Bangalore District Court
Rail Infrastructure Development ... vs M/S Gounder Infratech Company on 2 June, 2025
IN THE COURT OF LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE, BENGALURU. (CCH-90)
Present: Sri.K.M.RAJENDRA KUMAR., LLM, M.Phil,
LXXXIX Addl.City Civil &
Sessions Judge, Bengaluru.
DATED THIS THE 2nd DAY OF JUNE 2025
Com.A.P.No.110/2024
PLAINTIFF: Rail Infrastructure Development
Company Karnataka Limited (K-
Ride),
MSIL House, 7th Floor,
No.36, Cunnigham Road,
Bengaluru-560 052,
represented by its
General Manager,
Praveen Kumar.
(By Sri.Nithin Bhargav, Advocate)
V/s.
DEFENDANTS : 1. M/s.Gounder Infratech
Company,
B-004, Mantri Elite Apartment,
J.P.Nagar, 4th Phase,
Bannerghatta Road,
Bengaluru-560 076,
Represented by its
Managing Partner,
/2/
Com.A.P.No.110/2024
P.Chandravelu,
2. The Union of India
Rep.by The General Manager,
South Western Railway,
Gadag Road, Hubli,
3. The Chief Administrative Officer
(Construction),
South Western Railway,
No.18, Millers Road,
Bengaluru-560 046,
4. The Chief Engineer/ West/
Construction,
South Western Railway,
No.18, Millers Road,
Bengaluru-560 046
5. The Deputy Chief Engineer/
Brigade/Construction,
South Western Railway,
No.18, Millers Road,
Bengaluru-560 046.
(By Sri.S.Vasudeva Naidu,
Advocate)
/3/
Com.A.P.No.110/2024
Date of Institution : 16.07.2024
Nature of case : U/sec.34 of the Arbitration &
Conciliation Act, 1996.
Date of commencement : -
of recording of evidence
Date of Order : 02.06.2025
Total duration : Year/s Month/s Day/s
00 10 16
(K.M.RAJENDRA KUMAR)
LXXXIX ADDL.CITY CIVIL &
SESSIONS JUDGE,
BENGALURU. (CCH-90)
JUDGMENT
The Plaintiff has filed this suit under Section 34 of the Arbitration & Conciliation Act, 1996 praying the Court to set aside the impugned Award dated 18.03.2024 passed in AC No.637/2022 by the Hon'ble Arbitral Tribunal and for costs and for such other orders/reliefs that this Court may deem fit and proper in the facts and circumstances of the case.
The brief facts of the plaintiff's case are as under:
02. That, being aggrieved by the Arbitral Award dated /4/ Com.A.P.No.110/2024 18.03.2024 passed in arbitration proceedings in AC No.637/2022, initiated by the respondent No.1 herein, wherein the learned Arbitrator has held the respondent Nos.2 to 5 including the petitioner liable to pay the respondent No.1 a sum of ₹.25,00,000/- towards loss of profits and damages along with the interest thereon @ 10% p.a. thereon, the petitioner is filing the present petition for setting aside the impugned Award for the reasons and on the grounds set out in this petition.
03. That, in response to a tender floated by the respondent No.2 for the work of doubling, earthwork, cutting embankment, construction of minor bridges, and other miscellaneous works from KM 205/300 to KM 194/180 in Baiyappanahalli-Hosur Section (excluding station yards), the respondent No.1 was the successful bidder and was issued a Letter of Acceptance, dated 21.02.2019 bearing No.LOA No.W.496/BYPL-HSRA/01.
That, work was valued at a sum of ₹.24,97,25,445/- and the period for the completion was 18 months. Subsequently, necessary agreements were entered into between the respondents for execution of the work, which were governed by the provisions of the General Conditions /5/ Com.A.P.No.110/2024 of Contract and Special Conditions of Contract set out in the tender floated by the Ministry of Railways.
04. That, the respondent No.1 could not commence with the work. That, on 04.06.2020, the Railway Board transferred the work from the respondent No.2 to the petitioner. That, accordingly, by a Letter dated 19.06.2020 the petitioner informed the respondent No.1 regarding the transfer of the work and directed him to be present for the execution.
