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Saturday, September 10, 2016

"An award shall not be set aside except on one or more of the following grounds." A fortiori, a reasoned award cannot be set aside unless it falls in any of the three sub-clauses (a) (b) and (c) of Section 30 of the Act 1940.= Since the respondent (State) disputed the appellant's claim on various factual grounds and hence the issue centered around to the questions as to whether the appellant did this work and, if so, how and in what manner and to what extent and lastly, what should be the rate at which the appellant should be paid, if it is held that the appellant has done the work. = appellant has done the work in question and, therefore, they were entitled to claim its price for the work done. Though the appellant, in their claim petition, claimed the money at the rate of Rs.30 per Cu M but the arbitrator did not accept the rates claimed by the appellant and instead awarded the amount to the appellant at the rate of Rs.12.97 per Cu.M. whether the High Court was justified in allowing the objections filed by the respondent (State) under Section 30 of the Act 1940 and thereby was justified in setting aside of the award passed by the sole arbitrator on the ground of "legal misconduct"?

                            IN THE SUPREME COURT OF INDIA
                             CIVIL APPELLATE JURISDICTION
                              CIVIL APPEAL No.8829 OF 2016
                      (ARISING OUT OF SLP (C) No. 24443/2007)

M/s Harish Chandra & Company …….Appellant(s)


State of U.P. Thr. Superintending
Engineer                                ……Respondent(s)


SPECIAL LEAVE PETITION (C) No. 23950 of 2007

M/s Harish Chandra & Company …….Petitioner (s)


State of U.P. Thr. Superintending
Engineer                                ……Respondent(s)

                               J U D G M E N T
Abhay Manohar Sapre, J.

      In Special Leave Petition (c) No. 24443 of 2007

      1)    Leave granted.

2)    This appeal is filed  against  the  final  judgment  and  order  dated
17.08.2007 of the High Court of Uttarakhand at Nainital in O.A. No. 1097  of
2001 whereby the High Court allowed  the  appeal  filed  by  the  respondent
herein and set aside the judgment and order dated 30.05.1996 passed  by  the
Civil Judge, Dehradun and, in consequence, allowed  the  objections  of  the
State of U.P. filed  under  Section  30/33  of  the  Arbitration  Act,  1940
(hereinafter referred to  as  “the  Act  1940”)   against  the  award  dated
27.11.1995 which, in turn, also resulted in its setting aside.
3)    Facts of the case need mention, in  brief,  infra  to  appreciate  the
controversy involved in the appeal.
4)    The appellant herein is a civil contractor whereas the  respondent  is
the State of U.P. represented  through  Superintending  Engineer  Irrigation
Construction Circle, Yamuna Colony, Dehradun.
5)    In the year 1979, the respondent (State) invited tender  being  Number
6/1979-80 for doing  "Earthwork in power channels  on  different  routes  of
various distances and also construction of drainage crossing in  Chhoti  Lui
falling in 6 stretches and divided in two sections called   "serial  4”  and
“serial 6" in a scheme called -  KHARA HYDEL SCHEME".
6)    The appellant submitted their tender for serial 4 and  serial  6.  The
respondent accepted the  appellant's  tender.  Accordingly,  two  agreements
bearing nos. 5/SE/79-80 and 6/SE/79-80 were executed between  the  appellant
and the respondent for execution of the work in question on 30.10.1979.
7)    So far as agreement No. 5/SE/79-80 is concerned, it  was  in  relation
to work of section bearing serial 4 whereas agreement No. 6/SE/79-80 was  in
relation to work of section bearing serial 6. The work,  pursuant  to  these
agreements, was to start from 01.12.1979 and  had  to  be  completed  on  or
before 31.05.1982.
8)    Disputes of various nature arose between the parties in  execution  of
both the agreements.  The  disputes  were  related   to  the  completion  of
works, its nature, manner of its completion, non-payment and withholding  of
appellant's bills,  deduction of amount from  the  bills  etc..   Since  the
disputes could not be settled amicably, the parties invoked the  arbitration
clause (1.47) contained in the agreements and  approached  the  Civil  Court
for  appointment  of  arbitrator  and  for  making  references  to  him  for
adjudication of the disputes which had arisen between them in relation to  2
agreements. The request was acceded to and accordingly  some  disputes  were
referred to the sole arbitrator.
9)    So far as this appeal is concerned, it arises out of  disputes,  which
relates to agreement No. 6/SE/79-80, i.e., (serial 6). So  far  as  disputes
relating to agreement  No.  5/SE/79-80  i.e.(serial  4)  and  some  disputes
relating to agreement No. 6/SE/79-80 are concerned, they were also  referred
to the  arbitrator  for  his  decision.  One  reference,  however,  attained
finality by the orders of this Court in State of U.P. vs. Harish  Chandra  &
Co., (1999) 1 SCC 63,   whereas another reference is pending in this  Court.

