N.R. Construction Private Limited having registered office at 16/C City Centre Sector IV Bokaro v. 1. The State of Jharkhand through the Secretary, Road Construction Department
Case Details
IN THE HIGH COURT OF JHARKHAND AT RANCHI Arbitration Appeal No. 13 of 2009 N.R. Construction Private Limited having registered office at 16/C City Centre Sector IV Bokaro Steel City P.S., P.O. & Distt. Bokaro through its Managing Director Sri D.S. Rai S/o- Late K.D. Rai … … Appellant Versus 1. The State of Jharkhand through the Secretary, Road Construction Department (N.H. wing) At Nepal House, P.O. & P.S. Doranda, Distt. Ranchi 2. The Engineer in Chief, Road Construction Department, (N.H. wing) At Nepal House, P.O. & P.S. Doranda, Dist.- Ranchi 3. The Superintending Engineer, Road Construction National Highway Circle, at P.O. P.S. & Distt. Dhanbad 4. The Executive Engineer, Road Construction Division National Highway No. 2, At P.S. & P.O. Dhanbad Distt. Dhanbad … … Respondents --- CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY For the Appellant For the Respondents --- : Mr. Indrajit Sinha, Advocate Ms. Puja Agarwal, Advocate : Mr. Sachin Kumar, A.A.G.-II --- 14/12.05.2023 Heard the learned counsel for the parties. 2. This arbitration appeal has been filed for the following reliefs: “That this is an appeal against an order dated 29-08-2009 passed under section 34 of the Arbitration & Conciliation Act 1996 by Sri Viveka Nand Banerji, learned Subordinate Judge 1st at Ranchi in Misc. arbitration case no. 58/2007 whereby and where under an award made and published by Sole Arbitrator Hon’ble Mr. Justice P. K. Sarkar a retired judge of the Patna High Court has been set aside on untenable grounds.” Arguments of the appellant. 3. Learned counsel for the appellant has submitted that the learned court below has set aside the award by referring to Clause 11 of the agreement by holding that as per clause-11, it was specifically provided that the contractor shall not be entitled for any payment for any additional work unless he has received an order in writing from the in- charge for the additional work in terms of clause 11 of the agreement. It has been held that the arbitral award has been passed by ignoring clause 11 (proviso) of contract/agreement and therefore the learned Arbitrator had travelled beyond his jurisdiction. 4. The learned counsel has submitted that before the learned Arbitrator, neither any ground of jurisdiction was raised nor any reliance 2 was placed upon clause 11 of the contract to show that the sanction for additional work having not been granted in terms of clause 11, no payment was admissible. The learned counsel has also submitted that even as per the respondents the entire work was already completed. He has referred to paragraph 23 of the award. The respondents had admitted before the learned arbitrator that the appellant was entitled for payment to the extent of a sum of Rs. 14,13,779/-. The learned counsel submits that though the point of sanction was the bone of contention between the parties before the learned arbitrator, but no specific plea regarding point of jurisdiction or any objection with regard to clause 11 of the contract having been raised by the respondents before the learned Arbitrator, such ground could not have been a reason for setting aside the award under Section 34 of the Arbitration and Conciliation Act, 1996. He has also submitted that no reference was even made to clause 11 of the contract in the petition for setting aside the award filed under section 34 of the Act
Legal Reasoning
of 1996. The learned counsel submits that new plea could not have been raised for the first time at the stage of argument before the learned court below. He has also submitted that no such plea was raised in the petition filed under Section 34 alleging that the learned arbitrator had ignored any term of the contract. 5. The learned counsel has referred to paragraphs 17 and 18 of the judgment passed by the Hon’ble Supreme Court in the case of “Chandigarh Construction Company Private Limited Vs. State of Punjab and Another” reported in (2020) 11 SCC 161 to submit that there cannot be any statutory limitation or bar for the claim in all circumstances. He has submitted that whether the claim was admissible or not is essentially a question of fact and once the work was already done, there was no question of denial of any payment. The learned counsel has submitted that no such plea was raised before the learned Arbitrator that the claim, which was made for extra work, was beyond the terms of agreement between the parties and was outside the scope of work. Although such plea ought to have been raised under Section 16 of the Act of 1996, but neither any such plea was raised under Section 16, nor any such plea was raised before the learned arbitrator at any point of time. 6. He has also relied upon a judgment passed by the Hon’ble Supreme Court reported in (2016) 4 SCC 119 (Venkatesh Construction 3 Company v. Karnataka Vidyuth Karkhane Limited) and has submitted that similar clause as that of clause 11, was subject matter of consideration by the Hon’ble Supreme Court. He has referred to paragraph No. 18 of the said judgment to submit that while considering the judgment of the High Court, the Hon’ble Supreme Court has also recorded that while relying upon clause 11 of the contract, the High Court had brushed aside the admission of the witness that extra work was done and the High court was not right in ignoring the same to hold that the admission of a witness cannot have any effect on the contractual obligation of the parties. It was also pointed out that the respondent of the said case had not raised any plea relying upon clause 11 of the contract. 7. The learned counsel submits that in the present case also, the work was already done and the sanction/ approval was sought for, but it cannot be said that the learned arbitrator has travelled beyond jurisdiction to award the amount on the account of the work already done. Learned counsel submits that the award did not call for any interference within the permissible limit of interference under Section 34 of the Arbitration
Decision
