Page 1 IN THE HIGH COURT OF ORISSA AT CUTTACK ARBA No.55 of 2014 (In the matter of an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996) Mahanadi Coal Fields Ltd. & Anr. …. Appellant (s) -versus- Ashish Transport Company Ltd. …. Respondent (s) Advocates appeared in the case through Hybrid Mode: For Appellant (s) : Mr. J. Pattnaik, Sr. Adv. Along with Mr. Rakesh Sharma, Adv. For Respondent (s) : Mr. Durga Prasad Nanda, Sr. Adv. Along with Mr. B.P. Panda, Adv. CORAM: DR. JUSTICE SANJEEB K PANIGRAHI DATE OF HEARING:-07.03.2026 DATE OF JUDGMENT:-15.05.2026 Dr. Sanjeeb K Panigrahi, J. 1. The present Appeal has been preferred seeking setting aside of judgment dated 12.9.2014, passed by the Ld. District Judge, Angul in ARBP No. 8 of 2012 whereby, the Ld. District Judge has allowed the appeal in part. I. FACTUAL MATRIX OF THE CASE: 2. The dispute arises out of a coal transportation contract between Mahanadi Coalfields Limited (MCL) and Ashish Transport Company Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 2 Ltd.. The first agreement was executed on 13.10.1992, pursuant to which the respondent was engaged for transportation of coal from quarry faces and surface stocks to railway sidings and stockyards of MCL, for lead distances up to ten kilometers, as per the applicable rate schedule. The contract was stated to have commenced from 6.12.1991 and was to run till December 1996, covering specified quantities and operational conditions. 3. Upon expiry of the initial contractual period, MCL continued the engagement of the respondent under a subsequent agreement dated 10.1.1998, extending the transportation arrangement for a further period from 6.12.1996 to 5.10.2001, with variations in rates and lead slabs while retaining the essential terms of operation. 4. During this extended period, coal was transported to two railway siding spurs, and routing of loaded and empty trucks was altered in or around 1996 to avoid accidents, resulting in separate paths for inbound and outbound movement, while billing continued on an average lead basis. 5. A Measurement Committee of MCL conducted physical measurement of the routes using steel tape on 1.12.1998, and a map was prepared reflecting the normal route for loaded trucks and an alternative route for empty trucks. The total distance was averaged by dividing by four, and payments continued to be made on the average lead method. Bills were raised by the respondent under the 9–10 km lead slab until completion of work on 5.12.2001, without raising contemporaneous claims under the 10–11 km slab in the running bills. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 3 6. After completion of the contract, disputes were raised by the respondent regarding alleged under-payment of transportation charges for the period March 1996 to 5.12.2001, claiming that the actual lead distance to one of the spur sidings exceeded ten kilometers. The respondent also raised claims towards loss of business, damages, and compensation. As disputes could not be resolved administratively, the respondent approached the Hon’ble High Court of Orissa under Section 11 of the Arbitration and Conciliation Act, 1996, by filing ARBP No.7 of 2003 seeking appointment of an arbitrator. 7. By order dated 11.1.2008, the Hon’ble Chief Justice of this Court appointed Hon’ble Shri Justice D.M. Patnaik (Retd.) as Sole Arbitrator. 8. Pursuant thereto, Arbitration Case No.2 of 2008 was registered before the Ld. Arbitrator. The claimant filed its statement of claim, and MCL filed its written statement contesting the computation of lead distance, the method of billing, and the entitlement to damages beyond contractual rates. Oral and affidavit evidence of witnesses from both sides was recorded during 2008. 9. The Ld. Arbitrator passed the arbitral award on 2.6.2009, allowing the claim towards recalculated lead distance, awarding Rs.55,06,520/- towards transportation charges, interest at 14% per annum from 13.10.1992, damages of Rs.10,00,000/-, and loss of business of Rs.22,00,000/-, along with other consequential reliefs. 10. Aggrieved by the award, MCL filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Ld. District Judge, Dhenkanal, which was registered as ARBP No.167 of 2009. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 4 Subsequently, on administrative transfer, the matter was placed before the Ld. District Judge, Angul and renumbered as Arbitration Case No.8 of 2012. The Ld. District Judge heard the parties, and arguments were concluded on 5.9.2014. 11. Judgment was delivered by the Ld. District Judge, Angul on 12.9.2014, partly allowing the petition. The award was set aside to the extent of granting compensation for loss of business of Rs.22,00,000/-, and interest was modified to run at 14% per annum from March 1996 instead of 13.10.1992, while the award on lead distance and damages was otherwise upheld. Both parties were directed to bear their own costs. 12. Challenging both the arbitral award dated 2.6.2009 and the judgment dated 12.9.2014 to the extent they were sustained, MCL has preferred the present appeal. 