Dalveer Bhandari ( 1 ) THE disputes between the parties were referred to the arbitrator by this court. The award and proceedings were filed in the court. The objections to the award were filed by the petitioner Indian Oil Corporation. ( 2 ) BEFORE deciding the controversy involved in this case, it would be desirable to recapitulate the basic facts. By virtue of a written contract dated 7th December, 1976 between the petitioner and the respondent, the work of installation of temporary and permanent Cathodic Protection System, (for short, C. P. S.) for the Salaya Viramgam, (for short, S. V.) Section and Viramgam Koyali (for short V. K.) Section, was awarded to the respondent. The said contract contained an arbitration clause for reference to arbitration of all the disputes arising and falling within the ambit of the contract. ( 3 ) THE petitioner alleged that the respondent failed to commence and complete the work within the stipulated period according to the design and specification given by the petitioner. The respondent against the wishes of the petitioner suspended the work and did not resume the same despite a number of the warnings and letters from the petitioner. In these circumstances, the petitioner was left with no choice but to terminate the contract vide letter dated 28th March, 1978 in pursuance of the provisions of paragraphs (b), (c), (d) and (i) of sub-clause 7. 0. 1. 0 of the General Conditions of the Contract. ( 4 ) THE petitioner had to get the balance work completed from another contractor and thereafter made a claim against the respondent for the additional costs incurred, including the supervision charges and interest. ( 5 ) THE respondent in turn made a counter claim on the petitioner challenging the termination and for the damages for illegal termination and for certain other sums that the respondent claimed, were due and payable by the petitioner. ( 6 ) THE respective claims of the parties were referred to the arbitrator for adjudication. The arbitrator gave the award on 28th July, 1987. The arbitrator in para 12 of the award has mentioned : "i have considered the whole matter and find that, there has been breach of the contract mainly by the contractor and most of the above defences by and large do not hold good. The arbitrator gave the award on 28th July, 1987. The arbitrator in para 12 of the award has mentioned : "i have considered the whole matter and find that, there has been breach of the contract mainly by the contractor and most of the above defences by and large do not hold good. "the arbitrator in the concluding portion of para 12 of the award has held that the main plea in defence of natural holds ups due to early monsoon, soil being rocky, no electric supply, non provision of import licence or non-availability of cement or other material or that his suggestion for alternative material was of no avail to the contract as per stipulations in the contract. ( 7 ) THE arbitrator in para 13 has held that correspondence between 14. 4. 1977 to 20. 11. 1977 on the record by the petitioner/owners shows that: " (I) the work of V. K. Section had not commenced as per schedule (correspondence at pages 67, 68, 69, 74, 75), so also on S. V. Section (pages 54, 52, 53 ). (ii) the contractor s progress of work on both the sections was much lagging behind the approved progress schedule (page 66-68-69, 87. 89, 83-85, 79-82) and (iii) the contractors had stopped the work with effect from 26. 6 1977 as indicated in the owners letter dated 23. 8. 1977 (page 60-61)". ( 8 ) THE arbitrator has also been mentioned that the performance was poor on V. K. Section. The contractor lagged behind and failed to supply man-power and material, and the work was held up on that account, is writ large in the correspondence. It is further mentioned that apart from the correspondence, the contractor s assurance to catch up the work and to provide a separate crew of S. V. Section is indicated in minutes of the joint meeting dated 5. 10. 1977. It is further mentioned that the contractor failed to arrange man-power and material to catch up the work is clear from the owner s letter dated20. 10. 1977. The correspondence on record indicates that right from 4. 12. 1976 to 20. 2. 1977 the owner s were complaining against non-commencement of the work of TCP, which had to be done simultaneously with laying of Pipe Lines as per clause 2. 1. 10. 1977. The correspondence on record indicates that right from 4. 12. 1976 to 20. 2. 1977 the owner s were complaining against non-commencement of the work of TCP, which had to be done simultaneously with laying of Pipe Lines as per clause 2. 1. 2 of the Special Conditions, including the current drainage survey, installation of test lead points and about non-carrying on/out the work according to the plan, but lagged behind the approved Progress Schedule . ( 9 ) THE Minutes of the Joint Meeting held on 5th October, 1977 revealed that the contractor had annulled the delay and undertook to catch up the arrears and to provide separate clauses for a particular section. The contractor failed to do so or maintain the progress as per approved schedule. The contractor also suspended the work without authority for a period of over 14 weeks. The delay has been clearly attributed in correspondence also, due to non-provision and paucity or material, equipment and machinery arranged by the contractor. The arbitrator held that the contractor had clearly committed a breach of the contract within the meaning of Clauses (b), (c) and (d) and (i) of para 7. 0. 1. 0. of the Original Conditions of the contract. The arbitrator has mentioned that the petitioner also, to an extent, was in breach of their obligations like delay in laying pipe lines and not securing site clearance. ( 10 ) THE arbitrator has also dealt in detail the aspect whether the termination of the contract by the owner is legal or not. According to the arbitrator apart from the owner s default, the time factor for commencing the work, carrying out the work as per approved Progress Schedule and completion of the work within time was of the essence of the contract. If so, the breach of contract could possibly entitle the owner to terminate the contract and get the balance work executed at the risk and cost of the contractor. ( 11 ) ACCORDING to the respondent contractor, time was not of the essence of the contract, because of the stipulation contained in the contract for (i) extension of time, and (ii) levy of compensation for the delay in execution and for diverse reasons including non-commencement or carrying out/on of the work according to approved progress Schedule . ( 11 ) ACCORDING to the respondent contractor, time was not of the essence of the contract, because of the stipulation contained in the contract for (i) extension of time, and (ii) levy of compensation for the delay in execution and for diverse reasons including non-commencement or carrying