2025:HHC:25333 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CARBC No.47 of 2025 Reserved on:17.07.2025 Decided on: 30.07.2025 The State of Himachal Pradesh & others … Petitioners Versus Mohinder Singh …. Respondent. Coram Hon’ble Mr. Justice Ajay Mohan Goel, Judge. Whether approved for reporting?1 ____________________________________________________ _ For the petitioners : Mr. Rupinder Thakur, Additional Advocate General, with Ms. Ayushi Negi, Deputy Advocate General. For the respondent : Mr. J.S. Bhogal, Senior Advocate, with M/s Chander Shekhar Thakur, Vivek Sharma and Srishti Verma, Advocates. Ajay Mohan Goel, Judge (Oral) By way of this petition, filed under Section 34 of the Arbitration and Conciliation Act, 1996, the petitioners have assailed Award dated 19.05.2023, passed by learned Sole Arbitrator, in Arbitration Case No.126 of 2021, titled Mohinder Singh Versus State of Himachal Pradesh & others, in terms whereof, learned Arbitrator passed the following Award in favour of the claimant:- “Thus, while rejecting claim Nos. 2 &3, an award is accordingly passed in total, to the tune of Rs.84,15,899/- (Eighty-four lakhs fifteen thousand eight hundred and ninety-nine only), which shall now be the principal amount adjudged and it shall carry future interest @ 9% p.a. w.e.f. the date of award, i.e., 19-05-2023, till its 1 Whether reporters of the local papers may be allowed to see the judgment? 2 2025:HHC:25333 deposit/realisation, in favour of the claimant and against the respondents, with costs quantified at Rs. 50,000/- (fifty thousand) to be paid by the respondents to the claimant.” 2. Learned Additional Advocate General argued that the Award under challenge is per se bad. He took the Court through the Award as well as other relevant material and submitted that the impugned Award is liable to be set aside, as it is in-conflict with the Public Policy of India. He submitted that the work was awarded to the respondent/contractor on 28.04.2007 and after the award, contractor was requested to accelerate the pace of work vide various letters dated 10.11.2007, 19.11.2007, 08.01.2008, 24.01.2008, 29.02.2008 and 27.04.2008, but the contractor failed to complete the work within the stipulated period i.e. within 12 months (13.05.2008). On account of this slow speed, liquidated damages amounting to Rs.16,12,346 only (5% of awarded amount i.e. Rs.3,22,46,915) were imposed upon the contractor. The contractor was again requested to accelerate the pace of work vide letters dated 07.01.2016, 27.08.2010, 19.12.2011 & 27.08.2010. Again, for the slow speed of the work, Additional liquidated damages amounting to Rs. 8,06,173/- were imposed upon the contractor on 20.04.2012. On 09.10.2012, in the management meeting held in the office of the S.E (Superintending Engineer), the contractor admitted that only 73% work could be completed by him and he assured that remaining 3 2025:HHC:25333 work will be completed by 31.12.2012. On 10.07.2013 the work was inspected by National Quality Monitors (NQMs) and they pointed out various defects and deficiencies and rated overall grading of the executed work as "unsatisfactory" given badly damaged condition of the road in majority of the sections and no rectification of defects. On 26.09.2013, in the management meeting held in the office of S.E., the contractor admitted that work has not been completed till date. The contractor again assured the Department that remaining work will be completed by 31.12.2012. On 24.05.2014 & 05.06.2014, the contractor failed to get extension of the validity of Bank Guarantee and he was requested for the same vide letters of these dates. On 26.09.2014, in the Management meeting held in the office of the SE, HPPWD, Circle Nahan, the contractor assured to furnish performance security and insurance and sought time to complete work by 30.11.2014. Again, an extension was given to him to complete the work. The contractor again failed to rectify the defects and complete the balance work. On 26.02.2015, the recommendations were made for closing of the contract and encashing of his performance guarantee so that the balance work and routine maintenance may be done. On 19.09.2015, TDR No. BU000170079 for Rs 16.40 lakh was encashed and deposited with the Empowered Officer, HPGSDA, Nirman Bhawan Shimla, given the delays and defects in the work of the contractor. Letters and notices 4 2025:HHC:25333 by contract to sought release of payments pertaining in price escalation on 14.09.2016 & 09.12.2018. The work was completed on 19.10.2016, after a prolonged delay of 8 years and 6 months. On 10.11.2016, the Department issued fresh Tenders given the unsatisfactory reports of NQM and various defects and deficiencies. Thereafter, on 04.01.2017, during the meeting held at the office of the Superintending Engineer, Liquidated Damages amounting to Rs 32,34,692 were waived off. In exchange, the contractor agreed to refrain from pursuing any "extra claims" pertaining to price escalation, compensatory events, loss of profit, or prolongation, and further agreed not to initiate any arbitration proceedings in relation to said accord. On 09.07.2020, a legal notice was issued, demanding the release of payment, and on 27.04.2022, an order was issued for the appointment of an Arbitrator and refund of the security deposit. On 05.09.2022, the Objectors filed reply to the rejoinder which was not taken as part of the proceedings. 