Judgment D.V. Shylendra Kumar, J., delivered the following: 1. This is an appeal filed under Section 37 (1) of the Arbitration and Conciliation Act, 1996 (for short, `the Act’) by the employer, in this case the Chief Engineer, Karnataka Health Systems Development Project, for the purpose of renovation and expansion of the hospital premises/ complex at Sirsi in Uttara Kannada District of Karnataka State. 2. The appeal is against the order dated 14-1-2004 passed in Arbitration Suit No.37 of 2002, on the file of VI Additional City Civil Judge, Bangalore City, an application filed by the very appellant herein before the City Civil Court under Section 34 of the Act for setting aside the award dated 30-3-2002 passed by the sole Arbitrator in respect of the disputes that arose between the parties herein and referred to for arbitration, had come to be dismissed by the City Civil Court and therefore the award remained intact and had become executable. 3. Under the award, the Arbitrator has awarded a total sum of Rs.59,31,000/- in favour of the respondent – contractor, purporting to be against four bills which had been presented by the contractor for payment. Out of such bills which had been presented during the working of the contract i.e., running bill Nos. 1 to 5, as detailed below: Dated 12-5-1999 Rs. 20,60,526.00 Dated 29-6-1999 Rs. 14,57,510.00 Total Rs. 35,18,036.00 Which, undoubtedly have been settled in full and four more bills in respect of which the Arbitrator awarded a sum of Rs.59,31,000/-, viz.: Summary of Award i. Claim from 3rd R.A. Bill dated 29-2-2000 Rs.13,00,472.82 with interest at rate of 24% from 17-3-2000 Award Rs.13,00,472.82* with interest at rate of 16% from 17-3-2000 ii. Claim from 4th R.A. Bill dated 13-9-2000 Rs.28,66,011.74 with interest at rate of 24% from 4-10-2000 Award Rs.28,66,011.74* with interest at rate of 16% from 4-10-2000 iii. Claim from 5th R.A. Bill dated 16-10-2000 Rs.4,15,930.00 with interest at rate of 24% from 4-11-2000 Award Rs.4,15,930.00* with interest at rate of 16% from 4-11-2000 iv. Claim from 6th R.A. Bill dated 17-10-2000 against idle labour, materials, machinery and plants Rs.26,98,136.61 Award Rs. 13,49,068.00* Total Award Rs. 59,31,481.00* (Say Rs. 59,31,000/-) 4. Claim from 5th R.A. Bill dated 16-10-2000 Rs.4,15,930.00 with interest at rate of 24% from 4-11-2000 Award Rs.4,15,930.00* with interest at rate of 16% from 4-11-2000 iv. Claim from 6th R.A. Bill dated 17-10-2000 against idle labour, materials, machinery and plants Rs.26,98,136.61 Award Rs. 13,49,068.00* Total Award Rs. 59,31,481.00* (Say Rs. 59,31,000/-) 4. It is aggrieved by this award made by the Arbitrator in favour of the contractor, directing the appellant-employer to make payment of the sum of Rs.59,31,000/-with interest at 16%p.a., which is worded by the Arbitrator as under: Interest has to be worked out at the rate of 16% till the date of release of payment and added against awarded in 3rd, 4th and 5th RA bills. The employer had filed the application under Section 34 of the Act, seeking for the award to be set aside. 5. The subject-matter of the dispute before the Arbitrator was in the wake of a contract having been awarded in favour of the contractor for execution of the renovation and expansion work of the Government Hospital at Sirsi as per the acceptance letter dated 2-3-1999, accepting the offer/quotation of the contractor in response to the tenders invited by the employer and whereupon an agreement dated 19-3-1999 was brought into existence between the parties, delineating the terms and conditions of the execution of the work and on 26-3-1999, the parties signed the contract after the site in question where the work had to be executed was handed over to the possession of the contractor by the employer. 6. In terms of the contract, the work in question was required to be executed by 25-9-2000 and it appears the period had been extended upto 7-11-2001. However, it further transpires that the employer, for whatever reasons may be due to the dissatisfaction with the work etc., appears to have put an end to the work by the contractor on 3-9-2001, whereupon, there was no need or scope on the part of the contractor to execute any further work. 7. However, it further transpires that the employer, for whatever reasons may be due to the dissatisfaction with the work etc., appears to have put an end to the work by the contractor on 3-9-2001, whereupon, there was no need or scope on the part of the contractor to execute any further work. 7. We may note that the dates as mentioned with regard to the 5th R.A. Bill which is as per extract from the summary of award is dated 16-10-2000 and the 6th R.A. Bill is dated 17-10-2000, are both obviously mistaken dates for the reason that the 4th R.A. Bill was dated 13-9-2000 and the 5th R.A. Bill which is purporting to be towards further works executed thereafter could not have been within about a month therefrom, but within the extended period which had been extended upto 7-11-2001 and at any rate at least upto 3-9-2001 on which date the employer terminated the contract itself and therefore the date of the 5th R.A. Bill should necessarily be 16-10-2001 and likewise the date of the 6th R.A. Bill should be 17-10-2001 and not 17-10-2000 as indicated by the Arbitrator in the summary of award. We say so for the reason that the 6th R.A. Bill purporting to be towards damages for idling of men and machinery etc., can only be for the period subsequent to the last day of working by the contractor as had been indicated in the 5th R.A. Bill for a sum of Rs. 4,15,930/- with interest from 4-11-2000 which means that the work was being executed till that time and it is only thereafter the men and machinery could have been left idling till at least up to the date of termination of the contract by the employer which was on 3-9-2001 and the so-called idling period, should be in between the two and therefore the date of the 6th R.A. Bill should necessarily read as 17-10-2001 as the bill is only after the period is over and the Arbitrator having indicated the date of the bill as 17-10-2000 in the summary of award obviously is a mistake. 8. 8. It is in the background of such factual matrix, the dispute arose in the matter of payment of amount claimed by the contractor, purporting to be for the work executed till that point of time as also a further claim made beyond the period, a claim in the nature of idling charges, towards idling of men and material at the site, which, according to the contractor, he had mobilsed for the due execution and completion of the work. It is to be noticed that the contractor had put forth a claim for a sum of Rs. 26,98,136.31 exclusively towards idling of men, machinery and wastage of materials at the work site even beyond the period of contract from the date of non-setting of the third running bill dated 29-2-2000 upto the date of termination of the contract on 3-9-2001. 9. Prior to the matter going before the Arbitrator, it appears, in terms of the provisions under the contract between the parties viz., Clause 24, reading as under: “24. Disputes.— 24. 1 If the contract believes that a decision taken by the Engineer was either outside the authorities given to the Engineers by the contract of that the decision was wrongly taken, the decision shall be referred to the Adjudicator within 14 days of the notification of the Engineer’s decision’. the matter had been placed before an adjudicator – in this case one S. Shivaraj, a retired Chief Engineer – and the dispute being regarding running account bills and interest as per the petition of the contractor dated 15-4-2001, the adjudicator had occasion to look into the same, and had opined that certain action taken by the employer-department for recovery of part of the advance amount from out of the payment to the contractor against the bills presented for payment commensurate/ proportionate to the shortfall of available material at the site in comparison to the requisite material, which was stored at the site, having regard to the amount of mobilisation advance which had been given to the contractor by the employer. The adjudicator had while opined that the contractor was entitled to claim interest on the value of running account bill Nos. 4 and 5, claim towards idling charges was declined to be examined, for the reason that it was not part of the subject-matter referred to the adjudicator in terms of the contractor’s petition dated 15-4-2001. The adjudicator had while opined that the contractor was entitled to claim interest on the value of running account bill Nos. 4 and 5, claim towards idling charges was declined to be examined, for the reason that it was not part of the subject-matter referred to the adjudicator in terms of the contractor’s petition dated 15-4-2001. It was with this further background, the matter went before the Arbitrator. 