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2016 DIGILAW 286 (ORI)

MESCO Kalinga Steels Ltd v. Bijaya Kumar Mohapatra

2016-04-12

BISWANATH RATH

body2016
JUDGMENT : BISWANATH RATH, J. This is an appeal at the instance of the contesting respondent in the arbitration proceeding before Hon’ble Justice P.K.Mohanty (Retd.) and the appellants in the proceeding under Section 34 of the Arbitration & Conciliation Act, 1996 vide Arbitration Petition No.04/14 of 2006/2012 on the file of District Judge, Jajpur. The respondent herein was the claimant before the Arbitration Authority and opposite party in the aforesaid arbitration petition. By filing this appeal, the appellants have challenged the order dated 15.7.2013 passed by the District Judge, Jajpur in Arbitration Petition No.4/14 of 2006/2012 refusing to set aside the award dated 7.10.2005 passed by the sole Arbitrator in Arbitral Proceeding i.e. in M.J.C.No.262 of 1997. 2. Short background involved in the case is that pursuant to tender call notice at the instance of the appellants, the respondent submitted his tender. Respondent’s tender being accepted, construction of compound wall work for a stretch of one kilometer was awarded with contract worth of Rs.43,91,475/-with the voluntary offer of rebate at 5% by the respondent. As per the terms of the work order, the date of commencement was fixed to 1.8.1995 and date of completion was 31.8.1995. Further, the respondent was required to mobilize and make all arrangements within 7 days from the date of letter of intent. The nature of work was construction of a boundary wall of the plant covering one kilometer. The respondent constructed the boundary wall up to the length of 245 meters and could not continue thereafter for resistance of the local public on the pretext of land dispute. Consequently, the respondent on 17.8.1995 and 24.8.1995 intimated the Vice President of the appellant-company about the stoppage of work and local land problems. Respondent again intimated the appellant on 31.8.1995 that he could complete the construction up to the length of 245 meters and the work has been stopped for the reasons indicated hereinabove. Facing no improvement in resolving the problems, the appellants closed the contract on the premises that the construction of the boundary wall beyond 245 meters could not be executed by the respondent. In the meantime, the respondent submitted the 2nd R/A bill and final bill on 22.12.1995 (Ext. C/13). Subsequently, the respondent executed a “No Claim Certificate” dated 11.10.1997. After submission of the No Claim Certificate, the respondent issued a demand notice dated 28.1.1997 for final payment vide Ext.C/12. In the meantime, the respondent submitted the 2nd R/A bill and final bill on 22.12.1995 (Ext. C/13). Subsequently, the respondent executed a “No Claim Certificate” dated 11.10.1997. After submission of the No Claim Certificate, the respondent issued a demand notice dated 28.1.1997 for final payment vide Ext.C/12. In response to the communications of the respondent, the appellants issued a letter dated 1.2.1997 (Ext.9) undertaking therein that the amount payable was Rs.39,746.70 paise. At this stage the respondent issued a notice under Section 11 (4) (a) in terms of Clause 15.1 of the General Conditions of Contract for appointment of an Arbitrator by appointing a retired Judge of the High Court. Felling mutual consent of the parties in the matter of appointment of an Arbitrator, an application under Section 11 of the Arbitration & Conciliation Act, 1996 was moved before the High Court of Orissa vide M.J.C.No.262 of 1997. Even though, there was already appointment of an Arbitrator, but in change of the nomination of Arbitrator because of unwillingness of the previous Arbitrator, the Hon’ble Chief Justice by order dated 27.6.2002 appointed Mrs. Justice A.K.Padhi, Former Judge of the Orissa High Court as the sole Arbitrator. After the appointment of Arbitrator by this Court, the respondent raised a claim of Rs.36,15,128/-with interest @ 8% per annum with effect from 1.9.1995 and also claimed cost of Rs.2,00,000/-. The present appellants as respondents before the Arbitrator filed defence statement. As per the appellants, the defence statement of theirs’ was accepted by the Arbitrator, Mrs. Justice A.K.Padhi by order dated 21.12.2003. In a further development in the matter, after the evidence from the side of the present respondent got closed, Mrs. Justice A.K.Padhi resigned and by a further order of this Court, Justice P.K.Mohanty, (Retired) of the Orissa High Court was appointed as sole Arbitrator. As per the direction in the appointment of new Arbitrator, there was specific direction that the sole Arbitrator to continue in the proceeding from the stage of resignation of earlier Arbitrator. It is alleged by the appellants that the sole Arbitrator rejected the defence statement filed by the appellants on the ground that the defence statement has been verified and sworn to by one Sudhansu Sekhar Naik, who is not a party to the arbitration proceeding. It is alleged by the appellants that the sole Arbitrator rejected the defence statement filed by the appellants on the ground that the defence