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8. On 30th May, 1986, after hearing both the parties the sole Arbitrator made an interim award under Section 27 of the Arbitration Act granting a sum of Rs. 18 lakhs in favour of the contractor, by making it clear that he was not deciding the issues raised by the parties and that the claims and the counter-claims made by both the parties will be decided on merits after further hearing. Thereafter on 29th February, 1988, the sole Arbitrator wrote a letter to the contractor endorsing a copy to the Executive Engineer and the Assistant Government Pleader, who was appearing in the matter on behalf of the state Government, that he has decided to declare the award on 30th March, 1988. He mentioned the arbitration fees and other incidental expenses. In the said letter, it is stated that an amount of Rs. 20,600/- towards the fees of the Arbitrator and costs is to be shared equally by both the parties. However, the directed the contractor to make the fully payment of Rs. 20,600/- before 15th March, 1988 by a demand draft. With regard to the share of Rs. 10,300/-, of the State Government, he stated that the necessary mention would be made in the award.

9. On 30th March, 1988 Arbitrator declared the award. In the award, it is stated that the contractor had claimed Rs. 1,35,30,383/- plus interest at the rate of 18% per annum from the due date till realisation. As against, this, the State Government had submitted its counter-claims amounting to Rs. 60,39,891/- on 20 October, 1985, which were subsequently cancelled and the counter-claims were reduced to Rs. 23,12,347/- on 25th April, 1986. After considering the claims made by the contractor, the award was passed by stating that claims No. 8, 12, 13, 14, 15, 16, 17, 18 and 19 of the claim statement were not considered because they were not included in the Appendices "A" and "B" enclosed with the Government order refering the matter to the Arbitrator. Similarly, the claim for interest has not been considered because it has been specifically mentioned in the arbitration order that the Arbitrator will not decide about any interest payable. It is also stated that he has passed the award as per the Statement at Annexure "X" enclosed therewith after considering the claim and the counter claims, perusing all the documents filed before the Arbitrator by the parties, hearing both the parties fully to their entire satisfaction, giving due consideration to the arguments put forth by them in support of their respective stands and after visiting the work site in company of both the parties for proper appreciation of the points in dispute. The reasons for fixing the rates and the amount awarded were given in Appendix "I" which was to be treated as an integral part of the award. As per the award, it was declared that the contractor is entitled to recover remaining amount of Rs. 36,36,885/- with the simple interest at the rate of 18% per annum from the date of the award, i.e., 30th March, 1988 to the date of decree or realisation whichever is earlier. In the award, it is also mentioned that the contractor has paid entire sum of Rs. 20,600/- towards the fees and costs of arbitration and, therefore, he is entitled to recover half of the said amount, i.e., Rs. 10,300/- from the State Government. On the basis of the said award, after considering the objections filed by the parties, the trial court has passed the decree dated 27th October, 1989 as stated above. Against the said judgment and decree, these appeals are filed.

27. Misconduct of the Arbitrator :

Lastly, learned A.G.P. Mr. K. M. Mehta has vehemently submitted that the Arbitrator has misconducted himself as he has accepted the entire arbitration fees and costs from the contractor. In support of this contention, he has relied upon the decision of the Calcutta High Court in the case of Akshoykumar v. S. V. Dass & Co. (AIR 1935 Cal 359).