10. The contractor in his pleading before the Arbitrator put forth claims as under: Bill Amount claimed (a) Claim under the 3rd running bill (b) Interest payable on the running bill from 17-3-2000 Rs.13,00,472.82 (day by which it should have been settled) at the rate of 24% p.a. (c) Claim under the 4th running bill Rs.28,66,011.74 (d) Interest payable on the running bill from 4-10-2000 (day by which it should have been settled) at the rate of 24% p.a. (ia) Claim under the 5th running bill. (b) Interest payable on the running bill from 4-11-2000 (day by Rs. 4,15,930.21 which it should have been settled at the rate of 24% p.a. Rs.45,82,414.77 The claimant is entitled to damages of Rs.26,98,136.31 (Annexure – O) according to the details given hereunder, in the 6th running and part bill. The adjudicator could not have refused to consider the claim and the order is not a speaking order. The claimant is also entitled to current interest during the period of proceedings as well as till the date of amount is settled at the rate of 24% per annum. PRAYER The claimant prays that this Hon’ble authority may be pleased to pass an award for a sum of Rs.72,80,551.08 (Rupees Seventy-two Lakhs Eighty Thousand Five Hundred Fifty-one and Eight paise only) along with interest at the rate of 24% per annum from today till the date of payment for costs of the arbitration and such other reliefs as this Hon’ble Authority may deem fit under the circumstances of the facts of the case, in the interest of justice and equity. 11. In terms of the pleadings, the contractor had put forth claim on the premise of nonpayment of three running bills viz., 3rd and 4th running bills for Rs. 13,00,427.82 and Rs. 28,66,011.74 respectively and the fifth running bill for a sum of Rs. 11. In terms of the pleadings, the contractor had put forth claim on the premise of nonpayment of three running bills viz., 3rd and 4th running bills for Rs. 13,00,427.82 and Rs. 28,66,011.74 respectively and the fifth running bill for a sum of Rs. 4,15,930.21 being the interest on the running bills from 4-11-2000 and in addition, put forth a further claim for a sum of Rs.26,98,136.31, as part of the 6th running bill. In all, the claim made by the contractor was for a sum of Rs.72,80,551.08 with interest at the rate of 24% p.a. from 13-9-2001 till payment along with cost of the arbitration proceedings. 12. The employer while factually disputed the entire claim as not one payable in terms of the contract and while prayed for rejecting the claim in its entirely, also urged that the claimant has to make good the cost of arbitration. 13. Further protracting the pleadings, the claimant-contractor filed rejoinder and the employer responded to by filing further reply. 14. It is thereafter the Arbitrator noticing that the contractor was not satisfied with the adjudicator’s decision and it appears had held as many as seven sitting for discussing the issues between the parties and for a good measure also made a site inspection and it appears while the date is not mentioned, it is said to be between 24-8-2001 and 5-2-2002. 15. What transpired thereafter, it is easier to quote from the award of the Arbitrator than for this Court to recapitulate or summarise and when put in a narrative, as the arbitration proceedings being formal proceedings, not conforming to any procedural requirements, the manner in which the proceedings go about in resolving the disputes between the parties though astronomical claims are put forth before the Arbitrator by the warring parties and the claims more often than not running to several crores and in this case about eight million rupees, it is always rather difficult for persons familiar in judicial proceedings either to understand or to appreciate the manner in which the Arbitrators go about for passing awards! For convenience sake, we quote from the Arbitrator’s award on this aspect of the matter, which is as under: “Based on my experience and the facts which were presented to me by both parties I am pleased to give the award with due justification as follows.— a claim amount of Rs. For convenience sake, we quote from the Arbitrator’s award on this aspect of the matter, which is as under: “Based on my experience and the facts which were presented to me by both parties I am pleased to give the award with due justification as follows.— a claim amount of Rs. with 24% interest 13,00,472.82 against from 17-3-2000 3rd R.A. Bill dated 29-2-2000. Executive Engineer who was in charge of the project when the 1st and 2nd R.A. Bill were processed and paid had made some part payment against B.O.Q. in the items. No where it is mentioned “Materials advance” bill. Therefore part payments made in the running account bills are deemed as provisional payments and have to be regularised only in the final bill. Such unwarranted recoveries not only create complications in the accounting process but also act as counter productive to the otherwise smooth progress. Therefore, recovery in 3rd R.A. Bill against B.O.Q. (Part) paid in the previous bills was premature and hasty. During the site visit on 19-1-2002, the Arbitrator along with petitioner and respondent has physically seen in the contractor’s site store stock of materials such as doors, windows, floor tiles, electrical items etc., which are meant for the project and the same has been recorded in the inspection note. AWARD Bill amount of Rs.13,00,472.82 (Rupees Thirteen Lakhs and Four Hundred and Seventy-two only) should be paid along with interest at rate of 16% from 17-3-2000 upto the date of payment to the contractor. (b) Claim against 4th and 5th R.A.Bills. I. 4th R.A. Bill dated 13-9-2000 with interest at rate of 24% from 4-10-2000 Rs. 28,66,001.74 II. 5th R.A. Bill dated Rs.16-10-2000 with interest at rate of 24% from 4-11-2000 Rs. 4,15,930.00 TOTAL Rs.32,81,941.00 It is seen from discussions, exchange of letters and statements etc., that the department totally ignored and have not given any consideration to the claim as because the contract executed the jobs in violation of the contract without giving due intimation to the department and in the absence of departmental Engineers. This is an area where one has to be very careful and cautions. There is no doubt that the contract terms and conditions are always meant to safeguard department’s interest and punish erring contractors. This is an area where one has to be very careful and cautions. There is no doubt that the contract terms and conditions are always meant to safeguard department’s interest and punish erring contractors. But at the same it should also be ensured that actions taken do not in any way defeat the very purpose of such actions and undermine department’s interest. Unfortunately in this case department took a rigid stand which has led to total collapse of the site and the progress came to a grinding halt, at a time when 66% progress had been achieved and the project was nearing completion. Other considerations are: (a) Work has been awarded to Class I P.W.D. Contractor i.e., Chengama Naidu is a recognised contractor with adequate resource, experience and capability of delivering the goods. (b) The job was being executed under the Supervision of Executive Engineer, Dharwad Division who was being assisted by a team of Engineers and Supervisors of various ranks and categories. (c) From the statements of both the claimant and respondent, there was no dearth of executives and supervisors for effective control and supervision of works. Regular attendance at site was there, on all the days from both the sides. (d) Contractor had taken adequate measures to establish quality of work by taking samples of materials and getting them tested in the laboratory. He has also communicated results of all such tests to the department. (e) As the project is being financed by World Bank, in fulfillment of certain conditions laid down by the financing agency, department had appointed a reputed consultant to independently check the quality of work, assist and advice the department in all aspects of quality control. This aspect was physically seen by the Arbitrator during the site visit on 19-1-2002, consultants had carried out extensive quality test on the R.C.C. structures. From the physical appearance the structures appeared to be sound and of standard workmanship. (f) Contractor has also stated that he had telegraphically communicated to the Executive Engineer about the site activates and programmes. Under the above situation I do not find any reason or scope for the department to complain that the contractor did the jobs without their knowledge and resort to counter productive actions leading to chaos and stoppage of work. That too jobs related to improvement of medical facilities in backward areas, financed by outside agency like World Bank. Under the above situation I do not find any reason or scope for the department to complain that the contractor did the jobs without their knowledge and resort to counter productive actions leading to chaos and stoppage of work. That too jobs related to improvement of medical facilities in backward areas, financed by outside agency like World Bank. Personally I cannot appreciate the stand taken by the department in not paying the contractor and simultaneously not doing what even was required to satisfy themselves about the quality. From the executive Engineer’s letter dated 3-4-2001 it is clear that the department was making the contractor responsible for delays. The department has written to the contractor to resume the work immediately after getting quality control certificate from T.R.F.I. Authority so as to award the bills. Without quality control certificate bills will not be entertained for payment. This letter has been issued after a period of 8-9 months after the work was executed by the contractor and stoppage of site activities. I do not understand how the department can except the contractor to approach T.R.FI. who are consultants to the department for getting quality certificates? In my opinion present situation could have been avoided had the department taken quick initiative and prompt decision about the quality of work vis-à-vis payments to the contractor. My award against claim amount in 4th and 5th bills is as follows.