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2025 DIGILAW 488 (CAL)

State of West Bengal v. CAB Engineers Pvt. Ltd.

2025-08-25

ARIJIT BANERJEE, OM NARAYAN RAI

body2025
JUDGMENT : Om Narayan Rai, J. 1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the said Act of 1996’) lays challenge to an order dated April 29, 2009 passed by the learned Civil Judge (Senior Division), Purulia, whereby the appellants’ application under Section 34 of the said Act of 1996 (which was registered as Misc. Case No. 05 of 2006) was disposed of by modifying the arbitral award dated January 31, 2006 that had been impugned in the said application under Section 34 of the said Act of 1996. FACTS: 2. Briefly summed up, the facts of the case, insofar as they are relevant for the present appeal, are as follows: a. The appellants had floated a tender for completion of “Remaining works of Dam, Dyke and Spillway in connection with the Extension of Bandhu Irrigation Scheme, in P.S. Arsa, District Purulia”. b. The respondent participated in the tender process and emerged successful. Thereafter the contract for the aforesaid work was awarded to the respondent. c. Disputes and differences arose between the parties relating to the execution of the aforesaid work awarded to the respondent by the appellants. In terms of the arbitration clause contained in the relevant agreement governing the parties, an Arbitrator was appointed and the disputes that had arisen between the parties were referred to the Arbitrator for adjudication. d. The respondent herein filed its statement of claim, laying as many as nine distinct claims which are as follows: “CLAIM NO. 1 Amount payable as per final bill prepared by the Department but not yet passed for payment or paid --Rs.3,90,768/- CLAIM NO. 2 Amount payable against security deposit lying with the department --Rs.1,00,000/- CLAIM NO. 3 Amount payable due to loss suffered in flush flood during 25th & 26th September, 1992 for being an Act of God. --Rs.14,82,880/- CLAIM NO. 4 Additional amount payable on A/C of excess/additional works executed beyond (+) 10% of original estimated work provided in the tender (i.e. work beyond normal variation limit) all as per instruction and direction of Engineer-in-Charge. --Rs.63,45,996/- CLAIM NO. 5 a) Compensation on account of damages and losses suffered due to various breaches of contract by the department infructuous expenditure incurred due to repeated suspension of work for reasons attributable to the department Rs. --Rs.63,45,996/- CLAIM NO. 5 a) Compensation on account of damages and losses suffered due to various breaches of contract by the department infructuous expenditure incurred due to repeated suspension of work for reasons attributable to the department Rs. 11,65,005/- b) Increase in cost of work due to rise in prices of labours and materials for all works executed in the over-run period, for reasons attributable to the department. Rs. 22,62,190/- c) Additional/extra On-site expenses incurred due to prolongation of work by more than 13 months. (Claimed 7 months only considering excess work) Rs. 3,67,850/- d) Additional/extra cost involved due to detention of heavy plants and machineries due to prolongation of work by more than 13 months. Rs. 20,35,833/- (Claimed 7 months only considering excess work) e) Additional/Extra Off-site (H.O.) Expenses incurred due to prolongation of work more than 13 months. (Claimed 7 months only) Rs. 1,00,000/- f) Additional Guarding expenses incurred to pacify local unrest of land losers-cum-villagers by engagement as extra alleged security staffs all as per approval and knowledge of Engineer-in-Charge. Rs. 3,60,000/- (16 Guards @ Rs. 750/- P.M. from November ’91 to April ’94) g) Extended stay compensation and/or loss of profit earning capacity being retained longer in the contract without any corresponding monetary benefit and without being free to move elsewhere to earn the normal profit, which he otherwise might do. Rs. 5,46,700/- CLAIM NO. 6 Repair and maintenance of old village Road and approach road, being badly damaged by September, 1992 flood (movement of all vehicles including Govt. vehicles were stopped by the villagers), repaired on instruction of Engineer- in-Charge by supplying, laying & consolidating, boulders (where necessary), 40mm down stone metal and morrum including mechanical compaction. L.S Rs.8,50,000/- CLAIM NO. 7 Amount payable on A/C of difference of Royalty & Cess etc. due to statutory rise by state Govt. during the pendency of contract. (To be verified from Record). Rs.2,50,000/- CLAIM NO. 8 Compensation and/or delinquent interest @ 18% P.A. for delayed payment of admitted dues of R/A bills. Purported final bill and security deposit money held by the department. Rs.6,26,524/- CLAIM NO. 9 Interest @18% P.A. on the due amount in respect of Claim Nos.1 to 7 from due date of payment till realization.” AS ACCRUED e. The appellants contested the respondent’s claims by filing their counter- statement. Purported final bill and security deposit money held by the department. Rs.6,26,524/- CLAIM NO. 9 Interest @18% P.A. on the due amount in respect of Claim Nos.1 to 7 from due date of payment till realization.” AS ACCRUED e. The appellants contested the respondent’s claims by filing their counter- statement. f. The sole Arbitrator ultimately disposed of the arbitral proceeding by an award which was made and published on January 31, 2006, thereby allowing Claim No. 1 in full and Claim Nos. 2, 4, 8 and 9 in part. The rest of the claims stood rejected. g. Feeling aggrieved by the arbitral award, the appellants filed an application under Section 34 of the said Act of 1996 before the learned Civil Judge (Senior Division) at Purulia which was registered as Misc.Case No.05 of 2006. h. The said Misc. Case was disposed of by an order dated April 29, 2009, thereby modifying the arbitral award apropos Claim No. 9 and upholding the award as regards the other claims. i. Assailing the said order dated April 29, 2009, the appellants have approached this Court by way of the present appeal. ARGUMENTS ON BEHALF OF THE APPELLANTS: 3. Mr. Banerjee learned Advocate appearing for the appellants, has urged that since the award which had been impugned under Section 34 of the said Act of 1996 was (is) patently illegal, the same ought to have been set aside by the learned Court in exercise of its jurisdiction under Section 34 of the said Act of 1996. 4. In order to demonstrate the patent illegality in the award, Mr. Banerjee took us through that portion of the arbitral award where Claim Nos. 4, 8 and 9 have been discussed and submitted that the Arbitrator could not have allowed the said claims. 