The court reinforced the limited scope of review under Section 34 of the Arbitration Act, emphasizing non-interference with an arbitrator's factual determinations unless procedural flaws or patent illegality are evident.

JUDGMENT :

SUNITA AGARWAL, C.J.

1. The instant appeal under Section 37 of the Arbitration and Conciliation Act, 1996 has been filed by the Rajkot Municipal Corporation challenging the arbitral award dated 21.11.2021, amended award dated 21.03.2022 passed by the learned sole Arbitrator as well as the judgment and order dated 21.02.2023 passed by the learned Commercial Court, Rajkot in the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996 (in short as the "Arbitration Act' 1996") in Civil Miscellaneous Application No. 2 of 2022.

2. The main ground of challenge to the arbitral award is that the learned Arbitrator went beyond the scope of the agreement and committed a gross error of law in holding that the contractor-respondent is entitled to additional amount for the additional constructions made by him. The contention is that the learned Arbitrator has erred in holding that the contractor-claimant has proved that the FSI of 3 was available on the entire plot comprising of Final Plots No. 64-A/SEWS and 64-C/Commercial Sale located at Raiyadhar, near Ramapir Chowki, Town Planning Scheme No.22 Raiya admeasuring 20231 sq. mtrs. and that the appellant, viz. the Corporation is not entitled to recover any amount paid towards the FSI from the claimant.

3. In addition to the above, the claimant was held entitled to payment of an amount of Rs.3,32,11,000/- adjusted by the respondent-appellant herein towards the cost of additional construction of 220 dwelling units. The arbitral Tribunal has further directed the appellant herein to return the cheques deposited by the claimant for a total sum of Rs. 2,89,88,251/- towards paid FSI charges for Plot B 2nd Part to the claimant. It was further held by the learned Arbitator that the appellant Corporation was not justified in demanding betterment charges in respect of the free sale land on the date when such charges were demanded and, therefore, is liable to refund the amount of Rs. 41,92,335/- and Rs.33,19,111/- paid by the claimant towards betterment charges. Thus, it was held that the claimant is entitled to payment of Rs.4,23,25,627.50 towards the cost of additional construction and for issuance of a CSR certificate for a sum of Rs.1,74,82,724/- for the year 2019-2020.

4. Apart from the above, simple interest at the rate of 10% p.a. is to be paid on the amount of refund of paid FSI from the date when such amount was recovered/adjusted till the date of the award. The interest on refund of betterment charge is payable at the rate of 10% p.a. from the date of payment till the date of award. Interest on an amount of Rs.3,32,11,000/- at the rate of 10% p.a. adjusted towards cost of additional construction is payable from the date on which the dwelling units were handed over to the appellant Corporation till the date the amount was adjusted against paid FSI and interest on the balance amount of Rs.91,14,627.50 towards cost of additional compensation at the rate of 10% p.a. from the date of which the dwelling units were handed over to the respondent till the date of award has been accorded by the Tribunal.

5. The main ground of challenge to the arbitral award under Section 34 of the Arbitration Act' 1996 was that the evidence furnished by the appellant Corporation, in defence were not appreciated. The learned Arbitrator has gone beyond the terms and conditions of the contract in payment of the additional amount towards additional