2026:HHC:42293 IN THE HIGH Court OF HIMACHAL PRADESH, SHIMLA CARBC No.121 of 2025 Reserved on: 25.09.2026 Decided on: 30.09.2026 Uploaded on: 30.09.2026 State of H.P. & others … Petitioners Versus M/s Inder Jeet Singh, Avtar Singh Contractors … Respondent Coram Hon’ble Mr. Justice Ajay Mohan Goel, Judge. Whether approved for reporting?1 Yes ____________________________________________________ _ For the petitioners: Mr. S.D. Vasudeva, Deputy Advocate General. For the respondent: Mr. J.S. Bhogal, Senior Advocate, with M/s T.S. Bhogal, Satish Sharma and Swati Verma, Advocates. Ajay Mohan Goel, Judge By way of this petition, the petitioner-State has assailed Arbitral Award dated 06.02.2012 (Annexure P-8), in terms whereof, the claim petition of the respondent herein has been partly allowed by the learned Arbitral Tribunal by majority. The case of the petitioners before this Court is that the parties herein entered into a lump-sum agreement No.6 of 1989-90 for the construction of a bridge over Ali Khad near Village Kothi to connect Bilaspur with Ghumarwin in District Bilaspur. Said agreement was entered for an amount of Rs.3,31,00,000/- on 21.09.1989. The time limit of three years was there for the completion of said work and in terms of the Award Letter, the Contractor was to commence the work from 15th day of the Award Letter and the same was liable to be completed by 06.10.1992. However, the Contractor failed to complete the work 1 Whether reporters of the local papers may be allowed to see the judgment? 2 2026:HHC:42293 within three years and the same was completed by him only in the month of June, 2000. As per the petitioners, the completion of the bridge was delayed by as many as 8 years by the Contractor. It is further the case of the petitioner-Department that in the year 1999, Contractor raised certain disputes and also made a request for referring the disputes for arbitration. As per Condition No.16 of the contract agreement, i.e. Award Letter dated 21.09.1989, both the parties were to appoint one Arbitrator each to adjudicate the dispute and accordingly, one Arbitrator each was appointed by the Contractor and the Department and the third Arbitrator was to be appointed by the said Arbitrators. This was done after the Contractor raised the dispute and the parties submitted their respective claims before the Tribunal. According to the petitioners, Shri S.N. Mukherjee, who was the Arbitrator appointed by the Contractor and Shri R.A. Chaudhary, who was appointed as the Presiding Arbitrator, unilaterally proceeded with the matter without associating the third Arbitrator, who was appointed by the Department and announced an Award on 30.06.2001, in terms whereof, the Contractor was allowed a claim of Rs.82.99 lacs. This was challenged by the Department by way of objections under Section 34(2) of the Arbitration and Conciliation Act before this Court. The Award was set aside by the High Court in terms of judgment dated 16.09.2003, passed in OMP No. 94/2008, directing the Presiding Arbitrator to pass a fresh Award, after discussing the 3 2026:HHC:42293 case in a joint meeting. Thereafter, the Arbitral Tribunal announced a revised Award on 16.01.2004, which as per the petitioners herein, was nothing but a mere repetition of the previous Award of the two Arbitrators, that is, the Presiding Arbitrator and the Arbitrator of the Contractor. The dissenting Award of the third Arbitrator, i.e. the Arbitrator of the Department was ignored by the other Arbitrators. This was also assailed by the Department before this Court and the said revised Award was also set aside by this Court vide judgment dated 06.01.2010, appended with this petition as Annexure P-6. 2. It is the case of the petitioners that this Court in terms of order dated 06.01.2010, had directed that the parties shall meet at a mutually agreed place to initiate further proceedings and there was no direction to any of the Arbitrators to join the proceedings. On 08.03.2010, after receiving a telephonic message from the Contractor of the claimant, Executive Engineer, Bilaspur Division, reached at the mutually agreed place, i.e. the office of Superintending Engineer, Arbitration Circle, Solan. Further, as per the petitioners, despite a clear direction of this Court, to the contrary, the claimant-Contractor not only brought the previous Presiding Arbitrator, Shri R.A. Chaudhary, for the meeting on 08.03.2010, but the said Presiding Arbitrator also conducted the hearing arbitrarily in the absence of the other two Arbitrators. It is further the contention of the petitioners that the Presiding Arbitrator, whose Award was earlier set aside twice, repeatedly 4 2026:HHC:42293 exhibited a biased attitude and feeling dissatisfied, the Department expressed its no-confidence in his impartiality and appealed to the Court to reconstitute the Arbitral Tribunal on 17.08.2010, which was decided on 22.03.2011 in favour of the Contractor without giving the petitioners any opportunity to file a reply before the High Court. Thereafter, the Arbitral Tribunal held further meetings and announced the Award on 06.02.2012, i.e. the majority Award, in terms whereof, the claim of the Contractor was partly allowed and the counter-claims of the Department were rejected. Hence, this petition. 