The court emphasized the limited scope of interference with an arbitrator's award and the grounds for setting aside an award under Section 34(2)(b) of the Arbitration and Conciliation Act, 1996.

B. RAJENDRAN, J

1. The present appeal has been filed by the appellant aggrieved by the order dated 24.08.2007 passed by the learned single Judge, dismissing the O.P.No. 660 of 2003 filed by the appellant under Section 34 of the Arbitration and Conciliation Act, 1996.

2. The brief facts of the case is that the first respondent herein was awarded the contract for execution of certain works on the basis of the tender called for by the appellant on 15.03.1989. The first respondent became the highest bidder and his tender was accepted by the appellant on 05.07.1989. An agreement dated 23.10.1989 was entered into between the parties. As per the agreement, the contract work has to be completed within 9 months from the date of handing over the site. According to the appellant, the site was handed over to the first respondent as early as on 24.12.1989 and the work should have been completed on or before 23.09.1990. Since the work was not completed by the first respondent, the period of contract was extended upto 04.04.1993. Even on 04.04.1993, the first respondent did not complete the work and therefore, the contract was terminated on that date. According to the appellant, originally the contract awarded in favour of the first respondent was to construct a building consisting of basement and ground floor, however, that was abandoned and a fresh plan was drawn for constructing ground floor, first and second floor. The first respondent also agreed to construct the building as per the revised plan, in terms of the original agreement dated 23.10.1989. As per the agreement between the parties, steel, cement and other building materials were supplied by the appellant to the first respondent, which were also acknowledged by the first respondent. However, the first respondent, right from the inception, did not adhere to the time schedule and failed to complete the work in time. On account of the lethargic progress of the work in the site, the appellant had to suffer administrative problem, apart from objections raised by the audit. No doubt, there was a delay on the part of the appellant due to the change in the plan. However, the first respondent insisted for payment of enhanced rate for completing the work. In order to avoid any contraversy in future, complications or unavoidable delay in completing the work, the appellant agreed for such enhanced rate insisted by the first respondent on 01.08.1991, which represents 5% increase than the originally agreed rate. Even for putting up construction of second floor, the contract was given to the first respondent to avoid civil dispute raised by the first respondent in C.S. No. 224 of 1992 on the file of this Court. It was further contended by the appellant that an excess amount of Rs.1,38,420.70 was paid to the first respondent. On the contrary, the first respondent filed the claim petition before the learned Arbitrator claiming huge sum of money due and payable by the appellant. In fact, after terminating the contract on 04.04.1993, the appellant called upon the first respondent for taking inventory of the materials on 16.04.1993, but the first respondent did not come forward to take stock of the inventory. Therefore, the appellant had taken the inventory and found that there was a shortage of materials to the tune of Rs.4,47,924/-. Therefore, the appellant would contend that in view of the fact that there was excess payment made by the appellant to the first respondent, besides there was shortage of materials, the first respondent is estopped from making any claim before the arbitrator and the claim petition filed by the first respondent before the learned Arbitrator ought not to have been entertained. Furthermore, the appellant would contend that only 60% of the work was completed by the first respondent, but the first respondent alleged that they have completed 90% of the contract work.

3. Mr. Rajmohan, learned counsel for the appellant would contend that pending arbitration proceeding