Himachal Pradesh High Court
Reserved On: 29.5.2025 vs M/S B S Ranbir And Company on 25 June, 2025
Author: Sandeep Sharma
Bench: Sandeep Sharma
2025:HHC:19708
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
.
CARBA No. 4 of 2025
Reserved on: 29.5.2025
Date of Decision: 25.6.2025
_____________________________________________________________________
Union of India and Anr.
.........Appellants
Versus
M/s B S Ranbir and Company
.......Respondent
Coram
Hon'ble Mr. Justice Sandeep Sharma, Judge.
Whether approved for reporting? Yes.
For the Appellants: Mr. Balram Sharma, Deputy Solicitor General of
India.
For the Respondent: Mr. Shubham Sood, Advocate.
___________________________________________________________________________
Sandeep Sharma, J.
Instant appeal filed under Section 37 of the Arbitration and
Conciliation Act, 1996 (in short the “Act”), lays challenge to the judgment
dated 11.8.2023, passed by the learned District Judge Kangra at
Dharamshala, whereby objections under Section 34 of the Act, having been
filed by the appellants to the awards dated12.4.2018 and 24.4.2018, passed
by the learned Sole Arbitrator in Arbitration case No. 07/XIV/2018
pertaining to Contract Agreement CEPZ-26/2010-11, construction of School
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building and Staff Quarters for K.V. Dharamshala, Tehshil Dharamshala,
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District Kangra, Himachal Pradesh, came to be dismissed.
2. Precisely, the facts of the case, as emerge from the pleadings
adduced on record by the respective parties are that aforesaid contract was
executed between M/s Ranbir Singh & Co. and Chief Engineer Pathankot
Zone for ‘construction of school building and staff quarters for Kendriya
Vidyalaya at Palampur on 6.12.2010 for a sum of Rs. 6,27,79,484.48/-.
After completion of work, final bill for undisputed portion was paid on
28.10.2016, but since certain dispute arose between the parties qua certain
portions, matter came to be landed before the Sole Arbitrator in terms of
Condition No.70 of IAFW-2249, who was appointed vide letter No.
13600/WC/915/07/E8 dated 31.3.2017. The Sole Arbitrator adjudicated
the matter and vide awards dated 12.4.2018 and 24.4.2018 (Annexure A-2),
awarded certain amount alongwith interest for different claims in favour of
the respondent-M/s Ranbir Singh and Co.
3. Being aggrieved by the afore awards, appellants-Union of India
and Chief Engineer Pathankot Zone filed an application under Section 34 of
the Act for setting aside afore awards passed by the Sole Arbitrator, however
vide order dated 11.8.2023, learned District Judge dismissed the
application /objections with cost (Annexure A-1). If the awards are read in
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its entirety, it clearly emerges that objections under Section 34 of the Act,
.
came to be dismissed on the ground that scope of interference in the
Arbitral Award is limited. In the afore background, appellants-Union of
India has approached this Court in the instant appeal, praying therein to
set aside the afore awards on the grounds, which shall be taken note of in
the later part of the judgment.
4. Precisely the grouse of the appellants as has been highlighted
in the grounds of appeal and further canvassed by Mr. Balram Sharma,
learned Deputy Solicitor General of India, is that learned District Judge has
failed to appreciate the provision contained Section 34 (2A), which
empowers the court to set aside an award if it finds that the same is vitiated
by patent illegality appearing on the face of it. Learned Deputy Solicitor
General of India, while referring to judgment passed by the Hon’ble Apex
Court in case titled Associate Builders v. Delhi Development Authority
(2015) 3 SCC 49, attempted to argue that contravention of the Act itself
would be regarded as patent illegality and in this background, appellants
are well within their right to maintain the present appeal. While making
this Court peruse Arbitral Award dated 12.4.2018, Mr. Balram Sharma,
learned Deputy Solicitor General of India submitted that the Sole Arbitrator
erred in awarding a sum of Rs. 4,12,273/- alongwith 12% simple interest
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under Claim No. 1 in favour of the respondent. He submitted that the act
.
