JUDGMENT : Anubha Rawat Choudhary, J. 1. This appeal has been filed against the judgment dated 19th February 2020 passed in Original Suit No.1 of 2020 by the learned District Judge-XIV-cum-Presiding Officer, Commercial Court at Dhanbad whereby the learned Commercial Court has refused to interfere with the Award dated 22nd July 2017 passed in Arbitration Case No.12 of 2015 by the learned Arbitrator and has rejected the application filed under section 34 of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act of 1996). 2. The learned Arbitrator entered into reference pursuant to the order dated 31st March 2016 passed by this Court in Arbitration Application No.12 of 2015 filed under section 11(6) of the Act of 1996. 3. The dispute arises out of a contract dated 22nd December 2010 entered into between the parties for widening two lanes and improvement in KM 0.0090 to KM 21.000 and KM 62.650 to KM 73.000 of National Highways-100 (Chatra-Hazaribagh-Bagodar Road) within the State of Jharkhand. The contract was sought to be executed through the Road Construction Department, Government of Jharkhand which was an agency appointed on behalf of the Ministry of Road, Transport and Highway, Government of India. The value of the work as per the contract was Rs. 25,46,08,807.81. 4. The respondent (hereinafter referred to as the claimant) successfully participated in the bid process; a letter of acceptance was issued to the claimant on 29th November 2010; Agreement No.2 SBD of 2010-11 was executed on 22nd December 2010 after the deposit of Rs.12,36,400/- as performance guarantee; the time period for completion of work was 24 months. 5. The contract was terminated on 08th October 2012, prior to the expiry of the scheduled time for completion of work. However, the termination was stayed on 04th December 2012 and the stay on termination was finally revoked on 19th March 2013. The work was partly completed only to the extent of 20% (as per the appellants) and to the extent of 25 % (as per the claimant). Disputes arose between the parties and learned Arbitrator was appointed by the High Court vide order dated 31st March 2016. 6. It was the case of the claimant that the claimant mobilized his men and machinery for the execution of the work as per the terms and conditions of the contract and proceeded to execute the contract. Disputes arose between the parties and learned Arbitrator was appointed by the High Court vide order dated 31st March 2016. 6. It was the case of the claimant that the claimant mobilized his men and machinery for the execution of the work as per the terms and conditions of the contract and proceeded to execute the contract. However, its Running Account Bills (in short, “RA Bills”) were withheld for a considerable period of time in the absence of prior sanction from the Ministry of Road, Transport and Highway, Government of India. After a lapse of more than five months, the appellants took steps for the release of “RA Bills” which crippled the claimant and caused hindrance in the execution of the work. The claimant continued to execute the work but its “RA Bills” remained withheld. It was also the case of the claimant that several portions of the road over which the work was to be executed were encroached upon by the local people and at several places electrical poles were standing which obstructed the progress of the work. In spite of the repeated requests, the claimant was not handed over the site free from encumbrance. 7. The claim was on account of 7th and 8th “RA Bills” amounting to Rs. 2,07,37,577/-; refund of amount towards unused road construction materials amounting to Rs. 1,30,00,000/-; compensation for idle men and machinery amounting to Rs.24,60,000/-; loss of profit to the extent of Rs.1,91,37,900/-; refund of security deposit of Rs.18,00,000/-; cost of arbitration and interest on all the components to the extent of 24% per annum. The claim petition filed before the learned Arbitrator has been placed in the convenience compilation and has been referred to by both parties. 8. On the other hand, the case of the appellants before the learned Arbitrator was that within one month from the execution of the contract dated 22nd December 2010, the claimant received mobilization advance of Rs.1,50,00,000/- and was regularly paid for the work done but was able to achieve work only to the extent of 20% of the target till completion of 21 months period from the date of contract though the entire project was to be completed within 24 months. Accordingly, a notice of termination was issued to the claimant on 12th September 2012. Accordingly, a notice of termination was issued to the claimant on 12th September 2012. In response, an affidavit dated 16th November 2012 was filed by the claimant requesting for cancellation of the letter terminating the contract. The letter of termination of the contract was kept in abeyance vide letter dated 04th December 2012 and the claimant was given a provisional period of two months for evaluation of its performance. However, the claimant failed to perform and the performance evaluation report showed that the claimant was not found competent to complete the project by June 2013 as assured by the claimant in its affidavit dated 16th November 2012. Accordingly, the contract was finally terminated on 19th March 2013 by revocation of stay on termination. The further case of the appellants before the learned Arbitrator was that the appellants were entitled to refund of mobilization advance to the extent of Rs. 1,16,97,390/-; 20% penalty of the value of the portion of the work not completed – Rs.4,44,56,187/- and payment on account of statutory deductions in final bill amounting to Rs. 13,86,588/-. After adjusting the admissible amount, the appellants filed a counter-claim of Rs.8,61,61,783/- and claimed interest on all the components to the extent of 24% per annum. The counter-claim containing the calculations made by the appellants and filed before the learned Arbitrator has been placed in the convenience compilation and has been referred to by both parties. The counter-claim indicates certain claims of the claimant which stood admitted. The Schedule of the counter-claim of appellants said to be recoverable from the claimant was as under: - Bills payable by the employer to the claimant 7th & Final Bill- Rs.86,60,503.00 Performance security as NSC - Rs.3,67,000.00 Security Deposit Rs.18,68,128.00 Total Rs.1,08,95,631.00 (B) Debts payable to the employer 1. Recovery of Mobilization Advance - Rs.1,16,97,390.00 2. Value of recovery for the work not completed (Agreement Value Rs.25,46,08,807.00 - work done value Rs.3,23,27,873.00 = Rs.22,22,80,935.00 20% penalty as per section 40 of contract data (As Annexure-22) Rs.4,44,56,187.00 3. Statutory deduction of the final Bill Rs.13,86,588.00 Total Rs.5,75,40,165.00(A) To debt payable to the employer A-B – Rs.5,75,40,165.00-Rs.1,08,95,631.00 = Rs.4,66,44,534.00 (C) Interest payable by the claimant 24% w.e.f. 19th March 2013 to 30th September 2016 = Rs.3,95,17,249.00 (D) C+D = Rs.8,61,61,783.00 9. Statutory deduction of the final Bill Rs.13,86,588.00 Total Rs.5,75,40,165.00(A) To debt payable to the employer A-B – Rs.5,75,40,165.00-Rs.1,08,95,631.00 = Rs.4,66,44,534.00 (C) Interest payable by the claimant 24% w.e.f. 19th March 2013 to 30th September 2016 = Rs.3,95,17,249.00 (D) C+D = Rs.8,61,61,783.00 9. Arguments of the appellants - The learned counsel for the appellants has submitted that the learned Court below has failed to consider the following points for consideration: - A. Fraud and arbitrability of dispute. The claimant had entered into the contract by playing fraud and, therefore, no amount could have been awarded in favour of the claimant. Further, on account of fraud, the claim was not arbitrable. He has relied upon a judgment of the Hon’ble Supreme Court “Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd.” (2021) 4 SCC 713 , paragraph 35. B. Availability of the work site free from encroachment/encumbrance. No evidence was available on record to show that there was encroachment or any other problem in connection with the execution of work including the electrical poles. He has also submitted that the claimant did not refer to any impediment in the execution of the work in subsequent letters and, therefore, finding of the learned Arbitrator that the work site was not handed over free from encumbrance/ encroachment is perverse. C. Validity of the order of termination. The order of termination of the contract was wrongly held to be invalid in view of the fact that the due notice for termination was issued to the claimant through speed post and there was enough material before the learned Arbitrator to hold that the notice for termination was served upon the claimant. The learned counsel has submitted that the notice for termination was sent through speed post at the correct address. Though the receipt of the notice for termination was denied by the claimant, the notice having been sent through speed post it was not open to the claimant to say that the notice for termination was not received. The learned counsel also submitted that the final termination order had also referred to the notice for termination but the claimant never objected and, therefore, the finding of the learned Arbitrator that no notice for termination was served is perverse. D. Award of Rs.1,30,00,000/- towards unconsumed materials. The learned counsel also submitted that the final termination order had also referred to the notice for termination but the claimant never objected and, therefore, the finding of the learned Arbitrator that no notice for termination was served is perverse. D. Award of Rs.1,30,00,000/- towards unconsumed materials. The learned Court below has failed to consider that the Award of Rs.1,30,00,000/- towards unconsumed