2026:HHC:19374 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CARBC No. 44 of 2025 Reserved on: April 30, 2026 Decided on: May 22, 2026 Uploaded on: May 26, 2026 ________________________________________________________ Vijay Kumar Sharma ……….. Petitioner Versus The State of H.P. and others .. Respondents ________________________________________________________ Coram: Hon’ble Mr. Justice Sandeep Sharma, Judge. Whether approved for reporting? 1 Yes. For the petitioner Ms. Madhu P. Singh and Mr. Parveen Chauhan, Advocates. For the respondents Mr. Navlesh Verma, Additional Advocate General. ________________________________________________________ Sandeep Sharma, Judge Instant objections filed under S.34 of the Arbitration and Conciliation Act (hereinafter, ‘Act’), as amended upto date, lays challenge to award dated 24.7.2023, passed by respondent No.4-Sole Arbitrator with a prayer to set aside the award qua claim 1(b) and to modify the same qua claim 1(a) and 2. 2. Quintessential facts, as emerge from record and pleadings of parties are that vide letter No. PW.rMP.2016-2725-26, dated 5.5.2016, respondents invited tenders for “C/o 55.00 mtr. Span Box double lane bridge over Rai Khad including both side approaches on Rampur Gaura Mashnoo Sarahan Jeori road at RD 52/095 in Tehsil Rampur, District Shimla, Himachal Pradesh under CRF (Job No. CRF-HP-2015- 16 84).” 1 Whether the reporters of the local papers may be allowed to see the judgment? 2026:HHC:19374 2 3. On 15.6.2016, respondents uploaded departmental GAD No. 609/Bridge/2016-17 alongwith other documents and last date of receipt of tender was 23.6.2016. On 21.6.2016, petitioner uploaded technical proposal alongwith bid. On 17.8.2016, after receipt and elevation of Technical Bids, technically qualified bidders were called for the meeting for Normalization of Conditions and the successful bidders after technical elevation were given chance to give revised financial bids. The petitioner participated in this meeting and minutes of meeting became part of the agreement. In the meeting of Normalization of Conditions, the variations and deviations and price to be paid therefor was finalized as per Paras 27 and 28 of Minutes of Meeting of meeting, forming part of the agreement dated 4.11.2016. 4. After meeting petitioner herein was declared successful bidder and his Financial Bid for Rs.7.50 Crore was accepted by the Department and Letter of Acceptance was duly signed by the parties for execution of the work in question, for determining the rights and obligations of the parties. In terms of clause 31.1 of agreement, Engineer-in-Chief may make any alterations, additions to or omission from the work as described in the tender documents, including change in the lines, levels, positions and work dimensions of any part of the work, that may, in his opinion, be necessary and for that purpose, he shall have absolute power to order the contractor to do and the contractors shall carry out the same as provided in the agreement. 5. As has been taken note herein above, during evaluation of Technical Bid, respondents held a meeting on 17.8.2016, for Normalization of Conditions as per tender documents. Under condition 2026:HHC:19374 3 No. 30 and 31 of the Normalization of Conditions, the prospective bidders agreed that geological/ sub soil investigation for ascertaining the strata beneath the natural ground levels (and confirming the safe founding levels for susbstructure) is required to be carried out and logs chart of test boring is also required to be prepared as per IRC78 (latest edition). The safe bearing capacity test shall be conducted. Nothing extra shall be paid by the Department for carrying out these investigations. This will also include ascertaining the actual silt factor at the proposed founding levels or proposing fixing of founding levels on the basis of log charts. The prospective contractor’s liability to conduct sub soil investigation was decided and accepted by the parties on 17.8.2016, after submission of bids on 23.6.2016. 6. As per condition No. 27 of Normalization of Conditions, for any deviation/variation, instead of Clauses 31, 59 and 60 of the contract document, the Schedule of Variation items was made applicable. It was agreed that levels for ascertaining the increase/ decrease in depth of foundation and raising/lowering of deck levels and increase/ decrease span shall be with respect to parameters in the finally approved GAD based upon sub soil investigations and geotechnical report to be conducted by contractor. It was further agreed that portion of bridge beyond the faces of abutments i.e. portion of the bridge over the river shall be considered as part of superstructure and the remaining portion as part of sub-structure for operation of the payment schedule mentioned in the Normalization of Conditions dated 17.8.2016 and thus, the sub soil investigations were required to be conducted by the contractor after acceptance of the tender. On 17.8.2016, after opening 2026:HHC:19374 4 of the Technical Bids, an obligation was cast upon the claimant to get the sub soil investigation and geo-technical report. 7. Before finalizing the Financial Bid of the objector, the L-1 bidder, negotiation was held by the respondents with the claimant on 5.10.2016 wherein his quoted lump sum rates of Rs.7.76 Crores was reduced to Rs.7.50 and further said amount was bifurcated by the claimant on strenuous persuasion by them and the lump sum tender amount was lowered as under: i) Construction of bridge part Rs.460.00 Lakh ii) Construction of approaches portion Rs.290.00 Lakh Total Rs.750.00 Lakh 8. In the said negotiation meeting, the claimant agreed that the amount of Rs.460.00 Lakh as negotiated will be applicable for the increase/ decrease in span on pro-rata basis. In case the span of bridge increases, the contractor agreed that the rebate for construction of approaches from bridge side shall be as per the rate of increase or decrease of bridge payable to him. The negotiated financial terms dated 5.10.2016 forms the part of the agreement dated 4.11.2016. 9. In afore background, claimant was declared lowest bidder, who pursuant to being declared success bidder executed agreement dated 4.11.2016. The investigations regarding sub soil condition and geo- technical reports were got done by the claimant from Government approved labs. Revised GAD dated 31.1.2017 was approved by the competent authority and claimant submitted re-revised GAD (SrahanS- 0IR alongwith a forwarding letter dated 28.5.2017, wherein he had clearly urged the respondents to analyze the specific or implied 2026:HHC:19374 5 complexities ramifications and implications of the re-revised proposal S-01(R-2) vis-à-vis variations alongwith physical, technical and financial viability to its entirety, within the framework of the agreement and if found suitable at the departmental end, the approval of the same be conveyed to facilitate further submission of drawings and designs. 10. As per this GAD the founding level for Sarahan side abutment, A-1 was proposed as 1944.00 mts and for Jeori side abutment, A-2 it was fixed as was 1925.0 mts with safe bearing capacity for Sarahan side abutment as 123.22 tonne/sqm and for Jeori side abutment as 129.02 tonne/sqm. However, the Department considered bearing capacity of 45 tonne/ sqm for designing the two abutments. Upon excavation for Sarahan Side abutment foundation upto the level of 1946.38 mts hard rock in the entire foundation area was found. However, for Jeori side abutment, upon excavation upto 1928 mts no hard rock was found which could provide required safe bearing capacity of 45 tonne/smt. 11. On 26.4.2017, a joint inspection of the site was conducted by the Executive Engineer of the department alongwith the Design Consultant Mr. V.S. Verma of the petitioner wherein it was decided to check the bearing capacity for Jeori side abutment at level 1928.00 mtrs. Upon verification by the technical expert the bearing capacity of 35.45 tonne/sqm was found at location of abutment A2. The Design Consultant further opined that an abutment having a height of 29 mtrs cannot be stabilized on the strata having bearing capacity of 35.45 tonne/sqm. The prevalent soil classification of silt mixed with gravel can create uncontrollable situation during increased water presence at the 2026:HHC:19374 6 founding level. Therefore, the design consultant concluded that abutment A-2 is required to be substituted with a Pier with extra provision for abutment for an additional dry span of 27 mts to manage load dispersal within recommended norms. Accordingly, re-revised GAD was submitted on 28.5.2017. 