out/on of the work according to approved progress Schedule . ( 12 ) THE respondent has placed reliance on the judgment of the Supreme Court Hind Construction Company v. State of Maharashtra1. In this judgment, the Supreme Court opined that the question whether or not the time is of the essence of thecontract, would essentially be a question of intention of the parties to be gathered from the terms of the contract. Even if the parties express that the time is of the essence of the contract, such a stipulation will have to be read along with other provisions may, on construction of the contract, exclude the inference that the completion of the work by a particular date was intended to be fundamental, for instance, if the contract were to include clauses providing for extension of time in certain contingencies or for payment of fine or penalty for every day or week, the work undertaken remains unfinished on the expiry of the time provided in the contract, such clauses would be construed as rendering ineffective the express provisions relating to the time being of the essence of the contract. Therefore, all provisions of the contract have to be considered in order to arrive at the conclusion whether the time was of the essence of the contract or not. ( 13 ) THE arbitrator in the award has mentioned that though the breaches set up in the present case are : (I) non-commencement of the work within time ; (ii) non-carrying on/out the work according to the approved progress Schedule ; (iii)non-provision material labour machinery, etc. by the contractor ; and (iv) suspension of work. ( 14 ) THESE, one and all, are intimately connected with, are intended to and stipulate to ensure completion of work within the prescribed time. ( 15 ) THE arbitrator has held that compliance of these would result in completion within the stipulated time and non-compliance would result in failure to complete within time. ( 14 ) THESE, one and all, are intimately connected with, are intended to and stipulate to ensure completion of work within the prescribed time. ( 15 ) THE arbitrator has held that compliance of these would result in completion within the stipulated time and non-compliance would result in failure to complete within time. Admittedly, there are stipulations for extension of time in certain contingencies and payment of penalty for failure to complete within time, which make the stipulations of commencement within time, carrying on/out of the work as per approved Progress Schedule supplying material machinery etc. as not of the essence of the contract. In fact for the delay resulting in complained lapses/breaches, about a month before the impugned termination of contract, the owner in their letter dated 27. 2. 1988 sent to the contractor. The owners for the alleged breaches threatened the contractor with a claim for liquidated damages. The claim for levy of damages makes the time, in this case, as of non-essence of the contract. The owners themselves did not treat the breach as fundamental and practically waived their right to treat it as such. The arbitrator held that the termination of the contract by the owners was not legal. ( 16 ) THE main question that falls for consideration in this case is whether the Supreme Court judgment in Hind Construction Company s case (supra) has any application to this case. Close scrutiny and proper analysis of the said Supreme Court judgment leads to irresistible conclusion that the facts of both the cases are entirely different. Therefore, the ratio of the said judgment of the Supreme Court has no application to the facts of this case. ( 17 ) IN the instant case, the contract has been terminated under and in exercise of an independent contractual provision and right. The other main distinguishing feature of this case is that in the instant case, the contractor has suspended the work without notice to the petitioner in the mid-stream virtually leaving no option for the owner except to terminate the contract and get the same completed from another contractor which had to be done in this case. The other main distinguishing feature of this case is that in the instant case, the contractor has suspended the work without notice to the petitioner in the mid-stream virtually leaving no option for the owner except to terminate the contract and get the same completed from another contractor which had to be done in this case. ( 18 ) THESE are two separate and distinct features of this case and because of the peculiar facts of this case, the ratio arrived at in the Hind Construction Company s case has no application to the facts of this case. In the instant case the conclusions of the arbitrator regarding the time was not the essence of the contract, is irrelevant because the contract was terminated in exercise of an independent contractual provision and right. ( 19 ) THE arbitrator himself has held that there has been breach of contract mainly by the contractor and most of the defences taken by the contractor by and large do not hold good. The arbitrator in his award by reference to detailed correspondence from 14. 4. 1977 to 20. 11. 1977 has come to the conclusion that performance of the contractor was poor on V. K. Section. The contractor lagged behind and failed to provide man power and material and that the work was held up on that amount is writ large in the correspondence. Above all, the contractor had suspended the work without any notice to the petitioner. In these circumstances, the contract had to be terminated and incomplete work had to be completed by some other contractor. In view of these findings of the arbitrator, he was not justified in rejecting the petitioner s claim and coming to the conclusion that the contract was not legally terminated. In case the interpretation of the arbitrator is accepted, then practically in no case, the owner would be able to terminate the contract despise very serious lapses and breaches of the contract. ( 20 ) THE arbitrator erroneously rejected the petitioner s claim. This is an error apparent on the face of the record. The award to that extent is liable to be set aside. ( 21 ) IN view of the aforesaid conclusion, the findings of the arbitrator regarding counter claims also require reconsideration and those findings are also accordingly set aside. This is an error apparent on the face of the record. The award to that extent is liable to be set aside. ( 21 ) IN view of the aforesaid conclusion, the findings of the arbitrator regarding counter claims also require reconsideration and those findings are also accordingly set aside. The entire award is remitted to the arbitrator for deciding the same in accordance with the law. The arbitrator is directed to adjudicate the claims of the parties in the light, that the contract was validly terminated by the petitioner. ( 22 ) IN the facts and circumstances of this case, the parties are directed to bear their own costs.