Judgment :- P. Shanmugam, J. This Writ Appeal is against the judgment declining to issue a positive direction sought for by the appellant. 2. The appellant is a Civil Construction Company, namely, Hindustan Construction Company Ltd. (hereinafter referred to as 'HCC') entrusted with the work of construction of the Power Tunnel in the Lower Periyar Hydro Electric Project by the Kerala State Electricity Board thereinafter referred to as 'the board) with an agreed period of construction of 68 months reckoned from 27.2.1984. Their contractual date of completion of construction was 26.10.1989. The period was extended by the Board upto 30.6.92. While the work was nearing completion, HCC submitted a claim on 6.5.1994 (Ext. P4) for compensation for delays in the execution of the project. The Board by order dated 2.3.93, Ext. P1, constituted a High Power Adhoc Committee and referred the issues raised by HCC in their memorandum dated 6.5.92 (Ext. P4). The Adhoc Committee submitted their report on 2.9.93. The Board constituted another sub-Committee on 30.10.93 to go through the report of the Adhoc Committee. The Sub Committee submitted their note on 10.11.93. The Board by order dated 19.4.94 (Ext. P3) sanctioned a sum of Rs. 250 lakhs as an interim payment as recommended by the Adhoc Committee which shall be adjusted against the final amount payable to HCC. Subsequently, the Board held several meetings and finally in their meetings held on 12.4.94 and 30.4.94 unanimously decided to accept the recommendation of the Adhoc Committee. Sanction order was issued by the Board dated 19.4.94 for an interim payment of Rs. 250 lakhs. However, no payment was affected in spite of repeated requests and hence HCC filed O.P. 7623/96 (Writ Petition under Art.226 of the Constitution of India) praying for a direction to implement the Board's order dated 19.4.94 (Ext. P3) and issue consequential orders on the basis of the unanimous decision of the Board dated 30.4.94. The learned Single Judge in his judgment dated 4.10.96 declined to grant a positive direction, but, however, directed the Board to take a decision in the matter. HCC filed Writ Appeal on 12.2.97 against the judgment inter alia contending that a positive mandamus ought to have been issued against the Board. Pending the appeal, by a communication dated 25.2.97, the Board informed HCC of their decision to cancel the earlier order dated 19.4.94 and a formal order of communication dated 29.3.97 (Ext. HCC filed Writ Appeal on 12.2.97 against the judgment inter alia contending that a positive mandamus ought to have been issued against the Board. Pending the appeal, by a communication dated 25.2.97, the Board informed HCC of their decision to cancel the earlier order dated 19.4.94 and a formal order of communication dated 29.3.97 (Ext. Rl(a)) was issued. HCC impugned this communication by amending the prayers in the Original Petition and the Writ Appeal (See separate order). 3. The case of the appellant-Company HCC can be summarised as follows: In deference to the genuine claim of HCC for compensation for the delays, the Board willingly accepted for an alternative mechanism in the form of an Adhoc Committee consisting of experts in the field and men of eminence to go into their claims comprised of 5 members including one HCC',s representative and the Chief Engineer (Civil) General & World Bank Projects of K.S.E.B. as the Convenor. The Adhoc Committee had 21 sittings, made site visits and considered voluminous documents. After a minute consideration of the whole matter submitted their recommendations recommending a payment of a sum of Rs. 808.26 lakhs as against the claim of Rs. 1688.08 lakhs by the HCC. The Board again constituted another Sub-Committee consisting of two members, one of whom was the Convenor and representative of the Board in the Adhoc Committee. It was after considering both these recommendations and report, the Board decided and sanctioned to pay an advance of 250 lakhs as an interim payment. From the decision of the Board dated 12.4.94 and the detailed note dated 21.4.94 of the Secretary and the subsequent decision on 30.4.94, it is clear that the Board had taken a unanimous decision to pay a sum of Rs. 808.26 lakhs to HCC as recommended by the Adhoc Committee. The decision of the Board has become final. However, on a wrong assumption that the decision of the Board required confirmation, learned Single Judge accepting the stand of the Board directed them to take a decision. The matter has been concluded and, in any event, there was no further discussion, revision or modification of the decision, until the Writ Petition was filed, on 24.5.96. While admitting the Original Petition, learned single judge directed the Board on 14.5.96 to file a counter affidavit with specific reference to Ext. The matter has been concluded and, in any event, there was no further discussion, revision or modification of the decision, until the Writ Petition was filed, on 24.5.96. While admitting the Original Petition, learned single judge directed the Board on 14.5.96 to file a counter affidavit with specific reference to Ext. P3 order stating the reasons as to why the advance sanctioned was not paid to HCC. It is only thereafter on 17.5.96, the Board seems to have decided to have the matter reviewed, since the then Minister on the floor of the Assembly told in July 1994 that the decision will be reviewed before effecting the payment. Ultimately, the Board in their meeting held on 25.1.97 decided to cancel the order dated 19.4.94 and the same was communicated by the impugned order dated 29.3.97 (Ext. Rl(a)). 4. According to the learned senior Counsel Mr. F. S. Nariman appearing on behalf of the HCC, the real question that arise for consideration is whether there are genuine reasons for non-payment or it is only an excuse or pretence for non-payment. According to him, there is no reason at all for the failure to pay the amount as recommended by the Adhoc Committee. The eight reasons set out in the impugned order dated 29.3.97 are ex facie illegal, arbitrary and unsustainable. His further specific case is that from the present stand and the order of the Board, it is clear that the Board's action and order were predetermined with an intention not to honour their own decision and had acted unfairly and arbitrarily in dealing with HCC from the year 1994. 5. In support of his submissions, Mr. Nariman took us through the relevant dates, decisions and the pleadings including the report of the Adhoc committee. According to him, the Board is bound by the principle of promissory estoppel from going back on the acceptance of the report of the Adhoc Committee. The HCC has altered this position by continuing the work from 1992 and participating before the Adhoc Committee with the legitimate expectation that they will be paid compensation for the delays. The Board which is the statutory body is bound to honour the commitment and cannot act and take a decision arbitrarily. 6. The HCC has altered this position by continuing the work from 1992 and participating before the Adhoc Committee with the legitimate expectation that they will be paid compensation for the delays. The Board which is the statutory body is bound to honour the commitment and cannot act and take a decision arbitrarily. 6. The learned senior counsel Mr, Rajeev Dhawan who defended the case of the Board in countering the argument, submitted that the Writ Petition and the Writ Appeal are not maintainable. The HCC cannot seek contractual reliefs under Art.226 of the Constitution of India. The constitution of the Adhoc Committee was only to enable the Board to gather facts and information. The contract with the HCC contained no provision for arbitration and therefore, there cannot be any other outside mechanism to settle the dispute if any. HCC is trying to bring back the award of an arbitrator in the garb of recommendation of the Adhoc Committee. The Board is the sole authority to decide as to the payment and they have not given up their right to decide the matter at any time. No promise was ever made to the HCC regarding the acceptance of the' report of the Committee. According to him, if at all there is a promise, it came to an end once the Adhoc Committee was constituted. The report of the Committee was, never accepted, but it was under their continuous consideration. Finally, the Board decided that there is no legal obligation to implement the recommendation of the Adhoc Committee. The HCC has no legal enforceable right. There is no estoppel in cases where contract has been executed. There is no case of fairness or reasonableness that can be invoked against the Board. It was the contractual terms that governed the relationship between the parties. Judicial review is outside the scope of the contractual matters. 7. It is further argued that the Adhoc Committee has committed a serious error in including the delays as one coming under the scope of clause 18 of the work order. They would not come under "Excepted Risks" or caused by reasons beyond their control. Learned Senior Counsel took us as through the report of the Adhoc Committee in support of his submission that there is no merit in the recommendations and rightly the Board declined to accept the same. They would not come under "Excepted Risks" or caused by reasons beyond their control. Learned Senior Counsel took us as through the report of the Adhoc Committee in support of his submission that there is no merit in the recommendations and rightly the Board declined to accept the same. The Board is entitled to differ and has taken a decision ultimately in public interest not to accept the report for the reasons stated in the order. The decision is an integrated one and hence the cancellation of 19.4.94 order was part of it. 8. We have head me counsel in extensio, gone through the records made available to us and considered the matter. They are discussed under the following heads: 9. (1) Maintainability of the Writ Petition : The prayer in the Original Petition is to enforce the order of the Board (Ext. P3) dated 19.4.94 and also the decision of the Board taken on 12.4.94 and 30.4.94. The Original Petition has been amended, seeking to quash Ext. R1(a) dated 29.3.97. By the decision taken by the Board on 12.4.94, an order dated 19.4.94 was issued where by the Board sanctioned Rs. 250 lakhs as recommended by the Adhoc Committee as compensation for the delays. By the decision dated 30.4.94, the Board resolved to accept the recommendation of the Adhoc Committee to pay Rs. 808.26 lakhs towards compensation for the loss by the HCC. Though the decisions taken by the Board and the orders issued by the Board are in reference to the contractual work, in so far as the decision and the orders are concerned, they are taken by the Board as a public statutory body. Those orders are amenable to and are liable to be tested under Art.14 of the Constitution of India. In support of this proposition on the maintainability, this Court and the Supreme Court have laid down in a series of decisions that the Board is amenable to writ jurisdiction under Art.226 of the Constitution of India. 