IN THE HIGH COURT AT CALCUTTA CIVIL APPELLATE JURISDICTION (COMMERCIAL DIVISION)

BEFORE:

The Hon’ble Justice Soumen Sen and The Hon’ble Justice Biswaroop Chowdhury FMA 573 of 2024 State of West Bengal & Ors.

Vs.

M/s. S.K. Maji For the Appellants : Mr. Arindam Mondal, Adv., Ms. Srijani Mukherjee. Adv.

For the Respondent. : Mr. Soumik Ganguly, Adv., Mr. Tanmoy Mukherjee, Adv., Mr. Souvik Das, Adv., Ms. Chandana Chakraborty, Adv.

Hearing concluded on : 25th February, 2025 Judgment on : 5th March, 2025 Soumen Sen, J.

1. The present appeal arises out of an impugned judgment and order dated 25th February, 2021 passed by the learned Commercial Court at Asansol under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the said Act’).

2. Shorn of details the facts of the case enumerate that the respondent contractor carries on business under the trade name and style of M/s. S.K. Maji having its principal place of business in Tamluk, Purba Medinipur, executing various engineering works under contract with various departments including the state of West Bengal, which is the appellant herein.

3. The Government of West Bengal through the Superintending Engineer, Public Works Department, Paschim Medinipur published a notice inviting tender being N.I.T. No.15 of 2009-2010 on 24th February, 2010 for construction of District Health Administrative Building at Bankura at an estimated sum of Rs.1,69,25,089/-. Time for submission of tender was fixed on 29th March, 2010. The respondent contractor participated in the said tender and submitted his tender on the same date and within the stipulated time. The tender of the respondent contractor was accepted and the acceptance was communicated by letter dated 29th June, 2010. The contractor was requested to take up work immediately and complete it in conformity with the terms and conditions of the contract within a stipulated period of 18 months with effect from 6th July, 2010 i.e. within 5th June, 2012. The aforementioned memo dated 29th June, 2010 was treated as a formal work order and the contractor was directed to proceed with the work only after having conducted from assessment and pre-determination of the tender quantity and was also allowed to visit the site of work.

4. Disputes having arisen between the parties, by letter dated 13th January, 2014 the executive engineer terminated the work order and the tender was rescinded under Clause 3(a) of the agreement no.02 of 2010 and 2011. Subsequently, the respondent contractor invoked arbitration for settling of such disputes between the parties. Shri Tapan Kumar Roy Chowdhury, Superintending Engineer was appointed as the sole arbitrator in this matter and he passed the arbitral award dated 3rd July, 2017 as follows in respect of the 9 claims of the claimant/respondent:

5. In the impugned judgement and order dated 25th February, 2021 passed by the learned Commercial Court, the learned Judge found no reason for interference with the findings of the learned arbitrator for Claim Nos. 1 to 7 and 9 but set aside the Claim no.8 relating to payments towards labour force and establishment during the stoppage of work for which the claimant had claimed a sum of Rs.15,17,750/-. Considering the fact that the arbitrator had allowed this claim with reference to the prevailing labour wages during stoppage of work and awarded Rs.5,11,000/- even after noting that the contractor had not submitted any document being the labour licence from the labour department in terms of the contract during the arbitral process, the learned judge held that the actual loss suffered by the contractor in this regard could not have been ascertained in the absence of the requisite documents. The learned Commercial Court held that in the present facts and circumstances awarding this amount tantamounted to wandering outside the terms of the contract and awarding such sum in convention thereof had shocked the conscience of the court and hence the award on such ground w