28. In the facts of the present case, it would be difficult for us to accept the contention of the learned A.G.P. that the Arbitrator has misconducted himself by accepting the entire fees and costs from the contractor. It is true that, as per the Arbitration Agreement, the Arbitrator's fees and other charges were to be shared by the contractor and the State Government equally. However, when the arbitration work was over, the Arbitrator wrote a letter dated 29th February, 1988 to the contractor and copies were sent to the Executive Engineer, Irrigation Project, Rajpipla and to Shri S. S. Desai, Assistant Government Pleader, who appeared in the matter, informing that he has decided to declare the award on 30th March, 1988 at 5.50 p.m. in all, the Arbitrator's fees and other charges were to the extent of Rs. 20,600/- and that this amount is to be shared equally by both the parties, i.e. each party has to pay Rs. 10,300/- he has directed the contractor to make full payment of Rs. 20,600/- before 15th March, 1988 by a Demand Draft, and that, as regards share of Rs. 10,300/- which is to be paid by the Executive Engineer, necessary mention would be made in the award for adding this amount to the amount awarded. From this letter, it is apparent that the Arbitrator has directed the contractor to pay arbitration fees and costs by a demand draft before 15th March, 1988 so that he could declare the award on 30th March, 1988. Learned Advocate Mr. Soparkar submitted that, because of unusual delay with the Government officers in depositing the amount, if the Arbitrator has directed the contractor to deposit the entire amount of arbitration fees and costs, it cannot be said that he had received and pecuniary inducement which might have some effect on the determination of the matter submitted to him for his adjudication. In the present case, at no point of time, it is allegedly by the State Government that the sole Arbitrator was prejudiced against the State Government or that he has received any pecuniary inducement from the contractor which would have any effect on his determination of the matter submitted to him for his adjudication. The fees and costs were accepted by him only after informing the Executive Engineer and the Government Pleader who had conducted the arbitration proceeding before him. At no point of time, after receipt of the letter from the Arbitrator, either the Executive Engineer or the Government Pleader has protested against it. The letter was written by the Arbitrator on 29th February, 1988 and the award was pronounced on 30th March, 1988. Even at the time of hearing of this matter, the learned A.G.P. was not in a position to make any imputation or to point out any prejudice on the ground that the Arbitrator has directed the contractor to deposit the fees and costs before 15th March, 1988. The Arbitrator is entitled to recover fees and costs from the parties are prescribed in the arbitration agreement and that the Arbitrator has recovered only prescribed fees.

From the aforesaid passage, it is clear that, after giving notice to the parties that the award is ready for delivery, the Arbitrator has to notify them what is the amount of his charges so that the parties can pay them. The learned Author has also observed that the practice commonly prevails not to deliver the award upto the party seeking to take it up until the charges have been paid. Further, in the present case, at no point of time, the State Government has shown it is willingness to deposit or pay the arbitration fees and costs even though at the time of executing the agreement, the Government has directed the contractor to deposit Rs. 5,000/- towards fees and costs for the arbitration proceedings. Even that amount is withheld by the State Government until now. Nor it has paid its share of the arbitration fees and costs either to the contractor or to the Arbitrator. As per clause 8 of the Arbitration Agreement, the contractor was required to pay fees for arbitration to the Executive Engineer in Charge of the work at the rate of 50% of the fees payable to the Arbitrator as per the table given in Appendix 'I' and the said amount of fees should be deposited by the contractor before the commencement of the hearing. Clause 7 of the Appendix 'I' further provides that payment towards arbitration fees shall be made to the Arbitration on completion job. It is not disputed that the arbitration work was over in the month of January/February, 1988. The Arbitrator has issued notice informing that he intended to pronounce the award on 30th March, 1988. Still the State Government has not deposited one-half of the amount of arbitration fees and costs. Further, in the present case, the Arbitrator has demanded the fees as fixed by the State Government as per the table at clause 8 of Appendix 'I' of the Arbitration agreement, after completion of the work. Therefore, in the present case it hardly lies in the mouth of the State Government that, as the Arbitrator has directed the contractor to pay Rs. 20,600/- towards fees and costs instead of Rs. 10,300/-, i.e., one-half of the share, the Arbitrator has misconducted himself. In our view, the reliance placed on the decision of the Calcutta High Court in the case of Akshoykumar (supra) would not advance the contention of the appellants in any manner. In that very case, the court observed that everything would depend upon the circumstances attending the payment of fees of the Arbitrator and the court would be required to find out whether the Arbitrator was influenced in his decision by the manner in which the fees came to be recovered by him. In the present case, it can be stated that the procedure adopted by the Arbitrator is just and in consonance with the provisions of Section 14(2) of the Arbitration Act. Hence, in the present case, it cannot be stated that the Arbitrator has misconducted himself in determining and accepting the entire fees and costs by demand draft from the contractor before declaring the award.