statement has been verified and sworn to by one Sudhansu Sekhar Naik, who is not a party to the arbitration proceeding. It is alleged that the learned Arbitrator has failed to appreciate the fact that the respondents before the Arbitration Proceeding is a company and can be represented only by the authorized signatory of the Board of Directors, who was even then continuing as the General Manager of the Company and have been duly authorized by the Board of Directors to represent the Company and as such the defence statement was properly verified and accordingly the appellants claimed that the rejection of the defence statement is illegal. It is further alleged that the Arbitrator has reached at a wrong finding that the appellant no.1 has violated the contractual obligation and did not cooperate the present respondent for which reason the contract was closed. The appellants further submitted that land was acquired by IDCO, a State Government Nodal Agency and the amount of compensation payable to the land losers had already been deposited with the IDCO and IDCO has already handed over the land to the extent of 1756 acres to the Company and as such there was no legal impediment on possession of the land by the Appellant no.1-Company, as such it cannot be held responsible for local issues created by some miscreants. Upon hearing the parties and after considering their respective case, learned Arbitrator by its award dated 7.10.2005 awarded an amount of Rs.8,22,240/-with interest @ 10% per annum from 24.9.1997 till the date of award along with cost of Rs.75,000/-Failing in its approach, the appellants filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the District Judge, Cuttack by way of Arbitration Proceeding No.4 of 2006 challenging the award of the sole Arbitrator. The case was subsequently transferred to Jajpur upon creation of the new district and renumbered there as Arbitration Proceeding No.14 of 2012. The matter was heard and by final judgment dated 24.6.2013, by the impugned judgment, the Arbitration Case at the instance of the present appellants got rejected. Hence the appeal. The case was subsequently transferred to Jajpur upon creation of the new district and renumbered there as Arbitration Proceeding No.14 of 2012. The matter was heard and by final judgment dated 24.6.2013, by the impugned judgment, the Arbitration Case at the instance of the present appellants got rejected. Hence the appeal. This appeal is filed basically on the grounds as follows: (i) As per Section 34 (2) (a) (iii) of the Arbitration and Conciliation Act, 1996, an award of Arbitral Tribunal can be set aside if the party making the application under Section 34 of the Act is otherwise unable to present his case. In the arbitration proceeding, the defence statement of the appellants having not been accepted by the Arbitrator, the appellants could not be able to present their case. Consequently, the Arbitration award fails. (ii) The defence statement of the appellants was rejected by the Arbitrator on flimsy ground that the defence statement was not counter signed and sworn by competent person. The appellants claimed that such reasoning is contrary to the provision contained in Order 29, Rule 1 of the Code of Civil Procedure. In justifying their stand, the appellants contended that the defence statement/counter statement being counter signed and sworn by Sri S.S.Naik, who was not only the General Manager of the Company but was also duly authorized by the Board of Directors of the Company, therefore such non-acceptance has flawed the decision. (iii) It is next contended by Sri Abhijit Pal, learned counsel appearing for the appellants that when the Arbitral Tribunal by its order dated 21.12.2003 has already accepted the defence statement of the appellants, non-consideration of the defence statement by the subsequent Arbitrator violates provisions of Section 28 of the Arbitration & Conciliation Act, 1996 and as such this matter comes well within the ambit of Section 34(2)(a)(iii) of the Arbitration & Conciliation act,1996. (iv) It is next contended that having submitted the No Claim Certificate dated 11.10.1996 and without any endorsement or noting Indicating the amount cleared by the Company was received under protest or without prejudice, the claimants were precluded from making any further claim which fact has not only been appreciated by the Tribunal but also by the Arbitrator or Arbitral Tribunal. Following a decision reported in AIR 1975 SC 1259 , Sri Pal, learned counsel appearing for the appellants contended that the decision makes it clear the once Arbitrator fails to take note of relevant document and passed an award, the award vitiates for ignorance of the same. He has also relied on the decision reported in AIR 2001 SC 2062 and AIR 2003 SC 3660 claiming to have been covering his such claim. (v) It is next contended by Sri Pal that rejection of certain documents by the Arbitral Tribunal on the premises that these are private documents and could not be admitted was improper as all those documents related to IDCO, which is a State Government Corporation. Sri Pal also contended that the Tribunal did not follow the procedures prescribed under the