12. On 21.5.2017, claimant submitted Geo technical report (GTR). Though as per Notice inviting Tender as well as agreement, the span of bridge was 55.00 mts, whereas, as Geo-technical report dated 21.5.2017, and due to sub soil conditions prevailing on Jeori side, the total span of the constructed bridge was extended to82.00 metres alongwith a central pier and therefore re-revised GAD No. SAPRAHAN S-01(R-2) with span arrangement of 2 Abutments and central Pier and geo-technical report dated 21.5.2017 were submitted to the Department alongwith request to consider the specific and implied complexities, ramifications and implications of the re-revised proposal S-01( R-2) with variations alongwith physical technical and financial viability to be examined in its entirety within the framework of the agreement and if found suitable, approval to be conveyed. 13. On 30.5.2017, Executive Engineer of the respondent Department sent the re-revised GAD dated 28.5.2017 to Superintending Engineer, for approval and allegedly added without consent of claimant that he had verbally agreed not to claim extra amount for construction of dry span of 27.00 metre as per re-revised proposal and claimant was directed to appear in the office of Chief Engineer, South zone to submit undertaking regarding ‘No Claim’. 2026:HHC:19374 7 14. On 1.6.2017, claimant, claimant gave his no claim certificate undertaking therein that if his revised GAD is approved, which have one pier and two spans of 55.00 metres and 27.00 metres (on Jeori side), he will construct the bridge on the same awarded cost of Rs.750.00 Lakh only and will not claim anything extra on this account in future and this would be full and final settlement and the claimant will not seek any arbitration or approach any court of law in this regard. (available at page 252 of paper book). 15. On 8.6.2017, respondents released re-revised GAD with the stipulation pasted on it that the bridge under consideration alongwith the approaches shall be constructed at the awarded amount of Rs.7.50 Crore and contractor will not claim anything extra in this account. The approved GAD showed two spans of bridge 55.00 metres and 27.00 metres and construction of pier for safe bearing capacity as per geo- technical reports. As per agreement, stipulated date of completion of work was 18.11.2011 but actually the work was completed on 14.11.2019, after seeking extensions from the Department, from time to time, on the grounds accepted by the Department. 16. Claimant raised construction of 82.00 metres bridge as per revised-GAD, approved on 8.6.2017 and 169.00 metre approach towards Jeori side and 191.23 metres approach towards Sarahan side. During construction period claimant submitted various bills as per completion of various milestones and informed the department on 23.2.2019 that payment for the work done to the extent of 91.50% had been made to him against the items of work as incorporated payments schedule of the agreement but the payment of 27.00 metres 2026:HHC:19374 8 construction of extra span of bridge was not released to the claimant, as per conditions of Normalization of Conditions, over and above the contract price of Rs.7.50 Crore for construction of 55.00 metres bridge in between the centre to centre of bearing and including construction of 155.00 metres Jeori side approach and 190.00 metres long approach road on Sarahan side. 17. Claimant, claimed that additional span of 27.00 metres in between centre to cenre of bearing was payable to the claimant due to increase in span from 55.00 metres to 82.00 metres and the payment of said increase is admissible to the claimant, on pro rata rate of Schedule of Variation of the agreement, as Normalization of Conditions and accordingly, the claimant claimed extra cost payable over lump sum initial contract price, 27.00 metre at the rate of Rs.7.50 Crore /55.00 per metre length = Rs.3,68,18,182.00. The amount was not paid to the claimant, hence, dispute arose inter se parties. 18. The respondent No.3 did not accept the bill in totality and recommended payment for Rs.2,25,81,818.00 and forwarded the claim of the claimant for extra 27.00 metre bridge span to the Superintending Engineer, 11th Circle, HPPWD Rampur. The claimant sent reminder for refund of sales tax, payment of 10th and final bill, reimbursement of GST, revised 10th and final bill for making payment including payment for 27.00 metres span of bridge, the payment for which was approved and recommended for approval of the competent authority, by respondent No.3 on 20.4.2019. Since no action was taken by respondents, claimant sent reminders dated 1.1.2020, 20.3.2020, 28.10.2020, 2.11.2020 for release of payment and refund of sales tax, 2026:HHC:19374 9 payment of 10th and final bill for making payment including the payment for 27.00 metres span of bridge. 19. Since no response from respondents was received, claimant submitted requirement for appointment of sole arbitrator, to conduct amicable settlement meeting followed by reminder for appointment of arbitrator. 20. In the afore background, Shri K.K. Kampani (Retired Engineer- in-Chief) came to be appointed as Sole Arbitrator, who, taking note of pleadings adduced by respective parties passed impugned Award dated 24.7.2023, allowed claims Nos. 1(a) and 2 and rejected claims Nos. 1(b), 3 and. 21. In the afore background, claimant has approached this Court, praying therein to set aside the impugned Award in respect of claims No. 1(b) and 3 and further to award interest on the amounts awarded under claims Nos. 1(a) and 2. 22. Precisely, the grouse of the claimant, as highlighted in grounds of objections as well as canvassed by learned counsel for the claimant is that learned arbitrator has fallen in grave error while allowing claim No.1(a) inasmuch as he failed to award interest with effect from 29.9.2017. Learned counsel for claimant vehemently argued that when payment was wrongly deducted from 3rd running bill, non grant of interest is against statutory provisions of Arbitration and Conciliation Act. Learned counsel for the claimant further argued that the sole arbitrator wrongly declined relief under claim No. 1(b) regarding additional cost for construction of 27.00 metres bridge by misinterpreting that 27.0 metre bridge is substitution to the contracted 2026:HHC:19374 10 length of 55.0 metres of bridge and its cost is already included in the cost of approach roads on both sides of bridge and is covered under contracted amount of Rs.7.50 Crore. 23. Learned counsel for the claimant further argued that learned Arbitrator has failed to consider agreed normalization conditions dated 17.8.2016, forming part of agreement and the ‘no claim’ letter extracted from the claimant under duress and coercion duly drafted and corrected by the respondents, having admitted during the course of proceedings by respondents. It came to be further argued on behalf of learned counsel for the claimant that learned Arbitrator, ignored recommendations dated 20.4.2019, for release of payment for 27.00 metres extra bridge made by Er. Sandeep Kumar Sobti, who submitted his affidavit in evidence but learned Arbitrator returned the affidavit without examination in chief and cross-examination. Learned counsel for the claimant further argued that learned Arbitrator failed to appreciate the line diagram submitted by RW-7, wherein RW-7, has categorically stated that on Jeori side, the claimant has executed an approach road of 196.00 metres and he has been paid only for 169.00 metres approach against the bill raised by him for 196.00 metres approach road. The difference of 196 and 169 metres comes to 27.00 metres, which in no manner is an approach but is a part of extended bridge of 27.00 metres, as per re-revised GAD dated 8.67.2017 and no payment against aid 27.00 metres length has been made to the claimant. 