Judgment :- 1. The present Original Petition is filed seeking to set aside the award passed by the Arbitral Tribunal dated 11.11.2009. 2. The claimant before the learned Arbitrators is the petitioner herein. 3. The facts of the case, in nutshell, are set out hereunder: The petitioner herein had entered into an agreement with the first respondent on 03.09.2004 for the work of Enhanced Periodical Maintenance of Government Roads in Salem and Karur District. As per the said agreement, the petitioner has to complete the work within 12 months from the date of handing over the sites. The site was handed over on 29.09.2004. The targeted date of completion was on 28.09.2005. However, the work was completed only on 15.09.2007. The reason for the delay in starting the work was, to approve the revised level, the first respondent and his officials have taken time nearly five months. The exorbitant price-hike outside the control of the employer as well as contractor has resulted in frustration of the contract and for other reasons. Without considering the same, the first respondent's Engineer has levied the liquidated damages in two spells. Hence, the petitioner has preferred the claim before the first respondent, which is set out hereunder: (a) Refund of Rs.32,72,500/- was required, since it was recovered as liquidated damages illegally. (b) A sum of Rs.86,67,055/- was asked for compensation due to the delay in issue of Project Authority Certificate. (c) A sum of Rs.6,25,15,934/- for the price variation and difference in cost between the agreement rate and market rate spent by the petitioner during the execution of the work due to price hike. (d) A sum of Rs.4,72,79,191/- towards loss of profit and overheads due to prolongation of contract. Before the learned Arbitration Tribunal, the petitioner has raised those claims. However, the claim has been rejected in toto by the learned Arbitrators and hence, the petitioner has come up with the present Original Petition challenging the said award under Section 34 of the Arbitration and Conciliation Act, 1996. 4. The learned counsel appearing for the petitioner fairly submitted that in respect of the work carried out at Karur District, absolutely there is no dispute and there are disputes only with regard to the work carried out in Salem District. 5. 4. The learned counsel appearing for the petitioner fairly submitted that in respect of the work carried out at Karur District, absolutely there is no dispute and there are disputes only with regard to the work carried out in Salem District. 5. The first and foremost submission that was made by the learned counsel appearing for the petitioner is that as per various clauses in the agreement, the petitioner has followed the procedure for referring the matter to the Adjudicator. But, however, there was no response on the side of the first respondent and hence, the petitioner was not in a position to follow the Dispute Resolution Mechanism. However, this vital aspect has been overlooked by the Arbitral Tribunal while passing the award. Keeping in mind the said submission made by the learned counsel appearing for the petitioner, it has to be seen whether the claims made by the petitioner have been considered by the Arbitrators in proper perspective. 6. Claim No.1 – Refund of Liquidated Damages (LD) levied by the first respondent. (a) Before adverting to the claim made in this regard, the preliminary objections raised by the first respondent have to be considered. According to the first respondent, the contract between the parties envisages a reference to Adjudicator and the petitioner has not followed the adjudication mechanism. (b) Before adverting to the said contention, it will be useful to extract the relevant clause in the agreement, viz., Clauses 24 and 25, which are reproduced hereunder: "24. Disputes 24.1. If the Contractor believes that a decision taken by the Engineer was either outside the authority given to the Engineer by the Contract or 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. 25. Procedure for Disputes 25.1 The Adjudicator shall give a decision in writing within 28 days of receipt of a notification of a dispute. 25.2 The Adjudicator shall be paid daily at the rate specified in the Contract Data together with reimbursable expenses of the types specified in the Contract Data and the cost shall be divided equally between the Employer and the Contractor, whatever decision is reached by the Adjudicator. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. Either party may refer a decision of the Adjudicator to an Arbitrator within 28 days of the Adjudicator's written decision. If neither party refers the dispute to arbitration within the above 28 days, the Adjudicator's decision will be final and binding. 