13. This Court shall now endeavour to summarise the contentions of the Parties and the broad grounds that have been raised. II. APPELLANT’S SUBMISSIONS: 14. The Ld. Counsel for the Appellants contend that the Ld. Arbitrator travelled far beyond the four corners of the contract, the pleadings, and the evidence by discarding the agreed method of billing on average lead distance, which had been uniformly followed since the inception of the contract in 1992. It is urged that both agreements, dated 13.10.1992 and 10.1.1998, contemplated payment as per lead slabs, and that operational routing between spur sidings was always subject to operational exigencies, wagon placement, and safety Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 5 considerations, none of which altered the contractual basis of payment. The evidence on record, including that of the claimant’s own witness, acknowledged that payments had consistently been made on average basis and that bills were raised and accepted accordingly without protest during the subsistence of the contract. The appellants submit that in such circumstances, the Ld. Arbitrator could not have substituted a different billing methodology on perceived notions of fairness, thereby rewriting the contract between the parties. 15. It is further urged that the finding that Jagannath Railway Siding Spur-I and Spur-II were separate and independent destinations for the purpose of contractual computation is wholly unsupported by pleadings and evidence. The appellants maintain that both spurs formed part of the same siding system, and the choice of spur was dictated by availability at the receiving end, not by any contractual differentiation in lead. Witnesses for MCL deposed that the Measurement Committee had pre-fixed distances and that routing decisions were taken at the siding office depending on operational constraints. Despite noting in the award that average method of calculation had been followed since inception, the Ld. Arbitrator concluded, without evidentiary basis, that such method was adopted to reduce financial burden on the transporter. The appellants submit that this internal contradiction vitiates the award, as it reflects a finding based on conjecture rather than proof. 16. A major plank of challenge is directed against the grant of interest from 13.10.1992, i.e., the very date of execution of the first agreement, Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 6 whereas even the claimant’s own case was that the dispute regarding lead distance arose only from March 1996 onwards, after changes in routing patterns. The appellants submit that there was neither pleading nor evidence of any dispute prior to 1996, and that the Ld. District Judge rightly corrected this manifest error by modifying interest to run from March 1996. However, even this modified grant is assailed on the ground that the claim itself was raised only after completion of the contract in 2001, and there was no justification to impose retrospective financial liability when the claimant had accepted payments and raised bills on average basis throughout the contract period. The award of compound financial burden is thus asserted to be arbitrary and contrary to settled principles governing interest in commercial disputes. 17. The appellants also challenge the grant of damages and compensation on grounds wholly extraneous to the contract, including observations relating to harassment, mental agony, and the status of beneficiaries as war widows. It is submitted that the arbitration was a pure money claim arising from alleged under-billing of transportation charges, and no pleading, issue, or evidence existed regarding breach of contract, loss of reputation, or emotional distress. The appellants argue that the Ld. Arbitrator imported equitable and humanitarian considerations into a strictly contractual dispute, thereby exceeding jurisdiction under the Arbitration and Conciliation Act, 1996. Even though the Ld. District Judge set aside the component of loss of business, the sustenance of Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 7 damages on alleged breach of contract is assailed as legally untenable in absence of foundational pleadings. 18. On the scope of judicial review, the appellants submit that both the award and the impugned judgment suffer from patent illegality and perversity, warranting interference even within the limited contours of Section 37 jurisdiction. It is urged that findings based on no evidence, disregard of admitted contractual practices, internal inconsistencies in reasoning, and grant of reliefs not prayed for or proved, strike at the root of arbitral discipline and contractual certainty. The appellants, therefore, contend that this Court is not being invited to re-appreciate facts, but to correct jurisdictional errors where the Ld. Arbitrator substituted contractual terms with subjective notions of equity, and the court below failed to fully rectify such errors, thereby necessitating appellate interference. III. RESPONDENT’S SUBMISSIONS: 19. Per contra, the counsel for the respondent contends that the real dispute is not about alteration of contractual terms but about correct application of the rate schedule to the actual