and Conciliation Act, 1996. He submits that the impugned order is fit to be set-aside. Arguments of the Respondents. 8. Learned counsel appearing on behalf of the respondents has submitted that the award of the learned arbitrator clearly indicates that no sanction was given for extra work and accordingly the learned court below has rightly set aside the award which was primarily for the claim of the extra work. 9. He has also submitted that the learned Arbitrator had travelled beyond his jurisdiction while passing the award in connection with the extra work. 10. He has submitted that the learned arbitrator had ignored clause 11 of the contract while awarding the amount. 11. The learned counsel has further submitted that merely a statement made by the Executive Engineer before the learned Arbitrator that the work was completed cannot be used as an estoppel against the respondents to take a plea that the work was actually not completed. Learned counsel has submitted that the work was actually not completed 4 and the appellant has been awarded the amount without completion of the work. 12. He has further submitted that so far as argument of the appellant that clause 11 was not referred to or relied upon before the learned Arbitrator is concerned, it was for the learned Arbitrator to refer to the various clauses of the agreement and see whether any amount was admissible on the face of clause 11 of the contract. 13. While referring to the grounds, the learned counsel has stated that it has been specifically raised in the petition under Section 34 of the Arbitration and Conciliation Act, 1996 at paragraph 13 that the additional amount of claim was never sanctioned/approved by the competent authority and such plea was referable to clause 11 of the contract. The learned counsel has submitted that the learned court below has set aside the award by referring to clause-11 (proviso) of the contract and has rightly held that the learned Arbitrator has travelled beyond his jurisdiction. He has relied upon the judgment passed by the Hon’ble Supreme Court reported in 2022 Live Law (SC) 121 (Indian Oil Corporation Ltd. Vs. M/s Shree Ganesh Petroleum Rajgurunagar), paragraphs 40 and 44, to submit that an arbitral tribunal being a creature of contract is bound to act in terms of the contract under which it is constituted and award can be said to be patently illegal where the arbitral tribunal has failed to Act in terms of the contract or has ignored the specific terms of a contract. 14. The learned counsel has further submitted that it is a case where the learned Arbitrator has ignored the specific terms of the contract i.e. clause 11 of the agreement. He has also relied upon the judgment reported in (2014) 9 SCC 246 (Harsha Constructions Vs. Union of India and Others) to submit that the said case was relating to excepted matter and it was held that the learned Arbitrator, while deciding the claim specifically excluded from arbitration by the agreement, cannot give an award on such count. Findings of this Court 15. The matter was referred to the sole Arbitrator vide order passed by this Court dated 21.06.2006 passed under Section 11(6) of the Arbitration and Conciliation Act, 1996. The matter arises out of agreement dated 15.03.2001 which was for a total value of Rs. 28,52,482/-. The award in the present case was passed on 17.07.2007. 5 16. It was the specific case of the claimant that the contractor, after receipt of work order, completed the work to the extent of agreement value within the time schedule, however due to change in nature and quantity of work, the contractor was required to do additional work of huge amount and completed the work for the value amounting to Rs. 71,41,014.65. The additional and extra work was duly sanctioned by the competent authority, even then due to reasons unknown to the claimant, the payment was not made. The claim was made for the aforesaid amount with interest. 17. The paragraph 6 of the award deals with the claim : “The claimants prayed for the following reliefs:- i) Payment for the work done i.e. Rs. 71,41,014.00 out of which Rs. 28,52,482.00 have been paid. So the claimant claimed payment the balance amount of Rs. 48,51,173.00. for ii) Since the claimant completed the work with borrowed capital from the bank by paying interest at commercial rate, the claimant prays interest at the rate of 18 p.c. from the date of completion of the work i.e. 15.04.2003 to the date of filing of the claim petition. iii) For interest pendentilite at the rate of 18 p.c. iv) Litigation and Arbitration expenses worth Rs. 2,00,000.00 (Two lacs). v) The claimant submitted that an award be passed in favour of the claimant accordingly.” 18. The respondent herein contested the claim and it was mainly contested by the executive engineer. It was submitted that the payment will be made against the actual work done and comparative statement of actual work done was also attached. So far as the claimant’s statement that the executive engineer made payment of Rs. 22,89,775.19 by way of on account payment during progress of work and that the balance amount of Rs.48,51,173/- remained due, it was stated by the respondent that it was partly true. The following issues were framed by the learned Arbitrator: “(I) Whether the claimant is entitled to a sum of Rs. 48,51,173.00 on account of additional work done beyond the agreement no. 52/F2/2000-2001 dated 15.03.2001 as claimed. (II) Whether the claimant is entitled for interest on the aforesaid sum as claimed? (III) Whether the claimant is entitled to the cost of Arbitration? 6 (IV) To any relief/reliefs the parties are entitled.” 