Delhi District Court
Union Of India vs Chenab Const. Joint Venture on 15 April, 2026
IN THE COURT OF MS. MEENU KAUSHIK
DISTRICT JUDGE - 03, NEW DELHI DISTRICT
PATIALA HOUSE COURT
ARBTN. No. 2501/17
CNR No. DLND010046792017
In the matter of:
Union of India
Through
Dy. Chief Engineer (Const.),
Northern Railway,
Jammu Tawi
...Petitioner
Versus
M/s Chenab Construction Joint Venture
73-A/D, Gandhi Nagar,
Jammu (J&K) 180004
Also at
153, Kanak Mandi, Pratap Garh, Jammu
...Respondent
Date of institution : 03.06.2011
Date on which reserved for judgment : 04.04.2026
Date of decision : 15.04.2026
Decision : Petition dismissed.
JUDGMENT
1. The present objection petition is being filed against the amount awarded in respect of claim no.1 and claim no. 3 by the ld. Arbitration Tribunal, whereby the said claims of the claimant/ respondent, have been allowed.
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 1/18 Brief facts as per Petitioner :
2. The petitioner invited the tender for work of design and construction, of viaduct for single line BG railway track, between kilometre 40.240 and kilometre 40.490 in zone number E22 on Jammu Udhampur rail link project, including soil investigations, detailed design, and construction of foundation, pyres, and abutment, and superstructure in prestressed concrete. The said contract was awarded to the respondents on 14.09.1994 at the accepted cost of Rs. 2,60,25,000/- with a completion period of 18 months, i.e. on or before 13.03.1996. The claimant was required to start the work within 7 days from the issue of acceptance letter. As per clause 19(2) of GCC 1989, the contractor was also required to furnish the details of the program to be done in next month by 25th of preceding month in terms of clause 8.3 of tender conditions and instructions to tenderers. But the contractor neither started the work within the prescribed period, nor furnished the details of the program, despite verbal or written instructions issued to him vide later dated 18.11.1994 to carry out the geotechnical investigation, construction of temporary site accommodation, and mobilising man and machinery at the site, and early submissions of drawings with calculations for approval. The progress work of the contractor remained very slow from start of execution of work. Notice under clause 26 of general conditions of contract was served, vide letter dated 09.12.1996, 20.12.1996 and 25.01.1997 to augment the resources and deploy sufficient men and machinery to complete the work, but the claimant miserably failed to fulfil the promises. ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 2/18
3. The meetings were held in headquarters, office, Kashmiri Gate, Delhi, on 08.02.1995 and the construction program was discussed in detail. Similar meeting was held on 28.03.1997, wherein the claimant was instructed to deploy sufficient men and machinery so as to complete the work at the earliest possible. The claimant was granted 4 times extensions on written requests and the work was finally completed on 31.12.1997. The extensions were granted without penalty and without PVC. The penalty was not imposed while granting time extension because projects of the railways were not suffering due to this work of contract. The delay caused by the contractor in performing the contractual work gave birth to his claims before the Ld. Arbitral Tribunal. The claim no.1 was related to price variation that is escalation with interest calculated up to 31.03.2000 with further interest at the rate of 18% till realisation. As GAD, originally prepared by the claimant, was not in order, the delay on this account cannot be attributed on part of the petitioner. For the design of substructure, the soil investigation report is a prerequisite, and the same was required to be submitted within 30 days of issuance of acceptance letter, i.e. by 13.10.1994. But the same was submitted on 15.01.1995, and the report was also not complete. The amount of PVC for which claimant is legally entitled to has already been paid to the claimant vide final bill dated 05.081999, which has been accepted by the claimant as full and final without any objections. A supplementary agreement was also signed by the claimant on 5.08.2009 without any protest or objection. The petitioner had been given ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 3/18 PVC to the claimant from 14.01.1997 to 30.06.1997. The learned arbitral tribunal while dealing with this issue of PVC, has erroneously relied upon the recommendation made by deputy chief engineer, who is not the competent or final authority to grant sanction for extension of PVC and the chief engineer is actual competent and final authority. The Ld. Arbitration Tribunal while dealing with the payment of interest has erroneously relied upon the Judgement of Hon'ble Supreme Court in Madnani Construction Corporation Private Ltd v. Union of India, dated 07.12.2009. However, the Ld. Tribunal has ignored the fact that the said judgement was passed, in terms of the provisions of Arbitration and Conciliation Act, 1940 and overlooked the judgement dated 20.08.2010 passed by the Hon'ble Supreme Court in Siri Kamachi, Amman constructions v. Divisional Railway Manager works, Palghat and others which unambiguously bars the payment of interest, regarding the claim no.3 for interest on the machinery advance to the respondents that is refund for mobilisation interest + market interest. The mobilisation advance up to a maximum of 10% of contract value was granted to the claimant against irrevocable bank guarantee in 2 stages in terms of clause number 18 of SEC. The advance was carrying interest of 10% per annum. Similarly, machinery advance was also granted to the claimant in terms of clause 19 of SEC. And the same was also carrying the interest of 10% per annum. Both the advances had been recovered, along with interest, which is not refundable to the claimant in terms of contract clause. It is further argued that, ignoring the ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 4/18 said facts, figures, and contentions of the petitioner, Ld. Arbitration Tribunal passed the impugned award and thus, being aggrieved and dissatisfied with the said award, the present petition is filed.