— (ii) 4th R.A. bill dated 13-9-2000 – Rs. 28,66,011.75 (Rupees Twenty-eight lakhs Sixty-six thousand and eleven only) As the contractor has done the job and it is more than 18 months since the jobs were executed, now there is no point in taking about quality tests etc., which were relevant at a time when the jobs were just executed i.e., prior to 16-10-2000. The department should release this amount along with 16% interest from 4-10-2000 to the date of release of payment to the contractor. (iii) 5th R.A. Bill dated 16-10-2000 – Rs. 4,15,930.00 (Rupees four lakhs fifteen thousand nine hundred and thirty only) Same as above – Department should release the amount forth with along with interest at Rs.16% from 4-11-2000 upto the date of release of making payment. (c) Other claims against idle labour, Machinery and plant, construction materials etc., 6th R.A. Bill dated 17-10-2000 claim amount Rs. 26,98,136.61 It is a fact that huge money amounting to Rs. (c) Other claims against idle labour, Machinery and plant, construction materials etc., 6th R.A. Bill dated 17-10-2000 claim amount Rs. 26,98,136.61 It is a fact that huge money amounting to Rs. 45,82,414.56 (equivalent to 37% of contract valve) was blocked by the respondent and at the same time made the contractor responsible for causing delay in the project. Obviously no contractor can afford to pump in money against uncertainty without getting a work of assurance from the Engineer about resolving the matter. The contractor has been kept waiting for considerable period i.e., more than 1 year. This has obviously led to infructuous and avoidable expenditure to the contractor besides causing mental agony, suffering, loss of prestige etc., and other unaccountable losses. Even on 19-1-2002 during my site inspection it was seen that the contractor had maintained a site office, supervisory staff, watch and ward costly construction materials etc. The contractor is compelled to maintain the site establishment until the department taken over the site and release the contractor of his responsibility. My consideration is that about 66% work which form substantial progress has already been completed at the time of 5th R.A. Bill dated 16-10-2000. Therefore the contractor had no need for heavy construction equipments. Even the manpower requirement would have been mostly skilled category. I feel 50% of the contractor’s claim is reasonable. Award against idle labour machinery and plant – Rs.13,49,068.00 Total award Rs. 59,31,481.00 (Say Rs. 59,31,000/-) (Rupees Fifty-nine lakhs thirty-one thousand only) Note: (i) Interest has to be worked out at the rate of 16% till the date of release of payment and added against award in 3rd, 4th and 5th R.A. Bills. (ii) There could be genuine clerical mistakes in the bills etc. This has to be verified by the respective accounts from both the sides at the time of settlement of claims and making final payment. Arbitrator may be kept informed of such correction if any. I thank the Chief Engineer, KHSDP for the facilities provided for smooth conduct of the proceedings. I also thank all participants from the respondent and petitioner for the wholehearted co-operation, which has enabled me to fulfill my responsibilities as sole Arbitrator”. 16. Arbitrator may be kept informed of such correction if any. I thank the Chief Engineer, KHSDP for the facilities provided for smooth conduct of the proceedings. I also thank all participants from the respondent and petitioner for the wholehearted co-operation, which has enabled me to fulfill my responsibilities as sole Arbitrator”. 16. We are quite aware that neither a petition under Section 34 of the Act nor an appeal against an order passed on such a petition is in the nature of an appeal against the award of the Arbitrator, but the scope of an application under Section 34 of the Act is only either to set aside the award, if the grounds as are enumerated in Section 34 of the Act are made out by the person seeking for setting aside the award or the award becomes suspect or untenable on the touch stone of the statutory provision as has been indicated by the Supreme Court in the case of Oil and Natural Gas Corporation Limited v SAW Pipes Limited ( AIR 2003 SC 2629 : (2003) 5 SCC 705 ), other wise to leave the award as passed by the Arbitrator. 17. The scope of an application under Section 34 of the Act is only to set aside the award or to leave the award as it is, without being disturbed, and the Act does not provide for any via media, more so, an application under Section 34 of the Act not being in the nature of either an appeal or a revision or a review of the award passed by the Arbitrator, but the award getting vitiated due to illegalities such as being against either statutory provisions or the settled legal principles accepted in our legal system and enforced in Courts. 18. Before the Civil Court, the employer contended that the award was liable to be set aside, mainly urging the following grounds: 1. The Petitioner submits that the award passed by the Arbitrator is not in accordance with the law. The learned Arbitrator/ respondent 2 has only considered the proceedings and documents produced by the respondent 1 and passed an erroneous award which has caused heavy loss and hardship to the petitioners. Hence the award is required to be set aside by the Hon’ble Court. 2. The learned Arbitrator/ respondent 2 has only considered the proceedings and documents produced by the respondent 1 and passed an erroneous award which has caused heavy loss and hardship to the petitioners. Hence the award is required to be set aside by the Hon’ble Court. 2. The respondent 2 has not properly interpreted the certain clauses of the contract and shut his eyes to the legal aspect submitted for the consideration and passed an erroneous award against the petitions. 3. The respondent 2 has failed to follow the procedure and apply the provisions of Chapter V of the Arbitration and Conciliation Act, 1996 in relation to conduct of proceedings has not afforded proper opportunity to the petitioner. The Arbitrator passed an award in a hurry without giving any proper and sufficient opportunity to the petitioners. 4. The respondent 2 has not properly examined the document and contentions raised by the petitioners. Hence the Arbitrator has failed to come to the proper conclusion regarding the claim of the petitioners. 19. In addition, during the course of the arguments, the learned Counsel appearing for the employer before the Civil Court, urged that the award is also vitiated for the reason of it being opposed to the public policies of the country and urged for setting aside the award contending that the award is primarily vitiated for the reason that it was an award covering aspects beyond the scope of reference and the examination was not on the touchstone of terms between the parties. 20. 20. The learned Judge of the Trial Court while noticed the factual position and other arguments, on behalf of the applicant and the contractor, concluded that weight of judicial opinion is not to disturb an arbitral award; that Courts should be slow in disturbing an award and cannot sit in appeal like an Appellate Court over the award of the Arbitrator; that the Arbitrator is his own master and it is his exclusive domain to appreciate the evidence before him in any manner that appeals to him and it is not open for the Courts to scrutinise the award on the touchstone of either the quality or the quantity of the evidence that was placed before the Arbitrator, in the sense that on the ground of inadequacy of evidence, an award cannot be disturbed in application under Section 34 of the Act even assuming that the evidence placed by the parties before the Arbitrator was found lacking both in quality and quantity. 