JUDGMENT :

S.K. Panigrahi, J.

1. Since both Arbitration Appeals pertain to the same contract, award, and overlapping questions of law relating to the scope of judicial intervention under Sections 34 and 37 of the Arbitration and Conciliation Act, they are being disposed of together. The core dispute concerns selective modification of the arbitral award by the court below.

I. FACTUAL MATRIX OF THE CASE:

2. The contract for repair and reconstruction of cyclone-damaged roads from RD 0.000 km to 16.300 km (Dhunkapada-Kendubadi-Mandara- Nachunibadi) in Ganjam District was awarded to the contractor under World Bank-assisted Package No.RGJM-II. The agreement, valued at Rs.2,17,38,992/-, was executed on 03.12.2002.

3. The original completion period was 15 months, ending on 02.03.2004. Due to execution delays, including issues relating to site demarcation, borrow area identification, and water supply, the contractor sought extension until 31.12.2004. The extension was recommended up to 02.09.2004 but was not formally communicated.

4. The contract was retrospectively terminated with effect from 02.09.2004, communicated via letter dated 07.02.2005. The contractor contested the termination, alleging