and conduct of the contractor itself bars him from claiming compensation
qua Claim No. 1, as he, at the time of receiving RAR, did not lodge any
protest and as such, the Arbitrator while considering aforesaid claim was
bound by the terms of the contract agreement, which nowhere provides any
time limit for payment of RAR, nor any clause for payment of interest on
delayed RARs. While placing reliance upon judgment rendered by Hon’ble
Apex Court in case titled State of Manipur v. Shangreuhan Maivah, Civil
Appeal No. 1633 of 1990 decided on 27.03.2001, Mr. Balram Sharma,
learned Deputy Solicitor General of India, submitted that Hon’ble Apex
Court in the afore case has held that the nature of payment is an advance,
such advance, therefore, is not a debt under the Interest Act, we are,
therefore, of the opinion that no interest is payable on such delayed
advance and accordingly, the award under Claim No. 1 being unreasonable
is liable to be set aside.
5. While referring to finding returned by the learned Arbitrator
with regard to wrongful freezing of price index in claim No.2 for material
beyond the original period of completion, learned Deputy Solicitor General
of India, submitted that same is contrary to the terms and conditions of the
contract. While referring to Clause 38 at page No. 84 of the contract
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agreement, Mr. Balram, submitted that price indices for material were
.
correctly frozen in accordance with the contractual stipulations and the
same was duly agreed upon by the respondent at the time of signing the
contract. He further submitted that respondent continued to accept running
payments without any protest or reservation, hence, he is not entitled to
any relief under this claim.
6. While referring to award of Rs.1,83,106/- under Claim No. 3,
Mr. Balram, submitted that same is wholly untenable as respondent, being
a local resident of Palampur, has not incurred any actual expenses towards
establishment charges nor has he produced any documentary evidence
before the learned Arbitrator to substantiate claims relating to hiring of an
office, payment of wages, electricity bills, telephone charges or car expenses.
While referring to Condition 9(b)-(II) of IAFW-2249, learned Deputy Solicitor
General of India, submitted that respondent is not entitled to such claim,
yet the Sole Arbitrator, awarded the said amount for a period of three and a
half months without any justification.
7. While referring to claim No. 6, Mr. Balram, further submitted
that the Sole Arbitrator erred in awarding sum of Rs. 5,73,849/- for
redoing of protective works allegedly damaged due to an Act of God. He
submitted that though respondent had already been made full and final
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payment for the protective works, as was entered in the Measurement Book
.
(MB), but learned Arbitrator yet proceeded to award additional amount,
which is contrary to the terms and conditions contained in the agreement.
8. Learned Deputy Solicitor General of India submitted that sum
of Rs. 29,779/- has been wrongly awarded by the learned Arbitrator qua
claim No.4, as the surface dressing work was never executed by the
respondent on the site with completion of work. He further submitted that
omission Deviation Order was rightly prepared in terms of Condition 07 of
IAFW-2249 and the recovery of Rs. 29,778.65/- was rightly made by the
appellants. He submitted that similarly, Claim No. 5 for Rs. 30,000/- on
account of watch and ward is unsustainable as the work had been
completed on 15.01.2015 and the delay in issuance of the completion
certificate was due to own failure of the respondent to complete certain B/R
and E/M items, which had been duly communicated by the department.
9. While referring to amount awarded qua claim No. 7, Mr. Balram
Sharma, learned Deputy Solicitor General of India submitted that sum of
Rs. 22,322/- has been wrongly granted as the work was completed on
15.01.2025, but the respondent-contractor failed to submit the final bill
within the stipulated period of three months from physical completion as
per agreed condition no. 66 of IAFW-2249. He submitted that as per
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Condition 65, final bill was to be paid after certification by AGE (I), as such,
.
interest on the final bill on account of delay in payment of final bill is liable
to be set aside.