19. The learned Arbitrator, while deciding the aforesaid issue no. I, considered the various materials and documents placed and at paragraph 21 of the award, it has been recorded that the respondents had annexed a statement with their written statement giving the details of payment due as per the claim of the contractor and actual payment on the basis of work done and it was showed by the respondents that the claimant contractor was entitled for a sum of Rs. 14,13,779.00 only. The finding of the learned Arbitrator is recorded in paragraph 22 of the Award wherein the learned Arbitrator recorded that no provision for the earth cutting, filing and carriage was made for the approach road of the newly constructed bridge for which it could not be made trafficable for which a graphic representation and requirement was prepared under different heads and sanction was asked for from the authorities for the additional amount of Rs.31,72,871.00 from the Chief Engineer. The learned arbitrator also recorded on the basis of exhibits that it was clear that admittedly earth was filled-up for approach road out of which sanction was given for the part work and for the remaining sanction was wanting and was of the view that whether sanction could be obtained for the entire earth cutting, filling and carriage of 39,953.33 cubic meter was a different question, but there was no dispute on the fact that on the admitted position, the claimant/contractor did the work of cutting, filling and carriage of the above earth. The letter of the Executive Engineer Annexure-C-6 was very clear on the points. The learned Arbitrator further recorded that so far the question of 25,223.04 cubic meter earth cutting, filling and carriage was concerned, that was the internal matter of the Respondents department and the claimant could not be penalized for such want of sanction when up to Superintending Engineer agreed that the claimant/contract had done the work of 39,953.33 cubic meter of earth cutting, filling and carriage and the road had already been made trafficable after the completion of the construction of the approach road. The learned Arbitrator also recorded that it was not appreciable as to what prevented the Chief Engineer to grant sanction for the entire work done and give sanction for only a portion of the work done, to which the claimant had submitted that the Chief Engineer gave sanction to the extent the amount was available. As per paragraph 23 of the Award, it 7 was recorded that even as per the respondents, the claimant/ contractor was entitled for a sum of Rs. 14,13,779.00. 20. In the findings recorded at paragraph 25 of the Award, the learned Arbitrator recorded that the claimant had shown the balance amount to the extent of Rs.38,50,068.80. Earlier, while making calculation of the work provided in the agreement with the additional work required to be done, the superintending engineer had prayed for sanction of an additional amount of Rs. 31,72,871/-. Ultimately, the learned Arbitrator, was of the opinion that even if the entire bill as submitted by the claimant was not accepted, the figures of the executive engineer was also far from truth. The learned arbitrator recorded the fact that the approach roads were constructed satisfactorily and held that the claimant was entitled for payment of Rs. 30 lakhs as the price/value of the work done by him. 21. This Court finds that the learned Arbitrator considered the materials on record including the fact that the additional work was completed by the claimant and passed an award to the extent of Rs. 30 lakhs while deciding issue no. I. 22. This Court also finds that at no point of time before the learned Arbitrator, any reliance with regard to Clause 11 of the contract was placed nor any stand was taken that the work was outside the terms of the agreement. 23. This Court finds that the learned Arbitrator further awarded arbitration cost of Rs. 27,000/- and further certain fees was charged to the extent of Rs. 27,000/- and the total award was for an amount of Rs. 30,54,000/-. The learned Arbitrator also awarded interest @ 8% per annum from the date of the Award till payment. 24. The award was challenged before the learned court below by filing a petition under Section 34 of the Arbitration and Conciliation Act, 1996 and a stand was taken by the respondents that as per standing order, final measurement was take for the gross amount of Rs. 37,03,554.19 and the net balance amount after deducing previous payment came to Rs. 14,13,779/-. Further stand was taken that the award may be restricted only to the extent of aforesaid amount of Rs. 14,13,779/-. It was also the stand of the respondents that the additional amount of claim beyond Rs.37,03,554.19 was never sanctioned/approved by the competent authority. It was also stated with respect to issue no. I of the Award that 8 the learned Arbitrator has erroneously decided issue no. I which was in excess of authority as the arbitrator had no jurisdiction to make the award with respect to the particular item , in as much as, it was beyond the scope of reference. Admittedly, in the present case no objection with regard to the jurisdiction of the learned Arbitrator was raised before the learned Arbitrator at any stage, much less in terms of Section 16 of the Arbitration and Conciliation Act, 1996. This Court also finds that in the petition under Section 34 of the Arbitration and Conciliation Act, 1996, no reference whatsoever was made to clause 11 of the contract but before the learned court below arguments were advanced with respect to proviso to clause 11 of the contract which is quoted in the impugned order and it is quoted as follows:- “Provided always that the contractor shall not entitle to any payment for any additional work done unless he has received an order in writing from the Engineer incharge for the additional work, the contractor shall be bound to submit his claim for any additional work done during any month on or before the 15th day of the following month accompanying copy of the order in writing of the engineer incharge for the additional work.” 25. The learned court below has further recorded that the learned Arbitrator had not mentioned in his award regarding any written order in respect of any additional work and it was also recorded in the impugned order that the learned Arbitrator had relied upon some documents, but on perusal of such documents, it appeared to the court that none of them were related to written order for additional work and as per the learned Arbitrator, since no reply was given by the Chief Engineer, in such circumstances, he allowed the claim of the claimant. 