Delhi High Court
M.L. Mahajan vs Delhi Development Authority And Anr. on 24 April, 2002
Equivalent citations: 2002VAD(DELHI)1034, 2002(3)ARBLR376(DELHI), 99(2002)DLT512, 2002(63)DRJ57
Author: Vikramajit Sen
Bench: Dalveer Bhandari, Vikramajit Sen
JUDGMENT Vikramajit Sen, J.
1. In this appeal M/s. M.L. Mahajan (hereinafter referred as the Contractor) has assailed the judgment of the learned Single Judge dated July 20, 1990 whereby the Award of a sum of Rs. 2,51,600/- in respect of Claim No. 20 (which was for a total sum of Rs. 4,60,000/-) had been set aside. This Claim was lodged on account of the alleged rise in the market price beyond the stipulated date of completion. The Appellant/Contractor has prayed that the Award dated 15.9.87, in respect of Claim No. 20, be made rule of the Court and that interest thereon at the rate of 18% per annum from the date of the Award till the date of the payment be also granted along with costs. The facts in brief are that the Contractor was awarded the work of construction of 40 MIG/LIG and 20 Janta Houses at Dilshad Garden, Group A, Pocket II, Delhi, vide letter dated 25.3.1977. Thereafter an Agreement bearing No. 6/HD/XIX/76-77 dated 31.3.1977 was executed between the parties. The work was to commence on 4.4.1977 and was to be completed by 3.8.1978, i.e. 16 months. As it transpired, the project was completed as late as in August, 1980, i.e. after a delay of approximately 24 months.
2. The Contractor invoked arbitration by his letter dated 29.9.,1982. After one year, the Engineer Member of the DDA appointed Shri R.L. Hans, S.E. DDA, as the Arbitrator who however, resigned in December, 1985. Thereafter, the Engineer Member, DDA, in terms of his letter dated 9.1.1986, appointed Shri G.R. Hingorani, Chief Engineer, DDA, as the Arbitrator and referred to him the 24 Claims raised by the Contractor. The Arbitrator made and published his Award on 15.9.1987. He disallowed the Claims 3,6,7,9 to 18, 21 to 24. In other words, out of 24 Claims only seven were allowed in varying amounts. Under Claim No. 1 an amount of Rs. 54,279/- was awarded, although Rs. 1,20,000/- was claimed; under Claim No. 2, for the release of Bank Guarantee, was allowed; under Clim No. 4 an amount of Rs. 8250/- was awarded against the claim of Rs. 16,500/-; under Claim No. 5, an amount of Rs. 5,380/- was awarded against the claim of Rs. 45,000/-; under Claim No. 8 an amount of Rs. 3,938/- was awarded against Rs. 4000/-; under Claim No. 19 a sum of Rs. 9000/- was awarded for keeping the Bank Guarantee alive beyond the stipulated date of completion. Interest at the rate of 18% was awarded from 29.9.1982 up to the date of payment or decree whichever was earlier. As has already been indicated above, in this Appeal the Contractor has only prayed for the restoration of the sum of Rs. 2,21,600/- awarded in Claim No. 20 i.e. "on account of rise in the market price beyond the stipulated date of completion."
3. The Arbitrator has dealt with Claim No. 20 in the following words:
"Claim No. 20 for Rs. 4,60,000/- on account of rise in market price beyond stipulated date of completion.
The work was started on 4.4.1977 and stipulated date of completion was 3.8.1978. The claimant has stated that the completion was delayed mainly on account of respondents' delays in (a) giving decisions and designs. (b) issuing cement. As regards (a) he referred to Ex. C-18,19,20,21,22,23 and 46 none of which were controverter by the respondent. As regards (b), he referred to Ex. C-24,25,18,26 none of which were controverter. In fact the respondent has admitted (C-27) that materials are being supplied as and when available in D.D.A. Stores.
