Judgment Mansoor Ahmad Mir 1 .By the medium of this appeal, the appellant has invoked the jurisdiction of this Court, under Section 37 (1) (b) of the Arbitration and Conciliation Act, 1996for short, “the Act” and has questioned the judgment dated 15.6.2009, passed by the learned Single Judge of this Court in Arbitration Case No. 30 of 2007, whereby the objections filed by the respondent/Objector have been partly allowed, for short the “impugned judgment.” 2. Heard. 3. It appears that a tender notice was issued vide letter of intent (LOI) to the respondent on 26.12.2001 for executing certain works on turnkey basis of Cables, Cabling and Cable Trays, Package- IX, the details of which are given in the appeal as well as in the impugned judgment. Before the contract was concluded, a dispute arose in between the parties, constraining the appellant herein to file Civil Writ Petition No. 247 of 2002, which was found merit less and was dismissed by this Court on 23.7.2002. However, the petitioner was left to have recourse to appropriate remedy, as permissible under law. 4. The Writ Court has held that there was no concluded contract between the parties and it was cancelled at the very threshold stage, i.e., before the execution and signing the form of contract in view of the terms and conditions contained in the document. It is apt to reproduce operative part of the judgment herein. “Now the question was whether the petitioners are entitled to the relief sought for by them in the writ petition or not. It is true that many matters could be decided after referring to the contention raised in the affidavits and counter affidavits but that would hardly be a ground for exercise of extraordinary jurisdiction under Article 226 of the Constitution in case of alleged breach of contract. In State of Bihar and others vs. Jain Pulastics and Chemicals Ltd. (2001) 1 SCC 216 the facts before their lordships were whether the alleged non-supply of road permits by the appellants would justify breach of contract by the respondent would dependent upon facts and evidence and is not required to be decided or dealt with in a writ petition under Article 226 of the Constitution. Such seriously disputed questions or rival claims of the parties with regard to breach of contract are to be investigated and determined on the basis of evidence which may be led by the parties in a properly instituted Civil Suit rather than by a Court exercising prerogative of issuing writs. In this view of the matter, we are of the view that no relief sought for by the petitioners in this writ petition can be granted to them by this Court in exercise of its extra ordinary jurisdiction under Article 226 of the Constitution. In the result, there is no merit in this writ petition which is accordingly dismissed. There will be no order as to costs. It would be open to the petitioners to have recourse to other appropriate remedy as permissible under law. Stay order shall stand vacated. All miscellaneous applications filed by the petitioners shall stand disposed of.” [Emphasis supplied] 5. The parties have not questioned the aforesaid judgment passed by the Writ Court, thus has attained finality. 6. After noticing the judgment, it appears that the appellant had initiated arbitration proceedings before the Arbitrator. The Arbitrator, after examining the record, passed the award on 8.5.2007, constraining the respondent to file application under Section 34 of the Act referred to above before this Court by the medium of Arbitration Case NO. 30 of 2007. The respondent questioned the award precisely on the ground that (i) there was no concluded contract between the parties therefore, he had not violated any terms and conditions of the contract (ii) the disputed questions of facts and law are involved, (iii) the Arbitrator had no jurisdiction to enter upon the reference and make the award. 7. The learned Single Judge, after examining the pleadings framed two issues which are reproduced in para 9 of the impugned judgment. The learned Single Judge has rightly held that the contract was not concluded, thus, the Arbitration proceedings were not maintainable but partly allowed the objections and held that the respondent had made admission before the Arbitrator that he was ready to pay Rs.4,01,712/- to the appellant herein, which was also not seriously disputed even before the learned Single Judge, which fact stands recorded in para 23 of the impugned judgment. It is also worthwhile to record herein that even the respondent has not questioned the impugned judgment so far it relates to maintaining award on Claim No. (ii), as recorded in para 23 of the impugned judgment, referred to supra. 8. The appellant has not questioned the judgment made by the learned Single Judge in CWP No. 247 of 2002, which has attained finality. Thus, it cannot lie in the mouth of the appellant that the contract was concluded or any arbitral dispute had arisen to be agitated before the Arbitrator or Arbitrator had jurisdiction to enter upon the said dispute. 