditure, which they were entitled to be paid. The same was not accepted by the Government. In addition, th