Project Director, Integrated Tribal Development Agency, At/P.O./Dist.-Koraput vs M/s. Odyssey Advanced Telematics Systems

Biswanath Rath, J

The above appeal involves challenge to the judgment passed by the District & Sessions Judge, Koraput at Jeypore dated 7.05.2012 involving

Arbitration petition No.1 of 2012 and also involving setting aside of the award passed by the sole arbitrator on 4.10.2009 as appearing at Annexures-6

& 5 respectively.

Short background involved in this case is that pursuant to the appointment of the sole arbitrator by the order of the High Court dated 18.01.2008 in

Arbitration petition no.3 of 2005, the respondent herein submitted a statement of claim involving tender notice vide Annexure-1, the work order vide

Annexure-2 and the agreement between the parties vide Annexure-3. The factual backdrop as borne from the statement of the claim by the present

respondent is that the Integrated Triban Development Authority (hereinafter in short reflected as ITDA), Koraput invited a tender for work involving

construction of hostel building and staff quarters for the purpose of model school at Pungar in the district of Koraput at an estimated cost of

Rs.1,71,00,000/- (Rupees One crore seventy one lakh) vide tender call notice no.1388 dated 15.05.2002 as appearing at Annexure-1. Two numbers of

tenderers participated and on opening of the tenders on 17.06.2002 the respondent’s tender was evaluated to be the lowest one. However, instead

of issuing work order in favour of the respondent, there was negotiation on his rates. Ultimately the item rate tender of the claimant/respondent was

accepted after the rates were further reduced and agreed. Based upon which, the work order dated 15.07.2003 vide Annexure-2 was issued in favour

of the respondent. Pursuant to the issuance of work order, the parties entered into the agreements setting out the terms of contract explained therein

as available at Annexure-3. The respondent further averred in the claim petition that the value of the contract would be Rs.1,81,50,675.00/- (Rupees

One crore eighty one lakh fifty thousand six hundred seventy five only) and the scope of work was to be performed over a period of 18 months. As

per the work order/contract the date of commencement of the work was 15.07.2003 and the completion was by 14.01.2005.

Further, the scope of work comprised of the following components:

(i) Construction of Hostel Buildings for Girls and Boys Ground Floor only. (ii) Principal’s Quarters (Ground Floor & First Floor) (iii) Teachers’

Quarters (6 nos.) Ground Floor-(4 nos.) and First Floor-(2 nos.) (iv) Internal and External Water Supply and Sanitary Works (v) Electrical

installations. The contractor i.e. the respondent contended therein that the work order issued by the competent authority was during the period when

the monsoon fury in the year 2003 in the region was rampant. The claimant by his letter dated 15.07.2003 intimated the authority to make necessary

arrangements as per the contractual obligations to conclude the layout of the buildings. Instead of making necessary arrangement, the Project

Administration (hereinafter in short be reflected as P.A.) vide his letter dated 5.01.2004 asked the claimant to furnish a realistic work programme for

the subsequent transmittal to the authority for further necessary action at their level. At the same time, the P.A. also instructed the claimant to speed

up the work. It is also stated that in compliance of the instruction of the P.A. a realistic work programme was also drawn up and was also transmitted

to the P.A. on 8.01.2004. The work further delayed due to non-supply of design and drawing and soil bearing capacity of the structure by the

concerned department and also in absence of approval of a programme in the worse situation. Pursuant to the supply of layout of Boy’s hostel

buildings and other buildings prepared through a Senior Civil Engineer, Architectural Design Cell, hereinafter in short called as A.D.C., furnished a

tentative design to the claimant on 20.11.2003 and subsequently, gave layout on 5.12.2003. Consequent upon which, the claimant carried out

foundation excavation of boys hostel up to 29.12.2003, but the further work in the other components was slowed down under the effect of bad

weather followed by some local festivals. In the meantime, though a set up drawings were received from the P.A., I.T.D.A. but it was found that the

drawings had been prepared without the details relating to soft structural construction. In the meantime, a team of very high personnel headed by team

leader visited the building site and rounded the site to ascertain the ground condition, which are adversely worsen due to the construction at the site

selected by the A.D.C. and P.A., I.T.D.A. The committee on verification of the site conditions also published an inspective report on 28.1.2004

alleging that there was no practical cooperation and there was a superfluous inspection and investigation. The claimant also submitted that since the