10. Similarly, Mr. Balram, while referring to amount awarded by
the learned Arbitrator qua claim Nos. 8, 9, 10 and 11, vehemently argued
that Sole Arbitrator wrongly proceeded to award sum of Rs. 6,80,108/- on
account of overhead expenses allegedly incurred by the respondent during
the extended period. He submitted that time extensions were granted at
own request of the respondent and repeated notices for slow progress were
issued, which the contractor failed to comply with, hence no loss was
suffered warranting such compensation. He further submitted that awarded
amounts of Rs 19,57,236 and Rs.94,740/- are unsustainable as work
commencement and completion dates were clearly known to the
respondent, who was handed over the site on 21.12.2010, yet he failed to
maintain progress despite repeated directions. He submitted that delay was
solely on the part of the respondent, as such, there was no occasion, if any,
for the Sole Arbitrator to award amount qua aforesaid claim. He submitted
that since respondent was fully aware that Star Rates had to be prepared
based on prevailing market rates and he made no timely effort to procure
the NFTC doors, there was no occasion, if any, for the Sole Arbitrator to
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award sum of Rs. 94,740/- qua Claim No. 10. Mr. Balram, submitted that
.
award of interest is totally unfair, unreasonable and self-contradictory.
While referring to Section 37(1) of the Act, Mr. Sharma pointed out that
Arbitrator is bound by the terms of the contract. He submitted that under
Sections 2 and 3 of the Interest Act, 1978, a written notice is mandatory for
claiming interest, which was not served by the contractor.
11. Lastly, Mr. Balram, submitted that award of Rs. 1,85,000/-
under Claim No. 12 towards costs is highly unreasonable and not
sustainable, particularly when all the claims of the respondent-contractor
were unjustified and untenable.
12. To the contrary, Mr. Shubham Sood, learned counsel appearing
for the respondent-contractor, while referring to Sections 34 and 37 of the
Act, attempted to justify the award while stating that same does not suffer
from any patent illegality and the view taken by the learned Arbitrator is
justified, reasoned and plausible. Mr. Sood submitted that jurisdiction
conferred on courts under Section 34 of the Arbitration Act is fairly narrow
and when it comes to the scope of an appeal under Section 37 of the
Arbitration Act, the jurisdiction of an appellate court in examining an order,
setting aside or refusing to set aside an award, is all the more
circumscribed.
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13. I have heard the learned counsel for the parties and gone
.
through the record of the case.
14. Before ascertaining the correctness of rival submissions made
by the learned counsel for the parties, this court finds it necessary to
elaborate upon the scope of the appellate court exercising jurisdiction to
review the findings of an award.
15. By now it is well settled that scope of appellate Court in
exercising power under the Act to review the finding of an award is
narrow/limited, especially when award is upheld or substantially upheld
under Section 34 of the Act. Reliance in this regard is placed upon
judgment dated 11.8.2023, passed by the Hon’ble Apex Court in Civil
Appeal No. 3798 of 2023 titled as Larsen Air Conditioning and
Refrigeration Company v. Union of India, wherein it has been held that
Section 34 the Act, permits the Court to interfere with an award sans the
grounds of patent illegality to go to the root of the matter and cannot be of a
trivial nature. Relevant paras of the afore judgment reads as under:
“15. The limited and extremely circumscribed jurisdiction of the court under
Section 34 of the Act, permits the court to interfere with an award, sans the
grounds of patent illegality, i.e., that “illegality must go to the root of the
matter and cannot be of a trivial nature”; and that the tribunal “must decide
in accordance with the terms of the contract, but if an arbitrator construes a
term of the contract in a reasonable manner, it will not mean that the award
can be set aside on this ground” [ref: Associate Builders (supra)]. The other::: Downloaded on – 26/06/2025 21:20:34 :::CIS
10 2025:HHC:19708ground would be denial of natural justice. In appeal, Section 37 of the Act
.
grants narrower scope to the appellate court to review the findings in an
award, if it has been upheld, or substantially upheld under Section 34. It is
important to notice that the old Act contained a provision (15. Power of court
to modify award.–The court may by order modify or correct an award– (a)where it appears that a part of the award is upon a matter not referred to
arbitration and such part can be separated from the other part and does not
affect the decision on the matter referred; or (b) where the award is imperfect
in form, or contains any obvious error which can be amended without affectingsuch decision; or (c) where the award contains a clerical mistake or an error
arising from an accidental slip or omission.) which enabled the court to
modify an award. However, that power has been consciously omitted by
Parliament, while enacting the Act of 1996. This means that theParliamentary intent was to exclude power to modify an award, in any
manner, to the court. This position has been iterated decisively by this Court
in Project Director, National Highways No. 45E and 220 National Highways
Authority of India v M. Hakeem (2021) 5 SCR 368.
