ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE)

1. The instant Appeal has been filed in the month of August 2023 and has not been argued since then. There are two counsels appearing for the appellant. On the last date fixed, the matter was adjourned on the request of Mr. N. V. Gandhi, one of the learned advocates appearing for the appellant, who has sent a leave note today. Mr. Amit N. Chaudhary, another advocate appearing for the appellant submits that he has no instructions to argue the matter. We do not approve this approach of the learned counsel who has filed the Vakalatnama in the matter and therefore, proceed with the matter.

2. The present First Appeal impugns the judgment and order dated 27.7.2023 passed in Misc. Civil Appeal No.22 of 2018 whereby the award dated 24.3.2018 passed by the learned Sole Arbitrator has been upheld.

3. The relevant facts in the present case are that the Chief Officer of the appellant invited online tenders for the construction work of Protection Wall against Erosion (Gabion Wall) on the bank of Vatrak River Part-1 for 8 & 12 mts. slope. The tender of the respondent came to be accepted and therefore, work order No.899 dated 3.12.2015 came to be issued by the appellant to the respondent. The tender cost of the work was Rs.42,21,366/-. Accordingly, the contract was signed on 3.12.2015 and the stipulated period for completion of the work was 12 months. By mutual consent, the parties decided for resolution of disputes by “Fast Track Procedure” in compliance of Section 29B of the Arbitration and Conciliation Act, 1996 [“Act of

1996” for short]. It was decided that the place of arbitration would be Ahmedabad. That as per the appellant, since the work was not being conducted in a proper manner, notice dated 10.6.2016 came to be issued to the respondent. That thereafter another notice came to be issued on 17.6.2016 stating that the respondent contractor was not doing the work as per the specifications. That thereafter on 26.6.2016, on the basis of Consultant’s report, the appellant asked the respondent contractor to stop the work. That a show-cause notice came to be issued on 7.7.2016 to explain as to why the respondent contractor should not be disqualified. That thereafter on 18.7.2016 the Executive Committee of the appellant Nagarpalika passed a resolution No.55 dated 18.7.2016 to disqualify the present respondent and further decided to award the remaining work of construction of Gabion wall to the second lowest bidder. The said resolution came to be confirmed in the General Board Resolution No.24 dated 28.7.2016. Accordingly, the respondent contractor was disqualified; contract came to be terminated and the work was completed by the second lowest bidder.

3.1 Aggrieved, the respondent raised a dispute and invoked the arbitration clause for resolution of the same. Accordingly, Sole Arbitrator came to be appointed. The respondent submitted its claims for (i) unpaid work bills amounting to Rs.24,25,138/-; (ii) release of security deposit of Rs.2,20,550/-; (iii) loss of profit on unexecuted work amounting to Rs.3,59,245/-; (iv) interest loss of unpaid bills upto the notice stage being Rs.2,21,520/-; and (v) cost of litigation being Rs.3,50,000/-. The respondent also claimed interest at the rate of 18% on the amount awarded till actual date of realization. The appellant herein filed its affidavit- in-reply dated 25.11.2017. Both the parties produced documentary evidence on record in support of their case. The arbitrator by the judgment and award dated 24.3.2018 was pleased to allow the claim of the respondent and accordingly, awarded Rs.35,78,218/- along with interest at the rate of 9% to the respondent.

3.2 Aggrieved, the appellant herein preferred Misc. Civil Appeal No.22 of 2018 before the learned 3rd Additional District Judge, Kheda at Nadiad [“District Court” for short]. By the impugned judgment and order, the learned District Court has rejected the Misc. Civil Appeal under Section 34 o