4. Grounds of objection :
1. The respondent has already been paid PVC by the petitioner for the period 14.03.1996 to 13.01.1997.
2. Because the GAD originally prepared by the respondent was not in order, and the delay on this account cannot be attributed on part of the petitioner.
3. As the respondent was required to submit soil investigation report within 30 days, but the same was submitted with the delay on 15.01.1995 and the respondent neither started work within the prescribed period, nor furnished the details of the program, despite verbal return instructions.
4. The progress of the work during the entire period remained very slow and despite various meetings, no substantial progress was made.
5. Ld. Arbitration Tribunal has wrongly allowed granting of benefit of PVC to the respondent for extended period of second extension, although the extension was granted without PVC by competent authority.
6. Ld. Arbitration Tribunal has wrongly allowed the refund of interest on machinery and mobilisation advances for extended period from 14.03.1996 to 30.06.1996, in violation of terms and conditions of the contract agreement.
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 5/18
7. Ld. Arbitrary Tribunal has wrongly allowed payment of interest to the respondent, in spite of there being specific bar by clause 16.2 of GCC 1989.
Submissions of Respondent:
5. It is submitted on behalf of respondent that the petitioner had invited the tender and the respondent's bid was accepted. The respondent submitted the General Arrangement Drawings (GAD) on 07.10.1994. However, the petitioner repeatedly directed revisions and corrections, resulting in significant delays in approval. It is further stated that final approval for staging drawings was given on 27.01.1995 i.e. several months after initial submissions. It is further stated that the project faced recurring delays due to :
a) Non-handling over of certain portions of the site until January 1997,
b) Administrative bottlenecks within the petitioner's departments, and
c) Frequent changes required by the petitioner in designs and drawings.
6. It is further stated that despite these factors, the respondent continued to perform diligently and the petitioner itself granted extensions of four times, all without levy of penalty thereby acknowledging that delays were not attributable to the respondent. It is further stated that payments towards Price Variation Clause (PVC) were released only upto 31.08.1996 despite clear ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 6/18 recommendations by the Deputy Chief Engineer's letter categorically recorded that the delays were due to factors beyond the respondent's control. It is further stated that after completion of the work, certain amounts remained wrongfully withheld, leading the respondent to invoke arbitration in accordance with the contract and the tribunal, by majority, allowed the respondent's claim, including interest on delayed payments, and passed the impugned award.
7. It is further argued that the tribunal carefully gave findings after considering the evidence and observed that the delay of 15½ months out of total 21½ months was not attributable to the respondent but to administrative reasons of the petitioner. It is further stated that even for the last two extensions i.e. for the period of about six months, the petitioner did not impose any penalty, which can itself signify that the respondent was not at fault in any substantial manner. It is further argued that despite categorical findings, the petitioner now seeks to argue afresh that delay was solely due to the respondent and the same is beyond the scope of Section 34 of the Arbitration and Conciliation Act and the court cannot re-appreciate the evidence which is prohibited under Section 34 of the Act. It is further argued that out of seven claims, the tribunal awarded only two claims and rejected five claims outrightly which demonstrate a balanced and judicious approach of the Ld. Tribunal and there was no bias or arbitrariness and the award reflects careful consideration. ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 7/18
8. It is further argued in the catena of cases, the Hon'ble Supreme Court has held that even brief reasons are adequate so long as the reasoning process is discernible. It is further argued that Clause 16.2 of GCC does not govern the post completion phase, and hence cannot restrict the tribunal's statutory powers with respect to grant of interest regarding this period.