25.3 The arbitration shall be conducted in accordance with the arbitration procedure stated in the Special Conditions of Contract." (c) The Arbitrators found that the levy of last liquidated damages was made on 13.09.2006 and the petitioner made an objection for the claim on 23.09.2006. It was rejected by the first respondent on 18.10.2006 as per C.42. The petitioner, instead of referring the matter to Adjudicator, failed to do so. On records, it seems that certain adjudication have been made in respect of certain other claims and the last one was made to one Mr.Sampathkumar on 04.04.2007. While so, it is not known why the claim made by the petitioner towards liquidated damages was not referred to Adjudicator. Even in the present Original Petition, there is no answer for the same, when there is a reference about the claim 2,3 and 4 in this regard. (d) In view of the above stated position, it could be held that the petitioner intentionally waived its right in seeking a reference to the Adjudicator. The petitioner, who had allowed the first respondent to appropriate the liquidated damages, cannot seek for refund of the same at a later stage. This point, which was held in favour of the first respondent by the Arbitral Tribunal, does not require any interference by this Court. (e) On merits, regarding the claim, the Arbitrators analyzed the extension of contract sought for by the petitioner and the reason for such request. It has been found, 12 times extension has been sought for, totalling for a period of 23 months and 18 days. That apart, the Arbitrators found that the claim of the petitioner that though a proposal has been sent at their end in time, the approval was delayed, is factually incorrect. The same has been extensively discussed by the Arbitrators, which does not require any interference by this Court. (f) In view of the above discussion made earlier, I am of the considered view that the claim regarding refund of liquidated damages made by the petitioner is liable to be rejected and accordingly, rejected. 7. The same has been extensively discussed by the Arbitrators, which does not require any interference by this Court. (f) In view of the above discussion made earlier, I am of the considered view that the claim regarding refund of liquidated damages made by the petitioner is liable to be rejected and accordingly, rejected. 7. Claim No.2:- Payment of loss due to delayed issue of Project Authority Certificates (PAC). (a) It is contended by the learned counsel appearing for the petitioner that the petitioner, by its letter dated 08.11.2004, requested the first respondent to issue Project Authority Certificate (PAC). But, however, the first respondent issued PAC only on 24.12.2007, after a decision made by the Adjudicator. (b) Regarding this claim, it has to be seen that the contract was signed on 03.09.2004 and the petitioner, by its letter dated 08.11.2004, requested the first respondent to issue PAC. Thus, the petitioner had requested the first respondent for issue of PAC only after two months from the date of signing the contract. That apart, the said claim was rejected by the first respondent on 24.01.2005. While so, without immediately invoking adjudication, as per the terms of contract, which was extracted above, the matter was referred to the adjudicator only in April, 2007. Thus, the petitioner, who has to blame itself, is blaming the respondents. The Arbitrators extensively considered the matter, which is extracted hereunder: "The claimant has described his claim on pages 74 & 75 of his claims statement and elaborated in his rejoinder and written arguments. The respondent had given these objections to this claim. The claimant had committed the mistake of not filling the particulars for goods for which he expected exemption from excise duty, may be, by oversight. But, he had signed the blank page and enclosed with the tender (page 32 of contract document) The claimant had realized this need for PAC only on 18.11.2004, full 2 ½ months after signing the contract on 3.9.04 and applied to Project Director. But, he had signed the blank page and enclosed with the tender (page 32 of contract document) The claimant had realized this need for PAC only on 18.11.2004, full 2 ½ months after signing the contract on 3.9.04 and applied to Project Director. But the PD asked him why he wanted these certificates (see C2 on page 10 of claims) The clarification was given on 23.12.04 (page 102) and this was rejected by PD on 24.1.05 (page 104) If the claimant had considered this as his immediate justified claim, he should have invoked adjudication within 14 days (at least 8.2.05) Instead of this, claimant had been indulging in correspondence with Respondent for 2 years until 16.2.07, not realizing the fact that exemptions can be claimed only from Indian Oil Corporation only through advance applications (see C7) along with PAC given by the department. When the IOC rejected their