Executive Engineer, Survey And ... vs M/S Ramewshwar Lal Manaram
2023 Latest Caselaw 3774 Raj

[2023/RJJD/006421]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Misc. Appeal No. 1482/2019

1. Executive Engineer, Survey and Investigation Lift Division First, IGNP, Rawatsar.

             2.       The    State     of       Rajasthan      through           District   Collector,
                      Hanumangarh.                                                   ----Appellants
                                                    Versus


             M/s    Ramewshwar          Lal      Manaram,        Sarvodaya           Basti,   Behind
             Vishwakarma Mandir, Bikaner.                                           ----Respondent



             For Appellant(s)               :    Mr. Pankaj Sharma, AAG with
                                                 Mr. Dhairyaditya Singh Rathore
             For Respondent(s)              :    Mr. Harish Kumar Purohit with
                                                 Mr. Shashank Joshi


                          HON'BLE MR. JUSTICE ARUN BHANSALI
                            HON'BLE MS. JUSTICE REKHA BORANA
                                                  Judgment

              28/04/2023
Reportable
             (PER HON'BLE MS. JUSTICE REKHA BORANA)

1. The present appeal has been preferred against the order

dated 25.01.2019 passed by the Commercial Court, Jodhpur

(hereinafter referred to as 'the learned Court below') in Civil Misc.

'A' Case No.46/2018 (NCV no.32/2018) whereby the objections

under Section 34 of the Arbitration and Conciliation Act, 1996 (for

short 'the Act of 1996') preferred by the appellant-State against

the award dated 04.12.2014 passed by learned Arbitrator have

been rejected. Vide the award, the learned Arbitrator had

proceeded on to pass an award for an amount of Rs.25,42,748/-

qua price escalation in favour of the applicant-firm with interest @

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10% per annum and has proceeded on to reject the counter-claim

as preferred by the non-applicants State Department.

2. The facts of the case are as under :

An agreement was entered into between firm M/s

Rameshwar Lal Manaram and the State for "Construction work of

pumping station 3rd at Sahwa K.M. 63.200". Vide the work order

dated 27.10.1997, work valuing to Rs.1,41,52,086/- was awarded

to the applicant-firm and the stipulated period for completion of

the work was 18 months. During the progress of work, an

additional work valuing to Rs.69,17,847/- was also allotted to the

firm. The complete work could not be completed within the

stipulated period of 18 months and was infact completed on

05.04.2003. The firm then applied for extension of time and vide

order dated 06.11.2003, time extension up to the date of

completion i.e. 05.04.2003 was granted by the Department with a

penalty of 0.10% of the tender amount. In the circumstances, the

firm raised a claim for an amount of Rs.25,42,748/- along with

interest qua price escalation. When the request/claim of the firm

was not acceded to, it prayed for the dispute to be referred to

arbitration and on its application under Section 11 of the Act of

1996, vide order dated 08.11.2013, sole arbitrator was appointed

for adjudication of the dispute.

3. Before the learned Arbitrator following two claims were

raised by the applicant-firm :

(i) Rs.25,42,748/- qua price escalation and

[2023/RJJD/006421] (3 of 17) [CMA-1482/2019]

(ii) Rs.22,37,618/- qua interest on the principal amount from

21.09.2005 to 20.01.2014 + pendente lite & future interest.

4. In response to the claim of the firm, a counter-claim for an

amount of Rs.16,24,860/- was raised by the State Department

qua the damages/loss caused to the State due to delay in

execution of the work which was later amended to

Rs.1,59,45,028/-.

5. On basis of the pleadings as made by both the parties, the

following nine issues were framed by the learned Arbitrator :

"1. Whether the applicant firm is a registered partnership firm or not ?

.....Applicant

2. Whether the applicant firm did not give the pro-rate progress as provided under clause-2 of the agreement ? If not then what is effect of it on the claim ?

.....Non-applicants

3. Whether the applicant failed to complete the work within stipulated period or extended period as required under clause 45 and 45-A of the agreement ?

