Generation Co Ltd And Anr vs R S Construction And Anr
2025 Latest Caselaw 3370 Cal/2

Calcutta High Court

Generation Co Ltd And Anr vs R S Construction And Anr on 4 December, 2025

                     IN THE HIGH COURT AT CALCUTTA
                         (COMMERCIAL DIVISION)                                      2025:CHC-OS:238

                             ORIGINAL SIDE

                         RESERVED ON: 13.11.2025
                         DELIVERED ON: 04.12.2025

                                 PRESENT:
                      HON'BLE JUSTICE GAURANG KANTH

                              AP-COM 21 OF 2023

                MANAGING DIRECTOR BIHAR STATE POWER
                     GENERATION CO LTD AND ANR

                                     VERSUS

                         R S CONSTRUCTION AND ANR

Mr. U. P. Singh, Sr. Adv.
Mr. Kumar Manish, Adv.
Mr. S. K. Poddar, Adv.
Mr. Abin Lal Chakravarty, Adv.
                                                           ..... for the petitioners


Mr. Prashant Kumar, Adv.
Ms. Bhawna Tekriwal, Adv.
                                                     ..... for the respondent no. 1

                                   JUDGMENT

Gaurang Kanth, J.:-

1. The Petitioner in the present Arbitration petition under Section 34 of the

Arbitration and Conciliation Act, 1996 is challenging the Award dated

17.09.2023 passed by the Learned Sole Arbitrator Mr. Justice D.K Seth

(Retd).

2. The facts relevant for adjudication of the present petition are as follows.

3. The Respondent was declared as the successful bidder in an e-auction

floated by the Petitioner through MMTC (proforma Respondent herein) for

the dismantling, demolition and disposal of unserviceable and obsolete

decommissioned 3 ×15 MW units of the Barauni Thermal Power Station at

Begusarai. Pursuant to the auction, the Respondent deposited a sum 2025:CHC-OS:238 of

Rs. 2,00,05,100/- on 06.12.2012, whereupon the Petitioner issued the

acceptance/sale order in favour of the Respondent.

4. As per the said contract, the Respondent had to complete the dismantling,

demolition and disposal of the said three obsolete thermal units within 356

days from the date of acceptance, i.e. by 05.12.2013.

5. Under the terms of the sale order, the total sale consideration was to be

paid in three instalments. The Respondent deposited the first instalment

on 27.12.2012, the second instalment on 25.02.2013, and the third

instalment on 25.03.2013. Consequent upon payment of the first

instalment, the Petitioner issued the first delivery order on 31.12.2012.

The site was handed over to the Respondent for the first time on

16.01.2013, and the Respondent commenced dismantling and disposal

activities pursuant to the dismantling-cum-disposal order issued by the

Petitioner.

6. During the execution of the contract, several disputes and differences

emerged between the parties. Ultimately, on 10.12.2013, the Petitioner

No.1 issued an order directing stoppage of all work.

7. It appears from the record that during the subsistence of the contract, the

Respondent repeatedly sought extension of the validity period of the

contract. The Petitioners, however, did not accede to any such request, nor

were the grievances raised by the Respondent addressed.

8. In view thereof, the Respondent thereafter invoked the arbitration clause

contained in the tender document (Buyer's Specific Terms and Conditions).

On 01.02.2014, the Respondent issued a notice invoking arbitration and

requested MMTC to appoint an arbitrator in terms of the arbitration

2025:CHC-OS:238 clause. Shri S.S. Choudhuri was appointed as the Sole Arbitrator, who

conducted the arbitral proceedings and published an award on

02.07.2019. Both parties assailed the said award before this Court. By

order dated 24.03.2022, this Court set aside the said award and appointed

Mr. Justice Dilip Kumar Seth (Retd.) as the Sole Arbitrator to adjudicate

the disputes afresh, with a direction to proceed on the basis of the

pleadings already filed by the parties in the earlier reference.

9. In compliance with the said direction, the newly appointed Sole Arbitrator

entered upon the reference and, after conclusion of the arbitral

proceedings, passed the impugned award dated 17.09.2023. By the said

award, the Sole Arbitrator awarded a sum of Rs. 29,96,18,025/- to the

Respondent together with future interest @ 9% per annum, subject to the

condition that if the awarded amount was paid within 120 days, no

interest would be payable.