05. That, the work commenced only from 23.08.2020 and from that date, the initial period of 18 months expired on 02.02.2022. However, as the work entrusted was not completed, the respondent No.1 entered into a Tripartite Agreement, dated 25.03.2022, with the petitioner and the South Western Railways, in which the terms of extension and completion of the work were set out. That, one of the terms of the said agreement was that the respondent No.1 does not reserve any right to seek compensation and is estopped from putting forth further claims. That, however, even thereafter the respondent No.1 failed to complete the /6/ Com.A.P.No.110/2024 work within the stipulated time. That, as on April 2023, even though the respondent No.1 had completed only 50% of the assigned work it has initiated arbitration proceedings against the respondent No.2 to 5 and the present petitioner and set up a claim of ₹.5,27,92,342/- together with interest.
06. That, after conducting trial and hearing the Parties submissions, the Arbitral Tribunal passed the impugned Award, in which the Hon'ble Tribunal has held that the respondent No.1 has not produced any material to prove its claims. That, even so, the Arbitral Tribunal has directed the petitioner and the respondent Nos.2 to 5 to pay the respondent No.1 a sum of ₹.25 lakhs as ad hoc compensation together with interest thereon at the rate of 10% per annum from the date of award.
07. That, being aggrieved by the said award, the petitioner has preferred the present petition seeking to set aside the impugned award on the following amongst other grounds set out herein below.
08. That, the Impugned Award is arbitrary, wholly /7/ Com.A.P.No.110/2024 contrary to the facts and evidence on record, suffers from non-application of judicial mind and is contrary to the public policy of India and deserves to be set aside by this Court.
09. That, the Learned Arbitrator has failed to appreciate the submission and documents relied upon by the petitioner.
10. That, in para No.35 and 37, the Arbitral Tribunal gives a finding that no material is produced by the respondent No.1 to establish its claim.
11. That, however, at para No.42 without there being any such claim on facts and without there being any evidence and without any reasoning, the Hon'ble Aribitrator simply awards a sum of ₹.25 Lakhs as ad hoc compensation to the respondent No.1.
12. That, similarly in para No.49 of the Award, the Arbitrator has categorically rejected the Claim No.3 for interest, yet in the operative portion of the Award, has granted an interest on the sum awarded @ 10% per annum without any reasoning.
/8/ Com.A.P.No.110/2024
13. That, the Impugned Award deserves to be set aside by this Court under Section 34(2)(iv) and Section 34(2)(b)(ii) of the Arbitration and Conciliation Act, 1996.
14. On the other hand, the respondent No.1 and 5herein have filed a separate objections to the main petition. The respondent No.2 to 4 have adopted the objections filed by the respondent No.5.
15. The respondent No.1 has filed objections contending that, the Hon'ble Arbitral Tribunal passed an award dated 18.03.2024 and awarded an amount of ₹.25,00,000/- towards the loss of profit and damages along with interest @ 10% p.a in favor of respondent No.1. That, the Arbitrator was not made a formal party to the present petition and thus the present petition is not maintainable and hence liable to be dismissed in limine.
16. That, the work was commenced on 04.06.2020. That, the fact is that the work got commenced only after transferring the work to the petitioner company and thereafter the tri-party agreement dated 25.03.2022 was entered into between the respondent No.1 and the /9/ Com.A.P.No.110/2024 petitioner after 3 years (36 months) from the date of awarding the contract against 18 months original completion period of the contract. That, the respondent No.1 has suffered huge losses which ought to be compensated under the provisions of law on account of the delay caused in accordance with Section 55 of the Indian Contract Act, 1872.
17. That, even as on April 2023 the respondent No.1 could complete only 50% of the work and the remaining 50% work could not be completed because of the failures and breach of contract committed by the petitioner in discharging its part of reciprocal contractual obligations.