10. In L.I.C. of India v. Consumer Education and Research Centre (AIR 1995 SC 1811) the Supreme Court was considering the objection on the maintainability of the petition under Art.226 of the Constitution to enforce a contractual obligation. 10. In L.I.C. of India v. Consumer Education and Research Centre (AIR 1995 SC 1811) the Supreme Court was considering the objection on the maintainability of the petition under Art.226 of the Constitution to enforce a contractual obligation. Their Lordships observed that in the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner ie., fair, just and equitable manner. To act fairly is part of fair procedure envisaged under Art.14 and 21. The arms of the High Court are not shackled with technical rules or of procedure. Therefore, the actions of the State, its instrumentality, any public authority or person whose actions bear insignia of public law element or public character are amenable to judicial review and the validity of such an action would be tested on the anvil of Art.14. While exercising the power under Art.226 the Court would be circumspect to adjudicate the disputes arising out of the contract depending on the facts and circumstances in a given case. The distinction between the public law remedy and private law field cannot be demarcated with precision. In that case, the Supreme Court held that the action of LIC bears public character with an imprint of public interest element in their offers with terms and conditions and therefore, the Writ Petition was maintainable to test the validity of the conditions laid in Table 5 8 term policy and the party need not be related to a civil action. Their Lordships referred to Saghir Ahmad v. State of U.P. (AIR 1954 SC 728), sanjeev Naidu v. State, of Madras (AIR 1970 SC 1102), Ramana Dayaram Shetty v. International Airport Authority of India (AIR 1979 SC 1628), and Kasturi Lai Lakshmi Ready v. State of J. & K. (AIR 1980 SC 1992) and held as follows: "Every action of the public authority or the person acting in public interest or its acts give rise to public element, should be guided by public interest. It is the exercise of the public power or action hedged with public element becomes open to challenge. It is the exercise of the public power or action hedged with public element becomes open to challenge. If it is shown that the exercise of the power is arbitrary, unjust and unfair, it should be no answer for the State, its instrumentality, public authority or person whose acts have the insignia of public element to say that their actions are in the field of private law and they are free to prescribe any conditions or limitations in their actions as private citizens, simplicity, do in the field of private law. Its action must be based on some rational and relevant principles. It must not be guided by irrational or irrelevant considerations. Every administrative decision must be hedged by reasons". 11. In Air India Statutory Corporation v. United Labour Union (1997 9 SCC 377) the Supreme Court held that the legal right of an individual may be founded upon a contract or a statute or an instrument having the force of law. For a public law remedy enforceable under Art.226 of the Constitution, the action of the authority needs to fall in the realm of public law - be it a legislative act of the State, an executive act of the State or an instrumentality or a person or authority imbued with public law element. However, it may not be possible to generalize the nature of the action which would come either under public law remedy or private law field nor is it desirable to give exhaustive list of such actions. Following the decision in Calcutta Gas Co. (Proprietary) Ltd. v, State of W.B. (AIR 1962 SC 1044) the Supreme Court held that if the legal right of a Manager of a company is denuded on the basis of the recommendation by the Board of Management of the company, it would give him right to enforce his right by filing a Writ Petition under Art.226 of the Constitution. Similarly, the decisions in Mulamchand v. State of M.P. (AIR 1968 SC 1218), Gujarat State Financial Coloration, v. Lotus Hotels (P) Ltd. (1983) 3 SCC 379) and Mahabir Auto Stores v. Indian Oil Corporation (1990) 3 SCC 752) were referred with approval and held that the distinction between the public and private law rerqedy has now become practically obliterated. 12. Similarly, the decisions in Mulamchand v. State of M.P. (AIR 1968 SC 1218), Gujarat State Financial Coloration, v. Lotus Hotels (P) Ltd. (1983) 3 SCC 379) and Mahabir Auto Stores v. Indian Oil Corporation (1990) 3 SCC 752) were referred with approval and held that the distinction between the public and private law rerqedy has now become practically obliterated. 12. The Kerala State Electricity Board is a Board constituted in exercise of the powers conferred by S.79B of the Electricity Supply Act 1948, by the State of Kerala. The decision and the orders taken by the Board have to satisfy the test of fairness and reasonableness envisaged under Art.14 of the Constitution of India. The action of the Board has got a public law element init. The action of the Board bears public character with public interest and their's is administrative decision and are impeached on the ground of arbitrarinesss and violation of Art.14 of the Constitution of India and therefore, Writ Petition under Art.226 of the Constitution is clearly maintainable. The claim of the HCC satisfies the tests laid down in various decisions of Supreme Court. As held by the Supreme Court in Air India Statutory Corporation's case referred above, there is no limitation under Art.226 of the Constitution, except self imposed limitations. The arm of Court is long enough to reach injustice wherever it is found. The Court is empowered to give proper relief and grant the same in accordance with law. Since the public law remedy given by Art.226 of the Constitution is not only to issue prerogative writs but also to issue any order or direction to enforce any of the Fundamental Rights or for any other purpose. 13. The judgments referred to on behalf of the Board all relates to the enforcement of breach of conditions of contract. Their rights were held to be pure contractual rights and Writ Petitions are not normally entertained (vide: David v. Kerala State Financial Corporation (1988 (1) KLT 585 (DB)), Surendranathan v. Kerala State Financial Corporation (1988 (2) KLT 186 (DB)) Geetha Timbers v. State, of Kerala (1990 (1) KLT 402 (FB)), Joy v. Superintending Engineer (1990 (2) KLT 146) & Ushakumari v. G.C.D.A. (1995 KLT(SN) 18 (DB)). The ratio laid down in these decisions will not apply to the facts and points raised in this case. The ratio laid down in these decisions will not apply to the facts and points raised in this case. The challenge here is against the administrative decisions and orders of the Board on the ground of arbitrariness and on the principle of promissory estoppel. 14. (2) Promissory estoppel and legitimate expectation : The work involved is the construction of Power Tunnel in the Lower Periyar Hydro Electric Project extending 12.775 Kilometres in length. The HCC was awarded the contract for Rs. 2369.42 lakhs in April, 1983. The contract was extended in February, 1984 and the period of contract was 68 months ending on 26.10.89. Due to various reasons, the execution of work was delayed and the Board gave formal extension of time till 30.6,92. But still the work was not completed, even though the HCC continued the work. On 6.2.92, HCC submitted a memorandum to the Board claiming compensation for the delays in execution of the project. According to them, such delays were right from inception and were beyond their control. Even though they have the completed the major part of the work, for reasons beyond their control they are not in a position to continue the work unless certain matters of fundamental importance are sorted out immediately. In their memorandum, they have set out the particulars of delays and have also stated that the total delay comes to 62 months and 61 days. HCC has allowed certain concurrent delays. They have increased the pace of work to make up the lost time. However, the overall delay was 47 months, which has resulted in phenomenal losses to HCC. They have stated that they will not be able to continue any further by sustaining the progress of work from their own resources and it is imperative that solutions are found for the problems enumerated in their Memo. They have quantified their financial loss to Rs. 1,688.08 lakhs and requested for a direct negotiation or through the assistance of High Power Committee in view of specific exclusion of arbitration in the agreement. The request of the HCC was immediately responded by the Chief Engineer directing the HCC to continue to carry out the work of construction beyond 30.6.92 and sought for comments from his Subordinate officers on the memorandum and also convened a meeting on 8.7.92. The request of the HCC was immediately responded by the Chief Engineer directing the HCC to continue to carry out the work of construction beyond 30.6.92 and sought for comments from his Subordinate officers on the memorandum and also convened a meeting on 8.7.92. Ultimately after the Board corresponding with the Government, and after being informed by the Government that it is the Board which is competent to deal with the issues raised, ordered the constitution of High Power Ad hoc Committee by order dated. 