42. It can therefore be said that this question has now been settled
finally by at least 3 decisions [McDermott International Inc. v. Burn
Standard Co. Ltd.13], [Kinnari Mullick v. Ghanshyam Das Damani14],
[Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P)Ltd.15] of this Court. Even otherwise, to state that the judicial trend
appears to favour an interpretation that would read into Section 34 apower to modify, revise or vary the award would be to ignore the
previous law contained in the 1940 Act; as also to ignore the fact thatthe 1996 Act was enacted based on the Uncitral Model Law on
International Commercial Arbitration, 1985 which, as has been pointed
out in Redfern and Hunter on International Arbitration, makes it clear
that, given the limited judicial interference on extremely limited
grounds not dealing with the merits of an award, the “limited remedy”
under Section 34 is coterminous with the “limited right”, namely,
either to set aside an award or remand the matter under the
circumstances mentioned in Section 34 of the Arbitration Act, 1996.”
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.
16. Similarly, in Konkan Railway Corporation Ltd v. Chenab
Bridge Project Undertaking, 2023 (9) SCC 85, the Hon’ble Apex Court has
held that jurisdiction of the Court under Section 37 of the Act is akin to that
under Section 34 of the Act, as such, the courts ought not to interfere with
arbitral award in a casual and cavalier manner. Most importantly, the
Hon’ble Apex Court held that mere possibility of an alternative view on facts
or interpretation of contract does not entitle Courts to reverse findings of
the Arbitral Tribunal. Relevant paragraphs from the decision are as follows:-
“19. Therefore, the scope of jurisdiction under Section 34 and Section
37 of the Act is not akin to normal appellate jurisdiction (UHL Power
Company Ltd. v. State of Himachal Pradesh (2022) 2 SCC (Civ) 401,
para 15. See also: Dyna Technologies Pvt Ltd v. Crompton GreavesLimited (2019) 20 SCC 1, para 24, 25). It is well-settled that courts
ought not to interfere with the arbitral award in a casual and cavaliermanner. The mere possibility of an alternative view on facts or
interpretation of the contract does not entitle courts to reverse thefindings of the Arbitral Tribunal (Ssangyong Engineering. &
Construction Company Ltd. v. National Highways Authority of India
(NHAI) (2019) 15 SCC 131; Parsa Kente Collieries Ltd. v. RajasthanRajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236, para 11.1).
In Dyna Technologies Private Limited v. Crompton Greaves Limited
(2019) 20 SCC 1, this Court held:
“24. There is no dispute that Section 34 of the Arbitration Act
limits a challenge to an award only on the grounds provided
therein or as interpreted by various courts. We need to be::: Downloaded on – 26/06/2025 21:20:34 :::CIS
12 2025:HHC:19708cognizant of the fact that arbitral awards should not be
.
interfered with in a casual and cavalier manner, unless the
court comes to a conclusion that the perversity of the award
goes to the root of the matter without there being a possibility ofalternative interpretation which may sustain the arbitral award.
Section 34 is different in its approach and cannot be equated
with a normal appellate jurisdiction. The mandate under Section
34 is to respect the finality of the arbitral award and the partyautonomy to get their dispute adjudicated by an alternative
forum as provided under the law. If the courts were to interfere
with the arbitral award in the usual course on factual aspects,
then the commercial wisdom behind opting for alternate disputeresolution would stand frustrated.
25. Moreover, umpteen number of judgments of this Court have
categorically held that the courts should not interfere with an
award merely because an alternative view on facts andinterpretation of contract exists. The courts need to be cautious
and should defer to the view taken by the Arbitral Tribunal even
if the reasoning provided in the award is implied unless suchaward portrays perversity unpardonable under Section 34 of the
Arbitration Act.
XX XX XXX
25. The principle of interpretation of contracts adopted by the
Division Bench of the High Court that when two constructions are
possible, then courts must prefer the one which gives effect and voice
to all clauses, does not have absolute application. The said
interpretation is subject to the jurisdiction which a court is called
upon to exercise. While exercising jurisdiction under Section 37 of the
Act, the Court is concerned about the jurisdiction that the Section 34
Court exercised while considering the challenge to the Arbitral Award.