18. That, the petitioner has extracted the advantages portion of the arbitrators finding that the respondent has not produced any material evidence to prove its claim. That, the intention of the arbitrator is that substantial material proof was not produced to substantiate the claim amount of ₹.5,27,92,342/- and therefore, a compendious sum of ₹.25,00,000/- is awarded. However, the Hon'ble Arbitral Tribunal in its award at para 42 categorically observed as follows:
/10/ Com.A.P.No.110/2024 "Thus as could be seen that the claimant could not commence the work even as on 25.03.2022 from the date of LOA I.e,. 05.07.2019. Thus, the taking into consideration the challenges faced in matters of execution of contracts, one needs to test evidentiary value at threshold against practical considerations and further taking into account that a party whose contractual rights have been violated to be compensated adequately. Thus, having regard to the situation in which claimant has been placed and he being denied the legitimate profits he could have earned. A compendious sum of ₹.25,00,000/- is awarded". Thus, the amount awarded by the Hon'ble Tribunal is properly reasoned and thus no interference of this Hon'ble Court is warranted under Section 34 of Arbitration and Conciliation Act, 1996 and the petitioner failed to make out any grounds to set aside the award under Section 34 of Arbitration and Conciliation Act, 1996. By contending so, the respondent No.1 prays to dismiss the plaint filed by the plaintiff as capricious, vexatious, frivolous and devoid of merit and not in accordance with Section 34 of Arbitration and Conciliation Act, 1996.
19. The respondent No.2 to 5 also filed objections in /11/ Com.A.P.No.110/2024 support of the case of the petitioner. On perusal of the said objections in my opinion the said objections appears to be incomplete.
20. Heard on both sides.
21. The learned Senior counsel for plaintiff filed written arguments.
22.The learned Senior counsel for plaintiff has relied upon the following decisions:
Sl.No. Particulars Citations
1. In Indian Oil Corporation Ltd., Vs. 2022 SCC OnLIne SC Shree Ganesh Petroleum 131 Rajgurunagar
2. In M.D.Army Welfare Housing 2003 SCC 619 Organization Vs. Sumngal Services Pvt., Ltd..,
23. Now the points that arise for my consideration are as follows:
/12/ Com.A.P.No.110/2024
1) Whether the plaintiff has made out a ground to set aside the award?
2) What Order?
24. My answer to the above points are as follows:
Point No.1 : IN THE NEGATIVE
Point No.2 : As per the final order
for the following -
REASONS
25. Point No.1: It is pertinent here to mention that as I have already narrated the facts of the case in detail at the inception, I will not repeat the facts once gain at length, but I will confine myself to the material facts.
26. It is the specific case of the plaintiff herein that the learned Arbitrator even after observing that the respondent No.1 being the claimant has not completed the assigned work and that there were no materials produced by the respondent No.1 to substantiate that it has suffered loss of profit, however, awarded ₹.25,00,000/- along with interest @ 10% as ad hoc compensation. That, the said award passed by the learned Arbitrator is contrary to the evidence /13/ Com.A.P.No.110/2024 on record. Hence, the plaintiff was constrained to challenge the award.
27. On the other hand the respondent No.1 supports the award and prays to dismiss the petition.
28. Keeping in mind the above rival contentions, I would like to bestow my attention to the decision of Hon'ble Apex Court reported in 2015 (3) SCC 49 in Associate Builders Vs. Delhi Development Authority and Section 34 of Arbitration and Conciliation Act, 1996 to know the limitation of this Court in respect of scope of interference and to know under what circumstances the Arbitral Award can be set aside or not by the Court under Section 34 of the Act as held by the Hon'ble Apex Court in Associate Builders Vs. Delhi Development Authority which reads as under:
A. Arbitration and Conciliation Act, 1996 - Ss.34 and 5 - Merits of arbitral award When assailable before court under S.34 - Only when award is in conflict with public policy of India - Heads under which public policy of India may violated, enumerated, elucidated and explained in detail.
-Caution on and limits on power of /14/ Com.A.P.No.110/2024 court to interfere with arbitral award under the various heads public policy, explained and emphasised.
- Held, none of the grounds contained in S. 34(2)(a) deal with the merits of the decision rendered by an arbitral award - It is only when arbitral award is in conflict with public policy of India as per S.34(2)
(b)(ii), that merits of an arbitral award are to be looked into under certain specified circumstances, as given below
- Heads of "Public Policy of India"
(with their sub-heads) are:
1. Fundamental Policy of Indian Law:
(i) Compliance with statues and judicial precedents; (ii) Need for judicial approach:
(iii) Natural justice compliance; (iv) Wednesbury reasonableness;
II. Interest of India;
III. Justice or Morality; and IV. Patent Illegality: (i) Contravention of substantive law of India; (ii) Contravention of A & C Act, 1996; (iii) Contravention of the terms of the contract
- When any of the heads/sub-heads of tests of "public policy" is applied to an arbitral award, court does not act as court of appeal- Interference is permissible only when findings of arbitrator are arbitrary, capricious or perverse, or when conscience of court is shocked, or when illegality is not trivial but goes to root of /15/ Com.A.P.No.110/2024 the matter - Not when merely another view is possible - Furthermore, arbitrator being ultimate master of quantity and quality of evidence while drawing arbitral award, award based on little evidence or on evidence which does not measure up in quality to a trained legal mind cannot be held invalid - Once it is found that arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts.
