IMPORTANT POINT
Appeal against arbitral award has narrow scope.

JUDGMENT

Ritu Bahri, CJ.—The State has come up in both the appeals against the common judgment and order dated 11.05.2022, passed by the Additional District Judge (Commercial) Dehradun, whereby arbitration case No. 96 of 2019 and Arbitration Case No. 97 of 2019, filed by the appellants against the award dated 28.07.2016, passed by the single Arbitrator Mr. M.Z. Haq, in, were rejected. The two appeals before us have arisen out of common judgment and order, therefore, they are being decided together for the sake of brevity and convenience.

2. Brief facts leading to filing of both the appeals are that the appellants instituted aforementioned arbitration cases under Section 34 of the Arbitration and Conciliation Act, 1996 against the award dated 28.07.2016, passed by the single Arbitrator Mr. M.Z. Haq. The contention of the appellants is that the arbitration cases were filed before the Arbitrator on 11.08.2015. Opposite party submitted its written statement and counter-claim on 03.11.2015. The contract in question was executed between the parties for expansion and development of Kotdwar to Haridwar motor road. Opposite party presented a bank guarantee of Rs.20,53,300/-. The work commenced on 24.02.2012 and has to be completed on 31.03.2013. It is contended that the opposite party was handed over the possession of work place, but he failed to bring the resources, labour and machinery on the pretext that work had to be undertaken in forest area, whereas the fact was that necessary permission had already been taken for said work in the forest area. The road was in existence since 1960. Opposite party left the work, and when the payment of his bank guarantee was sought, he instituted a suit under Section 09 of the Arbitration and Conciliation Act. It is also contended that the opposite party had taken back the bank guarantee during pendency of the said suit due to which the appellants had to suffer losses. The appellants had to invite bid afresh and made to pay Rs.426.42 lakhs to the other contractor. It is further contended that the Arbitrator by admitting the claim petitioner and Rs.34,09,920/- for counter-claim of the appellants had passed the award in question.

3. The appellants in their arbitration cases took the ground that the Arbitrator had not framed issues and no conclusion has been drawn in it and as such the appellants had to suffer due to miscarriage of justice. It is also contended that the procedure prescribed on 03.08.2015 had not been complied with; no evidence was there for award on account of overhead expenses; there was no evaluation formula alleged for it. It is alleged that the Arbitrator was negligent for misconduct as violated the public policy, and without appreciating the evidence regarding loss of machinery, had passed the award in question. No evidence was brought on record to show that the contractor ever brought any machinery at the work place, or he was the owner of any machinery and passed the award regarding the loss of working labour. Opposite party had failed to produce any evidence to show that labour had been employed by him at the work place. The Arbitrator had passed the award on account of loss and profit without any evidence. It is alleged that the Arbitrator further had not taken decision that the opposite party had violated the contract, whereas sufficient evidence were available on record in this regard. Lastly, it is contended that there was no reason apparent on record for releasing the bank guarantee, and the interest had been paid without having any jurisdiction to do so. It is further alleged that the award in question is against the law and is contrary to the public policy of India and induced by deceit and is against the moral ethics of substantial principle of justice. Therefore, the award passed in favour of the opposite party is liable to be set aside.

4. The Additional District Judge (Commercial) Dehradun dismissed both the arbitration cases filed by the appellants on the following