10)   Consequent upon the reference made to the arbitrator  insofar  as  the
present appeal is concerned, the appellant (claimant) filed 6 claims  (claim
Nos. 12 to 17) before the sole arbitrator  (Mr.  Harish  Chandra  -  retired
Chief Engineer). The details of the 6 claims made by the  appellant  against
the respondent (State) are as under: -
|Claim No.     |Claim                 |Amount                 |
|12.           |Claim due on account  |Rs. 1,05,00,000.00     |
|              |of breaking of large  |along with interest @  |
|              |pieces of hard rock in|24% per annum from     |
|              |the filling done from |31.5.86 to the date the|
|              |9.00 to 9.80 KM.      |amount is actually     |
|              |                      |paid.                  |
|13.           |Claims due as payment |Rs. 11,62,650.00 along |
|              |on account of         |with interest at 24%   |
|              |non-payment after     |per annum from 1.6.86  |
|              |30.9.85.              |to the date the amount |
|              |                      |is actually paid.      |
|14.           |Payment due as claim  |Rs. 1,04,426.00 along  |
|              |on account of wrongful|with interest at 24%   |
|              |deduction of Security.|per annum from 1.5.85  |
|              |                      |to the date the amount |
|              |                      |is actually paid.      |
|15.           |Payment due as claim  |Rs. 5,51,250.00 along  |
|              |on account of extra   |with interest @ 24% per|
|              |excavation.           |annum from 1.6.86 to   |
|              |                      |the date the amount    |
|              |                      |actually paid.         |
|16.           |Payment due as claim  |Rs. 4,59,200.00 along  |
|              |on account of dressing|with interest @ 24% per|
|              |done on slopes of     |annum from 1.6.86 to   |
|              |filled earth in       |the date of amount     |
|              |embankments from Km.  |actually paid.         |
|              |9.00 to KM. 9.80      |                       |
|17.           |Stopping the          |Order respondents to   |
|              |respondents from      |accept our measurement |
|              |deducting any quantity|for excavation on      |
|              |of excavation done by |31.5.86.               |
|              |petitioner because of |                       |
|              |sitting in the monsoon|                       |
|              |year 1986 and onwards,|                       |
|              |if any.               |                       |

11)   The respondent (State) contested the aforementioned claims  by  filing
their reply.  The  State   also  filed  their  counter  claims  against  the
appellant claiming damages. The appellant contested the  counter  claims  by
filing their reply.  The  parties  adduced  evidence  and  examined  several
witnesses in support of their respective claims.
12)   On 27.11.1995, the arbitrator  passed  a  reasoned  award.  Out  of  6
claims, the arbitrator allowed appellant's 3 claims, i.e.,  claim  Nos.  12,
13 and 17 and rejected the claims Nos. 14, 15 and 16.  The  arbitrator  also
rejected the counter claims of the respondent (State) in toto.  The  details
of the claims awarded and rejected are as under:
|Claim No.|Amount demanded Rs.     |Amount Awarded Rs.      |
|12.      |Rs. 1,05,00,000.00 24%  |Rs. 44,98,995.00        |
|         |interest from 31.5.86   |                        |
|13.      |Rs. 11,62,650 with 24%  |Rs. 10,61,450/- with    |
|         |interest upto 31.5.86   |interest 18% from 1.6.86|
|         |                        |to 27.11.95             |
|14.      |Rs. 1,04,426 with       |Rejected                |
|         |interest from 1.5.85    |                        |
|15.      |Rs. 5,51,250/- with     |Rejected                |
|         |interest @ 24% from     |                        |
|         |1.6.86                  |                        |
|16.      |Rs. 4,59,200/- with     |Rejected                |
|         |interest @ 24% from     |                        |
|         |1.6.86                  |                        |
|17.      |Order respondent to     |No deduction in quantity|
|         |accept measurement for  |already paid vide 27th  |
|         |excavation on 31.5.86   |Running bill are        |
|         |                        |justified               |

