JUDGMENT : Jyotsna Rewal Dua, J. Arbitral award passed in favour of respondent No.1 on 15.10.2015 was upheld by the learned District Judge, Kangra at Dharamshala on 08.12.2023. Objections preferred against the award under Section of 34 of the Arbitration and Conciliation Act, 1996 (in short ‘the Act’) were dismissed. Feeling aggrieved, the appellants have now taken recourse to Section 37 of the Act and have assailed the order passed by the learned District Judge Kangra at Dharamshala dated08.12.2023 and Arbitral Award dated 15.10.2015, whereunder, claim preferred by respondent No.1 was allowed to the extent indicated therein. 2. The case 2(i) A Contract agreement was executed between the appellants and respondent No.1 for ‘Provision of OTM accommodation for Postal Unit at Palampur, District Kangra’ for an amount of Rs.3,94,96,923.36/-. Stipulated period of completion of work was 18 months with given date of completion as 16.07.2015. The work extended beyond the period of 18 months. Clause No.48 of the Contract Agreement provided mechanism of reimbursement/refund on variation in prices. Respondent No.1 claimed escalation amounting to Rs. 2,25,498.00/- in Running Account Receipt (RAR) dated 03.03.2014. Officials of the appellants submitted it to the Audit Branch. The concerned authority disallowed payment of escalation on the ground that stipulated period of completion of the contract was 18 months and as per the Government policy, provision for escalation is not to be included in the tenders having completion period of 24 months or less. The escalation was denied to respondent No.1. The dispute, ultimately reached the learned Arbitrator. Respondent No.1 submitted that both the parties were bound by the contract provisions and not by the departmental instructions; That it was obligatory on part of the appellants to make payment of escalation as per the provisions of the contract; That he had quoted rates considering contract provisions including provisions for escalation. 2(ii) Respondent No.1 also submitted that he had continued to claim escalation payment in subsequent RARs also. His legitimate payment of escalation was denied in the subsequent RARs as well. The Physical Date of Completion of the project was 36 months and hence, inclusion of escalation clause was in order. Despite respondent No.1’s representation, escalation was not paid to him. The claim filed by respondent No.1 gave details of different RARs for different amounts claimed by him, which were not paid to him on due dates on account of alleged departmental instructions. Despite respondent No.1’s representation, escalation was not paid to him. The claim filed by respondent No.1 gave details of different RARs for different amounts claimed by him, which were not paid to him on due dates on account of alleged departmental instructions. 2(iii) From the award, it appears that during hearing of the claim before the learned Arbitrator, appellants agreed to the contention of respondent No.1 that it was incumbent upon both the parties to abide by the contractual obligations and not the departmental instructions; That the departmental instructions would not override the contractual provisions agreed to between the parties. The appellants also furnished calculations in terms of Clause 48 for the escalation admissible to respondent No.1. 2(iv) Learned Arbitrator held that the contract had stipulated completion period of 18 months from the date of commencement. As per the contract, variations in price was to be reimbursed/refunded on quarterly bases, based on formula commencing from the date of receipt of quoted tenders and the claim preferred on account of work done by respondent No.1 at an interval of not less than 30 days. Condition No.64, pertaining to advances on account, was also considered, which stipulated that RARs payment so made shall be regarded as payments by way of advance for work done and material delivered at site. The advances were to be adjusted against the final bills submitted by respondent No.1 on completion of work. 2(v) Learned Arbitrator further held that contract is a legal document within the ambit of Indian Contract Act. It was obligatory on both the parties to follow it holistically without any deviation. Disallowance and delay in payment by the appellants, which were admittedly due to respondent No.1, citing their internal procedure was not justified and contrary to contract. The internal procedure of the appellants did not form part of the contract agreement. Appellants’ denial of payment, due to respondent No.1, was in breach of the contract. Interpretation/ clarification/ departmental procedure cannot override express terms and conditions of the contract agreement. Accordingly, learned Arbitrator awarded a sum of Rs. 4,299,00.85/- including simple interest @ 12 % per annum up to 08.09.2015. Learned Arbitrator also awarded simple interest @12% per annum on escalation amount of Rs. 4,04,531.32/- w.e.f. 09.09.2015 till the date of actual payment. Interpretation/ clarification/ departmental procedure cannot override express terms and conditions of the contract agreement. Accordingly, learned Arbitrator awarded a sum of Rs. 4,299,00.85/- including simple interest @ 12 % per annum up to 08.09.2015. Learned Arbitrator also awarded simple interest @12% per annum on escalation amount of Rs. 4,04,531.32/- w.e.f. 09.09.2015 till the date of actual payment. 