materials was without any basis and without any supporting documents i.e. purchase vouchers etc. He submits that as per the claim itself the amount of Rs.1,30,00,000/- was on account of the purchase of more than 3 lakhs CFT of stone metals and boulders and the learned Arbitrator has awarded the said amount only on the basis of a letter dated 23rd February 2013 issued by the Assistant Mining Officer relating to the issuance of transport permit for 1,22,600 CFT of stone metals and boulders. The learned counsel submits that when the aforesaid letter dated 23rd February 2013 referred to only 1,22,600 CFT of stone metals and boulders, the entire claim to the extent of 3,00,000 CFT of stone metals and boulders worth Rs.1,30,00,000/- could not have been awarded. He has also submitted the mere issuance of a transport permit for 1,22,600 CFT of stone metals and boulders without any purchase bills/vouchers was not sufficient to award any amount even towards the supply of 1,22,600 CFT of stone metals and boulders. It is submitted that on this count the Award is ex-facie perverse. E. Non-consideration of the claim of Mobilization Advance. The learned counsel has submitted that Rs.1,50,00,000/- was given to the claimant which was to be adjusted. The claimant had partly utilized the mobilization advance and the amount of Rs.1,16,97,390/- remained unutilized which was required to be refunded as per the counter-claim but the learned Arbitrator has rejected the counter-claim towards the head of the mobilization advance and other heads except the counter-claim of statutory deductions vide paragraph no. 63 of the Award by stating that neither much comprehensive arguments were advanced nor was supported by any documentary evidence. The learned counsel submits that such a finding is perverse as well as non-speaking and hence is also violative of section 31(3) of the Act of 1996. 63 of the Award by stating that neither much comprehensive arguments were advanced nor was supported by any documentary evidence. The learned counsel submits that such a finding is perverse as well as non-speaking and hence is also violative of section 31(3) of the Act of 1996. The learned counsel has submitted that the learned Arbitrator was duty-bound to pass an order in connection with the mobilization advance and there were enough materials and arguments of the parties on record. He has referred to the letters of the claimant by which the claimant had acknowledged the receipt of the mobilization advance. F. Refund of security With regard to the refund of the security amount, the learned counsel has submitted that the work having not been completed, the claimant was not entitled to refund of the security amount rather the appellants were entitled to the counter-claims but those have not been properly considered. This aspect of the matter has not been properly considered by the learned Court below. G. Rate of interest on the awarded amount. The learned counsel has further submitted that an exorbitant rate of interest has been given by the learned Arbitrator to the extent of 24% per annum which is not referable to any lending rate of interest nor it is backed by any contractual rate of interest. This aspect of the matter has not been properly considered by the learned Court below. 10. Arguments of the Claimant- The learned counsel for the claimant has submitted that the impugned Award and the impugned order do not call for any interference on account of the following points: - a. The scope of interference in the arbitral Award is very limited; the Courts play only a supervisory role with regards to the arbitral Awards; the scope is all the more restricted when it comes to the appellate jurisdiction of this Court under section 37 of the Act of 1996. b. The learned Arbitrator has considered all the materials on record and given his findings on the basis of the arguments advanced by the parties and materials produced. No specific plea was raised by the appellants before the learned Court below in connection with the bank guarantee being forged under section 34 of the Act of 1996. Mere filing of the First Information Report is not a piece of evidence to show that the bank guarantee was forged. No specific plea was raised by the appellants before the learned Court below in connection with the bank guarantee being forged under section 34 of the Act of 1996. Mere filing of the First Information Report is not a piece of evidence to show that the bank guarantee was forged. The learned counsel has submitted that the appellants did not place the materials before the learned Arbitrator to come to any finding in connection with the allegation that the bank guarantee was forged. The learned Arbitrator simply referred to the First Information Report and has observed that it is for the competent Court to decide. The bank guarantee by itself is a separate agreement from the main agreement for which the judgment in “Gujarat Maritime Board v. Larsen & Toubro Infrastructure Development Projects Ltd.” (2016) 10 SCC 46 has been relied upon. In “Gujarat Maritime Board” (supra) the Hon’ble Supreme Court has observed as under: “11. It is contended on behalf of the first respondent that the invocation of bank guarantee depends on the cancellation of the contract and once the cancellation of the contract is not justified, the invocation of bank guarantee also is not justified. We are afraid that the contention cannot be appreciated. The bank guarantee is a separate contract and is not qualified by the contract on performance of the obligations. No doubt, in terms of the bank guarantee also, the invocation is only against a breach of the conditions in the LoI. But between the appellant and the Bank, it has been stipulated that the decision of the appellant as to the breach shall be absolute and binding on the Bank.” c. So far as the mobilization advance is concerned, the learned counsel has submitted that with respect to this counter-claim, no specific plea was raised in the petition under section 34 of the Act of 1996. The learned counsel has also referred to paragraph no.63 of the Award which is the sole paragraph dealing with the findings of the learned Arbitrator on the point of the mobilization advance and submitted that the learned Arbitrator has recorded that comprehensive arguments and documents were not placed to come to a finding in connection with the mobilization advance. The appellants having failed to advance arguments in connection with the mobilization advance were not entitled to its adjustment/counter-claim. The appellants having failed to advance arguments in connection with the mobilization advance were not entitled to its adjustment/counter-claim. The learned counsel has also referred to the Memo of the Appeal before this Court and has submitted that no specific ground has been raised in connection with the mobilization advance before this Court. d. With respect to unused materials to the extent of Rs.1,30,00,000/- it is submitted that the learned Arbitrator has considered the materials and has passed a speaking Award in connection with the same. e. The learned counsel has also submitted that so far as the Award of Rs.1,30,00,000/- towards unutilized materials is concerned, the same is clearly severable from the rest of the Award and even if this Court is inclined to interfere with the Award the Award of the admitted amount to the extent it relates to the 7th RA Bills as well as the Award relating to refund of security money is required to be retained. For this purpose, the learned counsel has relied upon the judgment of the Hon’ble Supreme Court in “J.G. Engineers (P) Ltd. v. Union of India” (2011) 5 SCC 758 . Findings of this Court. 11. The learned Arbitrator framed as many as 9 issues as follows: - i. Whether any of the parties to the dispute have committed breach of any of the terms and conditions of the contract agreement No. 2 SBD of 2010-2011 dated 22.12.2010? ii. Whether the contract in question entered between the parties was legal and valid and whether the dispute between the parties is arbitrable or not? iii. Whether the termination of the Contract by the Respondent was due to non-fulfillment or the breach of the terms of the contract by the Claimant and/or due to the breach of the terms of the contract as alleged by the Respondent? iv. Whether the termination of the contract by the Respondent was legal, valid and justified? v. Whether the claimant is entitled to damages in terms of money due to such termination of the contract? If yes to what extent? vi. Whether the Claimant is entitled to the claim(s) raised by him and more fully enumerated as Claim Nos. I to VI mentioned in the petition of the claim? vii. Whether the contract in question was obtained by the Claimant by virtue of committing any fraud by him as alleged by the Respondent? viii. If yes to what extent? vi. Whether the Claimant is entitled to the claim(s) raised by him and more fully enumerated as Claim Nos. I to VI mentioned in the petition of the claim? vii. Whether the contract in question was obtained by the Claimant by virtue of committing any fraud by him as alleged by the Respondent? viii. Whether the claimant failed to perform his part of contract by not constructing the road as envisaged in the contract? ix. Whether the Respondent is entitled for payment of any amount by the claimant as counter-claim? If yes, to what extent? 