21. The learned Judge of the Trial Court recorded his findings on these aspects as under: “15. The allegation of award being erroneous, illegal and opposed to public policy not sustainable under Section 34 of the Arbitration and Conciliation Act, 1996. The Arbitrator is the final arbiter for the disputes 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. Courts cannot substitute its own evaluation of the conclusion of law or facts to come to the conclusion that Arbitrator had acted contrary to the bargain between the parties. Whether particular amount was liable to be paid is a decision within the competency of the Arbitrator the Court cannot take upon itself the burden of saying that this was contrary to the contract and as such beyond jurisdiction. If on a view taken of a contract, the decision of the Arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Where the reasons have been given by the Arbitrator in making the award the Court cannot examine the reasonableness of the reasons. If on a view taken of a contract, the decision of the Arbitrator on certain amounts awarded is a possible view though perhaps not the only correct view, the award cannot be examined by the Court. Where the reasons have been given by the Arbitrator in making the award the Court cannot examine the reasonableness of the reasons. 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”. Consequently, the Trial Court dismissed the application filed under Section 34 of the Act. It is aggrieved by this order, the present appeal under Section 37 of the Act preferred before this Court. 22. We have heard Sri Zulfikar, learned Counsel for the appellant, employer and Sri. R. Nataraj, learned Counsel for the respondent-contractor at great length and over a number of days. 23. In between, there was also an effort made to explore the possibility of the parties reconciling themselves with regard to the compensation that can be paid to the respondent-contractor in substitution of the award of the Arbitrator as one agreeable to both parties and to avoid a decision on the merits, which can possibly give cause or scope for either party to take it up further in appeal to Supreme Court etc. 24. An arbitration proceeding is an informal proceeding conducted by a person who is acceptable to both parties, who have agreed to abide by the decision of the person. Such is the origin of arbitration proceedings. The simplest meaning and definition of an Arbitrator is that he/she is an informal adjudicator, who attempts to resolve disputes between parties without being bettered by procedures and laws and to the best of his judgment and the parties agreeing to abide the decision of the Arbitrator without demur. 25. If the perception of an Arbitrator is to be accepted in its original or initial concept, the proceedings before the Arbitrator should be an end in itself and nothing beyond. 26. 25. If the perception of an Arbitrator is to be accepted in its original or initial concept, the proceedings before the Arbitrator should be an end in itself and nothing beyond. 26. But, unfortunately, the arbitral proceedings are not left to settle by itself, but has been made subject-matter of legislation and the Arbitration and Conciliation Act, 1996 is the present form of such Legislation, regulating and controlling the arbitral award, inspired/ mandated by the model law by the United Nations Commission on International Trade Law (UNCITRAL), mooted in the year 1985 and India being a party to the deliberations has been obliged and compelled to modify the Arbitration Act, 1940, which was holding the field hitherto to ensure that the legislation regulating arbitral proceedings in this country is also in conformity with the UNCITRAL guidelines. That is how the present Act has taken birth. 27. To quote from the preface by Justice R.P. Shethi in his commentary on Law of Arbitration and Conciliation, 2006 edition, published by Ashoka Law House, New Delhi, is as under: “The mounting arrears of cases in the country touching the Himalayan peaks numbering more than 2.5 crores has alerted the litigating people to strongly think about having speedy effective and less expensive justice. The globalisation, the internationalisation and dependence of each other, particularly of the commercial institutions and individuals have compelled them to seriously think about the Alternative Dispute Resolution Forums. The Alternative Dispute Resolution Forums are considered consensual, binding, confidential between the parties, speedy and cheaper. It is considered to be the best tool to enable the parties to preserve and continue their commercial relationship without adversely affecting their business of complex nature in the modern set up. The most broadly recognised ADR on the international scene has been, and will probably continue to be, arbitration. Arbitration, being a creature of contract, compels the parties to address the procedures which will control the resolution of a dispute and will usually address the question of what substantive law, if any, should govern the dispute. Forum selection is also the choice of the parties. Parochial interests may be represented and balanced in the make up of a panel, while the president or chair of the panel should reflect as much neutrality as the parties wish to provide. Forum selection is also the choice of the parties. Parochial interests may be represented and balanced in the make up of a panel, while the president or chair of the panel should reflect as much neutrality as the parties wish to provide. It is resorted to as the best tool to enable the parties to preserve and continue their relationship from the very beginning till the disposal of the disputes. The parties have full control over the procedure that is to be adopted for the settlement of their disputes. The Arbitration and Conciliation Act, 1996 has been enacted by the Parliament in discharge of its international obligation cast upon the country after adoption of the model law by the United Nations Commission on International Trade Law, in 1985. Though the Arbitration Act of 1940 was enacted to search for an alternative forum to the interminable, time consuming complex and expensive Court procedure, providing an alternative forum, less formal, more effective and speedy, yet the way in which the proceedings were conducted under the said Act and challenged in the Courts frequently in effect and essence made the lawyers laugh and the legal philosophers weep. The new Act was enacted after being satisfied that the object of 1940 Act had been frustrated. The new Act is totally different from the old Arbitration Act. The provisions of 1996 act are required to be interpreted and construed independently without being influenced by the principles underlined or the judicial pronouncements under the Old Act. The intention of the lawmakers who excluded the intervention of the Courts in arbitration matters is evident from the scheme of the Act. Efforts have been made while compilation of this book to keep in mind the resolutions of the United Nation, the UNCITRAL Model Law and the similar provisions made by various countries while enacting Arbitration Acts to fulfill the international demands, the object and reasons of the present Act and to keep in mind almost all important judgments of the Supreme Court and various High Courts in the country after the passing of the Act of 1996. The judgments under Arbitration Act of 1940 have been referred scantly, only where it was felt indispensable for the purposes of advancing the aimed object under the new Act. In the task of completing this book, I have got the full support, co-operation and assistance from Ms. Shalini Chuni, LL.M. (Leicester). The judgments under Arbitration Act of 1940 have been referred scantly, only where it was felt indispensable for the purposes of advancing the aimed object under the new Act. In the task of completing this book, I have got the full support, co-operation and assistance from Ms. Shalini Chuni, LL.M. (Leicester). But for the personal attention, Cooperation and encouragement of my wife Raj Sethi, I could have completed this task. I am grateful to the senior Advocates of the Supreme Court and the High Courts who from time to time gave me their valuable suggestions in this regard, I shall feel happy and satisfied if this book of mine proves helpful to the legal profession, the Bench, the arbitrators, the business community and the law students”. The present law is totally different from the provisions of Arbitration Act, 1940 (for short, `the 1940 Act’) and in understanding and interpreting the provisions of the 1996 act, the law as has been developed by the Courts interpreting the provisions of the 1940 Act, may not be of much use. 29. Even while so, what common phenomenon that Courts can inevitably notice in the working of the 1996 Act, is and rather ironically the manner in which the arbitration proceedings have developed in this country even under the 1996 Act and the developments thereafter, has only reiterated the views expressed by Justice R.P. Sethi in the working of the 1940 Act and even now the working of the 1996 Act, has not made much difference to the phenomenon of the laughing lawyers and weeping philosophers! But more realistically to the utter dismay and disappointment of the litigants caught in the web of these arbitration proceedings. 29. But more realistically to the utter dismay and disappointment of the litigants caught in the web of these arbitration proceedings. 