Judgment :- 1. O.P. No. 193/94 is filed by the petitioner under Section 14 of Indian Arbitration Act, 1940 for issuing directions to the Umpire/8th respondent to file the award dated 4.3.1994 and other connected papers relating to the proceedings of arbitration. 2. O.P. No. 255/95 is filed by the petitioners under Section 30 of the Indian Arbitration Act 1940 to set aside the award of the Umpire/2nd 3 respondent dated 4.3.1994 filed in O.P. No. 193/94. 3. The main averments found in the petition in O.P. No. 255/95 are as follows: (a) The first petitioner S.S. Investments is having its office at No. 56, Sir C.P. Ramasamy Iyer Road, Madras-18 and petitioners 2 to 7 are its partners. The fourth petitioner Mr. Kishore Apparao died during the arbitration. His two legal heirs, who are minors, are represented through their mother and guardian the 5th petitioner who is also a legal heir of Mr. Kishore Apparao, and apart from that she is the partner of the firm. The first respondent Reserve Bank of India is having its office at Fort Glasis Rajaji Road, Madras-1. The 2nd respondent Honble Mr. Justice M.M. Ismail is the Umpire. The first respondent Reserve Bank of India issued a public advertisement in newspapers dated 11.9.1983 for the construction and sale of flats on a ‘package deal’ and the petitioners and the first respondent entered into an agreement dated 4.6.1984 which incorporated the terms and conditions of the sale of land and the building to be constructed. As agreed between the parties, with certain modifications, a supple mental agreement dated 17.7.1984 was entered into. The construction was going on till the first respondent paid the 16th Running Bill submitted by the 1st petitioner. For the 17th Running Bill, the payment was not made by the first respondent. The 1st petitioner demanded some increase in the cost for the completion of the project. Accordingly, a meeting was held on 16.7.1987 at Bombay and as the first respondent was not agreeable for the escalated cost, the first petitioner proposed to pay back all the moneys received from the first respondent. By their letter dated 6.10.1987, the 1st respondent called upon the 1st petitioner to execute the conveyance of the land and unfinished building on or before 31.10.1987 and the 1st petitioner felt that the same was not in accordance with the agreement. (b) The 1st respondent appointed Mr. By their letter dated 6.10.1987, the 1st respondent called upon the 1st petitioner to execute the conveyance of the land and unfinished building on or before 31.10.1987 and the 1st petitioner felt that the same was not in accordance with the agreement. (b) The 1st respondent appointed Mr. Justice M.R.A. Ansari a retired Judge as Arbitrator and the 1st petitioner nominated Thiru Vedantam Srinivasan as an Arbitrator. As the Arbitrators did not concur each other in their findings, the entire matter was referred to the 2nd respondent herein as the Umpire. Learned Umpire gave an award as follows: (i) The claimant Reserve Bank of India is entitled to specific performance of the agreement of sale dated 4.0.1984 supplemented by the agreement dated 17.7.1984 of the land described in Schedule I and shown as Schedule A to the claims Statement and Schedule B to the agreement dated 4.6.1984 with all incomplete structures thereon, and the respondents 1 to 3 and 5 to 7 shall jointly and severally execute the sale deed in respect of the said land together with the incomplete construction thereon in favour of the claimant on receipt of Rs. 26,57,535/- being arrived at in the claim petition itself as Schedule B thereto which is set-out in the award as Schedule II from the claimant. (ii) The respondents 1 to 3 and 5 to 7 shall jointly and severally procure or cause to be procured the Certificate under Section 230(A) of Income Tax Act in respect of the sale of land together with the incomplete construction thereon in order to have the sale deed duly registered. (iii) The respondents 1 to 3 and 5 to 7 shall jointly and severally pay the claimant a sum of Rs. 1,42,20,000/- being damages estimated as indicated in Schedule C to the claim petition. (iv) No exemplanary damages awarded as claimed in the claim statement. (v) Parties do bear their own costs. 4. (iii) The respondents 1 to 3 and 5 to 7 shall jointly and severally pay the claimant a sum of Rs. 1,42,20,000/- being damages estimated as indicated in Schedule C to the claim petition. (iv) No exemplanary damages awarded as claimed in the claim statement. (v) Parties do bear their own costs. 4. Aggrieved by the said award, the petitioners have filed this petition to set aside the same on the following grounds: (a) The supplemental agreement, newspaper advertisements, many of the letters written by the Reserve Bank of India and the Minutes of the Meeting dated 13.2.1986 are unmistakably clear that the agreement has been entered into as a ‘package deal’ for construction of flats in the land belonging to the petitioner and for selling the same to the Reserve Bank of India. (b) The Umpire has gone outside the designated area by not construing the agreement as a ‘package deal’ for land and the construction thereon and calling the same as an ordinary agreement is without jurisdiction and beyond the scope of the agreement itself. (c) The award is in contravention of Section 14 of the Specific Relief Act and that constitutes an error apparent on the face of the award. (d) The finding of the Umpire that the 1st petitioner has agreed to sell the land with unfinished structure is incorrect. (e) Invoking the Bank Guarantee is a clear breach of the agreement on the part of Reserve Bank of India especially when the Bank Guarantee covers 8% of the total cost of the project which as per the agreement between the parties has to be adjusted at the time of execution of conveyance and thereby the Reserve Bank of India has elected to recover part of the cost of the project. he 1st respondent has committed further breach by its failure to make payment for the 17th Running Bill. (f) The award of damages is shockingly and disproportionately high, considering the conduct and the breach committed by Reserve Bank of India. (g) Compensation award towards extra expenditure has no legal basis. On these grounds, the award passed by the Umpire has to be set aside. 5. (f) The award of damages is shockingly and disproportionately high, considering the conduct and the breach committed by Reserve Bank of India. (g) Compensation award towards extra expenditure has no legal basis. On these grounds, the award passed by the Umpire has to be set aside. 