12. A summary of the decision on the aforesaid issues by the learned Arbitrator is as under:- Issue Finding of learned Arbitrator Issue no. ii The contract was held to be valid and the dispute was held to be arbitrable. Issue no. vii The alleged fraud was with regard to a bank guarantee furnished by the claimant. It was held that the question of fraud is an independent issue that was already sub-judice before a competent Court of law as such the learned Arbitrator refrained from making any comments in this regard. Issue nos. i, iii and iv These issues have been dealt with together from paragraph nos. 33 to 57 of the Award. The findings have been recorded in paragraph nos. 46 to 57 of the Award. It has been held in paragraph no. 50 of the Award that the order of termination of the contract dated 08th October 2012 was violative of the principles of natural justice as no prior notice was given to the claimant and thereby the claimant was not given reasonable opportunity to show cause. The learned Arbitrator found that the order of termination was stayed and the stay order was subsequently withdrawn vide letter dated 19th March 2013 and held in paragraph no. 57 of the Award that the termination of the contract dated 03rd September 2012 prior to the completion of 24 months as well as withdrawal of the stay order were in contradiction of the fundamental breach of the contract and thereby the same termination held to be illegal and unsustainable. Issue no. v, vi and viii. Issue Nos. (v), (vi), and (viii) have been considered by the learned Arbitrator from paragraph nos. 11 to 32 of the Award. Issue no. v, vi and viii. Issue Nos. (v), (vi), and (viii) have been considered by the learned Arbitrator from paragraph nos. 11 to 32 of the Award. It was the case of the claimant that time was not the essence of the contract as there was a provision for extension of time in Clause 28 of the Conditions of Contract. The claimant mobilized its men and machinery but the appellants failed to release the payments as per contract and the first running account bill was paid to the claimant after a lapse of six months i.e., on 19th May 2011. By referring to Clause 59.2(d) of the Conditions of Contract, it was the case of the claimant that the delay in payment of the running account bill was solely attributable to the appellants, and such delay amounted to a fundamental breach by the appellants. These submissions were opposed by the appellants by submitting that the claimant had admitted the fact that they not only received mobilization advance to the tune of Rs. 1.50 crore within one month from the date of the contract but 1st RA bill till 6th RA bill were also released to the claimant. The claimant raised a grievance that mobilization advance which was sanctioned in the month of July 2011 was stopped from disbursement under the instructions of the appellants. The claimant vide letter dated 28th July 2011 and 26th September 2011 enclosed the certificate of utilization and mobilization advance invoice of purchase of new machinery etc. and requested for recall of the decision to stop disbursement of mobilization advance. The claimant also raised a grievance that the appellants had instructed the bank to stop the disbursement of the mobilization advance which was sanctioned in the month of July 2011. It was submitted by the claimant that several portions of the road where the work was to be executed were encroached by the local villagers and several electricity poles were standing in the road but in spite of information given to the appellants no action was taken by the appellants. It was submitted by the claimant that several portions of the road where the work was to be executed were encroached by the local villagers and several electricity poles were standing in the road but in spite of information given to the appellants no action was taken by the appellants. By referring to Clause 21 of the Conditions of Contract, it was submitted that the appellants were required to give possession of all parts of the site to the contractor and that it was the fundamental duty of the appellants to provide the encumbrance-free site to the claimant and to maintain law and order, but the appellants failed to do so. The appellants had referred to the undertaking of the claimant that they were to invest their own money to the tune of 25% of the contract value i.e. Rs. 6.35 crore apart from mobilization advance provided by the appellants, but the work value only to the extent of Rs. 3,23,27,873/- was performed by the claimant during the entire period of execution and thus, it was contended that in spite of having sufficient fund, the claimant did not perform the work as per program. The claim filed by the claimant with regard to 7th and 8th RA bills as well as the claim of unused materials to the extent of Rs. 1.30 crores and claim of idling men and machinery to the extent of Rs. 24,60,000/- and also claim of loss of profit to the extent of Rs. 1,91,37,900/- was considered and findings were recorded in paragraph no. 31 that the project site had certain encroachments in the form of electricity pole and disturbance from local villagers which was communicated to the appellants by the claimant and as per Clause 21 of the contract such situation would be covered under the contract and thereby making the claimant legally liable for extension of time for completion of the project as provided under Clause 28.1 of the contract. The learned Arbitrator recorded in paragraph no. The learned Arbitrator recorded in paragraph no. 32 of the Award that the claimant had completed only 20% - 25% of the work after almost 20 months from the date of the agreement and the claimant was putting in genuine efforts during the period of stay of 1st termination by investing in huge quantity of construction material for speeding up of the project work and held that the conduct of the parties was not in line with the agreed terms and conditions. The learned Arbitrator awarded the amount of Rs. 86,60,503/- apart from the amount already given to the claimant; refund of the amount towards unused road construction material; refund of security deposit and interest @ 24% to be calculated on the awarded amount from the date such amount fell due till the date of the Award. The learned Arbitrator rejected the claim in connection with idle men and machines as well as loss of profit. Issue no. ix The counter-claim filed by the appellants has been partly allowed only to the extent of statutory deductions and the other counter-claims have been rejected by recording in paragraph no. 63 of the Award that neither the appellants have made much comprehensive arguments nor the same are supported by any documentary evidence. 13. The following chart reflects the claim/ counter-claim, and the awarded amount : Claim by the respondent-claimant Awarded amount I. Payment due on account of “RA Bills”. (a) 7th R.A. Bill for 0 km to 21 km = Rs.1,02,64,074.60 (b) 8th R.A. Bill for 62.65 km to 73 km = Rs.1,04,73,501.90 “The claimant has submitted these bills to the respondents while the work was in full progress but the respondents deliberately did not release these bills, which caused hindrance in progress of the work. This also amounts to fundamental breach on part of the respondents. The claimant is therefore entitled to payment of the aforesaid bills.” “After the deduction of the amounts awarded to the respondents, the claimant was awarded with the amounts legally due towards the said 7th & Final RA Bills. The amount of Rs.86,60,503/- has already been admitted by the respondent under the said heading in its counter claim calculation. The claimant is therefore entitled to payment of the aforesaid bills.” “After the deduction of the amounts awarded to the respondents, the claimant was awarded with the amounts legally due towards the said 7th & Final RA Bills. The amount of Rs.86,60,503/- has already been admitted by the respondent under the said heading in its counter claim calculation. If there is any further amount to be paid under the said heading to the claimant, the respondent is directed to do the same within two months from the date of the award.” Statutory deductions allowed in favour of the appellants amounting to Rs.13,86,588/- with interest @24% under the counter claim head no. III to be adjusted. II. Refund of amount towards unused road construction materials = Rs.1,30,00,000.00 “The claimant has purchased more than 3 lacs cft stone metal and boulders for execution of the project and had paid royalty to the government against the same. However, these materials remained unused on account of illegal termination of the agreement by the respondents. The claimant is therefore entitled for refund of cost of unused materials.” Fully allowed. III. Compensation for idle men and machinery i. Hot Mix Plant – 3 lacs. ii. Paver finisher – Rs.1 lac. iii. Tandum vibrator roller x 2 nos. – Rs.1,70,000.00 iv. Tanker truck – Rs.1 lac. v. Dumber x 3 nos. – Rs.1,80,000.00 vi. JCB x 2 nos. – Rs.1,80,000.00 vii. Salary for staff – Rs.2 lacs. Total = Rs.12,30,000.00 for one month. “Thus, for maintaining staff and machinery at the site, the claimant had to spend an average of Rs.12,30,000/- per month. The work was illegally terminated firstly on 8.10.2012. The men and machinery of the claimant remained idle for approximately two months after 8.10.2012 till 4.12.2012. The claimant is therefore entitled for compensation for idle men and machinery of Rs.24,60,000.00” No amount awarded – claimant not aggrieved. IV. Loss of Profit – The value of the work was Rs.25,51,71,000.00. “As per the respondents the claimant has completed on 25% of the work i.e. about Rs.6,37,92,000.00. Since the work was terminated illegally, the claimant is entitled to loss of profit on the balance work. The contractor’s profit is normally assessed at 10% of the value of the work. IV. Loss of Profit – The value of the work was Rs.25,51,71,000.00. “As per the respondents the claimant has completed on 25% of the work i.e. about Rs.6,37,92,000.00. Since the work was terminated illegally, the claimant is entitled to loss of profit on the balance work. The contractor’s profit is normally assessed at 10% of the value of the work. This is the percentage taken by the