ORDER :

1. The respondents before the arbitral tribunal has challenged the award passed against them in and by which they have been directed to pay interest on delayed payments to the 1st respondent herein as well as compensation for loss of overhead charges and erosion of profits together with interest to the 1st respondent. The facts in brief necessary for considering the challenge to the award are herein below narrated.

2. The 1st respondent herein had invoked arbitral proceedings for recovery of sum of Rs. 11,30,591/- towards interest on account of the delay in making the final payment. As against the bill raised on 30.01.2000, the final payment was made only on 04.03.2003. A sum of Rs. 47,57,000/- was claimed towards compensation for loss of overhead charges and profit on account of the contract being delayed. The 1st respondent had also claimed interest at 18% per annum on the above two claims from 04.03.2003 till date of actual payment.

Claim and Counter Statement:

3. The 1st respondent herein had contended that on 30.03.1996, pursuant to their being awarded a contract for the work of forming a link road connecting Salai Road and Karur Bypass road Trichy city, an agreement was entered into between them and the Superintending Engineer (H) TNUDP Circle, Madurai. The total contract price for the project was arrived at a sum of Rs. 3,46,02,500/- and the contract was agreed to be completed within a period of fifteen months from the date of the signing of the agreement. The site was also handed over on the said date and the 1st respondent would contend that they had commenced work in April 1996.

4. However, they would contend that they were unable to proceed with the work since there was a delay in handing over the entire site as there were land acquisition proceedings pending and the land owners were seeking higher compensation. The proceedings were pending before the Courts at Trichy as well as the High Court of Madras. The 1st respondent would further contend that in addition to the entire site not being handed over to them, there were changes in the design for the embankment on Karur side formation and they were also asked to undertake cross drainage work. These were works not originally contemplated. As a result the 1st respondent had to undertake additional works not originally contemplated. The 1st respondent would submit that all this contributed to the delay of over 22 months and the delay was solely attributable to the petitioners herein.

5. Ultimately, the work entrusted was completed to the satisfaction of the Competent Authority, namely, the Special Chief Engineer (H) Project I Circle, Coimbatore on 30.01.2000. On 24.02.2000, the 1st respondent was also issued with the completion certificate. The 1st respondent would further contend that the final bill was submitted on 30.01.2000. The final bill was inclusive of the new items of works, increase in quantity and deletion as directed by the Department. Ultimately payments were received by the 1st respondent on the following dates:

(a) Rs. 31,02,427/- on 12.03.2001.

(b) Rs. 13,15,358/- on 04.03.2003.

(c) Rs. 19,71,170/- on 04.03.2003.

6. The 1st respondent would contend that these payments were received by them under protest since there was enormous delay in making payments contrary to the terms of the agreement. The agreement had clearly stipulated that bills had to be cleared within a period of 45 days of their submissions. The 1st respondent would submit that the delay in executing the contract was only on account of the fact that the petitioners had not handed over the site on time. The 1st respondent would also contend that by reason of this delay the 1st respondent was forced to remain on site retaining his workmen. The 1st respondent would submit that he sustained enormous burden of overheads, loss of money circulation and erosion of eligible profit solely due to th