JUDGMENT

M. Jagannadha Rao, J.-This appeal, which arises out of an award passed under the Indian Arbitration Act, 1940 concerns the interpretation of a variation clause in the contract which allows the appellant, the National Fertilizers Ltd., to issue directions to the contractor varying the extent of the contract work, both upwards and downwards upto 25 . Question is whether (as contended by the appellant) the said 25 is to be arrived at by taking into account the net overall increase in the work i.e. by adding up the increases in work and deducting therefrom the decreases in work or whether (as contended for the respondent-contractor) the 25 was to be computed by adding up the total variations, both involving the increase in the work and the decrease in the work. The importance of the point is that if the variations exceed 25 of the contract price, the contractor is not confined to the contract rates but can claim market rates.

2. The disputes were referred to arbitration and the arbitrator gave a non-speaking award. The arbitrator s award was set aside by the learned District Judge on the ground that the reference was bad. He, however, gave alternative findings accepting the