lead distance travelled by the loaded trucks after operational changes introduced by MCL from 1996 onwards. It is submitted that once routing was changed for safety and traffic management reasons, with loaded trucks being diverted to longer routes and specific spur sidings, the contractual obligation to pay according to lead slabs necessarily followed the actual distance covered. The respondent argues that continued billing on an average basis, despite longer actual leads, resulted in systematic under- Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 8 payment, and that such practice, even if longstanding, cannot override the express rate structure in the agreement which links payment to distance. According to the respondent, the Ld. Arbitrator merely enforced the contract as written, rather than rewriting it. 20. It is further urged that Spur-I and Spur-II, though part of the same railway siding complex, were operationally distinct destinations with different lead distances from the loading point, and that the trucks were directed to a particular spur only after reaching the siding area based on availability. The respondent submits that the measurement map prepared on 1.12.1998 clearly reflected separate routing for loaded and empty trucks and showed that the average method masked higher actual lead for loaded trips. The respondent argues that once actual lead exceeded the threshold slab, the transporter became contractually entitled to higher rates, and that averaging both loaded and empty routes diluted this entitlement. It is therefore contended that the finding of the Ld. Arbitrator on improper averaging was based on physical measurement and operational realities, not on conjecture or sympathy. 21. On the question of acquiescence, the respondent submits that acceptance of payments and submission of running bills during the subsistence of the contract cannot be treated as waiver of contractual rights, particularly when the transporter was dependent on MCL for continued engagement and payment release. It is argued that commercial compulsion and unequal bargaining power prevented immediate escalation of disputes, and that limitation under the Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 9 Arbitration Act permits post-contract adjudication of claims that crystallize upon final accounting. The respondent asserts that the claim raised after completion of the contract in 2001 was within time and legally maintainable, and that silence during performance cannot legalize under-payment where the contract itself prescribes slab-wise rates based on distance. 22. With respect to damages and compensatory relief, the respondent maintains that MCL’s insistence on billing by averaging, despite knowledge of increased actual lead, amounted to breach of contractual payment obligations, justifying compensatory damages. 23. It is submitted that evidence on record showed financial strain on an enterprise composed of ex-servicemen and dependents, and that the Ld. Arbitrator, vested with authority to grant complete relief in a commercial dispute, was entitled to consider the economic consequences of persistent under-payment. While the Ld. District Judge set aside the component relating to loss of business, the respondent supports sustenance of damages connected to breach of payment terms, contending that such relief flows naturally from contractual non- compliance and does not require separate proof of reputational or emotional injury. 24. On the scope of appellate interference, the respondent strongly relies on the limited jurisdiction under Section 37 of the Arbitration and Conciliation Act, 1996, submitting that this Court is not to re-assess evidence or substitute its own interpretation of the contract where two views are possible. It is argued that the Ld. Arbitrator examined Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 10 measurement data, witness testimony, and billing practice before arriving at findings of fact, and that the Ld. District Judge independently reviewed the award and corrected only those portions found unsustainable, while affirming the rest. According to the respondent, the appeal is in substance an attempt to reopen factual determinations and commercial assessment, which is impermissible in appellate arbitration jurisdiction, and therefore the award, as modified by the Ld. District Judge, deserves to be upheld. IV. ISSUE FOR CONSIDERATION 25. Having heard the parties and perused the materials available on record, this court here has identified the following issue to be determined: A. Whether the order of the Ld. District Judge warrants interference keeping in mind the limitations of this court’s powers under Section 37 of the A&C Act? V. ISSUE A: WHETHER THE ORDER OF THE LD. DISTRICT JUDGE WARRANTS INTERFERENCE KEEPING IN MIND THE LIMITATIONS OF THIS COURT’S POWERS UNDER SECTION 37 OF THE A&C ACT? 26. Before going into the merits of the contentions, it is necessary to outline the ambit and scope of Section 37(2)(b) of the 1996 Act. The said section is extracted below: “37. Appealable orders.