work progress due to suspension of the ongoing works under the prejudicial decision of the Committee was unduly hindered, the Committee after

consulting some members again took the stock of situation resulted from the superfluous decision taken earlier by the said Committee. A meeting was

also convened on 8.04.2004, in which the authority surprisingly expressed displeasure on a plea of non-starting of construction work as per the earlier

decision. In spite of the fact that the work had been stalled only after site visit of the authority on 28.01.2004 and upon the decision of the authority to

make large scale changes in the nature of the construction, even in spite of one of the major reason was non-receipt of approved drawing in time, in

the proceeding dated 8.04.2004 explaining the contractor that there is provision of escalation at clause 30 in the F2 agreement agreed therein for the

foundation already done as per the original drawing the same will be paid to the contractor in the said meeting. There was also further decision on

agreement of the contractor, which reads as follows:

 “1.        (a)         The Contractor will resume the work immediately.

              (b)         Layout will be given by Sri Raghunath, Sr. Engineer, A.D.C. on 12.04.2004. Sri Debasis Ray will reach site

earlier and make necessary arrangements.

(c) Â Â Â Â Â Â Â Â Casting of foundation concrete will be done or before 14.04.2004.

(d) Â Â Â Â Â Â Â Â Capt.I.C. Mallick, Technical Advisor will reach the site on 13.04.2004 to oversee the foundation excavation work and check on

founding soil.

(e) Â Â Â Â Â Â Â Â The Contractor will submit work programme in Consultation with P.A., ITDA and consultant on 12.04.2004.

(f) Â Â Â Â Â Â Â Â Â Anti-termite treatment has to be done in foundation. The date of expiry of the Chemical for Anti-termite treatment should be

verified before use.

(g) Â Â Â Â Â Â Â Â Test result of founding soil already taken by Govt. Lab should be obtained by P.A., ITDA from Laboratory.

(i) Â Â Â Â Â Â Â Â Â The Contractor shall submit works bill every month.

(ii) Â Â Â Â Â Â Â Â The Contractor confirmed in writing that he has received the modified drawings.

(iii) Â Â Â Â Â Â Architectural Design Cell the consultant were also requested to ensure that work is not held up due to delay on their part.

It is also alleged therein that in the meantime, for some other obstruction being created by the authority pursuant to a letter dated 9.06.2004, the

claimant intimated the Project Administration (P.A), I.T.D.A. vide his letter dated 19.07.2004 that certain changes in the master plan of the buildings

was still going on, for which, the claimant had not been able to start the work. The claimant also intimated therein that the soil testing report was also

awaited. There was also obstruction in the proceeding with the work for the reason of pendency of approval of the illegal plan and estimate by the

concerned S.D.O. being transmitted by the P.A. I.T.D.A. It was also requested therein for immediate transmission of the detail design for the double

storied building. In the meantime, the claimant vide another letter dated 28.07.2004 intimated the Secretary of Orissa Model Tribal Education Society

that he has secured necessary Plan and Estimate from the Executive Engineer for installation of the Electrical Sub-station and had also arranged to dig

up a Bore well and his request to the site engineer to identify the place for the above work has not been accepted on the premises of awaiting further

government orders. In the meantime, the claimant was surprised to receive the letter dated 28.07.2004 from the P.A., I.T.D.A. to attain the final

measurement of the works already done on 16.08.2004 in order to help for the closure of the contract. The claimant’s explanation for delay in

work and thereby requesting to allow resumption of the work till finally completed has been turned down. In the meantime, in absence of taking any

decision on the request of the claimant, the claimant was served with a letter on 10.11.2004 an intimation to the P.A., I.T.D.A. that the balance work

has been decided to be entrusted to M/s. O.C.C. Ltd. for completion of the construction, which constrained the claimant to resort the legal course

requesting the Tribunal to take a decision on the claim of the claimant. In filing the claim petition, the claimant has made the following claims:

“Claims of the claimant

(Outstanding payments as reported from time to time and lastly in a letter dated 10.10.08 at Annexure-C/20 on the basis of the Books of Accounts of the Claimant the

details of which shall be shown for the kind appreciation of the Hon’ble Tribunal during the course of hearing of Claims before him).

