Sri Debashish Das vs The State Of Tripura
2026 Latest Caselaw 2112 Tri

Tripura High Court

Sri Debashish Das vs The State Of Tripura on 1 April, 2026

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                       HIGH COURT OF TRIPURA
                             AGARTALA
                     Commercial Appeal No.03 of 2024
Sri Debashish Das, son of Lt. Nirmal Bikash Das, resident of village-
Joynagar, Middle Road, P.O.-Agartala, P.S.-West Agartala, Sub-Division-
Sadar, District-West Tripura, PIN-799002, Age-58 years.
                                                        ......... Appellant(s).
                                 VERSUS
1. The State of Tripura, represented by the Secretary-cum-Commissioner,
Public Works Department(R & B), New Secretariat Building, P.O.-Kunjaban,
Agartala, West Tripura.
2. The State of Tripura, represented by the Executive Engineer, PWD(R & B),
Kailashahar Division, Unokoti Tripura.
                                                        .........Respondent(s).

For Appellant(s) : Mr. Somik Deb, Sr. Advocate, Mr. Haradhan Sarkar, Advocate, Mr. Jishan Samed, Advocate, Ms. Adwitiya Chakraborty, Advocate.

For Respondent(s) : Mr. Kohinoor Narayan Bhattacharyya, G.A.

HON'BLE THE CHIEF JUSTICE MR. M.S. RAMACHANDRA RAO HON'BLE MR. JUSTICE BISWAJIT PALIT

Date of hearing : 26.02.2026.

Date of judgment : 01.04.2026.

Whether fit for reporting : YES.

JUDGMENT & ORDER

(M.S. Ramachandra Rao, C.J.)

Heard Mr. Somik Deb, learned Senior counsel assisted by Mr.

Haradhan Sarkar, counsel for the appellant, and Sri Kohinoor N

Bhattacharyya, Government Advocate for the respondent.

2. This appeal has been filed under Section 13(1A) of the

Commercial Courts Act, 2015 read with Section 37(1)(c) of the Arbitration

and Conciliation Act, 1996 ( for short 'the Act') challenging the judgment

dt.31.08.2024 of the Commercial Court, Unakoti Judicial District, Kailashahar

in case No.T.S.(ARB) 04 of 2020.

The Background facts:

3. A Notice Inviting Tender dt.27.12.2013 was issued by the Public

Works Department of the Government of Tripura for executing the work of

"Construction of Kailashahar District Jail at Kailashahar, Unakoti District".

4. The appellant participated in the said tender and became the

successful bidder, and in 2014, an agreement was executed between the

appellant and the respondents for execution of the said works contract.

5. On 28.05.2019, disputes arose between the parties in connection

with the said agreement. The appellant then made a request to respondents for

appointment of an Arbitrator, and a Sole Arbitrator was appointed.

6. On 18.06.2019 the Sole Arbitrator entered into the reference, and

registered it as ARB/SRB/2019(2).

7. The appellant then filed his claim statement and the respondents

also filed their counter statement/written objection.

8. In 2019-2020, on various dates, proceedings took place before the

Sole Arbitrator in connection with the above case.

The award of the arbitrator:

9. On 17.06.2020, by an elaborate Arbitral Award, the Arbitrator

decided the dispute partly in favour of the appellant, i.e. claims under Head

Nos.1, 5, 6, 6(a), partly under Head Nos.7 and 7(a), 8, partly under Head

Nos.9, 11 and 12 were allowed in favour of the appellant, and claims under

the other remaining Heads were held against the appellant.

The application under Section 34 of the Act by the respondents:

10. The respondents, on 24.09.2020, filed an application under

Section 34 of the Arbitration and Conciliation Act, 1996 before the District

Judge, Unakoti Judicial District, Kailashahar (for short 'the Commercial

Court'), which was numbered as Title Suit 04 (Arbitration) of 2020

challenging the Arbitral Award dt.17.06.2020.

11. The appellant on 11.11.2021 filed his objection thereto refuting

the pleas advanced by the respondents.

The judgment dt.16.3.2022 of the Commercial Court in the Section 34 petition:

12. The Commercial Court on 16.03.2022 dismissed T.S.

04(Arbitration) of 2020 filed by the respondents.