5. The averments found in the counter filed by the 1st respondent Reserve Bank of India are as follows: (a) The award of the Umpire is final, conclusive and binding and the parties having agreed to be bound by award of the Umpire cannot challenge the award unless ex facie any error of law is found in the award. The Umpire has not gone beyond the agreement or reference nor failed to construe the agreement properly. The Umpire has discussed in detail several clauses of the agreement including “preamble”. The mere fact that the agreement makes a reference to the expression ‘package deal’ does not warrant the inference that there can be no sale of land without completion of the building thereon. The petitioner has acted in a manner to render the agreement for sale, negative and ineffective by deliberately stopping the work in the middle and approaching the respondent for enhancement of the total cost of the project which is a pure breach of agreement. In the given context the agreement for ‘package deal’ only means that the separate prices of land and each and every item of work on the land and building, et c. which could not be mentioned separately, but, total cost for the entire land and building are given at a particular specified rate. Several clauses of the agreement referred to incomplete construction. Clauses 19 and 20 show that the Purchaser is entitled to purchase the land and the building which is incomplete for the appropriate price to be fixed. The correspondence between the parties would also show that the Vendors were fully aware that the Purchaser is entitled to have the conveyance of the land with incomplete construction thereon. The contentions of the petitioners that the Umpire has committed an error in this behalf is misconceived and no error of law apparent on the face of the award has been committed by the Umpire and therefore the petition under Section 30 of the Arbitration Act 1940 is not maintainable. The contentions of the petitioners that the Umpire has committed an error in this behalf is misconceived and no error of law apparent on the face of the award has been committed by the Umpire and therefore the petition under Section 30 of the Arbitration Act 1940 is not maintainable. It is well within the jurisdiction of the Umpire to put a true and correct construction upon the agreement between the parties and the Umpire has not exceeded the limits of his jurisdiction. The award is not in contravention of Section 14 of the Specific Relief Act 1963. The construction of the building is not in the nature of a personal contract for service or work and therefore the contract can be specifically enforced. Compensation in terms of money for breach of contract is not an adequate relief in this case. The specific performance regarding the conveyance of incomplete building and land is within the four corners of the agreement between the parties. The Umpire has taken into consideration all the necessary documents in accordance with law. The petitioners have failed to show any error of law apparent on the face of the award. Under the special terms of the Bank Guarantee, within a period of three months from the date of the guarantee, the petitioners were bound to execute the conveyance deed in respect of land with or without structure, after obtaining all necessary documents. When the petitioners failed to execute the conveyance within three months, the 1st respondent invoked the bank guarantee for Rs. 27,37,240/- with interest at the rate of 10/% per annum notwithstanding any dispute that may exceed or arise between the parties as per the terms of the guarantee. As the entire construction was already stopped in October 1986, the 17th Running Bill for which payment has to be made on or before 16.1.1987 was stopped and the 1st respondent was well within its right in not making any payment thereof, as the petitioners had already committed the breach of agreement even before submitting the said bill. The invoking of bank guarantee was not a part of the agreement and therefore it cannot be construed as breach of agreement. It is well within the discretion of the Umpire to grant damages and the petitioners have not shown any error of law apparent on the face of the records. The invoking of bank guarantee was not a part of the agreement and therefore it cannot be construed as breach of agreement. It is well within the discretion of the Umpire to grant damages and the petitioners have not shown any error of law apparent on the face of the records. The award for the extra expenditure which would be incurred by the Reserve Bank of India in completing the structure is appropriate. Learned Umpire has awarded the enhanced cost of completion of the building which was demanded by the petitioners, as such they cannot have any objection for the said award. The incomplete structures which were left by the petitioners in 1986 have to be demolished and therefore the grant of compensation towards the extra cost for completing, the construction is in order. As the petitioners have failed to make-out any ground under Section 30 of the Arbitration Act, 1940, the petition is liable to be dismissed with costs. 6. As the main decision which has to be taken is in respect of O.P. No. 255/1995, the averments in the other O.P. No. 193/1994 filed by Reserve Bank of India to file the award dt. 4.3.1994 in the Court, need not be stated as the award already been filed before this Court. 7. M/s. S.S. Investments (here-in-after called petitioners) a partnership firm had four partners and since the 4th partner Kishore Appa Rao died, petitioners 5 to 7 are impleaded as his legal representatives and petitioners 5 and 6 (being minors) are represented by their mother the 5th petitioner. The firm constituted under the Indian Partnership Act, 1932, with their principal place of business at Secunderabad, Andhra Pradesh and having an office at Rosy Tower, Nungambakkam High Road, Chennai 34 is the petitioner in O.P. No. 255/1995. The first respondent are Reserve Bank of India (hereinafter-called respondent) a Corporation established under Reserve Bank of India Act, 1934 and having its Central Office at Bhagatsingh Road, Fort, Bombay-23 and also an Office at Fort Glasis, Rajaji Road, Madras 1. Reserve Bank of India published an advertisement in ‘The Indian Express’ Madras Edition dt. 11.9.1983 and other newspapers inviting offers for residential flats on package deal basis and the petitioners pres ented their applications and finally after observing the preliminary formalities the contract was concluded and an agreement for sale at Madras on 4.6.1984 was entered into between the parties. 8. 11.9.1983 and other newspapers inviting offers for residential flats on package deal basis and the petitioners pres ented their applications and finally after observing the preliminary formalities the contract was concluded and an agreement for sale at Madras on 4.6.1984 was entered into between the parties. 