24. While referring to Annexure A-3, learned counsel for the claimant argued that learned Arbitrator failed to appreciate the agreed 2026:HHC:19374 11 terms of agreement and the evidence on record to prove the admissibility of Claim under this head. Learned counsel for the claimant further argued that regarding claim No.2, learned Arbitrator allowed the claim alongwith interest after one month of award and not awarded the interest from 30.3.2021, when the said amount was due to the claimant, which is contrary to provisions of S.31(7)(a) of the Act 25. Learned counsel for the claimant further argued that learned Arbitrator has fallen in grave error while rejecting claim qua arbitration cost. Learned counsel for the claimant submitted that claimant approached the respondent Department on 2.6.2021, for amicable settlement of dispute and respondent did not take any steps to call a meeting for amicable settlement, which necessitated the claimant to approach respondents for appointment of Arbitrator and thus, claimant is entitled to recover arbitration cost, which he has been forced to bear due to acts of omission and commission on the part of respondents. 26. Lastly, learned counsel for the claimant argued that on account of interest on amounts as claimed under claim No. 1(a) and 2, interest has not been granted as per provisions of S.31(7)(a) of the Act hence, the award needs to be interfered with. 27. Pursuant to notices issued in instant preceding respondent State has filed detailed reply, wherein facts as have been taken note herein above, have not been denied rather an attempt has been made to refute claim of the claimant on the ground that no payment as is being claimed through arbitration proceedings is payable rather, claimant has been paid all due and admissible payment. 2026:HHC:19374 12 28. Shri Navlesh Verma, learned Additional Advocate General argued that no grounds within the purview of S.34 of the Act have been made out, as such, no interference is called for. He submitted that the award can be interfered only on the grounds as mentioned in S.34(2)(a)(I) to S.34(2)(b)(II) of the Act and none of grounds raised in the petition falls within the ambit of provisions of afore Section, hence, the objections deserve dismissal. 29. Learned Additional Advocate General submitted that as per Normalization of Conditions, dated 17.8.2016, rebate was given to contractor and same were accepted by him. He submitted that since tender was on lump sum basis, rates for 55 metre span bridge including the approaches coupled with the fact that portion beyond faces of abutments mentioned with the claim i.e. portion of the bridge as mentioned is not part of the bridge but the dry span of 27 metres constructed by claimant is part of approaches, claimant is estopped from claiming any separate payment qua construction of dry span of 27 metres. He submitted that had claimant not constructed dry span of 27 meter he would have constructed 54.00 metres on both sides counter fort walls as per Condition No. 26 of Normalization of Conditions, agreed by contractor on 17.8.2016, which would have resulted in extra cost to the claimant and claimant constructed this dry span of 27 metres for his own convenience. 30. Mr. Verma submitted that otherwise also as per own undertaking given by claimant, he cannot claim any amount over and above Rs.7.50 Crore. He submitted that the claimant agreed that amount of Rs.460.00 Lakh as negotiated will be applicable for increase or 2026:HHC:19374 13 decrease in span on pro-rata basis and in case span of bridge increases, the claimant agreed that the rebate for construction of approaches from bridge side shall be as per rate of increase or decrease of bridge payable to the contractor. He submitted that nothing was altered and claimant never challenged the award letter and received all the payments on the basis of award letter, whereby he came to be awarded the work. 31. While disputing claim that respondents did not go into the technical and financial viability of revised GAD dated 28.5.2017, Mr. Verma, learned Additional Advocate General stated that it is wrong to suggest that Executive Engineer, of his own, incorporated conditions that contractor had agreed that he would not claim any extra for construction of dry span of 27 metre as per revised proposal. Mr. Verma stated that undertaking was voluntarily given by claimant and there was no occasion for the Executive Engineer to procure such undertaking. He submitted that hard rock was found in entire foundation area of Sarahan side abutment, while loose soil on Jeori side abutment and as per periling soil conditions, GAD was revised with revised foundation level of both side abutments which was approved by Chief Engineer (South Zone) office vide letter No. PW(Bridges) Raikhad/2017-945-46, dated 29.3.2017 and due to loose strata towards Jeori side abutment at revised foundation level of 1928.00 metre, the soil was tested to check bearing capacity at revised level which as reported by M/s Geo Tech. Engineers and Consultant, New Shimla was 34.45 Tonn per sqm, against the desired bearing capacity of 45 tonne per sqm. 2026:HHC:19374 14 32. Lastly Mr. Verma submitted that it is sole prerogative of learned Arbitrator to award interest and in that regard, claimant cannot claim interest, as a matter of right. With these submissions, Mr. Verma, sought dismissal of the objections. 33. I have heard the learned counsel for the parties and gone through the record of the case. 34. Before ascertaining the correctness of rival submissions made by the learned counsel for the parties, this court finds it necessary to elaborate upon the scope of the appellate court exercising jurisdiction to review the findings of an award. 35. By now it is well settled that scope of appellate Court in exercising power under the Act to review the finding of an award is narrow/limited, especially when award is upheld or substantially upheld under Section 34 of the Act. Reliance in this regard is placed upon judgment dated 11.8.2023, passed by the Hon’ble Apex Court in Civil Appeal No. 3798 of 2023 titled as Larsen Air Conditioning and Refrigeration Company v. Union of India, wherein it has been held that Section 34 the Act, permits the Court to interfere with an award sans the grounds of patent illegality to go to the root of the matter and cannot be of a trivial nature. Relevant paras of the afore judgment reads 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 2026:HHC:19374 15 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. It is important to notice that the old Act contained a provision (15. Power of court to modify award.—The court may by order modify or correct an award— (a) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred; or (b) where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision; or (c) where the award contains a clerical mistake or an error arising from an accidental slip or omission.) which enabled the court to modify an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996. This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the court. This position has been iterated decisively by this Court in Project Director, National Highways No. 45E and 220 National Highways Authority of India v M. Hakeem (2021) 5 SCR 368. 