As the work has been delayed due to defaults of D.D.A. the contractor is entitled to compensation due to rise in prices for which he had claimed 10% extra in 1978 (C-49). He has now claimed 20% extra on the basis of increase in C.P.W.D. cost index of buildings from 100 (1-10-1976) To 157 (On 10.4.1980). The value of work done after 3.8.1978 was as under:
value of work as per 31st bill on 2.8.1980 Rs. 33,02,000/-
Value of work as per
14th bill on 31.8.78 Rs. 11,40,358/-
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Difference: Rs. 21,61,722/-
Work done after 31st bill
as per Claim No. 1) Rs. 54,279/-
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Rs. 22,16,001/-
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From the above it is clear that the Arbitrator's finding was that the delay was due to the default of the DDA. These are findings of fact which would normally not be interfered with by the Court. Objections covering such points are not justiciable. Intervention in post-Award proceedings may be warranted if the error of law or fact is perverse and apparent on the face of the Award, and results in a monumental miscarriage of justice. Having chosen their own forum of adjudication, the parties are left to reap the harvest of the seeds that they have sown. Unless an error in the interpretation of a term in the contract between the parties is manifest merely by looking at that documents, jural interference is uncalled for. In no case is it permissible for the Court to substitute its own view, however compelling, for that preferred by the Arbitrator, even if it is only a plausible one. It is within this very restricted arena that the Court must consider and decide the Objections filed against an Award.
4. The Arbitration Clause in this Contract is reproduced below since its perusal is imperative. Broadly stated, it envisages arbitration on all disputes except where specifically prohibited. Therefore the endeavor must be to strictly construe the Agreement on the issue of exclusion of claims from the arbitral umbrella. The general position finds expression in this Clause 25, and the exception thereto in Clause 10C.
CLAUSE 25: Except where otherwise provided in the contract all questions and dispute relating to the meaning of the specifications, designs drawings and instruction hereinbefore mentioned and as to the quality or workmanship or materials used on the work or as to any other questions claim, right matter or thing whatsoever, in any way arising out of or relating to the contract designs drawings, specifications, estimates, instruction, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the completion or abandonment thereof shall be referred to the sole arbitration of the person appointed by the Engineer Member Delhi Development Authority at the time of dispute. It will be no objection to any such appointment that the arbitrator so appointed is a Delhi Development Authority employee that had to deal with the matters to which the contract relates and that in the course of his duties as Delhi Development Authority employees he had expressed view on all or any of the matters in dispute of difference. the matters in dispute of difference. The arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason, such Engineer Member Delhi Development Authority as aforesaid at the time of such transfer, vacation of office or inability to act shall appoint another person to act as arbitrator in accordance with the terms of the contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor it is also at terms of this contract that no person other than a person appointed by such Engineer Member, Delhi Development Authority as aforesaid should act as arbitrator and, if for any reason that is not possible, the matter is not to be referred to arbitration at all. In all cases where the amount of the claim in dispute is Rs. 50,000/- (Rupees Fifty thousand) and above, the arbitrator will give reason for the award.
Subject as aforesaid the provisions of the Arbitration Act, 1940, or any statutory modification or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under this Clause. It is a term of the contract that the party invoking arbitration shall specify the dispute or disputes to be referred to arbitration under this clause together with the amount or amounts claimed in respect of each such dispute.
It is also a term of the contract that if the contractor(s) does/do not make any demand for arbitration in respect of any claims(s) in writing within 90 days of receiving the intimation from the Engineer-in-Charge that the Bill is ready for payment, the claim(s) of the contractor(s) will be deemed to have been waived and absolutely barred and the Delhi Development Authority shall be discharged and released of all liabilities under the contract in respect of those claims."
5. The Learned Single Judge first dealt with the objection of the DDA that the Arbitrator's conclusion was contrary to Clause 10C of the Contract. It must be immediately clarified that the oft-relied Clause 10CC not incorporated into the standard-form Contract, till that point in time. Clause 10 and 10C read as follows:-
"10. Stores supplied by Delhi Development Authority. If the specifications or schedule or items provided for the use of any special materials to be supplied from Engineer-in-Charge's stores or it is required that the contractor shall use certain stores to be provided by the Engineer-in-Charge as shown in the schedule of materials hereto annexed the contractor shall be bound to procure and shall be supplied such materials and stores as are from time to time required to be used by him for the purposes of the contractor only, and the value of the full quantity of material and stores so supplied at the rates specified in the said schedule of materials may be set off or deducted from any sums then due, or thereafter to become due to the contractor under the contract, or otherwise or against or from the security deposit or the proceeds or sale thereof if the same is held in Government securities. the same or a sufficient portion thereof being in this case sold for the purpose. All materials so supplied to the contractor shall remain the absolute property of Delhi Development Authority and shall not be removed on any account from site of the work, all shall be at all times open to inspection by the Engineer-in-Charge. Any such materials remaining unshed and in perfectly good condition at the time of the completion or termination of the contract as shall be returned to the Engineer-in-Charge at a place directed by him, by a notice in writing under his hand, if he shall so require but the contractor shall not be entitled to return any such materials unless with such consent, and shall have no claim for compensation on account of any such materials so supplied to him as aforesaid not being used by him or for any wastage in or damage to any such materials. Provided that the contractor shall in no case be entitled to any compensation or damages on account of any delay in supply or non supply thereof all or any such materials and stores. Provided further that the contractor shall be bound to execute the entire work if the materials are supplied by the Delhi Development Authority within the scheduled time for completion of the work plus 50 percent thereof (scheduled time plus 6 months if the time of completion of the work exceeds 12 months) but if a part only of the materials has been supplied within the aforesaid period then the contractor shall be bound to do so much of the work as may be possible with the materials and stores supplied in the aforesaid period. For the completion of the rest of the work the contractor shall be entitled to such extension of time as may be determined by the Engineer-in-Charge whose decision in this regard shall be final."