2.3.93 (Ext. P1). Earlier the request of the HCC to include one of their nominees in the Committee as conceded and the Chairman in their meeting held on 8.7.92 with HCC, had told them that the relief that may be recommended by the committee would be possible to be paid only by instalments depending on the financial position of the Board. The Adhoc Committee consisted of 5 members who are all experts in the field. The Chairman is a retired member of the Board. The two other members are retired Additional Secretary to Government and Under Secretary to Government. The HCC representative was also a retired member (Accounts) of the Board. The fifth member was the Convenor and the Chief Engineer (Civil) of the Board. The penultimate portion of the order constituting the Adhoc Committee reads as follows: 'The terms of reference will be limited to the issues covered in the memorandum dated .6.5.92 submitted by M/s. HCC Ltd., and in accordance with the minutes of discussion held by the Full Time Members with M/s. HCC on 8.7.92. The question of allowing compensation, if any, on,v account of flood damages during July 1989, to M/s. HCC shall also be looked into by this committee. The report of the Committee shall be submitted to the Board within a period of two months from the date of first sitting." The report of the Committee was submitted on 3.9.93. The introduction chapter in the report states that even though the Committee was required to present its report within a period of two months, in view of the voluminous matters referred to it, detailed clarification and additional information required from both the Board and HCC as well as visit to the site, further extension of 4 months was sought up to 15.9.1993. It was stated that the Committee had 21 sittings visited the project. It was stated that the Committee had 21 sittings visited the project. The Committee received fullest co-operation from the Board as well as HCC in furnishing all relevant information, clarifications sought from them enabling a dispassionate, objective and balanced assessment of the matters placed before it. The Adhoc Committee had also recommended Rs. 250 lakhs as an interim payment. The Board appointed a Sub-Committee on 13.10.93 to go through the recommendation of the Adhoc Committee and to submit a note to the Board for discussion. The Convenor of the Adhoc Committee happens to be the member of the Sub-Committee which submitted a report on 10.11.93. On 12.4.94, the Board resolved to accept the report of the Adhoc Committee and the Sub-Committee and decided to make an advance of Rs. 250 lakhs to HCC. The decision is as follows: ''Sub: Lower Periyar HE Project- Construction of Power Tunnel - Contract with M/s. HCC Ltd. - Report of the Sub-Committee for approval. The Boardhad a very detailed discussion on the recommendations of the Adhoc Committee on the claims of M/s. HCC Ltd. The Board ordered that based on the discussions in the Board of the day, a note covering all aspects of the issue will be presented before the Board so as to enable the Board to take a decision in the matter. Subject to the above the Board unanimously decided to sanction an interest free adhoc advance of Rs. 250/- lakhs (Rupees Two Hundred and Fifty Lakhs only) to M/s. HCC Ltd. as interim payment recommended specifically by Adhoc Committee, which shall be adjusted against the amount payable to the company, based on the recommendations of the Adhoc Committee. The Full Time Members and Chairman were authorised to discuss with M/s. HCC Ltd. the possibility of advancing the commissioning of the project by crash programming the construction work of Dam and Power House by also utilising the amount thatmay be paid to the Company by way of their claims on tunnel work, on the basis of the recommendations of the Adhoc Committee, as and when the claim is sanctioned, so as to enable the Board to have the full benefit of the World Bank aid that may possibly be extended up to 31.3.1995". 15. The Board in their next meeting held on 30.4.94 passed the minutes of the meeting held on 12.4.94. 15. The Board in their next meeting held on 30.4.94 passed the minutes of the meeting held on 12.4.94. The minute is as follows: "Sub: Passing of the Minutes of the meeting of the KSE Board held on 12.4.1994. While passing the minutes of the Board meeting held on 12.4.1994, the Board noted that the minutes recorded against them No. 16/94 (TC3(C)136/92dated 20.12.1993) needed certain amendments. Accordingly, the Board decided that the words "based on the recommendations of the Adhoc Committee" occurring on the penultimate and last lines of para 2 of the draft minutes shall be deleted. With the above amendment the Board passed the Minutes of the Meeting". 16. The detailed note that was prepared by the Secretary referred to few questions raised as to whether this will not create a precedent and whether escalation given do not cover the element of delay. The Chairman clarified the position in the light of the full discussion of the matter and the Board resolved to pay a sum of Rs. 808.26 lakhs subject to adjustment of amount in relation to the quantities as in the report to be paid to M/s. HCC Ltd. in full settlement of their claim. In implementation of this decision, Ext. P3 order was issued sanctioning to pay an interest free Adhoc advance of Rs. 250 lakhs to HCC as an interim payment recommended by the Adhoc Committee which shall he adjusted against the amount payable by the Company. However, the amount could not be released as per the order dated 19.4.94 due to paucity of funds (vide Board's letter dated 25.2.97). Thereafter, on 30.5.94 the Board decided to discuss the issue further. The said minute is as follows: "Sub: Passing of the Minutes of the meeting of the KS E. Board held on 30.4.1994. The Board passed the minutes by confirming the minutes against all items except that with regard to item 68/94 (NoteNo.TC3(C)136/92 dated 21.4.1994). In regard to item 68/94, the Board has not confirmed the draft minutes. The Board decided to discuss the issue further." As on that date, from the records made available before us, no reason whatsoever is stated as to why the matter was to be discussed further. The decision taken on 12.4.94 and 30.4.94 had not been stayed or reversed. In regard to item 68/94, the Board has not confirmed the draft minutes. The Board decided to discuss the issue further." As on that date, from the records made available before us, no reason whatsoever is stated as to why the matter was to be discussed further. The decision taken on 12.4.94 and 30.4.94 had not been stayed or reversed. It is in the course of the argument, learned Senior Counsel appearing on behalf of the Board refers to a news item appeared in 'Mathrubhoomi' daily on 5.5.94 with the heading "Rupees 8 lakhs in paid additionally over and above the agreed amount'. This report is not referred to in any of the counter affidavits but it is furnished to show that there was some 'concern' for the Board to discuss the issue further. However, it is the case of the HCC that in the meeting held on 25.9.94 between representatives of HCC and the Board, the Chairman assured the Board to honour the Adhoc Committee recommendation and to release an amount of Rs. 25 0 lakhs, was not disputed or replied to. From the facts immediately set out above, it is clear that the HCC which had completed the major portion of the project was suffering from acute financial constraints due to the delay in completion of the project, during May, 1992. After the initial extension in the year 1991, the project was to be completed by 30.6.92. Faced with this situation of the inability of the HCC to proceed with the work unless their financial problems and matters are solved by the Board, and conscious of the fact that there is no arbitration clause in the contract, instead of having a direct negotiation on the claim of the compensation for the loss due to the delay, the Board agreed to constitute a High Power Committee consisting of experts in the field. In the light of the constitution of the Committee, HCC continued with the project. The Committee included one of the members of the Board also. From a reading of the Committee report, it is clear that there was no objection or dissenting omnion in the report. In other words, the Committee's recommendation was unanimous. Instead of considering the Committee's report, the Board decided to appoint another Sub-Committee and though HCC wanted a nominee to be appointed in the Sub-Committee, that was not conceded. From a reading of the Committee report, it is clear that there was no objection or dissenting omnion in the report. In other words, the Committee's recommendation was unanimous. Instead of considering the Committee's report, the Board decided to appoint another Sub-Committee and though HCC wanted a nominee to be appointed in the Sub-Committee, that was not conceded. However, the Sub-Committee did not differ from the Adhoc Committee's report. Faced with this position, the Board resolved unanimously in their full quorum meeting on 12.4.94 to grant an advance of Rs. 250 lakhs. It is important to note that one of the decisions taken on 12.4.94 meeting was authorising the full time members and Chairman to persuade HCC to take up the work of Dam and Power House by utilising the advance money that would be paid for the tunnel work. Thus, it is clear that HCC was promised that their claim regarding compensation would be settled through an alternate mechanism agreed to by the parties and the HCC continued with the work even after 30.6.92 without suspending and without any formal extension of time and completed the work to the full satisfaction of the Board. They have thus altered their position to their disadvantage. The HCC on the basis of assurance had advanced the work of some other contract also. So, on the part of the HCC there is legitimate expectation that the Board would honour the promise and commitment that they would settle the claim of compensation as recommended by the Adhoc Committee and as decided ultimately by the Board unanimously on 12.4.94 and 30.4.94. The decision taken on 30.5.94 to discuss the matter further that had not altered the situation since the decision already taken on 12.4.94 and 30.4.94 have become final and not been amended or altered. On the contrary, a formal order was issued on 19.1.94 in implementation of the decision, but not given effect to. Therefore, at the time of filing of the Original Petition, the HCC was entitled to the payments as the Board is estopped from going backfrom their commitments. It is only after the filing of the Original Petition on 26.4.96, the Board resolved on 17.5.96 review the matter. Therefore, at the time of filing of the Original Petition, the HCC was entitled to the payments as the Board is estopped from going backfrom their commitments. It is only after the filing of the Original Petition on 26.4.96, the Board resolved on 17.5.96 review the matter. The minutes of the meeting is as follows: "Sub: Lower Periyar HE Project - Construction of Power Tunnel - Contract with M/s. HCC Ltd. - Implementation of the recommendation of the Adhoc Committee - O.P.No. 7623/96 filed by M/s. HCC Ltd. The matter was considered in detail. The Board was informed that orders issued by the Board on 19.4.19 94 was not implemented since the then Minister for Electricity has stated in the floor of Assembly that the decision, will be reviewed before effecting payment. The Board, therefore, decided to have a detailed review of the matter and take up the matter with Government," 17. From 12.4.94, there was no review or discussion on the matter. All that the Minister said to have stated in the floor of the Assembly in July, 1994 was to review the matter before effecting