—(1)[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the court authorised by law to hear appeals from original decrees of the court passing the order, namely: ∗∗∗ Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 11 (2) Appeal shall also lie to a court from an order of the Arbitral Tribunal— (a) accepting the plea referred to in sub-section (2) or sub-section (3) of Section 16; or (b) granting or refusing to grant an interim measure under Section 17.” 27. The Hon’ble Supreme Court and this Court in catena of judgments have held that the powers of appellate court while exercising jurisdiction under Section 37(2)(b) of the 1996 Act against orders passed by the Arbitral Tribunal is very restricted and narrow and the same should be exercised when the orders seems to be perverse, arbitrary and contrary to law. The judgment of Wander Ltd. v. Antox India (P) Ltd.1 passed by the Apex Court, elaborates the ambit and scope of the appeals. Although the aforesaid judgment is not dealing with the arbitration proceedings but the same deals with the power of appellate court in the Civil Procedure Code, 1908 (CPC). Operative paragraphs of the aforesaid judgment are extracted below: “13. On a consideration of the matter, we are afraid, the Appellate Bench fell into error on two important propositions. The first is a misdirection in regard to the very scope and nature of the appeals before it and the limitations on the powers of the appellate court to substitute its own discretion in an appeal preferred against a discretionary order. The second pertains to the infirmities in the ratiocination as to the quality of antox's alleged user of the trade mark on which the passing-off action is founded. We shall deal with these two separately. 14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In such 1 1990 Supp SCC 727 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 12 appeals, the appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by that court was reasonably possible on the material. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion. After referring to these principles Gajendragadkar, J. in Printers (Mysore) (P) Ltd. v. Pothan Joseph (SCC OnLine SC para 9) ‘9. …These principles are well established, but as has been observed by Viscount Simon in Charles Osenton & Co. v. Johnston “the law as to the reversal by a court of appeal of an order made by a Judge below in the exercise of his discretion is well established and any difficulty that arises is due only to the application of well-settled principles in an individual case.”’ The appellate judgment does not seem to defer to this principle.” 28. The said judgment is consistently followed in adjudicating petitions pertaining to the A&C Act by Courts across the Country in Green Infra Wind Energy Ltd. v. Regen Powertech (P) Ltd.2; Sona Corpn. India (P) 2 2018 SCC OnLine Del 8273 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 13 Ltd. v. Ingram Micro India (P) Ltd.3; Manish Aggarwal v. RCI Industries & Technologies Ltd.4; Tahal Consulting Engineers India (P) Ltd. v. Promax Power Ltd.5 and Handicraft & Handlooms Exports Co. of India v. SMC Comtrade Ltd.6. 29. In Reliance Infrastructure Ltd. v. State of Goa7, the Apex Court noticing its previous decision in MMTC Ltd. v. Vedanta Ltd.8 has noted the limited scope of interference under Section 34 and further narrower scope of appeal under Section 37 of the Act particularly when dealing with the concurrent findings of the arbitrator and that of the Court. Relevant paragraph ‘14’ of MMTC Ltd.(supra) as noted in paragraph ‘26’ in Reliance Infrastructure Ltd.(supra) is to be extracted hereinunder:— “14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.” 3 2020 SCC OnLine Del 300 4 (2022) 3 HCC (Del) 289 5 2023 SCC OnLine Del 2069 6 2023 SCC OnLine Del 3981 7 (2024) 1 SCC 479 8 (2019) 4 SCC 163 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 14 30. The same view has been expressed in UHL Power Company Ltd. v. State of Himachal Pradesh9 in paragraph ‘16’ while noticing paragraph ‘11’ in MMTC Ltd.(supra):— “16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed. In MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293], the reasons for vesting such a limited jurisdiction on the High Court in exercise of powers under Section 34 of the ArbitrationAct have been explained in the following words : (SCC pp. 166-67, para 11) “11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the “fundamental policy of Indian law” would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury [Associated Provincial Picture Houses Ltd. v. Wednesbury 9 (2022) 4 SCC 116 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 15 Corpn., [1948] 1 K.B. 223(CA)] reasonableness. Furthermore, “patent illegality” itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.” 31. In Haryana Tourism Ltd. v. Kandhari Beverages Ltd.10 as noted in paragraph ‘30’ in Reliance Infrastructure Ltd.