5. Drawing our attention to pages 8 to 11 of the arbitral award (pages 194 to 197 of the Paper Book) which contain the discussion as regards Claim No. 4, it has been submitted that the Arbitrator has neither furnished any basis nor disclosed the computation apropos the amount of Rs.33,52,590/- awarded to the respondent in respect of its claim for additional works done by it. 6. Referring to the findings of the Arbitrator apropos Claim Nos. 6. Referring to the findings of the Arbitrator apropos Claim Nos. 8 and 9 (at pages 13 and 14 of the award & pages 199 to 200 of the Paper Book), it has been submitted that since the Arbitrator had allowed the respondent’s claim for interest on delayed payment of admitted RA bills which featured as Claim No. 8, there was no earthly reason for the Arbitrator to allow Claim No. 9 which pertained to interest on amounts due in respect of Claim Nos. 1 to 7. It has been submitted on behalf of the appellants that the Arbitrator has committed a patent error by allowing Claim No. 9 which amounts to double payment of interest. 7. In support of his submission that the Arbitrator is bound to disclose the computation and the basis for arriving at the awarded amount, Mr. Banerjee strongly relied on a judgment of the Hon’ble Supreme Court in the case of Batliboi Environmental Engineers Limited vs. Hindustan Petroleum Corporation Limited & Anr, (2024) 2 SCC 375 . ARGUMENTS ON BEHALF OF THE RESPONDENT: 8. Mr. Sen, learned Senior Advocate, appearing for the respondent, supported the order impugned. He placed the Arbitrator’s discussion on Claim No. 4 of the claimant (i.e. the respondent herein) and submitted that the same reveals that the Arbitrator has reached the conclusion to award a sum of Rs.33,52,590/- in favour of the claimant upon being satisfied that there was no dispute as regards the quantum of work done by the claimant. As regards the basis for arriving at the sum awarded, it has been submitted that once the quantum of work stood fixed by reason of there being no dispute as regards the same, the only aspect that remained to be determined was the rate at which payment could be made and the discussion made by the Arbitrator would reveal that such determination was done on the basis of clause 12 of the conditions of contract. 9. Mr. Sen relied on a judgment of the Hon’ble Supreme Court in the case of Dyna Technologies Private Limited vs. Crompton Greaves Limited , (2019) 20 SCC 1 for the proposition that if the conclusion arrived at by the Arbitrator can be implied by Courts upon a fair reading of the award and the documents referred to thereunder and the award is not unintelligible the same should not be upset. ANALYSIS & DECISION: 10. ANALYSIS & DECISION: 10. We have heard the arguments advanced on behalf of the respective parties and considered the material on record. 11. Although the instant appeal assails an order passed on an application under Section 34 of the said Act of 1996 seeking setting aside of the arbitral award, yet, since arguments before us have been restricted only to the award of Claim Nos. 4, 8 and 9 by the Arbitrator, therefore, we would confine our discussion only to that extent and no further. 12. Claim No. 4 of the statement of claim pertains to claim for “additional amount payable on account of excess/additional works executed beyond (+) 10% of the original estimated work provided in the tender (i.e. work beyond normal variation limit) all as per instruction and direction of Engineer-in-Charge for an amount of Rs.63,45,996/-”. 13. The Arbitrator has, while dealing with the said claim, referred to paragraph 23.3 of the statement of claim filed by the respondent and paragraph 34 of the counter statement filed by the appellant, wherein paragraphs 23 and 23.4 of the statement of claim have been dealt with. The relevant portion of the Arbitrator’s discussion as regards the said claim is extracted herein below: “…….From the evidences on record I find that this claim no.4 was explained by the Claimant in paragraph 23.3 of the Statement of Claims. The Respondent dealt with the said paragraph 23.3 in paragraph 34 of the counter statement of fact in which, the Respondent dealt with the paragraph 23 to 23.7 of the statement of facts. There was absolutely no denial of the facts stated by the Claimant in paragraph 23.3 in the counter statement. The Claimant’s Claim No.4 was dealt with by the Respondent in sub-paragraph IV of paragraph 34 of the counter statement. The Respondent merely denied the claim and stated all excess works beyond the 10% of the tender amount and all the supplementary works executed by the claimant had already been accounted for in the final bill against which payment has been made to the Contractor. The full payment of the final bill had not been made. There is no dispute regarding quantity of works done by the Claimant. It is a fact that all the excess works executed by the Claimant have been accounted for in the final bill at the tender rate. The full payment of the final bill had not been made. There is no dispute regarding quantity of works done by the Claimant. It is a fact that all the excess works executed by the Claimant have been accounted for in the final bill at the tender rate. The same is also admitted by the Claimant but the Claimant claimed extra amount for excess quantity beyond 10% of the tender quantity on the basis of Respondent’s schedule of rates for the year 1991-92 which was in force during the execution of the work. In other words, the Claimant has claimed difference in rates between the tender rate and the rates provided in the Schedule of Rates for the year 1991-92. The power of variation by the Engineer-in-Charge of the Respondent is given in Clause 12 of the conditions of contract. The claimant’s contention that such power must have a reasonable limit, is fully supported by the decision of the Hon’ble Supreme Court reported in AIR 1991 SC 945 (Har Charan Singh-Vs-Union of India). The fact of the said case is similar to the facts of the present case. Further the power of the Engineer-in-Charge to order variation under Clause 12 of the conditions of the contract is similar in both the cases. In other words, the facts of the present case and the Supreme Court case are similar.The conditions of the contract are identical. The Claimant’s contention that the preinci9ple of the said Supreme Court case is fully applicable in the present case is also not without substance. In the said Supreme Court case, the Hon’ble Supreme Court have referred to a sentence from an English case which runs