IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

(COMMERCIAL DIVISION)

ORIGINAL SIDE

Present:

The Hon’ble Justice Debangsu Basak

And

The Hon’ble Justice Md. Shabbar Rashidi

APOT No. 298 of 2025

GA-COM/1/2025

GA-COM/2/2025

ITD-ITD CEM Joint Venture

Vs.

Kolkata Metro Rail Corporation Limited

For the appellant : Mr. Jishnu Saha, Sr. Adv.

Mr. Anal Kumar Ghosh, Adv.

Ms. Hashnuhana Chakraborty, Adv.

Ms. Neelina Chatterjee, Adv.

Ms. Ahana Bhattacharya, Adv.

For the respondent : Mr. Jishnu Chowdhury, Sr. Adv.

Ms. Sreya Basu Mallick, Adv.

Mr. Chayan Gupta, Adv.

Mr. Ankit Dey, Adv.

Mr. Atri Mandal, Adv.

Mr. Subhrojit Mookherjee, Adv.

Hearing concluded on : 12.02.2026

Judgment on : 12.03.2026

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Md. Shabbar Rashidi, J.:-

1. The instant appeal under Section 37 of Arbitration and

Conciliation Act, 1996 is in assailment of judgment and order dated

October 31, 2025 passed in AP-COM No. 381 of 2024.

2. By the impugned judgment and order, the learned Single

Judge allowed the challenge to the Arbitral Award at the behest of

respondent herein, under Section 34 of the Act of 1996, setting aside

the arbitral award dated August 6, 2023, impugned therein.

3. In course of hearing, the learned Senior Advocate for the

appellant submitted that the impugned order suffers from patent

illegality, perversity and is liable to be set aside. The learned Single

Judge erred in holding that the award of the Arbitral Tribunal was

perverse, contrary to evidence on record and patently against the

public policy. In fact, the learned Single Judge failed to appreciate the

evidence on record in its true perspective.

4. Learned Senior Advocate further argued that while deciding

the application under Section 34 of the Act of 1996, learned Single

Judge proceeded on erroneous and irrelevant considerations and

failed to exercise the jurisdiction vested in it. The learned Single Judge

did not apply the settled position of law on the subject with reference

to the jurisdiction under Section 34 of the Act. It was also contended

that the impugned judgment and order was passed merely on the

basis of submissions made on the part of the respondents herein

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whereas, the submissions advanced by the appellants herein were

completely ignored by the learned Single Judge. The learned Single

Judge came to an erroneous conclusion that the impugned award did

militate against Section 34 (2) (b), Explanation-I Sub-clause (ii) and

(iii) of the Arbitration and Conciliation Act, 1996.

5. Learned Senior Advocate further submitted that the learned

Single Judge erroneously held that a judge cannot impute his

personal knowledge into the adjudicatory process. Merely the

members having an experience in general civil engineering and one of

the members of the Arbitral Tribunal being an alumnus of IIT, Delhi

could not enjoy any special status as a member of the tribunal insofar

as the disputes involved in the arbitration was concerned. In support

of such contention, learned Senior Advocate relied upon (2012)1

Supreme Court Cases 594 (P.R. Shah Shares and Stock Brokers

Private Limited Vs. B.H.H. Securities Private Limited and Others).

6. Learned Senior Advocate for the appellants also submitted

that the learned Single Judge did not take into consideration the

settled position of law that construction of the contract by an Arbitral

Tribunal was not liable to be interfered with. It was also submitted

that the learned Single Judge failed to take into consideration that the

findings of Arbitral Tribunal on issues of facts could not have been

really apprised. The findings of an Arbitral Tribunal if based on

plausible view cannot be interfered with, unless the tribunal is found

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to have ignored the evidence on material facts. The learned Single

Judge was not justified in substituting its own views otherwise than

arrived at by the arbitral tribunal. The impugned award was based on

plausible reasoning and was in consonance with the settled

proposition of law and was not liable to be set aside in exercise of

jurisdiction under section 34 of the Act of 1996.

7. Learned Senior Advocate for the appellant further submitted

that the learned Single Judge failed to appreciate that the incident

occurred on August 31, 2019 and immediately thereafter the

appellants engaged expert agencies for analyzing the causes of such

incident whereas the respondents engaged IIT Madras for the said

purpose after about 900 days of the incident i.e. when the Tunnel

Boring Machine (TBM) which was stuck in the mud was retrieved after

cutting into pieces. The learned Single Judge was also not justified in

discarding the expert report on the ground that such reports were

prepared subsequent to the commencement of the arbitral proceeding,

after a considerable delay of the happening of the incident.

