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2006 DIGILAW 387 (CAL)

STEEL AUTHORITY OF INDIA LIMITED v. M/S. JAIGURU CONSTRUCTION CO.

2006-07-04

INDIRA BANERJEE

body2006
Before: Indira Banerjee, J. ( 1 ) THIS is an application under section 30 and 33 of the arbitration Act, 1940 for setting aside an award, made and published by Mr. C. A. Govind, Sole Arbitrator. ( 2 ) THE petitioner issued a tender notice No. QMG Minining 1 of 1991 for removal and transportation of 4,80,000 CBM of blasted rejects and loose soil for a period of 2 years. ( 3 ) PURSUANT to the aforesaid tender notice, the respondent submitted its tender. The tender submitted by the petitioner being the lowest, the same was duly accepted. ( 4 ) A letter of intent being Ref. No. QMG-IV/17 (44)2889-92 dated 15th february, 1992 was issued to the petitioner. By a letter being Ref. No. OMQ-IV/17 (44)/7271-76 dated 8th May, 1992 the petitioner issued work order to the respondent on the terms and conditions specified in the said letter. ( 5 ) THE terms and conditions specified in the said letter are as follows: "1]. Scope of work : hiring of earth moving equipments for removal and transportation of soil and loose blasted rejects above the SMS grade Limestone layer/bench in Ispat Limestone Quarry, Satna. The total estimated volume (in situ) of these materials to the handled during the period of 2 (two) years from the date of commencement of work will be 4,80,000 Cubic metres + 506. The materials are to be transported to specified Dump Yards/locations ranging in distance from 1k. M. to 4 K. M. 2]. Rates:. . . . . . . . . (A ). . . . . . . . . . . . (B ). . . . . . . . . . . . 3]. You will provide adequate nos of equipments - excavators and dump trucks - to ensure and maintain minimum monthly rate of 20,000 Cubic metres (in situ volume)4]. Failure in adhering to the monthly target, as mentioned at serial No. 3 above, will attract penalty @ 2% of the unit rates mentioned in Serial No. 2 (A) and 2 (B ). Penalty will accrue on the deficit quantity/volume as per monthly assessment and will be recovered from your bills at the end of each quarter. Within any quarter if deficit in a particular month is made up in the succeeding month/months, no penalty will be levied. Penalty will accrue on the deficit quantity/volume as per monthly assessment and will be recovered from your bills at the end of each quarter. Within any quarter if deficit in a particular month is made up in the succeeding month/months, no penalty will be levied. In case of non-fulfilment of monthly target and recovery of penalty on the quarterly basis, any claim for waiver of penalty on the ground of deficit being caused by reasons beyond the control of the Contractor will be examined by Superintendent, ILQ of his authorized representative and finally decided/settled on merit of the case by the Zonal in-charge of ILQ, Satna. 5. Payment will be made on the basis of in situ measurement of volume of soil and blasted rejects removed and transported to the specified locations. 9. You will provide safety appliances all your workmen as prescribed in the Mines Act, and Rules framed thereunder. All other terms and conditions stipulated in the Tender Notice no. OMQ-Mining-1 of 1991 will apply to this contract. This work order will form a part of the contract to be executed by you. " ( 6 ) A contract was executed between the parties in terms whereof the respondent was required to lift at least 20,000 CBM per month. ( 7 ) SOME of the relevant terms of the contract are extracted hereinbelow for convenience. "the Contractor shall be under obligation to: (i) provide such number of equipments in perfect working and running condition at all time as would be required by the manager, ILQ, Satna, to carry out the specified work within the time specified by him for the purpose ; (ii) bear all expenses of preventatives and operative maintenance of equipments including cost of spare parts, lubricants, garage charges etc; (iii) maintain sufficient number of equipments in perfect working condition to meet the working programme. . . . . . . . . 10. (a) Payment shall be made after submission of bills of the contractor accompanied with a certificate to the effect that the entire quantity of materials in respect of any individual Mining face has been pushed/transported to the specified dump yard. Such certificate has to be obtained from the Manager, ILQ, Satna or his authorised representative. (b) The contractor should submit bills fortnightly/monthly covering the work done during the previous fortnight/month. Such certificate has to be obtained from the Manager, ILQ, Satna or his authorised representative. (b) The contractor should submit bills fortnightly/monthly covering the work done during the previous fortnight/month. (c) Payment will be released on the progress of work to be determined as per in situ measurement to be certified by the manager, ILQ, Satna on fortnightly/monthly basis. (d) Payment shall be made as far as practicable in the manner indicated below: (i) 90% of the amount payable within 15 days from the date of presentation of bills and balance 10% within 45 days from the date of presentation of bills, provided the bills are found to be in order. (ii) If however, payment cannot be made during the period mentioned above, it will not vitiate the other terms and conditions nor will it give any right to the Contractor to suspend the work or claim any compensation or interest on the amount of bills remaining unpaid. (iii) The final bill and the security deposit be payable only after receipt of "no Claim Certificate" from Manager, ILQ, Satna and in case of any claim after recovery of the claim of RMD from the Contractor or from the bills and Security Deposit. 