Arbitration Appeal No.07 of 2022 filed by respondents in this Court:

13. Challenging the same, the respondents filed an appeal, being

Arbitration Appeal No.07 of 2022 under Section 37(1)(c) of the Arbitration

and Conciliation Act, 1996 before this Court.

The Judgment dt.31.1.2024 by this court in Arbitration Appeal No.07 of 2022 and remand of the matter back to the Commercial Court:

14. On 31.01.2024, the said Arbitration Appeal No.07 of 2022 was

allowed by the Division Bench of this Court and the matter was remitted to the

Commercial Court with the observation that the Commercial Court had not

made any reference to the grounds of challenge relating to price escalation and

applicability of Clause 44 and 44.1 of the agreement; that the Commercial

Court as well as the Sole Arbitrator had failed to consider whether the

appellant herein was entitled to get payment relating to issue No.2 as the

payment relating to issue No.2 has already been paid to him. It was further

observed that there was complete non-consideration of several grounds urged

by the respondents herein in the application under Section 34 filed by them in

the Commercial Court.

15. The Division Bench also stated that the Commercial Court had

failed to test the correctness of the award within the contours of the grounds

available under Section 34(2) and 34(2-A) of the Act; and that it had without

referring to the relevant Clauses of the agreement and without consideration of

any of the grounds raised under Section 34 of the Act, passed judgment; and

so it makes the judgment of the Commercial Court an unreasoned one and so

unsustainable.

16. The Division Bench then stated as under:

"12. In view of the discussions made here-in-above, we are of the view that the matter be remitted to the learned District Court, Unakoti District to decide the grounds urged by the appellant and also as to the applicability of Clause 44 of the agreement and as regards to the expected loss of profit or adjustment in accordance with law within a reasonable time preferably 12(twelve) weeks from the date of receipt of the copy of this order since the Arbitration proceeding was initiated way back in the year 2019. Since the matter is remanded to the learned Commercial Court only on the grounds that the impugned Judgment shows complete non application of mind and non consideration of the grounds urged in the Section 34 application, we have consciously refrained from observing any opinion on the grounds urged by the parties in the question of sustainability of the Award rewarded by the Arbitrator at this stage.

The appeal is disposed of in the manner and to the extent as indicated above."

17. Thus, the matter was remitted back to the Commercial Court for

reconsideration as indicated above.

The judgment dt.31.8.2024 of the Commercial Court after remand by High Court:

18. Thereafter, the learned Commercial Court again heard the matter

and by judgment dt.31.08.2024 set aside the Arbitral Award in its entirety.

The instant Arbitration Appeal:

19. Challenging the same, appellant has preferred the instant appeal.

Scope of interference with an Arbitral award under Section 34 and by the Appellate Court under Section 37 of the Act with a judgment under Section 34 of the Act:

20. Before we consider the Appeal, we shall briefly discuss the legal

position regarding scope of interference by the Court (Commercial Court here)

with an Arbitral award under Section 34 of the Act and by the Appellate Court

under Section 37 of the Act while considering a judgment under Section 34 of

the Act.

21. The legal position on this aspect has been discussed by the

Supreme Court in Somdatt Builders-NCC-NEC (JV) v. NHAI1.

In that case, the Supreme Court relied on its previous judgments

and emphasized that as far as Section 34 is concerned, the position is well

settled that:

(a) the Court does not sit in appeal over an arbitral award and

may interfere on merits only on the limited ground provided under Section

34(2)(b)(ii) i.e. if the award is against the public policy of India.

(b) Even then, the interference would not entail a review on

the merits of the dispute but would be limited to situations where the findings

of the arbitrator are arbitrary, capricious or perverse or when the conscience of

the Court is shocked or when the illegality is not trivial but goes to the root of

the matter.

(2025) 6 SCC 757, at page 778

(c) An arbitral award may not be interfered with if the view

taken by the arbitrator is a possible view based on facts.

(d) As far as interference with an order made under Section 34

by the Court under Section 37 is concerned, it has been held that such

interference under Section 37 cannot travel beyond the restrictions laid down

under Section 34. In other words, the Court cannot undertake an independent

assessment of the merits of the award and must only ascertain that the exercise

of power by the Court under Section 34 has not exceeded the scope of the

provision. (Reliance Infrastructure Ltd v. State of Goa2)

(e) The scope of interference under Section 37 is all the more

circumscribed keeping in view the limited scope of interference with an

arbitral award under Section 34 of the 1996 Act. As it is, the jurisdiction

conferred on courts under Section 34 of the 1996 Act is fairly narrow.

