The interpretation of contractual clauses by an Arbitrator cannot be interfered with unless it is unreasonable or against settled legal principles.

JUDGMENT

Gurvinder Singh Gill, J. - The appellants/State of Haryana assail judgment dated 24.03.2007 passed by the Additional District Judge, Panchkula, whereby a petition under Section 34 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as 'the Act') filed on behalf of the appellants challenging award dated 30.12.2004 passed by the Arbitrator, has been dismissed.

2. The appellants/State of Haryana had invited tenders for the supply of 'A.C. Pressure Pipes with A.C. Couplings' and the bid made by respondent No.1 was accepted and consequently, a supply order dated 07.01.1999 was placed by the appellants with respondent No.1 for supplying 'Class-15, ISI marked, as per IS No.1592-1989 including upto date amendment with A.C. couplings manufactured through Class 15 A.C. Pressure Pipes cut into pieces of suitable lengths and machined for grooves accurately to seat a set of three rubber rings, one space, O-ring AC Pressure Pipes and two V-Rings Rubber Rings being anti termite'. The specifications and rates approved for the said articles are as follows:

3. Admittedly, the aforesaid articles were to be supplied by 06.05.1999 and out of the aforesaid articles, only 62307 Mts. of 80 mm A.C. Pressure Pipes (out of 92307 Mts.) was supplied by respondent No.1 within the prescribed period i.e. 06.05.1999. Thereafter, pursuant to the request made by respondent No.1, the period for supply was further extended upto 30.06.1999 and by the said date, respondent No.1 supplied another 30000 Mts. of 80 mm A.C. Pressure Pipes and 10000 Mts. of 100 mm A.C. Pressure Pipes (out of 70000 Mts.). In other words, by the extended date i.e. 30.06.1999, respondent No.1 had supplied the entire quantity of 80 mm A.C. Pressure Pipes, but out of ordered 70000 Mts. of 100 mm A.C. Pressure Pipes required to be supplied, respondent No.1 was able to supply only 10000 Mts. However, later i.e. after the expiry of the extended period, respondent No.1 supplied another 50000 Mts. of 100 mm A.C. Pressure Pipes leaving a balance of undelivered 10000 Mts. of 100 mm A.C. Pressure Pipes.

4. Since the appellants/State of Haryana during the said period had started negotiating with another vendor and had identified a vendor, namely, M/s Kalani Industries, Indore, who had agreed to supply 100 mm A.C. Pressure Pipes at the rate of 75.50 P.M., the appellants while invoking 'Fall Clause' i.e. Clause 21 of the Contract proceeded to make payment for 100 mm A.C. Pressure Pipes delivered by respondent No.1 at the rate of Rs.75.50 P.M. instead of agreed price of Rs.93.50 P.M. i.e. Rs.18 P.M. lesser than the agreed price. Aggrieved by the same, respondent No.1 invoked arbitration, wherein the appellants also submitted a counter-claim. Learned Arbitrator while considering all the claims awarded the following relief:

This calculation will be made by the claimant and after adjusting the amount already received from the respondents, he will be entitled to recover the remaining amount from the respondent as the principal amount with interest @ 18% per annum from the date the amount became due till the date of recovery.

The claimant shall be entitled to recover interest on the amount which was received after 15 days of the date of delivery @ 18% per annum from the date it became due till the date of recovery. This calculation shall also be made by the claimant.

The claimant shall make the calculation of the principal amount due and the interest thereon till the date of award as indicated above within a period of 15 days from the receipt of the copy of the award and shall send it to the respo