Claim item No.1 (Excavation)

i) Excavation of foundation trenches, for single Storey Building of Boys’ Hostel.

ii) Excavation for double storey Building of Boys’ Hostel at changed site.

iii) Re-excavated Quantity resulted from filled up

foundation treanches previously excavated,

Total quantity of excavation

=6000M3

Cost of work not paid

@Rs.125/M3=Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Rs.7,50,000.00

Claim Item No.2

Construction Materials which

included cost of Rock Products,

RR Stones, Bricks, Centering & Shuttering Materials, Sand, Cement & Steel

(Initial Procurement of above materials at the market rates) Rs.15,00,000.00

Claim Item No.3 (Site  Activities)

I) Anti-Termite Treatment

II) Infrastructures

III) Mobilisation of Men &

 Machineries etc.

IV) Idle expenditure,

 Establishment,

 expenditures

 Advances to

 working forces ….          Rs.20,00,000.00

V) Petty Expenditures ….Rs. 2,55,000.00

 Sub-Total :                     Rs.45,00,000.00

Claim Item No.4:

(Compensation for breach of

Contract)

Contract was broken by the

Respondents for which

compensation of 20% (Includes

15% of balance work not

allowed to be executed by the

Claimant for which no benefit

was availed of) of the Contract-

Value i.e. of Rs.1,81,50,675

amounting to ……………..Rs.36,30,135.00

Sub-Total of Claims…......Rs.81,30,135.00

Claim Item No.5:

 (Interest during Blockage Period)

The Contract was foreclosed before

 making over payment of

Rs.45,00,000.00 i.e. the expenditure

incurred relating to the work

performance. Till this date of filing of the

Claim Statement, the Respondents

have detained the payment of

Rs.45,00,000.00. Therefore, the

Claimant is entitled to interest on

Rs.45,00,000.00 @ 12% per annum

from 12.11.04 to 05.04.08 ….. Rs.18,36,000.00

 Total of claims =                  Rs.99,66,135.00

Besides the above payment of Rs.99,66,135.00, the Claimant is entitled to interest @ 18% per annum on Rs.99,66,135.00 from 06.04.08 to the date of awarded amount is

paid in full.

In the above backdrop of the matter, the claimant made the following prayer:

“ PRAYER

In presenting the Facts and Claims in foregone Paras 1 to 21 the Claimant most respectfully prays as below:

The legitimate Claim amount of Rs.99,66,135.00 be awarded in favour of the Claimant against the Respondents.

Interest on Rs.99,66,135.00 @ 18% per annum be awarded from 6.04.08 till the date of final payment is made in full by the Respondents.

The cost of Arbitration proceedings be awarded in favour of the Claimant against the Respondents.

An interim award of Rs.40.00 lac be awarded in favour of the Claimant to minimize his financial hardship having arisen out of the prevarication tactics adopted in

not finalizing payment of the Claimant by the Respondents over the years gone by.

Any other relief or reliefs as would be deemed proper be awarded in favour of the Claimant.

The Claimant reserves his right to file further documents/Book of A/cs to substantiate his claims before the Hon’ble Tribunal.â€​

Pursuant to receipt of the notice of claim, the respondents therein including the present appellant filed a combined written statement on behalf of

both the respondents. In the written statement while denying each of the allegations and further while reiterating the development up to issue of work

order as well as signing the agreement by both the parties and further the development through the writ petition vide W.P.(C) No.13171 of 2004

involving a challenge to the rescinding of the contract, for forfeiture of the E.M.D. and further appointment of the Arbitrator by the High Court in

disposal of the arbitration proceeding, the respondent therein further replying to the para wise comments involving the claim, submitted as follows :- for

the conditions in the work order the claimant was required to complete the work by 13.01.2005. It was also admitted in the response that in fact there

was correspondence by the P.A., I.T.D.A to the claimant to attend the work site for giving layout of the work involved therein from 23.09.2003 to

30.09.2003, the claimant also received the detailed layout diagram from A.D.C on 20.11.2009. According to the agreement, detailed work programme

was also furnished to the P.A., I.T.D.A. by the contractor on 8.01.2004 with clear indication that the work was to start from 20.01.2004 to 15.09.2004

for the purpose of cutting, bending, binding of M.S. rod or roof slab including beam casting and casting of roof slab. It is further contended that

however, in the meantime, on 28.01.2004 the Committee consisting of High officials indicated therein inspected the plot on 28.01.2004. In paragraph

(f) therein, the respondents admitted that in the proceeding of the meeting held in the Chamber of the Commissioner-cum-Secretary, ST & SC