29. Arbitration proceedings, leave alone being informal, leave alone being inexpensive, leave alone being expeditious has only resulted in highly technical (innumerable judgments of the superior Courts and not necessarily consistent is the testimony of this phenomenon), has become rather expensive for the litigants with the fee charged by the Arbitrators and members of legal fraternity appearing for the parties in such arbitral proceedings reaching astronomical figures and, of course, rather time consuming, as inevitably all arbitral proceedings resulting in awards, involving significant sums or amounts, go through the process of an application under Section 34 of the Act for setting aside the award at the instance of the party who is burdened with the award, a further appeal to the High Court under Section 37 of the Act and though not provided under the very act, as enabled under the Constitution of India, a further special leave petition to the Supreme Court, more often than not, involving highly technical questions, eliciting not only grant of leave and getting elevated to the status of a further appeal, but also warranting declaration of law by the Supreme Court, which may guide for the further proceedings under the enactment. 30. The net result is that the arbitration proceedings ending up more often than not time consuming and longer than the matter would have otherwise consumed before the Civil Courts; has burdened the litigant with higher expenditure and has not spared the Courts either and the paradox being arbitration proceedings, being informal dispute resolution mode, thought of as a boon to the heavily burdened formal litigation system through Courts being relieved of additional suits and appeals, but on the other hand has only contributed further to the docket explosion and has failed in all the three fronts of providing informal remedial forum, providing inexpensive resolution and settlement of the dispute and for providing expeditious forum for resolving the disputes. 31. Even within the short span of about 13 to 14 years, we find litigation proliferating under the provisions of the Act and the trend does not show any sign of abating, but on the other hand may only increase in the days to come. 32. 31. Even within the short span of about 13 to 14 years, we find litigation proliferating under the provisions of the Act and the trend does not show any sign of abating, but on the other hand may only increase in the days to come. 32. A phenomenon of this nature leaves one to wonder as to the wisdom of having a forum like this and even assuming it is to be had between the parties by mutual understanding and agreement, whether the law should intervene to provide for an avenue to the existing formal litigation system in this country and to further involve, Courts which are already burdened with sufficient number of cases, which originate within the legal system and which Courts find it difficult to cope with. 33. We are left to wonder as to the wisdom of having a legislation of this type, to regulate arbitral proceedings and if we are to have a say in the matter, we would rather suggest arbitral proceedings being given a total go-by or at least to give a go-by to the extent by statutory recognition of the proceedings by law and pave way to further litigation in Courts. Though this is not an area for the Courts to pronounce upon, nor to get active and it is for the appropriate forum viz., the Legislature to take note of these developments, our evaluation of the working of this law upto date is in the context of the present appeal and to act in the interest of the poor and hapless litigant and in the interest of our nation. 34. We have been compelled to recapitulate the history of this law and notice the developments upto the date for the reason that we find the arbitration proceedings are not on the established norms, but not amenable to rhyme or reason. 35. The manner in which the learned Judge of the Trial Court has dealt with the grounds urged in support of the application for setting aside the award and the manner in which the arguments addressed at the bar on behalf of the applicant have been dealt with, leaves much to be desired. Unfortunately, the learned Judge of the Trial Court appears to have been swayed by the idea that an arbitral award is gospel truth, most sanctified, sacred and not to be disturbed. 36. Unfortunately, the learned Judge of the Trial Court appears to have been swayed by the idea that an arbitral award is gospel truth, most sanctified, sacred and not to be disturbed. 36. The observation in para 15 of the order passed by the learned Judge of the Trial Court quoted above, only demonstrates the gross misunderstanding of the statutory provisions by the learned Judge. If the logic and the reasoning found in para 15 (See para 20 above) is to be accepted, it is nothing short of giving a go-by to the provisions of Section 34 of the Act. 37. It is the duty of the Court to apply the law as it is made and not to either avoid or evade in applying the relevant law. Section 34 of the Act as captioned, indicates and enables an application being made to a Court, for setting aside the arbitral award in case the situation as is indicated in sub-section (2) and (3) of Section 34 of the Act are made out. 38. For our present purpose, as the arguments advanced on behalf of the appellant-employer is mainly revolving around the provisions of sub-clause (iv) of clause (a) to sub-section (2) of Section 34 of the Act, viz.: “34. Application for setting aside arbitral award.— …… (2) An Arbitral award may be set aside by the Court only if – (a) the party making the application furnishes proof that .— ………. (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration.: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside”. and sub-clause (ii) of clause (b) of sub-section (2) of Section 34 of the Act reading: “(b) the Court finds that.— ……. (ii) the arbitral award is in conflict with the public policy of India. and sub-clause (ii) of clause (b) of sub-section (2) of Section 34 of the Act reading: “(b) the Court finds that.— ……. (ii) the arbitral award is in conflict with the public policy of India. Explanation.— Without prejudice to the generality of sub-clause (ii) of clause (b), it is hereby declared, for the avoidance of any doubt, than an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81. We shall confine the examination of the merits of the appeal only on the touchstone of these statutory provisions and as to whether the learned Judge of the Trial Court has in fact examined the application on the touchstone of these statutory provisions. 39. Most unfortunately, we find that the learned Judge of the Trial Court, who has framed the following issues: 1. Whether plaintiffs prove any one of the grounds mentioned under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside the award? 2. Whether plaintiffs are entitled the relief as prayer? 3. What or decree? has answered the issues against the petitioner-employer and in favour of respondent-contractor, not on the touchstone of the statutory provisions quoted above but on his own whims and fancies and a total misunderstanding of the case-law governing the statutory provisions. 40. The learned Judge of the Trial Court is also carried away too much by case-laws, as had developed under the 1940 Act. Very ironically, we notice that one of the grounds very strongly urged by the appellant-employer, in this case as urged by Sri Zulfikar, learned Counsel for the appellant is that the arbitral award is a non-speaking award, notwithstanding the statutory requirement that it should have been a reasoned award in terms of the provisions of Section 31 of the Act, as the agreement between the parties had not relieved the Arbitrator of an obligation to spell out reasons for the award, as is required under sub-section (3) of Section 31 of the Act. 41. A speaking award means an award which contains reasons to support the conclusions or to indicate the basis for such conclusions, a reasoning is necessitated if the conclusion is in favour of either of the party when the parties are at issue on a particular question. 41. A speaking award means an award which contains reasons to support the conclusions or to indicate the basis for such conclusions, a reasoning is necessitated if the conclusion is in favour of either of the party when the parties are at issue on a particular question. As we notice, the parties were on issue in respect of four bills out of six bills that had been presented by the contractor to the employer i.e., bill Nos. 3, 4, 5 and 6. Even here, the sixth bill was not in respect of any work done or executed by the contractor but on idle bill towards idling of men, machinery and wastage of materials. 42. It is not even a claim, which is enabled in favour of the contractor to be put forth as a claim in terms of the agreement between the parties. We had occasion to examine such obnoxious concept of idling charges towards idling of men, machinery and wastage of materials by a contractor, who has taken up a work in another matter before us, particularly the claim being in the nature of damages. While Sri Nataraj, learned Counsel for the contractor does not dispute that the agreement does not enable or does not have a clause to enable the contractor to put forth a claim towards idling of men, machinery and wastage of materials, would nevertheless seek to sustain the claim by contending that it is nothing but a claim in the nature of damages sustained for the losses incurred by the contractor due to non-deployment of the resources of the contractor resulting in a loss to the contractor due to non-utilisation/ under utilisation of his resources. 