as under:- “It was essential to remember, however, that works even though absolute must be limited to circumstances within the contemplation of the parties”. But as per Clause 12 of the Conditions of Contract, it is clearly mentioned that whenever any rate is arrived on analysis worked out from (a) the basic rates of materials and labour provided in the current schedule of rates or (b) the current market rates of materials and labour when basic rates of work are not available in the schedule. In cases when such rates are determined on analysis by the Engineer-in-Charge under (a) above, the stipulated percentage above or below schedule of rates as provided in the contract shall apply and in case of rates worked out on analysis under (b) above, payment shall be made at percentage. Moreover, the Advocate for the Claimant agreed in 15th sitting of this proceeding that “reasonable variation will be plus – minus 25%. So, in this case the Claimant is allowed the rates for extra work beyond 25% of the scheduled quantity to be paid as per Schedule of Rates for the year 1991-92 for those items whose quantities have exceeded. In view of above consideration, the difference of rates between the rates as per Schedule of rates for the year 1991-92 and the original rates as per original Tender Schedule for the items whose quantities have exceeded beyond 25% of the original quantities are taken into consideration for determining the claim amount on this Claim No.4. Considering all this aspects, I, therefore, make an award of Rs.33,52,590/- in favour of the Claimant in Claim No.4.” 14. The Arbitrator has found that there was no denial of the statements made by the claimant in paragraph 23.3 of the Statement of Claim. The Arbitrator has further observed that Claim No. 4 of the claims has been dealt with by the respondent in sub-paragraph (IV) of paragraph 34 of the counter statement wherein the respondent has merely denied the claim and stated that all works done in excess of the 10% of the tender work and all supplementary works executed by the claimant had already been accounted for in the final bill against which payment had been made to the contractor. Since the pleadings of the parties before the Arbitrator have weighed with the Arbitrator, the same deserve notice. 15. Paragraph 23.3 of the statement of claim reads thus (pages 27 to 28 of the Supplementary Paper Book filed by the Appellants): “23.3. As stated in the pregoing tender percentage quoted by the claimant was depended upon the quantity of works indicated in the tender schedule of items. The variation in the tender quantities was intended to be reasonable and even a limit of plus minus 10%. The Claimant is entitled to revision of rates in case of un- reasonably variation in the tender quantities. The variation in the tender quantities was intended to be reasonable and even a limit of plus minus 10%. The Claimant is entitled to revision of rates in case of un- reasonably variation in the tender quantities. The execution of the work was also pro-longed due to reasons beyond the control of the Claimant and/or due to reasons attributable to the Respondent. The tender schedule of rates was adopted from the departmental schedule which came into force from 1st February, 1988.In other words the tender schedule of rates were based upon ‘prices of labour material prevailing in late 1987 or early 1988.The work continued upto April, 1994.It cannot be denied that the departmental schedule of rates effective from 1st February, 1988 become totally unworkable during the execution of the work. The extra or excess work done by the Claimant is more 73% extra over the original contract value even as per the final bill prepared by the Respondent. The Claimant is entitled to revision of rate in respect of the quantities of works executed beyond 10% of the tender quantities. The claim on this account have been made under claim no.4. The detail particulars of the claim have been furnished vide Annexure-II of C-23.” 16. Paragraph 32 of the counter-statement which deals with paragraphs 23 and 23.7 of the statement of claim (which includes paragraph 23.3 extracted above) is extracted herein below (page 137 of the Supplementary Paper Book filed by the Appellants): “32. That in reply with regard to this statement made in paragraphs 23 to 23.7 of the statement of facts submitted on behalf of the Claimant it is denied that the claimant is entitled to get a sum of Rs.3,90,768/- and it is stated that payment has been made as per tender agreement and beyond tender agreement/clauses nothing can be admitted by the respondents.” 17. Paragraph 34(IV) of the counter statement wherein Claim No. 4 of the respondent has been dealt with, reads thus (pages 137 and 138 of the Supplementary Paper Book filed by the Appellants): “34. That in reply with regards to paragraph 25 of the statement of facts submitted on behalf of the claimant pertaining the claims it is denied and it is stated that in respect of the claims submitted by the agency, the respondents stated as follows :- ********************* ********************** *************************** IV. That in reply with regards to paragraph 25 of the statement of facts submitted on behalf of the claimant pertaining the claims it is denied and it is stated that in respect of the claims submitted by the agency, the respondents stated as follows :- ********************* ********************** *************************** IV. In reply to claim no.4 it is stated that the claim is not acceptable. All excess works beyond 10% of the tendered amount stated herein and all the supplementary works executed by the claimant contractor had already been of the additional excess works and supplementary beyond those which are stated above. The statement is fabricated, misleading, motivated and there is no veracity of the statement of the claimant contractor.” 18. A perusal of the aforesaid pleadings by the parties reveals that the assertion that additional work had been done by the respondent (claimant) has not been denied. In fact, the quantum of additional work done which the claimant claimed to be 73% over and above the original contract value, has also not been denied. We have noticed that in paragraph 23.3 the Claimant has referred to Annexure-II of C-23 wherein details of the claim have been furnished. We have gone through the said document at pages 102 to 110 of the Supplementary Paper Book filed by the Appellants and found that the quantity of the work executed and the work tendered have been given and calculations have been done to arrive at the payments claimed by the Respondent on the basis that the Respondent was entitled to payment at the Schedule of Rates applicable for the period 1991-92 for work executed beyond 10% of the tendered quantity. The content of Annexure-II of C-23 pertaining to the quantity of the work executed in excess of the tendered quantity has also not been denied. Therefore, the conclusion of the Arbitrator that “there was no dispute regarding quantity of works done by the claimant” does not appear to be baseless. 