.....Non-applicants

4. Whether the respondents had allowed the price escalation benefit to the applicant for the period from 09.11.1997 to 08.11.2000. If yes then what is effect thereof ?

.....Applicant

5. Whether the applicant had given the consent for the statement of time extension sent by the Engineer In charge to the state government for extension of time ?

.....Non-applicants

6. Whether, the nominal penalty dis-entitled to the applicant for benefit of price escalation under clause-45 and 45-A of the agreement ?

.....Non-applicants

7. Whether the applicant is liable to pay the damages to the respondents as claimed by the respondents in its counter claim ?

.....Non-applicants

[2023/RJJD/006421] (4 of 17) [CMA-1482/2019]

8. Whether the applicant is entitled to get the interest on the due amount ? If yes, then for what period and on what rate ?

.....Applicant

9. Relief ?"

6. Learned Arbitrator proceeded on to decide all the issues

except issue no.4 in favour of the applicant-firm and consequently,

passed the award as above mentioned in favour of the applicant-

firm. Aggrieved against the said award in favour of the applicant

and rejection of its counter-claim, the State Department preferred

objections under Section 34 of the Act of 1996 before the

Commercial Court, Jodhpur, which have also been rejected vide

order impugned dated 25.01.2019, against which the present

appeal has been preferred.

7. Learned Additional Advocate General Shri Pankaj Sharma

appearing for the appellant-State submitted that the learned Court

below has erred in rejecting the objections as preferred by the

State in a wholly cursory manner without even going into the facts

of the case and without analysing the issues in question. Learned

AAG submitted that the learned Court below has not even dealt

with the objections as raised by the Department and therefore,

the order impugned deserves to be set aside.

8. So far as the impugned award is concerned, learned AAG

submitted that the award qua price escalation has been granted in

favour of the firm by learned Arbitrator in terms of clause 45 of

the agreement whereas a bare reading of clause 45 would make it

clear that the same would not even apply in the present matter.

Learned counsel submitted that clause 45 comprised of 3 implied

[2023/RJJD/006421] (5 of 17) [CMA-1482/2019]

conditions : firstly, the stipulated period of contract ought to be

more than 12 months; secondly, the valuation of the work ought

to be above Rs.1 cr. and thirdly, the work ought to have been

completed within the stipulated/extended period without any delay

on part of the contractor. Herein, admittedly, the delay of 55 days

was attributable to the contractor and therefore, all the conditions

of clause 45 having not been fulfilled, the clause would not apply.

Learned counsel further submitted that the basic and the most

essential issue as to whom the delay in completion of the work

was attributable, was not even framed by the learned Arbitrator

and no finding on this specific aspect has been recorded by the

learned Arbitrator. Therefore, in absence of a specific finding as to

whom the delay was attributable, clause 45, which pre-supposes

that no delay is attributable to the contractor, could not have been

held to be applicable.

9. Next ground raised by learned counsel for the appellants is

that the burden to prove the issues had been wrongly placed by

the learned Arbitrator on the non applicants-State as the burden

to prove Issue No.3 (framed in negative) that the firm completed

the work within the stipulated or the extended period was totally

upon the applicant-firm and the burden to prove the same could

not have been placed on the non applicant-Department. It has

been submitted that the onus upon a party cannot be to prove the

negative and therefore, the finding by the learned Arbitrator that

the non-applicants failed to prove that the applicant-firm did not

complete the work within the stipulated/extended period is totally

[2023/RJJD/006421] (6 of 17) [CMA-1482/2019]

contrary to the basic principles of law as well as the material

available on record.