3. Learned Additional Advocate General contended that learned Arbitrator while passing the impugned Award failed to take into consideration the provisions of the Indian Limitation Act and has returned perverse findings on the issue of limitation. He contended that as the Contractor has failed to complete the work within the period stipulated in the Agreement and erred in not appreciating that except the maintenance part which was to be 5 2025:HHC:25333 completed by 19.10.2016, the other work was liable to be completed by 13.05.2008, i.e. within one year as from the date of the Award Letter, i.e. 28.04.2007 and the claim was time barred. He also argued that learned Arbitrator committed a patent illegality in awarding the price escalation by ignoring that there was no clause of price escalation in the Agreement. He further submitted that this made the Award bad as being against the Fundamental Policy of India and this extremely important aspect of the matter has been ignored by the learned Tribunal while allowing the claim petition. 4. On the other hand, learned Senior Counsel appearing for the respondents submitted that learned Arbitral Tribunal elaborately dealt with the issue of limitation in Paras-20 to 26 of the award while holding that the claims are not barred by limitation. He submitted that though in the meeting held on 04.01.2017, it was recorded that the work was completed within the extended period upto 31.10.2016 and the decision was taken to waive off the liquidated damages imposed on the respondent, no action was taken on said decision. He submitted that the record demonstrates that though the construction was completed by 31.10.2016, the contract also required the respondent to undertake the maintenance for a period of five years, which aspect has been taken note of by the learned Arbitral Tribunal in Para-26 of the award. As such the claim, which was raised vide legal notice dated 09.07.2020 and the request 6 2025:HHC:25333 for arbitration made thereafter before moving application for appointment of an Arbitrator vide Arb. Case 126 of 2021, was within limitation. Learned Senior Counsel referred to Clauses-38 and 50 of the General Conditions of Contract (GCC) and argued that these Clauses provided that the payment of final bill would be made on submission of the contractor's detailed account, which is required to be submitted within 21 days of issue of completion certificate by the Engineer. In this case no completion certificate was issued and in fact vide letters dated 09.08.2017 and 19.08.2017 (filed by the respondent in the Arbitration proceedings as additional documents with letter dated 17.10.2022 as Annexures N II and N III), the Engineer had asked the respondent to complete the work and remove some alleged shortcomings. The letter N III also acknowledged that routine maintenance would be required to be carried out by the respondent till 10.10.2021.He submitted that as limitation was suspended by orders of the Hon'ble Apex Court from 15.03.2020 till 28.02.2022, the claims preferred in August 2020 were well within limitation. He submitted that a perusal of the award would itself show that detailed reasons have been given by the learned Arbitral Tribunal for arriving at the findings recorded in the award and the objection appears to have been taken only for the sake of objection. Learned Senior Counsel submitted that learned Arbitral Tribunal specifically formulated Point No.3 to decide whether the delay in 7 2025:HHC:25333 execution of the work was attributable to the petitioner herein and after considering the pleadings and documents filed by the parties and detailed analysis of the matter from Paras 33 to 50 of the award, a finding of fact has been recorded that the petitioners caused hurdles and compounded the same. As the findings of fact and appreciation of evidence are exclusively within the domain of the Arbitrator, the petitioner herein is not competent to challenge the same in these proceedings and invite this Court to sit in appeal over the findings of fact recorded by the Arbitral Tribunal. Learned Counsel relied upon the law laid down by the Hon’ble Apex Court in the case of UHL Power Co. Vs State of HP (2022-4-SCC-116), Paras 16 to 22. Reference may also be invited to the case of Atlanta Co. Vs Union of India (2022 (3) SCC 739). Qua the plea of a price escalation not being in the contract, learned Senior Counsel submitted that this aspect was considered by the learned Arbitral Tribunal in Paras 53 to 61 and after considering the law laid down by the Hon'ble Apex Court in several decisions the Tribunal has been pleased to allow the claim and the said finding cannot be faulted, as it is in consonance with the law as laid down by the Apex Court and noted by the learned Arbitral Tribunal. Learned Senior Counsel further submitted that even as far as grant of the Award against Claims 4 and 5 is concerned, the Award of the learned Tribunal is in accordance with law and in consonance with the legal position that the learned 8 2025:HHC:25333 Tribunal can Award on the basis of its best judgment, as was also upheld by the Apex Court in the case of P M Paul Vs Union of India 1989 Supp-1-SCC-779. Further plea being taken by the petitioner that the award is against the fundamental policy of Indian law as the respondent had given an undertaking not to raise any claim, is not correct. He submitted that the learned Tribunal also considered this aspect in Para 47 of the award and held that the petitioners herein were in a dominating position and the respondent was at their mercy and succumbed to the pressure of the petitioners and the Tribunal, therefore, held the undertaking to be not absolute, unqualified and reasonable. 