13)   The respondent, felt aggrieved, filed objections under Section  30  of
the Act 1940  before the Civil Judge(S.D.), Dehradun against the award.  The
appellant contested the objections and prayed for passing a decree  in  term
of the award. By order  dated  30.05.1996,  the  civil  Judge  rejected  the
objections and passed a decree in  term  of  the  award  along  with  simple
interest  payable  at  the  rate  of  18%   p.a.  on  the  awarded  sum   of
Rs.55,60,445/-  from the date of decree till payment of amount.
14)   The respondent, felt aggrieved, filed appeal being O.A.  No.  1097  of
2001 before the High Court. By impugned judgment dated 17.08.2007, the  High
Court allowed the appeal, set aside the order of the Trial Court  and  while
allowing the objections filed by the State set aside the  award.   The  High
Court held that the arbitrator misconducted himself  in  passing  the  award
inasmuch as he travelled beyond the terms of the agreement.
15)   Felt aggrieved, the appellant  (contractor/claimant)  has  filed  this
appeal by way of special leave against the judgment of the High Court.
16)   Heard Mr. Vijay Hansaria, learned senior  counsel  for  the  appellant
and Mr. S.R. Singh, learned senior counsel for the respondent.
17)    Mr.  Vijay  Hansaria,   learned  senior  counsel  appearing  for  the
appellant   (claimant/contractor)   while   assailing   the   legality   and
correctness of the impugned order contended that the High Court was  clearly
in error in allowing the appeal of the State (respondent) which resulted  in
allowing the objections filed by the State before the Civil judge which,  in
turn, resulted in setting aside of the said award which was  rightly  upheld
by the Civil Judge.
18)   Learned counsel urged that there was no case made out by the State  in
their objections of any legal misconduct committed  by  the  arbitrator  and
nor there was any factual or/and legal foundation laid so as  to  constitute
a case of any legal misconduct within the meaning of Section 30 of  the  Act
1940 for setting aside the award.
19)   Learned counsel pointed out that even cursory reading of the order  of
the High Court would indicate that the apparent legal  error  was  committed
by the High Court while allowing the appeal. It was his submission that  the
High Court virtually acted as a first  appellate  Court  as  if  the  appeal
before the High Court  arose directly against the  award.   Learned  counsel
pointed out that the  High Court then proceeded to examine the legality  and
correctness of all factual findings of the arbitrator  by  appreciating  the
evidence and then finding fault in the approach of the  arbitrator  so  also
finding error in the findings set aside the award as being bad in law.
20)   Learned counsel urged that such approach of the High Court was  wholly
without jurisdiction being against the  law  laid  down  by  this  Court  in
series of decisions wherein this Court  has,  inter  alia,  ruled  that  the
Court while hearing the objections under Section 30 of the Act 1940  against
the award, cannot sit as  an  appellate  Court  over  the  decision  of  the
21)   Learned counsel then contended that even otherwise on the merits,  the
award and the judgment of the Trial Court do not suffer from any  illegality
and nor any case of legal misconduct is made out against the  arbitrator  so
as to empower the Court to set  aside the award under Section 30 of the  Act
1940. It was his submission that the arbitrator did not  travel  beyond  the
agreement  and  on  the  other  hand  discussed  each  and  every  issue  by
appreciating the evidence on record with reference to each  claim  and  then
recorded a finding in favour of the appellant in relation  to  three  claims
and rejected the remaining claims of the appellant.
22)   Learned counsel lastly contended that this  Court  should,  therefore,
restore the order of the Trial Court and, in consequence, uphold the  award,
which is partly in favour of the  appellant  and  partly  against  them,  as
being just and legal by setting aside of the  impugned  order  of  the  High
23)   In  reply,   Mr.  S.R.  Singh,  learned  counsel  for  the  respondent
supported the impugned order and contended that it does  not  call  for  any
interference. It was his submission that the reasoning  and  the  conclusion
arrived at by the High Court for  setting  aside  the  award  is  legal  and
proper and hence it deserves to be upheld calling no interference.
24)   Having heard the learned counsel for the parties  and  on  perusal  of
the record of the case, we are inclined to accept  the  submissions  of  the
learned counsel for the appellant as, in our opinion, it has substance.
25)   The question which arises for consideration in this appeal is  whether
the High Court was  justified  in  allowing  the  objections  filed  by  the
respondent (State) under  Section  30  of  the  Act  1940  and  thereby  was
justified in setting aside of the award passed by  the  sole  arbitrator  on
the ground of  "legal misconduct"? In other words, the question that  arises
for consideration in this appeal is whether  on  facts  any  case  of  legal
misconduct on the part of the arbitrator is made  out  by  the  State  under
Section 30 of the Act 1940 for setting aside of the award dated 27.11.1995?
26)   This question, in our opinion,  is  required  to  be  decided  in  the
context of Section 30 of Act 1940 since repealed.
27)   What is the jurisdiction  of  the  Court  under  Section  30  when  it
examines the question as to whether any case  of  legal  misconduct  on  the
part of an arbitrator in passing an award is made out or not  has  been  the
subject matter of several decisions of this Court and remains  no  more  res
28)   A three-Judge Bench  of  this  Court  in  State  of  U.P.  vs.  Allied
Constructions, (2003) 7 SCC 396 while examining  the  scope  of  Section  30
held as under:
“The award is a speaking one.  The arbitrator has  assigned  sufficient  and
cogent reasons in support thereof.  Interpretation  of  a  contract,  it  is
trite, is a matter for the arbitrator to determine.