8. The salient features of the agreement are: — (a) Clause ‘D’ of the agreement says: The petitioners herein are entitled to convey, assign or transfer and/or procure a right to convey, transfer or assign or undertake to arrange to convey, assign and transfer a piece or portion of vacant land (in plot No. 7 of the said approved lay out) admeasuring 30 grounds equivalent to 6688.8 sq. meters.” (b) Clause ‘F’ of the agreement says — The petitioners herein have prepared a scheme to develop the said land for the purpose of construction of five residential buildings having a total built-up area of about 1,40,000 sq.ft. and a community complex admeasuring about 2,200 sq.ft. built-up area for Community Centre.” (c) Clause ‘I’ of the agreement says — The petitioners herein have offered to construct on the said land five buildings having or consisting of 152 flats (60 flats of 1000 sq. ft. each, and another 92 flats having 750 sq.ft. each) having a total built-up area of 1,40,000 sq.ft. including balcony area not exceeding 12-1/2% of the built-up area’ of the flat and a community complex admeasuring about 2,200 sq.ft. built-up area for Community Centre, and amenities.” (d) Part I Terms and Conditions for, Clause 1 (a) says that the respondents herein shall purchase from the petitioners the said land and five buildings with 152 tenements or flats of various sizes or areas having a total built-up area of 1,40,000 sq.ft. including balcony area not exceeding 12 1/2% of the built-up area of the flats and with provision for a separate community complex admeasuring about 2,200 sq.ft. built-up area comprising community centre and amenities being/to be constructed thereon or such incomplete construction as may exist on the said land at the time of execution of the deed of conveyance, as the case may be, at the rate of Rs. 240/- (Rupees two hundred and forty only) per sq.ft. of built-up area of the entire complete buildings together with the community complete as stated herein to be paid as per the Schedule of payments hereto appended and marked as Third Schedule. 240/- (Rupees two hundred and forty only) per sq.ft. of built-up area of the entire complete buildings together with the community complete as stated herein to be paid as per the Schedule of payments hereto appended and marked as Third Schedule. (e) Clause 3 says the said rate of Rs. 240/- per sq.ft. of the built-up area of the said completed buildings on the said land is inclusive of; (a) The cost of land, (b) Civil Works, (c) Plumbing and sanitary works inside the buildings, and (d) to (m) the other amenities to be provided. The said rate shall be firm and shall not be varied under any circumstances whatsoever. (f) Clause 6 deals with Earnest Money to be deposited with Syndicate Bank at Nungambakkam High Road, Madras-34, a sum of Rs. 34,12,800/- (Rupees Thirty four lakhs twelve thousand and eight hundred only) representing ten per cent of the total purchase price of the estimated built-up area of 1,42,200 sq.ft. and the deposit shall be by way of earnest money to be adjusted at the time of conveyance towards the payment of purchase price. (g) Clause 6 (b) says the respondents herein and/or the owners shall create an equitable mortgage (mortgage by deposit of title deeds) of their interest in the said land to secure the earnest money and other monies paid to the petitioners herein from time to time as per the Third Schedule or advance otherwise by the respondents from time to time in case of conveyance is permissible only on completion of the work. (h) Clause 6(f) says Reserve Bank of India shall release and pay a sum equivalent to approximately 20% (Twenty per cent) of the cost of construction of the said buildings calculated at Rs. 240/- per sq.ft. of the built-up area of the said buildings viz. about 1,42,200 sq.ft. ascertained as above MINUS the cost of land inclusive of the sum of Rs. 34,12,800/- (Rupees thirtyfour lakhs twelve thousand and eight hundred only) earnest money released towards Mobilisation Advance on the petitioners herein furnishing an undertaking in such form as may be prescribed by Reserve Bank of India. The mobilisation advance shall be deducted and adjusted by Reserve Bank of India from out of the running bills to be submitted by the petitioners herein in accordance with Schedule of payment mentioned in the Third Schedule. The mobilisation advance shall be deducted and adjusted by Reserve Bank of India from out of the running bills to be submitted by the petitioners herein in accordance with Schedule of payment mentioned in the Third Schedule. (i) Clause 15 says “upon payment of the amount towards the cost of the land and the said construction and other works done thereon at the time of the completion of the sale the petitioners herein and all other necessary parties, if any, shall make and execute a conveyance to the Reserve Bank of India duly registered with the Sub-Registrar of Assurances having jurisdiction over the properties.” (j) Clause 18 says “if the sale be not completed due to wilful default on the part of the vendors, the purchasers shall be entitled either to claim specific performance or to terminate the agreement and claim damages and in either of the events the purchaser shall be entitled to all costs, charges and expenses.” (k) Part-II Clause 22 says the petitioners herein had “to complete the construction of all the buildings agreed to be sold herehefore the expiry of 18 (Eighteen) months from the date of execution of these presents in accordance with the plans duly approved and sanctioned by the Madras Metropolitan Development Authority and/or the Municipal Corporation of Madras.” (1) Part-II Clause 24 says if the petitioners herein “fail to complete the said buildings on the said land within the period or the extended period as stipulated under the provision, without prejudice to other rights under law are entitled to get liquidated damages calculated at Rs. 500/- per day subject to a maximum of 2% of the contract amount payable by the purchaser under this agreement for the period beyond the said stipulated time for completion of the buildings.” (k) Part-II Clause 30 says the petitioners herein “shall submit their bills duly certified by the Architects for payment in respect of the construction work strictly in accordance with the schedule of payments (vide Third Schedule). Amount of each bill shall be paid to the petitioners herein within a period of 30 days from the date of receipt of the certified bill in the office of Reserve Bank of India.” (1) Part-II Clause 36 deals with arbitration says that in case of dispute or difference a written notice has to be given for appointment of Arbitrator to be agreed upon and appointed by both the parties or, in case of disagreement as to the appointment of a single Arbitrator to the appointment of two Arbitrators, one to be appointed by each party which Arbitrators shall before taking upon themselves the burden or reference, appoint an Umpire. The award of arbitrator or arbitrators, as the case may be, shall be final and binding on the parties. The petitioners and the respondents also agreed that arbitration under this clause shall be a condition precedent to any right of action under the Contract. 