9. It is further argued that in case ONGC v. G&T Beckfield Drilling Services Pvt. Ltd.
MANU/SC/1221/2025, Hon'ble Supreme Court distinguished between the absolute prohibition where no interest could be awarded at any stage and the limited clause which merely stated that no interest will be payable by one party during the contract or on delayed payments without addressing the tribunal's power. It is further stated that applying this test, Clause 16.2 of the contract falls squarely in the later category and cannot oust the tribunal's jurisdiction to award the interest. It is further argued that the said clause relied upon by the petitioner is not an absolute prohibition of interest at any stage and it merely states that no interest shall be payable by the petitioner on amount payable to the contractor under the contract. It is further stated that it does not restrict the tribunal's statutory power to award pendente lite interest or post award interest for the amounts wrongfully withheld.
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 8/18 Findings :
10. By way of award dated 24.02.2011, Ld. Arbitration Tribunal has upheld the two claims out of seven of respondent herein (who were initially the claimant). It was held by Ld. Arbitration Tribunal with respect to Claim no. 1 & 3 that since all the four extensions were recommended by Deputy Chief Engineer and since first two extensions were granted without penalty to the contractors, thus, the tribunal found respondent entitled to PVC benefits till 30.06.1997. It is further observed that majority of delay was due to administrative reasons and not the respondent's fault.
11. It is also observed in the award that it took over 9½ years (from 15.12.1999 to 27.7.2009) for the Claimant to get Arbitral Panel appointed and get their disputes & differences referred for adjudication and considering six months as normal period of official processing for appointment of arbitrator, long period of over 9½ years was avoidable delay by NR in appointment of Arbitrators. Ld. Arbitration Tribunal has opined that Claimant is entitled for justified succor through a reasonable rate of compound interest 8% for the period i.e. from month following final payment in August 1998, i.e. from 01.09.1998 to 27.07.2009, the date of appointment of Arbitrators for claim of PVC and from six months after lodging request of arbitration in December 1999, i.e. from 01.07.2000 to 27.07.2009, the day of appointment of arbitrator for claim of refund of interest.
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 9/18
12. It has also been observed that Clause 16(2) of GCC does not contain any prohibition on the Arbitrator to grant interest and interest can be allowed by the Arbitrator on the merits of claim & case. It is further specified by the Ld. Arbitration Tribunal that since it is clear from the above details that Northern Railway took unduly long time in appointment of Arbitrator on the request/notice, dated 15.12.1999 of the Contractors and they took about 10 years, that too, only after interference of Hon'ble High Court/J&K, it was considered to be justified to grant compound interest @ 8% per year compounded quarterly as already provided for in Para XIII supra on the awarded amounts of claims. It is further clarified by the Ld. Tribunal that this award of interest is not from the date of cause of action to date of award; but rather it is for the period from date of cause of action/from six months after lodging a request of arbitration by the contractors to the date of appointment of arbitrators by GM/NR.
13. Section 34 of The Arbitration and Conciliation Act 1996 deals with setting aside of an arbitral award. The scope and ambit of court's jurisdiction under section 34 has been dealt with and explained in detail by the Hon'ble Apex Court in Delhi Airport Metro Express Pvt. Ltd. Vs. Delhi Metro Rail Corporation Ltd. (2022) 1 SCC 131 wherein it has been held as under:-
"22. The 1996 Act was enacted to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards and also to define the law relating to conciliation and for matters connected therewith, by taking into account the United Nations Commission on International Trade Law (UNCITRAL) Model ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 10/18 Law on International Commercial Arbitration and the UNCITRAL Conciliation Rules. One of the principal objectives of the 1996 Act is to minimize the supervisory role of courts in the arbitral process. With respect to Part I of the 1996 Act, Section 5 imposes a bar on intervention by a judicial authority except where provided for, notwithstanding anything contained in any other law for the time being in force. An application for setting aside an arbitral award can only be made in accordance with provisions of Section 34 of the 1996 Act.
26. A cumulative reading of the UNCITRAL Model Law and Rules, the legislative intent with which the 1996 Act is made, Section 5 and Section 34 of the 1996 Act would make it clear that judicial interference with the arbitral awards is limited to the grounds in Section 34. While deciding applications filed under Section 34 of the Act, courts are mandated to strictly act in accordance with and within the confines of Section 34, refraining from appreciation or re-appreciation of matters of fact as well as law. (See: Uttarakhand Purv Sainik Kalyan Nigam Limited. v. Northern Coal Field Limited. 2, Bhaven Construction Through Authorised Signatory Premjibhai K. Shah v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. and Another 3 and Rashtriya Ispat Nigam Limited v. Dewan Chand Ram Saran 4 ).