3. Learned Deputy Advocate General argued that the impugned Award was not sustainable in the eyes of law, as the constitution of the Arbitral Tribunal was void ab initio, being contrary to the judgment of this Court dated 06.01.2010. He also argued that in the present case, extension of time in the completion of work was presumed as an admission of liability by the majority Arbitrators by passing the Award and he further argued that the counter-claim of the Department was not decided on merit. No other point was urged on behalf of the Department. 4. On the other hand, learned Senior Counsel for the respondent submitted that the points which were urged in challenge to the Award in issue by the learned Deputy Advocate General were not even pleaded in the petition and as per him, no arguments could be addressed beyond pleadings by the Department. He also 5 2026:HHC:42293 submitted that the parameters within which this Court has to function while deciding objections under Section 34 of the Arbitration and Conciliation Act stand well-defined by the Hon’ble Supreme Court of India. He argued that as the Department was not able to establish that the Award was perverse per se or was against the Public Policy of India, now it cannot call upon this Court to sit as an Appellate Authority over the Award passed by the Arbitral Tribunal by way of majority. He submitted that otherwise also, the contention raised on behalf of the Department by the learned Deputy Advocate General was totally incorrect, because there was no direction passed by this Court in any of its judgments that the constitution of the Arbitral Tribunal was to be changed. He also argued that due process was followed by the Arbitral Tribunal and after hearing both the parties, the Award was announced by majority, which is permissible in law. He further submitted that as far as the issue of counter-claim is concerned, the counter-claim of the Department was not only dismissed by the majority Arbitrators, who announced the Award in favour of the Contractor, but in the dissenting Award of the Arbitrator of the Department also, the counter-claim of the Department was rejected. Accordingly, he submitted that as there was no merit in the present petition, the same be dismissed. Learned Senior Counsel also referred to the Award under challenge and submitted that perusal thereof would demonstrate that the same is a well-reasoned Award and that the 6 2026:HHC:42293 respective contentions of the parties were taken into consideration by the majority Arbitrators and therefore also, the Award calls for no interference. 5. I have heard learned Deputy Advocate General for the petitioners and also learned Senior Counsel for the respondent and have also carefully gone through the Award under challenge as well as other documents on record and also the relevant provisions. 6. Before proceeding further, this Court would like to refer to a recent judgment of the Hon’ble Supreme Court on the scope of Section 34 of the Arbitration and Conciliation Act. Hon’ble Supreme Court of India in Consolidated Construction Consortium Limited vs. Software Technology Parks of India, (2025) 7 Supreme Court Cases 757, has been pleased to hold that sub-section (1) of Section 34of the Arbitration & Conciliation Act provides that an application may be filed for setting aside an Arbitral Award to the competent Court and the conditions for setting aside an Arbitral Award are mentioned in sub-section (2) and 2-A. Sub-section (2) provides for situations such as the aggrieved party was under some incapacity or the arbitration agreement is not valid under the law or the aggrieved party did not receive proper notice regarding appointment of Arbitrator or of the Arbitral proceedings, which prevented it from presenting its case or the Arbitral Award deals with a dispute not contemplated by or not falling within the terms of arbitration, or the composition of Arbitral Tribunal or the procedure adopted in 7 2026:HHC:42293 arbitration were not in accordance with the agreement of the parties or the subject matter of the dispute is not capable of settlement by arbitration or the Arbitral Award is in conflict with the Public Policy of India. In terms of Section 2-A, an Arbitral Award may also be set aside on the ground of patent illegality appearing on the face of the Award. Hon’ble Supreme Court thereafter held that the scope of Section 34 is now well-crystallized by a plethora of judgments and Section 34 is not in the nature of an appellate provision. It provides for setting aside an Award, that too, only on very limited grounds, i.e. as those mentioned in sub-sections (2) and (2-A) of Section 34 of the Arbitration & Conciliation Act. Hon’ble Supreme Court held that it is the only remedy for setting aside an Arbitral Award and an Arbitral Award is not liable to be interfered with only on the ground that the Award is illegal or is erroneous in law, which would require reappraisal of the evidence adduced before the Arbitral Tribunal. Hon’ble Supreme Court held that if two views are possible, there is no scope for the Court to reappraise the evidence and to take a view other than the one