The court emphasized the need for evidence to support claims and held that an award based on supposition without evidence is not sustainable. It also clarified that claimants are not entitled to payment under certain claims without proper evidence.

AMIT RAWAL, J.

1. The appellant State is aggrieved of the impugned order dated 25.07.2008 whereby the objections filed under Section 34 of the Arbitration and Conciliation Act, 1996 against the Award dated 30.10.2002, has been dismissed.

2. Mr. Chetan Mittal, learned Senior Counsel assisted by Mr. Varun Issar, Advocate submits that the present case pertains to allowing of claim No. 1 and 4 by the Arbitrator to the tune of Rs. 1,82,31,658/- and Rs. 66,01,479/- respectively. A contract for four laning of NH No. 1 (IBRD) LN-3470-IN/CR-2365-In from KM 212.20 to KM 228.00 (Lot PB-1) was awarded to the respondents-Som Datt Builders Limited (hereinafter called claimants before the Arbitrator) on 23.11.1994 and contract agreement was signed between the parties on 4th January 1995.

3. Certain dispute arose between the parties and the matter was referred to the Arbitrator.

4. He submits that in order to appreciate the controversy with regard to eligibility of the respondent for sustaining the claim No. 1, Clause 2.11, dealing with the payment in foreign currencies is to be looked into. He has drawn attention of this Court to the clause 2.11.1 to 2.11.2, which are reproduced here-in-below:-

“2.11.1 The tenderer expecting to incur expenditure in currencies other than Indian Rupees for the inputs to the works supplied from outside the Employer's country and wishing foreign exchange to be paid accordingly, shall specify in Schedule I “Foreign Currency Requirements” of Section VIII in Volume 3 of the Tender Documents, the percentage of the Tender Amount (excluding Provisional Sums, if any) needed by him for payment of such currency requirements either (i) entirely in the currency of tenderer's home currency or at tenderer's option (ii) entirely in US dollars, always provided that a tenderer expecting to incur expenditures in a currency other than those stated in (i) and (ii) above for portions of the foreign currency requirements and wishing to be paid accordingly, shall so indicate the percentage portion of such requirements in the Schedule I of the tender document.

2.11.2. The rates of exchange to be used for currency conversion shall be the selling rate for similar currency transactions published by the Reserve Bank of India on the date 28 (twenty eight) days prior to the latest date for the submission of tender. If the exchange rates are not so published for certain currencies, the tender shall state the rates used and the sources. For the purpose of payments, the exchange rates used for the tender shall apply for the duration of the contract, so that no currency exchange risk is borne by the tenderer.”

5. As per the clauses extracted above, the tenderer expecting to incur expenditure in currencies other than Indian Rupees for the inputs to the works supplied from outside the Employer's country and wishing foreign exchange to be paid, is required to be specified in Schedule 1 of Section VIII in Volume 3 of the Tender Documents, the percentage of the Tender Amount (excluding Provisional Sums, if any) needed by him for payment of such currency requirements either (i) entirely in currency of tenderer's home currency or (ii) entirely in US dollars, provided that a tenderer expecting to incur expenditures in a currency other than those stated in (i) and (ii) above for portions of the foreign currency requirements and wishing to be paid accordingly, shall so indicate the percentage portion of such requirements and the rates of exchange to be used for currency conversion shall be the selling rate. The employer relied upon the Schedule I. The proposed machinery was to be imported from the foreign country in pursuant to the contract but did not place on record any invoice, bill of lading, custom clearance etc. It was only an intention to buy and since the employer had not been able to arrange the foreign currency as per the clause aforementioned, nothing prevented the contractor/tenderer to import the machinery by making the payment of currenc