27. For a better understanding of the role ascribed to courts in reviewing arbitral awards while considering applications filed under Section 34 of the 1996 Act, it would be relevant to refer to a judgment of this Court in Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (NHAI) 5 wherein R.F. Nariman, J. has in clear terms delineated the limited area for judicial interference, taking into account the amendments brought about by the 2015 Amendment Act. The relevant passages of the judgment in Ssangyong (supra) are noted as under: (SCC pp. 16971, paras 34-41) "34. What is clear, therefore, is that the expression "public policy of India", whether contained in Section 34 or in Section 48, would now mean the "fundamental policy of Indian law" as explained in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49:
(2015) 2 SCC (Civ) 204] i.e. the fundamental policy of Indian law would be relegated to "Renusagar"
understanding of this expression. This would necessarily mean that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] expansion has been done away with. In short, Western Geco [ONGC v. Western Geco International Ltd., (2014) ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 11/18 9 SCC 263 : (2014) 5 SCC (Civ) 12], as explained in paras 28 and 29 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as contained in Sections 18 and 34(2) (a)(iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in para 30 of Associate Builders Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204].
35. It is important to notice that the ground for interference insofar as it concerns "interest of India" has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basic notions of morality or justice". This again would be in line with paras 36 to 39 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
36. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49: (2015) 2 SCC (Civ) 204], or secondly, that such award is against basic notions of justice or morality as understood in paras 36 to 39 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204]. Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12], as understood in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], and paras 28 and 29 in particular, is now done away with.
37. Insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2-A), added by the Amendment Act, 2015, to ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 12/18 Section 34. Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within "the fundamental policy of Indian law", namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality.
38. Secondly, it is also made clear that reappreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
39. To elucidate, para 42.1 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Para 42.2 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.
40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204], namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2-A).
41. What is important to note is that a decision which is perverse, as understood in paras 31 and 32 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 :
(2015) 2 SCC (Civ) 204] , while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award which ignores vital evidence in ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 13/18 arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse."
28. This Court has in several other judgments interpreted Section 34 of the 1996 Act to stress on the restraint to be shown by courts while examining the validity of the arbitral awards. The limited grounds available to courts for annulment of arbitral awards are well known to legally trained minds. However, the difficulty arises in applying the well-established principles for interference to the facts of each case that come up before the courts. There is a disturbing tendency of courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases to come to a conclusion that the award needs intervention and thereafter, dubbing the award to be vitiated by either perversity or patent illegality, apart from the other grounds available for annulment of the award. This approach would lead to corrosion of the object of the 1996 Act and the endeavors made to preserve this object, which is minimal judicial interference with arbitral awards. That apart, several judicial pronouncements of this Court would become a dead letter if arbitral awards are set aside by categorizing them as perverse or patently illegal without appreciating the contours of the said expressions.
29. Patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression 'patent illegality'. Likewise, erroneous application of law cannot be categorised as patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression 'patent illegality'. What is prohibited is for courts to re- appreciate evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34(2-A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one, or interprets a clause in the contract in such a manner which no fair-minded or reasonable person would, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not allotted to them. An arbitral award stating no reasons for its findings ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 14/18 would make itself susceptible to challenge on this account. The conclusions of the arbitrator which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set aside on the ground of patent illegality. Also, consideration of documents which are not supplied to the other party is a facet of perversity falling within the expression 'patent illegality'.
30. Section 34 (2) (b) refers to the other grounds on which a court can set aside an arbitral award. If a dispute which is not capable of settlement by arbitration is the subject-matter of the award or if the award is in conflict with public policy of India, the award is liable to be set aside. Explanation (1), amended by the 2015 Amendment Act, clarified the expression 'public policy of India' and its connotations for the purposes of reviewing arbitral awards. It has been made clear that an award would be in conflict with public policy of India only when it is induced or affected by fraud or corruption or is in violation of Section 75 or Section 81 of the 1996 Act, if it is in contravention with the fundamental policy of Indian law or if it is in conflict with the most basic notions of morality or justice.