(supra), it was held on the scope of interference under Sections 34 and 37 of the Act' 1996 as under:— “30. In Haryana Tourism [Haryana Tourism Ltd. v. Kandhari Beverages Ltd., (2022) 3 SCC 237 : (2022) 2 SCC (Civ) 87], this Court yet again pointed out the limited scope of interference under Sections 34 and37 of the Act; and disapproved interference by the High Court under Section 37 of the Act while entering into merits of the claim in the following words : (SCC p. 240, paras 8-9) “8. So far as the impugned judgment and order [Kandhari Beverages Ltd. v. Haryana Tourism Ltd., 2018 SCC OnLine P&H 3233] passed by the High Court quashing and setting aside the award and the order passed by the Additional District Judge under Section 34 of the Arbitration Act are concerned, it is required to be noted that in an appeal under Section 37 of the Arbitration Act, the High Court has entered into the merits of the claim, which is not permissible in exercise of powers under Section 37 of the Arbitration Act. 9. As per settled position of law laid down by this Court in a catena of decisions, an award can be set aside only if the award is against the public policy 10 2022) 3 SCC 237 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 16 of India. The award can be set aside under Sections 34/37 of the Arbitration Act, if the award is found to be contrary to : (a) fundamental policy of Indian Law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. None of the aforesaid exceptions shall be applicable to the facts of the case on hand. The High Court has entered into the merits of the claim and has decided the appeal under Section 37 of the Arbitration Act as if the High Court was deciding the appeal against the judgment and decree passed by the learned trial court. Thus, the High Court has exercised the jurisdiction not vested in it under Section 37 of the Arbitration Act. The impugned judgment andorder [Kandhari Beverages Ltd. v. Haryana Tourism Ltd., 2018 SCC OnLine P&H 3233] passed by the High Court is hence not sustainable.” 32. It was, thus, observed in paragraph ‘33’ of Reliance Infrastructure Ltd.(supra) as under:— “33. Keeping in view the aforementioned principles enunciated by this Court with regard to the limited scope of interference in an arbitral award by a Court in the exercise of its jurisdiction under Section34 of the Act, which is all the more circumscribed in an appeal under Section 37, we may examine the rival submissions of the parties in relation to the matters dealt with by the High Court.” 33. It is observed in Punjab State Civil Supplies Corpn. Ltd. v. Sanman Rice Mills11 that: “9. The object of the Act is to provide for a speedy and inexpensive alternative mode of settlement of dispute 11 2024 SCC OnLine SC 2632 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 17 with the minimum of intervention of the courts. Section 5 of the Act is implicit in this regard and prohibits interference by the judicial authority with the arbitration proceedings except where so provided in Part-I of the Act. The judicial interference, if any, is provided inter- alia only by means of Sections 34 and 37 of the Act respectively. 10. Section 34 of the Act provides for getting an arbitral award set aside by moving an application in accordance with sub-Section (2) andsub-Section (3) of Section 34 of the Act which inter-alia provide for the grounds on which an arbitral award is liable to be set aside. One of the main grounds for interference or setting aside an award is where the arbitral award is in conflict with the public policy of India i.e. if the award is induced or affected by fraud or corruption or is in contravention with the fundamental policy of Indian law or it is in conflict with most basic notions of morality and justice. A plain reading of Section 34 reveals that the scope of interference by the court with the arbitral award under Section 34 is very limited and the court is not supposed to travel beyond the aforesaid scope to find out if the award is good or bad. 11. Section 37 of the Act provides for a forum of appeal inter-alia against the order setting aside or refusing to set aside an arbitral award under Section 34 of the Act. The scope of appeal is naturally akin to andlimited to the grounds enumerated under Section 34 of the Act. 12. It is pertinent to note that an arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law that too upon reappraisal of the evidence adduced before the arbitral trial. Even an award which may not be reasonable or is non-speaking to some extent cannot ordinarily be interfered with by the courts. It is also well settled that even if two views are possible there is no scope for the court to reappraise the evidence and to take the different view other than that has been taken by the arbitrator. The Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 18 view taken by the arbitrator is normally acceptable and ought to be allowed to prevail. xxxxxx 14. It is equally settled law that the appellate power under Section 37of the Act is not akin to the normal appellate jurisdiction vested in the civil courts for the reason that the scope of interference of the courts with arbitral proceedings or award is very limited, confined to the ambit of Section 34 of the Act only and even that power cannot be exercised in a casual and a cavalier manner. xxxxxx 16. It is seen that the scope of interference in an appeal under Section37 of the Act is restricted and subject to the same grounds on which an award can be challenged under Section 34 of the Act. In other words, the powers under Section 37 vested in the court of appeal are not beyond the scope of interference provided under Section 34 of the Act.” Here, the Supreme Court has once again reiterated that even an award which may not be reasonable or is nonspeaking to some extent cannot ordinarily be interfered with by the courts. It is also well settled that even if two views are possible there is no scope for the court to reappraise the evidence and to take the different view other than that has been taken by the arbitrator. The view taken by the arbitrator is normally acceptable and ought to be allowed to prevail. 