Clause 10C If during the progress of the works, the price of any material incorporated in the works, (not being a material supplied from the Engineer-in-Charge's stores in accordance with Clause 10 hereof) and/or wages of labour increases as direct result of the coming into force of any fresh law, or statutory rule or order (but not due to any changes in sales tax) and such increase exceed ten per cent of the price and/or wages prevailing at the time of receipt of the tender for the work, and contractor thereupon necessarily and properly pays in respect of the material (incorporated in the work) such increased price and/or in respect of labour engaged on the execution of the work such increased wages, then the amount of the contract shall accordingly be varied provided always that any increase so payable is not, in the opinion of the Superintending Engineer (whose decision shall be final and binding) attributable to delay in the execution of the contract within the control of the contractor. Provided, however, no reimbursements shall be made if the increase is not more than 10% of the said prices/wages and if so the reimbursements shall be made only on the excess over 10% and provided further that any such increase shall not be payable if such increase has become operative after the contract or extended date of completion of the work in question.
If during the progress of the works, the price of any material incorporated in the works (not being a material supplied from the Engineer-in-Charge's stores in accordance with Clause 10 hereof) and/or wages of labour is decreased as a direct result of the coming into force of any fresh law or statutory rule or order (but not due to any changes in sales tax) and such decrease exceeds ten per cent of the prices and/or wages prevailing at the time of receipt of the tender for the work, Delhi Development Authority shall in respect of materials incorporated in the work (not being materials supplied from the Engineer-in-Charge's stores in accordance with Clause 10 hereof) and/or labour engaged on the execution of the work after the date of coming into force of such law statutory rule or order be entitled to deduct from the dues of the contractor such amount as shall be equivalent of difference between the prices of materials and/or wages as they prevailed at the time of receipt of tender for the work minus ten per cent thereof and the prices of materials and/or wages of labour on the coming into force of such law, statutory rule or order. The contractor shall for the purpose of this condition keep such books of account and other documents as are necessary to show the amount of any increase claimed or reduction available and shall allow inspection of the same by a duly authorised representative of Delhi Development Authority and further shall, at the request of the Engineer-in-Charge furnish, verified in such a manner as the Engineer-in-Charge may require. Any document, so kept and such other information as the Engineer-in-Charge may require.
The contractor shall, within a reasonable time of his becoming aware of any alteration in the prices of any such materials and/or wages of labour give notice thereof to the Engineer-in-Charge stating that the same is given in pursuance to the condition together with all information relating thereto which he may be in a position to supply.
The Learned Single Judge was in agreement with the Counsel for Contractor that (i) Om Parkash Baldev Krishan, New Delhi v. Union of India and another, AIR 1984 Delhi 342, (2) M/s. Des Raj & Sons v. Union of India, AIR 1984 Delhi 365; and (3) Rawla Construction Co. v. U.O.I., 1982 Rajdhani Law Reporter 20, would indicate that the Objection that damages apart from 10C could not be claimed, was unsustainable. The Learned Judge, however, favored the view that these decisions were incongruous with the Apex Court's opinion in Continental Construction Co. Ltd. v. State of Madhya Pradesh, . He accordingly held that- "Once the parties have agreed that under a particular situation the contractor will not be entitled to claim any damages, then the arbitrator would be misconducting himself, if, contrary to the specific provisions of the contract, any sum is awarded under that head."