11. Should at any tine, the Contractor fails or neglects to observe or perform any of the terms, conditions and stipulations contained in the contract or any direction or instruction issued by the manager, ILQ, Satna, or his authorized representative as to the performance of the contract or when the performance is found to be satisfactory, the decision of Head of the Mines Department or RMD on these issues being conclusively binding on the Contractor, the rmd shall be at liberty to take recourse to any or some of all of the following remedies without incurring any liability to itself and without prejudice to any other remedy to which RMD may otherwise be entitled to: (a) Forfeit the security deposit in to to and appropriate the same. (b) To get the portion of the work without recision of the contract or rescind the contract and get the balance work executed departmentally or through any other agency or by hiring equipments of any kind from other sources at the risk and cost of the Contractor. (b) To get the portion of the work without recision of the contract or rescind the contract and get the balance work executed departmentally or through any other agency or by hiring equipments of any kind from other sources at the risk and cost of the Contractor. In case of departmental execution of the work, the cost incurred shall be not only the expenses incurred on labour and materials but also an additional departmental charge of 20% over and above the cost of labour and material. (c) Liquidated damage as given in C1. 10 of General conditions. " "12. No claim whatsoever of the Contractor will be entertained by RMD due to stoppage of work caused by circumstances beyond the control of RMD and to arise from Force Majeure. In this clause the expression 'force Majeure' would include act of God, war, insurrection, riot, civil commotion, strike, lock-out, earthquake, explosion, fire and any other happening which RMD could not reasonably prevent or control. 13. The terms and conditions given in the tender notice shah constitute a part of this agreement except and in so far as this are in conflict with the other terms of this agreement. " ( 8 ) THE respondent failed to lift the required quantity of at least 20,000 cbm per month between 24th April, 1992 when operations commenced. On 8th July, 1992, the petitioner appointed an alternate agency to execute the contract work. Ultimately, by a letter dated 18. 1. 1993, the petitioner terminated the contract. ( 9 ) DISPUTES arose between the respondent and the petitioner in connection with the said contract which inter alia contained an arbitration Clause. By an order being Ref. No. RMD/c/d (R4) 869 dated 24th September, 1993, the Director (Raw Materials) of the petitioner, appointed Mr. C. A. Govind, Chief Financial Manager having his office at 10, Camac Street, Calcutta as Sole Arbitrator to adjudicate (i) the claim of the petitioner against the respondent of Rs. 13,69,734/- as on 1. 12. 92 plus interest and cost and (ii) the alleged claim as raised by the respondent against the petitioner "subject to the approval of the hon'ble High Court Calcutta in Matter No. 1993 M/s. Jaiguru construction v. SAIL RMD Calcutta. 13,69,734/- as on 1. 12. 92 plus interest and cost and (ii) the alleged claim as raised by the respondent against the petitioner "subject to the approval of the hon'ble High Court Calcutta in Matter No. 1993 M/s. Jaiguru construction v. SAIL RMD Calcutta. " ( 10 ) IN an application filed by the respondent under sections 5, 8, 11 and 12 of the Arbitration Act, 1940 being A. P. No. 2066 of 1993 for removal of Mr. C. A. Govind as Sole Arbitrator, a learned single Judge of this Court passed the following order: "learned counsel submits that the present arbitrator being Mr. C. A. Govind will, by consent of parties, act as arbitrator in the matter. It is agreed that the Venue of the arbitrator will be at Calcutta. Interim order restraining Mr. Govind from acting as arbitrator will naturally stand vacated with immediate effect. Time to make and publish the award by Mr. Govind, learned arbitrator by six months from date. The application is thus disposed of. " ( 11 ) THE parties filed their respective pleadings and also adduced evidence before the Arbitrator. ( 12 ) THE time granted by this Court for completion of the arbitration proceedings and publication of the award was from time to time extended by consent of the parties. Ultimately an award dated 19th october, 2001 was made and published by the Arbitrator whereby the claim of the respondent has been allowed In part. The claim of the respondent for payment in respect of the job admittedly performed by the respondent has been allowed and the amount of Rs. 2 lakhs paid as earnest money has been directed to be refunded to the claimant. The claim of the petitioner for recovery from the respondent of the extra cost of getting the contract job executed through a different contractors after deduction of the amount payable to the petitioner for work done by the petitioner and the amount of the Earnest Deposit lying with the petitioner, and 2% penalty for the shortfall in removal, has been rejected. The petitioner has, however, been