10. Aggrieved thereby, the Petitioner has approached this Court by way of the

present petition under Section 34 of the Arbitration and Conciliation Act,

1996.

Submission on behalf of the Petitioner

11. Learned counsel for the Petitioner submits that the impugned award dated

17.09.2023 is liable to be set aside under Section 34(1)(a) and/or Section

34(2)(a)(iii) of the Arbitration and Conciliation Act, 1996 on the ground of

incapacity and misjoinder. It is urged that the Award has been made

against the Managing Director, Bihar State Power Generation Company

Limited and the Chairman, Bihar State Power Holding Company Limited,

persons who neither in their personal capacity nor in their official capacity

were parties to, or privy to, the arbitration agreement. Learned counsel

2025:CHC-OS:238 relies upon the pleadings to show that a specific objection as to misjoinder

was taken in the reply to the Statement of Claim but no amendment was

permitted or made in the Statement of Claim thereafter.

12. Learned counsel further points out that the first award rendered by Shri

S.S. Choudhuri, the earlier arbitrator, was an award against the Company.

That award was, by consent of the parties, set aside by this Court by order

dated 24.03.2022 and a fresh reference was directed to be adjudicated by

Mr. Dilip Kumar Seth (Retd.). Despite the setting aside of the earlier award

and the re-reference, the present Award has been rendered against

persons who were never proper parties to the arbitration.

13. Learned counsel further submits that no notice under Section 21 of the

Arbitration and Conciliation Act, 1996 was ever issued to or served upon

the Petitioners. In the absence of such mandatory notice invoking

arbitration, the arbitral proceedings stand vitiated at their very inception.

14. To support the proposition on incapacity and misjoinder, learned counsel

relied upon the judgments of the Hon'ble Supreme Court in Tata

Engineering & Locomotive Co. Ltd. Vs State of Bihar, reported as

1964 (6) SCR 885; S.N. Prasad Vs Monnet Finance Ltd., reported as

(2011) 1 SCC 320; and Deutsche Postbank Home Finance Ltd. Vs

Taduri Sridhar, reported as (2011) 11 SCC 375, West Bengal Power

Development Corporation Ltd Vs Sical Mining Ltd. pronounced on

30.09.2022, Adavya Projects Pvt Ltd Vs Vishal Structurals Pvt Ltd

reported as 2025, SCC OnlineSC 806, Vidya Drolia Vs Durga Trading

Corporation reported as 2021 (2) SCC 1.. Learned counsel submits that

the legal principles laid down in those decisions are attracted in the

present case and warrant the setting aside of the Award in question.

15. It is further contended by the Petitioner that the arbitration clause 2025:CHC-OS:238 is

narrowly worded and does not provide for reference of "all disputes arising

out of or in relation to the agreement". Reliance is placed on Oriental

Insurance Company Ltd. Vs Narbheram Power & Steel (P) Ltd.,

reported as (2018) 6 SCC 534, and United India Insurance Co. Ltd. Vs

Hyundai Engineering & Construction Co. Ltd., reported as (2018) 17

SCC 607, to submit that where the arbitration clause is restrictive in

scope, only those disputes expressly covered by the clause can be referred

to arbitration, and the Tribunal lacks jurisdiction to adjudicate issues

falling outside its explicit ambit.

16. It is next urged that the Sole Arbitrator misconstrued the contractual

timeline. Clause 7.3 of the tender documents and the acceptance

letter/sale order dated 06.12.2012 expressly provided for 365 days from

the date of the acceptance letter for taking delivery and removal of

materials by way of dismantling and demolition for all main packages; this

position is reiterated in the first Delivery Order dated 31.12.2012. On

these terms, the contractual tenure expired on 05.12.2013. The

Petitioner's stoppage-of-work order dated 10.12.2013 was therefore issued

five days after the expiry of the contractual period. Despite these clear

contract terms, the Sole Arbitrator erroneously held that the 365-day

period commenced from the date of the dismantling/demolition-cum-

disposal order on 02.04.2013/15.04.2013, and on that incorrect premise

concluded that the stoppage order was invalid and contrary to the

contract.