26. The learned court below after having recorded the aforesaid, has ultimately given its finding at paragraph 10 that the learned Arbitrator had overlooked the provision of clause 11 of the agreement and that the learned Arbitrator was bound by the terms of contract and had travelled beyond his jurisdiction and consequently set-aside the arbitral award. Upon perusal of the entire records of this case, this Court finds that objection with regard to jurisdiction of the learned Arbitrator was never taken by the respondents before the learned Arbitrator. No reliance was ever placed by the respondents before the learned Arbitrator with regard to any objection by referring to Clause 11 of the contract. This Court also finds that out of extra work, considerable amount to the extent of Rs. 14,13,779/- stood admitted and payable by the respondents not only 9 before the learned Arbitrator, but also before the learned court below in the petition filed under Section 34 of the Act of 1996. Rather, it was a specific case of the respondents before the learned court below that the award should be confined only to the extent of an amount of Rs. 14,13,779/- but the learned court below in para 9 of the award held that the alleged amount of Rs. 14,13,779/- was also not the subject matter of the award on the ground that the learned arbitrator had exceeded his jurisdiction as the award was passed with respect to additional work without any written order for additional work. The finding of the learned court below with regard to Rs. 14,13,779/- is perverse when seen in the light of award and also when seen in the light of the grounds taken by the State before the learned court below under Section 34 of the Act of 1996. 27. This Court finds that the learned court below, while setting aside the award, has recorded that no positive finding had been passed by the learned Arbitrator regarding any written order in respect of additional work to have been done by the claimant and has also recorded that the learned Arbitrator relied upon some documents, but none of them were relating to any written order for additional work. 28. This Court finds that the learned Arbitrator has not only considered the various documents which were exchanged between the parties and were filed for consideration by the learned Arbitrator but has also taken into consideration all the specific stand of the respondents before the learned Arbitrator while passing the award. The learned Arbitrator also considered the various records and also the measurement book and recorded specific finding at paragraph 22 to 25 of the Award as follows:- “ 22. On perusal of the different papers filed by the parties and marked as Annexure-C-1 to C-19 and Annexure -R-1. it appears that on the basis of the admitted cases of the parties the claimant / contractor was given additional work for a sum of Rs. 28,52,482.00 and an agreement was entered into between the parties (Annexure C-1) subsequently from Annexure C-18 and Annexure -C-19 the Respondents themselves came to the conclusion that no provision for the earth cutting, filling and carriage was made for the approach road of the newly constructed bridge for which it can not be made trafficable. Thus a graphic representation and requirement was prepared with the requirement of earth cutting, filling transport under different heads and sanction for those work was asked for from the authorities. Annexure -C-3 clearly show that the Superintending Engineer, N.H. Circle, Dhnabad giving details of for sanction of additional amount of Rs. the work asked 10 31,72,871.00 from the Chief Engineer. From Annexure - C-4 it is clear that admittedly 32,953.33 M3 (˜UkfeVj) earth was filed up for the approach road by cutting and carrying the same from a distance out of which sanction of 14,730.33 M3 (˜UkfeVj) was given and 25,223.00 M3 (˜UkfeVj) are still wanted. Thus whether sanction could be obtained for the entire earth cutting, filling and carriage etc of 39,953.33 M3 ( ) is a different question, but there is no dispute on the fact that on the admitted position the claimant / contractor did the work of cutting, filling and carriage of the above earth. The letter of the Executive Engineer Annexure-C-6 is very clear on the points. So far the question of sanction of 25,223.04 M3 ( ) earth cutting filling and carriage is concerned that is the internal matter of the Respondents Department and the claimant can not be penalized for such want of sanction when up to Superintending Engineer agrees that the ) claimant / contractor has done the work of 39,953.33 M3 ( of earth cutting, filling and carriage and the road has already been made trafficable after the completion of the construction of the approach road. The Chief Engineer as appears has also sanctioned 14,730.33 M3 (˜UkfeVj) of earth cutting and filling and carriage and there by agreed that the earth cutting, filling and carriage for approach road was not sanctioned. It is however not appreciable as to what prevented the Chief Engineer to grant sanction for the entire work done and given sanction for a portion of the work done only. The learned counsel for the claimant submitted that the Chief engineer gave sanction only to the extent the amount was available. But it appears that no payment has been made even for the sanctioned work. It therefore appears that even after repeated reminders for payment and the department writing to the higher authorities namely Chief engineer giving description for the work done, and the sanction received and for additional sanction of the rest of the work done, the Chief Engineer did not think it necessary to write anything to his subordinate officers either enquiring the justification of this recommendation or questioning the amount of work done or to grant or reject the entire matter. This is really a very callous action on the part of the authorities which raises a question on the working of the entire system in which even Junior Officers are finding helplessness after getting the work done which was essential for the fulfillment of the entire project. 23. Sri Swami Bibhudeo, learned Executive engineer, N. H. division, Dhanbad who is presently posted there and contested the case on behalf of the Respondents could not dispute the papers filed by the claimant / contractor and also agreed that the claimant- contractor done the entire work and constructed the approach road which is functional. But he gives a peculiar argument that the contractor-claimant is entitled for payment of the sanctioned earth cutting, filling and transport only. Shri Swami Bibhudeo has also 11 submitted a statement along with his rejoinder / counter statement to the claim petition marked Annexure -R-1. This statement shows the amount claimed by the claimant i.e. a sum of Rs. 38,50,068.00 and the actual payment due to the claimant / contractor on the basis of the work done which comes to Rs. 14.13,779.00. Thus even as per the Respondents the claimant/contractor is entitled for a sum of Rs. 14,13,779.00. 