taken by the Arbitrator. Hon’ble Supreme Court also held that the view taken by the Arbitral Tribunal is ordinarily to be accepted and allowed to prevail and thus the scope of interference in Arbitral matters is only confined to the extent envisaged under Section 34 of the Act. Hon’ble Supreme Court has also observed that the Court exercising powers under Section 34 has perforce to limit its jurisdiction within the four corners of Section 34. It cannot travel 8 2026:HHC:42293 beyond Section 34. Proceedings under Section 34 are summary in nature and not like a full-fledged civil suit or a civil appeal. The Award as such cannot be touched unless it is contrary to the substantive provisions of law or Section 34 of the 1996 Act or the terms of the agreement. Hon’ble Supreme Court has also held that the role of the Court under Section 34 of the 1996 Act is clearly demarcated. It is a restrictive jurisdiction and has to be invoked in a conservative manner. The reason is that Arbitral Autonomy must be respected and Judicial interference should remain minimal, otherwise it will defeat the very object of the 1996 Act. 7. This Court shall now examine the validity of the Award under challenge in light of the contentions raised on behalf of the petitioners by the learned Deputy Advocate General on the touchstone of the law laid down by the Hon’ble Supreme Court referred to hereinabove. 8. As has been observed by me hereinabove also, learned Additional Advocate General raised three pleas only against the validity of the Arbitral Award. His first contention was that constitution of the Arbitral Aribunal was bad as the same Arbitral Tribunal could not have again heard the matter in light of the judgment dated 06.01.2010, passed by this Court in Arbitration Case No.05 of 2004, titled State of H.P. & Another vs. M/s Inderjeet Singh Avtar Singh, copy whereof is appended with the petition as Annexure P-6. 9 2026:HHC:42293 9. This Court will answer this issue raised by the learned Deputy Advocate General first. Learned Deputy Advocate General submitted that while setting aside the revised Award which was passed by the Arbitral Tribunal by way of the said proceedings, this Court had directed a reconstitution of the Arbitral Tribunal, yet same Arbitrators decided the dispute afresh, which makes in the impugned Award bad. He submitted that as the constitution of the Tribunal was contrary to the directions issued by this Court in Arbitration Case No.5 of 2004 (supra), therefore, the Award was liable to be set aside on this count. 10. I have carefully perused the judgment of this Court passed in Arbitration Case No. 5 of 2004, decided on 06.01.2010. While setting aside the Revised Award, this Court disposed of the said claim petition in the following terms:- “The decision of this Court dealing with the concept of counter claim under the Code of Civil Procedure has been noticed in some detail as a counter claim in Act arbitration would be no different from that as envisaged under the Code of Civil Procedure. In any event, to remove all doubts, the itself envisages under sub section (9) of Section 2 that a claim includes a counter claim and the matter stands concluded by the judgments referred to above. It would be trite to observe that a counter claim negates the very claim set up by a petitioner. arbitrators have not dealt with the counter The claim in a manner required by law. To say that the order disposes of the counter claim by a non speaking 10 2026:HHC:42293 order, is but stating the obvious. In these circumstances, the award of the arbitrators is quashed and set aside. The arbitrators shall reconsider the entire case of the parties on merits and adjudicate the claim and counter claim of the petitioner- respondent herein on the material on record. It is clarified that in case any of the arbitrators is not willing to act or cannot act for some reason, then his vacancy shall be supplied by the party who had so named him in the first place. I have not entered into the other For merits of the submissions urged by the parties as that would have a material bearing on the merits of the case urged by the parties. the purposes of reconstituting the Arbitral Tribunal consisting of the very arbitrators who made this award or in their absence by an arbitrator to be nominated by the party (s) who had nominated him, both the parties to this agreement shall meet at a mutually agreed place on 8.3.2010 for which purpose they shall issue notice to the other party. The proceedings before shall commence the arbitrators thereafter. The Arbitral Tribunal shall be provided with the record as has been sent to this Court arbitrators for which or the purpose, parties either shall file appropriate application in this Court. This petition is disposed of. There shall be no order as to costs. All pending applications shall stand disposed of and all interim order(s) shall stand vacated.” 