17. Learned counsel for the Petitioner submits that the Sole Arbitrator has

committed patent errors of fact and law by returning findings on the basis

2025:CHC-OS:238 of purported admissions that do not exist on record. It is urged that the

Arbitrator repeatedly used the expression "admittedly" to support

conclusions, despite there being no admission by the Petitioner in the

pleadings or evidence. Reliance is placed on National Textile

Corporation Ltd. Vs Naresh Kumar Badrikumar Jagad, reported as

(2011) 12 SCC 695, wherein the Supreme Court held that in the absence

of pleadings, no amount of evidence can be looked into, and any finding

based on non-existent or assumed admissions is legally unsustainable.

18. Learned counsel further submits that the Sole Arbitrator committed a

patent error in law by holding that "time was not the essence of the

contract", despite the contract expressly stipulating a defined

delivery/removal period and incorporating time bound obligations. It is

contended that the Arbitrator effectively re-wrote the terms of the contract

by unilaterally fixing 02.04.2013/15.11.2013 as the dates of

commencement of the contract, dates which find no basis in the

contractual framework and appear to have been inferred solely on the

Arbitrator's own assumptions. Reliance is placed on Indian Oil

Corporation Ltd. Vs Shree Ganesh Petroleum, reported as (2022) 4

SCC 463, and South East Asia Marine Engineering & Constructions

Ltd. Vs Oil India Ltd., reported as (2020) 5 SCC 164, wherein the

Supreme Court has reaffirmed that arbitral tribunals cannot re-write

contractual terms and must give effect to the express stipulations agreed

between the parties.

19. Learned counsel for the Petitioner submits that the Sole Arbitrator further

erred in law in concluding that a sum of Rs.14,29,22,468/- represented

the value of the materials allegedly remaining unlifted, despite the

complete absence of evidence on record to support such a determination.2025:CHC-OS:238 It

is contended that the finding is wholly conjectural and contrary to the

evidentiary record. Reliance is placed on Bharat Coking Coal Ltd. Vs

L.K. Ahuja, reported as (2004) 5 SCC 109, and Unibros Vs All India

Radio, reported as 2023 SCC OnLine SC 1366, which reiterate that

arbitral awards cannot be sustained where the findings are unsupported

by evidence or are based on mere assumptions. It is further urged that the

Sole Arbitrator erred in law in awarding interest @ 10% on the claim for

loss of profit; that rate and the manner of computation are contrary to the

ratio laid down by the Hon'ble Supreme Court and result in an award

unsupported by law and inconsistent with established principles relating

to damages and interest.

20. Finally, learned counsel submits that the Arbitrator determined the costs of

the arbitration without any evidentiary foundation and in the absence of

any pleading to justify the quantum of costs awarded. Such an exercise,

according to learned counsel, is arbitrary and contrary to law.

21. Learned counsel therefore prays that the Award dated 17.09.2023 be set

aside in its entirety as the sole Arbitrator exceeded his jurisdiction and

misconducted the proceedings.

Submission on behalf of the Respondent

22. Per contra, learned counsel for the Respondent supports the impugned

Award and submits that the Petitioner has failed to make out any ground

under Section 34 of the Arbitration and Conciliation Act, 1996, warranting

interference by this Court. It is submitted that the present Petition is

nothing but an attempt to re-argue the merits of the case, which is

impermissible in proceedings under Section 34.

2025:CHC-OS:238

23. Learned counsel for the Respondent submits that the objection regarding

misjoinder of parties is wholly misconceived. The claims were at all

material times directed against Bihar State Power Generation Company

Ltd. and Bihar State Power Holding Company, the principal contracting

entities, and the impleadment of their Managing Director and Chairman

was only in a representative capacity. No relief was sought against them in

their personal capacity, and the Award is enforceable solely against the

corporate entities. Learned Counsel places reliance on Bhupesh Rathod

Vs Dayashankar Prasad Chaurasia, reported as (2022) 2 SCC 355,

wherein the Hon'ble Supreme Court clarified that arraying a party in a

representative capacity does not vitiate the proceedings unless prejudice is

demonstrated. He further relies on OPG Power Generation Pvt. Ltd. Vs

Enexio Power Cooling Solutions India Pvt. Ltd., reported as (2025) 2

SCC 417, which reiterates that technical objections such as misjoinder

cannot defeat an otherwise valid arbitral proceeding where the real parties

to the dispute were properly before the arbitrator. Accordingly, the

objection raised by the Petitioner is without merit and deserves rejection.

