P. KALAIYARASAN, J.

This Original Side Appeal is directed against the order, dated 04.02.2010 passed by the learned single Judge in O.P.No.847 of 2010, setting aside the award of the Arbitrator, dated 08.06.2007.

2. The brief facts necessitated to go before the Arbitrator and leading to this Original Side Appeal are as follows :

(i) The appellant is the contractor under the first respondent. The contract was awarded by the first respondent, Chennai Petroleum Corporation Ltd to the appellant, M/s. Boss Infrastructure Pvt., Ltd., for providing pavement with concrete blocks on the sides of the roads at Refinery III Projects expansion. The contract is an item rate lumpsum contract. The contract was entered into between the parties on 09.08.2004 for an amount of Rs.1,19,11,854/- and the work was agreed to be completed in 8 months reckoned from the date of issue of letter of acceptance by the contractor. The additional work of providing red oxide over concrete blocks was also entrusted by CPCL to the same contractor to a value of Rs.8,78,296.50/-. The work was to be completed by 30.03.2005 and the entire work including the red oxide to be completed by 30.05.2005.

(ii) The Defect liability period of one year was over by 28.05.2006, as per Clause 8.5 of the Contract. The final bill was paid by the first respondent on 22.12.2005 and the job completion certificate was also issued on 27.12.2005. During defect liability period, there was enquiry with respect to the performance of contract by the Vigilance Commission. When the appellant made a request on 30.05.2006 for release of the retention money and 5% on the final bill, dispute arose between the parties. The first respondent made a claim for a sum of Rs.35,23,008/-, saying that the forensic science lab test report and enquiry showed that the claim of the first respondent regarding the supply of cements to the extent of 165 metric tonnes was a fraudulent one and the seals in the inpass/entry letter were created one and therefore, the appellant was called upon to make good the loss arising on account of alleged short supply of cement. It is also contented that there is short supply of red oxide to the extent of 9713 kgs.

(iii) The appellant requested for the appointment of Arbitrator, as per clause 12 of the Contract. The High Court permitted the appellant to go before the Arbitrator.

3. As per the letter of the first respondent, Arbitrator was appointed and the Arbitrator after hearing both the parties declared the order of the first respondent to recover from the appellant, as not valid and ordered the first respondent to refund the withheld amount and to defer the recovery proposed by it.

4. The reason assigned by the Arbitrator is that the first respondent failed to prove the defective quality and the quantity in performance of the contract by the appellant.

5. The learned single Judge, after analysing the contract entered into between the parties and considering the Award and arguments of both sides, found that the Arbitrator committed a serious legal misconduct in taking the view that the contract does not require the arbitrator to go in justification of the input and output of the product. The learned single Judge found that the Award passed by the learned Arbitrator is contrary to the terms of the contract and therefore, set aside the award.

6. The learned Senior counsel appearing for the appellant strenuously contends that when the contract price is paid on the basis of the volume of the work performed, but not on the basis of the material utilised, the decision of the learned single Judge about the legal misconduct by the Arbitrator by not deciding the justification of the input and output of the material is not correct. It is further contended that the contract being a item rate lumpsum contract and payment being made for the volume of work performed, the alleged bogus letters and the seals thereon did not fall within the purview of the reference for the Arbitrator. It is fu