8. Learned Senior Advocate for the appellant further submitted

that the learned Single Judge erroneously accepted the report

prepared by IIT Madras regarding the analysis of the causes of the

incident in so far as the IIT Madras had no expertise and it engaged a

foreign expert Dr. G. J. Page. The said tunnel expert Dr. G. J. Page did

not did not furnish any report on his own. According to learned Senior

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Advocate for the appellant, the learned Single Judge did not take into

consideration that IIT Madras did not visit the TBM or the place of

incident and submitted its report solely based on the materials

supplied by the respondent including the photographs of the tail seal

brushes taken by Dr. Lee Blade. It was contended that learned Single

Judge did not appreciate that the Arbitral Tribunal considered the

entirety of the report prepared by IIT Madras and found the same to

be without basis or justification and was contrary to the observations

made in the report with regard to the poor quality of the photographs

on which the report proceeded. Since the findings of the Arbitral

Tribunal was based on meticulous consideration of all the reports filed

on behalf of the respondent, the learned Single Judge was not justified

in discarding such report which, in turn, was reappraisal of evidence

and was surely beyond the scope of Section 34 of the Act of 1996.

9. Learned Senior Advocate for the appellant further submitted

that the learned Single Judge was not justified in holding that there

was seizure in adequacy of greasing on the part of the appellants’

personnel who were engaged in operating the TBM. The learned Single

Judge did not appreciate the entire report given by Surbana Jurong

and relied upon a truncated portion of such report. It was also

contended that the learned Single Judge did not appreciate that the

appellants engaged experts to analyze the causes of the incident

immediately after the incident whereas the respondent approached IIT

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Madras for a report which was intended to be used in the arbitral

proceeding as a defense, much after the incident. The reports filed on

behalf of the appellant were unjustifiably discarded by learned Single

Judge. Learned Senior Advocate for the appellant also contended that

the learned Single Judge overlooked vital evidence to the detriment of

the appellants.

10. The learned Senior Advocate also argued that the learned

Single Judge was not justified in holding that the Arbitral Tribunal

misapplied the provisions of Section 18 of the Act of 1996. The learned

Single Judge erroneously held that the Arbitral Tribunal did not take

into consideration the report which exhibited that the incident

occurred due to erroneous handling of TBM both on account of

improper maneuverability and inadequate greasing of tail skin

brushes. Reappraisal of evidence was not within the jurisdiction of the

learned Single Judge within the realm of Section 34. The findings of

the Arbitral Tribunal were based on plausible reasoning which could

not have been interfered in the jurisdiction under Section 34 of the

Act of 1996. Similarly, learned Single Judge erred in holding that

rejection of reports was to be looked at on the parameters of validity in

law and rationality. Such findings were beyond the scope of challenge

under Section 34 of the Act of 1996.

11. It was further contended by learned Senior Advocate for the

appellant that the learned Single Judge wrongly held in the impugned

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judgment and order that the Arbitral Tribunal overlooked the terms

and conditions of the GCC and SCC entered into between the parties.

Referring to clause 4.23 of the GCC, learned Senior Advocate for the

appellant submitted that the learned Single Judge erroneously came

to a conclusion that the said provision of the GCC does not absorb the

burden of liability of the appellant contractor even in case of an

unforeseen physical condition. It was contended that the findings of

learned Single Judge in respect of the liability of the appellant borne

out of clause 4.23 of the GCC were self-contradictory. It was also

contended that the learned Single Judge took into consideration the

terms and conditions of the GCC to the effect that no acts or

omissions of the engineer shall relieve the contractor of its contractual

duties but at the same time overlooked the condition that the

contractor was under obligation to abide by the instructions of the

engineer in accordance with the contract.

12. The learned Senior Advocate for the appellant further

contended that the learned Single Judge erroneously set aside the

arbitral award on the ground that post of retrieval expert reports were

not considered by the tribunal and that contractual clauses more

specifically clause 4.23 were not considered by it. The arbitral award

was also set aside by the learned Single Judge on the ground that it

was based on the personal knowledge of London members of the

tribunal.