9. On 7.7.1984 the parties had entered into a supplemental agreement to the agreement dt. 4.6.84 referred as ‘the Principal Agreement’. As per the supplemental agreement, 8% of the total cost was agreed to be released on the petitioners firm furnishing a bank guarantee and the petitioners had agreed to limit the mobilisation advance to a sum representing 10% of the cost of construction which shall be payable to them after the sanction of the plans. Reserve Bank of India have agreed to release a sum representing 18% of the costs of the project as Earnest Money Deposit and as per the supp lemental agreement a further sum of Rs. 27,30,240/- (Rupees Twenty seven lakhs thirty thousand two hundred and forty only) representing at the rate of Rs. 240/- (Rupees Two hundred and forty only) per sq.ft. of the built-up area of the said buildings i.e. about 1,42,200 sq.ft. ascertained above against a bank guarantee from a nationalised bank in a form approved by the Reserve Bank of India. It was agreed that the supplemental agreement shall be read as part and parcel of the principal agreement. 10. As per the said agreement, after observing the necessary formalities as per the Rules for the construction, the work continued for some stage and thereafter there arose dispute between the parties and as the parties did not agree for a common Arbitrator, the dispute was referred to by the Reserve Bank of India to the Honble Mr. 10. As per the said agreement, after observing the necessary formalities as per the Rules for the construction, the work continued for some stage and thereafter there arose dispute between the parties and as the parties did not agree for a common Arbitrator, the dispute was referred to by the Reserve Bank of India to the Honble Mr. Justice M.R.A. Ansari, a retired Judge, as co-arbitrator, who passed the award on 1.12.1989, and to one Mr. Vedantam Srinivasan, an Advocate, Madras, as a co-arbitrator by the petitioners herein, who passed his award on 30.12.1989 and as the awards passed by each one of the arbitrators were not agreeable to the parties concerned, Honble Mr. Justice M.M. Ismail, Chief Justice of Madras High Court (Retired) was appointed as ‘Umpire’, who passed the award on 4.3.1994. Against the said award passed by the learned Umpire, the petitioners M/s. S.S. Investments have preferred this Original Petition before this Court. 11. The petitioners M/s. S.S. Investments have raised number of grounds to attack the award passed by the learned Umpire and the first among such grounds was that the contract was a composite one for the land as well as the buildings and nowhere in the agreement it is stated that the contract was for land alone and as such the award of the arbitrator directing the petitioners herein to deliver the land prior to the completion of the construction of the buildings is an error apparent on the face of the award and therefore the award has to be set aside on this ground alone. To substantiate this argument both the learned Senior counsel appearing for the petitioners herein have taken me to the various exhibits filed before the arbitrators and the umpire. It was argued that the very first publication inviting offers for residential flats on package deal basis would go to show that it was a composite contract for the sale of land as well as the construction of the building thereon. It was contended that ‘the principal agreement’ dt. 4.6.1984 was for the combined sale of land as well as buildings to be constructed thereon and no clause in the agreement would show that the land alone can be conveyed to the purchaser before the completion of the building thereon. The letters of the petitioners herein dated 7.2.1985, 7.11.1985, 2.3.1986, 3.3.1986, 22.3.1986, 15. 4.6.1984 was for the combined sale of land as well as buildings to be constructed thereon and no clause in the agreement would show that the land alone can be conveyed to the purchaser before the completion of the building thereon. The letters of the petitioners herein dated 7.2.1985, 7.11.1985, 2.3.1986, 3.3.1986, 22.3.1986, 15. 4.1986, and 29.10.1986, the letters of the respondents dated 6.8.1985, 2.2.1987 and 23.11.1987, and the minutes of the meeting dated 13.2.1986, would go to show that it was a package deal of land and buildings and not of land alone. 12. Learned Senior counsels appearing for the petitioners have shown the various provisions in the agreement dated 4.6.1984 especially ‘F’, ‘G’ and ‘I’ of the agreement and also Part-I - Terms and Conditions for Sale 1(a) to 6(f) and Clause 15 of the agreement and argued that it was a composite contract for the sale of land as well as the construction of the buildings (sic) and the Reserve Bank of India, will not attract our consideration cannot ask the petitioners to convey the land alone before the completion of the buildings. It was further argued that the learned Umpire has acted without jurisdiction while coming to the conclusion that the land alongwith the available construction should be delivered to the respondents Reserve Bank of India and thereby has committed misconduct warranting the interference of this Court. 13. While considering the arguments of both sides and also on a perusal of the records, it could be said that the original notice inviting offers for residential flats was on package deal basis. It was the intention of the Reserve Bank of India to have residential flats for its staff members and to have 2200 sq.ft. built-up area for community centre for the convenience of the residents. Though the sale of land as well as the constructed buildings thereon was the predominant intention of Reserve Bank of India, the agreement dated 4.6.1984 entered into between the parties does not contemplate that the land should be conveyed only with the completed construction. Much water has flown under the bridge from the time of notice inviting offer on 11.9.1983 till the matter was referred to the learned Umpire, Even otherwise the agreement dt. 4.6.1984 is also having certain provisions for the conveyance of the land if the construction was not completed within a reasonable period. Much water has flown under the bridge from the time of notice inviting offer on 11.9.1983 till the matter was referred to the learned Umpire, Even otherwise the agreement dt. 4.6.1984 is also having certain provisions for the conveyance of the land if the construction was not completed within a reasonable period. No one can expect a Corporation like Reserve Bank of India to Wait endlessly especially when the flats were required for the occupation of their Officials. When the construction could not be completed within a reasonable time, the Bank which needed the construction for the residential purposes of their Officials, was pushed to the necessity of taking some steps. A close scrutiny of the various provisions of the agreement would go to show that there are certain provisions for Reserve Bank of India to act further in the matter. 