B. Arbitration and Conciliation Act, 1996- Ss. 34(2)(b)(ii), 34(2)(a)(iii) and 18- Public policy of India - Award when against Fundamental Policy of Indian law, explained in detail - When it is: (i) not in compliance with statutes or judicial precedents, or (ii) violates the principle of judicial approach, or (iii) not in compliance with principles of natural justice, or (iv) violates the principle of Wednesbury reasonableness i.e. the award is perverse- Caution to court when interfering on any of these grounds, emphasised - Interference is permissible only when findings of arbitrator are arbitrary, capricious or perverse - Not when merely another view is possible C. Arbitration and Conciliation Act, 1996 S. 34(2)(b)(ii) - Public policy of India
- Award when contrary to Interest of India
- "Interest of India" -Manner of construing
- Held, interest of India must be construed taking India as a member of the world community in its relations with /16/ Com.A.P.No.110/2024 foreign powers - words and Phrases -
"Interest of India"
D. Arbitration and Conciliation Act, 1996 S. 34(2)(b)(ii) Public policy of India - Award when against Justice or Morality, explained in detail - Held, only when it shocks conscience of court - Hence, Division Bench of High Court clearly erred in interfering with award in present case on the ground that it itself would do "rough and ready justice" on the facts - Interference on the ground of justice does not include what the court thinks is unjust on the facts of a case for which it then seeks to substitute its view for the arbitrator's view and does what it considers "justice" - Court under S. 34 not act as first appellate court and cannot interfere with errors of fact either, in the absence of perversity - Contract Act, 1872, S. 23 E. Arbitration and Conciliation Act, 1996- Ss. 34(2)(b)(ii), 28(1)(a) and 31(3)- Public policy of India - Award when Patently Illegal, explained in detail Held, when it: (i) contravenes substantive law of India, (if) contravenes the A&C Act itself, - or (iii) contravenes terms of the contract - Caution to court when interfering on any of these grounds, emphasised - Illegality must go to root of the matter and cannot be of a trivial nature F. Arbitration and Conciliation Act, 1996 Ss. 34 and 5- Interference by court /17/ Com.A.P.No.110/2024 with finding(s) of fact in arbitral award - Arbitrator is the sole judge of quantity and quality of evidence when he delivers arbitral award - Thus, award based on little evidence or on evidence which does not measure up in quality to a trained legal mind cannot be held invalid - Once it is found that arbitrator's approach is neither arbitrary nor capricious then no interference is called for on facts.
G. Arbitration and Conciliation Act, 1996 Ss. 34 and 28(3) - Interpretation of contract - Held, construction of terms of a contract is primarily within the domain of arbitrator to decide - Interference by court is permitted only when arbitrator construes the contract in such a way that no fair-minded or reasonable person could do.
H. Arbitration and Conciliation Act, 1996 Ss. 34 and 28(3) - Damages claimed by promisor for delay in execution of contract/ prolongation of contract attributable to promisee - Formula that may be applied by arbitrator-Freedom available to arbitrator - Reiterated, different formulae can be applied in different circumstances and whether damages should be computed by taking recourse to one or other formula having regard to facts and circumstances of a particular case, would fall within the domain of arbitrator - Court cannot interfere with choice of formula made by arbitrator, nor vary the formula, on the /18/ Com.A.P.No.110/2024 ground of doing "rough and ready justice", unless the same shocks the conscience of the court - Interference is not permissible merely because another view is possible Only a perverse view can be interfered with Contract and Specific Relief - Remedies for Breach of Contract -
Damages- Extra- expense/cost due to breach/Loss of profits 51 to 54 -Contract Act, 1872, Ss. 73 and 51 to 54.