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13. The learned Senior Advocate for the appellant, in support of

his contentions, also relied upon the authority of (2019) 15 Supreme

Court Cases 131 (Ssangyong Engineering and Construction

Company Limited Vs. National Highways Suthority of India) ,

2025 SCC OnLine SC 2857 (Ramesh Kumar Jain Vs. Bharat

Aluminum Company Limited) , (2025) 2 Supreme Court Cases 417

(OPG Power Generation Pvt. Ltd. Vs. Enexio Power Cooling

Solutions India Pvt. Ltd. And Another), 2026 SCC OnLine SCC 33

(Jan De Nul Dredging India Pvt. Ltd. Vs. Tuticorin Port Trust) ,

(2023) 9 Supreme Court Cases 825 (Konkan Railway Corporation

Limited Vs. Chenab Bridge Project Undertaking) , 2024 SCC

OnLine SC 2632 (Punjab State Civil Supplies Corporation Limited

& Anr. Vs. Sanman Rice Mills & Ors.) , (2009) 10 SCC 259 (Som

Datt Builders Ltd. v. State of Kerala) and (2019) 20 SCC 1 (Dyna

Technologies (P) Ltd. v. Crompton Greaves Ltd.).

14. On the other hand, learned Senior Advocate for the

respondent submitted that the Arbitral Tribunal accepted the pre-

retrieval reports. The post retrieval reports submitted on behalf of the

respondents as an evidence in the arbitral proceeding were not

considered and were brushed aside without assigning any reason.

Learned Senior Advocate for the respondent referred to clause 14.5

and clause 14.9 of the GCC. It was submitted by learned Senior

Advocate for the respondent that the impugned arbitral award

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suffered from manifest perversity and learned Single Judge was quite

justified in setting aside the impugned arbitral award. The learned

Senior Advocate for the respondent cited the authorities of 2024 SCC

OnLine SC 2632 (Punjab State Civil Supplies Corporation Limited

& Anr. Vs. Sanman Rice Mills & Ors.) , (2024) 7 Supreme Court

Cases 219 (Bombay Slum Redevelopment Corporation Private

Limited Vs. Samir Narain Bhojwani) and an unreported decision of

this Court in AP (Com) No. 231 of 2024 (Damodar Valley

Corporation Vs. BLA Projects Private Limited).

15. Kolkata Metro Rail Corporation Ltd. issued a tender for design

and construction of underground section of Metro Railways from

Central Station to Subash Sarobar. The appellant ITD – ITD CEM joint

venture participated in such tender and was declared successful.

Following this, Metrorail and ITD entered into a contract for

underground tunnelling. Two tunnel boring machines (TBM) were

deployed by ITD for undertaking the contracted project; one TBM was

operating East – West and the other in the reverse direction. On

August 31, 2019 there was an incident of water ingress in the tunnels

where ITD was carrying on the project. Due to such incident, serious

damages to the properties above the surface where the tunnels were

running occurred leading to the claims being made by the victims of

such accident. Several litigations including public interest litigation

(PIL) were initiated and various directions were passed in such

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litigations by the Court. On the basis of such directions, an expert

body was constituted to analyze the causes of such incident in order

to fix the liability. Such body of experts submitted its report.

16. In view of the disputes arising between the parties with regard

to the liabilities for such accident, ITD initiated an arbitration

proceeding against Metro Railways. A three member Arbitral Tribunal

was constituted. Such arbitral tribunal, upon considering the

evidence produced by the rival parties, passed an award on August 6,

2023. Such award was challenged by Metro Railways under Section

34 of the Arbitration and Conciliation Act, 1996 by way of AP – COM

No. 381 of 2024 which resulted in the impugned judgment and order.

17. A perusal of the impugned judgment and order demonstrates

that the learned Single Judge while disposing of AP – COM No. 381 of

2024, observed the following:

“56. In Paragraph 121 of the impugned award, the AT

observed that it was there to judge the issues from the

“engineering point of view”. While admitting that engineering

is not a pure science but an applied science with a lot

depending on design constants and coefficients based on past

experience, the AT held that it is possible that after the

present incident also, some of the coefficients and constants

could stand modified like the additional modifications in

carrying out the work after the incident. The AT further

observed that those are preponderances of probabilities with

improvements to cover any further unforeseeable physical

condition. It admitted in Paragraph 121 of the award that

these improvements have no end and no one can be sure if

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these could have contributed to the safe passage of TBM-2

(the other TBM deployed from the reverse end) or were just

superfluous additional safeguards. However, thereafter it held

that none of the theories could put a definite blame on the

claimant’s conduct on the date of accident. While discarding

the IIT, Madras report, in sub-clause (ag) of Paragraph 112 of

the impugned award, the AT observed that since all the three

Arbitrators are civil engineers with more than 40 years of

experience and one of them has a post-graduate degree in

geo-technical engineering from IIT, Delhi, such “professional

knowledge” made them differ with the report as SPT values

can be misleading and in case of saturated silty soils, even

when the soil is weak, SPT values obtained can be quite high

and should not be relied upon in isolation unless corroborated

with other tests. It was suggested that internal erosion cannot

be ruled out.