5. I have heard learned Additional Advocate General as well as learned Senior Counsel appearing for the respondent and have also carefully gone through the Award under challenge. 6. Before proceeding further, this Court would like to dwell upon the scope of Section 34 of the Arbitration and Conciliation Act in terms of the law declared by the Hon’ble Supreme Court of India. 7. In MMTC Limited Vs. Vedanta Limited, (2019) 4 Supreme Court Cases 163, Hon'ble Supreme Court held that the position is well settled by now that the High Court does not sit in appeal over the arbitral award and may interfere on merits on the limited grounds provided under Section 34 (2) (b) (ii), i.e., if the award is against the Public Policy of India, Hon'ble Supreme Court 9 2025:HHC:25333 held that as per the legal position clarified through decisions of Hon'ble Supreme Court prior to the amendments to the 1996 Act in 2015, a violation of Indian Public Policy, in fact, 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. Hon'ble Supreme Court further held that 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 reasonableness. Hon'ble Court has further held that patent illegality 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. 8. In K. Sugumar and another Versus Hindustan Petroleum Corporation Limited and another, (2020) 12 Supreme Court Cases 539, Hon'ble Supreme Court held that the contours of the powers of the Court under Section 34 of the Act are too well established to require any reiteration and even a bare reading of Section 34 of the Act indicates the highly constricted power of the Civil Court to interfere with an arbitral award. Hon'ble Court has further held that the reason for this is obvious, as when parties have chosen to avail an alternative mechanism for dispute resolution. then they must be left to reconcile themselves to the wisdom of the 10 2025:HHC:25333 decision of the Arbitrator and the role of the Court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by the Arbitrator which can find manifestation in different forms including exercise of legal perversity by the Arbitrator. 9. In Dyna Technologies Private Limited Versus Crompton Greaves Limited, (2019) 20 Supreme Court Cases 1, Hon'ble Supreme Court in Para-24 thereof was pleased to hold 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." 10. Similarly, in Parsa Kente Collieries Limited Vs. Rajasthan Rajya Vidyut Utpadan Nigam Limited. (2019) 7 Supreme 11 2025:HHC:25333 Court Cases 236, Hon'ble Supreme Court has reiterated that construction of the terms of a Contract is primarily for an arbitrator to decide unless the arbitrator construes the Contract in such a way that it could be said to be something that no fair minded or reasonable person could do. Hon'ble Court has also held that an award based on little evidence or no evidence which does not measure up the quality to trained legal mind would not be held to be invalid on this score. 11. In Larsen AIR Conditioning and Refrigeration Company Versus Union of India and Others, (2023) 15 Supreme Court Cases 472, Hon’ ble Supreme Court has been pleased to hold as under:- “15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the tribunal “must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground” [ref: Associate Builders (supra)]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34.” In PSA Sical Terminals Private Limited Versus Board of Trustees of V.O. Chidambranar Port Trust Tuticorin and Others, (2023) 15 Supreme 12 2025:HHC:25333 Court Cases 781, Hon’ble Supreme Court has been pleased to hold as under:- “40. It will thus appear to be a more than settled legal position, that in an application under Section 34, the court is not expected to act as an appellate court and reappreciate the evidence. The scope of interference would be limited to grounds provided under Section 34 of the Arbitration Act. The interference would be so warranted when the award is in violation of “public policy of India”, which has been held to mean “the fundamental policy of Indian law”. A judicial intervention on account of interfering on the merits of the award would not be permissible. However, the principles of natural justice as contained in Section 18 and 34(2)(a)(iii) of the Arbitration Act would continue to be the grounds of challenge of an award. The ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. It is only such arbitral awards that shock the conscience of the court, that can be set aside on the said ground. An award would be set aside on the ground of patent illegality appearing on the face of the award and as such, which goes to the roots of the matter. However, an illegality with regard to a mere erroneous application of law would not be a ground for interference. Equally, reappreciation of evidence would not be permissible on the ground of patent illegality appearing on the face of the award. 