I. Arbitration and Conciliation Act, 1996 Ss. 34 and 28(3) - Damages claimed by promisor for delay in execution of contract/ prolongation of contract attributable to promisee - Escalation clause in contract providing for increases in prices of material and labour costs Application of such escalation clause (Clause 10-C) - In present case, held, claims for damages due to delay were clearly kept independent of claims on grounds of escalation in material and labour costs, and arbitrator had correctly appreciated this difference and applied the escalation clause, and not violated the terms of the contract Contract and Specific Relief - Contractual Obligations and Rights - Price/Escalation Clauses - Contract Act, 1872, Ss. 51 to 54.
J. Arbitration and Conciliation Act, 1996 Ss. 34 and 28(3) - exception clause in contract providing that no damages arising out of "unavoidable delay" would be payable - Damages claimed by promisor /19/ Com.A.P.No.110/2024 for delay in execution of contract/prolongation of contract attributable to promisee - Delay found to be entirely avoidable and caused solely by promisee - Furthermore, defendant promisee did not properly invoke the exception clause as per its own terms - Thus, held, arbitrator committed no error in awarding the damages claimed - There was no violation of the exception clause (Clause 22) - Contract and Specific Relief - Contractual Obligations and Rights Exemption/Exclusion/Restriction clauses/negative covenants-application of-compliance with terms of the clause - contract Act 1872 Sec.51 to 54.
K. Contract and Specific Relief -
Remedies for Breach of Contract -
Damages - Extra expense/cost due to breach/Loss of profits - Hudson's formula
- Correct application of - Held, establishment expenses are to be ascertained in accordance with said formula by taking into account the contract value that is awarded and not the work completed - Court cannot vary the formula if there are no valid grounds for rejecting application of the formula itself - Arbitration and Conciliation Act, 1996- Ss. 34 and 28(3) Contract Act, 1872, Ss. 73 and 51 to 54 L. Precedents - High Courts - Single Judge of High Court, held, bound by prior decision of Single Judge of same High Court.
/20/ Com.A.P.No.110/2024
29. Further Section 34 of the Arbitration and Conciliation Act, 1996 reads as under:
"Application for setting aside arbitral award.-(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the Court only if-
(a) the party making the application establishes on the basis of the record of the arbitral tribunal that-
(i) a party was under some incapacity; or
(ii) The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
/21/ Com.A.P.No.110/2024 Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part;
or
(b) the Court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.-For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or /22/ Com.A.P.No.110/2024
(iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.-For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33 , from the date on which that request had been disposed of by the arbitral Tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a /23/ Com.A.P.No.110/2024 party, adjourn the proceedings for a period of time determined by it in order to give the arbitral Tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral Tribunal will eliminate the grounds for setting aside the arbitral award.
[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.
30. Keeping in mind the above principle of Law I have bestowed my attention to the award passed by the learned Arbitrator wherein it appears the claim No.1 which was sought by the respondent No.1 herein being the claimant seeking for losses on account of overhead expenditure and profit of ₹.3,43,37,248/- by applying EMDEN Formula, Claim No.2 regarding entitlement of loss of ₹.1,49,83,526/- towards breach of contract committed by the respondent, claim No.3 regarding entitlement of interest on claim No.1 and 2, Claim No.4 as to whether the respondent committed /24/ Com.A.P.No.110/2024 breach of contract, the learned Arbitrator even though has answered the above claims in Negative, however, it was his observation that the claimant and respondent No.5 entered into a Triparte Agreement on 25.03.2022 and as could be seen the claimant could not commence the work even as on 25.03.2022 and thus taking into consideration the challenges faced in the matters the learned Arbitrator having regard to the situation in which the claimant has been placed and being denied the legitimate profits, he could have earned a sum of ₹.25,00,000/- along with 10% interest is awarded as a compendious sum.
31. The learned counsel appearing for plaintiff herein vehemently argued that when the learned Arbitrator has expressed his opinion that there is paucity of materials in favor of claimant to prove his loss of profits adopting EMDEN formula then the learned Arbitrator should not have awarded any amount as compensation to the claimant.
32. Keeping in mind the submission of learned Senior counsel appearing for the plaintiff I would like to take into consideration the fact that because of failure on the part of respondents in handing over the physical possession of the /25/ Com.A.P.No.110/2024 site to the claimant well within the time, the claimant could not commence the work as on 25.03.2022 from the date of letter of Acceptance, i.e., 05.07.2019. In my opinion the observation of the learned Arbitrator that the claimant has not produced any material to prove his loss of profit is right to the extent that because of the failure on the part of respondent No.1 to hand over the physical possession of the site, the claimant could not commence the work and therefore, claimant is entitle for compensation of ₹.25,00,000/- with interest cannot be found fault with. Admittedly, the claimant and the respondents were under the reciprocal contract, as such both the parties were under obligation to perform their part of initial contract which helps the other sides to proceed with the remaining part of the contract. In this case, when the respondents initially failed to hand over the physical possession of the site it is obvious to the claimant to commence the work belatedly.