14. Clause ‘G’ of the agreement says — “The Vendors also represented that by or under the said arrangement/agreement with the Owners that the Vendors can sell, convey, assign and transfer or procure the sale, conveyance, assignment or transfer of the said land with or without or at such stage of construction of buildings in such manner and to such extent as the Purchaser requires or desires and that the Owners or other persons entitled thereto including the Vendors shall and will execute the conveyance and other documents in favour of the Purchaser or its nominee or as it may require.” From this clause it is clear that the vendors M/s. S.S. Investments can convey the land and execute the conveyance with or without or at stage of construction of buildings in such manner and to such extent the purchaser requires. When there is such a clause in the agreement itself, the argument of the petitioners that the conveyance of land at such stage of construction of building is not contemplated under the provisions of the agreement, cannot be accepted. 15. When there is such a clause in the agreement itself, the argument of the petitioners that the conveyance of land at such stage of construction of building is not contemplated under the provisions of the agreement, cannot be accepted. 15. Part-I of Clause 15 says — “Upon payment of the amount towards the cost of the land and the said construction and other works done thereon at the time of the completion of the sale the Vendors and all other necessary parties, if any, shall make and execute a conveyance to the Purchaser.” From the above clause 15 of Part I, it can be said that the land can be conveyed alongwith the construction on the land at the time of completion of sale. 16. Part-I of Clause 20 says — “If the conveyance is made before completion of all the buildings, the professional charges of the Architects and RCC specialists in respect of the remaining work (after deducting the charges already paid by the Vendors upto the completion of the conveyance) shall be paid by the Purchaser.” This clause would also go to show that the conveyance can be made even before the completion of the building. 17. The petitioners have argued that by interpreting the composite contract the Umpire has acted in such a way as to compel the petitioners herein to convey the land to the respondents Reserve Bank of India which would amount to invalidating the entire contract. To substantiate this proposition the petitioners have cited a decision of the Apex Court in (The Union of India v. D.N. Revri & Co. ) AIR 1976 SC 2257 at page 2262 it was held — “It must be remembered that a contract is a commercial document between the parties and it must be interpreted in such a manner as to give efficacy to the contract rather than to invalidate it. It would not be right while interpreting a contract, entered into between two lay parties, to apply strict rules of construction which are ordinarily applicable to a conveyance and other formal documents. The meaning of such a contract must be gathered by adopting a commonsense approach and it must not be allowed to be thwarted by a narrow pedantic and legalistic interpretation.” In the instant case, it cannot be said that the learned Umpire has followed any narrow interpretation, while considering the various provisions in the agreement. The meaning of such a contract must be gathered by adopting a commonsense approach and it must not be allowed to be thwarted by a narrow pedantic and legalistic interpretation.” In the instant case, it cannot be said that the learned Umpire has followed any narrow interpretation, while considering the various provisions in the agreement. Learned Umpire has given various acceptable reasons for coming to such conclusion. From the provisions it is clear that though it was a composite contract for the sale of land as well as the construction of the building; in case of unexpected happenings the land can be conveyed alongwith the construction which was found on the land on the date of the sale to the Purchaser Reserve Bank of India by the Vendor M/s. S.S. Investments. While looking into the provisions, the petitioners arguments that the conveyance of land before the completion of the buildings, is not in accordance with law, cannot be accepted and for these reasons it cannot be said the learned Umpire has acted without jurisdiction and thereby the Umpire has committed mis-conduct, also of no avail to the petitioners. 18. Section 12 (4) of the Specific Relief Act says — “Specific performance of part of contract — Except as otherwise hereinafter provided in this section, the Court shall not direct the specific performance of a part of a contract. When a part of a contract which, taken by itself, can and ought to be specifically performed, stands on a separate and independent footing from another part of the same contract which cannot or ought not to be specifically performed, the Court may direct specific performance of the former part.” We have already stated the various provisions in the agreement dt. 4.6.1984 as to how the land alone can be conveyed even if the building was not completed. So, there is ample provision in the agreement to have the part performance of the contract i.e. sale of the land even before the completion of the building. Learned Arbitrator has taken pains to elucidate this point by quoting the concerned provisions in the agreement as well as the communications between the parties. When Section 12(4) of the Specific Relief Act, 1963 permits such part performance of the contract, the contention of the petitioners herein cannot be accepted. 19. Learned Arbitrator has taken pains to elucidate this point by quoting the concerned provisions in the agreement as well as the communications between the parties. When Section 12(4) of the Specific Relief Act, 1963 permits such part performance of the contract, the contention of the petitioners herein cannot be accepted. 19. Section 14 of the Specific Relief Act, 1963 defines the contracts which are not specifically enforceable. Section 14 (3)(c) says the Court may enforce specific performance in certain eases. The contract for the land and construction of building can be specifically enforced as stated in the said Section. When the land can be sold as per the provisions of Section 12 of the Specific Relief Act and Section 14(3)(c) specifically says that a contract for construction of building can be specifically enforced, the argument of the petitioners that the present contract between the parties cannot be specifically enforced and thereby the Umpire has erred in passing the award for the sale of the land, cannot be accepted. 20. The petitioners herein have relied upon a decision of the Bombay High Court in ( Farohar and Company v. Hemand Manohar Nabar ) AIR 1992 Bombay 8 at page 12 held — “Law does not prohibit the Courts or the arbitrators from granting specific performance of part of a contract altogether. In a given situation depending upon the interpretation of the contract, facts and equities of the case, conduct of the parties, severability of consideration for different obligations under the contract etc. the arbitrator or the Court may even grant specific performance of part of the contract.” This decision goes in favour of arguments advanced on the side of the respondents, Reserve Bank of India. Therefore the contention of the petitioners that the present contract cannot be performed in part and that it cannot be specifically enforced. 