19. In view of the aforesaid facts, the only bone of contention that would have remained between the parties is the rate at which the claimant was entitled to be paid for the additional works that had been rendered by the claimant. 20. 19. In view of the aforesaid facts, the only bone of contention that would have remained between the parties is the rate at which the claimant was entitled to be paid for the additional works that had been rendered by the claimant. 20. In such regard, the Arbitrator has relied on clause 12 of the conditions of contract as also on the admission made on behalf of the respondent in the fifteenth arbitral sitting and held thus: “But as per Clause 12 of the Conditions of Contract, it is clearly mentioned that whenever any rate is arrived on analysis worked out from (a) the basic rates of materials and labour provided in the current schedule of rates or (b) the current market rates of materials and labour when basic rates of work are not available in the schedule. In cases when such rates are determined on analysis by the Engineer-in-Charge under (a) above, the stipulated percentage above or below schedule of rates as provided in the contract shall apply and in case of rates worked out on analysis under (b) above, payment shall be made at percentage. Moreover, the Advocate for the Claimant agreed in 15th sitting of this proceeding that “reasonable variation will be plus – minus 25%. So, in this case the Claimant is allowed the rates for extra work beyond 25% of the scheduled quantity to be paid as per Schedule of Rates for the year 1991-92 for those items whose quantities have exceeded. In view of above consideration, the difference of rates between the rates as per Schedule of rates for the year 1991-92 and the original rates as per original Tender Schedule for the items whose quantities have exceeded beyond 25% of the original quantities are taken into consideration for determining the claim amount on this Claim No.4.” 21. A perusal of the discussion quoted hereinabove makes it evident that the Arbitrator has reached the cut off value for applying the schedule of rates prevalent at the material point of time when the contract was executed to be 25% based on the admission/concession given on behalf of the appellants. A regards the application of the relevant the schedule of rates the Arbitrator has relied on Clause 12 of the Conditions of Contract. The same again is a plausible view. We don’t find anything that shocks our conscience in such decision. 22. A regards the application of the relevant the schedule of rates the Arbitrator has relied on Clause 12 of the Conditions of Contract. The same again is a plausible view. We don’t find anything that shocks our conscience in such decision. 22. As already noticed hereinabove, in paragraph 23.3 the Claimant has referred to Annexure-II of C-23 wherein details of the claim have been furnished. The said document appears at pages 102 to 110 of the Supplementary Paper Book filed by the Appellants. The same reveals that the quantity of the work executed and the work tendered have been given and calculations have been done to arrive at the payments claimed by the Respondent on the basis that the Respondent was entitled to payment at the Schedule of Rates applicable for the period 1991-92 for work executed beyond 10% of the tendered quantity. The Arbitrator has treated the threshold limit as 25% instead of 10%. What would follow thereafter would be simple mathematics (rather simple arithmetic) to arrive at the amount payable to the Respondent for the work done in excess of or beyond 25% of the tendered quantity upon applying the difference between the rates prescribed in the contract (at which the respondent was paid) and those which are mentioned in the schedule of rates for the year 1991-1992 (payment at which rate has been claimed by the respondent). The Arbitrator has reached a conclusion that a sum of Rs.33,52,590/- would be payable to the Respondent on account of the additional work done by the Respondent on the aforesaid basis. 23. Upon a meaningful reading of the Arbitrator’s discussion in the light of the pleadings of the parties and the other documents on record, the Arbitrator’s ultimate decision to partly allow Claim No. 4 as above cannot be faulted. 24. Our aforesaid conclusion finds support from the judgment of the Hon’ble Supreme Court in the case of Dyna Technologies Private Limited (supra). Paragraphs 34 and 35 of the said judgment are quoted herein below for facility of reference: “34. The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the courts from a fair reading of the award and documents referred to thereunder, if the need be. The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the courts from a fair reading of the award and documents referred to thereunder, if the need be. The aforesaid provision does not require an elaborate judgment to be passed by the Arbitrators having regard to the speedy resolution of dispute. 35. When we consider the requirement of a reasoned order, three characteristics of a reasoned order can be fathomed. They are: proper, intelligible and adequate. If the reasonings in the order are improper, they reveal a flaw in the decision- making process. If the challenge to an award is based on impropriety or perversity in the reasoning, then it can be challenged strictly on the grounds provided under Section 34 of the Arbitration Act. If the challenge to an award is based on the ground that the same is unintelligible, the same would be equivalent of providing no reasons at all. Coming to the last aspect concerning the challenge on adequacy of reasons, the Court while exercising jurisdiction under Section 34 has to adjudicate the validity of such an award based on the degree of particularity of reasoning required having regard to the nature of issues falling for consideration. The degree of particularity cannot be stated in a precise manner as the same would depend on the complexity of the issue. Even if the Court comes to a conclusion that there were gaps in the reasoning for the conclusions reached by the Tribunal, the Court needs to have regard to the documents submitted by the parties and the contentions raised before the Tribunal so that awards with inadequate reasons are not set aside in casual and cavalier manner. On the other hand, ordinarily unintelligible awards are to be set aside, subject to party autonomy to do away with the reasoned award. Therefore, the courts are required to be careful while distinguishing between inadequacy of reasons in an award and unintelligible awards.” 