2(vi) In similar manner, interest on delayed payment for 4th and 5th RARs was also allowed under Claim No.2 in the sum of Rs.78,543.95/-, computed as simple interest @12% per annum for the delay for a period of 54 days and 24 days respectively. As Claim No.3, learned Arbitrator also held that in case the payment of awarded amount was not made within two months, interest @12% per annum on Claim No.2 will be payable to respondent No.1. For Claim No.4, costs of Arbitration were also awarded at Rs.70,000/- in favour of respondent No.1 payable by the appellants. 2(vii) Counter claim preferred by the appellants was not allowed. Objections preferred the appellants under Section 34 of the Act against the aforesaid award were also dismissed by the learned District Judge. 3. I have heard learned counsel on both sides and considered the case file. 4. Consideration 4(i)(a). It is by now well-settled that the scope of Appellate Court exercising jurisdiction under Section 37 of the Act to review the findings in an award, is narrow/limited, if the award has been upheld or substantially upheld under Section 34. [Ref. Larsen Air Conditioning and Refrigeration Company vs. Union of India, Civil Appeal No.3798 of 2023, decided on 11.08.2023 ] In Konkan Railway Corporation Ltd. Vs. Chenab Bridge Project Undertaking, 2023(9) SCC 85 , it was held thatjurisdiction of the Court under Section 37 of the Act is akin to that under Section 34 of the Act. The Courts ought not to interfere with arbitral award in a casual and cavalier manner. Mere possibility of an alternative view on facts or interpretation of contract does not entitle Courts to reverse findings of the Arbitral Tribunal. Relevant paragraphs from the decision are as follows:- “19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction.[UHL Power Company Ltd. v. State of Himachal Pradesh (2022) 2 SCC (Civ) 401, para 15. Relevant paragraphs from the decision are as follows:- “19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction.[UHL Power Company Ltd. v. State of Himachal Pradesh (2022) 2 SCC (Civ) 401, para 15. See also: Dyna Technologies Pvt Ltd v. Crompton Greaves Limited (2019) 20 SCC 1 , para 24, 25.] It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal.[ibid; Ssangyong Engineering. & Construction Company Ltd. v. National Highways Authority of India (NHAI) (2019) 15 SCC 131 ; Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd., (2019) 7 SCC 236 , para 11.1.] In Dyna Technologies Private Limited v. Crompton Greaves Limited, (2019) 20 SCC 1 , this Court held: “24. There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation whichmay sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated. 25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. 25. Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.” XX XX XX 25. The principle of interpretation of contracts adopted by the Division Bench of the High Court that when two constructions are possible, then courts must prefer the one which gives effect and voice to all clauses, does not have absolute application. The said interpretation is subject to the jurisdiction which a court is called upon to exercise. While exercising jurisdiction under Section 37 of the Act, the Court is concerned about the jurisdiction that the Section 34 Court exercised while considering the challenge to the Arbitral Award. The jurisdiction under Section 34 of the Act is exercised only to see if the Arbitral Tribunal’s view is perverse or manifestly arbitrary. Accordingly, the question of reinterpreting the contract on an alternative view does not arise. If this is the principle applicable to exercise of jurisdiction under Section 34 of the Act, a Division Bench exercising jurisdiction under Section 37 of the Act cannot reverse an Award, much less the decision of a Single Judge, on the ground that they have not given effect and voice to all clauses of the contract. This is where the Division Bench of the High Court committed an error, in re-interpreting a contractual clause while exercising jurisdiction under Section 37 of the Act. In any event, the decision in Radha Sundar Dutta (supra), relied on by the High Court was decided in 1959, and it pertains to proceedings arising under the Village Chaukidari Act, 1870 and Bengal Patni Taluks Regulation of 1819. Reliance on this judgment particularly for interfering with the concurrent interpretations of the contractual clause by the Arbitral Tribunal and Single Judge under Section 34 of the Act is not justified.” In Bombay Slum Redevelopment Corporation Pvt. Ltd. Vs. Samir Barain Bhojwani, (2024) 7 SCC 218 , the Hon’ble Apex Court emphasized that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Act. Samir Barain Bhojwani, (2024) 7 SCC 218 , the Hon’ble Apex Court emphasized that supervisory role of Courts is very restricted in dealing with appeals under Section 37 of the Act. Scope of interference in a petition under Section 34 of the Act is very narrow. Jurisdiction under Section 37 of the Act is narrower. By their own volition, the parties choose to go before the Arbitral Tribunal instead of availing remedy before the traditional Civil Courts. Therefore, Courts must be very conservative while dealing with arbitral awards and confine themselves to the grounds strictly available under Section 34 of the Act. 4(i)(b). In Reliance Infrastructure Ltd. vs. State of Goa, (2024) 1 SCC 479 , Hon’ble Apex Court held that ‘patent illegality’ in the award calls for interference but a mere illegality is not patent illegality. It ought to be apparent on the face of the award and not the one which is culled out by way of a long drawn analysis of pleadings and evidence. Relevant paragraphs of the decision relevant to the context are under:- “57. As noticed, arbitral award is not an ordinary adjudicatory order so as to be lightly interfered with by the Courts under Sections 34 or 37 of the Act of 1996 as if dealing with an appeal or revision against a decision of any subordinate Court. The expression “patent illegality” has been exposited by this Court in the cases referred hereinbefore. The significant aspect to be reiterated is that it is not a mere illegality which would call for interference, but it has to be “a patent illegality”, which obviously signifies that it ought to be apparent on the face of the award and not the one which is culled out by way of a long-drawn analysis of the pladings and evidence. 