6. Before considering the applicability of the Continental Construction's case (supra) to the facts that have presented themselves in this appeal, it would be appropriate to mention two decisions of two coordinate Division Benches of this Court in which the issue dealt with in Rawla Construction's case (supra) were also deliberated on. In both these cases, while declining to grant damages the Bench distinguished the earlier decisions on the grounds that they were rendered in the context of Clause 10C, and that consequent upon the incorporation of Clause 10CC into the Contracts the position had changed drastically. In Delhi Development Authority v. U. Kashyap, 1999(1) Arb. LR 88, the net value of work done after the stipulated date of completion, after deducting the cost of materials supplied by the DDA, was Rs. 52,86,520/-. It was alleged that an effective increase of 18.3% over cost of construction during the stipulated period of completion had occurred. After adjusting the amount allowed to him under Clause 10CC from the total damages computed as Rs. 9,67,433/- the Claimant pressed for the grant of compensation of Rs. 4,82,010. The Award for this sum was set aside. The Bench had considered the previous decisions of this Court in M/s. Metro Electric Co. New Delhi v. DDA, , Rawla Construction Co. v. Union of India, 1982 RLR 20, Hyderabad Municipal Corporation v. M. Krishnaswami Mudaliar and another, , P.M. Puri v. Union of India, 1989 (2) Arb. LR 215, M/s. Uttam Singh Duggal and Co. v. Union of India, 1988 (2) Arb. LR 225, Villayati Ram Mittal v. Union of India, 1986 (1) Arb. LR 328, Himachal Pradesh Nagar Vikas Pradhikaran v. Aggarwal and Co., 1997 (1) Arb. LR 275, Suresh Chander v. DDA., 1997 (1) Arb. LR 536 and also an unreported decision in M/s. Express Engineering & Construction Co. v. Delhi Development Authority, Suit No. 843/91, 2613/91, dated 4.10.1994. The opinion of the Bench in Kashyap's case was that since Clause 10CC of the agreement in that case provided for the escalation in the price of material and labour during the extended period of work as per the formula set out therein, none of these decisions would have any applicability. The Bench was primarily concerned with the legal propriety of the Arbitrator formulating his own formulae for computing damages, and not following the method and manner laid down in Clause 10CC. Kashyap's case (supra) came up for consideration by another Division Bench of this Court in Delhi Development Authority v. S.S. Jetley, 2001 (1) Arb.LR 289 (Delhi) in which the Bench observed that "the respondent had preferred separate claim namely. Claim No. 19 under Clause 10CC of the agreement and there is no dispute that the said claim was entertained and adjudicated upon, keeping in view the provisions of Clause 10CC of the agreement between the parties. The Claim No. 17 is in fact founded on different premise altogether. It was the case of the respondent that because of prolongation of the Contract due to the fault on the part of the appellant, the respondent was made to incur the expenditure on idle labour, staff, machinery centring, shuttering and other ancillary requirements like electricity, water, petroleum, etc. It was the case of the respondent that it was necessary for the respondent to keep regular establishment including graduate engineer at site till the work is completed as required under Clause 36 of the agreement. The Arbitrator found that the respondent had in fact incurred expenditure on the aforesaid grounds and awarded the claim @ Rs. 5,000 per month for the period of delay which was 44 months and on this basis a sum of Rs. 2,20,000 was awarded. It was clear, therefore, that Claim No. 17 was for damages on account of prolongation of Contract inasmuch as respondent was made to incur unnecessary expenditure due to the fault of the appellant in prolonging the Contract. This claim is, therefore, maintainable as per Sections 73 and 74 of the Contract Act which gave entitlement to the respondent to claim damages/loss suffered due to breach of contract by the appellant. The award of Claim No. 17 was, therefore, justified and we see no merit in the aforesaid contention raised by the appellant." We are in respectful agreement with the views of the Division Bench in both Kashyap's case as well as Jetley's case (supra). The result, in so far as the present dispute is concerned, is that Clause 10C does not exhaust all claims, and the Arbitrator's jurisdiction to consider the claims had not been excluded.
7. In Continental Construction Co. ltd's case (supra), the Apex Court considered a number of issues, all of which are not germane to the decision in this appeal. The learned Single Judge has specifically adverted to Clause 3.3.15 which was as under:-
"3.3.15. Clause 15. Time limit for unforeseen claims: under no circumstances whatever shall the contractor be entitled to any compensation from Government on any account unless the contractor shall have submitted claim in writing to the Engineer-in-Charge within one month of the cause of such claim occurring."