21. It was contended on the side of the petitioners that as per Clause 36 of the agreement dt. 4.6.1984 arbitration is provided to decide all disputes and differences of any kind whatever arising out of or in connection with the agreement. In the said clause it has been stated that the purchaser and the vendors herein also agree that arbitration under this clause shall be a condition precedent to any right of action under the contract. 4.6.1984 arbitration is provided to decide all disputes and differences of any kind whatever arising out of or in connection with the agreement. In the said clause it has been stated that the purchaser and the vendors herein also agree that arbitration under this clause shall be a condition precedent to any right of action under the contract. While so, the respondent Reserve Bank of India have encashed the bank guarantee given by the petitioners and the bank guarantee was originally given towards 10% of the total price consideration and thereafter vide supplemental agreement dt. 17.7.1984 it was agreed to release 8% of the total cost aggregating to 18% of the cost of the project as earnest money deposit and as already 10% of the total purchase price of Rs. 34,12,800 was released, the Reserve Bank of India had to release a further sum of Rs. 27,30,240/- representing the 8% of the total cost of the project calculated at, the rate of Rs. 240/- per sq.ft. of the built-up area of the buildings and a bank guarantee was gives by the petitioners for the said 8% of the total cost of the project i.e. Rs. 27,30,240/-, on 16.3.1987. For the 10% of the total cost of the project already a mortgage by deposit of title deeds was contemplated under the agreement. The bank guarantee was given with the Vysya Bank Limited, Chikkanapalli, Hyderabad. When the land was not delivered, as per the letters addressed to the petitioners herein by the respondents the Reserve Bank of India, they were compelled to proceed further and therefore the Reserve Bank of India thought fit to encash the bank guarantee. 22. The Apex Court has settled the legal position of invoking the Bank guarantee. In (Hindustan Steel Works Construction Ltd. v. Tarapore & Co. and another) (1996) 5 SCC page 34 where the bank guarantee is stipulated that the beneficiary shall be the sole and final judge to invoke the bank guarantee and that there are two exceptions (1) fraud in connection with the bank guarantee, and (2) irretrievable harm or injustice to one of the parties. In (U.P. State Sugar Corporation v. Sumac Internation Ltd.) (1997) 1 SCC 568 at page 574 the Apex Court held — “The law relating to invocation of such bank guarantees is by now well settled. In (U.P. State Sugar Corporation v. Sumac Internation Ltd.) (1997) 1 SCC 568 at page 574 the Apex Court held — “The law relating to invocation of such bank guarantees is by now well settled. When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realize such a bank guarantee in terms thereof irrespective of any pending disputes. The bank giving Such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. The very purpose of giving such a bank guarantee would otherwise be defeated. The Courts should, therefore, be slow in granting an injunction to restrain the realization of such a bank guarantee.” In (Dwarikesh Sugar Industries Ltd. v. Prem Heavy Engineering Works (P) Ltd. and another) (1997) 6 SCC 450 = 1997 3 L.W. 211 the Apex Court further confirmed the same view. The encashment of bank guarantee by the respondents Reserve Bank of India cannot be termed as (1) fraud in connection with the bank guarantee, and (2) irretrievable harm or injustice to one of the parties. In the instant case it cannot be said that by invoking bank guarantee the Reserve Bank of India have committed fraud on the petitioners. The second exception i.e. the resulting of irretrievable injury, has to be such a circumstance which would make it impossible for the guarantor to reimburse himself, if be ultimately succeeded. It cannot be said that it would be impossible for the ‘guarantor’ the petitioner herein to reimburse the amount if they ultimately succeeded, when the party concerned is Reserve Bank of India which controls the economy of the nation. Therefore, invoking bank guarantee is a right guaranteed and when Reserve Bank of India invoked the said right, it cannot be said that they have committed breach of contract for specific performance. 23. The petitioners have relied upon a decision of a Division Bench of this Court in (Krishna Reddy v. Thimmiah ) 1983 1 MLJ 467 (at page 485 = 96 L.W. 88) wherein it was held — “We therefore hold that assuming Exhibit P-1 acceptance of the refund amount of Rs. 23. The petitioners have relied upon a decision of a Division Bench of this Court in (Krishna Reddy v. Thimmiah ) 1983 1 MLJ 467 (at page 485 = 96 L.W. 88) wherein it was held — “We therefore hold that assuming Exhibit P-1 acceptance of the refund amount of Rs. 13,000/- constituted a concluded contract for sale, the by the first respondent waived his right to enforce the contract and that his right cannot be preserved merely because he had accepted the amount ‘without prejudice’ to his right.” By basing reliance on his decision, it was argued that when once the bank guarantee was encashed by Reserve Bank of India, they cannot enforce the specific performance of the contract. The decision was given in a case concerning a receipt and that receipt was taken as a concluded contract and thereafter Rs. 13,000/- was received by one party without prejudice to right and while interpreting the other document, this Court held so. The said ruling is totally inapplicable to the present case where the bank guarantee is involved. 24. The further arguments of the petitioners herein that by invoking the bank guarantee the respondents Reserve Bank of India have committed breach of contract of the agreement as contemplated under Clause 36 also cannot attract our consideration. No doubt under Clause 36 of the Agreement dt. 4.6.84 that in case of dispute the parties agree that arbitration shall be a condition precedent to any right of action under the contract. Invoking bank guarantee will not fall under the right of action under the contract since it is altogether a separate and independent right going alongwith the bank guarantee and the petitioners cannot take advantage of showing the encashment of bank guarantee as a breach of agreement on the part of Reserve Bank of India. It is also not permissible for the petitioners herein to argue that after invoking the bank guarantee, the Reserve Bank India cannot seek the equitable relief of specific performance as they had not came with clean hands. From the above decisions of the Apex Court, it is clear that invoking bank guarantee is a right given to the person in whose favour the bank guarantee was given by the guarantor and such a right to invoke bank guarantee is an independent right. 