Act rather passed the judgment following the procedures not prescribed in the Act and further also acted beyond the jurisdiction, thus, the claim of the appellants consequentially falls under the ambit of Section 34 of the Act. The Arbitral Tribunal also assessed some claims suo motu without any evidence. (vi) It is next contended by the appellants that by virtue of the Clause 5.1 of the Letter of Intent the parties have expressly agreed that the present respondent will be liable to pay the present appellants liquidated damages for violating the terms of schedule under Clause-4 not by way of penalty but at the rate of 0.75% of total contract price for every week of delay or part thereof and thus claimed that the compensation awarded by the Tribunal is beyond the provision contained under Clause 5.1 of the Letter of Intent and as such the award of claim in Claim Nos. 14 and 16 are patently illegal and opposed to the public policy. (vii) Relying on a decision of the Hon’ble Apex Court in the case of ONGC v. Saw Pipes, 2003 (5) SCC 705 , Sri Pal, learned counsel lastly contended that the Arbitrator was appointed by the High Court only in respect of the dispute between the parties. The Arbitration Tribunal failed to frame any issue regarding the jurisdiction of the Arbitration Tribunal and competence thereon on the existence of validity of the Arbitration Agreement. The Arbitration Tribunal failed to frame any issue regarding the jurisdiction of the Arbitration Tribunal and competence thereon on the existence of validity of the Arbitration Agreement. It is on these premises, the appellants claimed for setting aside the impugned judgment dated 15.7.2003 passed by the learned District & Sessions Judge, Jajpur in Arbitration Petition No.4 of 2006/14 of 2012 as well as the award dated 7.10.2005 passed by the sole Arbitrator in M.J.C.No.262 of 1997. 3. On his appearance, the respondent apart from filing his objection through Sri S.P.Misra, learned Senior Advocate contended that the respondent was a Special Class Contractor registered under the Orissa Public Works Department and following a tender call notice by the appellant no.1, the respondent submitted his tender application. The tender was accepted with award of contract on a value of Rs.43,91,475/-and after joint agreement get a rebate of 5% and being accepted by both the parties, the respondent was issued with the Letter of Intent fixing the date of commencement and completion of work stated as 1.8.1995 and 31.8.1995 respectively. Though as per the term of contract/Letter of Intent, work was to commence from 1.8.1995, the present appellants committed serious delay in giving the lay out. Ultimately on 6.8.1995 when the respondent started execution of the work/foundation work, the work site got changed and subsequently the lay out was revised and therefore, requiring the respondent to transfer of machineries and construction materials from the old site to new site consequently shifting of the labourers also. It is after completion of the construction of boundary wall up to a length of 245 meters, the local people started creating obstruction at three places of alignment preventing the respondent from proceeding further with the contract work. Finding no other alternate with the respondent than to bring to the notice of the appellants the obstruction created by the local people. The respondent by letter dated 17.8.1995 brought this fact to the notice of the competent officer of the company and requested him either to resolve the issue immediately in order to enable him to proceed with the work and complete the same or else to extend the period of completion of work. There was no response till 24.8.1995. The respondent by letter dated 17.8.1995 brought this fact to the notice of the competent officer of the company and requested him either to resolve the issue immediately in order to enable him to proceed with the work and complete the same or else to extend the period of completion of work. There was no response till 24.8.1995. The respondent again wrote a letter to the competent officer of the Company indicating that a plot of land locally known as DAS-MNIA comes within the work site for which notice under Section 4 of the L.A. Act had been served and he is unable to proceed as the acquisition of land was not completed enclosing therein a separate sheet indicating the names and addresses of land owners creating obstruction. The respondent even went demanding to the extent of allotment of a different site for construction of their work, which request was not cared for. On 31.10.1995, the respondent issued another letter indicating therein that the work has come to a grinding halt after completion of the boundary wall up to a length of 245 meters and the main and machineries are sitting idle. On 9.12.2015, the respondent was communicated by the Associate Vice-President of the Company indicating their decision for closure of the contract upon realizing the reality and on coming to closure of contract, the respondent submitted final bill on 22.12.1995 which was followed with another letter dated 7.6.1996 referring to its earlier letter dated 6.4.1996 requesting the Company to clear the