25. In the case at hand, it cannot be said that the Arbitrator’s decision lacks basis. A combined reading of the award together with the pleadings and the documents on record strongly persuades us to agree with the Arbitrator and dissuades us with equal vigour from interfering with the award merely on the ground that computation has not been disclosed. In the case at hand, it cannot be said that the Arbitrator’s decision lacks basis. A combined reading of the award together with the pleadings and the documents on record strongly persuades us to agree with the Arbitrator and dissuades us with equal vigour from interfering with the award merely on the ground that computation has not been disclosed. 26. As regards Claim No. 8, we find that the Arbitrator has given cogent reasons for arriving at the decision to award interest for the delayed payment of admitted dues in respect of R.A. bills. In fact, no submission countering the Arbitrator’s decision has been made, so as to persuade us to take a divergent view. The Arbitrator’s discussion as regards Claim No. 8 may be noticed: “This is a claim for interest and/or delinquent interest @ 18% per annum for delayed payment of admitted dues of RA Bills, final bill and security deposit. From details furnished by the Claimant in ANNEXURE-VII of C/23, it is seen that the 4th RA Bill dated 5th November, 1992 was paid in 4 installments and there was a time gap of 46 days in payment of 2nd installment and 61 days in payment of 3rd installment and 104 days delay in payment of 4th installment. Similarly the 5th RA bill dated 31st March, 1993 was paid in 7 installments and the 2nd installment was paid after 106 days from the date of bill and the 7th installment was paid after 277 days from the date of bill. The 7th RA bill and final bill dated 10th May, 1994 was also paid (in part) in 4 installments. The 2nd installment was paid after 36 days from the date of preparation of bill, the 3rd installment was paid after 63 days and the 4th installment was paid after 321 days from the date of the bill. The balance amounts of final bill and security deposit have not been paid till date and the Claimant has claimed interest in Claim No.8 in respect of the said amount upto 28th February, 1998. All these bills were prepared by the Respondent themselves and contained only admitted amounts. In the instant case, the bills were prepared by the Respondent themselves and accordingly, there should not have been any difficulty in making payment of the same. All these bills were prepared by the Respondent themselves and contained only admitted amounts. In the instant case, the bills were prepared by the Respondent themselves and accordingly, there should not have been any difficulty in making payment of the same. Further, Clause 8 of the conditions of the Contract stipulated that the bills shall be submitted by the Contractor each month on or before the date fixed by the Engineer-in-Charge for all works executed in previous months. The Clause 8 also stipulated that if the contractor does not submit the bill within the time fixed by the Engineer-in-Charge, he may prepare the bill. In the instant case the Engineer-in-Charge did not fix any date for submission of bill by the Claimant Contractor. Accordingly, the question of submitting any bill by the claimant contractor in terms of Clause 8 did not arise. The Respondent also never required the Claimant to submit any bill, but all bills were prepared by the Respondent themselves as per prevailing practice of the Department. Clause 8 also provided that the monthly on account bills, if possible, have to be paid before the expiry of 10 days from the presentation of the bill. Admittedly in the instant case there was abnormal delay in making payment of the admitted bill to the Claimant. Respondent in defense have referred to Clause 33 of the N.I.T. The Clause 33 of the N.I.T. is stated as under:- “The payment of R/A & final bill of any work be delayed for paucity of fund and letter of credit.” The Respondent’s reliance upon the said Clause is misplaced. Firstly, there is no pleading, far less, any evidence that the payment of R/A and final bill have been delayed for paucity of fund for letter of credit. Secondly, Clause 33 do not bar payment of any interest or compensation for such delay in payment of R/A and Final bill. There is no stipulation in the contract prohibiting payment of interest. The Claimant had relied upon a decision reported in AIR 1992 SC 732 (Secretary, Irrigation Department, Government of Orissa-Versus-G.C.Roy) in which the Hon’ble Supreme Court held that a person deprived of use of money to which he is legitimately entitled had a right to be compensated. It may be called interest, compensation, or damages. The Claimant had relied upon a decision reported in AIR 1992 SC 732 (Secretary, Irrigation Department, Government of Orissa-Versus-G.C.Roy) in which the Hon’ble Supreme Court held that a person deprived of use of money to which he is legitimately entitled had a right to be compensated. It may be called interest, compensation, or damages. In the instant case, the dues of the Claimant under the RA bills and final bill are legitimate dues and payable to the Claimant in terms of the Contract. The Claimant is therefore entitled to relief for deprivation of his legitimate dues for a long time by the Respondent. The Claimant has claimed interest @ 18% per annum for the period of deprivation. Further the Claimant has considered a sum of Rs.3,90,768/- as a balance amount payable to the Claimant under the 7th R/A and Final bill. But the actual amount payable to the Claimant as awarded in Claim No.1 is Rs.1,16,334/- and the Claimant is entitled to the interest on that amount only. The rate of interest of 18% per annum as claimed by the Claimant is however reduced to 12% per annum considering that the period of interest claimed was during the period 1992-1998 when the rate of interest were much higher compared to the present rate of interest. Further, the Claimant have computed interest from the date of the bill. The Claimant will be entitled to interest after allowing a time of 30 days to the Respondent for making payment of RA bills and 90 days for making payment of the final bill and Security Deposit. Accordingly, I make an award of Rs.2,28,587/- in favour of the Claimant against the Claim No.8.” 