Judicial scrutiny under the Arbitration and Conciliation Act is limited; courts must respect arbitral awards unless proven to violate public policy or statutory obligations, affirming the principle that reappraisal of evidence is impermissible.

Judgment :

Sanjeeb K Panigrahi, J.

1. The present Appeals have been preferred seeking setting aside of judgment dated 23.9.2013, passed by the Ld. District Judge, Ganjam in ARBP No. 1 of 2005 and judgment dated 16.9.2013 passed by the Ld. District Judge, Ganjam in ARBP No.3 of 2005 whereby, the Ld. District Judge has dismissed both the appeals.

2. Since both appeals arise out of arbitral awards relating to contracts executed by the same parties under the Baghua Irrigation Project and involve common questions concerning the scope of interference under Sections 34 and 37 of the Arbitration and Conciliation Act, 1996, they are taken up together and are being disposed of by this common judgment..

I. FACTUAL MATRIX OF THE CASE:

3. In ARBA 12 of 2014

a. In this appeal, the dispute arises out of Agreement No.1 NCB/2001–2002 executed on 27.7.2001 between the Department of Water Resources, Government of Odisha and the respondent, a Super Class Contractor, for excavation and construction of structures of minors and sub-minors off-taking from Baghua Right Branch Canal from RD 13.15 km to 23.425 km and Baghua Right Distributary from RD 23.425 km to about 30.375 km, described as Package No.9. The contract price was Rs.2,17,96,172/- . The date of commencement was 27.7.2001 and the stipulated date of completion was 26.7.2002.

b. According to the respondent, during execution of the work, large portions of the site were not made available. It is stated that initially only about 3.806 km of the site was available, out of which portions were private land, scattered patches, and reserve forest land. It is further stated that additional stretches were later made available but remained fragmented and obstructed by legal and physical constraints, and that objections were raised by private landowners in certain portions. The respondent claims that manpower and machinery had been mobilised but remained idle due to non-availability of continuous workable site.

c. The departmental authorities, on the other hand, treated the delay as attributable to the contractor and proceeded to foreclose the contract. Communications regarding foreclosure and imposition of penalty were issued around 30.10.2003 and 1.11.2003. A proposal for closure of the contract with penalty was approved by the Government and communicated to the Chief Engineer on 4.12.2003. The bank guarantee furnished by the contractor was encashed and final bills were not released according to the respondent.

d. Disputes having arisen, correspondence was exchanged regarding appointment of arbitrator. By letter dated 6.2.2004, the Chief Engineer and Basin Manager appointed Sri Naba Krushna Mohapatra as sole arbitrator. The arbitral proceedings were conducted, during which the claimant filed statement of claims and the respondents filed counter statement, followed by rejoinder.

e. The claimant raised multiple claims including claim towards final bill and deductions, claim towards idle man and machinery, claim towards payment on account of revised minimum wages, claim for refund of encashed bank guarantee, claim towards utilisation of mobilisation advance, and claim for interest on blocked amounts and future interest.

f. The sole arbitrator passed the award on 6.12.2004, allowing the claims towards final bill, idle establishment, revised minimum wages, refund of bank guarantee, mobilisation advance, and interest on blocked amount, and also awarded future interest a