24. So far the question of signing on the M. B. is question it appears that though the claimant/contractor appeared in the office as per the notice the M.B. was not available and could not be signed. Be as it may, the final bill could not be signed though the authorities before whom the actual work done were of the opinion that the claimant/contractor completed the work of the required quantity. Shri Swami Bibhudeo the present Executive Engineer accepted the reports of the then Junior Engineer, N. H. Gola, S.D. O. of the N. H. Sub-division and the Executive Engineer, N. H. division, Dhanbad but accepts the work only to extent of which the sanction was received. However he is unable to prove that the unsanctioned amount of work done was wrongly shown or there was any irregularity in the work of the officers posted during the concerned period. 25. In the result, I am of the opinion that the claimant / contractor is entitle for payment of the entire work of earth cutting, filling and carriage done and not only for the earth work cutting, filling etc for which sanction received. Thus the claimant contractor is entitled for the entire earth cutting, filling, carriage etc of 39,953.37 MB (˜UkfeVj). The claimant / contractor in his bill Annexure C-17 has shown the balance amounts Rs. 38,50,068.80. However the superintending Engineer earlier while making calculation of the work provided in the agreement with the additional work required to be done prayed for sanction of additional sum of Rs. 31,72,871.00 (Annexure -C-3). This amount was for 42,282.05 M3 (˜UkfeVj) of earth. Since the work done was 39,953.37 M3, the cost of 42782.05 M3-39953.37 M3 = 3188.68 M3 required to be deducted from the aforesaid amount. Annexure C/13 shows that the Superintending Engineer, N. H. Circle, Dhanbad even suggested to the Chief Engineer for payment to the claimant/ contractor for the work done from the saved amount of Job no. 11 which was also of the same head of 5054. This letter not only shows that even the Superintending Engineer had found the work complete, he also did not point out any defect in the work done and recommended for payment. It is also admitted that no M. B. has been signed and final bill is yet to be passed. Thus the statement of the present Executive Engineer, NH. Division, Dhanbad as actual work measured in M. B. can not be accepted. On a careful consideration of the matter and the facts on record, I am therefore of the opinion that even if we do not accept the entire bill as submitted by the claimant / contractor, the figures of the present Executive Engineer is also far from the truth considering the earlier comment made by the 12 different officers and also the fact that the approach roads have been constructed satisfactorily and the bill presented by the claimant / contractor, an additional payment of Rs. 30,00,000.00 (Rupees - Thirty lakhs) will justify as value for the work done by the claimant. In the result, I am of opinion that the claimant is entitled for payment of a sum of Rs. 30,00,000.00 as the price / value of the work done by him. This issue no. 1 is therefore answered in favour of the claimant accordingly.” (emphasis supplied) 29. As per the stand of the State before the learned Arbitrator, the claimant was entitled for a sum of Rs. 14,13,779.00 for the additional work but the claimant was claiming a sum of Rs. 48,51,173.00 which all related to the additional work. There was no such plea that the entire additional work was outside the purview of the contract and consequently, the learned arbitrator had no jurisdiction to adjudicate upon the same. The parties duly participated in the arbitral proceedings by adducing evidences with regards to the claim of additional work done by the claimant and upon appreciation of the materials on record the award was passed in favour of the claimant. 30. The learned Court below, in paragraph 9 of the impugned order recorded that in order to determine whether the learned Arbitrator had acted in exercise of his jurisdiction, it could be necessary to consider the agreement between the parties. Thereafter, the learned court below quoted the proviso to Clause 11 of the agreement. The learned court below, while considering the award, has made following comments on the Award: “The learned arbitrator has not mentioned in his award dated 17.7.07 regarding any written order in respect of the additional work for which the O.P/respondent has claimed. The learned arbitrator has relied upon some documents, but on perusal of these it appears that none of them are related to the written order for additional work. As per learned arbitrator since no reply has been given by the Chief Engineer, in such circumstances he allowed the claim of the claimant/O.P.” 31. After having made the aforesaid comment with regard to award, the learned court below was of the view that the terms of contract between the parties is binding and relied upon the judgement passed by the Hon’ble Supreme Court reported in 1999 (9) SCC 283 to say that where fundamental terms of the agreement between the parties are ignored by the Arbitrator, such Arbitrator exceeded his jurisdiction and acted beyond the terms of the contract. The learned court below finally recorded its findings at paragraph 10 as under: 13 “10. Taking into consideration all these facts and circumstances of the case and in view of the aforesaid law and fact stated above, it is apparent that the award passed by the learned arbitrator is against the stipulation and prohibition contained in contract between the parties. The learned arbitrator acting beyond his jurisdiction is a different ground beyond the error apparent on the face of the award. The learned Arbitrator has overlooked the proviso of clause-11 of agreement no. 2/F2/1992-93 dated 22.6.92, wherein it has been clearly mentioned that “Provided always that a contractor shall not entitle to any payment for any additional work done unless he has received an order in writing from the incharge for the additional work, claim for any additional work done during any month on or before the 15th day or the following month accompanying