The court affirmed that arbitral awards challenging under Sections 34 and 37 are limited in scope, requiring clear evidence of illegality or perversion; otherwise, the Arbitrator's decision stands.

Judgment :

S.K. Panigrahi, J.

1. The present appeals, filed under Section 37 (1)(b) of the Arbitration and Conciliation Act, 1996 (“the Act”), challenge the orders dated 21.11.2013 and 21.02.2015 passed by the Learned District Judge, Ganjam, Berhampur, in ARBA 03 of 2010 and ARBA 02 of 2011, respectively. By these orders, the Learned District Judge dismissed applications filed under Section 34 of the Act seeking to set aside the arbitral awards dated 04.08.2010 (as amended on 13.09.2010) in CA No. CEJZ/GOS/21 and dated 11.12.2010 in No. CEJZ/GOS/40. The appellants contend that the judgments and awards rendered by the Sole Arbitrator are illegal, perverse, vitiated by non-application of mind, and contrary to established principles of law.

I. FACTUAL MATRIX OF THE CASE:

2. The first petition pertains to Agreement No. CEJZ/GOS/21 dated 31.08.2005, executed between the Appellant and the Respondent for a construction project. The contract, valued at Rs. 2,77,24,575.44/-, was entered into by the Chief Engineer, Jabalpur Zone, and M/s. Jai Gopal Dhal & Bros. The scope of work included the construction of a triple-storied Administrative Block, 30 Single Officers’ Accommodation units, and associated facilities. Phase-I of the project was scheduled to be completed within six months, and Phase-II within 18 months, with both phases commencing on 07.09.2005. Phase-I was completed within the stipulated timeframe, while Phase-II was completed on 06.06.2007 after an extension was granted for delays. Both phases were completed and certified without dispute. However, the Respondent initiated arbitration proceedings alleging various financial losses and incomplete payments.

3. The Appellant has challenged the impugned award, alleging various irregularities in the claims made by the Respondent. Consequently, the claims raised by the Appellant have been presented in a detailed and elaborate manner to facilitate a comprehensive adjudication of the issues:

Claim No. 1: The Respondent seeks reimbursement for financial losses and damages suffered due to incomplete measurements and additional items of work executed but not accounted for in the contract’s original scope. The total claim is Rs. 5,81,312.00/-, which includes:

- Claim No. 1(A): The Respondent provided non-skid ceramic tiles at specified locations such as clerks’ rooms, classrooms, and corridors in the administrative building, replacing materials like terrazzo flooring and kota stone specified in the contract. Despite measurements being recorded and partial payments being made in the final bill, a balance amount of Rs. 1,68,795.00/- is claimed.

- Claim No. 1(B): Granite tile flooring was installed in the administrative building’s entrance hall, stair corridor, and flower box, but incorrect measurements led to underpayment. The Respondent claims Rs. 55,848.00/- for this work.

- Claim No. 1(C): An additional interlocking aluminium section grid ceiling with gypsum board was installed in areas outside the contract’s scope. Although Rs. 40,000.00/- was paid initially, the Respondent claims an additional Rs. 76,610.00/- for work completed but not fully compensated.

- Claim No. 1(D): Aluminium sliding glass doors were provided between the entrance and corridor, but contractually due payments were not made in the final bill, leading to a claim of Rs. 40,950.00/-.

- Claim No. 1(E): The Respondent provided a cement concrete road instead of the specified premixed carpet road in front of the main headquarters building. This alteration resulted in a claim of Rs. 40,416.00/-.

- Claim No. 1(F): Earthenware tiles were installed over RCC sloping roofs of variou