The limited scope of interference under Section 34 of the A&C Act of 1996 and the requirement for an arbitral award to be suffering from patent illegality for it to be set aside.

JUDGMENT

1. All these appeals have been filed by appellant-non-claimant Union of India through the General Manager North Western Railway, Jaipur (hereafter 'the Northern Railways') invoking the jurisdiction of High Court under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 (hereinafter "the A&C Act of 1996") assailing the order dated 21-11-2016 passed by the Additional District Judge, No.1, Jaipur Metropolitan, Jaipur under Section 34 of the A&C Act of 1996 to set aside the arbitral award dated 17-7- 2010 passed by the Sole Arbitrator in favour of respondent claimant firms (hereafter 'the claimant firms').

Since in all these appeals the impugned order and arbitral awards are verbatim involving common issues, hence, with consent of learned counsel for both parties, these appeals were heard together and would stand decided by this common order. SB Civil Misc. Appeal No.971/2017 is taken as a lead case.

2. Relevant facts which may be recapitulated succinctly are that Northern Railways in the year 1992-93, during undertaking the process of conversion of the Railway track from meter gauge to broad gauge, awarded a contract to claimants for supply and stacking of 21000 cum 65 mm gauge hard stone ballast as per Northern Railway specifications along the track from KM 01 to 15 between stations Merta road to Gotan one Merta Road-Jodhpur section. Pursuant to the agreement, work order dated 29-6-1992 was issued and the contractual work was completed by claimants by 30-6-1993. During progress of the awarded contractual work, concerned officers of Northern Railways after checking quality and quantity of stone ballast made payments to claimants from time to time. After completion of the work, a re-checking was conducted by one K.D. Ralh, Deputy Chief Engineer and his team and it was found that stone ballast supplied was short in supply and was also of inferior quality. Consequently, all security deposits of claimants were forfeited, due payments were freeze and bank accounts were seized as also claimants were declared black-listed.

3. It appears from the record that initially claimants challenged the action of Northern Railways by of filing SB Civil Writ petitions No.5628/1994 and 1497/1994. In both writ petitions, Northern Railways raised objection that the dispute arises out of contractual matter, entailing disputed questions of facts, hence either claimant firms should have approached to Civil Court or they could have invoked arbitration proceedings in view of arbitration clause incorporated in the agreements. Accepting preliminary objections of the Northern Railways, the High Court dismissed writ petitions vide order dated 25-9-2000 leaving open to claimants to avail the alternative remedy.

4. It is worthwhile to mention here that during course of writ petitions, claimants have also approached the Hon'ble Supreme Court feeling aggrieved by an interim order and Hon'ble Supreme Court vide order dated 3-4-1995 modified the interim order issuing directions to Northern Railways to deposit full amount (Rs.70 lacs) in fixed deposit in bank. Said amount was allowed to remain in FDR, while deciding the writ petitions by the High Court.

5. Claimants invoked arbitration clause 64, enshrined in the agreement, and asked the Northern Railways to appoint arbitrator. However, no arbitrator was appointed by the Northern Railways. Hence, claimants approached before the High Court for appointment of Arbitrator under Section 11(6) of the A&C Act of 1996 by filing arbitration application. The High Court turned down objections of the Northern Railways regarding maintainability of arbitration application and vide order dated 1-6-2006 appointed Arbitral Tribunal of the Sole Arbitrator of Justice O.P. Bishnoi (Retired High Court Judge) to adjudicate disputes between parties.

6. Claimants submitted their claim petitions before the Arbitral Tribunal. The Northern Railways submitted reply to claims as also counter claims alleging non performance and faulty