25. From the above decisions of the Apex Court, it is clear that invoking bank guarantee is a right given to the person in whose favour the bank guarantee was given by the guarantor and such a right to invoke bank guarantee is an independent right. 25. It was further argued on the side of the petitioners that one party has a right of action under the Contract against the party who has committed breach of contract. The respondents Reserve Bank of India have contended that under Clause 36 of the agreement there is provision for arbitration and therefore the “right of action” in the said clause has been used in a technical sense i.e. right of action used in a Court of law and not in suo motu exercise of right by a party to the agreement. Learned Arbitrator has elaborately gone into the expression ‘right of action’ and stated that in respect of a particular matter there cannot simultaneously be a right as determined by the arbitrator and a right of action under the contract. Learned Arbitrator has also given the meaning of the word “action” stated in various dictionaries, Encyclopedia and Law Lexicon and had elaborately dealt with the matter. There is no error apparent in the award while deciding the expression “right of action”. In these circumstances the arguments advanced on the side of the petitioners are rather technical and there is nothing wrong in the Reserve Bank of India invoking the bank guarantee. 26. It was argued on the side of the petitioners that the 17th Running Bill was not paid by the Reserve Bank of India in time and thereby they have committed breach of contract. The 17th Running Bill is dt. 25.11.1986, whereas it was presented to the respondent-bank on 17.12.1986. Learned Arbitrator has considered this aspect of the case and the bill dt. 25.11.1986 had to be presented within 30 days i.e. on or before 16.1.1987. However, the work was stopped by the Reserve Bank of India earlier to that date. The 17th Running Bill is dt. 25.11.1986, whereas it was presented to the respondent-bank on 17.12.1986. Learned Arbitrator has considered this aspect of the case and the bill dt. 25.11.1986 had to be presented within 30 days i.e. on or before 16.1.1987. However, the work was stopped by the Reserve Bank of India earlier to that date. Therefore, the learned Arbitrator has held as the work was stopped earlier to the date of the bill and its presentation, Reserve Bank of India has not committed any breach of contract The said reason given by the learned Arbitrator cannot be said to be wrong, while going through the various dates connected with the 17th Running Bill and the stoppage of work by the petitioners M/s. S.S. Investments. 27. The next submission, by the learned Senior counsels for the petitioners, is that the learned Arbitrator without any valid reasons has come to the conclusion of allowing damages to the tune of Rs. 1,42,20,000/- and since the respondent Bank have failed to prove the actual loss incurred by them, the damages allowed by the learned Umpire is unconscionable and unjustifiable. Learned Umpire while deciding the said question has considered the total extent of the construction of 1,42,200 sq.ft. and escalation claimed by the petitioners from Rs. 240/- to Rs 340/- per sq.ft. and fix the difference of Rs. 100/- claimed by the petitioners herein as damages per sq.ft. and also calculating the period of seven years between the date of contract and the date of award as calculated the total amount at Rs. 1,42,20,000/-. In pages 107 to 110 of the award, the learned Umpire has given the said calculations. When the learned Umpire has calculated the amount on the basis of escalation of Rs. 100/- per sq.ft. claimed by the petitioners by taking into consideration of the breach of contract committed by the petitioners herein and also the seven years period taken between the date of contract and the date of award has fixed the said sum as damages. 28. It was argued on the side of Reserve Bank of India that under Section 73 of the Indian Contract Act, such damages can be granted in favour of the affected party. The said argument advanced on the side of the respondent Bank is quite convincing and there is no error in granting damages to the respondent Bank. 28. It was argued on the side of Reserve Bank of India that under Section 73 of the Indian Contract Act, such damages can be granted in favour of the affected party. The said argument advanced on the side of the respondent Bank is quite convincing and there is no error in granting damages to the respondent Bank. For the foregoing reasons, the award passed by the learned Arbitrator has to be upheld. 29. This petition is filed by the petitioners herein for setting aside the award under Section 30 of the Arbitration Act, 1940. The main contentions of the petitioners herein are under Section 30(a) that the Umpire has mis-conducted the proceedings, and, 30(c) that the award is otherwise invalid. The learned counsel appearing for the respondents have cited a catena of decisions in support of their contention that the award passed by the Umpire cannot be set aside. The Apex Court has considered the Section 30 of the Arbitration Act, 1940 and Their Lordships have decided the question on what grounds the award can be interfered with. In (Chahal Engineering and Construction Company v. Irrigation Department, Punjab, Sirsa) AIR 1993 SC 2541 it was held — “The misconduct of the Arbitrator, referred to in Section 30(a) and the expression “is otherwise invalid” in Section 30(c) would include an error apparent on the face of the record. Where the award suffers from several patent errors, a party could raise objection for getting it set aside under Section 30”. In order to decide the expression “error apparent on the face of the award”, it is better to look into the decision rendered by the Apex Court, In (Raipur Development Authority v. Chokhamal Contractor) AIR 1990 SC 1426 it was clarified that the ground arising out of an error of law apparent on the face of the award prima facie fall either under Section 16(1)(c) of the Act, which empowers the Court to remit the award to the arbitrator, or under Section 30(c) of the Act which empowers the Court to set aside an award if it is ‘otherwise invalid’. Following the said decision, in ( Harcharan Singh v. Union of India ) AIR 1991 SC 945 , it was held that if the arbitrator or umpire has given reasons in support of his decision, it is open to the Court to set aside the award if it finds that an error of law has been committed by the arbitrator or umpire on the face of the record on going through such reasons. In (Bijendra Nath Srivastava v. Mayank Srivastava ) AIR 1994 SC 2562 at page 2573 in para-22 it was held — “The Court can set aside the award under clause (c) of Section 30 if it suffers from an error on the face of the award. An award might