33. The claimant before the Hon'ble Arbitral Tribunal admittedly has not produced any documentary proof to substantiate its loss and therefore, the learned Arbitrator was right in refusing the claim No.1 and 2 for ₹.5,27,92,342/-.
/26/ Com.A.P.No.110/2024
34. In my opinion the observation and the reasoning of the learned Arbitrator are not against to the principle as laid down by the Hon'ble Apex Court in Delhi Associate Case as noted supra. The learned counsel for plaintiff also did not argue that the award is against to the public policy or against to the other grounds as noted in Section 34 of Arbitration And Conciliation Act. Hence, in my opinion the discretionary power exercised by the Hon'ble Arbitral Tribunal in awarding a meagre compensation with interest to the claimant by assigning valid reason should not be interfered with.
35. The learned counsel for plaintiff relying upon the judgment of Hon'ble Apex Court reported in 2023 (15) SCC 781 has vehemently argued that, if an award is contrary to the terms of the contract and is neither based on any evidence then the award can be set aside. It is further argued that if the award is patently illegal and if the Arbitrator failed to confine to the four corners of the agreement then the award can be set aside. In my opinion, the above mentioned principal of law are well settled. However in the present facts of the case, as there was a delay on behalf of respondent in handing over the possession of the site to the claimant, the claimant could /27/ Com.A.P.No.110/2024 not commence the work in time and for this reason a compensatory cost with nominal interest was awarded by the Learned Arbitrator. In my opinion the said observation cannot be found fault with. Therefore, the above decisions relied upon by the learned counsel for plaintiff are not helpful in the present facts and circumstances of the case.
36. The learned senior counsel appearing for the plaintiff put forward another argument that when the Arbitrator answered that the claimant is not entitled for any interest upon claim No.1 and 2 could not have passed an award stating that claimant is entitle for 10% interest upon the compensation. In my opinion the said arguments also holds no water for the simple reason that the learned Arbitrator even though has opined that the claimant is not entitle for any interest upon claim No.1 and 2 but he was not debarred from granting interest upon the compensation awarded for the reasons as noted in the award.
37. Hence this court opines that plaintiff/claimant has not made out any ground to interfere with the impugned award in question. It is a reasoned award passed by arbitral tribunal after considering the claim made by plaintiff/claimant and also defense raised by /28/ Com.A.P.No.110/2024 the respondents. In the case of Dyna Technologies (P) Ltd., the Hon'ble Supreme Court held that "Arbitral Awards should not be interfered within a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of the alternative interpretation which may sustain the Arbitral Award. Further, held that, where two views are possible, the court cannot interfere in the plausible view taken by the arbitrator supported by reasoning. The court is usually not required to examine the merits of the interpretation provided in the award by the Arbitrator, if it comes to a conclusion that such an interpretation was reasonably possible." Relying upon these principles and also in view of my discussion supra, I answer Point No.1 in the Negative.
/29/ Com.A.P.No.110/2024
38. Point No.2: In view of my discussion and findings on Point No.1, I proceed to pass the following:
ORDER The petition filed by the plaintiff under section 34 of the Arbitration and Conciliation Act, 1996 is hereby dismissed.
The Award dated:18.03.2024 passed by the learned Arbitral Tribunal in A.C.No.637/2022 is hereby confirmed.
Both the parties are directed to bear their own costs.
The office is hereby directed to send a copy of the orders to the plaintiffs and the defendants through e-mail as per Order XX Rule 1 CPC as amended by Section 16 of Commercial Courts Act, 2015.
Office is directed to send the LCR to the Arbitration Centre.
(Directly dictated to the Stenographer on computer, corrected and then pronounced by me in the open court on this the 2nd day of June 2025).
(K.M.RAJENDRA KUMAR) LXXXIX Addl.City Civil & Sessions Judge, Bengaluru (CCH-90) /30/ Com.A.P.No.110/2024 ****