payment. However, the Board did not discuss the matter or review the decision till January 1997 when the Board resolved to cancel their order dated 19.4.94. Even then the Board had not decided to cancel their earlier decision taken on 12.4.94 and 30.4.94. There is no justification or acceptable reason for the Board to withhold the payment except the so-called 'concern' of the Board in view of press report dated 5.5.94. As rightly pointed out by the learned Senior counsel on behalf for the HCC that the report of newspaper cannot be the basis for stopping the payment and not implementing the decision. Besides the Board must be aware of the report that the Sub-Committee was against the recommendation of the Adhoc Committee, was incorrect. He also drew our attention on the report in the Indian Express daily on the same day on 5.5.94. While denying any undue favour shown to HCC they carried the response of the Board as follows: "The B card felt that the Adhoc Committee recommendation favouring payment of part of the HCC claims was just and fair and so it decided to accept the report. . While denying any undue favour shown to HCC they carried the response of the Board as follows: "The B card felt that the Adhoc Committee recommendation favouring payment of part of the HCC claims was just and fair and so it decided to accept the report. . They also denied that either the Chief Accounts officer or Chief Engineer (Civil-WB) had made any adverse remarks on the Adhoc Committee report while placing it in the agenda of the Board meeting." Therefore, Mr. P.S. Nariman is right in saying that there is absolutely no reason on records of the Board for not honouring their decision. The alleged newspaper report now put forwarded as a basis of the concern of the Board can only support the contention of the counsel for HCC that it is only a ruse or pretence not to pay the amount. Thus, it could be seen that HCC was assured of an Alternative Dispute Redressal Mechanism and its report was studied by a Sub-Committee and accepted by the Board. The HCC had altered their position by continuing the work with financial strain and problems. The decision dated 12.4.94 further assured and made HCC to continue another project work with the assured funds that would be made available. At no stage HCC was informed that Adhoc Committee's recommendation was not acceptable and they had not been given opportunity before revising their earlier acceptance. 18. Number of decisions have been cited on the scope of the principle of promissory estoppel and its applicability to the facts of this case, which are as follows: In MA. Motilal Padampat Sugar Mills Co. Ltd. v. The State of UP & Ors. 18. Number of decisions have been cited on the scope of the principle of promissory estoppel and its applicability to the facts of this case, which are as follows: In MA. Motilal Padampat Sugar Mills Co. Ltd. v. The State of UP & Ors. (AIR 1979 SC 621) the Supreme Court held that the true principle of promissory estoppel seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to raise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective 'of whether there is any pre-existing relationship between the parties or not. The doctrine of promissory estoppel need not be inhibited by the same limitation as estoppel in the strict sense of the term. It is an equitable principle evolved by the courts for doing justice and there is no reason why it should be given only a limited application by way of defence. In the same judgment, it was held that if the Government wants to resist the liability, it will have to disclose to the Court what are the subsequent events on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those events are such as to render it inequitable to enforce the liability against the Government. It is only if the court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. It is only if the court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden. 19. In Pawn Alloys & Casting Pvt. Ltd. v. U.P.S.E.B. (1997) 7 SCC 251) the Supreme Court held that the respondent Board must be treated to be estopped from prematurely withdrawing the incentive development rebate made available. In this, their Lordships after referring to Kasinka Trading & Union of India (1995) 1 SCC 274), Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398) and Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. (1979) 2 SCC 409) observed that two propositions follow from the analysis of these judgments, as follows: "(1) The determination of applicability of promissory estoppel against public authority/ Government hinges upon balance of equity or 'public interest'. (2) It is the court which has to determine whether the Government should be held exempt from the liability of the 'promise' or 'representation' " In this case, no public interest is pleaded, pressed into service or suggested at any stage, excepting in the last counter. Further general contentions are raised without specifying as to how Board's interest was given up or taken away. 20. The decision in Kasinka Trading v. Union of India ((1995) 1 SCC 274) is relied on both by the Board as well as HCC. In this decision, it has been held that the doctrine of promissory estoppel is well established in the administrative law of the Country. To put it simply, the doctrine represents the principle evolvedby equity to avoid injustice. It was further held that it is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. In this decision, it has been held that the doctrine of promissory estoppel is well established in the administrative law of the Country. To put it simply, the doctrine represents the principle evolvedby equity to avoid injustice. It was further held that it is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundations must be laid in the petition itself by the party invoking the doctrine and that bald expression without any supporting material would not be sufficient. The courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case, it would be inequitable to hold the public authority to its promise. In that case, the Union of India had disclosed the circumstances under which the exemption was initially granted as against change of circumstances which warranted with withdrawal of the exemption notification which was found not irrelevant in that case. The Supreme Court ultimately in that case held that the doctrine had no application to the impugned notification. 21. In this case, HCC has furnished sufficient materials and established as explained before us how the doctrine is applicable in this case. On the other hand, there are no materials furnished warranting to hold otherwise excepting at the argument stage. Board's own documents believe their stand. Hence this decision would not be of help to the Board. 22. 21. In this case, HCC has furnished sufficient materials and established as explained before us how the doctrine is applicable in this case. On the other hand, there are no materials furnished warranting to hold otherwise excepting at the argument stage. Board's own documents believe their stand. Hence this decision would not be of help to the Board. 22. On behalf of the Board strong reliance was placed on the decision in the State of H.P. v. Ganesh Wood Products (1995) 6 SCC 363) wherein the Supreme Court after referring to the doctrine of promissory estoppel and in reference to the views expounded by the Supreme Court in various decisions held that the rule of promissory estoppel being an equitable doctrine, has to be moulded to suit the particular situation. It is not a hard and fast rule but an elastic one, the objective of which is to do justice between the parties and to extend an equitable treatment to them. If it is more just from the point of view of both promisor and promisee that the latter is compensated appropriately and allow the promisor to go back on his promise, that should be done; but if the court is of the opinion that the interest of justice and equity demand that the promisor should not be allowed to resile from his representation in the facts and circumstances of that case, it will do so. The Supreme Court held that it is a matter of holding the scales between the parties, and this is implicit in the doctrine. We do not find any justification or equity to allow the Board to go back from their promise. 23. (3) Merits of the order dated 29.3.97: The order now impugned by HCC is the order of the Board dated 29.3.97. By this order, the Board has given 8 reasons for their decision to cancel their order dated 19.4.94. This order does not cancel or reverse the decision taken by the Board on 12.4.94 and 30.4.94. This order cancels the order dated 19.4.94 (Ext. P3) whereby the Board sanctioned an advance of Rs. 250 lakhs as an interim payment. The stand of the Board that once they have taken a decision to review the decision dated 12.4.94 and 30.4.94, those decisions automatically lose their legal force and that there is no need specifically to revise or cancel those decisions. P3) whereby the Board sanctioned an advance of Rs. 250 lakhs as an interim payment. The stand of the Board that once they have taken a decision to review the decision dated 12.4.94 and 30.4.94, those decisions automatically lose their legal force and that there is no need specifically to revise or cancel those decisions. It is an integrated decision. We are unable to accept this stand. The unanimous decision taken by the Board on 12.4.94 as set out in the detailed note of the Secretary dated 21.4.94 are clear decisions binding on the Board. The decision do not require a confirmation. The regulation 19 of the Kerala State Electricity Board (Meetings) Regulations 1957 states that the minutes shall be recorded in a book and after they are confirmed by the Board, it is read in the next meeting and shall be signed by the presiding authority. It shall thereupon prima facie evidence of the decision. This does not mean that if the minutes are not confirmed, the decision will not be binding. 24. Shackleton on the Law and Practice of Meetings say that the decisions once arrived at do not need confirmation. The stand of the Board that the decision of the Board did not come into force since it was not confirmed by the subsequent meeting, cannot be sustained. Therefore, mere cancellation of 19.4.94 order which related to the payment of advance will not in any way affect the decisions of the B card accepting the report of the Committee and resolving to pay a sum of Rs. 808.26 lakhs subject to certain adjustments in full settlement of the claim. That decision stand unaltered. 25. Coming to the merits of the Board's order dated. 