allowed recovery of the cost of 200 litres of diesel supplied by the petitioner to the respondent. ( 13 ) MR. The petitioner has, however, been allowed recovery of the cost of 200 litres of diesel supplied by the petitioner to the respondent. ( 13 ) MR. Souvik Nandi learned Junior Counsel opening the arguments on behalf of the petitioner drew the attention of this Court to Clause 18 of the contract between the petitioner and the respondent which provided that the contract would be deemed to have been entered into by the Rourkella Zone of the Raw Materials Division of the petitioner and the entire cause of action would be deemed to have been arisen at Rourkella irrespective of the location of the Head or Branch office of the petitioner or the respondent. In terms of the contract, any legal proceedings against the petitioner in connection with the contract was to be triable only by the appropriate Civil Court in Rourkella. ( 14 ) IT is rather surprising that the applicant for setting aside should, after filing the application in this Court, question the jurisdiction of this Court to entertain or adjudicate the setting aside application. Even assuming, as contended by the petitioner, that the Award should have been filed in the appropriate Civil Court of Rourkella, and not at calcutta, that is, no ground for setting aside of the Award. ( 15 ) THE question of jurisdiction raised by the petitioner is exacie without merit. The petitioner submitted to the jurisdiction of this Court by consenting to the order dated 2nd May, 1996 of A. N. Ray, J. The forum selection clause was thereby waived mutually by the petitioner and the respondent. ( 16 ) MOREOVER, in A. P. No. 2066 of 1993 referred to above, the Director, raw Materials of the petitioner appointed Mr. C A. Govind as Arbitrator to adjudicate the alleged claim as raised against the respondent "subject to the approval of the Hon'ble High Court, Calcutta in Matter No. . . . of 1993 M/s. Jaiguru Construction Co. v. Steel Authority of India Ltd. " The petitioner thus expressly agreed to the jurisdiction of this Court. ( 17 ) IT is true, that the parties cannot by consent confer jurisdiction on a Court that inherently lacks jurisdiction as argued on behalf of the petitioner. This Court, however, does not inherently lack jurisdiction. of 1993 M/s. Jaiguru Construction Co. v. Steel Authority of India Ltd. " The petitioner thus expressly agreed to the jurisdiction of this Court. ( 17 ) IT is true, that the parties cannot by consent confer jurisdiction on a Court that inherently lacks jurisdiction as argued on behalf of the petitioner. This Court, however, does not inherently lack jurisdiction. The letter of termination of the contract was addressed to and received by the Respondent at its office at Bentinck Street, Kolkata within the jurisdiction of this Court. The respondent carries on business within the jurisdiction of this Court. The petitioner has its Head Office at camac Street, Kolkata within the jurisdiction of this Court. The authority empowered to appoint an Arbitrator in terms of the contract has his office within the jurisdiction of this Court. The arbitration sittings were, in terms of the contract, to be held in Kolkata. The minutes of the sittings reveal that arbitration sittings took place at camac Street within the jurisdiction of this Court. ( 18 ) THERE can be no dispute with the proposition of law laid down by the Judgments of the Supreme Court in the case of Hakarn Singh v. Gammon (India) Ltd. , AIR 1971 SC 740 and ABC Laminart (P) Ltd. v. A. P. Agencies, AIR 1989 SC 1239 cited on behalf of the petitioner. Where two or more Courts have jurisdiction the parties may mutually agree to adjudication of disputes by one to the exclusion of the other/others. A forum selection clause is binding on the parties. The parties however, cannot by mutual agreement confer jurisdiction on a Court that inherently lacks jurisdiction. ( 19 ) IF the parties can mutually agree to a jurisdiction clause, the parties can also mutually waive the jurisdiction clause, which the parties have, by course of their conduct, done. Moreover, as rightly submitted by Mr. Sarkar appearing on behalf of the respondent, proceedings under sections 5, 8, 11 and 12 of the Arbitration Act, 1940 having been initiated in this Court and a consent order having been passed in the said proceedings all subsequent proceedings were to be initiated in this Court alone. ( 20 ) MR, Biswanath Somadder appearing on behalf of the petitioner strenuously contended that in passing the impugned award, the arbitrator had given a total go-bye to the contract between the parties. ( 21 ) MR. ( 20 ) MR, Biswanath Somadder appearing on behalf of the petitioner strenuously contended that in passing the impugned award, the arbitrator had given a total go-bye to the contract between the parties. ( 21 ) MR. Somadder submitted that payment for the work done by the respondent had rightly been withheld by the petitioner since the respondent did not submit bills in accordance with clause 10 (a) of the contract. ( 22 ) MR. Somadder argued that the Arbitrator allowed payment to the respondent for the work done in total disregard of clause 10 of the contract. ( 23 ) MR. Somadder further argued that Clause 11 of the contract expressly provided that in case of failure or neglect on the part of the respondent to perform any of the terms of the contract the petitioner would be entitled to forfeit the security