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The jurisdiction under Section 34 of the Act is exercised only to see if
.
the Arbitral Tribunal’s view is perverse or manifestly arbitrary.
Accordingly, the question of reinterpreting the contract on an
alternative view does not arise. If this is the principle applicable toexercise of jurisdiction under Section 34 of the Act, a Division Bench
exercising jurisdiction under Section 37 of the Act cannot reverse an
Award, much less the decision of a Single Judge, on the ground that
they have not given effect and voice to all clauses of the contract. Thisis where the Division Bench of the High Court committed an error, in
re-interpreting a contractual clause while exercising jurisdiction
under Section 37 of the Act. In any event, the decision in Radha
Sundar Dutta (supra), relied on by the High Court was decided in1959, and it pertains to proceedings arising under the Village
Chaukidari Act, 1870 and Bengal Patni Taluks Regulation of 1819.
Reliance on this judgment particularly for interfering with the
concurrent interpretations of the contractual clause by the ArbitralTribunal and Single Judge under Section 34 of the Act is not
justified.”
17. In Bombay Slum Redevelopment Corporation Pvt. Ltd. Vs.
Samir Barain Bhojwani (2024) 7 SCC 218, the Hon’ble Apex Court
reiterated that supervisory role of Courts is very restricted in dealing with
appeals under Section 37 of the Act. Hon’ble Apex Court has further held
that scope of interference in a petition under Section 34 of the Act is very
narrow and jurisdiction under Section 37 of the Act is very narrower.
Hon’ble Apex Court further held that since parties to the lis themselves
chose to go before the Arbitral Tribunal instead of availing remedy before
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the traditional Civil Courts, Courts must be very conservative while dealing
.
with arbitral awards and confine themselves to the grounds strictly
available under Section 34 of the Act.
18. In Reliance Infrastructure Ltd. vs. State of Goa (2024) 1 SCC
479, Hon’ble Apex Court interpreting expression ‘patent illegality’ held that
mere a mere illegality is not a patent illegality, rather to interfere patent
illegality, illegality must be apparent on the face of the award and not the
one which is culled out by way of a long drawn analysis of pleadings and
evidence. Relevant paragraphs of the afore judgment are being reproduced
as under:
“57. As noticed, arbitral award is not an ordinary adjudicatory order
so as to be lightly interfered with by the Courts under Sections 34 or37 of the Act of 1996 as if dealing with an appeal or revision against a
decision of any subordinate Court. The expression “patent illegality”
has been exposited by this Court in the cases referred hereinbefore.
The significant aspect to be reiterated is that it is not a mere illegality
which would call for interference, but it has to be “a patent illegality”,
which obviously signifies that it ought to be apparent on the face of
the award and not the one which is culled out by way of a long-drawn
analysis of the pleadings and evidence.
58. Of course, when the terms and conditions of the agreement
governing the parties are completely ignored, the matter would be
different and an award carrying such a shortcoming shall be directly
hit by Section 28(3) of the Act, which enjoins upon an Arbitral
Tribunal to decide in accordance with the terms of contract while
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taking into account the usage of trade applicable to the transaction.
.
As said by this Court in Associate Builders vs. DDA9, if an Arbitrator
construes the term of contract in a reasonable manner, the award
cannot be set aside with reference to the deduction drawn from
construction. The possibility of interference would arise only if the
construction of the Arbitrator is such which could not be made by
any fairminded and reasonable person.
95. The narrow scope of “patent illegality” cannot be breached by
mere use of different expressions which nevertheless refer only to
“error” and not to “patent illegality”. We are impelled to reiterate what
has been stated and underscored by this Court in Delhi Airport Metro
Express (P) Ltd. Vs. DMRC10 that restraint is required to be shown
while examining the validity of arbitral award by the Courts, else
interference with the award after reassessing the factual aspects
would be defeating the object of the Act of 1996. This is apart from
the fact that such an approach would render several judicial
pronouncements of this Court redundant if the arbitral awards are
set aside by categorizing them as “perverse” or “patently illegal”
without appreciating the contours of these expressions.”