9. The learned Single Judge in CWP No. 247 of 2002 filed by the appellant herein has recorded the findings at page 21 of the impugned judgment that contract was not concluded and it was within the competency of the respondent-Corporation to withdraw the LOI and LOA issued to the petitioners before the concluded contract would come into existence. It is apt to reproduce relevant para at page 21 of the judgment herein: “In the light of the above-said decision of the Supreme Court and the factual situation of the present case stated herein-above, we are of the view that the action of competent authority of respondent-Corporation withdrawing LOI and LOA issued to the petitioners before the concluded contract would come into existence and before the petitioners actually started the work for which the tender notice was issued to them would not attract the doctrine of promissory estoppel…………” 10. The learned Single Judge has rightly framed issues and has held that the award of the Arbitrator was not tenable, in view of the fact that it was against the public policy of India. 11. The Supreme Court in Associate Builders versus Delhi Development Authority reported in (2015) 3 SCC 49 , has discussed on what grounds an award can be set aside, when it is found against the public policy of India. It is apt to reproduce paras 19 to 26 of the said judgment herein. “19.When it came to construing the expression "the public policy of India" contained in Section 34 (2) (b) (ii) of the Arbitration Act, 1996, this Court in ONGC v. Saw Pipes, 2003 5 SCC 705 , held- "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. 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. 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 case, 1994 Supp1 SCC 644 it is required to be held that the award could be set aside if it is patently illegal. The 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. 74. In the result, it is held that: (A) (1) The court can set aside the arbitral award under Section 34(2) of the Act if the party making the application furnishes proof that: (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (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. (2) The court may set aside the award: (i)(a) if the composition of the Arbitral Tribunal was not in accordance with the agreement of the parties, (b) failing such agreement, the composition of the Arbitral Tribunal was not in accordance with Part I of the Act. (ii) if the arbitral procedure was not in accordance with: (a) the agreement of the parties, or (b) failing such agreement, the arbitral procedure was not in accordance with Part I of the Act. However, exception for setting aside the award on the ground of composition of Arbitral Tribunal or illegality of arbitral procedure is that the agreement should not be in conflict with the provisions of Part I of the Act from which parties cannot derogate. (c) If the award passed by the Arbitral Tribunal is in contravention of the provisions of the Act or any other substantive law governing the parties or is against the terms of the contract. (3) The award could be set aside if it is against the public policy of India, that is to say, if it is contrary to: (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality; or (d) if it is patently illegal. (4) It could be challenged: (a) as provided under Section 13(5); and (b) Section 16(6) of the Act. (B)(1) The impugned award requires to be set aside mainly on the grounds: (i) there is specific stipulation in the agreement that the time and date of delivery of the goods was of the essence of the contract; (ii) in case of failure to deliver the goods within the period fixed for such delivery in the schedule, ONGC was entitled to recover from the contractor liquidated damages as agreed; (iii) it was also explicitly understood that the agreed liquidated damages were genuine pre-estimate of damages; (iv) on the request of the respondent to extend the timelimit for supply of goods, ONGC informed specifically that time was extended but stipulated liquidated damages as agreed would be recovered; (v) liquidated damages for delay in supply of goods were to be recovered by paying authorities from the bills for payment of cost of material supplied by the contractor; (vi) there is nothing on record to suggest that stipulation for recovering liquidated damages was by way of penalty or that the said sum was in any way unreasonable. (vii) In certain contracts, it is impossible to assess the damages or prove the same. Such situation is taken care of by Sections 73 and 74 of the Contract Act and in the present case by specific terms of the contract." The judgment in ONGC v. Saw Pipes has been consistently followed till date. In Hindustan Zinc Ltd. v. Friends Coal Carbonisation, 2006 4 SCC 445 , this Court held: "14. The High Court did not have the benefit of the principles laid down in Saw Pipes, 2003 5 SCC 705 , and had proceeded on the assumption that award cannot be interfered with even if it was contrary to the terms of the contract. It went to the extent of holding that contract terms cannot even be looked into for examining the correctness of the award. This Court in Saw Pipes, 2003 5 SCC 705 has made it clear that it is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India." In McDermott International Inc. v. Burn Standard Co. Ltd., 2006 11 SCC 181 , this Court held: "58. In Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp1 SCC 644 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. An apparent shift can, however, be noticed from the decision of this Court in ONGC Ltd.v. Saw Pipes Ltd., 2003 5 SCC 705 (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, 1986 3 SCC 156 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 referred to an earlier decision of this Court in Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly, 1986 3 SCC 156 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 the 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, 2003 5 SCC 705 this Court, apart from the three grounds stated in Renusagar, 1994 Supp1 SCC 644, 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. 