34. In Konkan Railway Corpn. Ltd. v. Chenab Bridge Project12 referring to MMTC Limited (supra) it has been held that: “19….The scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to 12 (2023) 9 SCC 85 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 19 normal appellate jurisdiction. It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the arbitral tribunal…” 35. In Dyna Technology Private Limited v. Crompton Greaves Limited13, the Hon’ble Apex Court observed as under: “24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award 13 (2019) 20 SCC 1 Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 20 portrays perversity unpardonable under Section 34 of the Arbitration Act.” 36. Judicial scrutiny of arbitral awards is stringently limited under Indian law. Section 34 of the Arbitration and Conciliation Act, 1996, provides the exclusive grounds upon which an arbitral award can be challenged. Courts, therefore, are not empowered to interfere merely because another interpretation or outcome may seem more reasonable. The jurisdiction under Section 34 is confined to procedural and legal infirmities such as lack of jurisdiction, violation of natural justice, or patent illegality. Consequently, appellate jurisdiction under Section 37 is even narrower in its scope. Its purpose is to evaluate whether the court adjudicating under Section 34 has remained within the permissible statutory boundaries. The appeal court cannot re-evaluate evidence or reconsider the factual matrix afresh. The statutory framework thus reflects an overarching legislative intent to insulate arbitral decisions from excessive judicial intervention. The entire architecture of Sections 34 and 37 reinforces the finality and autonomy of arbitral proceedings. Arbitration is designed to offer an efficient, expert-led, and expedited alternative to litigation. Courts must therefore resist the temptation to intervene unless the decision by the court under Section 34 itself amounts to a significant transgression of legal boundaries. 37. Judicial restraint under Section 37 also reflects respect for institutional competence of arbitral tribunals in resolving technical and commercial disputes. Courts are cautious not to intrude into operational or industry-specific assessments unless such assessments are manifestly Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 21 disconnected from evidence or contractual terms. Arbitration is valued precisely because it permits specialized adjudication, and appellate courts must avoid substituting judicial perceptions for commercial judgment, unless the latter is demonstrably arbitrary or legally unsound. 38. The balance, therefore, lies between two competing imperatives: preserving arbitral autonomy and ensuring legal accountability. Excessive deference risks validating legally flawed awards, while excessive interference undermines arbitration as an effective dispute resolution mechanism. Section 37 embodies this balance by allowing interference only when legal thresholds are crossed. Courts must carefully calibrate intervention to correct illegality without re-opening factual controversy, thereby preserving both rule of law and arbitral efficiency. 39. Now this Court shall endeavour to answer the main question framed herein. The central issue concerns the method adopted for computation of lead distance after operational changes were introduced from 1996 onwards. The appellants emphasise that billing on average basis had been consistently followed since inception, whereas the respondent asserts that actual lead for loaded trucks increased and that payment should correspond to such increase. The material on record indicates that routing of vehicles was altered for safety and logistical reasons, and that loaded and empty trucks were no longer using identical routes. This factual shift forms the foundation of the dispute and cannot be ignored while examining contractual application. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 22 40. The agreements dated 13.10.1992 and 10.1.1998 link payment to lead slabs based on distance. They do not prescribe any specific formula for averaging different routes. The rate structure is thus inherently distance-sensitive. Evidence before the adjudicating forum included physical measurements conducted on 1.12.1998 and maps reflecting alternative routes for loaded and empty vehicles. Whether averaging could still fairly represent contractual distance after such operational divergence is a matter of factual assessment, and one on which more than one conclusion is reasonably possible. 