19. In S.V. Samudram vs. State of Karnataka (2024) 3 SCC 623,
the Hon’ble Apex Court has concluded that though jurisdiction of Court
under Section 34 is fairly narrow and moreover, when it comes to
jurisdiction under Section 37, it is all the more circumscribed. The relevant
paras of the afore judgment read as under:-
“46. It has been observed by this Court in MMTC Ltd. v. Vedanta Ltd.
(2019) 4 SCC 163.
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“14. As far as interference with an order made under Section 34,
.
as per Section 37, is concerned, it cannot be disputed that such
interference under Section 37 cannot travel beyond the
restrictions laid down under Section 34. In other words, the
court cannot undertake an independent assessment of the
merits of the award, and must only ascertain that the exercise of
power by the court under Section 34 has not exceeded the scope
of the provision. Thus, it is evident that in case an arbitral
award has been confirmed by the court under Section 34 and by
the court in an appeal under Section 37, this Court must be
extremely cautious and slow to disturb such concurrent
findings.” (Emphasis Supplied)
47. This view has been referred to with approval by a bench of three
learned Judges in UHL Power Company Ltd v. State of Himachal
Pradesh (2022) 4 SCC 116. In respect of Section 37, this court
observed:-
“16. As it is, the jurisdiction conferred on courts under Section
34 of the Arbitration Act is fairly narrow, when it comes to the
scope of an appeal under Section 37 of the Arbitration Act, thejurisdiction of an appellate court in examining an order, setting
aside or refusing to set aside an award, is all the morecircumscribed.”
xx xx xx
49. We may also notice that the circumscribed nature of the exercise
of power under Sections 34 and 37 i.e., interference with an arbitral
award, is clearly demonstrated by legislative intent. The Arbitration
Act of 1940 had a provision (Section 15) which allowed for a court to
interfere in awards, however, under the current legislation, that
provision has been omitted (Larsen Air Conditioning and Refrigeration
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Company v. Union of India and Ors. 2023 SCC OnLine 982 (2-Judge
.
Bench).
50. The learned Single Judge, similar to the learned Civil Judge under
Section 34, appears to have not concerned themselves with the
contours of Section 37 of the A&C Act. The impugned judgment (S.V.
Samudram v. State of Karnataka, 2017 SCC OnLine Kar 6559) reads
like a judgment rendered by an appellate court, for whom re-
examination of merits is open to be taken as the course of action.”
20. It is quite apparent from the aforesaid exposition of law laid
down by the Hon’ble Apex Court that scope of interference by this Court
while exercising power under Section 37 of the Act is very very limited.
Courts should not interfere with an award merely because an alternative
view on facts and interpretation of contract exists, rather courts need to be
cautious and should defer to the view taken by the Arbitral Tribunal even if
the reasoning provided in the award is implied unless such award portrays
perversity unpardonable under Section 34 of the Act.
21. Now being guided by aforesaid law on the subject, this Court
would make an attempt to ascertain the correctness of the claim put forth
at the behest of the appellants that learned District Judge, while
ascertaining the correctness of the award, has failed to take note of the
alleged patent illegality. Though learned Deputy Solicitor General of India,
while referring to Section 34 (2a) attempted to argue that award is vitiated
by patent illegality on the face of it, but he was unable to point out patent
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illegality, if any, on the face of the award. Though Mr. Balram, submitted
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that learned Arbitrator while passing award failed to adhere to the
expressed terms and conditions of the contract agreement, but having
perused terms and conditions of the contract agreement vis-à-vis amount
awarded by the learned Arbitrator qua the different claims put forth by the
respondents, this Court is not persuaded to agree with Mr. Balram, for the
reason that learned Arbitrator has proceeded to decide each and every claim
of the award taking note of terms and conditions qua the same detailed in
the contract agreement.