29.3.87, the order ex facie is unsustainable for the following reasons. It is admitted in paragraph 1 that the delay was due to various reasons and that thereis provision to pay compensation for the delay, but the mode of fixing the compensation is not stated in the agreement. Therefore, when there is a provision to pay compensation and the mode of payment had not been fixed, by appointing a High Power Committee, they have adopted the mode of alternate dispute mechanism to quantify the claim. Therefore, when there is a provision to pay compensation and the mode of payment had not been fixed, by appointing a High Power Committee, they have adopted the mode of alternate dispute mechanism to quantify the claim. It is true that the claim of HCC covers compensation for the delays and compensation for other items and for extra items as stated in paragraph 3 of the impugned order. Paragraphs 4 and 5 of the order which could be read together only strengthens the case of the HCC. The Board is under the impression that HCC is claiming compensation for the delay caused by the Board and therefore, Cl.18 of the work order is not applicable. In the counter affidavit dated 23.11.97 the stand of the Board is that "the Board is further convinced that the Adhoc Committee's finding is not acceptable as the Committee wrongly found that the compensation is liable to be paid solely on account of the delay on the part of the Board. There is no sustainable data or proof to enter such finding. It is in that background the Board subsequently did not confirm this order under Reg. 19(b) and had taken a decision to review it". Basically, this is on a wrong promise. The HCC did not claim compensation for the delays caused by the Board. The claim of HCC is that the delay comes under Clause "excepted risks" or cause that comes under beyond their control. Inasmuch as the Board is proceeding under the wrong assumption, the Board has no answer to the claim of HCC which is based to Clause 18 for reasons beyond their control for which they are found liable to pay compensation. The B card did not make any contra claim in this regard. This has been admitted in the note of the Chief Engineer dated 12.12.96. Further, the reasoning that the amount is awarded without evidence, is basically incorrect. The evidence in the form of documents, personal visit and inspection were before the committee. The representative of the Board also was member of the Committee. Therefore, the stand of the Board that there is absence of quantification and there is no evidence is incorrect. This is contrary to the admitted position accepted in the notes submitted by the Sub-Committee and the Chief Engineer. The representative of the Board also was member of the Committee. Therefore, the stand of the Board that there is absence of quantification and there is no evidence is incorrect. This is contrary to the admitted position accepted in the notes submitted by the Sub-Committee and the Chief Engineer. The sixth reason set out in the impugned order is that the Adhoc Committee is not competent to quantify the amount, is a wrong stand. The Adhoc Committee was authorised to look into the claim and had, as a matter of fact, taken into account the documentary materials running into several hundreds of pages of the claim and also the note submitted by the representative of the Board. The Committee had 21 sittings and had visits of the site before coming to the conclusions. Therefore, the reasoning of the Board in this regard is unsustainable. 26. It is true that there was no understanding between the Board and HCC that the report of the Committee will be binding on both the parties. But taking into account the facts and circumstances of the case and the reasons that prompted the Board to constitute a Committee to look into the claims of HCC in the absence of an arbitration clause, are to make the Committee as an alternate dispute resolving mechanism. Therefore, unless there is something wrong in the report of the Committee, the Board cannot claim that they can disregard the report. In this case, the Board had unanimously accepted the report and agreed with its finding. No further acceptable reason has been given for rejecting the report. As a matter of fact, no such decision has been taken. The only decision as revealed from the impugned order is to cancel the order dated 19.4.94 on the plea that the decision taken on 30.4.94, has no legal force because the minutes of the meeting was not confirmed. The impugned order thus proceeds on wrong premises and on illogical basis. All the 8 reasons set out in the order to cancel the earlier order dated 19.4.94 cannot be sustained. 27. The decisions dated 12.4.94 and 30.4.94 do not require further confirmation. The decision of the Board to discuss the matter further does not automatically keep the earlier decision in abeyance, especially when there was no decision by the Board to cancel the earlier decision except to have a detailed review of the matter. 27. The decisions dated 12.4.94 and 30.4.94 do not require further confirmation. The decision of the Board to discuss the matter further does not automatically keep the earlier decision in abeyance, especially when there was no decision by the Board to cancel the earlier decision except to have a detailed review of the matter. This aspect was not brought to the notice of the learned Judge. Therefore, the learned judge came to the conclusion that the Board and the Government have not taken any final decision which in our view cannot be supported. Firtly, the Board had already taken a final decision and the Government had not taken any view in this matter. Even at the initial stage, the Government has left the matter to the Board to take a decision. Therefore, the.judgment of the learned Single Judge cannot be supported. 28. Strong reliance was placed on the judgment of the Supreme CourtmShrilekha Vidyarthiv. State of U. P. (AIR 1991 SC 537) on behalf of HCC wherein the Supreme Court held that every holder of a public office by virtue of which he acts on behalf of the State or public body is ultimately accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. This is equally true of all actions even in the field of contract. The Supreme Court held that no doubt, it is true, that there is a presumption of validity of the State action and the burden is on the person who alleges violation of Art.14 to prove the assertion. However, where no plausible reason or principle is indicated nor is it discernible and the impugned State action, therefore, appears to be ex facie arbitrary, the initial burden to prove the arbitrariness i s discharged shifting onus on the State to justify its action as fair and reasonable. If the State is unable to produce material to justify its action as fair and reasonable, the burden on the person alleging arbitrariness must be held to be discharged. The Supreme Court further held that the wide sweep of Art.14 and the requirement of every State action qualifying for its validity on this touch stone, irrespective of the field of activity of the State, has long been settled. The Supreme Court further held that the wide sweep of Art.14 and the requirement of every State action qualifying for its validity on this touch stone, irrespective of the field of activity of the State, has long been settled. The absence of reasons for not implementing their valid decision taken on 12.4.94, 19.4.94 and 30.4.94 coupled with their justification in paragraph 25 of Board's counter dated 7.10.98 and unsustainable and contradicting stand in their order dated 29.3.97 all would reveal arbitrariness writ large. The Board cannot take shelter on the ground that the claim arose out of contract and the decision taken was on public interest. 29. In Dwarkadas Marfatia & Sons v. Bombay Port Trust ((1989) 3 SCC 293) it was held that where there is arbitrariness in State action, Art.14 springs in and judicial review strikes such an action down. Every action of the executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Art.14 of the Constitution of India. 30. In Food Coloration of India v. Kamdhenu Cattle Feed Industries ((1993) 1 SCC 71) it was held that in contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Art.14 of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law. A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is 'f airplay in action'. Due observance of this obligation as a part of good administration arises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. 31. In Sterling Computers Ltd. v. M/s. M&N Publications Ltd. (AIR 1996 SC 5,1) the Supreme Court held that by way of judicial review the Court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time, the Courts can certainly examine whether "decision making process" was reasonable, rational, not arbitrary and violative of Art.14 of the Constitution. 31(a). Courts have inherent limitations on the scope of any such enquiry. But at the same time, the Courts can certainly examine whether "decision making process" was reasonable, rational, not arbitrary and violative of Art.14 of the Constitution. 31(a). applying the tests and principles laid down by the Supreme Court, we are of the view that the impugned order is arbitrary and is liable to be set aside. 32. (4) Malafide nature of the order : One of the arguments advanced by Mr. F.S. Nariman for HCC is that there is an element of malice in law in this case. According to him, the facts taken from the beginning would now reveal that there is a pre-determined decision not to honour their own decision. According to them, the Board after deciding to discuss the matter further have never discussed the matter till 17.5.96, ie., only after the learned judge directed the Board to give a reply. There is no explanation as to why the Board did not discuss anything about this, nor undertook any further scrutiny of the Adhoc Committee's report earlier. The Board gave a wrong impression before the learned Single Judge in their counter that the discussion was continuing, but no final decision on the review was taken. The Board knew that this was not the position. The Board did not disclose the comments of the various officials and the report of the Chief Engineer on the recommendation of the Adhoc Committee. It is only in their last counter, the Board has tried to bring "haste" "mistake or fraud" and the interest of public revenue so as to deprive the genuine claim of the HCC. 33. According to Mr. Rajeev Dhawan, the Board need not set out reasons for their decisions. Therefore, nothing can be read into the decision to discuss the matter further. There is absence of bonafide in the claim of exorbitant claim. The same cannot be sustained on the grounds of public interest. It is further submitted that the public interest concern could be gathered from the newspaper report dated 5th May, 1994, the communication by the Government dated 10th May, 1994, the statement of the Minister in the floor of the Assembly in July, 1994, and lastly from the decision of the meeting held on 30.5.94 to discuss the matter further. It is further submitted that the public interest concern could be gathered from the newspaper report dated 5th May, 1994, the communication by the Government dated 10th May, 1994, the statement of the Minister in the floor of the Assembly in July, 1994, and lastly from the decision of the meeting held on 30.5.94 to discuss the matter further. It is further emphasised that any payment for the alleged compensation can be said to be against public interest, even though malafide is not alleged against the officers involved in accepting the claim. 