IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION APPELLATE SIDE BEFORE:

The Hon’ble Justice Soumen Sen and The Hon’ble Justice Biswaroop Chowdhury FMA 1144 of 2019 M/s. Beekay Engineering Corporation VS.

Steel Authority of India Ltd.

For the Appellant : Mr. Siddhartha Lahiri, Adv., Mr. Soumya Ganguly, Adv., Mr. Debraj Dutta, Adv.

For the respondent/SAIL : Mr. L.K. Gupta, Sr. Adv.

Mr. Soumik Nandy, Sr. Adv.

Mr. Arjun Roy Mukherjee Ms. Debapriya Mitra Mr. Joydeev Medhi Hearing concluded on : 18th July, 2025 Judgment on : 25th July, 2025 Soumen Sen, J.:-

1. The present appeal arises out of a judgment dated 28th February, 2019 passed by the Learned District Judge, Paschim Bardhaman in Misc (Arbitration) Case No.11 of 2018 whereby the application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) filed by the respondent herein i.e., Steel Authority of India Ltd. (SAIL) was allowed and the Arbitration Award dated 6th November, 2007 was set aside and the case remanded back to the learned Arbitrator.

2. The appellant contractor who was the claimant in the arbitration proceedings is a firm carrying on the business of executing various engineering contract works and maintains labour forces, equipment and establishments for proper execution of works undertaken by it. The respondent SAIL situated at Durgapur was in need of cast iron slag pots and had in furtherance of the same, invited tenders for purchase of ten cast iron slag pots for its twin blast furnace in August, 1991.

3. Pursuant to negotiations by and between the parties, purchase order No. PUR/THF/631.04016 dated 12th December, 1991 was placed by the respondent upon the contractor for manufacture and supply of cast iron slag pots at a total cost of Rs.26,01,000/- (excluding Central Tax and Excise Duty applicable) and to supply them at a total freight of Rs.3,90,000/- on or before 31st March, 1992. There was a delay in supply of slag pots with the contractor starting supply from 30th July, 1992 and the last pot being supplied on 16th November, 1992. Out of the said six pots, five pots having developed cracks and becoming unusable, SAIL demanded the return of price of the defective five pots which the appellant contractor failed to do leading to SAIL withholding the bills of the contractor relating to other contracts amounting to Rs.19,46,242/. Hence, disputes having arisen between the parties the matter was referred to arbitration. The learned Sole Arbitrator Sri. P.L Banerjee passed the Arbitral Award dated 6th November, 2007 on the basis of six heads of claim raised by the contractor as has been reproduced below for convenience. The learned sole arbitrator awarded a total amount of Rs. 87,46,264.71 to be paid by the respondent within a period of six weeks, failing which the respondent would be liable to pay interest at the rate of 18% per annum on the awarded amount from date of Award.

4. Before the arbitrator, the contractor made a total claim of Rs.24,38,359/- pertaining to refund of liquidated damages and including the contractor’s bill under other contracts amounting to Rs.19,46,242/- and interest at the rate of 18% per annum and Rs.1,00,000/- towards costs of arbitration. On the other hand, SAIL made a counter claim for recovery of Rs.5,30,411/- along with interest at the rate of 18% after adjusting the price of five slag pots amounting to Rs.27,13,827/- minus the security deposit and other sums payable to the claimant totaling Rs.21,83,415/-.

5. The learned District Judge in the impugned judgment

has noted the scope of setting aside of an Arbitral Award to be

primarily on four grounds viz fundamental policy of Indian law,

interest of India, justice or morality and patent illegality. The

learned Judge has noted that the fact of the defects which had

developed in five slag pots out of six delivered to it by the contractor and received by SAIL from 30th July, 1992 to 16th November, 1992 was known to SAIL in the month of January