Therefore, when it comes to scope of an appeal under Section 37 of the 1996

Act, jurisdiction of the appellate court in examining an order passed under

Section 34, either setting aside or refusing to set aside an arbitral award, is all

the more circumscribed. (UHL Power Co. Ltd v. State of HP3)

22. It also relied on its judgment in Ssangyong Engg. &

Construction v. NHAI4 to reiterate what public policy of India is and

explained that it means the fundamental policy of Indian law. Violation of

Indian statutes linked to public policy or public interest and disregarding

orders of superior courts in India would be regarded as being contrary to the

fundamental policy of Indian law. It would also mean that the arbitral award is

against basic notions of justice or morality. An arbitral award can be set aside

(2024) 1 SCC 479

(2022) 4 SCC 116

(2019) 15 SCC 131

on the ground of patent illegality i.e. where the illegality goes to the root of

the matter but re-appreciation of evidence cannot be permitted under the

ground of patent illegality.

Consideration by this Court:

23. We shall now discuss the correctness or otherwise of the

judgment of the Commercial Court under Section 34 of the Act in the

impugned judgment.

24. After extracting the pleadings, the written submissions and the

judgments dealing with the scope of Section 34 of the Act, the Commercial

Court, in the impugned judgment, considered the issues framed by the

Arbitrator.

Re: Issue No.1:

25. Issue No.(1) framed by the Arbitrator was "Whether the claim

petition of the claimant contractor is maintainable?"

This issue was held in favour of the appellant by the arbitrator

and the Commercial Court .

Re: Issue No.2:

26. Then the Commercial Court considered issue No.(2) framed by

the Arbitrator.

The said Issue No.(2) was "Whether the claimant is entitled to

balance outstanding payment against work executed up to 03.01.2017, but not

measured-Rs.50,00,000/-?"

27. On this issue, the Arbitrator had not granted any relief to the

appellant.

28. But the Commercial Court went into the said issue and found that

on the face of the record, the award of the Arbitrator goes against the notions

of justice and was in contravention with the fundamental policy of Indian law.

It also stated that this matter is required to be dealt with and considered by the

Arbitrator.

29. We cannot approve this view of the Commercial Court. When the

Arbitrator had not granted any relief to the appellant on this issue, there was

no necessity for the Commercial Court, while dealing with the application of

the respondents under Section 34 of the Act, to take up this issue at all.

30. When the Arbitrator had not granted any relief to the appellant on

this issue and the appellant had not challenged it by filing an application under

Section 34 before the Commercial Court, and the respondents had succeeded

before the Arbitrator on this ground, it is shocking that the Commercial Court

went into this issue which was wholly unnecessary for it to go into, and held

against the respondents. This is a clear error in its judgment and warrants

interference with it.

Re: Issue Nos. 3 and 4:

31. Then the Commercial Court considered issue Nos.(3) and (4),

which are as under:

"Issue Nos.3 and 4- Whether the claimant is entitled to get the

balance outstanding payment against the extra/deviated item for additional

lift, but not measured-Rs.1,31,44,169/-? and Whether the claimant is entitled

to get the balance outstanding payment against the work executed as extra

item for additional lead, but not measured-Rs.1,03,95,679/-?"

32. The Arbitrator had not granted any relief to the appellant on both

these issues.

33. But the Commercial Court held that the Arbitrator's decision on

these issues goes against the notions of justice and was in contravention with

fundamental policy of Indian law.

34. We are of the view that in the application filed under Section 34

of the Act by the respondents, it was again wholly unnecessary for the

Commercial Court to go into these issues and interfere with the Arbitrator's

decision.

35. It was wholly unnecessary, in our opinion, for the Commercial

Court to reverse the view of the Arbitrator, which was adverse to the appellant

and which the appellant had not chosen to challenge by filing an application

under Section 34 of the Act. Thus this is another clear error in his judgment

warranting interference with it.

Re: Issue No.5:

36. Then the Commercial Court took up issue No.(5), which states as

under:

"Issue No.5-Whether the claimant is entitled to get the balance

outstanding payment against the work executed and measured, but not paid

Rs.28,01,334/-?"