34. The action of the Board notwithstanding the earlier decision taken till the final order dated 29.3.97 was passed, revealed an element of malice in law. The purpose of delaying the payment was to enable the Board to make further discussions or to scrutinise the matter again. But, that never happened till 17.5.96 and decision was only to review the decision to make the payment. Therefore, for nearly three years, the Board did not consider the claim of HCC in spite of the report of the Adhoc Committee and the recommendation of the Sub-Committee and the decision of the Board. The Board has taken their stand in paragraph 25 of the counter dated 7.10.98 as follows: "The necessity to appoint such a committee was not merely to gather facts and information relevant to consider the claim of HCC. The work was nearing completion and stood at a very critical stage. The claims by HCC, imaginary or otherwise, could not be totally ignored by the Board except at the risk of HCC abandoning the work at such a crucial stage. It was therefore, thought necessary on contractual and commercial considerations to refer the matter to an Adhoc Committee as sought for by HCC with the intention of solely gathering facts for taking as administrative decision by the Board". This paragraph clearly bring out the intention of the Board. Their main contention that the Adhoc Committee was constituted only to gather information is given up. A new case has been set out stating that in order to make the HCC to continue the work and prevent them from abandoning the work, the Adhoc Committee was constituted on contractual commercial consideration. In other words, the Board wants to convey that the appointment of the Committee was made with no intention to implement its recommendations. A new case has been set out stating that in order to make the HCC to continue the work and prevent them from abandoning the work, the Adhoc Committee was constituted on contractual commercial consideration. In other words, the Board wants to convey that the appointment of the Committee was made with no intention to implement its recommendations. They only wanted to divert the action of HCC as a commercial proposition. Such a stand of the Board would be clearly malafide. The Board cannot act arbitrarily in dealing with the contracting parties. 35. The Board placed before us the copies of minutes and three files containing the Note of the Sub-Committee and the Chief Engineer. The other relevant correspondence with the Government and their views were not placed before us in spite of direction in this regard. There are no acceptable reasons discernible from the records. In the absence of any plausible stated reasons for not playing the amount as decided by the Board earlier and the present reason of commercial consideration and unexplained public interest, we have only to conclude that the order is actuated by malice in law and cannot be sustained. 36. In Mahabir Auto Stores v. Indian Oil Coloration (AIR 1990 SC 1031) the Supreme Court held that the decision of the State/Public authority under Art.298 of the Constitution is administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Art.14 of the Constitution of India on any of the grounds available in public law field. It was also held that if a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. Rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination. It is well settled that there can be "malice in law". It is well settled that there can be "malice in law". Existence of such "malice in law" is part of the critical apparatus of a particular action in administrative law. Indeed "malice in law" is part of the dimension of the rule of relevance and reason as well as the rule of fair play in action. 37. (5) The status of the Adhoc Committee and its report: It is an admitted fact that when the contract was entered into in the year 1982, the parties consciously excluded a provision for settlement of dispute by arbitration. It is also not disputed that the Board adopted the appointment of Adhoc Committees in similar complicated matters like Idukki, Idamalayar projects to resolve the issues. Realising the desirability of such a mechanism and especially in a crucial moment of completion of the project, the Board agreed and ordered the constitution of a High Power Adhoc Committee. It is an expert Committee including the members representing the HCC as well as the Board. The nature of question referred to them was compensation for delays. The subject, matter is so complex which requires technically qualified and experienced persons like the members chosen by the Board to assess the compensation claim. Therefore, without going into the merits of the report as such, we find that the Board conscious of the claim and the need of findings thereon agreed to constitute the committee to make their recommendations. It is nowhere suggested or stated in the pleadings by either of the parties anything against the competency and the performance as members of the Committee. The report of the Committee has been given after due deliberation and opportunity to both the parties, going into the minute details of the claim and accepting many of the claims and rejected some others. The Committee's report was also subject-matter of further study by a Sub-Committee, again constituted by the Board. The Note of the Sub-Committee dated 10.11.93 in its conclusion states as follows: 7. Conclusion The Committee was appointed by the Board fora specific purpose and the Chief Engineer (Civil), General and World Bank Projects was the Convenor. The Convenor and his team submitted all the relevant details and arguments before the Adhoc Committee. The Committee had in all 21 sittings, visited the Project and obtained fullest co-operation from both KS E. Board and HCC. The Convenor and his team submitted all the relevant details and arguments before the Adhoc Committee. The Committee had in all 21 sittings, visited the Project and obtained fullest co-operation from both KS E. Board and HCC. The Committee, as explained in their report had examined all the matters as placed before it and made its final recommendation. Hence even if this Sub-Committee recommends something less than what was recommended by the Adhoc Committee, it need not be binding in the part of M/s. HCC. For a mutually acceptable agreement, we feel that Hie Full Time Members may, if think necessary, have a discussion with the Contractors on the various matters covered in the report of the Adhoc Committee. After the discussion, the recommendations may be placed before the Full Board for approval." The Electricity Board which consisted of 7 members after the discussion have expressed their full agreement with the Adhoc Committee's report and its recommendation. Thereafter, the Board also resolved to pay the amount as recommended in full settlement of the claim of the HCC. Thus, it could be seen that the Adhoc Committee's report and its recommendations, Sub-Committee's report and the Board's decision were of unanimous. A Note to the Board by the Chief Engineer (Civil), World Bank Projects & KES dated 12.12.1996 was submitted on the request from the Principal Secretary to the Government, Power (B) Department addressed to the Chairman, K.S.E. Board to examine and report as to what is legally payable to the company out of the amount claimed by HCC. The relevant portion for the purpose of this point is as follows: "The Adhoc Committee was constituted by the Board on the basis of assurances given by the Chairman to HCC in the presence of other Full Time Members in the Meeting held on 8.7.92. The Committee looked into the claims by examining statements and supporting details furnished by both sides, hearing kith sides and visiting the work sites. They submitted their report in 9/93 which was studied by the Sub-Committee consisting of the Chief Engineer and the Financial Advisor and Chief Accounts Officer of the Board and submitted their note in 11/93. The Board had detailed discussions on the issues, decided to pay adhoc advance as per the recommendation of the Adhoc Committee and issued orders in 4/94 but did not implement the same". The Board had detailed discussions on the issues, decided to pay adhoc advance as per the recommendation of the Adhoc Committee and issued orders in 4/94 but did not implement the same". Thus, all the members involved in this exercise are competent persons and they have after due deliberation rendered their considered recommendations. This deserves acceptance unless it is demonstrably shown otherwise. In matters like this which involves the assessment of compensation, it is only the technical assessment that has to weigh the result of the decision. In this case, the recommendation of the Adhoc Committee which was an alternate dispute resolving mechanism involved for settling the claim, was duly accepted by the Board after full discussion. Therefore, we are of the view that in the circumstances, the Adhoc Committee is a mutually created alternate dispute resolving mechanism and its resolutions deserve acceptance, unless they are proved arbitrary. 