deposit, to get the work done through any other agency and recover the extra cost from the respondent and also claim liquidated damages in terms of Clause 10 of the General Conditions of contract. The aforesaid Clause was, according to Mr. Somadder, also ignored. ( 24 ) MR. Somadder submitted that the learned Arbitrator being a creature of the contract was bound by the terms and condition of the contract. It was not open to the learned Arbitrator to give a go-bye to the terms and condition of the contract. ( 25 ) MR. Somadder cited the Judgment of the Supreme Court in the case of Rajasthan Mines and Minerals Ltd. v. Eastern Engineering Ltd. , reported in (1999) 9 SCC 283 in support of his submission that the Court could look into the contract between the parties to determine whether the arbitrator had disregarded the terms of the contract. ( 26 ) MR. Somadder also cited the Judgment of the Supreme Court in the case of Steel Authority of India Ltd. v. J. C. Budharaja, reported in (1999) 8 SCC 122 . ( 27 ) IN the aforesaid case the Supreme Court held that the Arbitrator derive authority from the contract and if he acts in manifest disregard of the contract, the Award would be beyond the scope of his authority. To find out whether the Arbitrator has travelled beyond his authority and acted beyond the terms of the contract, the Court might look into the contract. ( 28 ) MR. To find out whether the Arbitrator has travelled beyond his authority and acted beyond the terms of the contract, the Court might look into the contract. ( 28 ) MR. Somadder emphasized on sub-paragraph (i) and (j) of paragraph 44 of the said Judgment where the Supreme Court held that the Arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract. A deliberate departure or conscious disregard of the contract not only manifests the disregard of his authority or misconduct on his part but it may tantamount to mala fide action. The Supreme Court further held that the Arbitrator was not a conciliator and could not ignore the law or misapply it in order to do what he thinks is just and reasonable. ( 29 ) SOMADDER cited the Judgment of the Supreme Court in the case of State of Jammu and Kashmir v. Dev Dutt Pandit, reported in (1999) 7 SCC 339 where the Supreme Court held as follows: "it was submitted before us that it is a non-speaking award and this Court cannot go into the mental process of the arbitrator in making the award on various claims. The Court has certain limitations while examining a non-speaking award but there is no complete bar in examining if the award is in terms of the reference or the terms of the contract. . . . . " ( 30 ) MR. Somadder next cited the Judgment of the Supreme Court in the case of Oil and Natural Gas Corporation Ltd. v. Saw Pipes Ltd. , reported in (2003) 5 SCC 705 where the Supreme Court held as follows: "the result is - if the award is contrary to the substantive provisions of law or the provisions of the Act or against the terms of the contract, it would be patently illegal, which could be interfered under section 34. . . . . . Therefore, in a case where the validity of award is challenged, there is no necessity of giving a narrower meaning to the term "public policy of India". On the contrary, wider meaning is required to be given so that the "patently illegal award" could be set aside. " ( 31 ) MR. Somadder contended that the impugned award was ex facie, in total disregard of the contract and in particular clauses 10 and 11 thereof. According to Mr. On the contrary, wider meaning is required to be given so that the "patently illegal award" could be set aside. " ( 31 ) MR. Somadder contended that the impugned award was ex facie, in total disregard of the contract and in particular clauses 10 and 11 thereof. According to Mr. Somadder the claim of the petitioner had not at all been adjudicated. ( 32 ) MR. Somadder further submitted that the Arbitrator himself found that there was serious break down of machinery and was also some shortage of diesel as is evident from the Award. The Arbitrator, however, ignored the fact that in terms of the contract maintenance of the machinery was the responsibility of the "contractor and the contractor could not be absolved of his liability under the contract on the ground of break down of machinery. There was also no evidence to show that there was delay by reason of shortage of diesel. ( 33 ) MR. Somadder submitted that the award to the extent, the arbitrator concluded that the delay was by reason of failure to make payments was totally perverse, contrary to the express provisions of the contract and, therefore, not sustainable. ( 34 ) MR. Somadder lastly pointed out that there was an apparent inconsistency in the Award in as much as the Arbitrator observed that there was major break down of machinery employed by the respondent as well as a diesel crisis, but proceeded to hold that non-payment to the respondent was a major cause of delay on the part of the respondent in execution of the contract. ( 35 ) MR. B. B. Sarkar appearing on behalf of the respondent submitted that the Award was fair and reasonable and based on consideration of the materials on record including the contract. ( 36 ) MR. Sarkar argued that the Arbitrator made and published the impugned Award on the basis of his interpretation of the contract. This court hearing an application for setting aside an Award cannot interfere with the Award. ( 37 ) MR. Sarkar further argued that there was