37. The Commercial Court stated as under:

"On the aforesaid fact, this court finds that while deciding issue No.5 the Sole Arbitrator stated it is the claim against execution of work which have been measured and entered in MB, according to which the 1st R.A- 6th R.A Bills have been prepared and paid and 7th R.A and Final bill has been prepared, but not paid. Hence, the question of entitlement of payment remaining outstanding. The claim of the contractor in this issue is Rs.28,01,334/- which has been recorded in the claim statement but during hearing a written application has

been submitted by claimants lawyer claiming an amount of Rs.39,66,805/- on the plea that the said outstanding amount has been admitted as balance payment to be made to the claimant (Respondent) (Annexure-2) and showed the same in Tabular form along with interest to be paid by the Petitioner to the Respondent.

This court finds that the Sole Arbitrator has mentioned that the Petitioner has accepted an amount of Rs.39,66,805/- as balanced outstanding payment and the said outstanding amount being an admitted fact by the Petitioner, the Sole Arbitrator allowed the claim of the Contractor-Respondent but whether the payments claimed to be made by the petitioner to the Respondent- Contractor in dispute Nos.2 and 3 has been adjusted or not has not been discussed and decided as Respondent is not entitled to such amount as opined by the Arbitrator in Issue Nos.2, 3 and 4 but, in fact, paid by the petitioner. Further, Annexure- R-2 as mentioned by the Arbitrator in Issue No.5 has neither been submitted by the Petitioner at present nor it is with the re-constructed record. The said fact of the admission by the petitioner, thus, being beyond record and the findings arrived by Sole Arbitrator, appears to be, beyond record and in contravention with the fundamental policy of Indian law."

38. No doubt, the appellant had claimed under this issue only

Rs.28,01,334/- in the claim statement, but during the hearing before the

Arbitrator, he had filed a written application claiming Rs.39,66,805/-

contending that this outstanding amount had been admitted as balance

payment to be made to him as per Annexure-R/2, and he had showed the same

to the Arbitrator in a tabular form along with interest to be paid by the

respondents to the appellant.

39. The Commercial Court in its judgment states that this Annexure-

R/2 [as mentioned by the Arbitrator in issue No.(5)] was not submitted by the

respondents nor it was with reconstructed record. It therefore, states that the

fact of admission by the respondents is beyond the record and so the findings

on this issue by the Arbitrator were beyond the record and in contravention

with the fundamental policy of Indian law.

40. From this statement in the judgment of the Commercial Court

and also as per contentions of the parties, it is clear that the documents

including Annexure-R/2, which had been filed before the Arbitrator by the

respondents, had not come before the Commercial Court when the Section 34

application was before it. There was only a reconstructed record before the

Commercial Court.

41. But admittedly Annexure-R/2 was available when the Arbitrator

considered the matter and pronounced the award on 17.06.2020 and he had

perused the said document, accepted the same, and granted relief to the

appellant.

42. Merely because the respondents did not submit the said

Annexure-R/2 before the Commercial Court or merely because it was not

found in the reconstructed record, it is not permissible for the Commercial

Court to interfere with the relief granted by the Arbitrator to the appellant.

43. As held by Justice A.P. Misra (as His Lordship then was) in Ram

Khelwan v. Dy.Director of Consolidation, Allahabad5, the principle of

reconstruction of document whether it is lost, burnt or misplaced not on

account of fault of either parties is clearly covered under the Court's inherent

power under section 151 CPC. However, this power has to be exercised with

1988 All LJ 68 : 1987 (2) All WC 1255

great care and circumspection to see that in reconstruction of file, no party is

getting favorable gains from the position what it was prior to the

reconstruction.

44. So the loss of the Annexure R-2 filed before the Arbitrator by

respondents either when it was in the custody of the Arbitrator, or after they

had been submitted by the Arbitrator to the District Court, cannot be to the

prejudice of the appellant, because neither party can be blamed for the loss of

the said document. Its loss cannot put the respondents in a better position than

they were in prior to the reconstruction of the record when its original was

available before the Arbitrator.

45. In fact copy of the said Annexure R-2 was produced before us by

counsel for the appellant and its contents were not disputed by counsel for the

respondents. It supports the stand taken by the appellants that in the said

document there was an admission of liability by respondents to the tune of

Rs.39,66,805/-. So the arbitrator cannot be said to have committed any error

which warranted interference by the Commercial Court under section 34 of

the Act.