department themselves while preparing the estimate of the work as well as by the contractors while preparing their bids, therefore, 10% of the value of work is normally taken as the contractor’s profit. Since, the claimant was illegally prevented from completing the remaining work, therefore the claimant could not earn profit on the same, hence he is liable to be compensated @ 10% of the remaining work i.e. 25,51,71,000.00 - 6,37,92,000.00 = Rs.19,13,79,000.00. Contractor’s profit = 10% of 19,13,79,000.00 = Rs.1,91,37,900.00” No amount awarded – claimant not aggrieved. V. Refund of security deposit = Rs. 18,00,000.00. “The respondents have recovered security deposit from the running account bill of the claimant to which the claimant is entitled to receive.” Fully allowed. VI. Cost of Arbitration – Rs.10,00,000.00 No amount awarded – none of the parties is aggrieved. Total (I + II + III + IV + V + VI) – Rs.5,81,35,477.00 (Rupees Five Crores Eighty-One Lacs Thirty-Five Thousand Four Hundred Seventy-Seven Only) with interest @ 24% per annum from the date the amount remained due to the claimant, pendente lite and future till the payment is received by the claimant. The claimant was awarded the interest @ 24% per annum upon the awarded amounts; to be calculated from the day such amount fell due till the date of the Award. Counter-claims by the appellants. Awarded amount. I. Recovery of mobilization advance – Rs.1,16,97,390/- (Rupees One Crore Sixteen Lac Ninety-Seven Thousand Three Hundred & Ninety) Rejected by stating that neither much comprehensive arguments were advanced by the appellants nor was supported by any documentary evidence. II. Value of recovery for the work not completed – Rs.4,44,56,187/- (Rupees Four Crore Forty-Four Lac Fifty-Six Thousand One Hundred & Eighty-Seven) Rejected by stating that neither much comprehensive arguments were advanced by the appellants nor was supported by any documentary evidence. III. Statutory deductions Rs.13,86,588/- (Rupees Thirteen Lac EightySix Thousand Five Hundred & Eighty-Eight) Fully allowed. II. Value of recovery for the work not completed – Rs.4,44,56,187/- (Rupees Four Crore Forty-Four Lac Fifty-Six Thousand One Hundred & Eighty-Seven) Rejected by stating that neither much comprehensive arguments were advanced by the appellants nor was supported by any documentary evidence. III. Statutory deductions Rs.13,86,588/- (Rupees Thirteen Lac EightySix Thousand Five Hundred & Eighty-Eight) Fully allowed. Appellants were awarded with Rs.13,86,588/- towards the claim made under the head of Statutory deductions. IV. Interest Payable @ 24% per annum Interest to be calculated upon the same @ of 24% per annum from the date wherein it fell due till the date of the Award 14. The learned Arbitrator has awarded Rs.13,86,588/- towards the head of the statutory deduction to the appellants. So far as the 7th and final “RA Bills” are concerned the learned Arbitrator awarded an amount of Rs. 86,60,503/- only to the extent which stood admitted by the appellants in their counter-claim. So far as the claim of unused materials is concerned, the learned Arbitrator has awarded Rs.1,30,00,000/-. He has further awarded Rs.18,00,000/- towards refund of the security deposit. With regards to the counter-claim regarding the recovery of balance mobilization advance amounting to Rs.1,16,97,390/- it was rejected by stating that neither much comprehensive arguments were advanced by the appellants nor the same was supported by any documentary evidence. Thus, the learned Arbitrator has partly allowed the claim and partly allowed the counter-claim. 15. With regards to the counter-claim regarding the recovery of balance mobilization advance amounting to Rs.1,16,97,390/- it was rejected by stating that neither much comprehensive arguments were advanced by the appellants nor the same was supported by any documentary evidence. Thus, the learned Arbitrator has partly allowed the claim and partly allowed the counter-claim. 15. The appellants filed a petition under section 34 of the Act of 1996 before the learned Court below wherein it was alleged that the arbitral Award was illegal, void, without jurisdiction and a nullity; the learned Arbitrator failed to appreciate that the performance guarantee given by way of bank guarantee was found fake for which an F.I.R. bearing Sadar P.S. Case No. 192/2014, dated 07th March 2014 was lodged against the claimant; the learned Arbitrator failed to consider that the claimant completed only 20% of the work and the pace of work was slow and erratic and the claimant was responsible for non-completion of work within the stipulated period; the learned Arbitrator failed to consider that the termination of contract was as per the condition of contract and after termination, the claimant filed affidavit dated 16th November 2012 with a prayer for cancellation of termination order dated 08th October 2012 and gave an undertaking that the whole project shall be completed by June, 2013 and provisional two months’ time was granted to evaluate his work but as per the performance work report the claimant was not competent to complete the work by June, 2013 and, therefore, there was no violation of principles of natural justice in the matter of termination of contract; the learned Arbitrator erroneously held that no prior notice to show cause before termination of the contract of the claimant was served upon him and such findings is bad in law and against the material available on the record; on the contrary notice to show cause dated 12th September 2012 was properly served upon the claimant by speed post and a copy thereof was placed in support of service of notice, but unfortunately, the learned Arbitrator relied upon oral submission of the claimant that it was never received by the claimant and as such the finding of learned Arbitrator that there is no proof of service of notice through speed post notice is wholly illegal and without jurisdiction; 7th and final bill of Rs. 86,60,503/- is not liable to be paid, as amount under various heads were liable to be recovered from the claimant in terms of the contract and this aspect of the matter have not been considered by the learned Arbitrator although documents were available on record; the arbitration Award is against-the-terms of contract as also the terms of reference made by the Hon'ble High Court; the Award is not based upon evidence or material available on record, rather the same is based on conjectures and surmises which is in clear contravention of section 31 (3) of the Act of 1996; Issue Nos. (v), (vi) and (vii) have not been properly discussed and considered; the learned Arbitrator acted illegally and without jurisdiction and has not considered the case of the appellants as well as available materials, documents ; the aspect of limitation has not at all been considered; the learned Arbitrator erroneously awarded a sum of Rs. 86,60,503/- towards 7th and final bill to the claimant, besides he also awarded a sum of Rs. 1,30,00,000/- wrongfully claimed under the heading refund of amount towards unused road construction materials and Rs. 18,00,000/- towards Security deposit and not only this he was awarded interest @ 24% p.a. per annum and the Award is contrary to the materials available on the record; the claimant is not entitled for recovery of the awarded money from the appellants, since claimant failed to complete the work as per agreement/work order, thus the appellants as per provision of the contractual agreement is entitled to recover the following amount from the claimant : (i) Mobilisation Advance amount i.e. Value of recovery for the work not completed as per clause 40 of the contractual agreement 1,16,97,390.00 (a) Agreement Value 25,46,08,807.00 (b)Work done Value - 3,32,27,873.00 (ii) 20% penalty for the contract Work not done by the Claimant- (Rs.25,46,08,807.00-Rs.3,23,27873.00) i.e. Rs.22,22,80,934.00 x 20% - Rs.4,44,56,187.00 (iii) Statutory deduction in final bill 13,86,588.00 Total of (i) + (ii) + (iii) 5,75,40,165.00 (iv) Less (i) Final Unpaid Bill 86,60,503.00 N.S.C. 3,67,000.00 Security Deposit 18,68,128.00 (-) 1,08,95,631.00 4,66,44,534.00 (v) Interest 3,95,17,249.00 Total (iv & v) Rs.8,61,61,783.00 16. The learned Court below has rejected the application of the appellants filed under section 34 of the Act of 1996 by the impugned order. The findings of the learned Court below are extracted as under: “8. The learned Court below has rejected the application of the appellants filed under section 34 of the Act of 1996 by the impugned order. The findings of the learned Court below are extracted as under: “8. On perusal of the record, I find that the Hon'ble Arbitrator has been pleased to frame nine issues to settle the dispute between the parties. While deciding issue no. 5,6 and 8 i.e. whether the claimant is entitled to damages in terms of money due to such termination of the contract and if yes to what extent, whether the claimant is entitled to the claim raised by him and more fully enumerated as claim no. I to VI mentioned in the petition of the claim and whether the claimant failed to perform his part of contract by not constructing the road as envisaged with the contract has discussed the submission and evidence on both the sides and after detail discussion of the facts involved in the aforesaid issues the Hon'ble Arbitrator has been pleased to decide issue no. V, VI and VIII accordingly. As far as Issues no. I, III and IV are concerned which deals with whether any of the parties to the dispute have committed breach of any of the terms and condition of the contract agreement no. 2 SBD of 201-11 dated 22-12-10, whether the termination of the contract of the respondent was due to non fulfillment or the breach of the terms of contract and/or due to breach of the terms of the contract as alleged by the led respondent and whether the termination of the contract by the respondent was legal, valid and justified, the Hon'ble arbitrator after discussing the material on record has been pleased to held that the termination of the contract dated 03-09-12 prior to the completion of 24 months as well as withdrawal of the stay order were in contradiction of the fundamental breach of the contract and thereby the same was hold to be illegal and unsustainable. Issue no. I, III & IV were accordingly answered. Like wise issue no. Issue no. I, III & IV were accordingly answered. Like wise issue no. VI and IX which deals with whether the contract in question was obtained by the claimant by virtue of committing fraud by him as alleged by the respondent and whether the respondent is entitled for payment of any amount by the claimant as counter claim, the Hon'ble Arbitrator has been pleased to grant an Award to the respondent the amount of statutory deduction claimed along with interest upon the same at the rate of 25% per annum to be calculated from the date from wherein it fell due till the date of Award and all the other claims under the said counter claim were rejected. Issue no. VI & IX were accordingly answered. 