no inconsistency in the Award. The Arbitrator took note of major break in machinery and some shortage of diesel. The Arbitrator only held that failure to make payment was a major cause of the delay in execution of the contract. ( 37 ) MR. Sarkar further argued that there was no inconsistency in the Award. The Arbitrator took note of major break in machinery and some shortage of diesel. The Arbitrator only held that failure to make payment was a major cause of the delay in execution of the contract. The Arbitrator did not hold that failure to make payment was the only cause for the delay in execution of the contract. ( 38 ) MR. Sarkar relied on the Judgment of this Court in the case of tapan Kumar Paul v. Krishna Kanta Paul, reported in AIR 1980 Cal 28 where this Court held that mistakes in the recital or in non-essential parts of all award does not vitiate the contract. ( 39 ) MR. Sarkar next cited the Judgment of the Supreme Court in the case of Food Corporation of India v. Jogenderpal Mohenderpal and Anr. , reported in AIR 1989 SC 1263 where the Supreme Court held that where reasons are given, a challenge to the Award cannot be sustained, unless it can be demonstrated that the reasons are erroneous as propositions of law or the view taken by the Arbitrator cannot be sustained in any view of the matter. Where the view of the Arbitrator is a plausible one, the Court cannot sit in appeal over the views of the Arbitrator by reassessing and re-examining the materials on record. I agree with the submission that the view taken by the Arbitrator, in this case, was a plausible one. ( 40 ) MR. Sarkar submitted that the Award is partly reasoned. The arbitrator has indicated his mind. The reasons do not reveal any error of law, but are on the other hand, fair and just reasons. ( 41 ) MR. Sarkar cited the Judgment of this Court in the case of Union of India v. Royal Construction, reported in 2002 (1) CHN 12 where the division Bench held as follows: "the law as it appears from the above authorities and especially the two last ones referred to above is as follows: (1) To make a reasoned award the arbitrator has to make his mind known on the basis which he has acted. (2) Statement of reasons is not the same thing as the giving of a detailed Judgment. (3) Reasons are short and intelligible indications of the arbitrator's mind, no more. (2) Statement of reasons is not the same thing as the giving of a detailed Judgment. (3) Reasons are short and intelligible indications of the arbitrator's mind, no more. (4) The reasons must have such connection with the conclusions reached by the arbitrator as to show that the arbitrator has not acted irrelevantly, unreasonably or capriciously. (5) The reasons should deal with the substantial points raised in the reference. . . . . . . . . . When awards used to be made without reasons, the Courts said that the Courts have no duty or power to probe into the mental process of the arbitrator. Now that reasons are being given, the law becomes this, that the Court shall examine only that part of the mind of the arbitrator which he chooses to lay bare before the Court, but about the rest the Court shall not exhibit an undue inquisitiveness. If the arbitrator has failed to lay bare the essential parts of his mental reasoning, then he has failed to do his duty; if, on the other hand, even after a frank and fair statement made by the arbitrator on the award, the Court sets it aside because if wants even more and even fuller reasons, then the Court fails to do its duty. Different arbitrators are differently mentally constituted, and they are also differently trained. The award of a lawyer arbitrator will be different from the award of an engineer arbitrator. All fair and frank thought processes are permitted in the award irrespective of the style of thought. What is not permitted is a reasoning or a mental link which is forbidden by the law. If the arbitrator discloses such a false step, then and then only the award can be set aside for error apparent. But if on the basis of a sufficiently well reasoned award no such error is apparent on the face, the Court cannot say that further detailed reasons are necessary, because in such detail, there appears to be a possibility of there having been an application of an erroneous principle of law. If the award is good on its face, if the face if fair, frank and open, then that is all that is needed. That is the requirement of a reasoned award. " ( 42 ) MR. If the award is good on its face, if the face if fair, frank and open, then that is all that is needed. That is the requirement of a reasoned award. " ( 42 ) MR. Sarkar next cited the Judgment of the Supreme Court in the case of Sudarsan Trading Co. v. Government of Kerala, reported in air 1989 SC 890 where Sabyasachi Mukharji, J. held as follows: "it is not open to the Court to probe the mental process of the arbitrator and speculate, where no reasons are given by the arbitrator, as to what impelled the arbitrator to arrive at his conclusion. . . . . . . . . . . . . . 