41. The appellants rely heavily on the fact that bills were raised and paid on average basis without protest during the contract period. However, continued billing practice, while relevant, does not conclusively settle the issue of contractual entitlement if factual conditions affecting lead distance materially changed. The adjudicatory forum was called upon to determine not merely what was done administratively, but whether such practice aligned with the contractual rate mechanism once routing patterns were altered. That inquiry falls squarely within arbitral fact- finding. 42. It is also necessary to distinguish between operational convenience and contractual compliance. Administrative practices may evolve for efficiency, but contractual rates remain tied to agreed parameters. Where distance is the basis of payment, and evidence suggests that actual distance for loaded trips exceeded the threshold slab, reliance on averaging that combines loaded and empty journeys may dilute Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 23 contractual compensation. Whether such dilution occurred, and to what extent, is essentially a technical and factual determination. 43. The contention that Spur-I and Spur-II constitute a single siding for contractual purposes does not, by itself, resolve the dispute. The relevant inquiry is not nomenclature, but whether routing to particular spurs resulted in longer haulage distances. Witness testimony indicated that assignment to spurs depended on availability and that distances to each spur were pre-measured. The issue thus shifts from contractual categorisation to operational distance actually travelled, which again is factual in nature. 44. This Court cannot undertake independent evaluation of such technical evidence. Its function is confined to examining whether the conclusion drawn is unsupported by evidence or based on impermissible considerations. In the present case, measurement records, routing explanations, and admissions regarding operational practices formed part of the evidentiary matrix. The inference drawn therefrom cannot be characterised as one resting on conjecture or extraneous sympathy. 45. The appellants’ argument that long-standing billing practice amounts to contractual modification cannot be accepted as a ground for appellate interference. Modification of contract requires mutual intention and formal variation, not merely continuation of administrative procedure. At most, billing practice constitutes evidence of understanding, which may inform interpretation but does not extinguish contractual rights if factual conditions materially alter. This Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 24 nuanced evaluation of conduct and contract falls within arbitral domain. 46. The scope of appellate interference does not extend to preferring one plausible interpretation over another. Even if the appellants’ construction of the agreement and billing method appears commercially rational, that alone does not justify substitution of the adjudicatory conclusion. The law does not permit appellate courts to reassess technical matters or to choose between competing factual inferences unless the adopted view is wholly untenable. 47. On the question of interest, the Ld. District Judge has already intervened to align accrual with the period when the dispute factually arose, namely from March 1996, instead of from inception of the contract. This modification reflects corrective oversight consistent with Section 34 standards. Beyond this adjustment, the grant of interest follows from the finding of differential payment liability. Interest, being compensatory in nature, cannot be excluded merely because the claim was raised after completion of the contract. 48. The argument that delayed assertion of claims should defeat interest overlooks the distinction between accrual of cause of action and crystallisation of dispute. Commercial claims often surface upon reconciliation of accounts. Absence of contemporaneous protest does not automatically extinguish statutory entitlement to interest where liability is otherwise established. These are matters of commercial adjudication, not grounds for appellate displacement. Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 25 49. With regard to damages, this Court notes that the Ld. District Judge has already curtailed the award by setting aside compensation for loss of business. What remains is compensation linked to breach of payment obligations. While certain observations in the award may reflect contextual background, the operative relief is financial in nature and tied to contractual non-payment. This court’s role is to examine legality of relief, not language of narration. 50. The appellants further contend that the adjudicatory forum exceeded jurisdiction by considering humanitarian aspects of the respondent’s enterprise. While contractual adjudication must remain anchored to legal principles, mere reference to background circumstances does not, by itself, invalidate financial findings based on contractual breach. The decisive factor is whether compensation flows from legal liability, not whether the narrative contains extraneous references. 