58. Of course, when the terms and conditions of the agreement governing the parties are completely ignored, the matter would be different and an award carrying such a shortcoming shall be directly hit by Section 28(3) of the Act, which enjoins upon an Arbitral Tribunal to decide in accordance with the terms of contract while taking into account the usage of trade applicable to the transaction. As said by this Court in Associate Builders vs. DDA, (2015) 3 SCC 49 , if an Arbitrator construes the term of contract in a reasonable manner, the award cannot be set aside with reference to the deduction drawn from construction. The possibility of interference would arise only if the construction of the Arbitrator is such which could not be made by any fair-minded and reasonable person. 95. The narrow scope of “patent illegality” cannot be breached by mere use of different expressions which nevertheless refer only to “error” and not to “patent illegality”. We are impelled to reiterate what has been stated and underscored by this Court in Delhi Airport Metro Express (P) Ltd. Vs. DMRC, (2022) 1 SCC 131 that restraint is required to be shown while examining the validity of arbitral award by the Courts, else interference with the award after reassessing the factual aspects would be defeating the object of the Act of 1996. This is apart from the fact that such an approach would render several judicial pronouncements of this Court redundant if the arbitral awards are set aside by categorizing them as “perverse” or “patently illegal” without appreciating the contours of these expressions.” In Larsen Air Conditioning and Refrigeration Company’s case, Hon’ble Apex Court held that Section 34 of the Act, permits the Court to interfere with an award, sans the grounds of patent illegality, i.e., that illegality must go to the root of the matter and cannot be of a trivial nature. Relevant paragraphs from the decision reads as under:- “15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality, i.e., that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the tribunal “must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground” [ref: Associate Builders (supra)]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34. It is important to notice that the old Act contained a provision[ “15. Power of court to modify award.—The court may by order modify or correct an award— (a) where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred; or (b) where the award is imperfect in form, or contains any obvious error which can be amended without affecting such decision; or (c) where the award contains a clerical mistake or an error arising from an accidental slip or omission.”] which enabled the court to modify an award. However, that power has been consciously omitted by Parliament, while enacting the Act of 1996. This means that the Parliamentary intent was to exclude power to modify an award, in any manner, to the court. This position has been iterated decisively by this Court in Project Director, National Highways No. 45E and 220 National HighwaysAuthority of India v M. Hakeem, (2021) 5 SCR 368 : “42. It can therefore be said that this question has now been settled finally by at least 3 decisions [McDermott International Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 ], [Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106 ], [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657 ] of this Court. v. Burn Standard Co. Ltd., (2006) 11 SCC 181 ], [Kinnari Mullick v. Ghanshyam Das Damani, (2018) 11 SCC 328 : (2018) 5 SCC (Civ) 106 ], [Dakshin Haryana Bijli Vitran Nigam Ltd. v. Navigant Technologies (P) Ltd., (2021) 7 SCC 657 ] of this Court. Even otherwise, to state that the judicial trend appears to favour an interpretation that would read into Section 34 a power to modify, revise or vary the award would be to ignore the previous law contained in the 1940 Act; as also to ignore the fact that the 1996 Act was enacted based on the Uncitral Model Law on International Commercial Arbitration, 1985 which, as has been pointed out in Redfern and Hunter on International Arbitration, makes it clear that, given the limited judicial interference on extremely limited grounds not dealing with the merits of an award, the “limited remedy” under Section 34 is coterminous with the “limited right”, namely, either to set aside an award or remand the matter under the circumstances mentioned in Section 34 of the Arbitration Act, 1996.” In S.V. Samudram vs. State of Karnataka, (2024) 3 SCC 623 , the Hon’ble Apex Court held that jurisdiction of Court under Section 34 is fairly narrow and moreover, when it comes to jurisdiction under Section 37 it is all the more circumscribed. The relevant paragraphs from the decision reads as under:- “46. It has been observed by this Court in MMTC Ltd. v.Vedanta Ltd., (2019) 4 SCC 163 “14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the courtcannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.” (Emphasis Supplied) 47. This view has been referred to with approval by a bench of three learned Judges in UHL Power Company Ltd v. State of Himachal Pradesh, (2022) 4 SCC 116 . This view has been referred to with approval by a bench