38. (6) Merits of the Adhoc Committee report: Before we go into this aspect, it has to be made clear that we are not assessing the committee's decision as such. Our attempt is only to satisfy our judicial mind of the reasonableness and proper consideration of the claims. The claim before the Adhoc Committee is related to compensation for delays upto December, 1992. The Committee considered the compensation for the delays in Chapter IV and concluded that the various delays occurring at different periods and stages of execution of work extending to 47 months which is beyond the control of HCC are covered under "Excepted Risks" as defined under Clause 18 of the contract. There is no dispute regarding the total period of delay. The Board's objection in this regard can be summarised as follows: There is no break up figure as to the claim of 62 months and as to how it is 47 months; that there is no exclusion of idling period resulting in duplication; that monthly average cannot be worked out; that it can only be an actual loss and that delays cannot include court delays etc. As a matter of fact, the actual delay was 62 months and 21 days. As a matter of fact, the actual delay was 62 months and 21 days. In the note given in response to the HCC's memorandum, by the Chief Engineer (Civil), it was stated that the total claim made by the contractor (HCC) for 62 months was not acceptable and the total overrun that was reasonable was 47 months beyond the original date of completion. Board's main objection is that the delay of 47 months was not attributable to "Excepted Risks" so as to claim compensation under clause 18. The merits of the Committee's report was canvassed in detail only in the counter affidavit dated 17.10.1998. In paragraph 15 of the counter, it is stated that though there is an agreement that there was actually a delay of 47 months that itself will not suffice for compensation under clause 18. In paragraph Wit is stated that the delay of 47 months is admitted by HCC to be on account of various circumstances and only a small portion of the delay was attributed by HCC as being due to the default of the Board. 39. It was accepted to be reasonable by the representative of the Board. It was not objected to by the Board when they took a decision to accept the report in their decision dated 12.4.94 and 30.4.94 and in the note of the Secretary. The Note of the Chief Engineer dated 12.12.96 states as follows: "From the above clause arises some of the claims of ICC, those related to delay. The clause is elaborate but vague in the sense that quantification of compensation is not specified. The contract does not stipulate any procedure for fixing the basis for compensation. HCC's argument is that the delays were not attributable to them but such delays caused losses by way of infructuous overheads, idling equipments and cost of financing. They demanded compensation for these losses. The Board did not concede HCC's requests. The Adhoc Committee after examining the issue came to the conclusion that the en tire delay of 47 months (as assessed then) was to be considered for compensation under clause 18. It is pointed out by them that the Board granted extension without penalty and without attempting to arrange the work through other agency at risk and cost of HCC, and allowing escalation payments during the extended period; so HCC are eligible to be compensated under Clause 18. It is pointed out by them that the Board granted extension without penalty and without attempting to arrange the work through other agency at risk and cost of HCC, and allowing escalation payments during the extended period; so HCC are eligible to be compensated under Clause 18. For quantifying the claims the Committee accepted HCC's statements as basis, with modifications/ corrections to the extent required in their judgment. The Board could not produce any other statement before the Committee, in this context." xxx xxx xxx xxx "This office is not in a position to offer any recommendation in this matter at this stage. The Board may examine the issue taking into consideration all the aspects pointed out above, and after getting remarks of Legal and Financial Experts, if considered necessary." xxx xxx xxx xxx "Considering that in spite of not very favourable circumstances HCC was able to complete this work, the Board may take early steps to settle all pending issues connected with this con tract, without further delay." The Chief Engineer has admitted that the Board had not repudiated the case of HCC by materials and they had no specific objection to the claim of delay. On the contrary, they have reckoned the delay at 47 months. HCC had not claimed compensation from April 1983 to February, 1984. Hence the Adhoc Committee did not go into the delays prior to 27.2.1984, ie. after vacating of the stay order and commencement of work. The periods were split up in the claim but ultimately 47 months was accepted as reasonable period coming within the "excepted risks". There is no duplication since overhead and fixed expenses incurred during extended period like salary, establishment, wages etc. were not included in the escalation. The principle of computation that was followed was not objected to by the Sub-Committee or the Chief Engineer. In London Borough of Morton v. Stanley Hugh Leach Ltd. (32 BLR 51) the Chancery Division has expressed their views on a similar claim, as follows: "In Crosby the arbitrator rolled up several heads of claim arising under different heads and indeed claims for which the contract provided different bases of assessment. xxx xxx xxx xxx I find his reasoning compelling, the position in the instant case is, I think, as follows. xxx xxx xxx xxx I find his reasoning compelling, the position in the instant case is, I think, as follows. If application is made (under clause 11 (6) or S.24(1) or under both sub-clauses) for re-imbursement of direct loss or expense attributable to more than one head of claim and at the time when the loss or expense comes to be ascertained it is impracticable to disentangle or disintegrate the part directly attributable to each head of claim, then, provided of course that the contractor has not unreasonably delayed in making the claim and so has himself created the difficulty the architect must ascertain the global loss directly attributable to the two causes, disregarding, as a Crosby, any loss or expense which would have been recoverable if the claim had been made under one head in isolation and which would not have been recoverable under the other head taken in isolation. To this extent the law supplements the contractual machinery which no longer works in the way in which it was intended to work so as to ensure that the contractor is not unfairly deprived of the benefit which the parties clearly intend he should have." Actual loss cannot be ascertained in this case since the work had been completed and it may not be practically possible to ascertain. The method adopted for computation on averages is not faulted either by the Sub-Committee or the Chief Engineer. It has to be accepted as the actual loss on the principle. 40. In "The FIDIC Form of contract" by Nael G. Bunni under the heading -The Global Approach', it is stated that in general it is necessary for the claimant to establish each and every head of claim by means of separate supporting evidence. The further relevant portion is as follows: "Under the applicable law of the contract is some jurisdictions, it may be permissible to submit one global claim for a number of headings. Under English Law for example, the global approach was accepted in 1967 in the case of J. Crosby & Sons Ltd. v. Portland Urban District Counsel (1967) 5 B building Law Reports, 121. The Condition of Contract used was the Fourth Edition of the ICE Form and one of the matters in dispute which was referred to arbitration by the contractor was a claim for delay and disorganisation'. The Condition of Contract used was the Fourth Edition of the ICE Form and one of the matters in dispute which was referred to arbitration by the contractor was a claim for delay and disorganisation'. The completion of the works had been delayed by 46 weeks due to a number of reasons, some of which entitled the contractor to additional time and or money and some of which did not. The arbitrator stated: "The result in terms of delay and disorganisation, of each of the matters referred to above was a continuing one. As each matter occurred its consequences were added to the cumulative consequences of the matters which had preceded it. The delay and disorganisation which ultimately resulted as cumulative and attributable to the combined effect of all these matters. It is therefore, impracticable, if not impossible, to assess the additional expense caused by delay and disorganisation due to any one of these matters in isolation from other matters...' The arbitrator held that the contractor was entitled to be paid in respect of 31 weeks of the overall delay and awarded the contractor a lump sum by way of compensation. This decision was upheld by the Court and the employer's argument that the arbitrator must necessarily build up the sum by finding amounts due under each of the individual heads of claim upon which the contractor relied in support of his overall claim for delay and disorganisation (disruption) was rejected. The boundaries of this decision were described as depending 'on an extremely complex interaction in the consequences of various denials, suspensions and variations' and where "it may well be difficult Or even impossible to make an accurate apportionment of the total extra cost between the several causative events.' Mr. Justice Donaldson (as he then was) stated that in those limited circumstances there is no reason why an engineer or arbitrator "should not recognise the realities of the situation and make individual awards in respect of those part of individual items of the claim which can be dealt with in isolation and the supplementary award in respect of the remainder of those claims as a composite whole'." The principle set out above has been kept in view by the Adhoc Committee. 41. In Allen Berry & Co. 41. In Allen Berry & Co. v. Union of India (AIR 1971 SC 696) the Supreme Court held in reference to a non speaking award of an Arbitrator, as follows: "The rule is that as the parties choose their own arbitrator to be the judge in the dispute between them, they cannot, when the award is good on the face of if subject to the decision either upon the law or the facts. Therefore, even when an arbitrator commits a mistake either in law or in facts in determining the matters referred to him, but such mistake does not appear on the face of the award or in a document appended to or incorporated in it so as to form part of it, the award will neither be remitted nor set aside notwithstanding the mistake." In this case, Adhoc Committee is not an Arbitrator and no award was rendered. But considering its composition, purpose and assurance and the understanding between the parties, the recommendations of it are to be given effect to and as a matter of fact given effect to after further study. 