42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd.13], [Kinnari Mullick v. Ghanshyam Das Damani14], [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd.15] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the “limited remedy” under Section 34 is coterminous with the “limited right”, namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996.” 36. Similarly, in Konkan Railway Corporation Ltd v. Chenab Bridge Project Undertaking, 2023 (9) SCC 85, the Hon’ble Apex 2026:HHC:19374 16 Court has held that jurisdiction of the Court under Section 37 of the Act is akin to that under Section 34 of the Act, as such, the courts ought not to interfere with arbitral award in a casual and cavalier manner. Most importantly, the Hon’ble Apex Court held that mere possibility of an alternative view on facts or interpretation of contract does not entitle Courts to reverse findings of the Arbitral Tribunal. Relevant paragraphs from the decision are as follows:- “19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction (UHL Power Company Ltd. v. State of Himachal Pradesh (2022) 2 SCC (Civ) 401, para 15. See also: Dyna Technologies Pvt Ltd v. Crompton Greaves Limited (2019) 20 SCC 1, para 24, 25). 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 (Ssangyong Engineering. & Construction Company Ltd. v. National Highways Authority of India (NHAI) (2019) 15 SCC 131; Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236, para 11.1). In Dyna Technologies Private Limited v. Crompton Greaves Limited (2019) 20 SCC 1, this Court held: “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 2026:HHC:19374 17 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 portrays perversity unpardonable under Section 34 of the Arbitration Act. XX XX XXX 25. The principle of interpretation of contracts adopted by the Division Bench of the High Court that when two constructions are possible, then courts must prefer the one which gives effect and voice to all clauses, does not have absolute application. The said interpretation is subject to the jurisdiction which a court is called upon to exercise. While exercising jurisdiction under Section 37 of the Act, the Court is concerned about the jurisdiction that the Section 34 Court exercised while considering the challenge to the Arbitral Award. The jurisdiction under Section 34 of the Act is exercised only to see if the Arbitral Tribunal’s view is perverse or manifestly arbitrary. Accordingly, the question of reinterpreting the contract on an alternative view does not arise. If this is the principle applicable to exercise of jurisdiction under Section 34 of the Act, a Division Bench exercising jurisdiction under Section 37 of the Act cannot reverse an Award, much less the decision of a Single Judge, on the ground that they have not given effect and voice to all clauses of the contract. This is where the Division Bench of the High Court committed an error, in re- interpreting a contractual clause while exercising jurisdiction under Section 37 of the Act. In any event, the decision in Radha Sundar Dutta (supra), relied on by the High Court was decided in 1959, and it pertains to proceedings arising under the Village Chaukidari Act, 1870 and Bengal Patni Taluks Regulation of 1819. Reliance on this judgment particularly for 2026:HHC:19374 18 interfering with the concurrent interpretations of the contractual clause by the Arbitral Tribunal and Single Judge under Section 34 of the Act is not justified.” 37. In Bombay Slum Redevelopment Corporation Pvt. Ltd. v. Samir Barain Bhojwani (2024) 7 SCC 218, the Hon’ble Apex Court reiterated that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Act. Hon’ble Apex Court has further held that scope of interference in a petition under Section 34 of the Act is very narrow and jurisdiction under Section 37 of the Act is very narrower. Hon’ble Apex Court further held that since parties to the lis themselves chose to go before the Arbitral Tribunal instead of availing remedy before the traditional Civil Courts, Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Act. 38. In Reliance Infrastructure Ltd. v. State of Goa (2024) 1 SCC 479, Hon’ble Apex Court interpreting expression ‘patent illegality’ held that mere a mere illegality is not a patent illegality, rather to interfere patent illegality, illegality must be apparent on the face of the award and not the one which is culled out by way of a long drawn analysis of pleadings and evidence. Relevant paragraphs of the afore judgment are being reproduced as under: “57. As noticed, arbitral award is not an ordinary adjudicatory order so as to be lightly interfered with by the Courts under Sections 34 or 37 of the Act of 1996 as if dealing with an appeal or revision against a decision of any subordinate Court. The expression “patent illegality” has been exposited by this Court in the cases referred hereinbefore. The significant aspect to be reiterated is that it is not a mere illegality 2026:HHC:19374 19 which would call for interference, but it has to be “a patent illegality”, which obviously signifies that it ought to be apparent on the face of the award and not the one which is culled out by way of a long-drawn analysis of the pleadings and evidence. 58. Of course, when the terms and conditions of the agreement governing the parties are completely ignored, the matter would be different and an award carrying such a shortcoming shall be directly hit by Section 28(3) of the Act, which enjoins upon an Arbitral Tribunal to decide in accordance with the terms of contract while taking into account the usage of trade applicable to the transaction. As said by this Court in Associate Builders vs. DDA9, if an Arbitrator construes the term of contract in a reasonable manner, the award cannot be set aside with reference to the deduction drawn from construction. The possibility of interference would arise only if the construction of the Arbitrator is such which could not be made by any fairminded and reasonable person. 95. The narrow scope of “patent illegality” cannot be breached by mere use of different expressions which nevertheless refer only to “error” and not to “patent illegality”. We are impelled to reiterate what has been stated and underscored by this Court in Delhi Airport Metro Express (P) Ltd. Vs. DMRC10 that restraint is required to be shown while examining the validity of arbitral award by the Courts, else interference with the award after reassessing the factual aspects would be defeating the object of the Act of 1996. This is apart from the fact that such an approach would render several judicial pronouncements of this Court redundant if the arbitral awards are set aside by categorizing them as “perverse” or “patently illegal” without appreciating the contours of these expressions.” 39. In S.V. Samudram v. State of Karnataka (2024) 3 SCC 623, the Hon’ble Apex Court has concluded that though jurisdiction of Court under Section 34 is fairly narrow and moreover, when it comes to jurisdiction under Section 37, it is all the more circumscribed. The relevant paras of the afore judgment read as under:- 2026:HHC:19374 20 “46. It has been observed by this Court in MMTC Ltd. v. Vedanta Ltd. (2019) 4 SCC 163. “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 Section 34 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.” (Emphasis Supplied) 47. This view has been referred to with approval by a bench of three learned Judges in UHL Power Company Ltd v. State of Himachal Pradesh (2022) 4 SCC 116. In respect of Section 37, this court observed:- “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.” xx xx xx 49. We may also notice that the circumscribed nature of the exercise of power under Sections 34 and 37 i.e., interference with an arbitral award, is clearly demonstrated by legislative intent. The Arbitration Act of 1940 had a provision (Section 15) which allowed for a court to interfere in awards, however, under the current legislation, that provision has been omitted (Larsen Air Conditioning and Refrigeration Company v. Union of India and Ors. 2023 SCC OnLine 982 (2-Judge Bench). 