IN THE HIGH COURT AT CALCUTTA CIVIL APPEALLATE JURISDICTION APPELLATE SIDE FMA 1409 of 2022 With FMA 1419 of 2022 M/S. B.B.M. Enterprise Vs State of West Bengal Before: The Hon’ble Justice Arijit Banerjee &

The Hon’ble Justice Rai Chattopadhyay For the Appellant Mr. Malay Kr. Ghosh, Sr. Adv.

Mr. Aniruddha Mitra, Sr. Adv.

Ms. Nilanjana Adhya, Adv.

For the State Md. T. M. Siddiqui, Sr. Adv., learned AGP.

Mr. Tanay Chakraborty, Adv.

Mr. S. Adak, Adv.

For Judgment 2 4 . 0 7 . 2 0 25 Arijit Banerjee, J. :-

1. These two appeals arise out of the same set of facts. Hence, the appeals have been taken up for hearing together along with the connected applications, by consent of the parties.

In Re: FMA 1409 of 2022

2. FMA 1409 of 2022 is directed against a judgment and order dated August 9, 2019, passed by the learned District Judge, Purba Medinipur in J. Misc Case (Arbitration) no. 68 of 2018 filed by the respondents herein under Section 34 of the Arbitration and Conciliation Act, 1996 (in short “the said Act”) for setting aside the arbitral award dated May 19, 2018, passed by a learned Sole Arbitrator being the Superintendent Engineer, South Western Circle, P.W.D. (Roads), Directorate., to the extent the learned Arbitrator allowed the claim of the appellant herein (hereinafter also referred to as “BBM”).

3. FMA 1419 of 2022 is directed against a judgment and order dated January 4, 2020, passed by the same learned Judge in J Misc. Case no. 69 of 2018, being an application filed by BBM challenging the same arbitral award to the extent the learned Arbitrator rejected some of BBM’s claims. The State’s application for setting aside the arbitral award was allowed by the judgment and order dated August 9, 2019. BBM’s application for setting aside the award was dismissed by the judgment and order dated January 4, 2020.

4. Appearing for BBM, Mr. Malay Kr. Ghosh, learned Senior Counsel, submitted that only one head of claim has been allowed by the Arbitrator in favour of BBM. The Arbitrator came to a finding that the respondents herein wrongfully terminated the contract in question and thereby prevented BBM from completing performance of the contract. Consequently, BBM suffered loss of profit which the Arbitrator assessed at 15 per cent of the value of the unexecuted portion of the work, following the formula adopted by the Hon’ble Supreme Court in the case of A. T. Brij Paul Singh & Ors v. State of Gujarat reported at AIR 1984 SC 1703. Learned Counsel submitted that there was no ground for the learned Judge to set aside the said award to the extent it was in favor of BBM.

5. Learned Senior Counsel then referred to Clauses 2 and 3 of the general conditions of contract. Clause 2 pertains to the quantum of compensation payable by the contractor to the employer when there is delay on the part of the contractor in performing the contract. Clause 3 indicates the measures that the Divisional Officer may adopt if and when the employer becomes entitled to forfeit the whole of the security deposit.

Clauses 2 and 3 are set out hereunder:-

“Clause - 2 The time allowed for carrying out the work as entered in the tender shall be strictly observed by the contractor and shall be reckoned from the date on which the order to commence work is given to the contractor. The work shall be proceeded throughout the stipulated period of the contract with all due diligence, (time being deemed to be of the essence of the contract on the part of the contractor) and the contractor shall pay as compensation an amount equal to one percent or such smaller amount as the Superintending Engineer (whose decision in writing shall be final) may decide, on the amount of the whole work as shown in the tender for everyday delay, and the days for which the work remains uncommenced or unfinished after the proper completion date. The contractors shall commence execution of such part of the work as may be notified to him within…….days from the date of the order of commencement for work, and diligently c