41. A decision which is perverse, though would not be a ground for challenge under “public policy of India”, would 13 2025:HHC:25333 certainly amount to a patent illegality appearing on the face of the award. However, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. 42. To understand the test of perversity, it will also be appropriate to refer to paragraph 31 and 32 from the judgment of this Court in Associate Builders (supra), which read thus: “31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where: (i) a finding is based on no evidence, or (ii) an Arbitral Tribunal takes into account something irrelevant to the decision which it arrives at; or (iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse. 32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons [1992 Supp (2) SCC 312], it was held: (SCC p. 317, para 7) “7. … It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring 14 2025:HHC:25333 the blame of being perverse, then, the finding is rendered infirm in law.” In Kuldeep Singh v. Commr. of Police [(1999) 2 SCC 10. 1999 SCC (L&S) 429], it was held: (SCC p. 14, para 10) “10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with.” In Dehli Metro Rail Corporation Limited Versus Delhi Airport Metro Express Private Limited, (2024) 6 Supreme Court Cases 357, Hon’ble Supreme Court has been pleased to hold as under:- “ 34. The contours of the power of the competent court to set aside an award under Section 34 has been explored in several decisions of this Court. In addition to the grounds on which an arbitral award can be assailed laid down in Section 34(2), there is another ground for challenge against domestic awards, such as the award in the present case. Under Section 34(2-A) of the Arbitration Act, a domestic award may be set aside if the Court finds that it is vitiated by ‘patent illegality’ appearing on the face of the award. 35. In Associate Builders vs. Delhi Development Authority22, a two-judge Bench of this Court held that although the interpretation of a contract is exclusively 15 2025:HHC:25333 within the domain of the arbitrator, construction of a contract in a manner that no fair-minded or reasonable person would take, is impermissible. A patent illegality arises where the arbitrator adopts a view which is not a possible view. A view can be regarded as not even a possible view where no reasonable body of persons could possibly have taken it. This Court held with reference to Sections 28(1)(a) and 28(3), that the arbitrator must take into account the terms of the contract and the usages of trade applicable to the transaction. The decision or award should not be perverse or irrational. An award is rendered perverse or irrational where the findings are: (i) based on no evidence; (ii) based on irrelevant material; or (iii) ignores vital evidence. 36. Patent illegality may also arise where the award is in breach of the provisions of the arbitration statute, as when for instance the award contains no reasons at all, so as to be described as unreasoned. 37. A fundamental breach of the principles of natural justice will result in a patent illegality, where for instance the arbitrator has let in evidence behind the back of a party. In the above decision, this Court observed: “31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where: (i) a finding is based on no evidence, or (ii) an Arbitral Tribunal takes into account something irrelevant to the 16 2025:HHC:25333 decision which it arrives at; or (iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse. … 42.2. (b) A contravention of the Arbitration Act itself would be regarded as a patent illegality — for example if an arbitrator gives no reasons for an award in contravention of Section 31(3) of the Act, such award will be liable to be set aside.” 38. In Ssangyong Engineering & Construction Co. Ltd. vs. NHAI 23, a two- judge bench of this Court endorsed the position in Associate Builders (supra), on the scope for interference with domestic awards, even after the 2015 Amendment: “40. The change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 in Associate Builders, namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2-A). 41. … Thus, a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and 17 2025:HHC:25333 liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties, and therefore, would also have to be characterised as perverse.” 