24. Learned counsel further submits that the plea of absence of notice under

Section 21 is an afterthought. The Respondent states that the notice

invoking arbitration was duly issued on 01.02.2014 and was acted upon

by the Petitioner itself, as evidenced by the appointment of the first

arbitrator, Shri S.S. Choudhuri. Once the Petitioner voluntarily

participated in the proceedings and filed pleadings before both the earlier

and subsequent Arbitrators, it cannot now contend that no notice was

served. Participation in arbitration without demur constitutes valid waiver

within the meaning of Section 4 of the Act.

2025:CHC-OS:238

25. On the question of the contractual period of 365 days, learned counsel

submits that the Arbitrator's interpretation is both reasonable and

consistent with the conduct of the parties. The dismantling and demolition

work could commence only upon issuance of the dismantling-cum-

disposal order and actual handing over of the site. Therefore, the

Arbitrator correctly held that the period of 365 days would run from the

date on which effective possession and operative orders were issued. The

stop-work order dated 10.12.2013 was therefore premature and contrary

to the terms of the contract.

26. Learned counsel submits that the Petitioner's grievance regarding the

Arbitrator's use of the expression "Admittedly" is baseless. The Arbitrator

referred only to facts established either through documentary evidence or

through uncontroverted testimony. The mere use of the expression does

not vitiate the Award.

27. With regard to the issue of whether time was the essence of the contract,

learned counsel submits that the Arbitrator correctly applied the settled

principles of law. In contracts involving dismantling, demolition and

disposal of large industrial units, time is ordinarily not regarded as the

essence unless the contract expressly stipulates otherwise. No such

express stipulation exists in the present case.

28. With respect to the rate of interest, it is contended that the Arbitrator

exercised his discretion under Section 31(7) of the Act. Courts ought not to

interfere with the Arbitrator's discretion unless the rate awarded is

arbitrary or perverse, which the Petitioner has failed to demonstrate.

29. Learned counsel further argues that the fixation of costs by the Arbitrator

falls squarely within his jurisdiction under Section 31A of the Act. The

2025:CHC-OS:238 Petitioner has neither established illegality or shown any perversity in the

manner in which costs were awarded.

30. The Respondent submits that the present challenge is outside the narrow

scope of Section 34. The Hon'ble Supreme Court in Consolidated

Construction Consortium Ltd. Vs JMC Projects (India) Ltd., reported as

2025 (7) SCC 757 has reaffirmed that a court cannot re-appreciate

evidence or substitute its own view where the arbitrator's interpretation is

a plausible one. Likewise, in Ssangyong Engineering & Construction

Co. Ltd. Vs NHAI, reported as (2019) 15 SCC 131, the Hon'ble Supreme

Court held that interference is permissible only when the award is perverse

or patently illegal, not merely because another interpretation is possible. In

the present case, the learned Arbitrator has adopted a reasonable,

evidence based and commercially sensible view. The Petitioners are

essentially seeking a re-evaluation of facts and interpretation, which is

expressly impermissible under the law laid down in the above decisions.

The Award, therefore, warrants no interference.

31. Learned counsel submits that the Award is reasoned, internally consistent,

and founded on a proper appreciation of facts and evidence. No ground

under Section 34(2) or 34(2A) of the Arbitration and Conciliation Act,

1996, has been made out. Accordingly, the Petition deserves to be

dismissed.

Legal Analysis

32. This Court has heard the submissions advanced by learned counsel for

both parties and has meticulously examined the record, along with the

judicial precedents cited at the Bar. The objections raised by the

2025:CHC-OS:238 Petitioners are now considered under the respective heads outlined

hereinbelow.

Preliminary Objection Regarding Misjoinder of Parties and the Impermissible Passing of an Award Against Non-Signatories to the Arbitration Agreement.

33. The principal contention advanced by the Petitioners is that the Award

stands vitiated as it has been passed against individuals who were not

parties to the arbitration agreement, namely the Managing Director of

Bihar State Power Generation Company Ltd. and the Chairman of Bihar

State Power Holding Company Ltd. According to the Petitioners, the

impleadment of these officers, who had no privity to the arbitration clause,

renders the Award without jurisdiction.

34. This Court, upon considering the arbitral record, finds no merit in the

objection raised by learned counsel for the Petitioner. At the outset, the

Petitioners did not actively pursue this objection before the Arbitral

Tribunal. Although the issue of maintainability was framed, the Petitioners

confined their challenge to (i) the scope of the arbitration clause and (ii)

whether disputes arising after completion of the contract could be referred

to arbitration. No submissions were advanced with respect to alleged

misjoinder of parties. This omission amounts to a clear waiver of this

objection. Having failed to raise this plea at the appropriate stage, the

Petitioners cannot now be permitted to resurrect it in proceedings under

Section 34 of the Act.

