NEUTRAL CITATION

C/FA/4628/2023 ORDER DATED: 19/02/2024

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

R/FIRST APPEAL NO. 4628 of 2023

With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In R/FIRST APPEAL NO. 4628 of 2023
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BOARD OF TRUSTEES OF DEENDAYAL PORT THROUGH EXECUTIVE
ENGINEER (H)
Versus
M/S. SHANTILAL B. PATEL & ANR.
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Appearance:
AISHVARYA(8018) for the Appellant(s) No. 1
for the Defendant(s) No. 2
PARAS K SUKHWANI(8284) for the Defendant(s) No. 1
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CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE
SUNITA AGARWAL
and
HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE
Date : 19/02/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE ANIRUDDHA P. MAYEE)

1. The present First Appeal is filed under Section

37 of the Arbitration and Conciliation Act, 1996
[“Act of 1996” for short]. The appellant awarded the
contract vide work order No.CM-I/WK/2110-A/88 dated
22.8.2003 to the respondent No.1 - contractor with
the timeline to complete the same within 12 months.
The said contract came to be executed by the
respondent No.1. The appellant herein vide its letter
dated 13.10.2004 informed the respondent No.1 to
prepare the final bill and invited the respondent
No.1 for signing the final bill. The respondent No.1
disputed the final bill and requested to consider its
additions as per the Clause-25 of the Tender

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document, which it had raised against the appellant.

Since there was a dispute, sole Arbitrator came to be
appointed to adjudicate the same. On 29.6.2013, the
learned Arbitrator published the award directing
payment of Rs.11,10,000/- along with the interest at
the rate of 6% p.a. till the date of payment.

1.1 Aggrieved, the appellant herein preferred the

petition under Section 34 of the Act of 1996
challenging the said award dated 29.6.2013 passed by
the learned Arbitrator. By the judgment and order
dated 28.4.2014, the Additional District Judge,
Gandhidham, District: Kutchchh was pleased to dismiss
the said Civil Misc. Application.

1.2 Aggrieved, the appellant has filed the present

appeal.

2. The learned counsel for the appellant Ms.

Aishwarya Gupta submitted that the respondent No.1
had raised 21 claims for the work of reclamation of
OSG/Back up area. She further submitted that the
appellant had filed a detailed reply dated 23.8.2006
whereby it was categorically stated that none of the
claims were maintainable. In support thereof, the
appellant had also produced the relevant documents
before the learned Arbitrator. She further submitted
that the learned Arbitrator allowed only three claims
of the respondent No.1 and rest of the claims came to
be rejected. She submits that claim No.2 came to be

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allowed for Rs.6,00,000/- towards cutting and re-

filling of segmental bund above +7 mtr. level; that
claim No.7 was allowed for Rs.4,98,000/- for
providing bunders and B.T. metals; and claim No.19
was allowed for Rs.12,000/- for providing the mesh in
the area of 120 mt near the end of jetty. She submits
that the learned Arbitrator also erred in awarding
Rs.15,000/- towards the costs. She submits that
reasoning given by the learned Arbitrator while
allowing the said claims were contrary to the
special conditions and specifications of work as
agreed between the parties and thus, is illegal and
opposed to the public policy of India. She submits
that the learned Arbitrator has proceeded on the
basis that all the averments made by the respondent
No.1 are correct, and without recording any reasons
in respect of the same, the learned Arbitrator has
arrived at the conclusion in favour of the respondent
No.1. It is her contention that the award is passed
in contravention of Section 28(3) of the Act of 1996
which provides that the Arbitral Tribunal has to
decide the dispute in accordance with the terms of
the contract. Further contention is that the arbitral
award is passed in contravention of Section 31(3) of
the Act of 1996, which mandates that the arbitral
award shall state the reasoning upon which it is
based. It was submitted that the claims which were
allowed by the learned Arbitrator are merely based on
the recording of the submissions of the respondent
No.1 for such claims and the learned Arbitrator has

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not given any independent reasons as to why such

claims are allowed. She, therefore, submitted that
the award dated 29.6.2013 be set aside.

3. Per contra, the learned advocate Mr. Paras

Sukhwani appearing for the respondent No.1 has
submitted that cogent reasons have been given by the
learned Arbitrator in allowing the said three claims
of the respondent No.1. He submits that the learned
Arbitrator has neither travelled beyond the scope of
the agreement nor the terms of the contract, and
certain claims have been decided on the basis of the
site visit and are based on appreciation and
interpretation of the conditions which have been
properly interpreted by the learned Arbitrator. He
submits that the scope of Section 34 of the Act of
1996 for interference in an arbitral award is, now,
very limited. The learned trial Court has rightly
appreciated the legal position while dismissing the
petition under Section 34 of the Act of 1996. He
submits that the appellant herein has not made out
any ground as required by Section 34 of the Act of
1996 to challenge the award and instead, has
challenged the award on merits, which is not
permissible in law. He, therefore, submits that the
present appeal be dismissed.

4. Heard learned counsels for the parties and

perused the documents on record.

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5. It is trite law that the Court cannot sit in

appeal over the arbitral award and re-examine the
merits. It is further not permissible to re-
appreciate the evidence on record. By a catena of
decisions of the Apex Court, the scope of
interference under Sections 34 and 37 of the Act of
1996 is very limited. Further, it is well settled
that the award cannot be interfered with where on
interpretation of any contract or document, two views
are possible, and the learned Arbitrator has accepted
one view.

6. In the present case, the learned counsel for the

appellant could not make out any case with respect to
any illegality in arbitral award. The emphasis of the
learned counsel for the appellant was on re-
appreciation of evidence, which is not permissible
under Sections 34 and 37 of the Act of 1996. No case
is made out in respect of contravention of any law
related to the public policy or public interest or in
respect of any patent illegality in the arbitral
award. With respect to the contention of the learned
counsel for the appellant that the arbitral award has
been passed in contravention of the provisions of
Sections 28(3) and 31(3) of the Act of 1996, no case
has been made out from the documents on record.
Further, the learned counsel for the appellant could
not demonstrate as to how the learned Arbitrator has
travelled beyond the conditions of the agreement or
terms of the contract for the claims which have been

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allowed by the learned Arbitrator. Further, the

findings of the learned Arbitrator are based upon the
proper appreciation and interpretation of the
prevalent conditions and the site inspection along
with the documents on record. Further, no error could
be pointed out by the learned counsel for the
appellant in the impugned judgment and order.

7. For the aforesaid reasons, no ground is made out

within the parameters of Section 34 or Section 37 of
the Act of 1996 to show any illegality, irrationality
or perversity in the arbitral award. The present
First Appeal is accordingly, dismissed. No order as
to costs.
In view of dismissal of the main First Appeal,
the Civil Application for stay also stands disposed
of.

(SUNITA AGARWAL, CJ )

(ANIRUDDHA P. MAYEE, J.)

KAUSHIK D. CHAUHAN

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