9. After going through the material on record, I find that the date of the agreement was 22-12-10, date of intended completion was 22-12-12, date of first termination was 08-10-12, date of stay of first termination was 04-12-12, date of revocation of stay i.e. final termination was 19-03-2013. After discussing the service of notice to the claimant and publications of the notice in the News paper, the Hon'ble Arbitrator has been pleased to held that no prior notice to show cause before termination of the contract was served on the claimant and thereby he was not afforded reasonable opportunities to show cause and was not given a chance to be heard and therefore, the order of termination of contract dated 03-10-12 was in violation of principle of natural justice. 10. As far as submission of forged bank guarantee is concerned, the Hon'ble Arbitrator has been pleased to held that the issue relating to validity of the bank guarantee is concerned, the claimant in its submission has laid emphasis and has relied upon the letter dated 18-01-11 issued from the Bank Manager of the Branch from where the Bank Guarantee was prepared. But it is to be noted here in that the said letter dated 18-01-11 has not been brought on record and therefore, reliance upon the same cannot be made by the claimant. It was held by the Hon'ble Arbitrator that since this is an independent issue which is sub judice in the court of law hence the Hon'ble Arbitrator refrain from making any comment in this regard. It was held by the Hon'ble Arbitrator that since this is an independent issue which is sub judice in the court of law hence the Hon'ble Arbitrator refrain from making any comment in this regard. On the basis of material on record the Award dated 22-07-17 was passed by the Hon'ble sole arbitrator. 11. After going through above discussed material on record I find that there is nothing on record to show that the arbitration agreement is not valid and the parties were not given proper notice of the appointment of the arbitrator. There is nothing on record to show that the arbitrator award deals with dispute not contemplated by that not falling within the terms of the submission to the arbitration or it content decision on material beyond the scope of the submission of the arbitration. There is nothing on record to show that the Arbitration Award was passed in contravention of the fundamental policy of the Indian law and against the public policy. As far as appointment of the arbitration is concerned the petitioner was required to disclose in writing the circumstances under which they find that there is ground for challenge as per provision of section 12 & 13 of the Arbitration and Conciliation Act. Section 16 of the Arbitration and conciliation Act deals with competence of arbitral tribunal to rule on its jurisdiction which is not subject matter of this petition. 12. As per settled principle of law, if the court finds that the Award is vitiated by patent illegality appearing on the face of the Award then the same can be set aside. The Public Policy of India also includes Fundamental Policy of Indian Law as decided by the Hon'ble Supreme Court of India in the case of Ssangyong Engineering & Construction Co. Ltd Vs National Highways Authority of India (NHAI) as reported in 2019 SCC On Line SC 677. As per settled principle of law the Award can be set aside if it shock the conscience of the Court and would not include what the court thinks is justice on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be justice. The reliance may be placed upon the case of Sutlej Construction Limited Vs Union Territory of Chandigarh reported in (2018) 1 SCC 718 . 13. The reliance may be placed upon the case of Sutlej Construction Limited Vs Union Territory of Chandigarh reported in (2018) 1 SCC 718 . 13. Considering the above facts, I do not find any reason to interfere with the Award dated 22-07-17 passed by the Hon'ble Arbitrator in Arbitration Case no. 12/15. Hence, it is therefore ORDERED That the case stand dismissed. Both the parties shall bear their own cost.” Scope of interference under section 34 of the Act of 1996 17. In the present case, the petition under section 34 of the aforesaid Act of 1996 has been filed after coming into force of the Arbitration and Conciliation (Amendment) Act, 2015 and in view of judgment of Hon’ble Supreme Court in “Ssangyong Engg. & Construction Co. Ltd. vs. NHAI” (2019) 15 SCC 131 , the case will be governed by the law which existed prior to 2015 amendment regarding the permissible grounds for setting aside an arbitral Award. 18. Since the matter is governed by the Arbitration and Conciliation (Amendment) Act, 2015, it would be useful to compare the provisions relevant for the purposes of this case as it stood prior to the 2015 amendment and post-2015 amendment in the Act of 1996 for appreciating the scope of section 34 in the facts and circumstances of this case. Pre amendment Post amendment 34. Application for setting aside arbitral Award - (1) ……... 34. Application for setting aside arbitral Award - (1) ………….. (2) An arbitral award may be set aside by the Court only if - (a) the party asking the application furnishes proof that - (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid ………………………………; or (iii) the party making the application was not given proper notice …………..; 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: Provided that, …………..; or (v) the composition ………………… or (b) the Court finds that - (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (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, that 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. (2) An arbitral award may be set aside by the Court only if- (a) the party making the application furnishes proof that - (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid …………………………………; or (iii) the party making the application was not given proper notice ……………; 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:  Provided that, ………………; or (v) the composition …………… or (b) the Court finds that- (i) the subject matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral Award is in conflict with the public policy of India. Explanation 1.- For the avoidance of any doubt, it is clarified that an Award is in conflict with the public policy of India, only if, - (i) the making of the Award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2. --For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute. (2A) An arbitral Award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the Award is vitiated by patent illegality appearing on the face of the award: Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence. 19. 19. Prior to coming into force of the 2015 amendment, the Hon’ble Supreme Court in the judgment in “ONGC Limited vs. Saw Pipes Limited” (2003) 5 SCC 705 , held that an Award contrary to substantive provisions of law or the provisions of Arbitration and Conciliation Act, 1996 or against the terms of the contract would be patently illegal, and if it effects the rights of the parties, it would be open to interference by the Court under section 34(2) of the aforesaid Act of 1996. 20. The interpretation of the law by the Hon’ble Supreme Court in so far as section 34 of the Act of 1996, as it stood then, was summarized in paragraph no.21 of the judgment which is “DDA vs. R.S Sharma and Co.” (2008) 13 SCC 80 which is quoted as under: - “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.” 