46. Secondly, the Commercial Court stated that payments claimed to

be made by the respondents herein to the appellant in dispute Nos.2 and 3 had

been adjusted or not, had not been discussed and decided by the Arbitrator.

47. When the appellant had been denied relief by the Arbitrator on

issues (2), (3) and (4), it would be perverse for the Commercial Court to say

that claims made under those issues should be verified as to their adjustment

against the claim of the appellant referred to in issue No.(5).

48. Therefore, we find that the Commercial Court had erred in

interfering with the award of the Arbitrator, which was based on evidence

adduced before the Arbitrator and that the grounds of interference by it do not

fall within Section 34 of the Act in any manner. There is also no contravention

with any fundamental policy of Indian law as regards this particular finding of

the Arbitrator is concerned.

Re: Issue No.8:

49. The Commercial Court then considered issue No.(8), which is as

under:

"Issue No.8-Whether the rescission of contract by the respondent

is lawful or not?"

50. Admittedly, the commencement of the original contract was

20.06.2014 and it fixed the date of completion of the work as 19.6.2016. There

is also no dispute that its validity was extended by respondents up to

30.09.2018. It was rescinded on 31.1.2019 by respondents.

51. This issue is linked with the question as to who is responsible for

delay in execution of the work order.

52. The stand of the respondents in their written objection filed

before the arbitrator was as under:

"Para-1(9)

The reason of Hindrances up to 30th April'2016 for a period of 165 days has been considered by the Competent Authority (The Superintending Engineer, 1st Circle, Kumarghat) without levy of compensation.

Para-1(10).

The payment for clearing of Jungles i/c uprooting of Sank Vegetation, Brush Wood, Trees etc. has been measured and paid as extra item for an area of 29,356.20 sqm. @Rs.2.70/sqm. totaling a sum of Rs.79,262.00.

Para-1(11) The Claimant Contractor could visit the site-of-work before submission of tender as provided vide clause of the Draft N.I.T. Para-1(12). Payment for Earth work as Alleged have been made in terms of item No.1 N and 2 and nothing extra is entertainable.

Para-1(13) The design and Drawing delivered to the Claimant Contractor from time to time. Statement showing the details of Design and Drawing handed over to the Claimant Contractor showing the dates is appended for kind appraisal of the Ld. Advocate.

Para-1(14) Reply submitted against para-1(13). Para-1(15) There was some delay for a total period of 165 days in finalization of working drawing and hindrance for 165 days approved by the Competent Authority without levy of compensation.

Para-1(17) Provision extension of time sanctioned up to 31- 01-2019 to keep the contract alive in accordance with the terms of the Agreement.

Para-1(18) Provisional extension of time granted up to 31- 01-2019 for completion of work."

53. The arbitrator held in his Award, after appreciation of evidence

on record, as under:

(i) The Hindrance register filed by the parties shows that for

period up to 30-4-2016, 165 days delay was attributable to the respondents;

(ii) Correspondence between the parties further reveals that no

clear site was available for executing the contracted work straightaway from

beginning as per the work order and that the work started on 14.8.2014 instead

of 20.6.2014. This delay of 54 days is also attributable to the respondents;

(iii) changes in design and drawings by respondents on several

occasions and non-supply of design and drawings in time also caused

considerable delay in execution of work and that this was also not denied by

the respondents;

(iv) the contract was extended by the respondents suo motu up

to 30.9.2018, but thereafter there was no extension of contract and that on

31.1.2019, the respondents all of a sudden decided to terminate a non-existent

contract, without extending the validity of the contract upto the date of

rescission;

(v) that most of delays are attributable to the respondents

(80%); and

(vi) a non-existent contract cannot be terminated legally.

54. These findings are based on appreciation of record and cannot be

termed as perverse or contrary to law.

55. If there was a valid extension of the contract only up to

30.09.2018 and there was no extension of the contract up to 31.01.2019, by

efflux of time the contract stood rescinded on 30.09.2018 itself. This is also

the view taken by the Commercial Court. To that extent it is correct.