outstanding dues within 15 days. On 11.10.1996, the respondent met the General Manager, Project and by handing over a letter to him requested for early clearance of the balance dues. The response was that the bills cannot be settled unless the respondent submits a No Claim Certificate, the bills cannot be settled. The respondent was constrained to give a signature on the printed specimen of “No Objection Certificate”. To the surprise of the respondent, dues were not even settled thereafter. The response was that the bills cannot be settled unless the respondent submits a No Claim Certificate, the bills cannot be settled. The respondent was constrained to give a signature on the printed specimen of “No Objection Certificate”. To the surprise of the respondent, dues were not even settled thereafter. Ultimately, after a long gap on 20.1.1997 the General Manager of the Company issued a letter making therein reference of varieties of payments in the matter and indicating therein that net amount to be paid to the respondent was Rs,.39,746.70 paise and assured the respondent for making the payment in due course, which compelled the respondent to issue a notice asking for appointment of an Arbitrator complying provision contained in Section 11(4) (a) of the Arbitration & Conciliation Act, 1996 following terms of Clause-15.(1) of the General Conditions of Contract. On failure of mutual appointment of an Arbitrator, the matter came up to Hon’ble High Court and ultimately, this High Court by order dated 27.6.2002 in modification of its earlier order appointed Mrs. Justice A.K.Padhi, a Former Judge of the High Court of Orissa as sole Arbitrator on consent of the parties. After filing of the claim and defence statement refused to continue Mrs. Justice A.K.Padhi, as an Arbitrator, hence, this High Court by a subsequent order appointed Hon’ble Mr. Justice P.K.Mohanty, a Retired Judge of this Court as the substituted Arbitrator. The respondent contended that on 11.2.2005 he produced before the Arbitrator the original claim statement and the consolidated claim statement along with Exts.1 to 13, which had been returned to the respondent earlier. Mr. A.C.Das, learned Counsel appearing for the present appellants also filed the original defence statement which was also returned to him for his previous undertaking to file the consolidated defence statement and the list of Exts. with other documents. 4. In substantiating their stand and in opposition to the claim of the appellants, Sri S.P.Misra, learned Senior Counsel appearing for the respondent contended that looking to the provision contended in Section 34 (2) (a) (iii), a party has the only remedy of appeal to this Court provided he was not given proper notice of appointment of an Arbitrator or of the arbitral Proceeding or show otherwise and unable to present his case. In support of his such claim, learned Senior Counsel submitted that apart from filing the statement of defence, the parties also filed documents, adduced evidence. Even after considering the defence statement as defective on technical ground of non-compliance of Order 3, Rule 1 read with Order 6, Rule 14 read with Order 29, Rule 1 of the Code of Civil Procedure within his domen, yet the Arbitrator considered the statement of defence and the evidence of R.W.1 dealing with the same on merit. Thus claimed that the award having been passed taking into consideration not only the statement of defence but also the evidence led by the present appellants, the Appeal does not fall within the ambit of Section 34 (2) (a) (iii) of the Act and claimed that the appeal does not bear any merit. 5. On the contention of Sri Pal, learned counsel appearing for the appellants that the statement of defence of the appellant has been illegally rejected for being signed and sworn by an incompetent authority, Sri Mishra, learned Senior counsel appearing for the respondent contended that the allegation is absolutely false as the Arbitrator thought it prudent to keep the same defence statement on record to test the veracity of such document at the time of hearing of the Arbitration case and as a consequence of which it had extracted the relevant paragraphs and produced its supporting documents to establish his case. During course of examination, in view of contradictory and inconsistent statements of the signatory, claiming to be the competent person on behalf of the company, the sole Arbitrator rightly did not put reliance on his testimony, resulting rejection of the claim of the company and thus contended that it is absolutely false to say that there is total rejection of the statement of defence and the case has been decided by the Arbitrator solely on the basis of the materials at the instance of the claimant and as such claimed that there is also no violation of the provisions contained in Section 28 of the Arbitration and Conciliation Act,1996. On the submission of Sri Pal that the District Judge, Jajpur has not followed the procedure enshrined in Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996 and in his response Sri Mishra, learned Senior counsel for the respondent submitted that the company-appellants were given sufficient opportunity to