50. The learned Single Judge, similar to the learned Civil 2026:HHC:19374 21 Judge under Section 34, appears to have not concerned themselves with the contours of Section 37 of the A&C Act. The impugned judgment (S.V. Samudram v. State of Karnataka, 2017 SCC OnLine Kar 6559) reads like a judgment rendered by an appellate court, for whom reexamination of merits is open to be taken as the course of action.” 40. It is quite apparent from the aforesaid exposition of law laid down by the Hon’ble Apex Court that scope of interference by this Court while exercising power under Section 34 of the Act is very-very limited. Courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists, rather 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 portrays perversity unpardonable under Section 34 of the Act. 41. Now being guided by aforesaid law on the subject, this Court would make an attempt to ascertain the correctness of rival submissions made by both the parties. 42. Following claims and counter-claims were made by respective parties before learned Arbitrator: The claimant’s claim: 1. On account of work done but no paid a) Amount withheld in the pretext of Sale Tax deduction 2,57,850.00 b) Extra work for 27 mt increase in bridge length over and above the scope of the contract 3,68,18,182 2. On account of reimbursement of extra GST paid by claimant after 1.7.2017 29,99,861 3 On account of cost of arbitration towards fee of 8,70,000 2026:HHC:19374 22 Ld. Arbitration and cost of attending hearing and other miscellaneous expenses 4. On account of interest on the amount of all the claims To be calculated at the time of award Total 4,09,45,893 The counter claim: 1)a) On account of revision of the founding level f the Sarahan side abutment R.L. 1940 to 1944 Rs.6,00,000 b) On account of revision of the founding level of the Jeori side abutment R.L. 1925 to 1928 6,75,000 b) Extra work for 27 mt increase in bridge length over and above the scope of the contract 3,68,18,182 Total 12,75,000 2 On account of cost of arbitration fees attending hearings and administrative expenses 11,50,000 Total 24,25,000 43. Learned Arbitrator, vide impugned Award dated 24.7.2023, allowed the following claims/counter-claims of parties: Claim of claimant Sr. No. Claim item Amount claimed Amount awarded Remark 1 Claim No. 1(a) 2,57,850 2,57,850.00 Claim 1(b) 3,68,18,182 Nil 2 Claim No.2 (reimbursement of GST) 29,99,861 Amount to be finalized by the o/o the SE 11th Circle HPPWD Rampur (HP) within one month award of Claim dt. 7.10.21 not contested by the respondent 2026:HHC:19374 23 subject cited cost 3 Claim No. 3 (on account of cost of arbitration) 8,70,000 Nil 4. Claim No.4 on account of interest Included in the award of claim as and where applicable Amount awarded in favour of claimant Rs.32,57,511 Claim of Department Sr. No. Claim item Amount claimed Amount awarded Remark 1 Counter claim No1 12,75,000 6,00,000 Revision of founding level 2 Counter claim No.2 11,50,000 Nil Amount awarded in favour of respondent is Rs.6,00,000/-. 44. After making adjustments, the learned Arbitrator held the claimant entitled to Rs.26,57,711. Learned Arbitrator observed in impugned Award that, “If however, the claim of the reimbursement of the GST finalized and paid by respondent department, within one month of award fo the subject cited work by this forum, then the value of final award of subject cited work will be the resultant of Rs.2,57,850(sale tax) + value of claim of reimbursement finalized by the o/o SE HPPWD Rampur –(minus) Rs.6,00,000.00 (counter claim) 2026:HHC:19374 24 in favour of the claimant.” It is further observed that interest for delay in payment shall be payable @ 7% per annum in case of the claim of reimbursement of GST as and where become applicable. 45. Claimant is aggrieved on account of the fact that no interest has been awarded in his favour under claim Nos. 1(a) and 2, though he has been held entitled to refund of withheld sale tax and reimbursement of GST. Lastly, petitioner is aggrieved of rejection of claim 3 whereby arbitration cost came to be refused. 46. Major grouse of the petitioner is that he could not have been denied payment qua construction work of 27 metres additional span of bridge. It is undisputed that tender was invited for work C/o 55.00 mtr. Span Box double lane bridge over Rai Khad including both side approaches on Rampur Gaura Mashnoo Sarahan Jeori road at RD 52/095 in Tehsil Rampur, District Shimla, Himachal Pradesh under CRF (Job No. CRF-HP-2015-16 84). It is also not in dispute that claimant being lowest bidder came to be awarded aforesaid work vide award letter dated 4.11.2016. Pursuant to said award of work, parties executed agreement No. 21, for 2016-17. As per agreement, stipulated date for commencement of work and completion was 19.11.2016 and 18.11.2018 respectively whereas, work was completed on 14.11.2019. It is also not in dispute that claimant was repeatedly granted extension of time. It is also not in dispute that claimant along with other technically qualified bidders was called for meeting i.e. Normalization of Conditions, whereafter, he was given chance to give revised financial bid. In the meeting for Normalization of Conditions, for variation and deviation and prices to be paid were fixed as per para 27 2026:HHC:19374 25 and 28 of minutes of meeting, forming part of agreement dated 4.11.2016. 47. It is also not in dispute that after opening of Technical Bid, claimant along with other bidders was under obligation to get sub soil testing and get geo-technical report. Claimant being successful bidder submitted GAD Sarahan S0-2 and sub soil investigation report to the respondent where-after, a joint inspection was conducted by Executive Engineer of the respondent Department alongwith Design Consultant, Shri V.S. Verma of the petitioner and it was decided to check the bearing capacity for Jeori side abutment at level 1928.00 metres. Upon verification by the technical expert of bearing capacity of 35.45 Tonne/sqm, was found at the location of abutment A2. The Design Consultant further opined that an abutment having a height of 29 metres cannot be stabilized on the strata having bearing capacity of 35.45 tonne/sqm. It was decided to check bearing capacity for Jeori side abutment at level 1928.00 metres. Upon verification by technical expert, safe bearing capacity of 35.45 one was found at A2 whereas, design consultant opined that abutment having height of 28 cannot be stabilized on strata having 34.5 tonne bearing capacity. Since prevalent soil classification of silt mixed with gravel could create uncontrollable situation during increased water presence at the founding level, therefore, the design consultant concluded that abutment A-2 is required to be substituted with a Pier with extra provision for abutment for an additional dry span of 27 metres to manage load dispersal within recommended norms. Accordingly, re-revised GAD was submitted on 28.5.2017. 2026:HHC:19374 26 48. Though as per NIT as well as agreement, span of bridge was 55 metres, whereas, as per geo-technical report dated 21.5.2017 and due to sub-soil conditions, prevailing on Jeori side, the total span of the constructed bridge was 82.00 metres alongwith a central pier and therefore, re-revised GAD No. SARAHAN S-01 (R-2) with span arrangement of 2 abutments and central pier and geo-technical report dated 21.5.2017, were submitted to the Department alongwith the request to consider the specific and implied complexities, ramifications and implications of the re-revised proposal S-01 (R-2) with variations alongwith the request to consider the specific and implied complexities, ramifications and implications alongwith physical technical and financial viability be examined to its entirety within the framework of the agreement and if found suitable, approval was sought to be conveyed. 