The court emphasized the importance of upholding the terms of the contract and the usages of the trade applicable to the transaction, as well as the liability of individual partners in a partnership concern.

( 1 ) THIS Appeal is directed against the Judgment of the learned Single judge dated 28. 11. 2005 dismissing the Objections filed by the Appellant under section 34 read with Section 16 (6), 28 (1) (a) and 31 (3) of the Arbitration and conciliation Act, 1996 (hereinafter referred to as the 'act' for short) for setting aside the Arbitral Award dated 5. 12. 2002 passed by the Sole Arbitrator. The learned Single Judge has recorded the argument of the Appellant, predicated on Oil and Natural Gas Corporation Ltd.-vs- Saw Pipes Ltd. , AIR 2003 SC 2629, that the Award is patently illegal and, therefore, deserves to be set aside. The learned Single Judge has also noted that it was a detailed and reasoned Award that was under challenge. The Petitioner's attempt to take the learned Single judge through the complete records in an effort to reappraise the material including the evidence on the record of the Arbitral Tribunal was rejected, as being clearly impermissible in view of the provisions of Section 34 of the Act. The scope of Inquiry before us is even more restricted and limited than before the Court dealing with an action under Section 34 of the Act.

( 2 ) LEARNED counsel for the Appellant has relied on Hindustan Zinc Ltd.- vs- M/s. Friends Coal Carbonisation, 2006 (2) R. A. J. 1 (SC) : 2006 (4) JT 392 : 2006 (4) SCC 445 where their Lordships observed that the Supreme Court had made it clear in Saw Pipes Ltd. that it was open to the Court to consider whether an award is contrary to the specific terms of contract since the Award would then be subject to interference on the ground that it was patently illegal and hence opposed to the public policy of India.

( 3 ) LEARNED counsel for the Appellant has also drawn our attention to paragraph 59 of Mcdermott International Inc.-vs- Burn Standard Co. Ltd. , 2006 (2) R. A. J. 661 (SC) which speaks of reasons being the link between the material on which certain conclusions are based. We are satisfied that the award as well as the Judgment of the learned Single Judge do not suffer from this vice and are, therefore, unable to appreciate the relevance of Mcdermott.

( 4 ) LEARNED counsel for the Respondent relied on Bharat Heavy Electricals ltd.-vs- Globe Hi Fabs Ltd. , 116 (2005) DLT 1 (DB ). In that case it was contended that there was a specific bar in the contract against payment of interest to the contractor in view of Clause 3. 3 which stated that - "no interest shall be payable by the employer on earnest money, security deposit or any money due to the contractor by the employer". The Division Bench nevertheless held that the Award granting the interest to the Respondent was not without jurisdiction and the Award was not liable to be set aside on that ground. Our learned Brothers held that a contract did not debar payment of interest illegally withheld by the employer after it became due.

( 5 ) THE Arbitral Tribunal as well as the Court cannot ignore the provisions of Section 28 (3) of the Act which enjoins the Arbitral Tribunal to decide disputes before it in accordance with the terms of the contract, and while doing so to take into account the usages of the trade applicable to the transaction. "it is beyond any cavil that a Bank Guarantee must be construed on its own terms. It is considered to be a separate transaction. " (See State Bank of India -vs- Mula Sahakari Sakhar Karkhana Ltd. , (2006) 6 SCC 293 ). The contention of learned counsel for the Appellant is that it was illegal to invoke the Bank guarantee amounting to Rs. 5 lacs in respect of dues of a third party. A vain endeavour has been made before us, as before both forums below, that the subject engagement was one of a Performance Guarantee. We must record that the learned single Judge, while issuing Notice, had restricted it to Claim Nos. 4 and 5 which concerned the Bank Guarantee of Rs. 5 lacs and the Security Deposit of Rs. 1. 5 lacs. Before us learned counsel for the Appellant stated that he had no q