42. Then the next question is whether this was beyond the control of HCC or covered under "excepted risks". The finding of the Committee is that it is covered under the said clause. The last decision of the Board dated 25.1.97 which reversed the order dated 19.4.94 has stated as though HCC is claiming that the delay is caused by the Board. It is not the case of the HCC that the delay is caused by the Board, but it was caused due to beyond the control of HCC or covered under "excepted risks". The stand of the Board as set out in their impugned decision dated 25.1.97 clearly goes to the root of the matter and exposes the fallacy in the stand of the Board. It is only at the argument level and in the last counter it is highlighted that the claim of HCC would not come under "expected risks" and beyond their control. Clause 18 is found in the work order issued by the Board dated 27.2.84. It is only at the argument level and in the last counter it is highlighted that the claim of HCC would not come under "expected risks" and beyond their control. Clause 18 is found in the work order issued by the Board dated 27.2.84. The said clause is extracted for appreciation of the matter: "Clause 18 - Force Majeure: The contractors shall be under no obligation or responsibility whatsoever for any loss or damage or destruction to the work or any part thereof or to the tools and plant belonging to the contractors and to the project authorities or to any articles at the site from the "Excepted risks" defined below. "Expected risks" are risks due to the Acts of God, such as earthquake, lightning, fire, unprecedented floods, gale, typhoon, storm, hurricane, acts of the Government, Civil war, Insurrection, Enemy action, damage from aircraft war (declared or undeclared), sabotage, explosion, Civil commotion, strike, lack of proper security arrangements, breakdown of law and order, Belligerence, intransigence or any other coercive tactics by the labour, interference by condition, nuclear fission, nuclear fusion or radio activity and other "like causes" coming under the category of expected risks over which the contractor has no control and which directly or indirectly affect the operation of the contract. Should the con tract be terminated, delayed and/or incomplete, permanent works, temporary works, materials equipment, property, life etc. be damaged/destroyed/lost and/or to be rebuilt/ replaced as a result of such excepted risks, the contractors will be compensated suitably by the K.S.E. Board including all completed work not paid for and all escalation in cost arising out of the delay in the performance of the contract". Clause 18 (force majeure) enables the contractors to get suitable compensation. The expected risk include act of God, acts of Government, interference by outside elements, labour problems, physical conditions and other like causes coming under the category of excepted risk over which the contractor has no control and which directly or indirectly affect the operation of the contract. The major types of delays met with at the project as identified by HCC are initial delays, labour intransigents, strike, act of God viz., floods and other natural calamities, changes in the nature and character of work leading to extra items not contemplated at the tender stage, delays by KSEB in fulfilling their contractual obligation in time and commensurate with progress. The HCC assessed the cumulative effect of the above reasons for the delay of 62 months and 21 days. The Committee found on each occasion while conveying the extension of time and the Board stipulated that such extension is subject to the terms and conditions of the original agreement and various supplemental agreements. Therefore, there is no convincing reason to differ from this finding that the delay claimed by the HCC came under "excepted risk". At no stage, the Committee's report was faulted on accepting this aspect that the claim would not come within the "excepted risk". As a matter of fact, but for this Clause 18, the claim of the HCC cannot be sustained at all. When the memorandum was submitted before the Board on 6.5.98 setting out these delays, HCC has claimed that this delay is coming within the "expected risk" and not attributable to the HCC and beyond their control. The Board could have easily rejected the claim as going beyond the terms of contract or outside the scope of the work order. Thus "the committee found that even though escalation provisions concerning labour materials and POL compensated the escalations that took place during and after original period of contract, no relief was provided for overheads and fixed expenses (supervisory salary, general establishment wages, PF contributions and other wages related overheads, rents, taxes etc.). This being the basic and fundamental question, the Board could have simply rejected the claim instead of referring the claim to the Adhoc Committee. Maybethequantificationunderthevariousheadsmayrequireascertainment, but the fact whether the delay is caused due to Clause 18 is a fact which could have been decided by the Board itself. Therefore, the present stand of the Board that it would not come under the "excepted risk" merits no acceptance. That apart, we do not find any error or flaw in the finding of the Committee that the delay is covered under "excepted risk" as defined under Clause 18 of the contract.' 43. The next question is in reference to the quantification of the claim. There are three major claims which are as follows: 1) Compensation for infructuous overheads and fixed expenses; 2) compensation for extra incidents of equipment charges; and 3) compensation for cost of financing the deficit on amount of inadequate progress due to the delays. 44. Chapter V deals with the compensation for infructuous overheads. There are three major claims which are as follows: 1) Compensation for infructuous overheads and fixed expenses; 2) compensation for extra incidents of equipment charges; and 3) compensation for cost of financing the deficit on amount of inadequate progress due to the delays. 44. Chapter V deals with the compensation for infructuous overheads. The Adhoc Committee found that any delay beyond the original contract period involves continued development of manpower and overheads to execute the same quantum of work thus leading to infructuous additional expenditure on a continuing basis so long as the delay extends. The contract adequately covers and compensates for price escalations in extended periods, but only in so far as labour material and POL (Petrol, Oil and Lubricant) are concerned. There is no provision for continued expenses on overheads caused by retention of the manpower who could have been redeployed usefully, if there was no delay. No relief is provided for overheads and fixed expenses which the contractor continues to incur during the extended period. The quantum is fixed by taking the total on site and offsite expenses per month at 5.12 lakhs as against the claim of 8.67 lakhs per month. The Committee recommended a total claim for infructuous overheads at Rs. 240.26 lakhs. The Committee disallowed the offsite overheads expenses amounting to Rs. 180.57 lakhs. 45. On the 2nd head compensation for extra incidence of equipment charges the Adhoc Committee found that extra expense of equipment charges in the extended period of 47 months is a direct consequence of the delay beyond the control of HCC qualifies for compensation in principle. The calculation of equipment charges has been based on the principle and methodology recommended by the Construction Plant and Machinery Group of the Central Water Commission, Government of India. After checking the calculations, the Committee found that the claim is reasonable and should be taken into account for the purpose of payment of compensation. The Committee reduced the charges from 1.7417% to 1.6667% per month and the total amount fixed under this head is Rs. 244.62 lakhs per month. 46. The 3rd claim allowed by the Committee relates to compensation for cost of finance deficit on account of inadequate progress due to delays. As against the claim of Rs. 503.74 Iakhs, the Committee found that an amount of Rs. 193.22 lakhs is genuine claim. 244.62 lakhs per month. 46. The 3rd claim allowed by the Committee relates to compensation for cost of finance deficit on account of inadequate progress due to delays. As against the claim of Rs. 503.74 Iakhs, the Committee found that an amount of Rs. 193.22 lakhs is genuine claim. The Committee found that the additional interest on charges incurred by HCC on borrowed finance to sustain the. progress of work is a direct cash loss to HCC occasioned by the delay of 47 months. While computing the claim, the Committee accepted the principle subject to certain modifications. The Committee considered and allowed the offsite overheads and justified it for the reason that the present claim relates to interest losses and present offsite expenses is part of the cash flow attributable to the project to determine the interest lost thereon. Even though the Committee disallowed the element of cost while computing infructuous overheads, the Committee ultimately accepted 1.93 lakhs as reasonable cost of financial deficit. The Committee disallowed the 4th head of the claim for compensation by way of interest on delayed payments. Thus the amount recommended by the Committee under the three head of compensation on account of delays is Rs. 678.48 lakhs. The other items of claims accepted by the Committee and the amount recommended are as follows: The Board did not dispute certain items of claims amounting to Rs. 20.41 lakhs. Thus the total claim of HCC is Rs. 807.95. 47. After going through the report of the Committee and considering it, we do not find any irrationality or arbitrariness in the findings of the Committee. No grounds are made out and no infirmities were pointed out so as to warrant the rejection of the Committee as totally unsustainable. We have gone through the report of the Committee and its findings only to satisfy ourselves that the alternate dispute solving mechanism evolved by mutual agreement, has done their part and it should not be a futile exercise so as to be discharged in toto. 48. In the light, of our discussion, we are of the considered view that the decisions of the Board dated 19.4.94 and 30.4.94 have become final, binding and enforceable. We ire also of the view that Board's order dated 29.3.97 is arbitrary and illegal is liable to are set aside. 49. In the above circumstances, we pass the following orders: 1. In the light, of our discussion, we are of the considered view that the decisions of the Board dated 19.4.94 and 30.4.94 have become final, binding and enforceable. We ire also of the view that Board's order dated 29.3.97 is arbitrary and illegal is liable to are set aside. 49. In the above circumstances, we pass the following orders: 1. (a) The order dated 29.3.97 (Ext.Rl (a)) is quashed. (b) We direct the respondents, particularly the Board to implement the order of the Board dated 19.4,94 (Ext.P3); and (c) We direct the Board to issue consequential orders on the basis of the decision of the Board dated 12.4.94 and 30.4.94 to make the necessary payments as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment. 2 The Writ Appeal is allowed and the judgment in O.P. 7623/96 is set aside. 3. There will be no order as to cost.