Arbitration and contract limits on delay compensation, material-use disputes, and post-award interest shaped the court's modification.

Where the contract and APDSS barred compensation for delay, and the contractor had accepted extension of time without reserving a claim, the arbitrator lacked jurisdiction to award delay damages under claim No. 1; that portion was set aside. A factual dispute on excess steel consumed under claim No. 8 was within the arbitrator's remit because the agreement contained no clear prohibition, so that award was upheld. Interest from the date of the award to the date of decree was impermissible in the absence of authority for post-award interest; it was deleted, with interest allowed only from the decree date to realisation.

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Issues: (i) Whether the arbitrator could award compensation under claim No. 1 for delay in handing over the site when the contract and specifications barred such claim. (ii) Whether the recovery of amount under claim No. 8 towards excess steel consumed was open to interference. (iii) Whether interest could be awarded from the date of the award till the date of decree.

Issue (i): Whether the arbitrator could award compensation under claim No. 1 for delay in handing over the site when the contract and specifications barred such claim.

Analysis: The claim was one for compensation for delay in handing over the site, worked out on the basis of rise in price index and overheads. The contractor had accepted extensions of time and completed the work. Under Section 55 of the Contract Act, compensation for delayed performance cannot be claimed after acceptance of late performance without notice of intention to claim compensation. Clause 59 of the APDSS also barred claims for compensation on account of delays or hindrances from any cause, while granting only extension of time. In such a situation, the arbitrator could not ignore the contractual bar or award compensation beyond the agreement.

Conclusion: The award under claim No. 1 was without jurisdiction and liable to be deleted, in favour of the Appellant.

Issue (ii): Whether the recovery of amount under claim No. 8 towards excess steel consumed was open to interference.

Analysis: The dispute turned on whether steel used for bolts and frames of centering for RCC items was to be treated as wastage or as steel used for the work. The agreement did not contain any specific provision excluding such use from the work. The arbitrator was therefore entitled to take an overall view of the contract and decide the claim. No excess of jurisdiction was shown.

Conclusion: The award under claim No. 8 was sustained, in favour of the Respondent.

Issue (iii): Whether interest could be awarded from the date of the award till the date of decree.

Analysis: The reference was governed by the arbitration regime under which the arbitrator had no power to award interest for the post-award period. The award of such interest suffered from legal infirmity and could not stand. The court, however, granted interest from the date of the decree till realisation.

Conclusion: Interest from the date of the award till the date of decree was impermissible, in favour of the Appellant.

Final Conclusion: The award was sustained only to the extent of claim No. 8, while the compensation awarded under claim No. 1 and the post-award interest were set aside. The matter resulted in a partial modification of the decree, with consequential interest allowed only from the date of the civil court decree.

Ratio Decidendi: Where the contract expressly bars compensation for delay and the contractor accepts extended performance without reserving a claim, the arbitrator cannot award compensation contrary to the agreement; however, the arbitrator may decide a claim on a disputed factual use of materials where the contract contains no clear prohibition, and post-award interest is not recoverable unless lawfully authorised.

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