49. On 30.5.2017, Executive Engineer of the respondent Department sent re-revised GAD dated 28.5.2017 to Superintending Engineer, for approval specifically mentioning therein that claimant had verbally agreed not to claim extra amount for construction of dry span of 27.00 metres as per re-revised proposal. 50. Pursuant to communication, claimant was asked to come present in the office of Chief Engineer (South one), where he submitted an undertaking dated 1.6.2017, regarding no claim. Relevant portion of Annexure C-9 is reproduced herein “The contractor has agreed verbally not to claim extra amount for construction of dry span of 27.00 m as per re-revised proposal. The contractor has agreed that he will submit an undertaking to this effect before the approval of the re-revised GAD. It is also brought to your kind notice that during excavation of the Jeori side abutment, the surrounding land including a 20 m stretch of road got slided 2026:HHC:19374 27 down and it is apprehended that the abutting land having apple orchard pertaining to private land owner may also slide down during rainy season. An early action to restore the damaged road portion and necessary protection work to safe guard the structure is required. However, this work is not included in the agreement for the subject cited work, but is necessarily/ urgently required as per prevailing site conditions. Necessary direction in this regard may kindly be issued to this office at the earliest please. The re-revised GAD proposal along with structural drawings and design is enclosed herewith for getting it approved from the competent authority. ” 51. Reading of aforesaid communication is very material for adjudication of controversy in the case at hand. Bare perusal of aforesaid communication suggests that meeting was held in office of authority on 1.6.2017, wherein detailed discussion regarding bridge was held. Lump sum tender submitted by claimant for construction of bridge was inclusive of approaches on Sarahan and Jeori sides. Original GAD was approved with single span of 55 metre with approaches on both sides. However, as has been taken note here above, as per site condition as well as report submitted by committee, it was found more appropriate to construct additional span of 27 metres, instead approaches due to low load bearing on Jeori side in addition to original span of 55.0 metres, With the construction of additional span of 27 metres, length of approaches on Jeori Side was to be reduced. Claimant categorically stated in the afore communication that since he had already given same rebate for approaches from bridge side as per the rates of increase or decrease of bridge payable to him coupled with the fact that now on account of increase of 27 metres in span, he was entitled for Rs.27x460/55= 225.81 Lakh, on account of increase in span, but since there was a decrease in length of approaches from bridge side, claimant is ready to 2026:HHC:19374 28 give same rebate of 27x460/55= 225.81 Lakh for decrease in length of approaches from bridge side, meaning that increase in span was equal to decrease in cost, due to decrease in length of approaches from bridge side, hence, no additional amount was payable to the claimant and dry span of 27.00 metres was to be treated as part of approaches. 52. In nutshell claimant admitted that increase in cost due to increase in span is equal to decrease in cost due to decrease in length of approaches on bridge side, hence no additional amount is payable to him rather, 27 metres dry span shall be treated as part of approaches. He submitted that if his re-revised GAD is approved, having one pier and two spans of 55.00 metres and 27.00 metres (on Jeori side), he will construct bridge on the same awarded cost of Rs.7.50 Crore and will not claim anything extra on this count in future. Claimant further agreed that this shall be full and final settlement and he would not seek any arbitration or approach any court of law. He further agreed that conditions of Normalization of Conditions shall remain in force. 53. In terms of aforesaid communication/ undertaking, claimant categorically submitted before department that in the event of his being permitted to raise two spans of 55 and 27 metres on Jeori side, total length of span of bridge shall be 82 metres, but there will be decrease in length of approaches. There is nothing on record to suggest that after his having furnished NOC/undertaking, claimant ever raised any issue with respect to having his NOC allegedly obtained from him under coercion, before any competent authority rather, he completed 2026:HHC:19374 29 the work as per revised GAD and submitted final bill, claiming payment qua additional span of 27 metres, which prayer of him came to be rejected by department as well as arbitrator on the ground that he himself vide communication dated 1.6.2017, Annexure P-2 had given undertaking to not claim any amount for additional span of 27 metres. 54. Though, Ms. Madhu, learned counsel for the claimant vehemently argued that afore communication was extracted under coercion and as such, same cannot be relied but the court is not persuaded to agree with afore submission of learned counsel for the claimant. It is not in dispute that afore communication is dated 1.6.2017 by which time, work had actually not started rather till that time, petitioner after his having got soil tested, had come to know that upto foundation level of 1928.00 and and 19250.00 for Jeoi side, ther was no sign of hard rock which could provide required safe bearing capacity of 45.00 tonne/sqm. 55. Though as per NIT as well as agreement, span of bridge was 55 metres, but having taken note of geo-technical report dated 21.5.2017 and due to situation prevailing on Jeori side, total span of constructed bridge came to be approved as 82 metres, alongwith central pier, however, even while accepting aforesaid proposal of report submitted by claimant, Executive Engineer concerned apprised Superintending Engineer, who was competent authority to give approval that claimant has verbally agreed to do work as per revised GAD, within lump sum amount of 7.50 crore quoted by him. 56. 56. It is not in dispute that though afore communication Annexure C- 8/I was very much in the knowledge of claimant, rather, he acting upon 2026:HHC:19374 30 afore communication presented himself for meeting in the office of Chief Engineer, South Zone, on 1.6.2017 and thereafter sent communication dated 1.6.2017 (Annexure C-9), thereby undertaking that in case his revised GAD is approved, which has one pier and two spans of 55 and 27 metres, he will construct bridge for the amount of Rs. 7.50 Crore, coupled with the fact that after writing said communication, no objection ever came to be raised at his behest, qua his being coerced to write said communication, this court is not persuaded to agree with submission made at the behest of the claimant that learned Arbitrator could not have taken into consideration said communication while deciding claim of the claimant, qua additional span of 27 metres. 