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. " ( 43 ) MR. Sarkar cited the Judgment of this Court in the case of Union of India v. Abhoy Sarkar, reported in AIR 1992 Cal 243 where this Court held that it is for the Arbitrator to interpret the contract and the interpretation was not liable to review in an application under section 30 of the Arbitration Act, 1940. ( 44 ) MR. Sarkar next cited Paragraph 34 of the Judgment of the supreme Court in the case of M/s. Tarapore and Company v. Cochin shipyard Ltd. , reported in AIR 1984 SC 1072 . The portion of the paragraph cited by Mr. Sarkar is extracted hereinbelow: "in this case, as earlier pointed out a specific question as to whether the claim of compensation made by the appellant contractor and demurred and disputed by the respondent would be covered within the scope, ambit and width of the arbitration clause, was specifically referred by the parties for the decision of the arbitration. Sarkar is extracted hereinbelow: "in this case, as earlier pointed out a specific question as to whether the claim of compensation made by the appellant contractor and demurred and disputed by the respondent would be covered within the scope, ambit and width of the arbitration clause, was specifically referred by the parties for the decision of the arbitration. Therefore, it is a case where a specific question of the law touching upon the jurisdiction of the arbitrator was referred for the decision of the arbitration by the parties. Even if the view taken by the arbitrator may not accord with the view of the Court about the scope, ambit and width of the arbitration clause, the award cannot be set aside on the ground that there is an error of law apparent on the face of the award. " ( 45 ) RELIANCE has been placed on a recent Judgment of the Supreme court in case of Bhagabati Oxygen Ltd v. Hindusthan Copper Ltd. , reported in 2005 (3) Supreme 243 where the Supreme Court held as follows: "this Court has considered the provisions of section 30 of the Act in several cases and has held that the Court while exercising the power under section 30, cannot re-appreciate the evidence or examine correctness of the conclusions arrived at bv the Arbitrator. The jurisdiction is not appellate in nature and an award passed by an Arbitrator cannot be set aside on the ground that it was erroneous. It is not open to the Court to interfere with the award merely because in the opinion of the Court, an other view is equally possible. It is only when the Court is satisfied that the Arbitrator had misconducted himself or the proceedings or the award had been improperly procured or is 'otherwise' invalid that the Court may set aside such award. " ( 46 ) THE Arbitrator has given cryptic but intelligible reasons for the award. The Arbitrator has made an Award in favour of the respondent for payment for the work admittedly done by the respondent, upon consideration of the records produced by the petitioner and for return of its Earnest Deposit. ( 47 ) THE arbitrator on his interpretation of the Contract held that the time for execution as well as the obligation to make payments were of essence to the Contract. ( 47 ) THE arbitrator on his interpretation of the Contract held that the time for execution as well as the obligation to make payments were of essence to the Contract. ( 48 ) THE claim of the petitioner against the respondent which is a claim in the nature of damages has been rejected on the finding, in effect, of the Arbitrator, that the petitioner had not performed its reciprocal obligations under the agreement. No fault can be found with the finding, for a party to a contract, that is, itself in breach of its obligations under the contract cannot claim damages against the other contracting party, for whose breach it is responsible, at least to a substantial extent. ( 49 ) THE Arbitrator found on facts that the failure of the petitioner to release payment was a major cause for the delay on the part of the respondent in executing the contract. The aforesaid factual finding, based on the materials on records as also his construction of the terms of the contract is not liable to be interfered with. ( 50 ) THE Arbitrator also found that the respondent had not been given the opportunity to make up for the deficit, but awarded the job to an alternate whose rates were exorbitantly high. The petitioner was not able to justify the choice of the alternate agency. ( 51 ) IN other words, the learned Arbitrator on his interpretation of the contract and the materials on record found that the respondent was entitled to make up the deficit in lifting the loose soil and blast rejects. The aforesaid finding cannot be interfered with in an application under sections 30 and 33 of the Arbitration Act, 1940, for setting aside an award. In the case of Steel Authority of India Ltd. v. J. C. Budhraja (supra)cited by Mr. Somadder and a catena of other cases the Supreme Court has held that interpretation of the provisions of the contract is within the domain of the Arbitrator. ( 52 ) THE petitioner got the contract job executed through an alternate agency before expiry of three months from the date of commencement of the contract work, without giving the opportunity to the respondent to make up the shortfall and without taking reasonable steps for mitigation of costs. ( 53 ) THIS Court does not sit in appeal over an award passed by the arbitrator. ( 53 ) THIS Court does not sit in appeal over an award passed by the arbitrator. This Court can neither re-appreciate the evidence before the Arbitrator nor examine the correctness of the construction placed by the Arbitrator on any term of the contract or any document on record as held by the Supreme Court in the case of Bhagabati Oxygen Ltd. v. Hindustan Copper Ltd. (supra ). ( 54 ) A contract may contain terms both express and implied. The terms may be incorporated