11. A careful perusal of the judgment of this Court demonstrates that while disposing of the petition,this Court had directed the Arbitrators to reconsider the entire case of the parties on merits and adjudicate the claim and the counter-claim of the 11 2026:HHC:42293 parties on the material on record, with further clarification that in case any of the Arbitrators was not willing to act or could not act for some reason, then his vacancy shall be supplied by the party who had so named him in the first place. There was no direction passed by this Court for reconstitution of the Arbitral Tribunal, as was urged by the learned Deputy Advocate General. In fact, there is a complete misreading of the judgment at the end of the petitioners, because there was no direction issued by the Court for the reconstitution of the Tribunal and the only observation was that out of the Arbitrators, who already stood nominated, if either of the Arbitrator was not willing to act or could not have acted for some reason, then his vacancy shall be filled by the party, who had earlier named such an Arbitrator. 12. In this case, incidentally, this situation did not arose. Neither the Arbitrator appointed by the petitioners, nor the Arbitrator appointed by the Department, nor the Arbitrator appointed by the Contractor, nor in fact the Presiding Arbitrator, who was appointed by the said two Arbitrators expressed their unwillingness to act or were incapacitated from acting as Arbitrators in this case. 13. Therefore, this Court has no hesitation in holding that the contention of the Department that the reconstitution of the Arbitration Tribunal was bad and not in-consonance with the judgment dated 06.01.2010, passed by this Court in Arbitration 12 2026:HHC:42293 Case No.05 of 2004, titled State of H.P. & Another vs. M/s Inderjeet Singh Avtar Singh, is liable to be rejected. 14. The next point urged by the learned Additional Advocate General was that the counter-claim of the Department was not decided on merit by the Arbitrators. A perusal of the Arbitration Award, which is on record as Annexure P-8, demonstrates that the Award passed by the majority Arbitrators is in fact a detailed Award in which the respective contentions of the parties have been taken note of and thereafter, reasoning has been given by the majority Arbitrators as to why the findings were being returned, as they stood returned therein. 15. The counter-claim of the Department has been dealt with in Para-20 of the majority Award by the learned Arbitrators and reasons have been assigned therein as to why the counter-claims were being rejected. That being the case, the contention of the learned Deputy Advocate General that the counter-claim has not been decided on merit is completely misconceived. Whether or not the findings returned by the learned majority Arbitrators are correct or not, is not being gone into by this Court for the reason that neither any arguments were addressed in this regard by the learned Deputy Advocate General and further, as per the law declared by the Hon’ble Supreme Court of India, this Court is not to act as an Appellate Court and re-appreciate the findings returned in the Arbitral Award by re-appreciating the evidence etc., which exercise 13 2026:HHC:42293 has to be undertaken by the Court rarely, in case perversity on the face of the Award is demonstrated before it, which is not even the case of the petitioners in this case. 16. As far as the last issue raised by the learned Deputy Deputy Advocate General that extension of time was presumed as an admission of liability is concerned, a perusal of the grounds of challenge, which have been mentioned in the petition filed under Section 34 of the Arbitration & Conciliation Act demonstrate that there is no foundation for this contention laid down therein. In fact, the challenge primarily against Claim No. 1 is that the same has not been decided unanimously by all the three Arbitrators, as the third Arbitrator, Shri R.K. Jain, had denied the said claim and therefore, the majority claim was liable to be set aside on this account. The majority claim is not liable to be set aside on the sole ground that there was a dissenting Award, also because it is well-settled law, as is also evident from the majority Award given by the two Arbitrators, that in an Arbitral Tribunal consisting of three Arbitrators, there can be an Award passed by majority and it is not as if there has to be a unison Award. The contention raised in the petition that there was no delay on the part of the Department and delay, if any, was on the part of the Contractor, could not be substantiated during the course of the hearing of this petition and, in fact, this issue has been dealt with at length in Para-8 of the Award and the findings returned therein have been so returned after referring to the respective 14 2026:HHC:42293 contentions of the parties, which demonstrates that the findings were returned in the majority Award after consideration of the respective stand of the parties and appreciation thereof. 17. Accordingly, in light of the above discussions, as the petitioner- Department has not been able to make out a case so as to call for interference with the Award under challenge within the parameters as have been laid down by the Hon’ble Supreme Court of India, which stand referred in the above part of this judgment, this petition being devoid of any merit, is dismissed, so also pending miscellaneous application(s), if any. (Ajay Mohan Goel) Judge September 30, 2026 (Rishi)