Sudarshan Trading Co. vs. Govt. of Kerala (1989) 2 SCC 38: REFERRED TO:

Section 30 of the Arbitration Act,  1940  providing  for  setting  aside  an
award is restrictive in its operation.  Unless one or  the  other  condition
contained in Section 30 is satisfied, an award cannot  be  set  aside.   The
arbitrator is a Judge chosen by the parties and his decision is final.   The
court is precluded from reappraising the evidence.  Even  in  a  case  where
the award contains reasons, the interference herewith  would  still  be  not
available within the jurisdiction  of  the  court  unless,  of  course,  the
reasons  are  totally  perverse  or  the  judgment  is  based  on  a   wrong
proposition of law.  An error apparent on the fact of the records would  not
imply closer scrutiny of the merits of documents and  materials  on  record.
Once it is found that the view of the arbitrator is  a  plausible  one,  the
court will refrain itself from interfering.”

29)   Justice S. Mukharji, as His Lordship then was, speaking for the  Bench
in M/s Sudarsan Trading Co. vs. Government of Kerala, (1989) 2 SCC 38  while
examining the jurisdiction of Court under Section 30 held as under:
“However, there is a distinction between disputes as to the jurisdiction  of
the arbitrator and the disputes as to in what way that  jurisdiction  should
be exercised.  There may be a conflict as to the power of the arbitrator  to
grant a particular remedy.  One has to determine the distinction between  an
error within the jurisdiction and an error in excess  of  the  jurisdiction.
Court cannot substitute its own evaluation of the conclusion of law or  fact
to come to the conclusion that the arbitrator  had  acted  contrary  to  the
bargain between the parties.  Whether a particular amount was liable  to  be
paid  or  damages  liable  to  be  sustained,  was  a  decision  within  the
competency of the  arbitrator  in  this.   By  purporting  to  construe  the
contract the court could not take upon itself  the  burden  of  saying  that
this was contrary to the contract and, as such, beyond jurisdiction.  If  on
a view taken of a contract,  the  decision  of  the  arbitrator  on  certain
amounts awarded, is a possible view through perhaps  not  the  only  correct
view, the award cannot be examined by the court.”