60. What would constitute public policy is a matter dependent upon the nature of transaction and nature of statute. For the said purpose, the pleadings of the parties and the materials brought on record would be relevant to enable the court to judge what is in public good or public interest, and what would otherwise be injurious to the public good at the relevant point, as contradistinguished from the policy of a particular Government. (See State of Rajasthan v. Basant Nahata, 2005 12 SCC 77.)" In Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., 2006 11 SCC 245 , Sinha, J., held: "103. Such patent illegality, however, must go to the root of the matter. The public policy, indisputably, should be unfair and unreasonable so as to shock the conscience of the court. (See State of Rajasthan v. Basant Nahata, 2005 12 SCC 77.)" In Centrotrade Minerals & Metals Inc. v. Hindustan Copper Ltd., 2006 11 SCC 245 , Sinha, J., held: "103. Such patent illegality, however, must go to the root of the matter. The public policy, indisputably, should be unfair and unreasonable so 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." 104. What would be a public policy would be a matter which would again depend upon the nature of transaction and the nature of statute. For the said purpose, the pleadings of the parties and the materials brought on record would be relevant so as to enable the court to judge the concept of what was a public good or public interest or what would otherwise be injurious to the public good at the relevant point as contradistinguished by the policy of a particular government. (See State of Rajasthan v. Basant Nahata, 2005 12 SCC 77.)" In DDA v. R. S. Sharma and Co., 2008 13 SCC 80 , the Court summarized the law thus: "21. From the above decisions, the following principles emerge: (a) An award, which is (i) contrary to substantive provisions of law; or (ii) the provisions of the Arbitration and Conciliation Act, 1996; or (iii) against the terms of the respective contract; or (iv) patently illegal; or (v) prejudicial to the rights of the parties; is open to interference by the court under Section 34(2)of the Act. (b) The 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. (c) The award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. (d) It is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India. (d) It is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India. With these principles and statutory provisions, particularly, Section 34(2) of the Act, let us consider whether the arbitrator as well as the Division Bench of the High Court were justified in granting the award in respect of Claims 1 to 3 and Additional Claims 1 to 3 of the claimant or the appellant DDA has made out a case for setting aside the award in respect of those claims with reference to the terms of the agreement duly executed by both parties." J.G. Engineers (P) Ltd. v. Union of India, 2011 5 SCC 758 , held: "27. Interpreting the said provisions, this Court in ONGC Ltd. v. Saw Pipes Ltd., 2003 5 SCC 705 held that a court can set aside an award under Section 34(2)(b)(ii) of the Act, as being in conflict with the public policy of India, if it is (a) contrary to the fundamental policy of Indian law; or (b) contrary to the interests of India; or (c) contrary to justice or morality; or (d) patently illegal. This Court explained that to hold an award to be opposed to public policy, the patent illegality should go to the very root of the matter and not a trivial illegality. It is also observed that an award could be set aside if it is so unfair and unreasonable that it shocks the conscience of the court, as then it would be opposed to public policy." Union of India v. Col. L.S.N. Murthy, 2012 1 SCC 718 , held: "22. In ONGC Ltd. v. Saw Pipes Ltd., 2003 5 SCC 705 this Court after examining the grounds on which an award of the arbitrator can be set aside under Section 34 of the Act has said: (SCC p. 727, para 31) "31. ... 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 case [Renusagar Power Co. ... 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 case [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp1 SCC 644 it is required to be held that the award could be set aside if it is patently illegal". 12. Applying the test in this case, the learned Single Judge has rightly passed the impugned judgment. 13. It is apt to record herein that the respondent has not questioned the impugned judgment so far as it has gone against it, thus reluctantly it is upheld. 14. In view of the foregoing discussion, no interference is called for. The appeal is dismissed, alongwith pending applications, if any.