copy of the order in writing of the Engineer incharge for the additional work”. And no such document (written sanction order) either mentioned by the learned arbitrator in his award dated 17.7.07 nor any such document has been available on record. The contract/ agreement No. 52/F2/2000-2001 dated 15.3.2001 is admitted by both the parties and the learned Arbitrator is bound by the term of contract. Hence by ignoring the Clause 11 (proviso) of contract/agreement traveled beyond his learned arbitrator has jurisdiction. In such circumstances in the interest of justice the award passed by the learned arbitrator is liable to be set-aside. Therefore, it is, ORDERED That this Misc. case is allowed on contest and the impugned award dated 17.7.07 is hereby set aside. There will be no order as to costs.” the 32. This Court finds that the learned court below was of the definite view that in absence of any approval for additional work by the Chief Engineer, the entire claim (even Rs. 14,13,779/- which was admitted by the state) was not admissible in view of clause 11 of the agreement, which provided that the contractor shall not be entitled for any payment for any additional work done, unless he has received an order in writing from the Engineer-in-charge for the additional work and that the contractor shall be bound to submit his claim for additional work during any month on or before the 15th day of the following month accompanying with a copy of the order in writing of the Engineer in- charge for additional work. However, the learned court below, while considering the award, has failed to consider that before the learned Arbitrator, no objection was made by referring to clause 11 of the contract. The learned court below also failed to consider that a specific finding was recorded by the learned Arbitrator that on the basis of admitted case of the parties, the claimant was given additional work over and above the work as per agreement (agreement value- Rs. 28,52,482/-). After the agreement, the State themselves came to the conclusion that no provision for earth cutting, filling and carriage was made for the approach road and newly constructed bridge for which it cannot be made trafficable. The Arbitrator had also considered that the details of the additional work done was available and steps were also taken for the 14 purpose of grant of additional sanction for an amount of Rs. 31,72,871/- and there was no dispute on the fact that the claimant had done the entire additional work of cutting, filling and carriage of the earth. Thus, the learned Arbitrator, on the basis of the materials on record, gave a finding that the claimant had completed the required additional work and ultimately awarded the amount. The learned arbitrator had specifically recorded in para 22 of the award that “……Thus whether sanction could be obtained for the entire earth cutting, filling and carriage etc of 39,953.33 M3 ( ) is a different question, but there is no dispute on the fact that on the admitted position the claimant / contractor did the work of cutting, filling and carriage of the above earth The letter of the Executive Engineer Annexure-C-6 is very clear on the points. So far the question of sanction of 25,223.04 M3 ( ) earth cutting filling and carriage is concerned that is the internal matter of the Respondents Department and the claimant can not be penalized for such want of sanction when up to Superintending Engineer agrees that the claimant / contractor has done the work of 39,953.33 M3 ( ) of earth cutting, filling and carriage and the road has already been made trafficable after the completion of the construction of the approach road…” The learned arbitrator further recorded finding regarding satisfactory completion of the work in para 25 “…..On a careful consideration of the matter and the facts on record, I am therefore of the opinion that even if we do not accept the entire bill as submitted by the claimant / contractor, the figures of the present Executive Engineer is also far from the truth considering the earlier comment made by the different officers and also the fact that the approach roads have been constructed satisfactorily and the bill presented by the claimant / contractor, an additional payment of Rs. 30,00,000.00 (Rupees - Thirty lakhs) will justify as value for the work done by the claimant. In the result, I am of opinion that the claimant is entitled for payment of a sum of Rs. 30,00,000.00 as the price / value of the work done by him. This issue no. 1 is therefore answered in favour of the claimant accordingly.” In fact, the learned Arbitrator, while allowing the claim to the extent of Rs. 30 lakhs clearly recorded that the additional work was completed. The claimant had shown the balance amount in his bill as Rs. 38,50,068.80. However, the superintending Engineer earlier, while 15 making calculation of the work provided in the agreement with additional work required to be done prayed for sanction of additional amount of Rs. 31,72,871.00. The learned arbitrator, after considering the numerous materials on record, took into consideration the fact that the approach roads were constructed satisfactorily and the bill was presented by the claimant for an additional payment and was of the view that payment of Rs. 30 lakhs would justify as value of the work done by the claimant. The learned court below has recorded incorrect finding in the impugned order that as per the learned arbitrator, since no reply was given by the Chief Engineer, in such circumstances he allowed the claim of the claimant. Further, such finding was recorded upon reappreciation of the materials. 33. The learned court below, while considering clause 11 of the contract, has failed to consider the admitted position that the work of construction of the approach road was admittedly done which fell within the ambit of additional work and committed an error of record by recording that the learned Arbitrator had allowed the claim since no reply was given by the Chief Engineer. The learned court below also recorded that on perusal of the documents none of them related to written order for additional work, but has failed to consider that the additional work was admittedly executed by the claimant as per the finding recorded by the learned Arbitrator. 