30)   The aforesaid view was consistently followed  in  later  decisions  by
this Court in  State of Andhra Pradesh &  Ors.  Vs.  R.V.  Rayanim  &  Ors.,
(1990) 1 SCC 433 and Ravindra Kumar Gupta & Co. vs. Union of  India   (2010)
1 SCC 409.
31)   One cannot, therefore, dispute the legal  proposition,  which  is  now
fairly settled keeping in view the aforementioned  law  laid  down  by  this
Court that an award can be set aside only on the grounds specified  in  sub-
clause (a) (b) and (c) of Section 30 of 1940 Act and on  no  other  grounds.
Indeed this is clear from the opening  words  of  Section  30  itself  which
starts with the words "An award shall not be set  aside  except  on  one  or
more of the following grounds." A fortiori, a reasoned award cannot  be  set
aside unless it falls in any of the three sub-clauses (a)  (b)  and  (c)  of
Section 30 of the Act 1940.
32)   The grounds such as inadequacy of reasons  in  support  of  an  award,
error committed by the arbitrator on facts, alternate or/and more  plausible
view could  be  taken  then  what  is  taken  by  the  arbitrator,  improper
appreciation of evidence done by the arbitrator  in  recording  any  finding
etc. are not the grounds on which any award much less a reasoned  award  can
be set aside. In other  words,  none  of  these  grounds  can  be  made  the
foundation for setting aside the award because they do not fall  within  the
four corners of any of the three sub- clauses  of  Section  30  of  the  Act
33)   Coming now to the facts of this  case,  on  perusal  of  the  impugned
judgment, we find that the High Court while setting aside of the  award  did
not take into consideration the aforesaid view of this Court  and  thus,  in
our view, committed a legal error.
34)   We are constrained to observe that the High Court virtually sat as  an
appellate Court as if it was hearing the appeal arising  out  of  the  award
little realizing rather ignoring  its  well  defined  jurisdiction  in  such
matter and proceeded to probe into all factual issues arising in  the  case.
It seems to have gone to the extent of permitting  the  State’s  counsel  to
file some documents in appeal  as  would  be  clear  from  para  12  of  the
judgment.  This would also be clear from the observations of the High  Court
made in Paras 12, 13, 18 and 19 which read as under :
“12 The learned standing counsel has supplied the list of petty  contractors
in whose names the bills were submitted before the Arbitrator.  The  details
of those bills is as below:-

|S.No.    |Names of Petty         |Amount                 |
|         |Contractors            |                       |
|1        |Harish Chandra & Sons  |Rs. 3,11,965.80        |
|2        |Vijay Gupta & Sons     |Rs. 3,04,828.00        |
|3        |Phool Chand Gupta &    |Rs. 17,95,346.00       |
|         |Sons                   |                       |
|4        |Ashok Gupta & Sons     |Rs. 178,84,942.00      |
|5        |Vijay Gupta & Sons     |Rs. 17,78,664.00       |
|6        |Phool Chand & Sons     |Rs. 2,97,583.50        |
|7        |Ashok Gupta & Sons     |Rs. 3,10,258.60        |
|8        |Harish Chandra & Sons  |Rs. 17,84,468.00       |
|9        |Ajay Gupta & Sons      |Rs. 3,00,196.90        |
|10       |Ajay Gupta & Sons      |Rs. 17,73,903.98       |

13. The department made enquiries upon which it was  revealed  that  in  the
concerned area there exist no Firms in the aforesaid  names  and  addresses.
The  correspondence  made  in  this  regard  is  filed  as   Annexure   No.2
(Collectively) to the Stay Application in the appeal before this Court.  The
endorsement made by the postal department about non-existence  of  the  said
Firms is also Arbitrator has not considered the above facts and allowed  the
claims 12, 13 and 17 filed by the contractor.  The  Department’s  allegation
is that the contractor for the first time raised claim Nos. 12 to 16  before
it vide his letter No. 102/S.C.C./87 dated 20.9.87 and the  department  vide
its letter No. 3911/-2/case/647/86, dated 28.11.87 has rejected the  claims.
Claim No. 17 was never raised  before  the  Department  and  it  was  placed
before the Arbitrator directly.