39. In essence, the ground of patent illegality is available for setting aside a domestic award, if the decision of the arbitrator is found to be perverse, or so irrational that no reasonable person would have arrived at it; or the construction of the contract is such that no fair or reasonable person would take; or, that the view of the arbitrator is not even a possible view. 24 A ‘finding’ based on no evidence at all or an award which ignores vital evidence in arriving at its decision would be perverse and liable to be set aside under the head of ‘patent illegality’. An award without reasons would suffer from patent illegality. The arbitrator commits a patent illegality by deciding a matter not within his jurisdiction or violating a fundamental principle of natural justice. 12. In the backdrop of said adjudication of the Hon’ble Supreme Court of India, now this Court would dwell into the legality of the Award under challenge. 13. It is evident in terms of the judgments of the Hon’ble Supreme Court of India that as far as the scope of Section 34 of the Arbitration and Conciliation Act is concerned, the Court is to interfere with the domestic Award if the decision of learned 18 2025:HHC:25333 Arbitrator is found to be perverse or is found to be so irrational that no reasonable person would have arrived at it. Hon’ble Supreme Court has also held that an Award without reasons would suffer from patent illegality and an Award passed by learned Arbitrator not within his jurisdiction or violating a fundamental principle of natural justice also suffers from patent illegality. Hon’ble Supreme Court also held that if learned Arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. Hon’ble Supreme Court has also held that the Award is rendered perverse or irrational where the findings are based on no evidence, based on irrelevant material, or ignores vital evidence. Hon’ble Supreme Court has also held that the High Court does not sit in appeal over the Arbitral Award and the reason for this is that when the parties have chosen to avail an alternative mechanism for dispute resolution, then they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the Court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by the arbitrator which can find manifestation in different forms including exercise of legal perversity by the Arbitrator. 14. Coming back to the facts of this case, a perusal of the Award passed by the learned Arbitrator demonstrates that the case 19 2025:HHC:25333 of the claimant before the learned Arbitrator was that the work upgradation of Dadahu to Bacher-Ka- Bag Road from Km 9/500 to 22/630, i.e., SH: Removal of Formation deficiencies C/O X-Drainage work C/O R/wall care of PCC Drain and parapets, MT and sign boards in Km 9/502, 22/330; under package NO: HP-10-108,8 for a sum of Rs. 3,22,46,915/- was awarded to the claimant vide letter dated 28-04-2007, with a stipulated time of 12 months for its completion, to be reckoned after 15 days after the issuance of the Award Letter, and thereafter, maintenance of the road was to commence for five years. According to the claimant the work could not be completed within the agreed period on account of the fault of the Department. Therefore, extensions were granted and the claimant completed the main work to the satisfaction of the respondents on 19.10.2016 within the allowed extension granted by the respondents. Only the maintenance work remained which was yet to start as per the Agreement. However, in between, during the subsistence of the contract and after the completion of the work, the maintenance work was tendered in favor of a third party for one year, disrupting the cash flow and causing hindrance. According to the claimant, the liquidated damages which were imposed by the Department after considering the reasons for delay and representation of the claimant were also waived off. As per the claimant, immediately after the acceptance of his tender for the work 20 2025:HHC:25333 in issue, he arranged all requisite resources in the form of men and machinery. However, the execution of the work got delayed because of the various omissions of the Department, like not handing over the hindrance free site, as at some places widening was involved and the private owners did not allow the contractor to work, the private owners threatened to file suits and issued legal notices and the Department failed to resolve said disputes; damage was also caused by BSNL Department by digging the sides of the road to lay cable in the ongoing work of the claimant and thereby causing delay in execution of the work. It was further the contention of the claimant that despite several communications, the Department remained slow in response, though it accorded extensions, but it also levied liquidated damages. Against the liquidated damages the claimant approached the Department upon considering the report of the Executing as well as Supervising Officers and on perusing the reports of the Subordinate Officers, Chief Engineer, South Zone, Shimla waived off the liquidated damages, but while doing so, said Authority illegally took an undertaking from the claimant that it shall not claim damages/escalation by arbitration or otherwise. It was further the contention of the claimant that as the respondents did not pay the escalation material and wages claimed, he was entitled thereto in terms of the claim led in the petition. It was also the case of the claimant that his FDR Bank Guarantee was not 21 2025:HHC:25333 released and performance securing was also wrongly with