43. Sri Zulfikar, learned Counsel for the appellant-employer has strongly relied upon the judgment of the Supreme Court in the case of Delhi Development Authority v R.S. Sharma and Company, New Delhi ( (2008) 13 SCC 80 : 2008 AIR SCW 5735), to contend that an award not germane to the terms of the contract between the parties, an award travelling beyond the terms of the agreement, an award beyond the scope of reference to the arbitrator and an award which is not a speaking award, are all situations to vitiate the awards in terms of the provisions of sub-section (2) of Section 34 of the Act. By drawing attention to para 17 of this judgment, wherein the Supreme Court had occasion to recapitulate its ruling in earlier case, viz., Grid Corporation of Orissa Limited and Another v Balasore Technical School ( AIR 1999 SC 2262 : (2000) 9 SCC 552 ) and also in the case of New India Civil Erectors (Private) Limited v Oil and Natural Gas Corporation ( AIR 1997 SC 980 : (1997) 11 SCC 75 ), it can be held that an award being made beyond the terms of the agreement between the parties getting vitiated, notwithstanding the justification for a claim of that nature, was also reiterated in this decision by the Supreme Court with reference to its earlier decision in the case of Associated Engineering Company v Government of Andhra Pradesh and Another ( AIR 1992 SC 232 : (1991) 4 SCC 93 ) and an award also getting vitiated if it is contrary to law of the land or any other statutory provisions, as reaffirmed by reference to its earlier decision rendered under the 1940 Act in the case of N. Chellappan v Secretary, Kerala State Electricity Board and Another ( AIR 1975 SC 230 : (1975) 1 SCC 289 ). 44. The scope of an enquiry by Courts into the manner of rendering awards which had come in for examination before the Supreme Court in an earlier case in General Manager, Northern Railways and Another v Sarvesh Chopra ( AIR 2002 SC 1272 : (2002) 4 SCC 45 ) and the related cases were all extensively examined by the Supreme Court in this case and it was opined that a matter which cannot be made subject-matter of a dispute before an Arbitrator in terms of the contract between the parties can never be made as a basis of the award and the award if so is liable to be set aside in terms of the provisions of Section 34 of the Act, was emphatically reiterated. 45. In fact, Supreme Court has very exhaustively examined various situations in which an arbitration award gets vitiated for being set aside in terms of Section 34 of the Act in the case of R.S. Sharma, a judgment which constitutes the fountain head for examining the sustainability or other wise of an arbitration award in terms of Section 34 of the Act. 46. 46. Unfortunately, the learned Judge of the Trial Court has, while given a total go-by to these principles, has without any discernible logic or reason, rejected the grounds urged in support of the application and has dismissed the application by what can be typically characterised as a non-speaking order. It is not the length of the order that matters to make an order a reasoned order, but it is the relevance of the reasons given, whether tenable or acceptable or otherwise, but within the context of the dispute between the parties and the claims and counter-claims made by the parties and applying the law relevant to the subject and circumstances. Any order without involving this exercise and falling short of this requirement, suffers from the vice of being a non-speaking order. 47. The irony here is that while even awards made by Arbitrators who are all informal adjudicating authorities, are found fault with, on the touchstone of the order failing to pass the test of a reasoned order or a speaking award, a Judge trained in legal and judicial methods, if is found to be short of fulfilling these requirements, there is obviously something radically wrong in the training system of the Judges of the Civil Courts. The basic requirement in a judgment is, it should indicate the reasons for rendering the judgment after a brief narration of the facts and then recording the findings on the basis of the evidence placed before the Court and reflected in the arguments. If the order or judgment of a Court does not contain these basic ingredients, the judgment/order fails on the touchstone of the order/judgment being not in consonance with a reasoned order or a speaking judgment. The order under appeal in this case suffers from this very vice. 48. One another ground urged by Sri Zulfikar, learned Counsel for the appellant-employer is that the award is opposed to the public policy of the country and this argument is sought to be buttressed on the basis of the ratio as laid down by the Supreme Court in the case of ONGC Limited. 48. One another ground urged by Sri Zulfikar, learned Counsel for the appellant-employer is that the award is opposed to the public policy of the country and this argument is sought to be buttressed on the basis of the ratio as laid down by the Supreme Court in the case of ONGC Limited. The phrase `public policy’ though had a checkered career and has seen its ups and downs, it blossomed in the hands of no less than the revolutionary Judge in the Court of Appeal in England, Lord Denning, the Master of Rolls, who has eloquently explained this phrase in the case of Enderby Town Football Club Limited v Football Association Limited (1971 Ch. 591) and has observed as under: “With a good man in the saddle, the unruly horse can be kept in control if it can jump over obstacles. Had the timorous always held the field not only the doctrine of public policy but even the common law or the principles of equity would never have evolved. Sir William Holdsworth in his History of English Law, Volume III, P. 55, has said: “In fact, a body of law like the common law, which has grown up gradually with the growth of the nation, necessarily acquires some fixed principles, and if it is to maintain these principles it must be able, on the ground of public policy or some other like ground, to suppress practices which, under ever new disguises, seek to weaken or negative them”. It is thus clear that the principles governing public policy must be and are capable, on proper occasion, of expansion or modification. Practices which were considered perfectly normal at one time have today become obnoxious and oppressive to public conscience. If there is no head of public policy which covers a case, then the Court must in consonance with public conscience and in keeping with public good and public interest declare such practice to be opposed to public policy. Above all, in deciding any case which may not be covered by authority our Courts have before them the beacon light of the preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution”. 49. Above all, in deciding any case which may not be covered by authority our Courts have before them the beacon light of the preamble to the Constitution. Lacking precedent, the Court can always be guided by that light and the principles underlying the Fundamental Rights and the Directive Principles enshrined in our Constitution”. 49. Our Supreme Court has followed suit and has applied these principles to resolve disputes arising out of a contract between the parties and we quote the following observation from the ruling of the Supreme Court in the case of Rattan Chand Hira Chand v Askar Nawaz Jung (dead) by L.Rs and Others (1991) 3 SCC 67 ): “17. …..It cannot be disputed that a contract which has a tendency to injure public interests or public welfare is one against public policy. What constitutes an injury to public interests or welfare would depend upon the times and climes … The Legislature often fails to keep pace with the changing needs and values nor is it realistic to expect that it will have provided for all contingencies and eventualities. It is, therefore, not only necessary but obligatory on the Courts to step in to fill the lacuna. When Courts perform this function undoubtedly they legislate judicially. But that is a kind of legislation which stands implicitly delegated to them to further the object of the legislation and to promote the goals of the society. Or to put it negatively, to prevent the frustration of the legislation or perversion of the goals and values of the society”. 50. It is these principles which found expression through Section 34 of the Act, is what the Supreme Court has observed in the case of SAW Pipes Limited and as indicated in para 31 of the ruling as under: “31. Therefore, in our view, the phrase `Public Policy of India’ used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term `public policy’ in Renusagar Power Company Limited v General Electric Company, AIR 1994 SC 860 , it is required to be held that the award could be set aside if it is patently illegal. Result would be award could be set aside if it is contrary to.