An arbitrator's award may be upheld if it conforms to contract terms, despite challenges regarding procedural compliance or interpretation, provided it does not contravene public policy.

JUDGMENT :

KRISHNA RAO, J.

1. The petitioner, State of West Bengal has filed the present application under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the award passed by the Learned Sole Arbitrator dated 21st August, 2008.

2. The State of West Bengal, through its Superintending Engineer, State Highway Circle No. 1, P.W (Roads) Department issued Notice inviting Tender for the work “Construction of Reinforcement Concrete Viaduct Structures with bored piles foundation and the retaining wall on the eastern side of the proposed road over bridge over the Howrah-Bandel Railway line of the Eastern Railway on replacement of the existing level crossing No. 1/1A at Liluah Howrah under the Howrah Highway Division.”

3. The estimated value of the tender was for Rs.1,97,00,000/- and pursuant to the said tender, the respondent by a letter dated 30th September, 1997, submitted its offer in Parts “A” and “B” with certain conditions. The conditions were not acceptable to the petitioner and accordingly, the respondent by its letter dated 28th October, 1997, withdrew the conditions contained in Part “A” of the letter by reserving its right to go for arbitration in case of any disputes and submitted revised offer at 4.80% above the rate put to the tender and enclosed the bar chart showing the tentative programme for executing the tender work.

4. The Superintending Engineer by a letter dated 3rd December, 1997, had accepted the revised offer of the respondent for a sum of Rs.1,93,46,553/- . As per the letter dated 3rd December, 1997, the time for completion of work was 24 months and the same will be counted on and from 23rd December, 1997.

5. As per Clause 2 of the conditions of contract, the contractor is bound to execute 1/4th of the total work in 1/4th time, 1/2 of the work in ½ of the time, 3/4th of the work before 3/4th of the time and the total work within the total stipulated time and in the event, the contractor failed to execute the work in terms of the General Conditions of Contract, the Superintending Engineer concerned shall penalize the contractor for the remaining work still to be completed during the contract period to the extent of 1% or such smaller amount as he thinks fit.

6. Clause 5 of the contract provides for extension of time by or on behalf of the Superintending Engineer in favour of the respondent for completion of the works of the said contract.

7. As per Clause 12, the Executive Engineer shall have the power to make any alterations, omissions, additions or substitutions of the original specifications, drawings, designs and instructions that may appear to him to be necessary or advisable during the progress of the work and the contractor shall be bound to carry out the work in accordance with any instructions which may be given to the contractor in writing and such alterations shall not invalidate the contract but shall deemed to have been formed as work included in the original tender.

8. As per the request of the respondent, the Executive Engineer has extended the time to complete the work by communications dated 30th December, 1999, 28th June, 2000, 29th December, 2000, 22nd June, 2001 and on 14th September, 2001. On 28th December, 2001, the Executive Engineer of his own and without the request of the respondent had extended the time till 31st March, 2002 for completion of the work by the respondent. On 26th March, 2002, the respondent has again requested for extension of time and by a letter dated 27th March, 2002, time to complete the work