57. Though, at this stage, learned counsel for the claimant referred to condition No. 27 of Normalization of Conditions for any deviation/variation to state that Schedule of Variation shall be applicable but this court is not persuaded to agree with aforesaid submission of learned counsel for the claimant for the reason that as per condition No.27 of Normalization of Conditions, for any deviation/variation, claimant, could have claimed amount if any on account of deviation/ variation on account of increase or decrease in depth-level span etc., on the ground that while executing work on the spot, he was compelled to do extra work for execution of project, however, in the instant case, deviation, increase or decrease or execution of additional work if any was decided inter se parties before start of work. Department while accepting re-revised GAD dated 28.5.2017, categorially apprised claimant that he shall not be entitled to 2026:HHC:19374 31 any extra amount qua the construction of central pier as well as additional span of bridge measuring 27 metres. Claimant, who had actually before starting work got the soil testing, himself submitted re- revised GAD therein proposing that abutment A2 (Jeori side) is required to be substituted with a provision of a pier and dry span of 27.00 metre with abutment extended towards Jeori side approach to manage the load dispersal within recommended values. While doing so, claimant was fully aware of the fact that it would be more appropriate to construct 27 metres span of bridge, instead of constructing approaches in addition to 55 metres span bridge. With the construction of 27 metres of span, length of approaches on Jeori side was to be reduced, hence, claimant himself proposed that he shall not claim any additional amount for construction of additional 27 metres span, rather, will construct the same within award/cost of Rs.750.00 Lakh. 58. Moreover, perusal of undertaking dated 1.6.2017, itself suggests that the claimant had already given rebate for construction of approach from bridge side as per rate of increase or decrease payable to him. Though, on account of increase in span of 27 metres, petitioner claimed himself entitled to Rs.285.81 Lakh but since on account of aforesaid construction, length of approach roads from bridge side was decreased coupled with the fact that he himself agreed to give same rebate for decease in length of approaches from bridge side, he is estopped from claiming extra amount. 59. In nutshell, increase in cost due to increase of 27 metres length of span bridge is equal to decrease in cost due to decrease in length of 2026:HHC:19374 32 approach road from bridge side, hence, learned Arbitrator, rightly did not hold the claimant entitled to the amount as claimed by the claimant, on account of construction of 27 metres additional bridge, rather, same rightly came to be treated as part of approaches. 60. Though, learned counsel for the claimant, while making this court peruse impugned Award vehemently argued that award qua said claim is inclusive but this court is not persuaded to agree with afore submission raised by the claimant. During arguments, learned counsel specifically referred to page 66 of impugned Award, wherein oral /written arguments of parties came to be analyzed by the learned arbitrator. In para 9 of impugned Award, learned Arbitrator observed as under: “10[2/5/hj This pertained to the Jeori side Approach as completed at the site of work for which the diagram has been provided by the Respondent on 25/6/2022 as asked by this forum. The 155 mt. length of the Approach on Jeori side adjoining to the 55 mt span Bridge was integral part of the agreement for its execution as per scope of the agreement for this work. After the award of this work, the respondent may consider any left out payment if admissible as per variation schedule of the agreement as no such alim is pending for consideration by this forum.” 61. While referring to said portion of award, learned counsel for the claimant vehemently argued that learned Arbitrator though arrived at a conclusion that 155 metres on Jeori side was an integral part of work, as per scope of agreement for this work, but yet failed to award any amount qua same, rather, opined that after award, the respondents may consider any left out amount, as no claim is pending consideration before him. 2026:HHC:19374 33 62. Having perused aforesaid part of the award, this court is persuaded to agree with learned Additional Advocate General that this is not finding returned by learned Arbitrator, rather his observation based on pleadings adduced on record by respective parties. Specific finding qua said claim has been given in award, which starts from internal page 69 of award. 63. Having carefully perused findings returned by learned Arbitrator qua afore claim, this court is persuaded to agree with learned counsel for the claimant, that there was no occasion for learned Arbitrator to go into question with respect to necessity of substituting approach roads with pier especially when department had accepted the revised GAD dated 28.5.2017. It is not in dispute that aforesaid revised GAD was made part of the agreement, however, while doing so, respondent took undertaking from the claimant, that he shall do the work as per revised GAD on the same awarded costs of Rs.750 Lakh. 64. At the cost of repetition, it is observed that though plea has been raised at the behest of claimant, that communication dated 1.6.2017, (Annexure C-9) whereby undertaking was given by the claimant ,is result of coercion but no cogent and convincing evidence in that regard ever came to be adduced on record by the claimant. Though, there are certain documents adduced on record, which are signed by officials of respondent department, suggestive of the fact that claimant has done extra work, as a result thereof, he is required to be paid additionally but same may not be of much relevance and on the basis of same, claimant, cannot claim, extra amount in terms of Schedule of Variation, 2026:HHC:19374 34 prepared as per condition No. 27 of Normalization of Conditions, for any deviation/variation. 65. Having scanned award passed by learned Arbitrator, vis-à-vis claim put forth by claimant, for payment qua additional span of 27 metres, this court sees no reason to interfere in the award, especially when learned counsel representing claimant has not been able to point out any patent illegality in the award. Learned counsel for the claimant, has not been able to point out that contract agreement entered inter se parties, enables claimant to claim any amount qua construction of additional span of 27 metres rather, this court finds that learned arbitrator having taken note of undertaking dated 1.6.2017 given by claimant, coupled with the fact that on account of undertaking claimant was made to perform additional work, which he would have otherwise not done pursuant to his having acted strictly in terms of NIT, wherein span of bridge was 55 metres, with both side approaches hence, no illegality can be submitted to have been by learned Arbitrator, while not awarding any amount on account of said claim. 66. However, this court having taken note of the fact that respondent was not competent to deduct any amount on account of sale tax deduction after 1.7.2017, when sales tax subsumed in GST, which submission of claimant was otherwise found merit-worthy by the learned arbitrator coupled with the fact that no cogent and convincing evidence ever came to be adduced on record by respondent qua withholding said amount, there appears to be merit in the claim of the claimant, that learned arbitrator, while allowing claim of Rs.2,57,17,50 ought to have awarded commensurate interest. Since aforesaid 2026:HHC:19374 35 amount was withheld without any authority for quite long, petitioner is entitled to interest and as such, award passed by learned Arbitrator needs to be modified. 67. Similarly, this court finds merit in the submission of learned counsel for the claimant, that learned Arbitrator, while allowing claim no.2, on account of extra GST that ought to have awarded interest, especially when said amount was found to be withheld for no justifiable reason and without any authority of law. 68. Learned Arbitrator after having perused pleadings and evidence adduced on record qua respective claims though arrived at a definite conclusion that for some unknown reason, respondents delayed the afore claim for more than 20 months and side-tracking this GST claim dated 7.10.2021 of claimant with some old reference, which is not relevant in present context. Learned Arbitrator further observed that respondent vide statement of defense dated 21.2.2022 agreed in principle to release the payment, under this claim as it became due but respondent ought to have dealt this claim of claimant dated 7.10.2021 and released due payment in this regard as per provision of the agreement after duly incorporating the Notifications of the competent authorities issued from time to time, as and where they become applicable, however, while passing the award, learned Arbitrator directed respondent No.2 to settle payment for said claim dated 7.10.2021, on its merit within one month of date of award, of the subject work. While stating that claim set up by claimant shall not be returned for re-submission, learned Arbitrator further observed that if claim is not finalized within Ione month specified in award, claimant 2026:HHC:19374 36 shall be entitled for full value of Rs.29,61,761 as final claim and simple interest of 7% per annum thereafter, would be payable. 