Development Department dated 8.04.2004 involving the Contractor, the Committee decided, the expenditure already incurred by the contractor

(claimant) involving foundation excavation as per the original drawing will be paid by the Government. It was further decided on 8.04.2004 for

resumption of the work as per the revised design plan and estimate imposing same condition to complete the work. In paragraph (h) it was also stated

therein that pursuant to a decision in the proceeding dated 8.04.2004 revised layout has been supplied to the contractor in the month of April, 2004 and

it is alleged therein that in spite of handing over of the revised layout plan, the construction work did not commence as appearing from the letter dated

4.05.2004. There was immediate correspondence to the Contractor to start the work and to complete the same timely as appearing by the

correspondence dated 26.05.2004. It was clearly indicated therein that in the meeting dated 16.06.2004 held by the Commissioner-cum-Secretary to

Government, S.T. & S.C. Development Department it revealed that in spite of repeated instructions the Contractor failed to complete the construction

work and thus, it was decided therein to close the contract work by issuing final notice to the contractor. As a consequence of which vide

communication dated 24.06.2004 a notice was issued to the contractor-claimant for cancelation of the contract, further, intimating therein the

contractor to come on 21.07.2004 in person or through his authorized agent for final measurement of the construction work already done by the

contractor and his failure in turning up, he was again issued with a notice on 21.07.2004 fixing 16.08.2004 for final measurement of the work already

executed. It is, further averred that pursuant to the above notice, on 16.08.2004, the Contractor deputed one Shri Debadas Ray, being the brother of

the contractor, in whose presence, the measurement of the construction work has been recorded and subsequently, Xerox copy of the M.B. entries

has been communicated to the contractor alongwith office letter dated 31.08.2004. In paragraph

(i) it is again contended that for the instruction vide letter no.35009 dated 23.09.2006 of the Director-cum-Additional Secretary to Government S.T. &

S.C. Development Department, the Contractor has been once again issued with a notice dated 3.10.2006 for his appearance on 9.10.2006 for taking

final measurement on the claim of the claimant to the tune of Rs.99,66,135/- with interest @ 18% per annum from 6.04.2008 as made in paragraph

no.21 of the claim petition. The respondent therein simply submitted that the claimant is entitled to payment for the work already executed until

8.04.2004 and therefore, he is only entitled to the expenditure already incurred for excavation of foundation work. Apart from the above response the

respondent therein by filing a list of document also appended the documents at Annexures-(i) to Annexure-(x). The claimant also filed document as at

Sl.Nos.1 to 15. It is further contended therein that for the claimant’s own submission that he has incurred expenditure of Rs.6,00,000/- towards

work already done, the claim made by the claimant is being highly exaggerated. It is also contended therein that for the failure on the part of the

claimant to complete the construction work, the Government has sustained huge loss. It is finally prayed by the respondent therein to the sole arbitrator

to make the claimant entitled for the actual construction as has been found in finally check measured by the technical officer.

Considering the rival contentions of the parties and the materials placed therein, learned Arbitrator after entering into more than 40 proceeding dates

vide his award dated 4.10.2009 as appearing at Annexure-5, directed both the respondents therein to make entitled the claimant Contractor to a sum

of Rs.48,63,014.00/- on different heads with interest @ 8% per annum for the period from 12.11.2004 to 5.04.2008 and the amount, so awarded, was

to be cleared within three months from the date of the award. Learned Arbitrator also observed that on failure in making the payment within three

months, the claimant will be entitled to get the interest @ 18% per annum on whole or the balance amount with effect from the date the whole or the

part of the balance amount of the award becomes due after three month after entering into the entitlement of the claimant on different head.

Being aggrieved by the award of the Arbitrator, one of the respondents therein initiated an arbitration proceeding under Section 34 of the Arbitration

& Conciliation Act, 1996 before the learned District Judge, Koraput at Jeypore being registered as Arbitration petition No.1 of 2010.