18.Now we proceed to scrutinize the claims awarded by the Arbitrator to  the

Claim No. 12 pertains to breaking of  large  pieces  of  hard  rock  in  the
filling work done from Km. No. 9.00 to  9.80.  The  Arbitrator  has  allowed
this claim on the ground that the site is  located  in  the  upper  Shivalik
ranges of the Himalayan mountains. These ranges  are  mostly  built  of  the
sedimentary rocks compressed of the material flown  down  the  rivers  since
millions of years which got compressed under their own pressure and  weights
and got very hard due to the ageing process.  This  material  could  not  be
dugged out manually  by  pick  axes  or  Phawaras.  The  possible  means  of
excavation were only by mechanical means either by mechanical shovels,  back
hows, rippers or by blasting. The objections of the Department is  that  the
Arbitrator has allowed the claim on imagination. As per the contract  clause
8.05 boulders of 150 mm dimensions were to be used in the filling reach  and
of more than 150 mm were to be staked at the site. The stones of  dimensions
of above 150 mm were not to be broken and then filled in the filling  reach.
The relevant clause 8.05 clearly indicates “the boulders of  more  than  150
mm  in  dimension  shall  not  be  permitted  in  the   embankments   unless
specifically approved by the Engineer Incharge and shall be stacked  by  the
contractor 10 meters away from the toe of the bank and nothing  extra  shall
be paid to the contractor for this work”. There is no  mention  of  breaking
of the stones in the agreement clause. The Arbitrator has acted  beyond  the
provision of the agreement in allowing this claim.”