35. Secondly, the pleadings unequivocally establish that the substantive

contractual relationship existed solely between the Respondent and Bihar

State Power Generation Company Ltd., while Bihar State Power Holding

Company Ltd. was arrayed as a party owing to its position as the holding

2025:CHC-OS:238 company. All claims were raised exclusively against these corporate

entities. Being juristic persons, they were necessarily represented through

their principal officers, i.e., the Managing Director and the Chairman, who

were impleaded merely in a representative capacity. Their inclusion did not

create any personal liability. The Award itself fastens liability exclusively

upon the corporate entities that were signatories to the arbitration

agreement and is neither directed against nor executable against the

individual officers in their personal capacity.

36. An examination of the relevant Supreme Court jurisprudence shows that in

Bhupesh Rathod (supra), the Court held that the impleadment of officials

in a representative capacity does not vitiate the proceedings unless specific

prejudice is demonstrated. No such prejudice has been shown in the

present case. Further, in OPG Power Generation Pvt. Ltd. (supra), the

Supreme Court reiterated that technical objections such as misjoinder or

non-joinder cannot defeat arbitral proceedings where the contracting

parties were before the arbitrator and the Award operates solely against

them. A pragmatic and non-technical approach is mandated under the

Arbitration and Conciliation Act, 1996.

37. Applying these principles, the Petitioners' argument that the Award has

been passed against "non-signatories" is untenable. The individuals named

in the arbitration were not independent parties but merely represented the

corporate entities that were privy to the arbitration agreement and were

the true subjects of the adjudication.

38. Learned counsel for the Petitioners has relied upon various judgments to

contend that arbitral proceedings can be initiated only against parties to

the arbitration agreement, and that the Managing Director and Chairman

2025:CHC-OS:238 were not such parties. This Court is in respectful agreement with the legal

principle laid down in those precedents. However, the reliance is misplaced

in the context of the present factual matrix. It is neither the Respondent's

case nor does the record suggest that arbitration was initiated against the

Managing Director or the Chairman in their personal capacity. The arbitral

proceedings were always directed against the corporate entities who were

signatories to the contract, and the officers were impleaded merely in a

representative capacity. Consequently, the cited judgments do not advance

the petitioners' case and have no application to the facts of the present

case.

39. Consequently, the contention that the Award is liable to be set aside on the

ground that it has been rendered against persons who are not parties to

the arbitration agreement is misconceived, unsupported by the record, and

contrary to established legal principles.

Objection Regarding Non-Compliance with the Mandatory Notice Requirement Under Section 21 of the Arbitration and Conciliation Act, 1996

40. Learned counsel for the Petitioner further contended that no notice under

Section 21 of the Arbitration and Conciliation Act, 1996 was issued, and

therefore the arbitral proceedings stand vitiated. This objection also

deserves rejection. The Petitioner never raised this plea before the Arbitral

Tribunal at any stage. The record indicates that arbitration was invoked by

notice dated 01.02.2014, pursuant to which the Arbitrator was appointed

in accordance with the contractual clause. The Petitioners participated

fully in the arbitral proceedings, the Sole Arbitrator rendered an Award,

and thereafter this Court on the consent of both parties set aside the

Award and appointed a fresh arbitrator. The Petitioners again participated

2025:CHC-OS:238 in the subsequent proceedings without ever raising an objection under

Section 21. Having consciously participated throughout without protest,

the Petitioner cannot now be permitted to raise this objection after the

Award has been rendered. The contention is therefore devoid of merit and

stands rejected.

Objection concerning Extension of the Contractual Timeline

41. Another point raised by the learned counsel for the Petitioners is that the

sole arbitrator misconstrued the contractual timeline. According to the

Petitioners, the Contractual period of 365 days was to be computed from

the date of issuance of the letter of acceptance, which would result in the

completion date being 05.12.2013. Whereas the Sole Arbitrator held that

the said time period of 365 days is to start from the date of issuance of the

dismantling/demolition-cum-disposal order 02.04.2013/15.04.2013.