27. It is evident that the Arbitrator has proceeded on an admitted case of delay in payment of the bills. The Arbitrator has observed that “Admittedly in the instant case there was abnormal delay in making payment of the admitted bill to the Claimant”. The Arbitrator found that there was neither any pleading nor evidence in support of the contention that the payment of R/A and final bill had been delayed for paucity of funds for letter of credit. The Arbitrator has adverted to Clause 33 of the NIT and concluded that the same did not bar payment of any interest or compensation for delay in payment of R/A and Final bills. The Arbitrator has adverted to Clause 33 of the NIT and concluded that the same did not bar payment of any interest or compensation for delay in payment of R/A and Final bills. The Arbitrator has also found that there was no stipulation in the contract that prohibited payment of interest. Thus grant of interest was not an excepted matter. Nothing has been shown to us to demonstrate that the aforesaid findings of the Arbitrator are in any manner perverse or even factually wrong. The Arbitrator has thus taken a plausible view. It is trite law that unless the Arbitrator is found to have taken an impossible view, i.e. a view that no reasonable person would have taken in the facts of the case, the award should not be interfered with. We do not find such a case to be made out here. 28. This takes us to the next point urged by Mr. Banerjee, Learned Advocate appearing for the appellant, that since the Arbitrator had allowed the respondent’s claim for interest on delayed payment of admitted RA bills which featured as Claim No. 8, the Arbitrator should not have allowed Claim No. 9 which pertained to interest on amounts due in respect of Claim Nos. 1 to 7. It has been submitted on behalf of the appellants that the Arbitrator has committed a patent error by allowing Claim No. 9 inasmuch as the same amounts to double payment of interest. 29. Indeed the Arbitrator had committed a mistake by allowing interest on the amounts awarded under claims 1 to 8 while the claimant had claimed interest only on the amounts claimed under Claim Nos. 1 to 7. To wit, claim 8 was for “Compensation and/or delinquent interest @ 18% P.A. for delayed payment of admitted dues of R/A bills, Purported final bill and security deposit money held by the department” and Claim No. 9 was for “Interest @18% P.A. on the due amount in respect of Claim Nos.1 to 7 from due date of payment till realization”. The arbitrator had erroneously granted interest even on the amount awarded as interest under Claim No. 8 by treating Claim No. 9 to be “a claim of interest @18% per annum on the due amount in respect of Claim No.1 to 8 from the due date of payment till realization” which it was not. The arbitrator had erroneously granted interest even on the amount awarded as interest under Claim No. 8 by treating Claim No. 9 to be “a claim of interest @18% per annum on the due amount in respect of Claim No.1 to 8 from the due date of payment till realization” which it was not. Considering Claim No. 8 for the purpose of awarding interest was indeed an error since Claim No. 8 was itself a claim for interest, albeit on dues under heads different than those mentioned under Claim No. 9. Such mistake has been noticed by the learned Court while dealing with the appellants’ application under Section 34 of the said Act of 1996 and the amount awarded under Claim No. 8 has been deducted from the aggregate of the amounts taken as principal sum for awarding interest under Claim No. 9 and the interest awarded has been consequently reduced. The relevant portion of the order passed by the learned Court may now be noticed in such regard: “…So far as this case is concerned, it appears that the arbitrator has passed the award of interest to the extent of a sum of Rs.19,40,578/- over a sum of Rs.37,97,511/- taking into account the interest over a sum of Rs.2,28,587/- which should not be because a sum of Rs.2,28,587/- was allowed in favour of the claimant i.e. the O.P. towards the interest of delayed payment of admitted dues of RA Bills, final bill and security deposit. To my understanding, there cannot be any interest over the interest to the extent of a sum of Rs.2,28,587/- in any manner whatsoever. As such, to my understanding, as there is a mistake or error in the award against the claim no.9 which included the interest to the extent of a sum of Rs.1,15,245/- over a sum of Rs.2,28,587/- which should not be. The award of interest granted by the Arbitrator and the inclusion of the said interest to the extent of a sum of Rs.1,15,245/- over a sum of Rs.2,28,587/- to the award of an interest of a sum of Rs.19,14,578/- is apparently erroneous on the face of the award. The award of interest granted by the Arbitrator and the inclusion of the said interest to the extent of a sum of Rs.1,15,245/- over a sum of Rs.2,28,587/- to the award of an interest of a sum of Rs.19,14,578/- is apparently erroneous on the face of the award. ********************** ************************* ************************** “…When it is apparent from the claim no.9 of the said award that there is an erroneous finding on the part of the Arbitrator in respect of passing an Award of interest against the claim no.9 to the extent of a sum of Rs.19,14,578/- over a sum of Rs.37,97,511/- and it is also evident from the said claim no.9 that the said Arbitrator has included the interest to the extent of a sum of Rs.1,15,245/- over an award of interest of Rs.2,28,587/- as was awarded in favour of the claimant against the claim no.8 to the award of interest to the extent of Rs.19,14,578/- which should not be. The O.P. i.e. the claimant is entitled to an award of interest at the rate of 10 per cent per annum over a sum of Rs.35,68,924/- i.e. to the extent of a sum of Rs.17,99,333/-. The O.P. i.e. the claimant is entitled to an award of a sum of Rs.55,96,844/- .” 