51. Appellate scrutiny must also respect the principle of severability. Where the court below has already removed unsustainable portions of the award, this court must examine whether the surviving findings can stand independently. In the present case, the modification has addressed the most vulnerable components, namely interest period and loss of business. The remaining components are linked to differential transportation charges and related compensation, which are factually and legally interconnected. 52. The appellants’ grievance, in substance, is that the adjudicatory forum ought to have given primacy to historical billing practice over physical measurement and routing changes. That preference, however, is itself a Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 26 matter of factual judgment. Arbitration law does not permit this Court to recalibrate such preferences unless the adopted approach is legally prohibited, which is not the case here. 53. This court must guard against transforming Section 37 proceedings into re-adjudication of contractual disputes. If every disagreement on commercial interpretation were to invite appellate substitution, arbitration would lose its core value of finality. The statutory framework deliberately limits intervention to exceptional cases of illegality or jurisdictional error, neither of which is demonstrated merely by existence of alternative factual interpretations. 54. The consistency of the adjudicatory reasoning with contractual structure, evidence on routing, and measurement data suffices to place the conclusions within the realm of reasoned adjudication. The law does not demand that arbitral conclusions be the only possible view, but only that they be legally sustainable and factually grounded. That standard is satisfied when conclusions emerge from material on record and not from external considerations. 55. It is also relevant that the adjudicatory process involved full participation of both parties, presentation of documents, examination of witnesses, and reasoned consideration of rival contentions. Procedural fairness has not been shown to be compromised. In absence of procedural impropriety, intervention must remain restrained. 56. The correction already undertaken by the Ld. District Judge demonstrates that judicial oversight has been exercised where warranted. Section 37 review does not operate as an additional Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 27 corrective tier for refining quantification or preferring alternate factual appreciation. Its function is supervisory, not substitutive. 57. Once the award, as modified, remains anchored to contractual rates, operational evidence, and accepted principles of compensation, further displacement would amount to re-entering the merits of the dispute. Such exercise is outside the permissible contours of Section 37. 58. The cumulative effect of the factual findings, contractual framework, and judicial modification below is that the surviving award cannot be characterised as arbitrary, perverse, or legally unsustainable. It reflects one permissible resolution of a commercial dispute arising from altered operational conditions and differing perceptions of contractual application. 59. In these circumstances, interference would require this Court to replace the factual and contractual assessment undertaken in arbitration with its own evaluation, which the statutory scheme expressly discourages. Judicial discipline under Section 37 mandates deference to plausible adjudicatory outcomes, even where competing interpretations exist. 60. The appeal, therefore, does not disclose grounds warranting further intervention beyond the modifications already made by the court below. The surviving findings and reliefs are legally sustainable within the limited scope of appellate scrutiny, and no jurisdictional or patent legal infirmity is made out. VI. CONCLUSION: 61. In view of the foregoing discussion, this Court finds no ground to interfere with the arbitral award dated 2.6.2009, as modified by the Digitally Signed Signed by: BHABAGRAHI JHANKAR Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 21-May-2026 17:57:39 Signature Not Verified Page 28 judgment of the Ld. District Judge, Angul dated 12.09.2014. The conclusions reached fall within the realm of permissible adjudicatory determination based on the contractual framework and the evidence on record, and do not disclose patent illegality, perversity, or jurisdictional excess warranting appellate correction. 62. The appeal, accordingly, stands dismissed. The award, as modified by the Ld. District Judge, Angul, shall remain operative and binding upon the parties and shall be carried into effect in accordance with law. 63. Any interim order passed during pendency of the appeal shall stand vacated. Pending interlocutory applications, if any, shall also stand disposed of. 64. There shall be no order as to costs. (Dr. Sanjeeb K Panigrahi) Judge Orissa High Court, Cuttack, Dated the 15th May, 2026/-