contest the case and thus claimed that neither the District Judge has committed any illegality nor the matter has been decided in favour of the company and further contended that under the above circumstances, there is no question of attraction of provision under Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996. Similarly on the plea of the company that the claimant was precluded from raising any claim for the reason of submission of No Claim Certificate, in his submission, Sri Mishra, learned senior counsel contended that at no point of time, claimant’s demand notice was rejected. On the other hand, on acceptance of the dispute raised by the claimant, the parties had even agreed to refer the matter for arbitration and submitted the proceeding before the Arbitrator being appointed by this Court. Company is thus estopped from raising such contention. Sri Mishra, learned senior counsel also objected to each of the decisions relied on by the other side on the premises that the decision relied completely stood on different facts and have no application to the present case at all. In summing up his argument, Sri Mishra, learned senior counsel appearing for the claimant-respondent contended that there is no illegality either in the award passed by the Arbitrator appointed by this Court nor any illegality committed by the District Judge in deciding the Arbitration Case and the judgment is based on information available on record and a reasoned one. Referring to the decisions of the Hon’ble Apex Court in the case between Associate Builders vrs. Delhi Development Authority reported in 2015 (3) SCC 49 and in the case between Swan Gold Mines Ltd. vrs. Hindustan Copper Ltd. reported in 2015 (5) SCC 739 , Sri Mishra, learned counsel contended that in view of the principles laid down therein, there is no scope for interference either in the award passed by the Arbitrator or in the judgment passed by the District Judge, Jajpur impugned therein. 6. This Court finds this Appeal is being filed on seven grounds as reflected at the end of paragraph-2 of this judgment. 6. This Court finds this Appeal is being filed on seven grounds as reflected at the end of paragraph-2 of this judgment. During judgment, this Court had the occasion to go through the memorandum of Appeal accompanied in the lower court record and perusal of the same, this Court finds the appellants have not raised the grounds at Sl. Nos. IV, V, VI and VII as appearing at paragraph-2 of this judgment and hence such grounds cannot be gone into by this Court in exercise of power under Section 37 (1) (b) of the Arbitration and Conciliation Act, 1996 and proceeding to decide taking note of other grounds. 7. Heard the argument advanced by the respective parties. Perused the claim application, counter statement, additional counter statement, documents filed by respective parties, evidence led by both sides, the award passed by the Arbitrator, memorandum of Arbitration case before the District Judge, Jajpur, objection therein as well as the judgment passed by the District Judge in Arbitration Case No.04 of 2006/14 of 2012. On perusal of all the above, this Court frames the following questions for determination: (i)Whether there is out-right rejection of the defence statement of the company-the present appellants by the Arbitrator, resulting violation of provision of Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996 ? (ii) Whether the Arbitrator has no jurisdiction to enter in to the dispute by way of Arbitration? (iii) Whether there is failure on the part of the company-appellants in facilitating the Contractor for carrying out its work under the letter of intent? (iv) If the decisions cited by the company-appellants have any relevancy in the case? 8. On the question No. II, as to whether the Arbitrator has any jurisdiction to decide the dispute involved in the matter, from the facts narration of the respondent as well as the appellants and from the pleadings of the appellants before the Arbitrator as well as District Judge and also from reading of the memorandum of appeal vide Arbitration Appeal No.34 of 2013, it appears that the company-appellants in paragraph Nos.2.2 to 2.10 submitted as follows: “2.2. That the Respondent-Claimant constructed the boundary up to the length of 245 meters and stop construction thereafter on the plea of obstruction by the local people. That the Respondent-Claimant constructed the boundary up to the length of 245 meters and stop construction thereafter on the plea of obstruction by the local people. Accordingly the claimant on 17.08.1995 and 24.08.1995 intimated the Vice-President of the Appellant Company about the stoppage of the work and local land problem issues. Claimant-Respondent thereafter on 31.08.1995, intimated the Appellants that the claimant could execute construction of boundary wall up to length of 245 meters and the work has been stopped. 2.3. That on 09.12.1995 the appellants closed the contract as the claimant could not execute the construction of the boundary wall beyond 245 meters. The claimant submitted the 2nd R/A. Bill and final bill on 22.12.1995 (Ext. C /13). 2.4. That on 11.10.1996 the claimant executed a “No Claim Certificate” vide Ext. R /6. 