him. 15. The stand taken by the Department before the learned Arbitrator was that the cause of delay in the execution of the work was attributable to the claimant. The claimant on account of ill- planning and insufficient staff failed to finish the work within the allotted time period. The Department had to bear the loses on account of poor workmanship of the claimant including that of the laying of the OFC Cable. According to the Department, the work was of upgradation of the existing roads which required no widening and it did not involve the land of the private owners. According to the Department, the claim was time barred and further it was also hit by Clauses 24 and 25 of the Contract Agreement, as no pre- arbitration steps were taken by the claimant. The Department further took the stand that whatever work was executed by the claimant, was of poor quality and the Department denied any liability of payment of escalation charges etc. It reiterated that the work was delayed on account of the fault of the claimant. It further took the stand that extension was granted subject to the condition that no escalation shall be claimed and as according to the Department, nothing as was done by the claimant was due from the Department to the claimant, it prayed for the rejection of the claim petition. 16. Learned Arbitrator framed the following points for 22 2025:HHC:25333 consideration:- “1. Whether the claims put-forth by the claimant were barred by limitation? 2. Whether non preferring the dispute to the empowered officer/ empowered committee, before seeking arbitration was mandatory? 3. Whether the delay, in execution /completion of the awarded work was attributable to the Department, on the grounds alleged by the claimant? 4. Whether the claimant is entitled to the claims preferred before the Tribunal, if yes, to what extent?” 17. While deciding Point No.1 qua limitation, learned Arbitrator held that according to the Department, the tendered work except the maintenance part was completed by the claimant on 19.10.2016, which otherwise was required to be completed within one year of the Award Letter dated 28.04.2007. It was the further the contention of the Department that even if claimant’s contention to the effect that he approached the Department on 09.07.2020 qua his grievance was accepted as it is, even then the claim was time barred having been filed beyond three years even from the said date. Learned Tribunal held that Section 43 of the Arbitration and Reconciliation Act makes the provisions of the Indian Limitation Act, 1963, applicable to the arbitration proceedings. It further held that by virtue of Section 21 of the Act, unless otherwise aggrieved by the party, arbitral proceedings in respect of a particular dispute 23 2025:HHC:25333 commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent. It held that in the present case, the Contract Agreement was still in vogue as after the completion of the main work in the year 2016, the work of yearly maintenance for five years would have ended in the year 2021 and thereafter, the final bill was to be submitted in terms of the Agreement. Learned Arbitrator, further, in Para-23 of the Award held that to decide the point of limitation, certain relevant facts which require consideration, as borne out form the record were as under:- “23. However, to decide the point of limitation some relevant facts, born out from the record, which need to be pointed out, requiring, some considerations, are as follows: a) Indisputably, the claimant contractor, was awarded the tender-work for Rs. 3,22,46,915/- vide letter dated SING, 28-04-2007, with a time limit of 12 months to be reckoned from 15th day of issuance of the award letter. Accordingly, the work was to be completed by 13- 05. 2008and thereafter the maintenance period would start for5 years. b) The work so awarded, was completed on 19.10. 2016during the extended time, granted by the 24 2025:HHC:25333 respondents, owing to some delays, interruptions and hindrances, as alleged by the contractor, which though have been denied by the respondents. Thus, the maintenance period would start from 20-10-2016 ending on19-10-2021. c). The contract agreement remained in force and was not terminated or rescinded by the respondents even till the date of period completion of maintenance period i.e. 19-10 2021. d). After completing the main, tendered workon19- 10-2016, without terminating or rescinding the agreement, the 3rd respondent invited fresh tenders of the road in question, under AMP 2016- 17, for yearly maintenance, even before the completion of work, awarding the maintenance work to Sh. Kuldeep Sood contractor vide letter dated 10-11-2016 annex. N1. It shows an unnecessary and illegal interruption/interference by the respondent department. e). Surprisingly enough, after about seven months, of completion of the main work and awarding maintenance work to Sh. Kuldeep Chand sood, the claimant-contractor Mohinder singh was asked, 25 2025:HHC:25333 vide letter date 09-08-2017annex. N-II, to clear the defect liability of the work done in the month of Sept; 2016, followed by another letter dated 19- 08-2017 (N-III) appended with the SOD. Whereas; contra