10. Learned counsel further submitted that it was an admitted

fact on record that qua the delay of 55 days attributable to the

contractor, a penalty @ 0.10% was imposed on the firm and the

same was never challenged. Meaning thereby, the time extension

was granted with a penalty and therefore also, clause 45 & 45-A of

the agreement would not apply. Learned counsel submitted that

the award is therefore, patently illegal and strictly in violation of

Section 28(3) of the Act of 1996. In support of his contentions,

learned counsel relied upon the Hon'ble Apex Court judgments in

the matters of (i) Oil & Natural Gas Corporation Ltd. Vs. SAW

Pipes Ltd., (2003) 5 SCC 705; (ii) Murlidhar Aggarwal and

Another Vs. State of Uttar Pradesh and Others, (1974) 2

SCC 472; (iii) Oil and Natural Gas Corporation Limited Vs.

Western GECO International Limited, (2014) 9 SCC 263 and

(iv) State of Chhattisgarh and Ors. Vs. Sal Udyog Private

Limited, AIR 2021 SC 5503.

11. Per contra, Shri Harish Purohit, learned counsel appearing

for the respondent contractor/firm submitted that the award as

passed by the learned Arbitrator is perfectly in consonance with

the material available on record in so far as it was clearly proved

on record that the stipulated period for completion of work was 18

months i.e. 546 days. The work was completed in 1972 days with

a delay of 1168 days out of which only 55 days was attributable to

the contractor and the complete remaining delay was admittedly

attributable to the State Department. Moreover, it is admitted on

[2023/RJJD/006421] (7 of 17) [CMA-1482/2019]

record that an additional work amounting to Rs.69,17,907/- was

awarded to the contractor and therefore, 267 extra days for

completion of work ought to have been granted to the firm qua

the additional work. Consequently, the stipulated period for

completion of work ought to be 813 days (546 + 267) and after

deducting 1168 days from 1972 days, the calculation comes out to

be 804 days in which the work has been completed. Meaning

thereby, 813 days were available to the firm for completion of

work against which it has completed the work in 804 days.

Therefore, by any extent, it cannot be held that the work was

completed with a delay which could even be considered to be

attributable to the firm. Therefore, learned Arbitrator rightly held

the firm to be entitled for the price escalation amount and the

objections against the award as passed by the learned Arbitrator

have rightly been rejected by the Commercial Court.

12. Learned counsel further submitted that the findings as

reached by the learned Arbitrator were based on documents of the

Department itself wherein it was specifically admitted that the

delay of 1168 days was attributable to the State Department and

an additional time of 267 days ought to have been granted to the

firm for completion of the work. Therefore, the Department being

bound by its own documents cannot urge that the reliance of the

learned Arbitrator on the said documents was bad. Learned

counsel also urged that none of the objections as raised, fell within

the purview of Section 34 of the Act and therefore too, their

rejection being perfectly valid, deserves to be upheld.

[2023/RJJD/006421] (8 of 17) [CMA-1482/2019]

13. In rejoinder, learned counsel for the appellants submitted

that the documents i.e. time extension application and the

hindrance statement as relied upon by the learned Arbitrator were

the internal communications between the officers of the

Department in the nature of recommendation and the same were

not the orders which could not have been considered to be a piece

of evidence and therefore, could not have been relied upon by the

learned Arbitrator to hold that the contractor was not responsible

for the delay.

14. Heard learned counsel for the parties and perused the

material available on record.

15. Before adverting into the adjudication on the grounds as

raised, it is relevant to note that an application under Order 41

Rule 27, CPC has been preferred in the present appeal by the

State Department with a prayer to take certain documents on

record annexed as Annexure-A/1 along with the application. The

said documents are five letters written by the Department to the

firm during progress of the work whereby the firm was called upon

to submit the price escalation bills, if any. It has been submitted

that inspite of being called upon, the firm failed to submit any bill

qua price escalation at the relevant point of time and therefore, its

claim qua price escalation could not have been entertained by the

learned Arbitrator subsequently.

16. Besides the above application, an application for amendment

of the memo of appeal has also been preferred with the

submission that as certain documents have been prayed to be

taken on record, the pleadings qua the said documents needs to

[2023/RJJD/006421] (9 of 17) [CMA-1482/2019]

be made in the present appeal and therefore, the appellants be

permitted to amend the present memo of appeal.