— (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality; or (d) in addition, if it is patently illegal. Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void”. 51. It is on such legal foundation, Sri Zulfikar, learned Counsel for the appellant, would urge that the award made by the Arbitrator in respect of claim No.6 towards idling of men, machinery and wastage of materials etc., is totally outside the scope of the agreement between the parties and a term not within the contemplation of the parties and therefore the award gets vitiated etc. 52. Countering such submissions, Sri Nataraj, learned Counsel for the respondent-contractor would contend that the scope of an appeal of this nature under Section 37 of the Act is rather less, and the scope of an application under Section 34 of the Act in itself being quite narrow, restricted and that application having been dismissed by the Civil Court, unless the appellant has made out a strong ground for interference, the appeal also should be dismissed and the award left undisturbed, for implementation. 53. 53. While Sri Nataraj submits that the award cannot be termed as a non-speaking award or non-reasoned award, the adjudicator in his wisdom has chosen to pass an award, calling in aid his rich experience in the construction activity and being himself a former Chief Engineer in civil division, had also looked into the claims and the objections put forth by the employer and therefore Mr. Nataraj would submit that when once the arbitrator has evinced awareness to the dispute between the parties, in the sense that he had exhibited awareness to the issue between the parties, and has proceeded to quantify the amount, payable to the contractor, the employer is bound to pay the amount to the contractor, under each claim in respect of which the award is made; that it should be taken that the award is as good as a reasoned award by relying upon the reasons that had been spelt out by the adjudicator in his award that it is, at any rate, a conscious award by the Arbitrator having shown his awareness to the relevant aspects and cannot be merely dubbed as a non-speaking award to subject it to surgery, under the provisions of Section 34 of the Act. 54. In the alternative, Sri Nataraj would submit that insofar as the award relating to the claims against the bill Nos. 54. In the alternative, Sri Nataraj would submit that insofar as the award relating to the claims against the bill Nos. 4 and 5 are concerned, it is to be noticed that the adjudicator, who was a person appointed for resolving the dispute even at an earlier stage and being the person named in the contract, and also a person having technical expertise, having by a reasoned order indicated that bill Nos.4 and 5 are required to be honoured to its full extent but without interest, as claimed by the contractor, and subject to certain inspection and certification of the quality of the work by an independent agency and that being so, with the employer not disputing the actual work that had been executed by the contractor and on the quality of the work also, there being not much dispute or demur, the reasoning given by the adjudicator to direct the employer to honour the bill to its full extent per se acts as a basis to sustain the award of the Arbitrator to that extent and at any rate can be taken as a reason by the Arbitrator also, to support the award in respect of the claim towards bill Nos.4 and 5. It is, therefore, strongly urged that there is absolutely no scope for disturbing the award in respect of these two bills. 55. It is, therefore, strongly urged that there is absolutely no scope for disturbing the award in respect of these two bills. 55. Insofar as the payment awarded in favour of the contractor towards Bill No.6 i.e., the amount claimed by way of idling charges towards idling of men, machinery and wastage of materials is concerned, by drawing our attention to the provisions of Section 73 of the Contract Act, 1872 (for short, `the Contract Act’) submission is that though the agreement between the parties did not provide for a claim of such nature and it was not within the contemplation of the parties to put forth a claim of this nature, which is more by way of a claim in the nature of damages for losses incurred or sustained by the contractor during the course of execution of the work, nevertheless it is a claim sustainable on the basis of the law of the land i.e., Section 73 of the Contract Act and if the Arbitrator has passed an award, though not by expressing his intention to grant damages to the contractor towards losses sustained by him, but by simply indicating that the claim is sustainable at least to the extent of 50% of the claim, that action should be sustained on the touchstone of Section 73 of the Contract Act, and submits that it should not be disturbed by this Court. 56. It is also urged that the grounds as are urged before this Court by Sri Zulfikar, learned Counsel for the appellant-employer are not the grounds found to have been taken in the application under Section 34 of the Act before the Civil Court and therefore, submits that it is not open to the appellant to supplement such grounds which were not taken before the Civil Court, in this appeal under Section 37 of the Act and seeks for a decision from this Court on the touchstone of only such grounds which had been urged before the Civil Court. 57. 57. By placing reliance on the decision of the Supreme Court in the case of Som Datt Builders Limited v State of Kerala (2009) 10 SCC 259 ), Sri Nataraj, learned Counsel for the respondent-contractor, submits that assuming for argument’s sake that any part of the award is not sustainable for the reason that it is not a speaking award or a reasoned award, the matter would not end by merely setting aside the award, but the matter should be remanded to the Arbitrator or the Civil Court, as the case may be, for re-examination of the question and therefore, submits that while the award can be sustained to the extent the reasons for supporting the award can be found intrinsically, in the sense, even without any dispute between the parties such as in the true order of the adjudicator, insofar as any other part of the award made by the Arbitrator which is not supported by any such intrinsic material is concerned and is therefore found to be wanting in reasons to sustain the same, only to that extent the award may be set aside and the matter by remanded to the Arbitrator or the Civil Court, as the case may be, for re-examination of that aspect alone. 58. On a perusal of the judgment of the Supreme Court in the case of Som Datt Builders Limited, we find that the Supreme Court on examining the contention for setting aside the arbitral award for the vice of being a non-speaking award, acceded to the request of the learned Counsel for the respondent-contractor for a limited remand to the Arbitrator and even while setting aside the award, it was only to the extent of enabling the Arbitrator to supplement reasons for the award, which award had already been made, so that the sustainability or otherwise of the award can be tested afresh on the touchstone of such reasons to be supplemented by the Arbitrator and as to whether they were germane to the passing of the award or if it was found wanting on the touchstone of the provisions of sub-clause (iii) of sub-section (2)(a) of Section 34 of the Act and other related statutory provisions under the Act. 59. 59. While these exercises can be followed by this Court also, even if the procedure adopted by the Supreme Court may not per se amount to a law declared in terms of Article 141 of the Constitution of India, we can take note of the statutory provisions of sub-section (4) of Section 34 of the Act, as extracted above, and can understand that the opportunity contemplated in terms of sub-section (4) of Section 34 of the Act in favour of a person who is interested in sustaining an award, the validity of which is questioned under Section 34 of the Act, it is only to enable the Arbitrator either to conclude the inconclusive proceedings or to eliminate the possible drawback or defect in the award, so that the award escapes the vice of sub-sections (2) and (3) of Section 34 of the Act. 60. In the present case, it cannot be said that the proceedings before the Arbitrator were inconclusive. However, insofar as the allowing of the claim by the Arbitrator to the extent indicated in the award as against bill nos. 3, 4, 5 and 6 are concerned, we are of the view that taking clue from the provisions of sub-section (4) of Section 34 of the Act and the judgment of the Supreme Court in the case of Som Datt Builders Limited, the award insofar as it relates to the claims against bill Nos. 3, 4, 5 and 6 are concerned, we are of the view that taking clue from the provisions of sub-section (4) of Section 34 of the Act and the judgment of the Supreme Court in the case of Som Datt Builders Limited, the award insofar as it relates to the claims against bill Nos. 3, 4 and 5 while are required to be set aside and is to be remanded to the Arbitrator only to the extent of indicating or to give supportive reasons for passing the award to the extent as already indicated by the Arbitrator; the award insofar as it relates to the claim under bill No.6 is concerned, i.e., amount claimed by way of idling charges towards idling of men and machinery and wastage of material and assuming that it is in the nature of a claim towards damages, we are of the opinion that the contract between the parties governed the entire relationship between the parties and when once the terms between the parties are reduced into writing in terms of the contract, the relationship between the parties cannot be expanded beyond the realm of the contract, assuming for argument’s sake that there are other enabling statutory provisions to sustain a claim of that nature, though it was not within the contemplation of the parties. 