57. The premise of the said consideration is entirely de hors

the fundamental policy of Indian Law. It is well-settled that a

Judge cannot impute his personal knowledge into the

adjudicatory process. The moment personal knowledge comes

in and replaces material evidence presented by the parties,

the objective consideration of the body of evidence,

irrespective of the biases and prejudices of the Judge (read

‘AT’ in the present context), are excluded.

58. Merely having experience in general civil engineering

and/or one of the AT members being an alumnus of the IIT,

Delhi did not confer any special status on the AT members

insofar as the dispute involved in this particular arbitration

proceeding is concerned. In their capacity as members of the

AT, which is a quasi-judicial body, the individual expertise of

the AT members cannot supplant tangible evidence produced

by the parties. It might very well be that the technical

qualifications of the AT members earned them a spot in the

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Tribunal in the first place, but once the members assumed the

role of Arbitrators, they were statutorily duty-bound to

undertake a quasi-judicial exercise and could not hold any

individual opinion or pre-conceived notion but were duty-

bound in law to adjudicate solely on the basis of the materials

produced by both parties and the terms of the contract

between them.

59. The moment the personal opinions, professional or

otherwise, of the Judge or Tribunal comes into play, one of the

fundamental policies of Indian Law is hit, being that one

cannot be the Judge in his own cause. The “cause”, in the

present case, is the opinion of the AT members as

professionals, the authenticity, relevance and worth of which

was decided by the AT members themselves while deciding

the contentious issues before them. Such approach on the part

of the AT was clearly against the fundamental policy of Indian

Law as well as contrary to basic principles of justice and

judicial morality, thereby bringing the award within the fold of

Section 34(2)(b)(ii), Explanation I, sub-clauses (ii) and (iii).”

18. In the impugned order, as it transpires, personal knowledge of

the members of the Arbitral Tribunal was imputed to discard an

evidence adduced on the part of respondent herein i.e. the report

submitted by IIT, Madras regarding the possible cause of the incident.

Professional knowledge of the members of the AT made them differ

with the report as SPT values could be misleading and in case of

saturated silty soils, even when the soil is weak, SPT values obtained

can be quite high and should not be relied upon in isolation unless

corroborated with other tests. It was suggested that internal erosion

13

cannot be ruled out. Such opinion was expressed by the members of

AT which was solely based on their alleged personal expertise in the

field and was not at all based on any definite scientific reasoning.

Moreover, such reasoning ought to have been based on definite

imputation saying ‘should not be relied upon’ instead of ‘must not be

relied’. In such view of the facts, we are not in a position to say that

the findings arrived at by learned Single Judge was perverse or not

based on plausible reasoning.

19. The other objection that was raised by the respondent, in its

challenge under Section 34 of the Act of 1996 and accepted by the

learned Single Judge was that the parties were not treated equally.

The evidence in the form of reports submitted by the appellant herein

whereas that produced on behalf of the respondent was discarded

merely on the ground that such reports were prepared during the

continuance of arbitral proceeding prepared for the purpose of putting

up a defense. The learned Single Judge analyzed the issue in the

following terms:

“61. There is not an iota of pleading or proof assailing the

integrity, independence and expertise of the authors of the

reports produced by either party, nor did the AT come to any

such finding. The primary premise of discarding the expert

reports produced by the Metro Railways was that those were

prepared subsequent to the commencement of the arbitration

proceeding, much after the fateful incident, for the purpose of

preparing the defence of Metro Railways.

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62. However, none of the said premises are valid in law. The

obvious reason for the delay in issuance of the said reports,

about nine hundred days after the incident, was that the

experts who authored those waited for the retrieval of the

concerned TBM, which had to be cut into pieces over a long

period of time spanning almost three years and recovered

from underground, along with soil samples. Even in the report

authored by Subarna Jurong, which was relied on by ITD

itself, it was clearly stated that the actual cause of accident

could be ascertained only after the retrieval of the TBM, thus

lending justification to the waiting period for retrieval of the

TBM.”