42. This Court has carefully examined the Arbitral Award in detail. The Sole

Arbitrator analysed the issue comprehensively and arrived at his findings

upon a considered interpretation of the relevant contractual clauses.

Clause 7.3.1 of the contract stipulates that the duration of the contract

shall be 365 days from the date of issuance of the acceptance letter

and/the dismantling/demolition-cum-disposal order and/or up to the

validity period of the delivery order/release order. Further, Clause 7.3.3

provides that the contract shall remain valid up to the validity period of the

delivery order/release order or the extended period thereof, in the event

such extension is granted by the principal.

43. Having regard to these two clauses, the Sole Arbitrator observed that the

Letter of Acceptance (LOA) was not the sole basis for computing the 365-

2025:CHC-OS:238 day contractual period. The contract expressly permitted extension of time

at the discretion of the Respondent, and in the presence of such an

enabling provision, the contract could not be construed as one in which

time was the essence. The Arbitrator further held that the date of entering

into the contract is distinct from the validity period of the contract, which

is dependent upon the issuance of the acceptance letter and/the

dismantling/demolition-cum-disposal order. Consequently, the 365-day

period was required to be computed from the date of issuance of any of

these operative documents. Applying this interpretation, the Sole

Arbitrator concluded that the starting point for calculating the 365-day

period must be the date of the first dismantling/demolition-cum-disposal

order, since the buyer was contractually prohibited from commencing

dismantling/demolition activities without such an order. Prior to the said

order, the buyer had no opportunity to undertake any substantive activity

except mobilization of resources, notwithstanding that the site was handed

over on 13.01.2013. Given that the plant consisted of three units requiring

dismantling and demolition prior to removal from the site, the issuance of

the dismantling/demolition-cum-disposal order was the operative trigger.

Since the first such order was issued on 02.04.2013/15.04.2013, the sole

arbitrator correctly computed the 365-day period from that date. In light of

this well-reasoned interpretation, the Petitioner's objection to the

computation of the contractual period stands negated.

44. This Court finds that the reasoning adopted by the learned Arbitrator

constitutes a plausible and judicious view based on a proper interpretation

of the contractual clauses. No ground for interference is made out, and

hence, no intervention is warranted on this issue.

2025:CHC-OS:238 Objection concerning quantification of goods which are not lifted

45. The next objection advanced by the Petitioners is that the Learned Sole

Arbitrator erred in concluding that a sum of Rs. 14,29,22,468/-

represented the value of the materials alleged to have remained un-

uplifted, despite there being, according to the Petitioners, no evidence on

record to support such a finding.

46. This Court finds no merit in the submission advanced by learned counsel

for the Petitioner. The Learned Sole Arbitrator undertook a detailed

examination of this issue. It was noted that the underlying transaction was

a contract for the sale of goods, with the Petitioner as the seller and the

Respondent as the purchaser. The total value of materials agreed to be

dismantled and lifted under the contract was Rs. 21,21,54,087.52/-. The

Respondent led expert evidence through CW-2 to establish that materials

worth Rs. 6,99,37,000/- had in fact been lifted from the site. On the basis

of this evidence, and in the absence of any contrary evidence, the

Arbitrator concluded that the remaining materials valued at Rs.

14,29,22,468/- were lying un-lifted.

47. It is significant that no evidence whatsoever was led by the Petitioners, who

were in custody and control of the un-lifted materials, to demonstrate that

the value of the materials lying at site was different or lesser. The

Petitioners, having exclusive possession of the un-lifted goods, were in the

best position to place such evidence but failed to do so. Conversely, the

Respondent, not being in possession of the remaining goods, produced the

best possible evidence available to it, namely, the quantification of the

materials actually lifted. In these circumstances, the Arbitrator's reliance

on the Respondent's evidence was fully justified.

2025:CHC-OS:238

48. The Arbitral Tribunal also undertook a comprehensive analysis of the

contractual terms and held that the stoppage-of-work notice dated

10.12.2013 was illegal, as the 365-day contractual validity period had not

expired. The Tribunal recorded that the Respondent had already paid the

entire contract value and that its inability to lift the remaining materials

was directly attributable to obstructions created by the Petitioner. The

Tribunal further noted that although the site was formally handed over

only on 13.01.2013, the first dismantling/demolition-cum-disposal order

without which dismantling could not commence was issued only in April

2013. Thus, the Respondent could not undertake dismantling or lifting

before that date.