31. In Ssangyong (supra), this Court held that the meaning of the expression 'fundamental policy of Indian law' would be in accordance with the understanding of this Court in Renusagar Power Co. Ltd. v. General Electric Co. 6 In Renusagar (supra), this Court observed that violation of the Foreign Exchange Regulation Act, 1973, a statute enacted for the 'national economic interest', and disregarding the superior courts in India would be antithetical to the fundamental policy of Indian law. Contravention of a statute not linked to public policy or public interest cannot be a ground to set at naught an arbitral award as being discordant with the fundamental policy of Indian law and neither can it be brought within the confines of 'patent illegality' as discussed above. In other words, contravention of a statute only if it is linked to public policy or public interest is cause for setting aside the award as being at odds with the fundamental policy of Indian law. If an arbitral award shocks the conscience of the court, it can be set aside as being in conflict with the most basic notions of justice. The ground of morality in this context has been interpreted by this Court to encompass awards involving elements of sexual morality, such as prostitution, or awards 6 1994 Supp (1) SCC 644 seeking to validate agreements which are not illegal but would not be enforced given the prevailing mores of the day."
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 15/18
20. In Associate Builders Vs. Delhi Development Authority (2015) 3 SCC 49 , it has been held as under:-
"17. It will be seen that none of the grounds contained in sub- clause 2 (a) deal with the merits of the decision rendered by an arbitral award. It is only when we come to the award being in conflict with the public policy of India that the merits of an arbitral award are to be looked into under certain specified circumstances.
.......33. It must clearly be understood that when a court is applying the "public policy" test to an arbitration award, it does not act as a court of appeal and consequently errors of fact cannot be corrected. A possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to a trained legal mind would not be held to be invalid on this score[1]. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts."
14. A bare reading of Section 34 and the law propounded by the Hon'ble Apex Court makes it crystal clear that the scope of inquiry and the grounds on which an award can be set aside are quite limited. This is because the Arbitrator is a Judge of choice of the parties and his decision, unless there is an error apparent on the face of the award which makes it unsustainable, is not to be set aside even if the court comes to a different conclusion on the same set of facts. The court cannot reappraise the evidence and it is not open to the court to sit in appeal over the conclusion of the arbitrator. It is not open to the court to set aside a finding of fact arrived at by the arbitrator and the only grounds on which the award can be set aside are those mentioned in the Arbitration Act.
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 16/18
15. Where the arbitrator has assigned cogent grounds and sufficient reasons and no error of law or misconduct is borne out, the award will not call for interference by the court in exercise of the power vested in it.
16. Interference with an arbitral award is permissible only when findings of the arbitrator are arbitrary, capricious or perverse or when conscience of the Court is shocked or when illegality is not trivial but goes to the root of the matter. Once it is found that the arbitrator's approach is neither arbitrary nor capricious, no interference is called for on facts. The arbitrator is ultimately a master of the quantity and quality of evidence while drawing the arbitral award. Patent illegality must go to the root of matter and cannot be of trivial nature.
17. After going through the award, I find no infirmity whatsoever in the award. Also, the challenge to the award is not even remotely covered within the scope & ambit of section 34 of the Act. The petitioner has failed to demonstrate how the award is in conflict with the public policy of India i.e. same has been obtained by inducement or fraud or corruption or that it is in contravention of the fundamental policy of law or is in conflict with the most basic notions of morality or justice.
18. The approach of the Ld. Arbitrator Tribunal was reasonable and judicious one. It was not even remotely arbitrary or whimsical. There is no violation of statutory provisions or of the decisions of the Hon'ble Apex Court or the Hon'ble High Court. Neither is the award unfair or ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 17/18 unreasonable to the extent that it shocks the conscience of the court. There is no illegality much less patent illegality which goes to the root of the matter. It is not the petitioner's case and otherwise also not borne out from the award that the same is against justice or morality or the interest of India.
19. There is no infirmity, illegality and perversity in the above findings of the Ld. Arbitration Tribunal. Even otherwise, this court cannot substitute its own view/interpretation nor re- appreciate or re-evaluate the evidence.
20. The claim no.1 and 3 were rightly granted to the respondent/ claimant in original by the Ld. Arbitration Tribunal. No ground for interference is thus made out.
21. For the foregoing reasons, the petition is hereby dismissed.
22. The parties are left to bear their own costs.
23. File be consigned to record room after necessary compliance.
Digitally
signed by
MEENU
MEENU KAUSHIK
(Announced in the open Court KAUSHIK Date:
2026.04.16
17:07:20
on 15th April, 2026) +0530
(Meenu Kaushik)
District Judge-03
Patiala House Courts, New Delhi District
New Delhi
ARBTN 2501/17 Union of India Vs. Chenab Const. Joint Venture Pages 18/18