17. During the course of the arguments, learned AAG did not

press both these applications and therefore, the same are

dismissed as not pressed.

18. Coming on to the ground as raised by learned AAG to the

effect that clause 45 has wrongly been held to be applicable by

the learned Arbitrator, there is no dispute regarding the first two

conditions of the stipulated period of contract being more than 12

months and valuation of the work being above Rs.1 crore. So far

as the third condition is concerned, it stipulated that the work

ought to have been completed within the stipulated/extended

period without any delay on part of the contractor. The issue

whether there was any delay on part of the contractor in

completion of the work has been dealt by the learned Arbitrator

while deciding Issue No.3 and it has been specifically held that

there was not a single day's delay which could be attributable to

the contractor. The said finding of the learned Arbitrator is based

on the letters dated 01.10.2003 (Ex.20) and 06.10.2003 (Ex.5)

whereby it has been specifically observed by the Superintending

Engineer as well as the Chief Engineer that in view of the

additional work allotted to the firm, an extra time of 267 days

ought to have been granted for completion of the work and on

computing the said additional days, the delay of not even a single

day could be attributable to the contractor. In both these letters, it

has also been specifically observed that the State Department did

not incur any loss because of the delay in completion of the work.

[2023/RJJD/006421] (10 of 17) [CMA-1482/2019]

In view of the above two letters exhibited on record, the learned

Arbitrator decided in favour of the applicant and held that clause

45 would be applicable and the contractor would be entitled to the

price escalation amount in terms of the said clause. Letter dated

06.10.2003 (Ex.5) whereby the time extension case was

forwarded/recommended read as under :

"QeZ }kjk mDr ck/kkvksa ds dkj.k dk;Z iw.kZ djus esa dqy 1972 fnol

dk le; fy;k x;k tcfd vuqcU/k ds vuqlkj dk;Z 546 fnu esa iw.kZ djuk

FkkA vuqcU/k vuqlkj :i;s [email protected]& dk dk;Z vkoafVr Fkk ftls 546 fnu

esa iw.kZ djuk Fkk ysfdu QeZ ls :i;s [email protected]& dk vfrfjDr dk;Z Hkh

djok fy;k x;kA mDr vfrfjDr dk;Z ds fy;s QeZ dks 267 fnol dk le;

vkSj fn;k tkuk pkfg;s FkkA bl izdkj dk;Z 546 + 267= 813 fnol esa

iw.kZ djuk FkkA dk;Z esa dqy 1168 fnol dh ck/kk mRiUu gqbZ gS & vr % QeZ

}kjk dk;Z 1972 - 1168 = 804 fnol esa iw.kZ fd;k gS tks fd mfpr gSA

mijksDr of.kZr ck/kk,a mfpr ,oa Bsdsnkj ds fu;a=.k ls ckgj gSA v/kh{k.k

vfHk;[email protected]/k'kk"kh vfHk;Urk us ;g izekf.kr fd;k gS fd dk;Z nsjh ls iw.kZ gksus

esa jkT; ljdkj dks fdlh izdkj dh gkfu ugha gqbZ gSaA"

(Emphasis supplied)

19. Relying upon the above documents, the learned Arbitrator

concluded his findings on Issue No.3 as under :

"I have considered the arguments raised by both the parties and perused the documentary evidence produced in this regard. According to the reply given by D.W.-1 in his cross examination it is admitted fact that the contents of the said letters Ex-5 and Ex-20 are correct and there is no averment of 55 days delay attributable on the part of the contractor in the said letters. In these circumstances, I am agree with the arguments of the applicant that he had completed the said work within 804 days excluding the delay of 1168 days attributable on the part of the government, while, the said work had to be completed within 813 days. Under this issue the non