49. The Tribunal further observed that the Petitioner, instead of extending the

contractual period and permitting the Respondent to lift the materials for

which payment had already been made, chose to issue the stoppage-of-

work order on 10.12.2013, thereby preventing the removal of dismantled

goods. On these findings, the Arbitrator held that the Respondent was

entitled to refund of Rs. 14,29,22,468/-, being the value of the un-lifted

materials.

50. This Court finds that the conclusions drawn by the Learned Sole Arbitrator

constitute a plausible and well-reasoned view based on a proper

appreciation of evidence, including expert testimony. In a petition under

Section 34, this Court cannot re-appreciate evidence or substitute its own

conclusions for those of the Arbitral Tribunal. As the findings are neither

perverse nor contrary to the express terms of the contract, no ground for

interference is made out.

2025:CHC-OS:238 Objection concerning loss of profit and Cost of Arbitration.

51. The final objection raised by the learned counsel for the Petitioners pertains

to the award of Rs. 1,42,92,247/- towards loss of profit, which, according

to the Petitioners, has been granted in the absence of any specific

evidence. The Petitioners further challenge the award of costs, contending

that the fixation of arbitration costs lacks evidentiary basis and is

unsupported by any pleadings justifying the quantum awarded.

52. This Court has carefully examined the findings recorded in the Award. The

Arbitral Tribunal has returned a categorical finding of fact that the

Petitioner was responsible for the breach of contract. Consequently, the

Respondent became entitled to compensation/damages on account of loss

of business and loss of profit attributable to the Petitioner's breaches.

While the Tribunal noted the absence of direct evidence quantifying loss of

profit, it applied a reasonable measure by assessing loss of profit at 10% of

the value of the unlifted materials, thereby arriving at an amount of Rs.

1,42,92,247/-. This method of assessment is a recognised and judicially

accepted approach, particularly in cases involving breach by a seller in a

contract for the sale of goods.

53. With respect to costs, Section 31A(3) of the Arbitration and Conciliation

Act, 1996 expressly empowers the Arbitral Tribunal to determine the costs

of arbitration. Applying the principles underlying Section 31A, the Tribunal

found it appropriate to award the costs incurred by the Respondent in

conducting the arbitral proceedings, particularly as the Respondent had

been compelled to pursue arbitration owing to the Petitioner's refusal to

extend the time period for lifting the goods for which payment had already

2025:CHC-OS:238 been made. On this basis, the Tribunal awarded Rs. 27,76,000/- as costs

of arbitration.

54. This Court finds no infirmity in the approach adopted by the Tribunal. The

conclusions reached are based on a plausible appreciation of the facts and

the law governing quantification of damages and the award of costs. The

Petitioner has failed to demonstrate that the Tribunal's findings are

perverse, irrational, or contrary to the terms of the contract. Accordingly,

the objections raised on this ground are also rejected.

Conclusion

55. Having considered the rival submissions, examined the arbitral record,

and evaluated the findings recorded by the Learned Sole Arbitrator, this

Court is of the view that none of the objections raised by the Petitioners

fall within the limited grounds permissible for interference under Section

34 of the Arbitration and Conciliation Act, 1996. The judicial review

contemplated under Section 34 is supervisory and not appellate in nature,

and the Court cannot reappreciate evidence or substitute its own

conclusions merely because another alternative view may be possible.

56. The objections relating to alleged misjoinder of parties, absence of notice

under Section 21, erroneous interpretation of contractual clauses

governing to the validity period of the contract, assessment of the value of

unlifted materials, quantification of loss of profit, and award of arbitration

costs have all been duly considered and stand rejected. The findings of the

Arbitral Tribunal are based on a logical, reasoned, and plausible

interpretation of the contractual terms and on a proper appreciation of

both expert and documentary evidence. None of these findings can be said

to be perverse, irrational, or violative of the public policy of India.

2025:CHC-OS:238

57. This Court reiterates that an arbitral award is to be accorded finality and

minimal judicial interference is the governing principle. The Petitioners

have failed to establish that the award suffers from any patent illegality or

contravention of the fundamental policy so as to attract the provisions of

Section 34 of the Act.

58. For all the reasons discussed hereinabove, this Court holds that the

impugned award does not warrant interference. The petition under Section

34 of the Arbitration and Conciliation Act, 1996 is accordingly dismissed.

(GAURANG KANTH, J.)

Sakil Amed P.A.