Section 34 proceeding was initiated on the following grounds:

“a. That the Hon’ble Arbitrator committed error of law while passing the award.

b. That the Hon’ble Arbitrator passed the award basing on wrong proposition of law and the award has laid a wrong proposition of law.

c. The award passed by the Arbitrator is unfair and unreasonable which is shocking to the conscience of any prudent person.

d. The award passed by the Arbitrator is opposed to public policy.

e. The award passed by the Arbitration is contrary to the morality and justice.

f. The award is patently illegal.

g. The Hon’ble Arbitrator has passed the award beyond the scope of submission before the Arbitrator.

h. The Hon’ble Arbitrator had acted in a manner which is not in conformity with law.

i. The Hon’ble Arbitrator has passed the award taking into account extraneous material into account.

j. That the award is passed contrary to the principles of justice.

k. The Arbitration award is hit by public policy.

l. The arbitrator has travelled beyond the agreement.

m. The Hon’ble Arbitrator has blindly accepted the claim of claimant-contractor without considering the case of the department (petitioner).

n. That the Department (respondent before the Honb’le Arbitrator) was prevented from presenting its case due to failure of the Hon’ble Rbitrator to give

reasonable opportunity to present its case.

o. That the Hon’ble Arbitrator after hearing both the parties on question to visit the spot and giving his consent to visit the spot to assess and consider the case

of the parties failed to do so without any reason and this petitioner was kept in dark about his intention not to visit. There by the Department (Respondent before the

arbitrator) was prevented from producing material evidence. The Hon’ble Arbitrator has failed to give chance to the department to adduce alternative evidence in

this regard causing prejudice to the department and violating the principles of justice.

p. That the Hon’ble Arbitrator has misinterpreted the relevant clauses of the Agreement (F-2 Agreement No.01/2003-2004).â€​

It appears, the present respondent on its appearance pursuant to the notice in the proceeding under Section 34 of the Act, 1996 filed a detailed counter

and contested the matter by participating therein maintaining its stand already taken before the Arbitrator.

Considering the pleadings as well as the contentions raised therein, the District Judge, Koraput dismissed the Arbitration petition No.1 of 2010 by his

order dated 7.05.2012 thereby confirming the arbitral award as appearing at Annexure-6.

Being aggrieved by the said order, the appellant preferred this Arbitration Appeal no.37 of 2012 an appeal under Section 37 of the Arbitration and

Conciliation Act, 1996 for setting aside of the judgment passed in arbitration petition 1 of 2010 as well as the Arbitral Award passed by the learned

Arbitrator.

Arguing on the merit of the appeal involving Section 37 of the Act, Shri Acharya, learned Senior Advocate appearing on behalf of the petitioner

while taking this Court to the grounds in the appeal, confined his argument on five items particularly claims pertaining to the matter of excavation,

foundation, construction of material, anti-termite and mobilization etc., in the matter of compensation and lastly involving refund of security and earnest

money. Shri G. Acharya, learned Senior Advocate appearing on behalf of the appellant apart from taking this Court to the parties objection before the

Arbitrator and plea before the District Judge particularly in the forums below, further taking this Court to the alleged foundation involving the claim by

the contractor, contended that the District Judge, Koraput failed in exercising his power under Section 34 of the Arbitration and Conciliation Act, 1996

and has not dealt with the grounds raised therein at all. He further alleged that the District Judge has failed in appreciating the fact that there could not

have been a decision in absence of disposal of the application filed by the appellant for spot inquiry. Shri Acharya, learned Senior Advocate further

contended that, the District Judge, Koraput erred in appreciating the facts by wrongly observing that the application for spot verification was filed by

the claimant contractor. Shri Acharya, learned Senior Advocate, therefore, claimed that the judgment of the learned District Judge, Koraput is

perverse and suffers on account of error apparent on the face of the record. Shri Acharya, learned Senior Advocate also contended that both the

learned Arbitrator as well as the learned District Judge, Koraput have all failed in appreciating that the contractor measurably failed in concluding the

work within the specified time. Further, there is no basis on the assessment of compensation on the head of foundation excavation. The rate applied on

this claim remained contrary to the rate agreed between the parties. It is also contended by Shri Acharya, learned Senior Advocate that the learned

Arbitrator as well as the District Judge, Koraput failed in appreciating that there involves a case contrary to the fundamental policy and opposed to the

public policy. It is also alleged that the Tribunal failed in appreciating the submission of the Department resisting the claim of the Contractor being

opposed to the public policy. Shri Acharya, learned Senior Advocate for the appellant also contended that there has been no fair opportunity of placing

its case to the Department in the matter of grant of interest. Shri Acharya, learned Senior Advocate further contended that there has been wrong

application of rate of interest. It is also alleged that the District Judge, Koraput failed to appreciate that there was no case for compensation in favour

of the claimant for his failing in completing the work within the time scheduled. Taking this Court to the different aspect involving the contract, learned

Senior Advocate attempted to support his above contentions and accordingly, prayed this Court for interfering in the judgment of the District Judge,

Koraput so also the award passed by the learned Arbitrator.