21. By another judgment in “ONGC vs. Western Geco International Ltd.” (2014) 9 SCC 263 , the Hon’ble Supreme Court, by further expansion of the phrase “public policy of India” contained in section 34 of the 1996 Act, added three other distinct and fundamental juristic principles which were to form part and parcel of the fundamental policy of Indian law. It was held that without meaning to exhaustively enumerate the purpose of the expression ‘fundamental policy of Indian law’, three distinct and fundamental juristic principles must necessarily be understood as a part and parcel of the fundamental policy of Indian law. It was held that without meaning to exhaustively enumerate the purpose of the expression ‘fundamental policy of Indian law’, three distinct and fundamental juristic principles must necessarily be understood as a part and parcel of the fundamental policy of Indian law. The first and foremost is the principle that in every determination whether by a Court or other authority that affects the rights of a citizen or leads to any civil consequences, the Court or authority concerned is bound to adopt what is in legal parlance called a ‘judicial approach’ in the matter and they cannot act in arbitrary, capricious or whimsical manner and the subject is required to be dealt with in fair, reasonable and objective manner and that the decision is not actuated by any extraneous consideration. The second fundamental to the policy of Indian law was held to be the determination of dispute in accordance with the principles of natural justice which included not only the principle of audi alteram partem but also the authority must apply its mind to the facts and circumstances while taking a view one way or the other and non-application of mind is a defect that is fatal to any adjudication and recording of reasons in support of the decision is best demonstrated for disclosure of mind. It was held that the requirement that an adjudicatory authority must apply its mind is so deeply embedded in our jurisprudence that it can be described as a fundamental policy of Indian law. The third point which was included was that a decision which is perverse or so irrational that no reasonable person would have arrived at the same will not be sustainable in a Court of law. The Hon’ble Supreme Court in the case of “Western Geco” (supra) was also of the view that it was neither necessary nor proper to attempt an exhaustive enumeration of what would constitute the fundamental policy of Indian law. 22. The Hon’ble Supreme Court in Paragraph nos. 29, 30 and 31 of “Western Geco” (supra) 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. 29, 30 and 31 of “Western Geco” (supra) 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: “18. Equal treatment of parties. —The parties shall be treated with equality and each party shall be given a full opportunity to present his case. 34. Application for setting aside arbitral Award. — xxx (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;” 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.” 23. In “Associate Builders v. DDA” (2015) 3 SCC 49 , the head “public policy of India” was considered as falling into following heads and subheads: a. Fundamental policy of Indian Law- i. Compliance with statutes, Judicial Precedents orders of superior courts in India. (para 27) ii. Need for judicial approach- decision be fair, reasonable and objective. (para 29) iii. Natural Justice compliance- Audi alterem partem rule. (para 30) iv. Wednesbury reasonableness- Perversity or irrationality. (para 31) b. Interest of India. (Para 35) Related to foreign powers of India c. Justice or morality (para 36), and d. Patent illegality- i. Contravention of substantive law of India. ii. Contravention of Arbitration and Conciliation Act, 1996. iii. Contravention of terms of contract. Perversity has been considered in the following terms: 31. Wednesbury reasonableness- Perversity or irrationality. (para 31) b. Interest of India. (Para 35) Related to foreign powers of India c. Justice or morality (para 36), and d. Patent illegality- i. Contravention of substantive law of India. ii. Contravention of Arbitration and Conciliation Act, 1996. iii. Contravention of terms of contract. Perversity has been considered in the following terms: 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. 32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer-cum-Assessing Authority v. Gopi Nath & Sons [1992 Supp (2) SCC 312], it was held: (SCC p. 317, para 7) “7. … It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered infirm in law.” In Kuldeep Singh v. Commr. of Police [ (1999) 2 SCC 10 : 1999 SCC (L&S) 429], it was held: (SCC p. 14, para 10) “10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with.” Justice has been considered in the following terms – 36. The third ground of public policy is, if an award is against justice or morality. These are two different concepts in law. An award can be said to be against justice only when it shocks the conscience of the court. The third ground of public policy is, if an award is against justice or morality. These are two different concepts in law. An award can be said to be against justice only when it shocks the conscience of the court. An illustration of this can be given. A claimant is content with restricting his claim, let us say to Rs. 30 lakhs in a statement of claim before the arbitrator and at no point does he seek to claim anything more. The arbitral award ultimately awards him Rs. 45 lakhs without any acceptable reason or justification. Obviously, this would shock the conscience of the court and the arbitral award would be liable to be set aside on the ground that it is contrary to “justice”. Patent illegality: Again sub-divided into: (a) Para 42.1- contravention of substantive law of India (b) Para 42.2 – contravention of the Arbitration Act itself. (c) Para 42.3 – arbitrator deciding outside the terms of the contract. 24. The expanding nature of the interpretation of the term fundamental policy of Indian law in order to set aside an Award under Section 34 of the Act of 1996 was noticed and was followed by law commission recommendations which ultimately culminated in an amendment of the aforesaid Act of 1996 vide amendment Act 2015. The entire background and the purpose of the Amendment Act 2015 in the aforesaid Act of 1996 have been fully narrated and explained in the judgment in “Ssangyong Engg. & Construction Co. Ltd.” (2019) 15 SCC 131 . The expansion of “public policy of India” in “ONGC Ltd. v. Saw Pipes Ltd.” (2003) 5 SCC 705 [“Saw Pipes”] and “ONGC Ltd. v. Western Geco International Ltd.” (2014) 9 SCC 263 [“Western Geco”] has been done away with and a new ground of “patent illegality” with inbuilt exceptions have been introduced through 2015 amendment. 25. The judgment passed by the Hon’ble Supreme Court in the case of “Ssangyong Engg. & Construction Co. Ltd.” (supra) has considered the impact of the 2015 amendment in the Act of 1996 and, inter alia, held in paragraph nos. 35 to 41 of the reports that:- A. In paragraph 35 it has been held that it is important to notice that the ground for interference insofar as it concerns the “interest of India” has since been deleted, and therefore, no longer obtains. 35 to 41 of the reports that:- A. In paragraph 35 it has been held that it is important to notice that the ground for interference insofar as it concerns the “interest of India” has since been deleted, and therefore, no longer obtains. B. In paragraph 35 it has been also been held that the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the “most basic notions of morality or justice”. This again would be in line with paragraphs 36 to 39 of Associate Builders, as it is only such arbitral awards that shock the conscience of the Court that can be set aside on this ground. C. In paragraph 36 it has been held that it is clear that the public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paras 18 and 27 of Associate Builders, or secondly, that such award is against basic notions of justice or morality as understood in paras 36 to 39 of Associate Builders. Explanation 2 to Section 34(2)(b)(ii) and Explanation 2 to Section 48(2)(b)(ii) were added by the Amendment Act only so that Western Geco, as understood in Associate Builders, and paras 28 and 29 in particular, is now done away with. D. In paragraph 37 it has been held that insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2-A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within “the fundamental policy of Indian law”, namely, the contravention of a statute not linked to public policy or the public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality. E. In paragraph 38 it has been held that it has been made clear that reappreciation of evidence, which is what an appellate Court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award. E. In paragraph 38 it has been held that it has been made clear that reappreciation of evidence, which is what an appellate Court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award. F. In paragraph 39 it has been elucidated that para 42.1 of Associate Builders, namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. G. In paragraph 39 it has been elucidated that Para 42.2 of Associate Builders, however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award. H. In paragraph 40 it has been held that the change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 in Associate Builders, namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator’s view is not even a possible view to take. Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2-A). I. In paragraph 41 it has been noted that a decision that is perverse as understood in paras 31 and 32 of Associate Builders, while no longer being a ground for challenge under “public policy of India”, would certainly amount to a patent illegality appearing on the face of the award. Thus, a finding based on no evidence at all or an award that ignores vital evidence in arriving at its decision would be perverse and liable to be set aside on the ground of patent illegality. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such a decision is not based on evidence led by the parties, and therefore, would also have to be characterized as perverse. 26. Additionally, a finding based on documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such a decision is not based on evidence led by the parties, and therefore, would also have to be characterized as perverse. 26. In “Sutlej Construction Limited versus Union Territory of Chandigarh” (2018) SCC 718 it has been held that when the Arbitrator has taken a reasonable view on the basis of a plausible view there is no scope of reappreciation of evidence and substitute its view unless the view taken by the Arbitrator shocks the conscience of the Court. 