in the deed of contract and may also be contained in the correspondence exchanged. Terms and conditions of a contract may stand modified by the course of conduct of the parties. The interpretation of a contract is within the exclusive domain of the arbitrator. As observed above, the Arbitrator on his interpretation of the contract held that the time for execution as well as the obligation to make payments were of essence to the contract. The Arbitrator being a judge chosen by the parties, his decision would ordinarily be final unless the conditions contained in section 30 of the Arbitration Act are satisfied for the purpose of setting aside his award. ( 55 ) AN award cannot be set aside merely because of an error unless the error is apparent on the face of the award or any document which forms the part of the award and that apparent error forms the basis of the award. ( 56 ) THE Arbitrator was not required to give, and has not given a detailed Judgment. The Arbitrator appointed in terms of the contract was not a person trained in law. The Arbitrator has indicated his mind. The reasons for Award of payment for work done and return of Earnest deposit to the respondent and rejection of the claim of the petitioner for liquidated damage and extra cost of execution of the balance contract job have sufficiently been disclosed, but the evidence and the contractual provisions have not been specifically discussed in the impugned Award. Although the Arbitrator has referred to and has apparently relied upon the contract in making his Award, the process of reasoning on the basis of which the contractual provisions have been interpreted are not manifest. In a sense, the Award may be termed a 'hybrid' Award; an Award which is partly speaking and partly non-speaking. Although the Arbitrator has referred to and has apparently relied upon the contract in making his Award, the process of reasoning on the basis of which the contractual provisions have been interpreted are not manifest. In a sense, the Award may be termed a 'hybrid' Award; an Award which is partly speaking and partly non-speaking. ( 57 ) THERE is no apparent error in the reasons disclosed. On the other hand the reasons are just, fair, reasonable and in accordance with law. For the findings which are non-speaking, the difficulty of showing an error apparent on the face of the Award becomes insurmountable, as held by the Supreme Court in the case of Bharat Coking Coal Ltd. v. A. K. Ahuja and Co. , reported in (2001) 4 SCC 86 . ( 58 ) MR. Somadder has painstakingly taken this Court through the various provisions of the contract and in particular Clauses 10 and 11 thereof. On perusal of the said Clauses it does not appear to this Court that the Award is patently contrary to the aforesaid Clauses. ( 59 ) FORFEITURE of security deposit or execution of the contract job at the cost of contractor and the imposition of liquidated damages as per clause 10 of the General Conditions is optional. The petitioner has been given liberty to take recourse to all or any of the aforesaid measures on failure or neglect by the contractor to observe or perform any terms or conditions. If the Arbitrator has found that the petitioner was not entitled to take recourse to any of the aforesaid measures in the absence of neglect or culpability, it cannot be said that the Arbitrator did not at all consider the contract. ( 60 ) WHETHER or not bills were in accordance with Clause 10 is a factual issue on which the finding of the Arbitrator is not liable to be disturbed. Clause 10 of the contract itself envisages payment of 90% of the amount payable within 15 days from the date of presentation of bills and the balance 10% within 45 days from the date of presentation of bills. ( 61 ) WHETHER or not bills were raised in conformity with section 10 (a)is a factual issue on which the decision of the Arbitrator is final. ( 61 ) WHETHER or not bills were raised in conformity with section 10 (a)is a factual issue on which the decision of the Arbitrator is final. Whether the requirement of a certificate is in terms of the contract mandatory or not in terms of the contract is a question of interpretation of the contract. Significantly, there is no express prohibition against releasing payment against bills not accompanied by a certificate, where the work is found to have been done. ( 62 ) THE terms and conditions of the letter of offer which constitute part of the terms and conditions of the contract provides for making up of deficit of any quarter in the following month/months without imposition of any penalty. It cannot, therefore, be said that the arbitration allowed any claim that was barred or has given a go bye to any provision of the contract. ( 63 ) IN the ease of Rajasthan Mines and Minerals (supra) cited by Mr. Somadder Supreme Court held that deliberate departure or conscious disregard of the contract manifests disregard of his authority. The judgment is distinguishable in the facts of this case. ( 64 ) THE Arbitrator, as observed above, that there was serious break down of machinery and some shortage of diesel but has arrived at the finding that failure of the petitioner to make payment was a major cause for the delay in execution of the contract. ( 65 ) ALTHOUGH at the first glance there appears to be an inconsistency between the observation and the ultimate conclusion in the operative portion of the Award referred to above, there is, in fact, no inconsistency. The