Under Section 34, courts cannot interfere with arbitral awards based on joint departmental reconciliations and admissions unless patent illegality apparent on award's face; limited to upholding finality and party autonomy.

JUDGMENT :

SANDEEP SHARMA, J.

1. Instant petition filed under Section 34 of Arbitration and Conciliation Act (herein after referred to as the “Act”), lays challenge to award dated 29.5.2023, passed by the learned Arbitrator, awarding therein sum of Rs. 4,97,49,382/- with interest @ 6% per annum w.e.f. 1.4.2022, till the date of payment.

2. Explicitly, facts of the case, relevant for adjudication of the case at hand, as emerge from pleadings adduced on record by the respective parties are that work of construction of Civil Hospital at Rohru (Sh: C/O Building Portion including WS and SI, rain water harvesting tank and septic tank) came to be awarded to the respondent/claimant vide letter dated 5.10.2016 amounting to Rs. 10,73,25,888/- which was to be completed within two years and time was to be reckoned from 15th day of the issuance of letter of award dated 5.10.2016. It is claimed by the respondent/claimant that work was commenced at the site well within time, but since petitioner-department failed to provide hindrance free site and required drawings/designs, delay was caused in completion of the work. Allegedly, petitioner-department failed to supply the requisite material required for the execution of the work, as a result thereof, machinery of the respondent-claimant as well as manpower brought on the site, rendered idle and the work was delayed.

3. Besides above, work of lifts and electrification, which was executed by another contractor, was not completed in time, rendering the infrastructure of the respondent-claimant idle for more than six months. Allegedly, petitioner-department failed to make the timely payments, as a result thereof, work on the site was delayed and prices of material and POL were increased under Clause 10CC of the Contract and respondent-claimant was entitled to price escalation. Since petitioner-department failed to pay price escalation admissible to the respondent-claimant under Clause 10CC, coupled with the fact that GST, which was liable to be reimbursed was not reimbursed, dispute arose inter-se parties, respondent filed Arbitration Case No. 48 of 2021, praying therein for appointment of the Arbitrator. Pursuant to directions issued by this Court in afore case, Mr. Justice Kuldeep Singh Kanwar (Retd.) Judge, came to be appointed as an Arbitrator.

4. Learned Arbitrator on the basis of pleadings as well as evidence adduced on record by the respective parties passed impugned award, thereby awarding amount of Rs. 4,97,49,382/-, along with interest @ 6% p.a. w.e.f. 1.4.2022 till payment in favour of respondent- claimant. Besides above, learned Arbitrator also awarded sum of Rs. 9,54,277/- in favour of the respondent-claimant on account of cost of proceedings. In the afore background, petitioner-department has approached this Court in the instant proceedings, praying therein to set-aside afore award on various grounds.

5. Precisely, the grouse of the petitioner, as has been highlighted in the petition and further canvassed by Mr. Rupinder Singh Thakur, learned Additional Advocate General, is that award passed by the learned Arbitrator is in conflict with basic notion of law and fundamental policy of Indian law and as such, deserves to be set- aside. While making this Court peruse record, learned Additional Advocate General attempted to argue that learned Arbitrator has not properly appreciated the pleadings of the parties and terms of agreement, as a result thereof, learned Arbitrator has wrongly allowed claims No. A, B, C, D