56. However, the Commercial Court, in the impugned judgment, held

that this opinion of the Arbitrator that respondents were responsible for delay

in execution of the work, was beyond record and unjustified and goes against

the notions of public policy and was in contravention with the fundamental

policy of Indian law.

57. While giving these findings, again the Commercial Court says

that :

(i) copy of Hindrance Register, which was marked as an

annexure before the Arbitrator, was not found with the reconstructed record;

(ii) certain correspondence indicating that no clear site was

available, was also not found with the record; and

(iii) that certain documents marked before the Arbitrator as

annexures showing that there were changes in design and drawing on several

occasions and there was non-supply of design and drawing in time, were also

not there in the reconstructed record etc.

58. But admittedly there is no dispute that the Arbitrator had seen

these documents and had referred to them in his award.

59. As stated above, merely because they were not found in the

reconstructed record, the award of the Arbitrator cannot be interfered with by

the Commercial Court because such loss of original record cannot be put by

the respondents as a point in their favour to doubt the Arbitrator's integrity and

question the very existence of such material at all. Such material has to be

believed to exist and also to have been considered by the Arbitrator, though it

might have got lost subsequently.

60. So, the findings of the Arbitrator on issue No.(8) could not have

been interfered by the Commercial Court as it had done and it erred in

holding that respondents were not responsible for delay in execution of the

work.

Re: Issue Nos.7 and 13:

61. Next the Commercial Court considered issue Nos.(7) and (13),

which are as under:

"Issue No.7-Whether price escalation bill up to 6th R.A. Bill?-

Rs.1,37,99,630/- and

Issue No.13-Whether any interference is called for, when the Ld.

Sole Arbitrator has considered the effect of Clause 44 of the Agreement?"

62. The High Court in its judgment dt.31.01.2024 in Arbitration

Appeal No.07 of 2022 filed by the respondents, while remitting the matter to

the Commercial Court, had asked it to consider the effect of Clause 44 of the

agreement.

63. This Clause dealt with price escalation and the Arbitrator had

opined that the original contract period was for 24 months only, and the

respondents were mostly responsible for delay of execution of work and so,

the appellant was entitled to price escalation.

64. But since on issue No.(8), the Commercial Court had held against

the appellant and held that respondents cannot be held liable for the delay in

execution of work, the Commercial Court relied on it to set aside the

Arbitrator's award in favor of the appellant on issue Nos.(7) and (13).

65. We have already held that the Commercial Court's decision on

issue No.(8) is erroneous and that merely because the reconstructed record did

not contain the documents which the Arbitrator had seen, the finding of the

Arbitrator cannot be interfered with.

66. Also, when the respondents themselves have admitted in black

and white in their very pleading before the arbitrator that there were

hindrances because of which extensions had been granted to the appellant for

execution of the work, and the Arbitrator had also relied on the documentary

evidence produced before him to come to the same conclusion as indicated in

his discussion on issue No.(8), the Commercial Court could not have

interfered with finding of Arbitrator.

67. Since the Arbitrator's view cannot be said to be perverse or

contrary to law on this aspect, we hold that the findings of the Commercial

Court on issue Nos.(7) and (13) are also bad in law, and cannot be sustained.

Re: Issue No.9:

68. The Commercial Court then considered issue No.(9), which

stated as under:

"Issue No.9-Whether the claimant is entitled to get loss of

expected profit @ 15% on the balance work remaining unexecuted?-

Rs.34,24,048/-"

69. While dealing with this issue, the Commercial Court again relied

on its finding on issue No.(8), and based on that finding, interfered with the

award of the Arbitrator, who had granted relief on this issue to the appellant.

70. Since we have held that the finding of the Commercial Court on

issue No.(8) cannot be sustained, we hold that the Arbitrator did not err in

granting relief to the appellant on this issue as well and the Commercial Court

erred in interfering with it.

Conclusion:

71. For all the aforesaid reasons, the judgment dt.31.08.2024 of the

Commercial Court, Unakoti District, Kailashahar is set aside, the award

dt.17.6.2020 of the Arbitrator is upheld, and the Appeal is allowed with costs.

Pending application(s), if any, also stands disposed of.

(BISWAJIT PALIT, J)                            (M.S. RAMACHANDRA RAO, CJ)




Pulak


PULAK BANIK              Digitally signed by PULAK BANIK
                         Date: 2026.04.01 12:24:16 +05'30'