61. 61. We are of the clear opinion that while the award passed by the Arbitrator may be found wanting and may expose itself to the vice of falling foul on the requirements of Section 34 of the Act and liable to be set aside, the converse viz., a statutory provision in any other enactment being capable of sustaining the claim on the parties making good the applicability of that statutory provision, cannot be called in aid to supplement the terms between the parties and to incorporate that as an additional term of the contract, while examining a claim in the nature of a claim towards idling of men and machinery and wastage of material etc., in an appeal arising out of a proceeding wherein also the contractor can come before Court instead of going before the Arbitrator by putting forth a claim in the nature of damages, though the proceedings in the instant case did originate before the Arbitrator, in law and on legal principles it does not make any difference and the legal principles are equally applicable to the proceedings arising out of the arbitration proceedings also. 62. It is to be noticed that when once the contract is determined, the claim by the contractor, who either might have executed the work or not and might have left it midway, can only be by way of damages and nothing else. We cannot help but to observe than an obnoxious practice that has developed in arbitral proceedings with the contractors putting forth fantastic, inflated, dubious claims and the arbitrators obliging them if not to the entire extent but to some extent; a fact which can be noticed in the present case also is proof of this phenomenon, insofar as the claim towards idling of men and machinery and wastage of material is concerned and as it is found on record that the employer terminated the contract in terms of its communication dated 3-9-2001, and whereafter there was no business on the part of the contractor to keep his men and machinery tied down to the work site. The Arbitrator in his wisdom and with his rich experience having visited the work spot on 19-1-2002, opines that he has found a good amount of men idling there and machinery parked there and therefore calling in aid his experience makes an award for 50% of the claim and has allowed a sum of Rs.13,49,068/- towards idling of men and machinery and wastage of material! 63. In our considered opinion, this being a claim not examined either by the adjudicator and being raised after the determination of the contract, was no claim in the eye of law and just because the contractor puts forth any and every claim and the terms contemplate disputed matter being referred to an Arbitrator, it does not compel this Court after the parties have gone through the process of arbitration proceedings and an application for setting aside the award, to shut a blind eye to the development of the law and to make a mechanical remand of this matter also to the Arbitrator for making an award even in respect of the claim under bill No.6. 64. We find that assuming the Arbitrator has made an award in respect of such a claim it is one which is clearly unsustainable on the touchstone of the provisions of subsection (2) of Section 34 of the Act, as one beyond the realm of the Arbitral proceedings and therefore we deem it as an idle exercise to call upon the Arbitrator to supplement reasons even in respect of the award on the claim against Bill No.6. We are of the view that there is nothing due, in fact or entitlement in law which could enable the Arbitrator to make an award in favour of the contractor on this claim and applying the legal principles / ratio of the decision enunciated by the Supreme Court in the case of ONGC Limited and as has been indicated by this Court in respect of claims towards damages in a similar case decided by this Court on 15-6-2001 in RFA No. 1051 of 2003 connected with RFA No.1076 of 2003, the claim was not one sustainable in law and therefore we do not find any need or justification to remand this claim also to the Arbitrator to supplement reasons to sustain this part of the award but set aside the award on this aspect by applying the provisions of Section 34 of the act. 65. In the result, this appeal is allowed, award of the Arbitrator is set aside and the award insofar as it relates to the claim against bill Nos. 3, 4 and 5 are concerned, the Arbitrator is called upon to supplement reasons. To that extent of examining the sustainability or otherwise of the award, with the reasons to be supplemented by the Arbitrator, the matter is remanded to the Court below for re-examination of the application under Section 34 of the Act, after the reasons are supplemented by the Arbitrator. 66. Only to this extent, the matter is remanded to the Civil Court for the purpose of examining the question of sustainability or otherwise of the award of the Arbitrator insofar as it relates to the claims against Bill Nos. 3, 4 and 5 and after the Court is enabled by the Arbitrator by placing or supplementing reasons for making the award against these claims. For such purpose, the matter is remanded to the Court below. In respect of all other aspects, the award is set aside. Parties to this appeal to appear before the Civil Court on 7-9-2010 for taking further instructions. The Civil Court to ensure compliance with this judgment. The Civil Court to ensure that a reasoning to supplement the award is received from the Arbitrator at the earliest and not later than three months from that date. It is also open to the parties to apprise the Arbitrator of the Developments in this regard. 67. The Civil Court to ensure compliance with this judgment. The Civil Court to ensure that a reasoning to supplement the award is received from the Arbitrator at the earliest and not later than three months from that date. It is also open to the parties to apprise the Arbitrator of the Developments in this regard. 67. Having regard to the mixed success, the parties to bear their respective costs. 68. Registrar General to ensure copies of this judgment is forwarded: 1. The Secretary to the Government, Ministry of Law and Justice, Government of India, Shastri Bhavan, Dr. Rajendra Prasad Road, New Delhi – 110 001. 2. The Secretary to the Government, Ministry of Commerce and Industry, Government of India, Udyog Bhavan, New Delhi – 110 001. 3. The Member Secretary, the International Centre of Alternate Dispute Resolution, Plot No.6, Vasant Kunj, Institutional Area II, New Delhi – 110 070. 4. The Director General, Indian Confideration of Indian Industry, CII Headquarters, Mantaosh Sondhi Centre, 23rd Institutional Area, Lodhi Road, New Delhi – 110 003. 5. The Secretary, Department of Road Transport and Highways, Transport Bhavan, Parliament Street, New Delhi – 110 001. 6. The Secretary, Ministry of Railway, Government of India, Rail Bhavan, New Delhi – 110 001. 7. The Chairman, TC and Secretary, Department of Tele Communication (Headquarters), Sanchar Bhavan, 20, Ashoka Road, New Delhi – 110 001. 8. The Chief Secretary, Government of Karnataka, Vidhana Soudha, Bangalore – 560 001. 9. The President, Federation of Karnataka Chamber of Commerce and Industry, Post Box No. 9996, K.G. Road, Bangalore – 560 009. 10. The Secretary, Ministry of Labour, Vidhana Soudha, Bangalore – 560 001. 11. The Secretary, Ministry of Public Works Department excluding Ports and Inland Water Transport, Vidhana Soudha, Bangalore – 560 001. 12. The Secretary, Ministry of Transport Department and Food Civil Supplies and Consumer Affairs Department, Vidhana Soudha, Bangalore – 560 001. 13. The Secretary, Ministry of Tourism from Kannada and Culture, Information and Tourism Department and Infrastructure Development Department, Vidhana Soudha, Bangalore – 560 001. 14. The Secretary, Ministry of Small Scale Industry from Capital C and I Department and Sericulture from C and I Department, Vidhana Soudha, Bangalore – 560 001. 15. The Secretary, Ministry of Large and Medium Scale Industries from C and I Department, Vidhana Soudha, Bangalore – 560 001. 16. 14. The Secretary, Ministry of Small Scale Industry from Capital C and I Department and Sericulture from C and I Department, Vidhana Soudha, Bangalore – 560 001. 15. The Secretary, Ministry of Large and Medium Scale Industries from C and I Department, Vidhana Soudha, Bangalore – 560 001. 16. The Secretary, Ministry of Minor Irrigiation from Water Resource and Planning Department, Vidhana Soudha, Bangalore – 560 001.