The court held that an arbitrator's award will not be set aside unless there is glaring illegality or injustice in arriving at the conclusion by the arbitrator.

R. K. Singh, J. - This First Appeal from order arises out of the judgment and order dated 31st of January, 1992 passed by Sri H. N. Misra, Civil Judge, Roorkee, District Hardwar in original suit No. 160 of 1991 rejection the objection of the appellant-defendant under Section 30(a) of the Arbitration Act, 1940 and making award of the Arbitrator rule of the court.

2. The defendant-appellant entered into an agreement No. 1/ICCR OF 1980-81 with the plaintiff-respondent for fabrication and erection of steel gates and hoist for new barrage across river Ganga at Bhimgoda, Hardwar. The contract work was completed on 28th of June, 1986. The work was certified by the appellant's Engineers to be satisfactory and upto the mark. The claimant-plaintiff claimed certain amounts on account of reimbursement of steel whereas the appellant (defendant) raised a counter claim on account of excess issue of steel. Thus a dispute arose between the parties and it was referred to the sole Arbitrator as per terms of agreement by L.R.'s letters dated 10.7.1989 and 21.3.1990. The Arbitrator entered into reference on 4th of September, 1989. The final award came on 11th of October, 1991. In the award the learned Arbitrator has allowed part of the claim of the claimant. The pendente lite interest has been allowed at the rate of 14% per annum and future interest at the rate of 6% on the principal.

3. We have heard Mr. R. K. Bisarie, learned Standing Counsel appearing for the appellant and Mr. P. C. Markanda, learned Counsel appearing on behalf of the respondent at length and in detail. We have gone through the impugned judgment and the relevant award. The grounds of objection under Section 30(a) of the Arbitration Act and the grounds taken in this appeal have also been perused and considered. Learned Standing Counsel has assailed the impugned award mainly on the ground that the different items of the claim were in respect of the disputes which had already got the decision of Engineer-in-Charge who was supervising the progress of the construction work at the site and the contractor-claimant did not raise any written protest against the decision of the Engineer-in-Charge within stipulated time limit in accordance with the Clause 22.01 of Part II of the agreement. So the decision had become final and the conclusion is binding on the claimant-contractor. So there was nothing to be arbitrated by the learned Arbitrator and so the award is bad going against the terms of agreement in Clause 22.01. The second ground of attack against the impugned award is that under Clause 16.06 only 3% wastage of materials was to be taken into account but the learned Arbitrator has awarded 14% wastage which is against the terms of agreement. Thirdly, the learned Standing Counsel has attacked the rate of interest awarded to the claimant at the rate of 14% which according to him should not go beyond 6% as stipulated in the Civil Procedure Code.

Relying on the two decisions, namely, (i) (K. P. Poulose v. State of Kerala and another ((1975) 2 SCC 236)), and (ii) (Union of India v. Jain Associates and anothers (1994 (4) SCC 665), the learned Standing Counsel has submitted that by going against the written terms of agreement in Clauses 22.01 and 16.06 and by not considering the counter claim of the department, the Arbitrator has committed misconduct provided under Section 30(a) of the Arbitration Act and so, the award is fit to be set aside

4. The parties of the contract referred the disputes of arbitration to the sole Arbitrator named in the Agreement under Clause 22.02 of the Agreement. It is a reference by the parties of the contract to the Arbitrator named in the agreement under Clause 22.02. So, the ground of objection that there was no dispute to be referred to the Arbitrator, is not available to any of the parties. The reference under Clause 22.02 to the Arbitrator to decide "every dispute, differences or question touching or arising out of or in respect of the aforesaid agr