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(iv) As the plans were not sanctioned at the relevant time by statutory authorities; Section 56 of the Contract Act was attracted having regard to the fact that it was commercially incapable of being performed upon passing of the ban order.
(v) An award ignoring material and relevant documents would be rendered illegal and bad in law. As in the case the arbitrators ignored the letter dated 8th December, 1994 of AWHO for regularization of deviations and thus thereby they must be deemed to have admitted that deviations were done by them deliberately to suit their own convenience, and as such the Arbitrators must be held to have misconducted themselves and the proceeding.
(ix) In any view of the matter the learned arbitrator committed a legal misconduct insofar as they applied a wrong principle of law as regard determination of quantum of damages.

In support of the aforementioned contentions, reliance has been placed by Mr. Bhat on Steel Authority of India Ltd. Vs. J.C. Budharaja, Government and Mining Contractor [(1999) 8 SCC 122], Shyama Charan Agarwala & Sons Vs. Union of India [(2002) 6 SCC 201], McGregor on Damages, 16th edition, pages 1142 and 1143 and Mertens Vs. Home Freeholds Co. Ltd. and Others [1921] All E.R. Rep. 372.

The approach to the question by the learned arbitrators was wholly erroneous.

An award made pursuant to an order which has been passed without jurisdiction necessarily must be held to be a nullity. Refusal on the part of the learned arbitrator to consider the effect of clause 130 of the agreement would amount to a legal misconduct. Having regard to the facts and circumstances of the case, as would be discussed in details hereinafter, it was incumbent on the part of the Arbitrators to apply "due diligence" clause contained in clause 129(e), more cautiously. They were further required to consider as to whether "due diligence"

"It was not open to the arbitrator to ignore the said conditions which are binding on the contracting parties. By ignoring the same, he has acted beyond the jurisdiction conferred upon him. It is settled law that the arbitrator derives the authority from the contract and if he acts in manifest disregard of the contract, the award given by him would be an arbitrary one. This deliberate departure from the contract amounts not only to manifest disregard of the authority or misconduct on his part, but it may tantamount to mala fide action."