The arbitrator's decision is final and can only be challenged on limited grounds under the Arbitration Act, and the assessment of damages should be supported by evidence and reasoning.

Vinod K.Sharma, J.

1. This revision petition is directed against the order dated 30.5.2009, passed by the learned Courts below, vide which the award passed by the learned arbitrator has been made rule of the court, and the appeal filed against the award also stands dismissed.

2. On petition filed under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as Act), the learned trial Court appointed Justice S.P. Goyal (Retd.) as sole arbitrator, to adjudicate the dispute raised in the petition under Section 20 of the Act.

3. The reference was made to the learned arbitrator. One of the disputes raised was, that the petitioner was not entitled to claim any damages, as there was no termination of contract. The notice issued to the respondent-contractor was only for stopping the work under Clause 2.12 of Section E.1 of the contract agreement.

4. The learned arbitrator, did not agree with this contention, as decision of the Board was placed on record by way of Annexure R-2, wherein the following decision was taken by the Board: -

"It was noted by the Board that most of the machinery intimated by M/s Sutlej Construction Co. Pvt. Ltd. to be brought to work at Power Houses II & III of UBDC stage - II was engaged on various works like Dholba Dam, S.Y.L. Canal, WYC Power Houses, T.T.P.S. (Bihar) etc. and most of the same is hypothecated with those departments. It was further noted that progress of the work where this machinery was lying/working was lagging and therefore it would not be possible for those organizations to spare the machinery in the near future.

It was understood that the financial position of the firm was not good. Inspite of the fact that M/s Sutlej Construction Co. Pvt. Ltd., has already been informed by Chief Engineer/Civil that the Board had not agreed for mobilization advance, the firm was making fresh references, for reconsideration. It was further noted that the firm was not in a mood to settle the previous claim on reasonable terms.

Under the circumstances the Board did not consider advisable to permit M/s Sutlej Construction Co. Pvt. Ltd. to restart the work and further decided that the contract be terminated under the existing terms and conditions of the contract."

5. The learned arbitrator did not accept the plea of the petitioner, that there was no termination of the contract. The only basis for raising the contention that contract was not terminated was, that as the decision of the Board was not conveyed to the contractor, therefore, it could not be said that the contract was terminated.

6. This plea is totally mis-conceived. Once, the decision of the Board was placed on record, it does not lie in the mouth of the petitioner to contend that the contract was not cancelled, merely on the ground that the notice issued was not in terms of the decision taken.

7. The contractor claimed a sum of Rs.74,62,199/- (Rupees Seventy four lac sixty two thousand one hundred and ninety nine only) as damages.

8. The learned arbitrator considered the details given in the claim petition, showing the losses suffered by the contractor on account of machinery. Most of the claims were not accepted, as it was proved, that the contractor had removed the machinery after suspension of work.

9. The learned arbitrator, however, took note of the workers employed, for doing the work. The learned arbitrator also took note of the meeting held between the parties (Annexure P-17), wherein the Board showed its willingness to pay a sum of Rs.2,64,000/- (Rupees two lac and sixty four thousand only) on account of losses suffered for suspension of work.

10. The learned arbitrator recorded a finding that the amount of damages assessed by the petitioner was not adequate, as it did not include the pay of staff and the interest, which the contractor paid on advances, to the banks. On appreciation of pleading and evidence, the learned arbitrator under this head gave Rs.5,00,000/- (Rupees five lac only) as damages.

11. Similarly, other c