claim and directed them to approach the Excise department, the claimant approached them and this was rejected as the rules required that such applications should be submitted within a year of purchase. In the present case, it was late by 4 years. If the claimant had sought adjudication in February 2005 itself instead of April 2007 he could have obtained PAC if he was eligible and this loss could have been avoided. Actually, the Excise department only has to refund and not the present respondent. The adjudication award for issue of PAC was of no use and the certificates which were issued very promptly by the respondent were also of no use. The claimant, though an experienced contractor, had committed 2 costly mistakes of (a) not filling the particulars in the exemption certificates and (b) invoking adjudication after a lapse of 2 years. Therefore the claim is rejected." (c) In view of the above stated position, I am of the considered view, the claim made in this regard is also liable to be rejected and accordingly, rejected. 8. Claim No.3: Price variation for the works carried out in the extended period. (a) It is the case of the petitioner that even though the contract price is firm through out the contract period, it is entitled to receive escalation charges due to price-hikes. It is further contended that the Engineer had admitted so in his letter. 8. Claim No.3: Price variation for the works carried out in the extended period. (a) It is the case of the petitioner that even though the contract price is firm through out the contract period, it is entitled to receive escalation charges due to price-hikes. It is further contended that the Engineer had admitted so in his letter. However, it is contended on behalf of the first respondent that the petitioner is not eligible to get compensation for the rise in price of the materials. It is further contended that the first respondent did not accept to pay the compensation for the rise in price of materials like cement, sand, etc. (b) Before adverting to the said contention, it will be useful to extract clauses 32.1 and 47.2 in the agreement between the parties: "32.1 The Contractor is to warn the Engineer at the earliest opportunity of specific likely future events or circumstances that may adversely affect the quality of the work, increase the Contract Price or delay the execution of works. The Engineer may require the Contractor to provide an estimate of the expected effect of the future event or circumstance on the Contract Price and Completion Date. The estimate is to be provided by the Contractor as soon as reasonably possible. 47.2 To the extent that full compensation for any rise or fall in costs to the contractor is not covered by the provisions of this or other clauses in the contract, the unit rates and prices included in the contract shall be deemed to include amounts to cover the contingency of such either rise or fall in costs." (c) It is not in dispute that the petitioner made an early warning as required under Clause 32.1 referred to above. The petitioner seems to have stopped work only due to "frustration" due to the price-hike from 31.03.2006 to 07.11.2006 for a period of seven months and 24 days. Not only that the petitioner, without approaching the adjudicator, made claim before the Arbitrators only on 29.12.2008. Further, in view of Clause 47.2, which is extracted above, the petitioner is not entitled to claim any amount in this regard. (d) In view of the above stated position, I am of the considered view that the claim made in this regard is also liable to be rejected and accordingly, rejected. 9. Further, in view of Clause 47.2, which is extracted above, the petitioner is not entitled to claim any amount in this regard. (d) In view of the above stated position, I am of the considered view that the claim made in this regard is also liable to be rejected and accordingly, rejected. 9. Claim No.4: Loss of Profit and overheads due to prolongment of contract. (a) Regarding this claim, it is the case of the petitioner that the first respondent has to be blamed for his delayed decision on profile-correction, new culverts and minor bridge on Attur road. According to the petitioner, the revised drawing though was submitted for approval by the petitioner, the first respondent has taken considerable time to approve the same and finally, it was approved only on 21.03.2007. (b) However, as per records, it has to be seen that the petitioner never intimated the first respondent as per clause 32.1 referred to above, that it was undergoing loss due to the failure of the first respondent in approving the drawing. However, the petitioner has not invoked the jurisdiction of the Adjudicator. The claim seems to have been made only on 28.08.2008. Thus, the Arbitrators rightly found that the petitioner is not entitled to make a claim in this count. 