27. The date of the agreement is 22nd December 2010 and the period of completion of the work was 24 months. The initial date of termination of the contract is 08th October 2012, that is, prior to the scheduled date of completion of work. The termination of the contract dated 08th October 2012 was stayed for a period of 2 months and ultimately the termination was ordered on 19th March 2013 by revoking the stay. Fraud and arbitrability of dispute. 28. This Court finds that the issue regarding the legality and validity of the arbitral proceedings and also the point regarding the arbitrability of the dispute between the parties was taken up by the learned Arbitrator as the first point in terms of issue no. (ii) framed by the learned Arbitrator. In paragraph no.9 of the Award, it has been recorded that issue no. (ii) had two parts. The first part of the objection was with regard to the validity of the contract, and the second part of the objection was with regard to the point as to whether the dispute was arbitrable or not. The learned Arbitrator has recorded that so far as the first part is concerned none of the parties advanced any argument questioning the legality and validity of the contract nor the learned Arbitrator could find any material on record to hold so and consequently, the learned Arbitrator held that the contract was perfectly legal and valid. No argument was advanced by the appellants with regard to the findings of the learned Arbitrator on issue no.(ii) and recorded in paragraph no.9 of the arbitral Award. No argument was advanced by the appellants with regard to the findings of the learned Arbitrator on issue no.(ii) and recorded in paragraph no.9 of the arbitral Award. The learned Arbitrator while deciding the said issue has also referred to the order of reference passed by this Court referring the matter to the learned Arbitrator and also recorded that the order of appointment of the learned Arbitrator was subject matter for consideration before the Hon’ble Supreme Court and the Special Leave Petition was also dismissed. The point regarding the filing of the criminal case through a First Information Report has also been considered by the learned Arbitrator although it only touches upon the point of arbitrability of the dispute. The learned Arbitrator, while considering the materials on record, has recorded a finding that no material could be placed from the side of the appellants that the bank guarantee was forged. In the judgment relied upon by the learned counsel for the appellants “Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd.” (2021) 4 SCC 713 , in paragraph no. 35 it has been held as under :- “35. After these judgments, it is clear that “serious allegations of fraud” arise only if either of the two tests laid down are satisfied, and not otherwise. The first test is satisfied only when it can be said that the arbitration clause or agreement itself cannot be said to exist in a clear case in which the court finds that the party against whom breach is alleged cannot be said to have entered into the agreement relating to arbitration at all. The second test can be said to have been met in cases in which allegations are made against the State or its instrumentalities of arbitrary, fraudulent, or mala fide conduct, thus necessitating the hearing of the case by a writ court in which questions are raised which are not predominantly questions arising from the contract itself or breach thereof, but questions arising in the public law domain.” 29. This Court finds that none of the two tests laid down in the aforesaid judgment is attracted in the present case to hold that the dispute between the parties was not arbitrable on account of allegation of fraud. This Court finds that none of the two tests laid down in the aforesaid judgment is attracted in the present case to hold that the dispute between the parties was not arbitrable on account of allegation of fraud. With regards to arbitrability of dispute it would be useful to refer to the judgment passed by the Hon’ble Supreme Court in “Ayyasamy v. A. Paramasivam and others” (2016) 10 SCC 386 where the Hon’ble Supreme Court has considered allegations of fraud arising out of civil disputes between the parties. Paragraph no. 45.2 of the aforesaid judgment is quoted as under : “45.2. Allegations of fraud are not alien to ordinary civil courts. Generations of judges have dealt with such allegations in the context of civil and commercial disputes. If an allegation of fraud can be adjudicated upon in the course of a trial before an ordinary civil court, there is no reason or justification to exclude such disputes from the ambit and purview of a claim in arbitration. The parties who enter into commercial dealings and agree to a resolution of disputes by an arbitral forum exercise an option and express a choice of a preferred mode for the resolution of their disputes. The parties in choosing arbitration place priority upon the speed, flexibility and expertise inherent in arbitral adjudication. Once parties have agreed to refer disputes to arbitration, the court must plainly discourage and discountenance litigative strategies designed to avoid recourse to arbitration. Any other approach would seriously place in uncertainty the institutional efficacy of arbitration. Such a consequence must be eschewed.” 30. Thus, an Arbitrator is even competent to adjudicate on allegations of fraud committed in connection with civil disputes. It is important to note that the allegation of fraud was in connection with the furnishing of a forged bank guarantee by way of a performance guarantee which essentially affects only the parties to the contract in connection with which one FIR was lodged. No public element is involved in the alleged fraud. The learned Arbitrator while considering this aspect of the matter considered its civil consequences within the realm of his jurisdiction and upon considering the materials on record held that the appellants could not show any material that the bank guarantee was forged and proceeded in the case by observing that only one FIR was lodged in that connection. 31. The learned Arbitrator while considering this aspect of the matter considered its civil consequences within the realm of his jurisdiction and upon considering the materials on record held that the appellants could not show any material that the bank guarantee was forged and proceeded in the case by observing that only one FIR was lodged in that connection. 31. The argument of the learned counsel for the appellants before this Court was that there were letters to show that the bank guarantee was forged inasmuch as the bank guarantee itself was never honored by the bank, but such argument would require reappreciation of evidence led before the learned Arbitrator and such an exercise could not have been undertaken by the learned Commercial Court under section 34 of the Act of 1996 nor can be undertaken under section 37 of the Act of 1996 in this Commercial Appeal. Such a course would be contrary to the law laid down by the Hon’ble Supreme Court as discussed above. Thus, the arguments of the appellants on the point of arbitrability of dispute are rejected. Validity of the order of termination. 32. With regard to the termination of the contract it has been argued by the appellants that notice was issued to the claimant prior to the termination by Speed-Post and the learned Arbitrator was not justified in holding that the notice was not served. This Court finds that the learned Arbitrator has considered the materials placed including the point that the notice was sent through Speed-Post but the learned Arbitrator has recorded that delivery receipt or tracking report of the Speed-Post was not produced and has taken a view that the letter of termination was never served upon the claimant and, consequently, has taken a view that the termination of the contract without the issuance of notice that too prior to completion of 24 months’ time for completion of work, was illegal. The learned Arbitrator has recorded a specific finding in paragraph no.57 of the Award which is quoted as under : “57. From the above discussion and finding, I hold that the termination of the contract dated 03.09.2012 prior to the completion of 24 months as well as the withdrawal of the stay order were in contradiction of the fundamental breach of the contract and thereby the same is held to be illegal and unsustainable.” 33. From the above discussion and finding, I hold that the termination of the contract dated 03.09.2012 prior to the completion of 24 months as well as the withdrawal of the stay order were in contradiction of the fundamental breach of the contract and thereby the same is held to be illegal and unsustainable.” 33. This Court is of the considered view that the argument of the appellants in connection with the service of notice prior to termination of the contract is also based on the appreciation of the materials on record which is again beyond the scope of consideration under section 34 of the Act of 1996 much less under section 37 of the Act of 1996 in this Commercial Appeal. Accordingly, the argument of the appellants questioning the finding of the learned Arbitrator on the termination of the contract does not call for any interference under the limited jurisdiction of section 34 or section 37 of the Act of 1996. Award of Rs.1,30,00,000/- towards unconsumed materials. 