2.5. That claimant after signing the “No Claim Certificate” issued a demand notice dated 28.01.1997 vide Ext. C/12 for final demand for payment. 2.6. That in reply to the notice dated 28.01.1997, the appellant issued a letter dated 01.02.1997(Ext.9) stating therein that the amount payable was Rs.39, 746.70 Paise only. 2.7. That thereafter on 24.02.1997 the claimant issued a notice U/s 11(4)(a) in terms of Clause 15.1 of the general conditions of contract for appointing Mr. Justice N.K.Das, a Retired Judge of the High Court of Orissa as sole Arbitrator. 2.8. That as the parties should not mutually agree on the sole Arbitrator to be appointed, the claimant filed an application U/s 11 of the Arbitration & Conciliation Act,1996 vide MJC No.262 of 1997.Initially the Hon’ble Chief Justice by order dated 27.6.2000 appointed Justice N.K.Das and B.M.Sahoo as nominees of the claimant and the Respondent respectively. However on 20.6.2000, Justice N.K.Das intimated his unwillingness to act as Arbitrator. Therefore the Hon’ble Chief Justice by its order dated 27.6.2002 appointed Mrs. Justice A.K.Padhi, Former Judge of the Orissa High Court as the sole Arbitrator. 2.9. That on 15.11.2003 the claimant filed his claim statement raising a claim of Rs.36,15,128/-with interest @ 8% per annum w.e.f. 01.09.1995 and cost of Rs.2 Lakhs. The appellants as Respondents have filed defence statement before the learned Arbitrator. The said defence statement was accepted by the learned Arbitrator Smt. Justice A.K. Padhi by order No.02 dated 21.12.2003.The copy of the order No.02 dated 21.13.2003 is annexed herewith as Annexure-2. 2.10. The appellants as Respondents have filed defence statement before the learned Arbitrator. The said defence statement was accepted by the learned Arbitrator Smt. Justice A.K. Padhi by order No.02 dated 21.12.2003.The copy of the order No.02 dated 21.13.2003 is annexed herewith as Annexure-2. 2.10. That after the evidence of the claimant was closed, Justice A.K. Padhi resigned and thereafter the Hon’ble Chief Justice by order dated 07.01.2005 appointed Justice P.K. Mohanty, (Retd.) as sole Arbitrator. The specific direction of the Hon’ble Chief Justice the sole arbitrator P.K. Mohanty to continuing the Arbitration proceeding from the stage earlier Arbitrator has resigned.” 9. From the reading of the above, it clearly discloses that not only there existed a dispute as regards to non-execution of the construction of the boundary wall beyond 245 meters but also on failure of the parties to appoint a neutral Arbitrator, the parties entered into notice under Section 11(a) in terms of Clause-15 (i) of the General Conditions of Contract for appointment of Judge of the High Court of Orissa as sole Arbitrator, parties also faced a proceeding under Section 11 of the Arbitration and Conciliation Act, 1996 before the High Court of Orissa vide M.J.C No.262 of 1997 which ultimately ended with appointment of Shri Justice P.K. Mohanty as sole Arbitrator by virtue of order of this Court dated 07.01.2005. Thus the parties having agreed for appointment of an Arbitrator in exercise of power under Section 11 of the Arbitration and Conciliation Act, 1996 through the High Court of Orissa and not being challenged the appointment of sole Arbitrator, the company is estopped from raising the issue of the jurisdiction and competency of the Arbitrator. Question No. II is answered accordingly. 10. Now coming to Issue No.III, this Court finds on its own submission of the appellants, the claimant could proceed with the construction up to 245 meters out of the total length of 1 Kilometer and the rest work could not be completed for local land problem issues and as categorically submitted in paragraph No.2.3 of the memorandum of appeal quoted as hereinabove. On 09.5.1995 the company itself closed the contract. On 09.5.1995 the company itself closed the contract. In its submission, the appellants in paragraph-2.12 contended that the land was acquired by the IDCO, a State Government undertaking, amount of compensation payable to the land losers had been deposited with the IDCO and IDCO has already handed over the land to the extent of 1756 Acres to the Company and as such the company cannot be held responsible for any local issues created by some miscreants. This admission itself suffices the case of the respondent to the effect that there existed local issues and the work under letter of intent remain unexecuted. Therefore there is failure on the part of the company facilitating the Contractor-the claimant for working out the construction under the letter of intent. This question is also answered accordingly. 