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2022 Supreme(Chh) 482

IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
Goutam Bhaduri, Radhakishan Agrawal, JJ.
State Of Chhattisgarh - Appellants
Versus
M/s. Learn Nature Consultants Partnership Firm, Through Its Partner Shri Abhisekh Sharma - Respondent
A.R.B.A. No.27 of 2019
Decided On : 13-12-2022

Advocates Appeared:
For the Appellants : Ms. Meena Shastri a/w. Shri Ashutosh Mishra.
For the Respondent: Shri Anup Majumdar a/w Shri Saket Pandey.

Headnote:

Arbitration and Conciliation Act, 1996 - Section 34 - Wild Life (Protection) Act, 1972 - Section 63 - Partnership firm - Agreement - Bid - Appeal is that non-applicant herein M/s. Learn Nature Consultants, which is said to be a consultancy partnership firm, entered into an agreement with department of Forest to develop a World Class Jungle Safari as per Central Zoo Authority (hereinafter referred to as 'CZA') norms and guidelines at Naya Raipur - Consultancy was for preparation of master plan followed by Detailed Project Report (DPR) and supervision for development of Jungle Safari project at Naya Raipur, Chhattisgarh - Non-applicant being successful bidder entered into an agreement vide Ex. P-1 - non-applicant, who filed a petition before sole arbitrator claimed that they have prepared a master plan for Jungle Safari and submitted the copy as per agreement, said master plan was approved by forest department authorities and thereafter was forwarded to CZA - Initially, for such work an amount of Rs.69,07,504/- was raised out of which Rs.66,00,000/- was paid to Learn Nature Consultants - Master plan includes over all layout and location, this was to be followed by Detailed Project Report which includes the minutes and particular of a construction and layout to be carried out for zoo purpose - Whether a breach of contract is a sufficiently substantial cause of the plaintiff's loss – Held, According to claimant without approval of the DPR by CZA, he continued work - As per statement what nature of work was carried out and to what extent, it was not substantiated before Arbitrator - Admittedly, DPR was not sanctioned - So any amount of work if done by claimant it was without any sanction & approval by CZA which otherwise would have entitled claimant to raise bills. Except the oral statement, there is nothing on record as to how department directed the claimant to continue with such work in absence of approval by CZA - State through it's department act in furtherance of any project and are required to follow official communications to adhere - In order to avail damages, claimant was required to lay foundation to reciprocate it with the work done by producing sufficient evidence - In absence thereof award passed by arbitrator would be without evidence and would be within ambit of patent illegality and not mere erroneous application of law to evaluate damages - In view of aforesaid discussions, Court hold that after termination of the contract compensation cannot be claimed as a windfall - Appeal allow.

JUDGMENT :

[Goutam Bhaduri, J]

Heard.

1. The present appeal is against the judgment dated 30.10.2018 passed by the Commercial Court, Raipur, whereby the Court below has affirmed the arbitral award dated 11.12.2017 passed by the sole arbitrator under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act, 1996').

2. The brief facts falls for consideration in this appeal is that the non-applicant herein M/s. Learn Nature Consultants, which is said to be a consultancy partnership firm, entered into an agreement with the department of Forest to develop a World Class Jungle Safari as per the Central Zoo Authority (hereinafter referred to as 'CZA') norms and guidelines at Naya Raipur. The consultancy was for preparation of master plan followed by Detailed Project Report (DPR) and supervision for development of Jungle Safari project at Naya Raipur, Chhattisgarh. The non-applicant being the successful bidder entered into an agreement vide Ex. P-1 on 27.03.2012. The non-applicant, who filed a petition before the sole arbitrator claimed that they have prepared a master plan for Jungle Safari and submitted the copy as per the agreement, the said master plan was approved by the forest department authorities and thereafter was forwarded to CZA. Initially, for such work an amount of Rs.69,07,504/- was raised out of which Rs.66,00,000/- was paid to the Learn Nature Consultants. Thereafter, after approval, the master plan was required to be followed by Detailed Project Report (DPR).

3. Master plan includes the over all layout and the location, thereafter this was to be followed by the Detailed Project Report which includes the minutes and particular of a construction and the layout to be carried out for the zoo purpose. The Learn Nature Consultants as per the requirement contended that they had filed the Detailed Project Report (DPR) which was required to be approved by the CZA and after submission of the Detailed Project Report, since it was to be routed through the forest department they waited for the approval but for some reason or the other no approval was given. Eventually when work was started they raised a bill of Rs.1,32,16,814/- which is a total consultancy fees for preparation of DPR. The same having not been paid and after notice to pay, agreement was eventually terminated by the department, the respondent raised the clause for arbitration, consequent thereof arbitration clause has been invoked.

4. State filed their reply and contended that the claimant failed to submit the necessary layout according to the guidelines of CZA, consequently, after the master plan the subsequent stage of Detailed Project Report was never approved. It further contended that the respondent was given chance to rectify the defect and despite communication when it was not done, the department on its own level got the master plan-Detailed Project Report approved and since the respondent failed to comply the terms of contract, the contract was terminated.

5. On the issues, the parties led their evidence before the sole arbitrator and after evaluating all the facts & evidence, the award was passed in favour of the consultant, which reads as under:-

“E- After considering and appreciating the oral and documentary evidence adduced by both parties the ld. Sole Arbitrator passed an award in favour of the non-applicant, against the applicant Forest Department. The operative para of the impugned award reads as below:-

“(a)The respondent shall make payment of Rs.1,84,76,640/-(Rupees One Crore Eighty Four Lakhs Seventy Six Thousand Six Hundred and Forty) within 3 months from today with interest upon principal sum @ of 12 % per annum from the date of submission of invoice till the date of its payment.

(b) The order dated 27.04.2015 (Exhibit P/28) relating to termination of the contract dated 27.03.2012, between claimant and respondent, p

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