22. Having perused finding returned by the learned Arbitrator qua
claim Nos. 5, 6 and 9, this Court is not persuaded to agree with learned
Deputy Solicitor General of India, that Arbitral Tribunal has proceeded to
award amount qua aforesaid claims on the assumptions contrary to the
express terms of contract. Perusal of award reveals that appellants were
specifically asked to submit the details/activities of the work executed by
the respondent between 30.11.2014 to 15.1.2015 except work covered
under PC sums for which the agency was nominated by the appellants only
on 13.1.2015. However, appellants could not give any details of work
executed during this period, and as such, learned Arbitrator rightly
construed that work was complete on 29.11.2014 and in that situation
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appellants had the option to omit work under PC sum and get it executed
.
directly through the nominated agency and issue completion certificate to
the claimant and take over the completed work. However, since afore option
was not exercised by the appellants, learned Arbitrator rightly held
appellants liable to compensation incurred on watch and ward of buildings.
23. Similarly, this Court finds that protective works amounting to
Rs. 40.00 lakhs had been paid in RAR no.4 dated 9.6.2011. respondent
during hearing submitted photographs of the damaged protective works due
to the landslides on intervening night of 27.6.2011 and 28.6.2011. Though
respondent claimant intimated to the appellants alongwith photographs
vide letter dated 29.6.2011, but yet no action was taken. Appellants have
not refuted the aforesaid communication brought on record by the
respondent. Similarly, it has also failed to prove or provide evidence as to
where and when the damaged protective works have been paid as per the
“Accepted Risks” in DO No. 17. Since respondent contractor successfully
proved on record that in the said DO No.17, only earth work for damaged
portion was paid and appellants-Union of India did not offer any comment
on pricing details of the claim putforth by the respondent claimant, learned
Arbitrator rightly proceeded to award the amount qua aforesaid claim No.6.
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24. Respondent submitted before the learned Arbitrator that he had
.
submitted price tender for work on 4.11.2010, which was accepted by
CEPKT zone on 6.12.2010, meaning thereby, learned Arbitrator rightly
concluded that respondent claimant was prevented by the appellants-Union
of India to execute the work since date of the commencement till end of
April 2012 and later till November 2012, for one reason or the other as
explained in the statement of claims vide paras 5.4, 5.5. 5.6, 5.7, 5.8, 5.9,
5.10 and 6.2. Since during afore period, respondent was unable to execute
the work on account of various fundamental breaches committed by the
appellants, no illegality can be said to have been committed by the
Arbitrator while awarding certain amount on increase of basic price of
building material i.e. cement, steel, bricks etc, which had admittedly gone
abnormally high.
25. Similarly, this court finds no illegality or infirmity in the award
passed by the learned Arbitrator, whereby he proceeded to award 12%
interest qua claim No. 1 to the tune of Rs. 4,12, 273/- in favour of the
respondent. It is well settled that in a situation where agreement does not
provide for grant of interest nor does it prohibit such grant, the interest can
be awarded on certain principles as have been taken note in para 34 of the
award.
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26. Learned Arbitrator has proceeded to award sum of
.
Rs.1,83,106/- in favour of the respondent against claim No. 3 i.e. losses
sustained due to incurring expenses towards head office and site office
overheads. It is quite apparent from the pleadings as well as documents
adduced on record by the respective parties before learned Arbitrator that
work was suspended by the appellants w.e.f.15.10.2012 to 24.11.2012
vide letter dated 13.10.2012, due to non availability of funds. Though
aforesaid letter was subsequently revoked vide letter dated 17.11.2012
pursuant to representation made by the respondent vide letter dated
26.10.2012, but since suspension was done under condition No. 9 (a) (ii) of
GCC, which was for the reasons other than the default of the contractor, no
illegality can be otherwise said to have been committed by the learned
Arbitrator while awarding Rs.1,83,106/- qua claim No.3.
27. Though it has been claimed by the appellants/Union of India
that no amount on account of wrong DO for omission of surface dressing
against Serial Items No.1 to 10 of Scheduled ‘A’ Part I, could have been
awarded, but aforesaid plea deserves outright rejection for the reason that
DO No. 33 dated 29.9.2015 for omission of surface dressing was served
upon claimant almost nine months after completion of work and recovery
effected in the final bill. Surface dressing was the first activity on the
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ground to commence the work, Since appellants failed to give satisfactory
.
explanation that why it took 58 months to place afore DO upon the
respondent in case this activity was not executed in time, no illegality can
be said to have been committed by the learned Arbitrator while allowing
aforesaid claim to the tune of Rs. 29,779.