34. This Court finds that the learned court below entered into re- appreciation of materials before the learned Arbitrator which was certainly beyond the limited scope of consideration under Section 34 of the Act of 1996. The objection with regards to the limited jurisdiction of the learned court below was taken by the appellant but such objection was ignored by the learned court below. 35. This court is of the considered view that there was no scope for the learned court below to scrutinize the materials and interfere with the award only on the ground that there was no such document relating to written order for additional work. The scope of interference under Section 34 of the Arbitration and Conciliation Act, 1996 being limited, there was no scope for the learned court below to enter into appreciation of materials which were furnished before the learned court below. 16 Consideration of the judgements cited by the parties. 36. So far as the judgement relied upon by the respondents reported in (2014) 9 SCC 246 (Harsha Constructions Vs. Union of India and Others) is concerned, it does not apply to the facts and circumstances of this case. The said judgement was relating to “excepted matter” as per the contract. From the perusal of the said judgement, at paragraph 7 it has been recorded that it was not in dispute that some work which was not covered under the contract was entrusted to the contractor and it has been recorded in paragraph 9 that the learned Arbitrator had decided all the disputes under his award though the contractor had objected to the arbitrability of the disputes which were not referable to Arbitrator as per clause- 39 of the contract involved in the said case. Thus, it appears from the aforesaid judgement that the objection with regard to arbitrability of the dispute was throughout taken. There is no such corresponding fact here. Rather, the objection in connection with the jurisdiction of the learned Arbitrator or with regards to the arbitrability of the dispute or with regards to any objection by referring to clause 11 of the contract regarding additional work and its payment was never taken by the respondents before the learned Arbitrator. Moreover, the present case relates to additional work and not that of any excepted matter and additional work was permissible under the agreement which was duly done by the claimant but the objection of the State is that the claim of additional work was not in accordance with proviso to clause 11 of the agreement. 37. So far as the judgement reported in 2022 Live Law (SC) 121 (Indian Oil Corporation Ltd. Vs. M/s Shree Ganesh Petroleum Rajgurunagar) is concerned, there is no dispute that an arbitral tribunal being a creature of contract is bound to act in terms of the contract under which it is constituted and award can be said to be patently illegal where the arbitral tribunal has failed to Act in terms of the contract or has ignored the specific terms of a contract. However, the aforesaid judgement does not help the respondents in any manner when seen in the light of the facts and circumstances of this case. In the said judgement, the appellant, in the written statement filed before the learned Arbitrator, had taken a specific plea that the prayers of the claimant were outside the ambit of the arbitral proceedings and were not maintainable. In the present case, objection regarding the jurisdiction of 17 the learned Arbitrator or arbitrability of the dispute or objection by referring to clause 11 of the agreement was never taken before the learned arbitrator, the liability was partly admitted and the work for which the claim was made was also completed. This court is of the considered view that it was not permissible for the learned court below to set-aside the award by reappreciating the materials on record and also by referring to clause-11 of the agreement and ignoring the finding recorded by the learned arbitrator that the additional work for which the claim was made by the claimant was completed as stood admitted by the respondents before the learned arbitrator. Considering the factual matrix of the case, the judgements relied upon by the appellant are relevant for the decision of this case. 38. In the judgement passed by the Hon’ble Supreme Court reported in (2016) 4 SCC 119 (Venkatesh Construction Company v. Karnataka Vidyuth Karkhane Limited), the case was arising out of a suit. The High Court had taken note of Clause 11 of the contract which states that the contractor was not authorized to do any extra work or make any alteration without the previous consent in writing of the respondent and set-aside the findings recorded by the trial court and held that the parties are governed by the terms of the written contract and any variation with the terms of the agreement was required to be done strictly adhering to Clause 11 of the contract and while doing so, the High Court had even brushed aside the admission of the witness of the defendant that extra work was done by the contractor. The Hon’ble Supreme Court set-aside the finding of the High Court by saying that the High Court was not right in ignoring the same to hold that the admission of defendant witness cannot have the effect on the contractual obligation of the parties and also considered the fact that the defendant had not raised the plea relying upon Clause 11 of the contract. It was held in para 18 of the judgement that while doing so, the High Court was not right in placing reliance upon Clause 11 of the contract to reverse the findings of fact recorded by the trial court. In the aforesaid judgement of Venkatesh Construction Company (supra), the High Court had brushed aside the admission of one of the witnesses that extra work was done and it was pointed out that the concerned respondent had not raised the plea relying upon clause 11 of the contract involved in the said case. In the present case also, the 18 respondents never raised any plea relying upon clause 11 of the contract before the learned Arbitrator to object to the jurisdiction of the arbitrator or admissibility of the claim before the learned arbitrator. In the present case, the learned court below was not right in placing reliance upon Clause 11 of the contract to reverse the findings of fact recorded by the learned arbitrator. 