8. This Clause is not even remotely in pari materia to Clause 10C. The learned Single Judge thereafter relied on the following extract from the Continental Construction's case (supra) which is, in fact, extracted from the earlier decision of the Hon'ble Supreme Court in Seth Thawardas v. Union of India., :
"If no specific question of law is referred, the decision of the arbitrator on that question is not final however much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. The arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks is just and reasonable. The arbitrator is a tribunal selected by the parties to decide their disputes according to law and so is bound to follow and apply the law; and if he does not he can be set right by the Court provided his error appears on the face of the award. In this case, the contractor having contracted, he cannot go back to the agreement simply because it does not suit him to abide by it. The decision of this Court in M/s Ajopi Parshad v. Union of India may be examined. There it was observed that a contract is not frustrated merely because the circumstances in which the contract was made, altered. The Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. The parties to an executory contract are often faced, in the course of carrying it out, with a turn of event which they did not at all anticipate, a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected abstacle to execution, or the like. There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous."
This question does not directly arise in the present case. However, what is of central relevance is the following passage from the Continental Construction's case (supra).
"In the aforesaid light, we are of the opinion, the High Court was right that the District Judge was entitled to examine the contract in order to find out the legality of the claim of the appellant regarding extra cost towards rise in prices of material and labour. As was pointed out by the learned District Judge clauses 2.16 and 2.4 stipulated that the contractor had to complete the work in spite of rise in prices of materials and also rise in labour charges at the rates stipulated in the contract. There was a clear finding of the arbitrator that the contract was not rendered ineffective in terms of Section 56 of the Act due to abnormal rise in prices of material and labour. This being so and the contractor having completed the work, it was not open to him to claim extra cost towards rise in prices of material and labour. The arbitrator misconducted himself in not deciding this specific objection raised by the State regarding the legality of extra claim of the appellant."
9. A perusal of the paragraph will show that Clause 10C is not an absolute bar on the claims put forward by the Constructer. As this Clause does not contain the peremptory prohibition expressed in Clause 3.3.15 or 2.16 and 2.4 of the contract in Continental Construction's case (supra), interference by the learned Single Judge was not called for. In this analysis the decisions of this Court in afore-mentioned cases of M/s. Metro Electric Co., Rawla Construction Co., etc. would support the impugned Award. A conjoint reading of these two Clauses 10 and 10C is necessary in order to appreciate their true import and intent. Clause 10 deals only with 'Stores supplied by Delhi Development Authority' as is evident from the caption itself. It empowers the DDA to insist upon the use of a particular material to be supplied by it. The Clause then envisages that there are eventualities which may result from the delayed supply by the DDA of such material. Broadly stated what is laid down is that the material must be used as and when supplied. The Contractor is not entitled to insist that the entire supply must be completed by the DDA before commencing its obligations under the Contract. It also clarifies that material supplied by the DDA will always remain its property. What is of great significance is the second proviso inasmuch as it states that the Contractor shall be bound to execute the entire work if the materials are supplied by the DDA within the scheduled time for completion of the work plus 50% thereof; but if a part only of the materials has been supplied within the aforesaid period, then the contractor shall be bound to do so much of the work as may be possible. The understanding between the parties therefore was limited to the period indicated above, and where the maximum period has elapsed, the obligations under this Clause would not remain operative. This factor is of obvious relevance while construing Clause 10C, and in particular the opening parase - "if during the progress of the works....." Thereafter, Clause 10C clarifies that it shall have no applicability on any increase in the price of materials to be supplied by the DDA, which clearly stands to reason, It further stipulates that increases in the price of any material, sourced and paid for by the Contractor, and increases in wages of labour as a direct result coming into force of fresh law which have been actually borne by the Contractor, would be reimbursed. Of course, the increase must be in excess of 10%. The Clause does not exclude or prohibit claims for increase in prices of material and wages of labour after the stipulated period within the work is to be completed. If this is not to be so, the opening words would be rendered wholly otiose. It is, therefore, plainly obvious that where a contract stretches beyond the stipulated period i.e., the schedule time plus 50% thereof, the claim for escalation in prices is not excluded or barred under Clause 10C. We make this observation not so as to lay down the only interpretation that can be given to these Clauses, but rather to outline these possible understanding by the Arbitrator. In consonance with the ratio of Sudersan Trading Co. And Associated Engineering (supra) if any other plausible meaning is preferred by the Arbitrator, he would be free to implement it. In no way therefore, can it be predicated that the Award is legally flawed on the contention that the Arbitrator has misconstrued Clause 10C. The judgments of this Court in which Clause 10C was directly in consideration ought to have been followed by the learned Single Judge. In the Continental Construction's case (supra) the relevant Clauses had a totally distinct intent.