69. In nutshell grouse of petitioner is that once learned Arbitrator had arrived at a definite conclusion that respondents have unnecessarily delayed GST claim of claimant for 20 months, which was actually submitted on 7.10.2021, he ought not have left the matter to be decided by respondent, rather, while ordering release of sum of 29,99,861, ought to have also awarded adequate interest in favour of claimant. 70. Since it is not in dispute that petitioner had submitted claim qua GST on 7.10.2021 and same was genuine, coupled with the fact subsequently in arbitration proceedings, respondents agreed to release amount, learned Arbitrator ought not have directed respondent to decide afore issue within one month rather, should have ordered release of same with up-to-date interest. 71. At this stage, it would be apt to take note of sub-section (7)(a) and 7(b) of S.31 of the Arbitration and Conciliation Act, which prescribe for award of interest in an arbitral award. Aforesaid provision reads as under: “(7)(a) Unless otherwise agreed by the parties, where and insofar as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) [ A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment.” 2026:HHC:19374 37 72. Since learned Arbitrator has allowed claims 1(a) and 2 of claim petition, thereby directing the respondents to pay amounts claimed thereunder, it ought to have awarded interest on the same. 73. Similarly, this court is persuaded to agree with learned counsel for the claimant, that the learned Arbitrator has fallen in error while declining relief qua costs of arbitration proceedings in favour of the claimant. Sub-section 31(8) and S.31A of the said Act provide for costs of arbitration. Aforesaid provisions read as under: “(8) The costs of an arbitration shall be fixed by the arbitral tribunal in accordance with section 31A.] Explanation.—For the purpose of clause (a), “costs” means reasonable costs relating to— (i) the fees and expenses of the arbitrators and witnesses, (ii) legal fees and expenses, (iii) any administration fees of the institution supervising the arbitration, and (iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award. [31A. Regime for costs.—(1) In relation to any arbitration proceeding or a proceeding under any of the provisions of this Act pertaining to the arbitration, the Court or arbitral tribunal, notwithstanding anything contained in the Code of Civil Procedure,1908 (5 of 1908), shall have the discretion to determine— (a) whether costs are payable by one party to another; (b) the amount of such costs; and (c) when such costs are to be paid. Explanation.—For the purpose of this sub-section, “costs” means reasonable costs relating to— (i) the fees and expenses of the arbitrators, Courts and witnesses; (ii) legal fees and expenses; (iii) any administration fees of the institution supervising the arbitration; and (iv) any other expenses incurred in connection with the arbitral or Court proceedings and the arbitral award. (2) If the Court or arbitral tribunal decides to make an order as to payment of costs,— 2026:HHC:19374 38 (a) the general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party; or (b) the Court or arbitral tribunal may make a different order for reasons to be recorded in writing. (3) In determining the costs, the Court or arbitral tribunal shall have regard to all the circumstances, including— (a) the conduct of all the parties; (b) whether a party has succeeded partly in the case; (c) whether the party had made a frivolous counterclaim leading to delay in the disposal of the arbitral proceedings; and (d) whether any reasonable offer to settle the dispute is made by a party and refused by the other party. (4) The Court or arbitral tribunal may make any order under this section including the order that a party shall pay— (a) a proportion of another party’s costs; (b) a stated amount in respect of another party’s costs; 1. Subs. by Act 3 of 2016, s. 16, for clause (b) (w.e.f. 23-10-2015). 1. Subs. by Act 3 of 2016, s. 16, for sub-section (8) (w.e.f. 23-10-2015). 2. Ins. by s.17, ibid. (w.e.f. 23-10-2015). 21 (c) costs from or until a certain date only; (d) costs incurred before proceedings have begun; (e) costs relating to particular steps taken in the proceedings; (f) costs relating only to a distinct part of the proceedings; and (g) interest on costs from or until a certain date. (5) An agreement which has the effect that a party is to pay the whole or part of the costs of the arbitration in any event shall be only valid if such agreement is made after the dispute in question has arisen.]” 74. Though, in the case at hand, this court in earlier part of judgment has held claimant not entitled to any amount qua claim 1(b) for the reason that he had given an undertaking to do the work as per revised GAD within lump sum cost of Rs.750 Lakh, but having taken note of some of communications wherein respondents themselves proceeded to recommend case of claimant qua aforesaid claim, coupled with the fact that no specific communication ever came to be issued by respondent thereby apprising the claimant, that on account of acceptance of his re-revised GAD he shall not claim any extra 2026:HHC:19374 39 amount for construction of additional span of 27 metres of bridge, rather, he shall be paid Rs.7.50 Crore for total work, this court is not persuaded to agree with findings of learned Arbitrator that there was no occasion if any for claimant to raise dispute. Moreover, learned Arbitrator while rejecting aforesaid claim qua arbitration cost, failed to take note of the fact that besides claim 1(b), claimant had also raised two claims 1(a) and 2 with regard to reimbursement of GST amount withheld on a account of sales tax deduction and GST which were ultimately allowed in favour of claimant, by the learned Arbitrator vide impugned Award. There is nothing on record to suggest that without intervention of the arbitrator, claimant, would have got aforesaid amount, rather, it came to be submitted before learned arbitrator that amount qua aforesaid both claims is being processed but it is a matter of fact that same ultimately came to be allowed/paid after passing of award. 75. Consequently, in view of detailed discussion made above, the award passed by the Sole Arbitrator on 24.7.2023, is upheld qua claim No. 1(b), however, same is modified qua claim Nos. 1(a) and 2, to the extent that the claimant shall be entitled to interest at the rate of 8% on the amounts awarded thereunder, from the date same became due and till the date of actual payment of same by the respondents to the claimant. 76. Since, otherwise claims Nos. 1(a) and 2 have been awarded by the sole arbitrator and even claim No.2 was not resisted by the respondents, it is clear that the claimant was forced to take recourse to arbitration to get the amount, which was due to him and in this process, 2026:HHC:19374 40 he had to engage a counsel and pay the fee of learned Arbitrator. Therefore, in view of the above, award dated 24.7.2023, qua claim No.3 is set aside and it is directed that the claimant shall be entitled to costs of arbitration amounting to Rs. 4.00 Lakh. 77. The petition is accordingly disposed of in the afore terms. All pending applications also stand disposed of. (Sandeep Sharma) Judge May 22, 2026 Vikrant