11. Now coming to the moot question No.1 recorded hereinabove, from the observation of the Arbitrator, even though the Arbitrator made a mentioning in paragraph-21 that there was no defence statement and even none of the company-respondents therein came to the witness box although they appeared through Advocates but on 14.12.2003 one Sudhansu Sekhar Naik filed a defence statement signed by him describing it as a defence statement of respondent Nos.1 and 2 therein-(present appellants). The Arbitrator basing on the submission of Mr. Sudhansu Sekhar Naik, an Officer of the Company claiming to be an authorized agent that the company remained non-functional since1998 and official records are not available then, entered in to a question as to how could he referred those records when he filed defence statement on 14.12.2003 which remained unanswered. Further though the Arbitrator recorded that the procedure adopted by Mr. Sudhansu sekhar Naik is not prescribed by the Arbitration and Conciliation Act, 1996 yet on consideration of the submission of the learned counsel appearing for the respondent, in paragraph-22 held that the contention for treating the averments admitted even in absence of proper claim statement, is not tenable. Again following a decision of the Hon’ble Apex Court in the case between Sial Sima vrs. Again following a decision of the Hon’ble Apex Court in the case between Sial Sima vrs. Shivadhari Sima, reported in AIR 1972, Patna-81, learned Arbitrator came to observe that the defence statement dated 14.12.2003 filed by Mr.Sudhansu sekhar Naik is not acceptable but in absence of defence statement and even after holding that the company cannot be permitted to adduce evidence on the question of facts, yet the Arbitrator in order to provide natural justice to the company, not only allowed the company to have the cross-examination of the witness examined on behalf of the claimant but also allowed the company representative to have his evidence recorded and in the process not only recorded the evidence of the representative of the present appellants but also accepted the documents under Exts. R/1 to R/6 in his evidence and further considering the materials available on record supplemented and substantiated through evidence from the side of the respondent as well as the company-appellants has come to a categorical finding that no reliance can be placed on the testimony of the company representative and the testimonial, if any, is full of contradictions, inconsistent, prevaricating and vague statements, by narrating such discrepancies in details in paragraph No.23 of the award. From the reading of the observations made in paragraph No.23 and in view of the observations of this Court hereinabove, it clearly appears that the company was provided with full opportunity of hearing and thereafter only the Arbitrator came to a finding that there is latches on the part of the company facilitating the claimant to work out the contract under the letter of intent. There is a clear recording that on the repeated request of the claimant for clearing the area to facilitate the work under contract, the Vice President of the company vide his letter dated 09.5.1995 as appearing at Ext.3, closed the contract indicating the following: “Reference your letter dated 31.10.1995. Because of the difficulties faced by you at site, you wish to be relieved of the rest of the work, for which you were allotted the work order. I have no hesitance to accept your proposal. Because of the difficulties faced by you at site, you wish to be relieved of the rest of the work, for which you were allotted the work order. I have no hesitance to accept your proposal. Hence, therefore, your total quantity of work shall be taken as completed equal to 245 meters and payment made thereof accordingly.” It is in these premises, this Court observes that the learned Arbitrator rightly held that the company itself violated their contractual obligation and the contract failed for non-co-operation with the claimant, getting the contract closed and further the company was guilty of breach of contract and therefore liable to pay compensation.” 12. In answering the question no. I, as above, now it is to be examined as to whether the present appeal falls within the purview of the provisions contained in Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996. Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996 reads as follows: “34.Application for setting aside arbitral award: (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub – section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if-(a)The party making the application furnishes proof that- (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.” Looking to the allegations made in the Arbitration case before the District Judge as well as the appeal herein, the main thrust of attack of the appellant herein is that in view of the rejection of their defence statement, they were otherwise unable to present their case. From the details of discussion made herein above and the observation of the Arbitrator as well as of this Court coupled with the observation made by the District Judge, Jajpur in deciding the Arbitration Case, this Court is of the opinion that it is not a case where the company being unable to present its case. From the entire pleadings and the arguments, this Court nowhere finds the applicant is able to demonstrate as to if it has suffered for rejection of the defence statement. Mere allegation that the appellant is prejudiced for non-consideration of the defence statement is not sufficient. From the entire pleadings and the arguments, this Court nowhere finds the applicant is able to demonstrate as to if it has suffered for rejection of the defence statement. Mere allegation that the appellant is prejudiced for non-consideration of the defence statement is not sufficient. Appellant even failed to establish a case of findings perverse to the materials available on record or even based on irrelevant materials or even based on ignorance of any material available in its favour. Therefore, there is no infraction of the provision contained in Section 34(2)(a)(iii) of the Arbitration and Conciliation Act,1996 and the question No.1 is answered against the appellant. 