10. What remains to be considered is whether the general legal principles have in any manner precluded the grant of Claim No. 20. It has been universally recognised that standard-form agreement must be strictly construed against the party responsible for drafting it. This is also for the reason that in the preponderance of such compacts a monopoly can be found to exist. Due to an imbalance in the stature and strength of the parties, they are not in pari delicto. In this very appeal it has been submitted on behalf of the Appellant/Contractor that even though the Contractor wanted to put an end to the contract because of the inordinate and extraordinary delay of the DDA, he was prevented from doing so for fear of having his security deposit forfeited. The possibility of such pressures cannot be ignored. It is further contended on behalf of the Contractor that although he did not terminate the contract, he had specifically cautioned the DDA that an extension of the contract would be conditional on his claim for damages. In this context attention has been drawn to the Contractor's letter dated January 16, 1978 in which at the very start "the absolute fiasco on the part of the DDA" was mentioned. It had further been underscored by the Contractor that "the work is in a deplorable state and at present the execution is standing at approximately 25% of the allotted quantum although the period of contract is more than 50% over. In view of the above we reserve our right to claim revision of rates and damages.....". In this last sentence of this letter it has been stated that "in case of failure of the department by the target dates, we should be reimbursed for the extra damages." Thereafter, in his Letter dated 1.8.1978 the Contractor had again spelt out in detail the causes for the delay, all of which were attributable to the DDA. In this sequence of events it cannot be predicated that a simpliciter extension of time had been granted, precluding any claim for damages due to delay. All that can possibly be argued is that the Contractor had not conclusively proved damages. A decision on this point however lies exclusively within the domain of the Arbitrator. His conclusion is a plausible one and is therefore beyond the pale of judicial review. Since an adjudication on this issue does not stand excluded by virtue of Clause 10C including Clause 11 of the Conditions of Contract of M.E.S. Department (Union of India) or any other covenant of the agreement between the parties, the Award cannot be interfered with; the Arbitrator could not be held to have exceeded his jurisdiction. The Contractor had ensured that his case was in consonance with Chapter IV of the Contract Act.
11. We may briefly take up the issue of whether it is open by this Court to interpret the subject Contract in order to ascertain whether the Arbitrator's understanding of the Contract was correct. It has been opined in Sudersan Trading Co. v. The Government of Kerala and Anr., and Associated Engineering Co. v. Government of Andhra Pradesh and Anr., , that the Court may interfere if the Arbitrator's erroneous conclusion is manifestly incorrect by merely looking at the Contract. In other words, the Arbitrator's conclusion is impossible in contra-distinction to implausible. In U.P. Hotels etc. v. U.P. State Electricity Board, , the decision of the Umpire had been challenged in respect of his interpretation of Section 49 of the Electricity (Supply) Act. Even on this aspect, which quite palpably takes on the characteristics of a point of law in contradiction to a point of fact, the Apex Court did not favor jural intervention. It observed that "the view taken by the Umpire on S. 49 was a possible view in the light of the decision of this Court in Indian Aluminium's case. In the premises, a question of law arose certainly during the course of the proceedings. Such a question has been decide by the Umpire on a view which is a possible one to take. Even if there was no specific reference of a question of law referred to the Umpire, there was a question of law involved. Even on the assumption that such a view is not right, the award is not amenable to interference or correction by the courts of law as there is no proposition of law which could be said to be the basis of the award of the Umpire, and which is erroneous. The Arbitrator has not travelled beyond his jurisdiction and the Award cannot be assailed on the strength of the observations in Continental Construction's case and Associated Engineering Co.'s case (supra) and Steel Authority of India Ltd. v. J.C. Budhiraja, and Ch. Ramalinga Reddy v. Superintending Engineer and Anr., 1999 (Suppl) Arbitration Law Reporter, 440 (SC).
12. In our view it cannot possibly be predicated that the Arbitrator's interpretation of the sundry Clauses of the Contract were not plausible. Interference with the Award was the Award was therefore impermissible.
13. In these circumstances, the Appeal is accepted. The sum of Rs. 2,21,600/- allowed by the Arbitration against Claim No. 20 is made rule of the Court.