the NQM had already inspected the road 17-02-2017 (Additional Documents filed by the claimant), had found the repair work satisfactory. On the top of it, more importantly, as noted above, while finalizing the RA bill on the completion of the main work on 19-10-2016, the respondents had also recorded that the work done by the contractor as "Satisfactory," and certified having been done as per the specifications of the PWD. Speaks volumes of interferences shown by the respondent- department. f). The claimant had already raised certain issues like justification of imposition of the Liquidated Damages (LD) and explaining delays attributable to the respondent-department. g). On 04-01-2017, within three months of the completion SINO of the main contract work, a meeting was also held by the respondent- department, to discuss and decide the issues 26 2025:HHC:25333 raised by the claimant, in the office of the Chief Engineer (Sz) Shimla, wherein amongst others, the Superintending Engineer (SE) 12th Circle Nahan and respondent No: 3. Executive Engineer Nahan, were present, mainly to discuss and decide the said issues, with respect to the present work. Considering the facts of entire case and recommendations of concerned Executive Engineer (Exen.) and Superintending Engineer (S.E.), the committee unanimously decided to waive off liquidated damages amounting to Rs.32,34,692/- subject to the condition that the contractor would give in writing that he would not seek extra claims regarding the price escalation, compensatory event and loss of profit, prolongation and would also not seek any arbitration or agitate in any court of law against this agreement. The contractor in fact gave such an undertaking, the effect of this undertaking would be considered at the later relevant stage of this award. Therefore, consequent there upon the respondents were obliged to refund the bank guarantee and the performance guarantee to the claimant on completion of the work, which was not 27 2025:HHC:25333 done but it was wrongly adjusted either against the LD, which was waived off of alleged removal of defects by the third party, during the subsistence of the contract agreement, the details whereof are also not placed on record. h). In para 27 of the SOC, the claimant averred that letters/notice dated 14-09-2016 and 09-02- 2018, sent through his counsel, he sought the release of payments pertaining to the price escalation etc In reply, the Respondents in their SOD to this para did not deny these averments made by the claimant, rather, conveniently completely denied the escalation and other claims, as stated above. j). The claimant- contractor had also sought the release of due payments and withdrawal of financial security of Rs.16,40,000/- and all repeated requests/ attempts failed to seeks its release, thus a legal notice was sent to the respondents 09.07.2020 and referred as (annex. 4) in the order/judgment dated 27-04-2022 in arbitration case No; 126/2021 by the high, in para 2, whereby the claimant sought appointment of the 28 2025:HHC:25333 arbitrator. In that case the respondents had put in appearance and filed their reply. This all shows that the claimant had been agitating for his genuine claims, from time to time within limitation. k). Even in the High Court, the stand of the respondents was that the work was not completed by the claimant within the stipulated time; therefore, respondents had imposed liquidated damages amounting to Rs. 16,12,346/- as per letter dated 15-06-2009(annex. R VII). According to the respondents, when the work was not accelerated, additional LD of Rs. 8,06,173/- (2.5.% of the awarded amount) was imposed (annex. R XI). The work was inspected by the NMQ, who pointed out various deficiencies in bitumen work and rated the overall grading of the executed work unsatisfactory. Further that the respondents had made all the payments due till 19-10-2016, the date of completion. The High Court taking note of the arbitration clause and appointed the arbitrator and referred the dispute for its adjudication.” 18. Thereafter, taking into consideration the contentions of the parties, learned Arbitrator in Para-26 of the Award held as 29 2025:HHC:25333 under:- “26. Further, in nutshell, the contract agreement is composite agreement for completing the work and maintenance for 5 years from the date of completion on 20-10-2016, which ended in October 2021. Thus, the finalization Of the work would have been over with the submission of the final bill in question on completion certificate and settling the account. Hence, these continuity of events, as highlighted above, born out from the record, set out complete chain of events, bringing the matter, within limitation As such, against the above proved facts, the tribunal holds that the claims filed by the claimant contractor are within limitation. The point of barred by limitation raised by the respondents is rejected.” 