The main legal point established in the judgment is that the arbitrator's decision must be in accordance with the terms of the agreement, and failure to do so can result in the decision being set aside.

JUDGMENT

Krishna Rao, J. - The respondent being the owner of the Premises No. 169, Rash Behari Avenue, Kolkata had published a tender notice on 5th September, 1998 for construction of commercial building complex. The petitioner had participated in the said tender by depositing an amount of Rs. 2,00,000/- as an earnest money with the condition that in case the offer of the petitioner is accepted the said amount shall be treated as security deposit. The respondent had accepted the offer of the petitioner on 7th October, 1999 and on 23rd July, 2001 an agreement was entered between the respondent and petitioner for construction of multistoried Air Conditioned Commercial Complex in the aforesaid property. As per the terms and conditions of the contract the petitioner had deposited further amount of Rs. 8,00,000/- as security deposit and the respondent had converted the earnest money of Rs. 2,00,000/-deposited by the petitioner as security deposit and the total security amount would come Rs. 10,00,000/-.

2. As per the terms and conditions of the agreement entered between the parties the respondents shall return 50% of the security amount on completion of the work and the remaining 50% of the amount shall keep the respondent with them for 12 months as security for removal of defects, if any occurred.

3. In terms of the agreement, the petitioner had completed the construction of the Multistoried Air Conditioned Commercial Building Complex consisting of ground plus sixth floor and accordingly, the respondent had provided Completion Certificate to the petitioner on 18th May, 2006.

4. After completion of the construction the Commercial Building, in terms of the agreement, the petitioner had made request to the respondent for refund of the of the security deposit and on receipt of the request of the petitioner, the respondent had directed the petitioner to provide the receipt of the security deposit and accordingly, the petitioner had provided the same to the respondent. Though the petitioner had completed construction work and the respondent had provided completion certificate but the respondent had not refunded the security deposit to the petitioner accordingly, the petitioner had requested for appointment of an Arbitrator in accordance with Clause 29 of the agreement and the Mayor of Calcutta Municipal Corporation was appointed as an Arbitrator.

5. On 13th December, 2012, the Ld. Sole Arbitrator has passed an Award and had rejected the claim of the petitioner.

6. The petitioner being aggrieved with the Award dt. 13th December, 2012 had filed the instant application under Section 34 of the Arbitration and Conciliation Act, 1996.

7. The Counsel for the petitioner submits that the error appearing on the face of record that the petitioner had invoked the provision of arbitration clause of the agreement for refund of Security Deposit of Rs.10,00,000/- along with interest but the Ld. Arbitrator has recorded that the petitioner is claiming refund of 50% of the Security Deposit and it is admitted that 50% of the Security Deposit is already refunded.

8. Ld. Counsel for the petitioner submits that the Award passed by the Ld. Arbitrator is totally contrary to law as in terms of the agreement 50% of the Security Deposit is required to be refunded immediately on completion of the work and in the instant case on completion of work the respondent provided completion certificate but had not returned the 50% of the amount but the Ld. Arbitrator was of the view that 50 % already refunded.

9. Ld. Counsel for the petitioner submits that the finding of the Ld. Arbitrator is based on no evidence as the Ld. Arbitrator held that the petitioner had deviated the plan by constructing stair case instead of ramp but the petitioner has constructed ramp and only after inspection of the building completion certificate was provided to the petitioner.

10. Ld. Counsel submits that the Ld. Sole Arbitrator without any evidence has referred that the commercial complex did not run sa