13. Considering in similar situation, the Hon’ble Apex Court in a case between Associate Builders-vrs.-Delhi Development Authority reported in 2015 (3) SCC 49 after referring to number of cases in paragraph Nos.29,30 and 31 held as follows: “29. It is clear that the juristic principle of a "judicial approach" demands that a decision be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would obviously not be a determination which would either be fair, reasonable or objective. 30. The Audi Alteram Partem principle which undoubtedly is a fundamental juristic principle in Indian law is also contained in Sections 18 and 34 (2) (a) (iii) of the Arbitration and Conciliation Act. These Sections read as follows: 31. The third juristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where. (i) a finding is based on no evidence, or (ii) an arbitral tribunal takes into account something irrelevant to the decision which it arrives at; or (iii) ignores vital evidence in arriving at its decision, such decision would necessarily be perverse.” 14. Similarly the Hon’ble Apex Court in another case between Swan Gold Mines Ltd.-vrs.-Hindustan Copper Ltd. reported in 2015 (5) SCC-739, in considering the allegations that the award is opposed to public policy, which is also an allegation involved in the present appeal, in paragraph Nos.11, 12, 13 and 19 held as follows: “11. Learned senior counsel drawn our attention to various documents including NIT, initial bid proceedings of the meeting, revised bid, offer and counter offers, on the basis of which the letter of intent was issued. Learned senior counsel drawn our attention to various documents including NIT, initial bid proceedings of the meeting, revised bid, offer and counter offers, on the basis of which the letter of intent was issued. Finally, the Work Order was issued and a contract was signed by both the parties. These documents would show that the appellant was made liable for payment of duty and taxes, which were inclusive of the bid price arrived at between the parties. 12. Section 34 of the Arbitration and Conciliation Act, 1996 corresponds to Section 30 of the Arbitration Act, 1940 making a provision for setting aside the arbitral award. In terms of subsection (2) of Section 34 of the Act, an arbitral award may be set aside only if one of the conditions specified therein is satisfied. The Arbitrator’s decision is generally considered binding between the parties and therefore, the power of the Court to set aside the award would be exercised only in cases where the Court finds that the arbitral award is on the fact of it erroneous or patently illegal or in contravention of the provisions of the Act. It is a well settled proposition that the Court shall not ordinarily substitute its interpretation for that of the Arbitrator. Similarly, when the parties have arrived at a concluded contract and acted on the basis of those terms and conditions of the contract then substituting new terms in the contract by the Arbitrator or by the Court would be erroneous or illegal. 13. It is equally well settled that the Arbitrator appointed by the parties is the final judge of the facts. The finding of facts recorded by him cannot be interfered with on the ground that the terms of the contract were not correctly interpreted by him. 19. The learned Arbitrator has gone in detail of the dispute raised by the appellant and rightly came to the conclusion that the responsibility on the appellant is to abide by the terms and conditions of the Work Order.” From reading of the aforesaid two decisions of the Hon’ble Apex Court, this Court finds both the decisions squarely applicable to the case of the respondent 15. Both parties have relied on several other decisions in support of their respective case. Having gone through the decisions, this Court finds none of the decisions are applicable to the present case. Both parties have relied on several other decisions in support of their respective case. Having gone through the decisions, this Court finds none of the decisions are applicable to the present case. Therefore, it is not necessary to refer to any such decision. 16. Under the aforesaid observation, findings and settled position of law as indicated herein above, in my view, the Arbitrator has rightly arrived in passing an award in favour of the claimant-the present respondent and further the District Judge, Jajpur in Arbitration Case No.4 of 2006 is also right in his approach. Consequently this Court finds no infirmity or irregularity either in the award or in the judgment of the Court below and hence dismisses this Arbitration Appeal but under the circumstances awards no cost.