30. As regards the submission of the appellants that double interest has been paid we do not find any substance in the same. As noticed earlier since Claim No. 8 was for “Compensation and/or delinquent interest @ 18% P.A. for delayed payment of admitted dues of R/A bills, Purported final bill and security deposit money held by the department and Claim No. 9 was for “Interest @18% P.A. on the due amount in respect of Claim Nos.1 to 7 from due date of payment till realization”, therefore the two don’t overlap. The two claims for interest were not in respect of the same dues. While the earlier claim was for interest on admitted dues paid belatedly, the latter pertained to interest on the sums claimed in the statement of claims under the various heads. The two claims for interest were not in respect of the same dues. While the earlier claim was for interest on admitted dues paid belatedly, the latter pertained to interest on the sums claimed in the statement of claims under the various heads. The Arbitrator had granted interest on the aggregate of all the sums awarded by the Arbitrator thus leaving scope for interference to the extent of inclusion of the sum awarded under Claim No. 8 for the purpose of calculation of interest under Claim No. 9 but such scope has been rightly exhausted by the learned Court while dealing the appellants’ challenge to the arbitral award under Section 34 of the said Act of 1996. There is thus no further scope for us to interfere with the arbitral award. 31. As regards the judgment of the Hon’ble Supreme Court in the case of Batliboi Environmental Engineers Limited (supra), we find that the Hon’ble Supreme Court had interfered with and set aside the arbitral award since the Hon’ble Court had found that the award was deficient being completely silent as to the method and the manner in which the arbitral tribunal had computed the figures. In this connection, paragraph 8 of the said judgment may be noticed: “8. The second patent error relates to the computation and award of 10% of the contract value towards loss of overheads and another 10% towards loss of profits/profitability. The two amounts have been quantified at Rs. 78,68,833 each. Thus, Rs. 1,57,37,666 has been awarded and held as payable by HPCL to BEEL. The award is deficient being completely silent as to the method and the manner in which the Arbitral Tribunal has computed the figures. Therefore, it leaves us and the parties to wonder the basis for awarding and computing the amounts. We are not commenting or examining the merits of the computation, but complete absence of any justification and reason to allow the claim and quantification of the sum awarded. We would subsequently examine the chart furnished by BEEL in support of the said computation, albeit at this stage we would like to highlight the apparent contradict in the award, which is the third ground to uphold the decision of the Division Bench of the High Court.” 32. We would subsequently examine the chart furnished by BEEL in support of the said computation, albeit at this stage we would like to highlight the apparent contradict in the award, which is the third ground to uphold the decision of the Division Bench of the High Court.” 32. The aforesaid extract reveals that the award that was being examined by the Hon’ble Supreme Court was one where there was complete absence of any justification and reason to allow the claim and quantification of the sum awarded. In the case at hand, neither the aspect that additional work had been done has been disputed nor the quantum of work done has been disputed. The Arbitrator has applied the schedule of rates prevalent at the time when the contract was executed and has, for the purpose of arriving at the threshold limit beyond which such schedule of rates could be made applicable, relied on the admission made on behalf of the appellants to the effect that there could be a reasonable variation of 25%. The conclusion to award the claim is based on reasons stemming from the undisputed facts and the reasons neither defy sense nor are outlandish. It therefore cannot be said that the award of the said sum is wholly without basis or that there was no evidence in support thereof. 33. Paragraphs 44 to 47 of the aforesaid judgment in the case of Batliboi Environmental Engineers Limited (supra), also deserve notice in the present context: “44. The decision of this Court in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] elaborately examined the question of public policy in the context of Section 34 of the A&C Act, specifically under the head “fundamental policy of Indian law”. It was firstly held that the principle of judicial approach demands a decision to be fair, reasonable and objective. On the obverse side, anything arbitrary and whimsical would not satisfy the said requirement. 45. Referring to the third principle in Western Geco [ONGC Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12], it was explained that the decision would be irrational and perverse if (a) it is based on no evidence; (b) if the Arbitral Tribunal takes into account something irrelevant to the decision which it arrives at; or (c) ignores vital evidence in arriving at its decision. The standards prescribed in State of Haryana v. Gopi Nath & Sons [State of Haryana v. Gopi Nath & Sons, 1992 Supp (2) SCC 312] (for short Gopi Nath & Sons) and Kuldeep Singh v. Delhi Police [Kuldeep Singh v. Delhi Police, (1999) 2 SCC 10 : 1999 SCC (L&S) 429] should be applied and relied upon, as good working tests of perversity. In Gopi Nath & Sons [State of Haryana v. Gopi Nath & Sons, 1992 Supp (2) SCC 312] it has been held that apart from the cases where a finding of fact is arrived at by ignoring or excluding relevant materials or taking into consideration irrelevant material, the finding is perverse and infirm in law when it outrageously defies logic as to suffer from vice of irrationality. Kuldeep Singh [Kuldeep Singh v. Delhi Police, (1999) 2 SCC 10 : 1999 SCC (L&S) 429] clarifies that a finding is perverse when it is based on no evidence or evidence which is thoroughly unreliable and no reasonable person would act upon it. If there is some evidence which can be acted and can be relied upon, however compendious it may be, the conclusion should not be treated as perverse. This Court in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] emphasised that the public policy test to an arbitral award does not give jurisdiction to the court to act as a court of appeal and consequently errors of fact cannot be corrected. Arbitral Tribunal is the ultimate master of quality and quantity of evidence. An award based on little evidence or no evidence, which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Every arbitrator need not necessarily be a person trained in law as a Judge. At times, decisions are taken acting on equity and such decisions can be just and fair should not be overturned under Section 34 of the A&C Act on the ground that the arbitrator's approach was arbitrary or capricious. Referring to the third ground of public policy, justice or morality, it is observed