The assessment of damages is within the authority of the arbitrator and the court will not interfere unless it can be objectively demonstrated that the figure arrived at by the arbitrator is palpably erroneous.

SANJIB BANERJEE, J. : –

1. The petitioner seeks to have the principal part of an award set aside on the ground that it is perverse and that the arbitrator has mis-conducted himself and the proceedings in awarding an amount despite recording that there was no evidence to substantiate the extent of loss suffered by the respondent. Under a purchase order of October 12, 1989 the respondent was required to take up the job of fabrication, erection and commissioning of two electrostatic precipitators for the Madhya Pradesh Electricity Board in Korba. It was the respondent-claimant’s case before the arbitrator that despite such contractor having completed all work, the commissioning could not be done on account of default on the part of the petitioner herein. The claimant complained in its statement of claim that it had suffered loss and damage on account of such inordinate delay and sought an amount of Rs.51 lakh on the ground that the petitioner herein could not arrange for the commissioning to be completed despite the claimant being ready and willing to do the same by December, 1992. The contractor said that it had to wait till the middle of 1994 to complete the commissioning work and its men and material were uselessly detained at site when they could have been gainfully engaged elsewhere. The arbitrator considered such claim under issue no. 3. The arbitrator recorded the basis of the claim and concluded, on the basis of the material before him, that the head of claim was justified since the job that remained outstanding was negligible and was equivalent to five per cent of the work assigned to the contractor. The arbitrator found that by July, 1992 the contractor had indicated that it would finish the entirety of the work by December, 1992, but no effective steps were taken for shutting down the plant to enable the new precipitators to be commissioned. The award records that the contractor had to wait at the Korba site needlessly and that it was the petitioner herein who was responsible for the delay.

The arbitrator noticed the claim for the 17 months’ delay made by the contractor at Rs.3 lakh per month and the petitioner’s contention that the contractor was not entitled to such amount and the contractor should have taken appropriate steps for mitigation of damages. After nearly four pages of discussion on such aspect, the arbitrator held as follows:

“I am of the view that the claimant has suffered damages. The claimant has claimed it in particulars specified in the Statement of Claim to justify the damages of Rs.51 lakhs that it has suffered loss on being detained at Korba site cannot be doubted. Its claim of Rs.3,00,000/- per month as the profit per month which it could have earned if it could do similar job is the claimant’s over estimate no doubt. But I am of the view that whether such contract could have been available to the claimant during the period the same value was not a certainty. So, it would not be proper to award the claimant damages for Rs.51 lakhs as claimed by it. However, on considering the case from all its aspects and regard being had to the fact that the claimant was a very efficient and competent contractor and even after the completion of this job the respondent offered it another contract which the claimant, however, did not undertake, the claim of compensation made in this arbitration proceeding is genuine as the claimant suffered loss for being detained for 17 months. However, in the light of the facts and circumstances of the case I award the claimant Rs.25,00,000/- as damages.” (Page 12 of the award)

The petitioner argues that the present challenge to such aspect of the award is not on the basis of any mistake of fact or reasonableness of the reason in support thereof or of inadequate evidence. The petitioner says that the assessment of the quantum of damages is based on no evidence at all and is, as such, perverse. The petitioner concedes that in a matter of such nature there is an element