In his opposition Shri K.B. Panda, learned counsel for the respondent/opposite party/contractor-claimant submitted that for the materials available

on record and for the observations of the Arbitrator, in no circumstance the award of the arbitrator can be termed to be an outcome of non-application

of the mind and non-consideration of the materials available on record. Taking this Court to the catena of decisions of the Hon’ble Apex Court as

well as of this Court and further taking this Court to the provision contained in Section 34 as well as Section 37 of the Act, Shri K.B. Panda, learned

counsel for the respondent contended that there is legal restrictions in interfering in the award of the Arbitrator and the provision leaves very limited

scope for the District judge to interfere in such matters. Taking this Court to the observations and findings of the learned District Judge, Koraput Shri

Panda, the learned counsel contended that there has been right consideration of the issue involved therein and therefore, there is no scope for

interfering in such judgment. Taking this Court to the different conditions in the agreement pursuant to the work order and further taking this Court to

the provision contained in Section 31 (7)(b), Section 34 and Section 37 of the Act, 1996, Shri K.B. Panda, learned counsel submitted that both the

award as well as the judgment of the learned District Judge, Koraput are legal and leaves no scope for interference by this Court in either of the

same. Sri Panda, further, taking this Court to the allegation of Shri Acharya, learned Senior Advocate that the claimant has abandoned his challenge to

rescinding of the contract involving W.P.(C) No.13171 of 2004, submitted that being aware of the situation, the claimant had the scope of agitating the

issue of rescinding of contract before the Arbitrator, the claimant contractor consciously dropped the issue involving the writ petition and further, there

being no decision involving the issue of rescinding of contract by this Court involving W.P.(C) No.13171 of 2004, there is no estoppel against the

claimant-contractor in pursuing such remedy before the Arbitrator. Taking this Court to the rates applicable for foundation excavation on different

heads, Shri K.B. Panda, learned counsel for the respondent referring to the claimant’s stand in the claim application contended that for the

involvement of foundation excavation, there involves several works and it is, thus contended that the Arbitrator has rightly taken an average of the

item rates available therein and applied average of all the items and thus, the compensation on the said head is justified. Further, on the allegation of

Shri G. Acharya, learned Senior Advocate that there has been no fair opportunity of hearing to the respondent therein in the arbitration proceeding,

Shri K.B. Panda, learned counsel for the respondent submitted that looking to the number of proceedings exceeding almost 40 dates before the

learned Arbitrator and for the observation and recordings therein, in no circumstance, it cannot be a case establishing no reasonable opportunity to the

claimant or to the department by the Arbitrator. On the objection to the grant of compensation for the breach of contract by the Arbitrator, Shri Panda,

learned counsel taking this Court to the catena of decision and the provision at Section 73 of the Indian Contract Act, submitted that the Arbitrator

rightly exercised his power in the matter of grant of compensation on this head and which finding has further been rightly confirmed by the learned

District Judge. Filing a written note of submission and taking this Court to the indications therein, Shri K.B. Panda, learned counsel for the respondent

submitted that there being no infirmity either in the award or in the judgment of the learned District Judge, Koraput and further for the settled position

of law, there leaves no chance for interfering in such matters, accordingly, prayed this Court for dismissal of the appeal.

Considering the rival contentions of the parties and on perusal of the materials available on record, this Court finds, as per their own submission,

even though the work order was issued by the Contractor on 25.07.2003 with direction to complete the work by 13.01.2005, as clearly borne from the

document at Annexure-2 page 21 of the Appeal Memorandum. Again on their own submission in the written statement filed by the present Appellant

along with other respondent therein, the layout given by the claimant was accepted by the Department on 13.04.2004. On 5. 01.2004 the P.A., ITDA

asks for furnishing the realistic work programme. There was no support of design and drawings and soil bearing capacity of the structure. Inspection

report dated 28.01.2004 alleged that there was a superfluous inspection and investigation by the authorities concerned. It also appears that there

involves large scale changes in the nature of construction. Proceeding dated 8.04.2004 is a clear indicator of non-receipt of approved drawing in time.