of three learned Judges in UHL Power Company Ltd v. State of Himachal Pradesh, (2022) 4 SCC 116 . In respect of Section 37, this court observed:- “16. As it is, the jurisdiction conferred on courts under Section 34 of the Arbitration Act is fairly narrow, when it comes to the scope of an appeal under Section 37 of the Arbitration Act, the jurisdiction of an appellate court in examining an order, setting aside or refusing to set aside an award, is all the more circumscribed.” xx xx xx 49. We may also notice that the circumscribed nature of the exercise of power under Sections 34 and 37 i.e., interference with an arbitral award, is clearly demonstrated by legislative intent. The Arbitration Act of 1940 had a provision (Section 15) which allowed for a court to interfere in awards, however, under the current legislation, that provision has been omitted[ Larsen Air Conditioning and Refrigeration Company v. Union of India and Others 2023 SCC OnLine 982 (2-Judge Bench) ]. 50. The learned Single Judge, similar to the learned Civil Judge under Section 34, appears to have not concerned themselves with the contours of Section 37 of the A&C Act. The impugned judgment[ S.V. Samudram v. State of Karnataka, 2017 SCC OnLine Kar 6559 ] reads like a judgment rendered by an appellate court, for whom re-examination of merits is open to be taken as the course of action.” 4(ii) In the instant case, it has not been disputed by learned Deputy Solicitor General of India that contract agreement executed between the parties provided for escalation. It is also not in dispute that respondent No.1 was denied the benefits of escalation only on the ground of some departmental instructions on the subject. The view taken by the learned Arbitrator that departmental instructions will not override the contractual provisions is sound and legal view requiring no interference. Since the appellants had denied due payment to respondent No.1 and kept his payments on hold, the award of interest by learned Arbitrator for the delay in payment is also justified. The view taken by the learned Arbitrator that departmental instructions will not override the contractual provisions is sound and legal view requiring no interference. Since the appellants had denied due payment to respondent No.1 and kept his payments on hold, the award of interest by learned Arbitrator for the delay in payment is also justified. In this regard, reference can also be made to Section 31(7) of the Act, which reads as under:- “31(7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. (b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of award to the date of payment. Explanation.-The expression "current rate of interest" shall have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of1978).]” It is not in dispute that the agreement executed between the parties was silent on award of interest. Award of interest in the given facts is justified. While awarding costs of Rs.70,000/-, learned Arbitrator had exercised the discretion in a judicious manner. The appellants had themselves conceded before the learned Arbitrator that contract agreement executed by them with respondent No.1 provided for an escalation clause, which entitled respondent No.1 to claim variation in prices. Despite this, the appellants did not adhere to the contractual provisions and took shelter behind departmental instructions for denying the payments legitimately due to respondent No.1. It has not been demonstrated by the appellant as how the judgment passed by the learned Court below is in contravention to Section 28(1)(a) of the Act. The judgment is in conformity with substantive law in force. It has not been demonstrated by the appellant as how the judgment passed by the learned Court below is in contravention to Section 28(1)(a) of the Act. The judgment is in conformity with substantive law in force. “An arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law that too upon reappraisal of the evidence adduced before the arbitral trial. Even an award which may not be reasonable or is non-speaking to some extent cannot ordinarily be interfered with by the courts. It is also well settled that even if two views are possible there is no scope for the court to reappraise the evidence and to take the different view other than that has been taken by the arbitrator. The view taken by the arbitrator is normally acceptable and ought to be allowed to prevail”. (Reference: Punjab State Civil Supplies Corporation Limited and another Versus Sanman Rice Mills and others, SLP(C) No.27699 of 2018, decided on 27.09.2024 ) The award does not suffer from any patent illegality. The view taken by the learned Arbitrator is reasoned, justified and plausible. Learned counsel for the appellants has not been able to dispute and disprove the findings of the learned Arbitrator, as affirmed by the learned District Judge. Learned District Judge has examined the award in accordance with law vis-à-vis the contentions urged by the appellants and did not find any ground in exercise of jurisdiction under Section 34 of the Act for interfering with it. Having considered the impugned judgment, the award andthe contentions now urged, I do not find it a case to interfere in exercise of limited jurisdiction under Section 37 of the Act. 5. In view of above discussion, no case is made out for interference with the impugned judgment dated 08.12.2023, whereby application moved by the appellant under Section 34 of the Act was dismissed and the award passed by the learned Arbitrator was affirmed. Accordingly, the present appeal under Section 37 of the Act is dismissed. Pending miscellaneous application(s), if any, also stand disposed of.