that these are two different concepts. At times, decisions are taken acting on equity and such decisions can be just and fair should not be overturned under Section 34 of the A&C Act on the ground that the arbitrator's approach was arbitrary or capricious. Referring to the third ground of public policy, justice or morality, it is observed that these are two different concepts. An award is against justice when it shocks the conscience of the court, as in an example where the claimant has restricted his claim but the Arbitral Tribunal has awarded a higher amount without any reasonable ground of justification. Morality would necessarily cover agreements that are illegal and also those which cannot be enforced given the prevailing mores of the day. Here again interference would be only if something shocks the court's conscience. Further, “patent illegality” refers to three sub-heads: (a) contravention of substantive law of India, which must be restricted and limited such that the illegality must go to the root of the matter and should not be of a trivial nature. Reference in this regard was made to clause (a) to Section 28(1) of the A&C Act, which states that the dispute submitted to arbitration under Part I shall be in accordance with the substantive law for the time being in force. The second sub-head would be when the arbitrator gives no reasons in the award in contravention with Section 31(3) of the A&C Act. The third sub-head deals with contravention of Section 28(3) of the A&C Act which states that the Arbitral Tribunal shall decide all cases in accordance with the terms of the contract and shall take into account the usage of the trade applicable to the transaction. This last sub-head should be understood with a caveat that the arbitrator has the right to construe and interpret the terms of the contract in a reasonable manner. Such interpretation should not be a ground to set aside the award, as the construction of the terms of the contract is finally for the arbitrator to decide. The award can be only set aside under this sub-head if the arbitrator construes the award in a way that no fair-minded or reasonable person would do. 46. Such interpretation should not be a ground to set aside the award, as the construction of the terms of the contract is finally for the arbitrator to decide. The award can be only set aside under this sub-head if the arbitrator construes the award in a way that no fair-minded or reasonable person would do. 46. As observed previously, we need not examine the amendment made to the A&C Act vide Act 3 of 2016 with retrospective effect from 23-10-2015 and the judgments that deal with the amended Section 34 of the A&C Act. Pertinently, the amendment to Section 34 of the A&C Act was effected, pursuant to the observations of the Supplementary Report to Report No. 246 on Amendments to Arbitration and Conciliation Act, 1996 by the Law Commission of India, titled “Public Policy — Developments post-Report No. 246” published in February 2015. This Supplementary Report observed that the power to review an arbitral award on merits under Section 34 of the A&C Act, as elucidated in Western Geco [ONGC Ltd. v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12], subsequently followed in Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , is contrary to the object of the A&C Act and international practice on minimisation of judicial intervention. A reference can also be conveniently made to MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] (for short MMTC) and Ssangyong Engg. & Construction Co. Ltd. v. NHAI [Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC (Civ) 213] (for short Ssangyong Engg), which examine the scope of intervention of courts under Section 34 of the A&C Act as amended by Act 3 of 2016. MMTC [MMTC Ltd. v. Vedanta Ltd., (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] and Ssangyong Engg [Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC (Civ) 213] , and other judgments which deal with the amended Section 34 of the A&C Act that are not applicable in the present case. 47. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 : (2020) 2 SCC (Civ) 213] , and other judgments which deal with the amended Section 34 of the A&C Act that are not applicable in the present case. 47. We have extensively analysed the award, its patent flaws and illegalities which emanate from it, like the manifest lack of reasoning in arriving at the conclusions and the calculation of amounts awarded, which, in fact, amount to double or part-double payments, besides being contradictory, etc. In view of our aforesaid reasoning, the award has been rightly held [Hindustan Petroleum Corpn. Ltd. v. Batliboi Environmental Engineers Ltd., 2007 SCC OnLine Bom 1016] to be unsustainable and set aside by the Division Bench of the High Court exercising power and jurisdiction under Section 37 read with Section 34 of the A&C Act.” 34. The award that has fallen for consideration before us, does not in our considered opinion, fall foul of any of the tests prescribed in the said judgment of the Hon’ble Supreme Court. To wit, the award is not one which is either based on no evidence or based on something irrelevant or one that ignores vital evidence. In fact the said judgment of the Hon’ble Supreme Court clearly holds that if there is some evidence which can be acted upon and can be relied upon, however compendious it may be, the conclusion should not be treated as perverse and further that an award based on little evidence or no evidence, which does not measure up in quality to a trained legal mind would not be held to be invalid on this score. Tested on such grounds too, the award does not appear to be unsustainable. 35. It is now very well settled that an appeal under Section 37 of the said Act of 1996 is circumscribed by the grounds available under Section 34 of the said Act of 1996. Upon the arbitral award being modified by the learned Court by passing the impugned order dated April 29, 2009 in exercise of its jurisdiction under Section 34 of the said Act of 1996 we do not find that there is any further scope of setting aside the award on any of the grounds mentioned under Section 34 of the said Act of 1996 as none of them stands satisfied. 36. 36. For all the reasons aforesaid, we agree with the ultimate conclusion reached by the learned Court in its order dated April 29, 2009 and hold the present appeal to be meritless. FMA 2795 of 2013, therefore, stands dismissed. No costs 37. Urgent photostat certified copies of this order, if applied for, be supplied to the parties on compliance of necessary formalities.