34. So far as the point regarding refund of the amount towards unused construction materials to the extent of Rs.1,30,00,000/- is concerned, the learned counsel for the appellants has specifically referred to the claim filed by the claimant in this regard wherein claim has been made for the refund of amount towards unused construction materials amounting to Rs.1,30,00,000/- stating that the claimant had purchased more than 3,00,000 CFT stone metals and boulders for execution of the project and these materials remained unused on account of the illegal termination of the contract. The learned Arbitrator has awarded the entire claim of Rs.1,30,00,000/- only on the basis of a letter issued by the Assistant Mining Officer, Hazaribagh who had issued permit for only 1,22,600 CFT of stone metals and boulders. This Court finds that on the face of the claim against unused stone metals and boulders to the extent of 3,00,000 CFT amounting to Rs.1,30,00,000/-, the learned Arbitrator could not have allowed the entire claim of Rs.1,30,00,000/- when the letter of the Assistant Mining Officer bearing no.5128 dated 23rd February 2013 recorded that permit was issued to the extent of 1,22,600 CFT. This letter was the only document produced and relied upon by the claimant as referred to in paragraph no. 20 of the Award. This letter was the only document produced and relied upon by the claimant as referred to in paragraph no. 20 of the Award. The award of the full claim amount of Rs.1,30,00,000/- (which was claimed for the purchase of more than 3,00,000 CFT of unconsumed stone metals and boulders) on the basis of the aforesaid letter dated 23rd February 2013 relating to the purchase of only 1,22,600 CFT of stone metals and boulders is ex-facie perverse and shocking to the conscience of this Court. The argument of the claimant that the amount of Rs.1,30,00,000/- included other materials is totally contrary to the claim made with regard to Rs.1,30,00,000/- which was clearly made only on account of the supply of 3,00,000 CFT of stone metals and boulders and not for any other material. Once the proved supply was less than the claimed supply, the entire claim under this head could not have been allowed by the learned Arbitrator. In such circumstances, the Award of the learned Arbitrator under this head is perverse on the face of it and suffers from patent illegality under section 34 (2-A) of the Act of 1996 when seen in the light of paragraph no. 41 of the judgment passed in the case of Ssangyong Engg. & Construction Co. Ltd.(supra) read with paragraph nos. 31 and 32 of the judgment passed in the case of Associate Builders (supra). The learned Court below has failed to consider this aspect of the matter and has mechanically dismissed the petition filed under section 34 of the Act of 1996 though, inter alia, the plea that the Award was not based on evidence or material available on record and that the Award was based on conjectures and surmises was duly raised by the appellants. This aspect of the matter has not been considered by the learned Commercial Court. Non-consideration of the claim of Mobilization Advance. 35. From the perusal of paragraphs nos.17 and 18 of the arbitral Award, this Court finds that specific arguments were raised by the parties before the learned Arbitrator in connection with the mobilization advance by referring to the documents and also by referring to the clause of the Contract as to how the mobilization was to be adjusted and at what stage. The claimant had raised a specific plea before the learned Arbitrator regarding utilization of the entire amount of mobilization advance given to them and the appellants had raised a plea that such amount was not adjustable and mobilization advance was used by the claimant on their own. It is not in dispute that Rs.1,50,00,000/- was given to the claimant by way of mobilization advance and the appellants had claimed recovery of only Rs.1,16,97,390/- on account of the mobilization advance in the counter-claim. Paragraphs nos.17 and 18 of the Award passed by the learned Arbitrator are quoted as under : “17. The Learned Counsel for the Claimant has further argued and submitted that without any just or cogent reason, the Respondent instructed the Banker to stop the disbursement of the mobilisation advance which was sanctioned in the month of July 2011. He further submitted that, the Claimant vide letter dated 28.07.2011 and 26.09.2011, which had enclosed therein, the certificate of utilization of the mobilization advance, invoice of purchase of new machinery & lease rent receipts of the plant; had requested for recall of decision to stop the disbursement of the mobilization advance. 18. In reply to the contention of the Claimant with regards to the mobilization amount and bank guarantee, the Learned Advocate, representing the Respondents submitted that, the mobilisation amount was passed for payment to the Claimant upon the submission of the Bank Guarantee and the advance loan was to be adjusted from the interim bill. Further by referring to the Clause 51.3 of the said Agreement, he further asserted that, said adjustment of the advance amount stood due after the six months period, i.e, in the month of July 2011 and the same was to be done after the completion of 20% of the Agreement Value, i.e., Rs. 5.092 Crore. Therefore, since the Claimant could not achieve 20% of the contract value, the adjustment was not liable to be made even after the completion of 21 months. The Learned Counsel for the Respondent further submitted that, the Respondent had requested the bank to invoke the said Bank Guarantee vide letter No 704 dated 23.07.2011 and again reminded about the same through Letter No.1076 dated 16.09.2011, but the Bank did not return the said advance loan which was in shape of the Bank Guarantee for the reasons best known to the Bank. It was further asserted by Learned Counsel that the Claimant used the mobilization advance as per their own wish.” 36. The counter-claim was filed by the appellants under heads including recovery of mobilization advance amounting to Rs.1,16,97,390/- and also statutory deductions amounting to Rs.13,86,588/-. Vide paragraph no. 63 of the arbitral Award, the learned Arbitrator allowed the counter-claim on account of statutory deductions only and rejected the claim of refund of mobilization advance by recording that apart from the counter-claim on account of statutory deductions, the appellants in support of their submissions neither made much comprehensive argument nor supported the same by any documentary evidence. Paragraph no. 63 of the arbitral award is quoted as under : “63. Further, with regard to the issue of Counter-Claim as raised by the Respondent, it is pertinent to note that apart from the claim of statutory deductions, the Respondent in support of its submission neither has made much comprehensive argument nor has supported the same by any documentary evidence.” 37. The Award of the learned Arbitrator rejecting the counter-claim with regard to mobilization advance vide paragraph no.63 of the Award is ex-facie contrary to the recordings of the arguments of the parties in paragraphs nos.17 and 18 of the arbitral Award by referring to the documents/clause of the contract with regards to their respective stand on the point of counter-claim regarding mobilization advance. 38. The learned Arbitrator while rejecting the counter-claim regarding the refund of mobilization advance, has not at all passed a speaking order and the counter-claim under the head refund of mobilization advance has been rejected without considering and referring to the materials/arguments recorded in paragraph nos. 17 and 18 of the Award. In fact, the learned Arbitrator has completely overlooked or ignored the arguments/materials referred to and recorded in paragraph nos. 17 and 18 of the Award. This makes the Award ex-facie perverse suffering from patent illegality in terms of section 34 (2-A) of the Act of 1996 on this aspect of the matter. Paragraph no. 63 of the arbitral Award is also non-speaking, inasmuch as, it records that the appellants have not made “much comprehensive argument” without recording or referring to the arguments. Such an approach of the learned Arbitrator is also contrary to the mandate of section 31 (3) of the Act of 1996. 39. Paragraph no. 63 of the arbitral Award is also non-speaking, inasmuch as, it records that the appellants have not made “much comprehensive argument” without recording or referring to the arguments. Such an approach of the learned Arbitrator is also contrary to the mandate of section 31 (3) of the Act of 1996. 39. The learned Court has simply recorded that it is a settled principle of law that the Award can be set aside if it is vitiated by patent illegality and has referred to the judgment in “Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India” 2019 SCC OnLine SC 677 but has failed to apply the ratio of the said judgment to the case and has mechanically dismissed the petition filed under section 34 of the Act of 1996. 40. The petition for setting aside the arbitral Award was filed only by the appellants. The learned Arbitrator has allowed the claim on account of 7th and final “R.A Bills” to the extent of Rs. 86,60,503/- which stood admitted by the appellants but was made subject to adjustment of counter-claim on account of statutory deductions amounting to Rs.13,86,588/-. Further, refund of security of Rs.18,00,000/- was also allowed. The aforesaid claim and counter-claim carried interest @24% per annum which was the rate of interest claimed by both the parties with respect to their claims and counter-claims. The claimant was not aggrieved by the Award and accordingly, the award of counter-claim on account of statutory deductions amounting to Rs.13,86,588/-with interest has attained finality. 41. The Award of Rs.1,30,00,000/- has been found to be patently illegal as aforesaid and this Court finds that the same is clearly severable from the rest of the Award. Consequently, the Award of Rs.1,30,00,000/- towards unconsumed materials (stone metals and boulders) by the arbitral Award is quashed. 42. The parties are free to pursue their remedies in accordance with the law. The Commercial Appeal No.12 of 2020 is allowed in the aforesaid terms. 43. Pending interlocutory application, if any, is closed.