39. In the judgement passed by the Hon’ble Supreme Court in the case of “Chandigarh Construction Co. (P) Ltd. v. State of Punjab”, (2020) 11 SCC 161, the learned arbitrator had awarded some amount on account of extra items. The first appellate court had taken note of Clause 39 of the contract agreement wherein a provision was made for extra items and the second paragraph therein provided for the manner in which the contractor is required to submit the returns of the work claimed for extra items. As per provision, the contractor was required to deliver in the office of the Executive Engineer on or before the 10th day of every month during continuance of the work, the return showing details of any work claimed for extra, and such return was also to contain the value of such work as claimed by the contractor. It was also stipulated in the contract that if the details were not indicated, it shall be deemed that the contractor has waived all claims not included in such returns and will have no right to enforce any such claim not so included. In that light since the claim was ultimately found as not included in the monthly statement, the first appellate court was of the opinion that the requirement of the conditions of the contract was not adhered to and, therefore, set aside the award of the said amount by the learned arbitrator. The High Court held that the question was not whether the claimant undertook the work but whether the claimant raised any claim for the extra amount in terms with the contract and took note of aforesaid Clause 39 of the contract and declined the claim. The Hon’ble Supreme Court held as under: - “18. In that background, having taken note of Clause 39 of the contract agreement, it cannot be considered as a statutory limitation or bar for the claim in all circumstances. The said clause no doubt prescribes a method by which the claim is to be put forth in the statement every month. The said requirement will have to be construed as being put in the agreement so as to ensure that the additional work has actually been done, the claim is put forth along with details so that baseless claim is not made at a distant point in time when it will not be possible to determine. Though the clause also indicates that if such claim is not made, it would amount to waiver, in a circumstance where the claim is ultimately put forth in the forum where an adjudication is made and based on the material if the adjudicating authority is satisfied that the actual work had been done and 19 the contractor being entitled to the extra amount spent by him to carry out the work in an appropriate manner, it would not be just and proper to deny such claim only on the ground that it had not been indicated strictly in the manner as provided in the contract specially keeping in view the nature of work undertaken. To that limited extent, a perusal of the award passed by the learned arbitrator would indicate that the learned arbitrator had taken into consideration the letter dated 14-11-1986 wherein the identification of soil was agreed to. The letter dated 9-3-1987 submitting the test results identifying the strata encountered as daldal is referred therein. The work having been completed during March 1988 was also taken note of. In that circumstance, when the fact remains that the daldal land was situated in the area, work was carried out and extra material was used, the claim in our opinion cannot be rejected outright adopting a technical view of the matter. However, the claim for the extra item in that regard for the work of 1,33,181.00 “Cum” will have to be calculated with premium at the same rate of 35.02% over and above the agreed rate and not at 93.12% as has been taken into consideration by the learned arbitrator for awarding the amount. The appropriate calculation in that regard shall however be worked out in such manner so as to award the amount under the said Claim 8.” In the aforesaid judgement, the matter was, inter alia, relating to additional work and in paragraph 18 thereof, with regards to the stipulation regarding additional work/extra work the Hon’ble Supreme Court was of the view, that the same could not be considered as a statutory limitation or bar for claim in all circumstances and such requirement was to be construed as being put in the agreement so as to ensure that the additional work has actually been done and that the claim is put forth along with details so that the baseless claims are not made at a distant point of time when it would not be possible to determine. It was also held that where the claim is ultimately put forth in a forum where an adjudication is made and based on materials, if the adjudicating authority is satisfied that the actual work had been done and the contractor being entitled to the extra amount spent by him to carry out the work in an appropriate manner, it would not be just and proper to deny such claim only on the ground that it had not been indicated strictly in the manner as provided in the contract specially keeping in view the nature of work undertaken. 40. This court is of the considered view that the facts in the present case are squarely covered by the said judgement, in as much as, the entire extra work was done by the claimant as recorded in the award itself and having recorded so the learned arbitrator passed the award. Such finding was recorded on the basis of materials on record. The learned court below was not at all justified in setting aside the award by relying upon proviso to clause 11 of the agreement and 20 reappreciating the materials on record before the learned arbitrator and thereby ignoring the finding of the learned arbitrator that the additional work was done. Such exercise was all the more not permissible when the state did not take any objection before the learned arbitrator by referring to clause 11 of the agreement. 41. In view of the aforesaid facts and circumstances of this case, this Court is of the considered view that the impugned order passed by the learned court below is contrary to the permissible grounds for setting aside an arbitral award under Section 34 of the Act of 1996. Accordingly, the impugned order setting aside the award, is set-aside. Office to prepare a decree. 42. This arbitration appeal is accordingly allowed. 43. Pending interlocutory application, if any, is closed. Pankaj (Anubha Rawat Choudhary, J.)