[2023/RJJD/006421] (11 of 17) [CMA-1482/2019]

applicants have to prove that the applicant failed to complete the said work within stipulated period or within extended period. In this respect, it is an admitted fact that the state government have granted the time extension up to 05.04.2003. Thus, the extended period of the said work became up to 05.04.2003. There is no dispute between the parties that the work had been completed up to 05.04.2003. In this respect, the non applicants argued that the government extended time up to 05.04.2003 but with penalty of 0.10% of tender amount, which disentitled the applicant to get the benefit of price escalation. As regard the extended period, it is an admitted fact that the government had extended the time of the said work up to 05.04.2003, therefore, there is no dispute between the parties in this regard. As regard the effect of the penalty, the separate issue no.06 has been framed, therefore, I will discuss this point under issue no.06. In conclusion I hold that the non applicants have failed to prove that the applicant had not completed the said work within stipulated period or extended period. But the applicant completed the said work within extended period. Further, I hold that the applicant completed the said work within 804 days excluding the delay of 1168 days attributable on the part of the government. It is an admitted fact that said work had to be completed within 813 days while the applicant completed the said work 9 days before the stipulated period. Thus, the non applicants have failed to prove this issue in their favour. Hence, the issue no.3 is decided against the non applicants."

(Emphasis supplied)

20. It is admitted on record that the total delay caused in

completion of work was 1168 days out of which delay of only 55

days was attributable to the contractor. The application for

extension of time along with hindrance statement as

recommended by the Executive Engineer to the higher authorities

had been placed on record by the applicant as Exhibit-A-16. A

detailed and day-wise statement of delay caused and the reasons

for such delay have been mentioned in the application. For ready

reference, reproduction of the said details is made as under :

[2023/RJJD/006421] (12 of 17) [CMA-1482/2019]

Period S.No Hindrance From To Days

1. Hkwfe dk eqvkotk u feyus ds dkj.k fdlkuksa }kjk 11-11-97 5-12-97 26 days dk;Z esa ck/kk igqapkus ds dkj.k

2. foHkkx }kjk ikuh rFkk LVhy miyC/k u djokus ds 21-1-98 11-3-98 50 days dkj.k

3. Earthing arrangement dk dk;Z u gksus ds 12-3-98 30-4-98 50 days dkj.k

4. MªkbZax esa ifjorZu ds dkj.k 1-5-98 21-5-98 21 days

5. vkaf/k;ksa ls jkLrs can gksus ls eSfVjh;y dh dSfjt u 1-6-98 15-7-98 45 days gks ikus ds dkj.k

6. fMyhojh VSad dh Mz̀kbZax Qkbuy gksus ls fMyhojh 1-8-98 9-10-98 70 days VSad ds fu"kku u feyus ds dkj.k

7. foHkkx }kjk ikuh miyC/k u djokus ds dkj.k 7-12-98 16-12-98 10 days

8. dsUnzh; m|ksx'kkyk [k.M }kjk Vsªl jsd ds pSuy 30-12-98 3-1-99 5 days fQV u djus ds dkj.k

9. foHkkx }kjk ikuh miyC/k u djokus ds dkj.k 18-4-99 15-5-99 28 days

10. foHkkx ds ikl L.O.C. dk vHkko gksus ls iwjk 1-10-99 30-11-99 46 days Hkqxrku u feyus ds dkj.k ¼/kheh izxfr] 75 izfr'kr ck/kk½ 61x75/100=46 fnu

11. deZpkjh gM+rky dh otg ls batu can gksus ls ikuh 22-1-2000 28-2-2000 38 days miyC/k u gksus ds dkj.k

12. vkaf/k;ksa ls jkLrs can gksus ls eSfVjh;y dh dSfjt u 16-4-2000 30-8-2000 137 days gks ikus ds dkj.k

13. foHkkx ds ikl L.O.C. u gksus ds dkj.k 1-9-2000 31-10- 61 days

14. [k.Mh; LVksj esa lhesUV miyC/k u gksus ds dkj.k 1-11-2000 30-6-2001 242 days

15. vkaf/k;ksa ls jkLrs can gksus ls eSfVjh;y dSfjt u gks 1-7-2001 11-8-2001 42 days ldus rFkk foHkkx }kjk ikuh miyC/k u djokus ds dkj.k