35)   The High Court  then  went  on  to  examine  the  case  on  facts  and
eventually held that the arbitrator  has  travelled  beyond  clauses  26,  3
(1)(a) and 1.46 of  the  agreement  and  hence  committed  legal  misconduct
requiring the High Court to set aside the award.
      36)   With respect, we can  neither  agree  and  nor  can  uphold  the
approach and the reasoning of the High Court. In our considered  view,  such
approach is wholly against the law laid down by this Court in the  decisions
quoted supra.
37)   In the first place, the High Court did not apply the law laid down  by
this Court while deciding the appeal and hence  committed  a  jurisdictional
error; Secondly, the High Court acted like an appellate Court and  virtually
treated as  if  the  appeal  arose  directly  against  the  award  and  then
proceeded to examine all factual findings of the arbitrator by  appreciating
the evidence.   It was not permissible in  law;   Thirdly,  the  High  Court
should have confined its inquiry  to  find  out  as  to  whether  any  legal
misconduct was committed by the arbitrator and,  if  so,  how  and  in  what
manner. It was, however, not done; Fourthly, the High Court  went  into  the
factual question by referring to clause 26  of  the  agreement  for  holding
that the arbitrator passed an  award  contrary  to  clause  26  and  thereby
traveled beyond the terms of agreement which constituted a legal  misconduct
on his part.  This finding, in our view, is,  on the face of  it,  untenable
in law for the reason, inter alia, that this objection  was  neither  raised
before the arbitrator and nor before the Trial Court in the manner in  which
it was raised for the first time in the High Court. In  any  event,  in  the
absence of any finding recorded by the arbitrator and the Trial Court,  such
issue could not have been gone into for the first  time  in  appeal  by  the
High Court. That apart, it has otherwise  no  substance  on  facts  for  the
simple reason that it being a question  of  fact,  the  same  could  not  be
examined in appeal; Fifthly, the High Court failed to  see  that  clause  26
only prohibits the appellant from  assigning  the  agreement  to  any  third
person.  Clause 26, therefore, had nothing to do with the  claims  filed  by
the appellants. It was an admitted fact that the appellant  did  not  assign
the agreement to any third  person.  If  some  work  was  got  done  by  the
appellant by employing some small contractor then it did  not  constitute  a
case of assignment of a whole  agreement  in  favour  of  small  contractors
within the meaning of clause 26 so as to empower the  State  to  cancel  the
agreement on such ground.  The finding of the High Court that the  award  is
rendered bad because it was passed in contravention  of  clause  26  of  the
agreement is, therefore, not legally sustainable in law;  Sixthly, the  High
Court further failed to see that there was no error apparent on the face  of
the record in the findings recorded by the arbitrator; Seventhly,  the  High
Court also failed to see that the Trial Court had elaborately gone into  all
the factual issues and rightly did not find any substance in the  objections
raised by the respondent;  and  lastly,  the  award  being  a  reasoned  one
(running into 36 pages-Annexure P5 pages 127-163 of  the  SLP  paper  book),
the reasoning of the arbitrator could not be said  to  be  perverse  to  the
extent that no man with ordinary prudence could take such view and  nor  any
finding  of  the  arbitrator  was  against  any  provision  of  law  or   in
contravention of any of the clauses of  the agreement so as to constitute  a
case of legal misconduct on the part of the arbitrator  within  the  meaning
of Section 30 of the Act for setting aside an award.
38)   We, on perusal  of  the  award,  find  that  the  main  claim  of  the
appellant (claimant) against the State was  "claim  No.  12"  which  was  in
relation to the work done by the appellant of breaking of  large  pieces  of
hard rock from 9.00 Km to 9.80 Km distance.  Since  the  respondent  (State)
disputed the appellant's claim on various  factual  grounds  and  hence  the
issue centered around to the questions as to whether the appellant did  this
work and, if so, how and in what manner and to what extent and lastly,  what
should be the rate at which the appellant should be  paid,  if  it  is  held
that the appellant has done the work.
39)   The arbitrator in Paras 19 to 36 of the award  examined  these  issues
on the basis of the evidence adduced  by  the  parties  and  held  that  the
appellant has done the work in question and, therefore, they  were  entitled
to claim its price for the work done. Though the appellant, in  their  claim
petition, claimed the  money  at  the  rate  of  Rs.30  per  Cu  M  but  the
arbitrator did not accept the rates claimed by  the  appellant  and  instead
awarded the amount to the appellant at the rate of Rs.12.97 per Cu.M.
40)   So far as claim  No.  13  was  concerned,  it  pertained  to  interest
claimed by the appellant on their some amount whereas the claim No.  17  was
in relation to some  deductions  already  made  by  the  respondent  in  the
appellant's bills for certain work done under the agreement.
41)   In our considered view, it is clear from the facts of  the  case  that
the claims made by the appellant were essentially based on facts. They  were
accordingly probed on oral and documentary evidence adduced by the  parties,
which resulted in partial success of 3  claims  in  appellant's  favour  and
rejection of 3 claims. So far as  the  State  is  concerned,  they  did  not
pursue their counter claim consequent upon its rejection by the arbitrator.
42)   We have not been  able  to  notice  any  kind  of  perversity  in  the
arbitrator's reasoning and nor are we able to notice any  kind  of  apparent
error whether legal or otherwise in the award which may  constitute  a  case
of any legal misconduct on the part of the arbitrator empowering  the  Court
to set aside the award by taking recourse to Section  30  of  the  Act.  The
reasoning and the conclusion arrived at by the  arbitrator  is  one  of  the
possible view which is  capable of being taken  by  the  arbitrator  on  the
material brought on record and we find no legal ground to set it  aside  the
      43)   Learned counsel for  the  respondent  made  sincere  attempt  to
support the reasoning and the conclusion reached by the High  Court  but  in
the light of what we have discussed above, we can  not  accept  any  of  his
      44)   In the light of foregoing discussion, we are  unable  to  concur
with the reasoning and the conclusion arrived at by the High Court.
      45)   As a result, the appeal succeeds  and  is  accordingly  allowed.
Impugned order is set aside and that of the Trial Court restored.
      In Special Leave Petition (c) No. 23950 of 2007
As prayed for, the petitioner is permitted to withdraw  this  special  leave
petition with a liberty granted to the petitioner to  file  review  petition
before the High Court.  In the event of  review  petition  being  dismissed,
the  petitioner  would  be  at  liberty  to  challenge  the  impugned  order
including the order in the review petition.
With the aforesaid liberty, the  special  leave  petition  is  dismissed  as

                                  [J. CHELAMESWAR]

                               [ABHAY MANOHAR SAPRE]     New Delhi;
September 08, 2016

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