10. Claim No.5: Interest claimed on the above claims. (a) Since the claims made by the petitioner were rejected by the Arbitrators, which have been confirmed by me in this Original Petition, the petitioner is not entitled to any interest. Thus, the claim made in this regard is also rejected. 11. Claim No.6: For costs of arbitration: (a) The Arbitrators have reasonably held that both the parties have to bear their respective cost, which appears to be reasonable. There need be no necessity to interfere with such finding. 12. That apart, the award could be set aside only if the award is patently illegal. In the decision reported in 2008 (6) CTC 392 – The Chief Engineer (Construction II), (Guage Conversion), Southern Railway, Egmore, Chennai-8 vs. Nilakantan & Sons Pvt. Ltd and others, the learned Judge of this Court has held that an award passed by the learned Arbitrator after elaborately evaluating the evidence and giving sufficient reasons thereto, cannot be set at naught by this Court. That apart, award is not open to any interference by the High Court unless and otherwise the award is patently illegal. In para 31 of the said judgment, the learned Judge has extracted a portion of the judgment of the Hon'ble Apex Court reported in 2006 (11) SCC 181 – McDermott International Inc. v. Burn Standard Co. Ltd. and others and the same is usefully extracted here under:- "31. In McDermott International Inc. v. Burn Standard Co. Ltd. and others, 2006 (11) SCC 181 , the Hon'ble Supreme Court held that the 1996 Act makes provision for the supervisory role of Courts and this supervisory role is to be kept at a minimum level and the interference envisaged only in cases of fraud, or bias, violation of natural justice etc. The Hon'ble Supreme Court further held that interference on the ground of patent illegality is permissible only if the illegality goes to the root of the matter and also the public policy violation should be so unfair and unreasonable so as to shock the conscience of the Courts. The relevant paras reads as under:- '52. The 1996 Act makes provision for the supervisory role of Courts, for the review of the Arbitral Award only to ensure fairness. Intervention of the Court is envisaged in few circumstances only, like, in case of fraud or bias by the Aritrators, violation of natural justice, etc. The Court cannot correct errors of the Arbitrators. It can only quash the award leaving the parties free to begin the Arbitration against if it is desired. So, the scheme of the provision aims at keeping the supervisory role of the Court at minimum level and this can be justified as parties to the agreement make a conscious decision to exclude the Court's jurisdiction by opting for Arbitration as they prefer the expediency and finality offered by it. ‘58. In Renusagar Power Co. Ltd. v. General Electric Co., this Court laid down that the arbitral award can be set aside if it is contrary to (a) fundamental policy of Indian law; (b) the interests of India; or (c) justice or morality. A narrower meaning to the expression "public policy" was given therein by confining judicial review of the arbitral award only on the aforementioned three grounds. A narrower meaning to the expression "public policy" was given therein by confining judicial review of the arbitral award only on the aforementioned three grounds. An apparent shift can, however, be noticed from the decision of this court in ONGC Ltd. v Saw Pipes Ltd. (for short "ONGC"). This Court therein referred to an earlier decision of this Court in Central Inland Water Transport Corpn. Ltd., v. Brojo Nath Ganguly, wherein the applicability of the expression "public policy" on the touchstone of section 23 of the Indian contract Act and Article 14 of the Constitution of India came to be considered. This Court therein was dealing with unequal bargaining power of the workmen and employer and came to the conclusion that any term of the agreement which is patently arbitrary and / or otherwise arrived at because of the unequal bargaining power would not only be ultra vires Article 14 of the constitution of India but also hit by section 23 of the Indian contract Act. In ONGC this Court, apart from the three grounds stated in Renusagar, added another ground thereto for exercise of the Court's jurisdiction in setting aside the award if it is patently arbitrary. 59. Such patent illegality, however, must go to the root of the matter. The public policy violation, indisputably, should be so unfair and unreasonable as to shock the conscience of the Court. Where the arbitrator, however, has gone contrary to or beyond the expressed law of the contract or granted relief in the matter not in dispute would come within the purview of section 34 of the Act. However, we would consider the applicability of the aforementioned principles while noticing the merits of the matter."