16. foHkkx ds ikl L.O.C. dk vHkko gksus ds dkj.k 1-12-2001 11-5-2002 122 days Hkqxrku iwjk u feyus ds dkj.k ¼/kheh izxfr 75 izfr'kr ck/kk 162x75/100=122 fnu½

17. vkaf/k;ksa ls jkLrs can gksus ds dkj.k eSfVjh;y dh 12-5-2002 8-9-2002 120 days dSfjt u gks ldus ds dkj.k

18. Bsdsnkj }kjk /kheh xfr ls dk;Z djus ds dkj.k 55 days Total 1168 days

21. The recommendation as made by the concerned Executive

Engineer on the above mentioned application for extension of time

was as under :

"Since the hindrance statement stated by contractor is partially genuine and beyond the control of contractor and department. Initially the land owners

[2023/RJJD/006421] (13 of 17) [CMA-1482/2019]

objected the work as land compensation was not given to them. After that drawings of pumping station was revised due to change in water allowance as the decision of state govt. Further in summer season heavy wind storms are common in this area due to which the roads generally get blocked and carriage of material becomes difficult. Many times supply of water is also interrupted. So in view of these reasons the hindrance statement is genuine. So extension in time limit up to 5-4-2003 is recommended with a token penalty of Rs.10000/- only.

There is no loss to the deptt. In delayed completion of the work."

(Emphasis supplied)

22. A bare perusal of the above documents i.e. the hindrance

statement and the recommendation of the concerned Executive

Engineer relied upon by the learned Arbitrator leaves no doubt

that the finding as reached by the learned Arbitrator is totally in

consonance with the material available on record. In view of the

specific admission of the Department itself that the work was

delayed due to the reasons beyond control of the contractor or the

State Department, the learned Arbitrator or the Commercial Court

could not have reached to any other conclusion contrary to the

said admissions of the Department itself. In the specific opinion of

this Court firstly, there was no other conclusion/view possible in

the present matter and secondly, even if any other/second

conclusion/view is possible, as is the settled proposition of law,

the same cannot be substituted in place of the conclusion/view as

arrived/taken by the learned Arbitrator.

23. Consequently, the finding of the learned Arbitrator that

clause 45 of the agreement would be applicable to the present

matter and the contractor is entitled for the price escalation

[2023/RJJD/006421] (14 of 17) [CMA-1482/2019]

amount and the rejection of the objections as raised by the State

qua the said finding by the Court below does not deserve any

interference by this Court.

24. So far as the ground raised by the learned AAG that the

burden to prove that the firm had not completed the work within

the stipulated or the extended period was wrongly placed on the

State is concerned, it is clear on record that the claim qua price

escalation as raised by the firm was denied by the State on the

ground that the work was not completed within the stipulated

period and therefore, clause 45 would not apply. It is the basic

proposition of law that a party who pleads a fact is under an onus

to prove the same. The fact of the firm having not completed the

work within the stipulated period had been pleaded/averred by the

respondent-Department and therefore, the onus definitely was on

it to prove the same. The case of the firm was that it had

completed the work within 804 days which was within the period

of 813 days, the period which ought to have been

computed/stipulated for completion of the original plus the

additional work allotted to the firm. It was the defence of the

State that the stipulated period was 546 days and the firm did not

complete the work within the said period. Therefore, the onus to

prove the said fact was rightly placed on the respondent-State

who pleaded the same. Hence, the ground as raised by the

learned AAG cannot be held to be tenable.