There is admitted disclosure for the proceeding dated 8.04.2004 that there was already commencement of foundation work as per the old drawing and

apparently some directions were given to the contractor in the meeting dated 8.04.2004 as clearly indicated in para-2 hereinabove. Further, it appears

that in the month of June, there has been some changes in the master plan, was still on peculiarly when there were so many obstructions in the

working out of the work involving the work order and the works involved was required to be completed by 14.1.2005 by letter dated 24.06.2004, on

the premises that the contractor had not completed the work in time, therefore, while intimating its decision for rescinding the contract the contractor

was asked to attend final measurement. All the above leaves no doubt that the decision for rescinding the work was made in haste. Records also

disclose that the work was entrusted to next contractor not with higher value but with change in the design also. On the objection on grant of

compensation for breach of contract by the Arbitrator, this Court apart from the observation and findings of the Arbitrator on this issue finds claim and

positive decision on such claim gets the support of provision at Section 73 of the Indian Contract Act. Considering such issue position has been settled

vide catena of decisions. Some of these are reproduced herein below:-

(1) In the case of CIT versus Shantilal (P) Ltd. as reported in AIR 1983 SC 952

(2) In the case of A.T. Brij Paul Singh versus State of Gujurat as reported in AIR 1984 SC 1703

 (3) In the case of Maharastra State Electricity Distribution Co. Ltd. versus Datar Switchgewl Ltd. and others as reported in 2018 (1) ARB. LR

239(SC)

Coming to take a call on the question being raised by the appellant that there was question of grant of compensation for breach of contract in absence

of specific prayer by the Contractor/claimant, this Court whole reading of the claim application finds, the claimant/contractor has sufficient pleading

and observes that the pleading involving the claim application and the prayer involving such application are to be read as a whole. This view of the

Court not only gets the support of Section 73 of the Indian Contract Act, but also gets support of the catena of decision as reproduced as herein

below:

(1) In the case of Janakirama Iyer versus Nilakantha Iyer as reported in AIR 1962 SC 633.

(2) In the case of Madan Gopal Kanodia versus Mamraj Maniram as reported in AIR 1976 SC 461.

(3) In the case of Ram Swarup Gupla versus Bishnu Narain as reported in AIR 1987 SC 1242.

(4) In the case of Syed Daslagir versus T.R. Gopala Krishna Setty as reported in AIR 1999 SC 3029.

(5) In the case of Desh Raj versus Bhagat Ram as reported in (2007) 9 SCC 641.

(6) In the case of Bachhaj Nahar versus Nilima Mandal as reported in (2008) 17 SCC 491.

Be that as it may, Considering the objection of Shri K.B. Panda, learned counsel for the respondent herein on the aspect of limited scope on the

District Judge, involving an application under Section 34 of the Act, 1996, this Court feels it appropriate to decide this issue first before proceeding to

examine the other issues involved herein. In the process this Court reading the provision at Section 34 of the Act, 1996 finds as follows:

Section 34 Application for setting aside the Arbitral award:-

(2) An Arbitral award may be set aside by the Court only if

xx xx

xx xx

(b) the Court finds that

(ii) the arbitral award is in conflict with public poly of India.â€​

It be noted here that no other provision involving Section 34 has any application to the case at hand. Thus, this Court proceeds to decide as to whether

the award is in conflict with public policy of India, thus requiring any interference in the same? and As to whether for the limited scope with the

District Judge involving the matter, the District Judge has nay scope for interfering in the award of the Arbitrator?

Provision taken note hereinabove, deals with recourse to inference against arbitral award in the circumstance specified therein. Reading the

aforesaid provision, this Court finds Sub-clause-ii, Clause-(b) is the only point of consideration involving the case at hand. The District Judge

considering the above aspect of the matter in paragraphs-7, 8 and 9 of its judgment and after the detail discussions, in paragraph-10 has come to

clearly observe that the present appellant failed to advance any case establishing the award contravenes the Public Policy of India. It has also been

observed therein that there was nothing to show that the award was unfair or unreasonable that too shocking the conscience of the court. The learned

District Judge even though observed that there has been no detail calculation coming to conclusion on the compensation aspect on different heads but,

however, taking into the quantum awarded, has categorically observed that for meager amount awarded with cogent finding establishing such claims

the quantum assessed cannot be taken to be unreasonable and shocking to the conscience of the court. It is at this stage, considering the submission of