28. Similarly, this Court finds no illegality in the award given qua
claim No. 5 on account of watch and ward of buildings constructed under
this contract for one and a half month. Appellants were though specifically
asked to submit the details/ activities of the work executed by the
respondent between 30.11.2014 to 15.1.2015, except work covered under
PC sums for which the agency was nominated by Union of India on
13.1.2015, but unfortunately, appellants failed to give any detail as was
asked for. Hence respondent rightly construed that work was completed on
29.11.2014 and in that situation, appellants had option to omit work under
PC sum and get it executed directly through the nominated agency, which it
failed to do.
29. Though learned Deputy Solicitor General of India, vehemently
argued that learned Arbitrator erred in awarding sum of Rs. 5,73,849/- qua
claim No.6 towards redoing of protective work on account of damage during
the currency of contract due act of God, but having perused reasoning
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assigned by the learned Arbitrator while allowing aforesaid claim, this Court
.
is not persuaded to agree with Mr. Sharma that protective works
amounting to Rs.40,00,000/- had been paid in RAR No.4 dated 9.6.2011.
Respondent made available sufficient material before the learned Arbitrator
with regard to protective work done due to landslides on intervening night
of 27.6.2011 and 28.6.2011, which appellants failed to refute. If it is so, no
illegality can be said to have been committed by the learned Arbitrator
while awarding amount qua aforesaid claim, especially when, protective
work was done as per “Accepted Risks” in DO No.17. Respondent during
proceedings before learned Arbitrator brought out that in the said DO
No.17, only earth work for the damaged portion has been paid.
30. Having scanned award passed by the learned Arbitrator vis-à-
vis various claims put forth by the respective parties, this court sees no
reason to interfere with the same, especially when learned Deputy Solicitor
General of India, has not been able to point out that amount awarded qua
aforesaid claim is/was outside the ambit of the contract. Learned Deputy
Solicitor General of India, has not been able to point out that contract
agreement executed between the parties had no provision, under which
learned Arbitrator could proceed to award certain amount qua the claims
detailed herein above in favour of the respondent-claimant. This Court has
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no reason to differ with the finding returned by the learned District Judge
.
while upholding award passed by the learned Arbitrator for the reason that
it has dealt with each and every aspect of the matter and no scope has been
left for interference. Learned DSGI has failed to demonstrate that how
judgment passed by the court below is in contravention of Section 34 of the
Act and as such, judgment being in strictly in conformity with substantive
law in force, deserves to be upheld. Needless to say, an arbitral award is
not liable to be interfered with only on the ground that award is illegal or
erroneous in law that too upon reappraisal of the evidence adduced before
the learned Arbitrator, meaning thereby, award which may not be
reasonable or is non-speaking to some extent, cannot be ordinarily
interfered with by the courts.
31. By now, it is well settled that even if two views are possible,
there is no scope for the court to reappraise the evidence and to take
different view as has been taken by the Arbitrator. Since awards, which
ultimately came to be upheld vide judgment passed by the learned District
Judge, do not suffer from any patent illegality, this Court is not persuaded
to interfere with finding returned by the learned District Judge while
upholding the award. The view taken by the learned Arbitrator is reasoned,
justified and plausible. Learned District Judge has examined the award in
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accordance with law vis-à-vis contentions raised by the appellants and as
.
such, rightly did not find any ground under the Act to interfere with it.
Having considered impugned judgment, award and contentions urged in the
instant appeal, there is no scope left for this court to interfere in the
impugned awards exercise of limited jurisdiction under Section 37 of the
Act.
32. Consequently, in view of the detailed discussion made herein
above as well as law taken into consideration, this Court finds no merit in
the present petition and accordingly same is dismissed, as a result thereof,
award passed by the learned Arbitrator, which has been otherwise upheld
by the learned District Judge, is affirmed. Pending applications, if any,
stand disposed of.
June 25, 2025 (Sandeep Sharma),
(Manjit) Judge
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