25. So far as the imposition of the penalty on the firm having not

been challenged is concerned, the same cannot be also of any

consequence as firstly, even if it is assumed that there was some

[2023/RJJD/006421] (15 of 17) [CMA-1482/2019]

delay in completion of the work on part of the firm, it was

admittedly a delay of 55 days only. The total delay in completion

of work in the present matter was of 1168 days out of which only

55 days were held to be attributable to the firm even by the

Department. As held in P.M. Paul Vs. Union of India; AIR 1989

SC 1034, "Escalation" is a normal incident arising out of gap of

time in this inflationary age in performing any contract. The

purpose why a price adjustment/escalation clause is essential to

be incorporated in agreements and why the said amount deserves

to be granted was discussed by the Hon'ble Apex Court in the case

of National Highway Authority of India Vs. M/s

Progressivemvr (JV); (2018) 14 SCC 688 and it was observed

as under :

".....After all, what is the purpose of giving price adjustment ? The Clause relating to price adjustment indicates that certain component which go into the execution of the projects like labour component, cement component, steel component, plant and machinery and spares component, bitumen component etc. may not remain static insofar as their price is concerned. There is a possibility that from the date when the price of these components was quoted by the contractor in his bid, there may be increase or decrease in the said price from time to time during the execution of the contract. It is for this reason, Clause relating to price adjustment is provided so as to give effect to the rise or fall in the costs to the contractor."

26. Admittedly, in the present matter, the delay of 1113 days

was attributable to the Department and the firm could not have

been denied the price escalation qua the said period. Even if it is

held that the delay of 55 days was attributable to the firm, how

could it have been denied the price escalation qua the huge period

of 1113 days, the delay for which it could not have been held to

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be responsible. In Food Corporation of India Vs. A.M. Ahmed

and Company and Others; (2006) 13 SCC 779, the Hon'ble

Apex Court specifically held that even in absence of an escalation

clause in contract, the Arbitrator is within his jurisdiction to award

escalation charges if the delay is not attributable to the contractor

himself. It being an admitted case on record that the delay of

1113 days was on part of the Department, the award of the claim

qua price escalation to the contractor was a necessary corollary

and the award of the same by the learned Arbitrator cannot

therefore be termed to be perverse or illegal. The same therefore

does not deserve any interference by this Court.

27. The ground regarding the Commercial Court having cursorily

rejected the objections as raised by the Objector State also does

not find any merit with this Court as a bare perusal of the order

dated 25.01.2019 makes it clear that the Commercial Court has,

after thoroughly discussing the ambit of Section 34 of the Act and

after appreciating the findings of the learned Arbitrator with the

available scope, reached to well reasoned conclusions on the

objections. The Court below rightly held that none of the

objections as raised, fell within the purview of Section 34 of the

Act and therefore, the award impugned did not deserve any

interference.

28. So far as the judgments relied upon by learned counsel for

the appellants are concerned, there is no dispute on the settled

proposition of law that failure on the part of the Arbitrator to

decide in accordance with terms of the contract governing the

parties, would certainly attract the "Patent illegality ground". There

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is no dispute even on the proposition of law that the award which

is on the face of it, patently in violation of statutory provisions

cannot be said to be in public interest and such award would

definitely be termed to be patently illegal, thereby attracting the

ground of being against the "public policy of India". But then, the

question is whether the said proposition of law would be applicable

to the present matter. As observed in the preceding paras, the

findings as arrived by the learned Arbitrator in the present matter

are neither in breach of any of the conditions of the agreement

nor are they contrary to the material available on record. The

findings are rather based on the specific admissions of the

Department itself. Therefore, the same cannot, in terms of any

provision of law, be termed to be perverse, patently illegal or

against the fundamental policy of Indian law. The judgments as

cited therefore, have no application to the present matter.

29. In view of above analysis, this Court does not find any

ground to interfere with the award dated 04.12.2014 as passed by

the learned Arbitrator and the order dated 25.01.2019 passed by

the Commercial Court, Jodhpur. The present appeal being devoid

of merits, is hence dismissed.

                                   (REKHA BORANA),J                                        (ARUN BHANSALI),J
                                    Vij/-









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