Arbitrator found that there was serious break down of machinery, there was some shortage of diesel and the respondent failed to release payments. All the aforesaid factors contributed to the delay. The Arbitrator held that failure to release payment was a major cause of the delay. The Arbitrator did not hold that was the only cause of the delay. ( 66 ) THE style of writing the Award may not exactly be perfect. The award of a technical Arbitrator is, however, not expected to match the judgment of a Court of law. A technical Arbitrator may not have experience of marshalling of facts and the law as a lawyer has or experience of writing Judgments that a judicial officer has. The award of a technical Arbitrator is, however, not expected to match the judgment of a Court of law. A technical Arbitrator may not have experience of marshalling of facts and the law as a lawyer has or experience of writing Judgments that a judicial officer has. Minor inconsistencies, if any, have to be overlooked if the award is fair, just, reasonable and not contrary to any express provision of the contract or any express provision of statute. ( 67 ) IN the Judgments referred to by Mr. Somadder the Supreme Court held that the Court might look into the terms of the contract only to ascertain whether the award was patently contrary to any provision of the contract "whether any expressly barred claim had been allowed". ( 68 ) THE Judgment in the case of State of Jamma and Kashmir v. Dev dutt Pandit was rendered by the Supreme Court in the particular facts of that case where total value of contract was only Rs. 12,23,500/-, but a contractor who had done less then 50% of the work and had been paid rs. 5,71. 900/- got away with an Award of Rs. 20,08,000/- with interest @10% per annum and penal interest @ 18% per annum. ( 69 ) IN the case of Oil and Natural Gas Commission v. Saw Pipes Ltd. (supra) cited by Mr. Somadder, the contract provided for recovery of liquidated damages by the Oil and Natural Gas Corporation at the rate specified, in the event of delay in supplies. The Arbitrator made an award for refund of the liquidated damages so recovered on the ground that the Oil and Natural Gas Commission had not been able to establish that it had suffered any loss. The Award was found to be based on an erroneous proposition of law that proof of actual loss or damage was essential for recovery of damages, even when there was a specific contractual term for levy of liquidated damages in case of delay in supplies. The aforesaid proposition was found to be patently contract to section 74 of the Contract Act, 1872, which provides as follows: "74. The aforesaid proposition was found to be patently contract to section 74 of the Contract Act, 1872, which provides as follows: "74. Compensation for breach of contract where penalty stipulated for.- When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exeeding the amount so named or, as the case may be, the penalty stipulated for. Explanation.- A stipulation for increased interest from the date of default may be a stipulation by way of penalty. " ( 70 ) IN fact, in the case of Oil and Natural Gas Commission v. Saw Pipes ltd. (supra) the Supreme Court held that illegalities of a trivial nature might be ignored even if the Arbitrator misinterpreted the Clause 10a with regard to the necessity of a certificate, it cannot be said that the arbitrator was either misconducted himself or the proceedings. ( 71 ) IN the case of Steel Authority of India Ltd. v. J. C. Budharaja the supreme Court held that the Arbitrator derives authority to arbitrate from the contract. If, therefore, the Arbitrator acted in manifest disregard of the contract, the Award would be vitiated. In the aforesaid case, the Arbitrator awarded damages for delay in making over the entire site to the contractor notwithstanding an express term in the contract providing that the contractor would have no claim for delay in making over the entire site. The Supreme Court has, however, held that interpretation of any particular term of the contract would be within the domain of the Arbitrator. ( 72 ) AS held by the Supreme Court in the case of State of Kerala v. Arya Refrigeration and Air Conditioning Company, reported in (2004)7 SCC 546 , an Award does not suffer from any infirmity unless the findings are unreasonable. In the aforesaid case, it was alleged that the arbitrator had disregarded the fundamental terms of the contract. In this case the findings are perfectly reasonable. In the aforesaid case, it was alleged that the arbitrator had disregarded the fundamental terms of the contract. In this case the findings are perfectly reasonable. ( 73 ) AN Award based on the Arbitrator's interpretation of the contract allowing the contractor's claim cannot be interfered with in an application under section 30 of the Arbitration Act, 1940 in the absence of any specific bar or prohibition in the contract as held by the Supreme court in the case of Pure Helium India (P) Ltd. v. Oil and Natural Gas commission, reported in (2003)8 SCC 593 . For the reasons discussed above, this application is dismissed without any order, however, as to costs. Learned counsel appearing an behalf of the petitioner prays for stay of operation of this order. Stay, as prayed for, is granted for a period of two weeks from date. All parties are to act on a signed copy of the operative portion of this judgment and order on the usual undertakings. Application dismissed