Sri Acharya, learned Senior Advocate appearing for the appellant claiming that the judgment of the District Judge suffers for the perverse recording

of the District Judge involving the 34 proceeding in paragrtaph-9 recording that there was an application for spot visit by the claimant, when the fact

remains, the said application was made by the authorities, this Court observes, for the observations made hereinabove and for no significance on the

request of the visit of the spot having not been chased any further by the parties concerned, finds such observation not only a minor discrepancy but

also becomes irrelevant for the purpose of determination of the case. For the limited scope involving the challenge to the arbitral award prescribed

under Section 34 of the Act and for appellant having not been in a position to establish that the arbitral award suffered on account of provision

contained under Section 34 (2) (b) (ii) of the Act, this Court finds, there was no scope for the District Judge to decide the matter otherwise.

Considering the submission of Sri Goutam Acharya, learned senior counsel much emphasizing that the award of the Arbitrator opposed public

policy, following a decision of the Hon’ble Apex Court involving Oil & Natural Gas Corporation Ltd., v. Saw Pipes Ltd., AIR 2003 SC 2629, this

Court finds, the award of the Tribunal can only be interfered provided the award becomes contrary to the substantive provision of law or the

provisions of the Act or against the provisions of the contract giving rise to interfere in such award in exercise of power under Section 34 of the Act.

As discussed hereinabove, the appellant has miserably failed in throwing any light to establish that the award is opposed to public policy or any of the

benefit granted is contrary to the provision of the contract. Taking queue of some other judgments of the Hon’ble Apex CourtÂ

involving Olympus Superstructures Pvt. Ltd. Vs. Meena Vijay Khetan and others, AIR 1999 SC 2102 and Arosan Enterprises ltd. Vs. Union of

India and another, AIR 1999 SC 3804, this Court observes for the assessment of compensation on different heads being based on materials available

on record and the evidence so led by the parties, this Court has no scope to interdict an award on factual issues. Further, there is also restriction for

interfering in the award attracting the provision contained under section 34(2) of the Act. For the decision involving Rashtriya Ispat Nigam Limited vs.

Dewan Chand Ram Saran, AIR 2012 SC 2829, law has been fairly settled that no award has reached at a wrong conclusion. In the case of Hindustan

Construction Co.Ltd. vs. Governor of Orissa, AIR 1995 SC 2189, law has also been settled that while exercising power under section 34 or Section 37

of the Act, the Court cannot re-appreciate the materials on record for the purpose of recording a finding where in the facts and circumstances of a

particular case the award in question could have been made. The above view also finds support from another decision of the Hon’ble Supreme

Court in the case of State of Rajasthan v. Puri Construction Co. Ltd., and another (1994) 6 SCC 485, where the Hon’ble Apex Court clearly

observed that a court of competent jurisdiction has both right and duty to decide the lis presented before it for adjudication according to the best

understanding of law and facts involved in the lis by the judge presiding over the Court. It is held there that such decision, even if erroneous either in

factual determination or application of law correctly, is a valid one and binding inter se parties. It does not, therefore, stand to reason that the

arbitrator’s award will be per se invalid and inoperative for the simple reason that the arbitrator has failed to appreciate the facts and has

committed error in appreciating the correct legal principle in basing the award. It is also held therein that since the arbitrator is a judge by choice of the

parties and more often than not a person with little or no legal background, the adjudication of disputes by an arbitrator by way of an award can be

challenged only within the limited scope of several provision of the Arbitration Act. In the case of P.R.Shah Shares & Stock Brokers (P) Ltd., vs.

B.H.H. Securities (P) Ltd. and others, AIR 2012 SC 1866, legal position has been settled holding that the court does not sit in appeal over the award

of an arbitrator by re-assessing or re-appreciating the evidence and the award can only be challenged on the grounds mentioned in Section 34(2) of

the Act otherwise it has to fail totally applying the principle of law.

For the observations of this Court hereinabove and for the settled provision of law giving remote scope for interfering in the decision of the

Arbitrator and there being no infirmity in the judgment of the District Judge, Koraput, this Court finds no reason to interfere in the award or the

impugned judgment, for which the Arbitration Appeal stands dismissed. For this Court dismissing the appeal on the observation of very very limited

scope to interfere in the same, it is not required to enter into any other issue involved therein.

Arbitration appeal fails. Parties to bear their own cost.

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