be set aside on the ground of an error on the face of it when the reasons given by the decision, either in the award or in any document, incorporated with it, are based upon a legal proposition which is erroneous. In the absence of any reasons for making the award, it is not open to the Court to interfere with the award.” By considering all the above decisions, in (Trustees of the Port of Madras v. Engineering Constructions Corporation Limited) AIR 1995 SC 2423 at page 2429 it was held — “The proposition that emerges from the above decisions is this: in the case of a reasoned award the Court can interfere if the award is based upon a proposition of law which is unsound in law. The erroneous proposition of law must be established to have vitiated the decision. The error of law must appear from the award itself or from any document or note incorporated in or appended to the award.” From the above decisions of the Apex Court, it is clear that error of law apparent on the face of the award is a valid reason to set aside the award of the arbitrator or Umpire. In the instant case, the learned Umpire has elucidated the facts and law on the subject, in conformity with the law on the subject and there is no error apparent on the face of the award. In the instant case, the learned Umpire has elucidated the facts and law on the subject, in conformity with the law on the subject and there is no error apparent on the face of the award. 29- a. When we consider the other aspects of the award, apart from the question of law, it is pertinent to point-out some of the relevant decisions of the Supreme Court of India which would guide us to draw the final conclusion in the matter. In (Sudarsan Trading Co. v. The Government of Kerala) AIR 1989 SC 890 at page 900 it was held — “Furthermore, in any event, reasonableness of the reasons given by the arbitrator cannot be challenged. Appraisement of evidence by the arbitrator is never a matter which the Court questions and considers. If the parties have selected their own forum, the deciding forum must be conceded the power of appraisement of the evidence. The arbitrator is the sole judge of the quality as well as the quantity of evidence and it will not be for the Court to take upon itself the task of being a judge on the evidence before the arbitrator.” Learned Umpire herein has given reasons for arriving at the conclusion and this Court cannot go into the reasonableness of the reasons given by the arbitrator who is the sole Judge of the quality as well as the quantity of evidence. In ( State of Rajasthan v. Puri Construction Co. Ltd.) (1994) 6 SCC 485 at page 500 it was held — “The arbitrator is the final arbiter for the dispute between the parties and it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or has failed to appreciate the facts.” In ( State of U.P. v. Ramnath International Construction (P) Ltd. ) (1996) 1 SCC 18 at page 22 it was held — “The jurisdiction of the Court to interfere with an award of an arbitrator is undoubtedly a limited one. The adjudication of the arbitrator is generally binding between the parties and it is not open to the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion. Award of an arbitrator can be set aside by a Court only on the grounds indicated in Section 30 of the Arbitration Act. The adjudication of the arbitrator is generally binding between the parties and it is not open to the Court to attempt to probe the mental process by which the arbitrator has reached his conclusion. Award of an arbitrator can be set aside by a Court only on the grounds indicated in Section 30 of the Arbitration Act. It is not open to the Court to reassess the evidence to find whether the arbitrator has committed any error or to decide the question of adequacy of evidence and the Court cannot sit on the conclusion of the arbitrator by re-examining and reappreciating the evidence considered by the arbitrator.” In ( Radhakrishna v. Sponge Iron India Ltd. ) AIR 1997 SC 1324 at page 1328 the Supreme Court after referring many earlier decisions on this point held — “Bearing in mind, the principles laid down by this Court in the abovesaid cases, if we look into disposal of the matter by the High Court, it would be evident that the High Court has substituted its own view in place of the Arbitrators view as if it was dealing with an appeal. That is exactly what is forbidden by the decision of this Court. Therefore, we have no hesitation to set aside the judgment of the High Court on this issue.” From these decisions it is clear that the award of the arbitrator cannot be set aside on the ground that he has drawn his own conclusion or failed to appreciate the facts. The Court cannot probe the mental process by which the arbitrator has reached the conclusion and it cannot substitute its own view in place of the arbitrators view. On the whole, the jurisdiction of the Court to go into the validity of the conclusion reached by the arbitrator is very limited. Therefore most of the arguments advanced on the side of the petitioners regarding the conclusion arrived at by the learned Umpire on the question of fact cannot be probed into by this Court. 30. The very foundation of the major part of the arguments advanced on the side of the petitioners was questioning the validity of the conclusions arrived at by the arbitrator. This Court cannot act like an Appellate Court as if sitting in appeal over the judgment of the Umpire. 30. The very foundation of the major part of the arguments advanced on the side of the petitioners was questioning the validity of the conclusions arrived at by the arbitrator. This Court cannot act like an Appellate Court as if sitting in appeal over the judgment of the Umpire. The Apex Court in ( Puri Construction Pvt. Ltd. v. Union of India ) AIR 1989 SC 777 at page 780 wherein it was held — “When a Court is called upon to decide the objections raised by a party against an arbitration award, the jurisdiction of the Court is limited, as expressly indicated in the Arbitration Act, and it has no jurisdiction to sit in appeal and examine the correctness of the award on merits.” 31. From this decision of the Apex Court it is clear that this Court cannot assess the evidence like an Appellate Court. The catena of decisions stated supra would lead us to the conclusion that the Court can interfere with the award passed by the arbitrator or umpire, in case of error of law apparent on the face of award or the award is otherwise invalid. Both the grounds are not made-out against the present award passed by the learned Umpire, who has elaborately discussed the materials available on record and arrived at the correct conclusion. For all the foregoing reasons, the award passed by the learned Umpire has to be up-held and O.P. No. 255 of 1995 is liable to be dismissed. 32 In the result, O.P. No. 255/1995 is dismissed with costs. O.P. No. 193/1994 is allowed and as the learned Umpire has already filed award into the Court decree is passed in terms of the award.