JUDGMENT :

Dhananjaya Y. Chandrachud, J.

1. Leave granted.

2. The appeal arises from a judgment of a Single Judge of the High Court of Punjab and Haryana dated 18 May 2016 in FAO 2637 of 2013.

3. By an arbitral award dated 20 December 2005, the sole arbitrator rejected the claims of the first and second respondents¹[hereinafter referred to as the respondents], amounting to Rs 4,88,437 and upheld the action of the appellants of forfeiting the security deposit. The award of the arbitrator was challenged under Section 34 of the Arbitration and Conciliation Act 1996²[“1996 Act”] in Arbitration Case No 17 of 2006 before the District Judge at Chandigarh. By a judgment dated 9 November 2012, the District Judge, finding no substance in the petition under Section 34 of the 1996 Act, rejected it. The judgment of the District Judge was challenged before the High Court in FAO 2637 of 2013 under Section 37 of the 1996 Act. The High Court allowed the appeal, inter alia, on the ground that the award lacked reasons and the reasons which were assigned were arbitrary and erroneous. Having held that the award was liable to be set aside, the High Court decreed the claim of the respondents for the supply o