19. This Court is of the considered view that the findings returned by the learned Arbitrator with regard to the issue of limitation call for no interference. This Court concurs with the findings returned by the learned Arbitrator that the Contract Agreement remained alive till October, 2021 and in fact, the issuance of fresh tender on 10.11.2016 during the subsistence of the Agreement with the claimant was an illegality committed by the Department. It is a matter of record that the Contract was alive till 30 2025:HHC:25333 October, 2021 and a Legal Notice was sent to the respondent by the claimant on 09.07.2020 and the Contractor sought the appointment of the Arbitrator under Section 11 (6) of the Arbitration and Conciliation Act by filing a petition, i.e. Petition No.126 of 2021. It is also a matter of record that limitation stood suspended during this period on account of COVID-19 pandemic as per the order of Hon’ble Supreme Court. 20. In light of the findings returned by learned Arbitrator, it cannot be said that the findings returned by the learned Arbitrator that the claim was not hit by limitation were perverse findings. 21. Similarly, while deciding Point No.2, learned Tribunal after taking into consideration the respective contentions of the parties and by referring to the judgments of the Hon’ble Supreme Court and this Court, which find mentioned in Paras 31 and 31A thereof, held that the claim preferred by the claimant was maintainable and the Clauses containing the pre-arbitration steps were not mandatory. This Court is of the considered view that these findings returned by the learned Arbitrator are correct findings because non-resorting to the Clauses containing pre-arbitration steps cannot be fatal as far as the filing of a claim petition for arbitration is concerned. 22. As far as the Point No.3 is concerned, a perusal of the adjudication thereupon by the learned Arbitrator demonstrates that 31 2025:HHC:25333 learned Arbitrator took into consideration the contentions of the claimant as well as the respondent and thereafter, returned detailed findings from Para-35 onwards of the Award and held that the delay in the execution of the work was not attributable to the claimant, but the respondent caused hurdles and compounding the same on given and proved facts. A perusal of the findings returned by learned Arbitrator being based on the respective contentions of the parties do not call for any interference by the this Court, for the reason that in terms of the law declared by the Hon’ble Supreme Court, this Court is not to act as an Appellate Court while scrutinizing the Award passed by the learned Arbitrator. It is settled law that if the findings arrived at by the learned Arbitrator stand arrived at after taking into contention of the respective contentions of the parties, as also the evidence which was relied upon by the parties, then even if another view is possible, the Court is to go with the view of the learned Arbitrator, for the reason that when the parties have chosen to avail an alternative mechanism for dispute resolution, then they must be left to reconcile themselves to the wisdom of the decision of the Arbitrator and the role of the Court should be restricted to the bare minimum. (See: K. Sukumar and Another Versus Hindustan Petroleum Corporation Limited, (2020) 12 Supreme Court Cases 539). 23. As far as Point No.4 is concerned, a perusal of the Award again demonstrates that learned Arbitrator took into consideration 32 2025:HHC:25333 the respective contentions of the parties and also the evidence that was produced by them. The findings are based on the records of the case. Therefore, this Court is of the considered view that parties must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the Court should be restricted to the bare minimum. 24. Thus, in light of the fact that learned Arbitrator announced the Award by referring to the pleadings of the parties and by taking into consideration the evidence placed by the parties before the learned Arbitrator, the findings returned by the learned Arbitrator call for no interference by this Court under Section 34 of the Arbitration and Conciliation Act. This is for the reason that findings that have been returned by the learned Arbitrator are based on the facts of the case as well as on the terms and agreement of the Contract entered into between the parties. During the course of the arguments, it could not be demonstrated from the record that the learned Arbitrator either misconducted himself or had conferred upon him powers in excess of what the Contract conferred, so as to say that the learned Arbitrator travelled beyond the scope of the Contract. It also could not be pointed out that the findings returned by the learned Arbitrator which obviously are findings of fact, are so perverse that no man of ordinary prudence could have had returned such conclusions or that some patent illegality has been committed 33 2025:HHC:25333 by the learned Arbitrator in the course of the adjudication of the claim petition in terms of the law declared by the Hon’ble Supreme Court of India. 25. Accordingly, in light of the findings returned hereinabove, as this Court does not finds any reason to interfere with the Award passed by the learned Arbitrator, this petition is dismissed. No order as to costs. Pending miscellaneous application(s), if any also stand disposed of accordingly. (Ajay Mohan Goel) Judge July 30, 2025 (Rishi)