20. The respondent Metro Railways came up with a definite case

that the TBM was operated unprofessionally and incorrectly, as well as

that there was severe inadequacy of greasing on the part of the ITD

personnel. Such allegations were elaborately discussed in the reports

submitted on behalf of the respondent and the experts came to

conclude that the huge quantity of grease consumed at the relevant

juncture, coupled with the erroneous alignment of rings laid by TBM

in its route of boring, which deviated about eighty-eight per cent from

the correct alignment as per the said reports, were sufficient proof that

the TBM was not being manoeuvred properly and there was excessive

wear and tear on the tail skin brushes aligning the TBM, which stood

between the unwarranted influx of soil, grout, etc. into the machine

from outside. A comparative study of the other TBM deployed at the

sight was produced as evidence by the respondent Metro Railway to

15

establish that excessive requirement of grease and frequent change of

tail brushes indicated that the tail brushes were worn off much more

frequently than the normal. Such evidence, according to the

respondent, established that the particular TBM was not being

operated with due care as was required. The personnel of the

appellant overlooked and ignored the indications. Therefore, the

reports established that the appellant did not handle the TBM with

proper care and caution resulting in the mishap.

21. The learned Single Judge also held that there was in fact, no

delay in producing the report. Such report was prepared immediately

after the retrieval of the TBM. Moreover, the reason for discarding the

expert report by the Arbitral Tribunal was shown to be based on

unreliable photographic evidence. However, learned Single Judge

found the reports submitted by IIT, Madras and IIEST Shibpur to be

prepared on the basis of physical examination of recovered parts of the

TBM as well as its report together with the soil conditions. The learned

Single Judge also took note that even Dr. Lee Blade who had stated

that the photographic evidence was unreliable; himself was present at

the site of recovery of the TBM and did not rely solely on the

photographic evidence to form his opinion. The learned Single Judge

thus observed that,

“68. These aspects of the matter were not gone into by the AT

at all, which discarded the entire body of expert evidence filed

by Metro Railways at the stroke of a pen, holding that such

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reports were not independent reports, since they were

prepared subsequent to the commencement of the case for the

purpose of defending the case and also that those were

belated. As observed earlier, the delay in furnishing the

reports corresponded with the delay in retrieval of the TBM

and those were filed at the earliest thereafter. The TBM was

completely recovered only after commencement of the

arbitration proceeding, which was the reason for belated

submission of the post-retrieval reports.

69. The logic that the said post-retrieval reports were prepared

at the behest of the respondent/petitioner-Metro Railways for

preparing their defence equally applies to the reports

furnished by the claimant/ITD. It is quite obvious that both

parties filed reports in support of their respective cases for the

obvious reason that expert reports would be the best evidence

to resolve the dispute. However, the integrity, independence

and professional acumen of none of the experts/expert bodies

who/which authored the reports was even challenged, let

alone being tarnished by evidence. Thus, the said logic could

not have been a valid or rational ground for discarding the

post-retrieval reports filed by the Metro Railways altogether

while accepting the pre-retrieval reports produced by the

claimant/ITD.

70. It has be borne in mind that the reports were all authored

by experts in their field, which view was even reiterated by

the AT in different places of the award. However, the AT

proceeded to junk Metro Railways’ reports on frivolous

grounds while accepted those of the claimant/ITD, by

applying different parameters, hence depriving one of the

parties of level playing ground.”

71.Thus, the application of double standards attracts the

violation of Section 18 of the 1996 Act and tantamounts to

perversity, which, according to Associate Builders (supra)6,

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comes within the purview of “patent illegality” as introduced

under sub-section (2-A) of Section 34 of the 1996 Act by the

2015 Amendment, which is applicable to the present lis.”

22. In P.R. Shah, Shares & Stock Brokers (P) Ltd. (supra), the

Hon’ble Supreme Court noted that,

“22. The appellant contends that the Arbitral Tribunal had

used personal knowledge to decide the matter. Attention was

drawn to the following observation in the award by the

majority:

“Also, it is known fact which is known to the arbitrators

that as per the market practice such kind of

transactions of one broker takes place with another

broker either in their own name or in their firm's name

or in the name of different entity which is also owned

by the member. Same way these transactions are done

by Respondent 2 (the appellant herein) in the name of

Respondent 1 (the second respondent herein).”

23. An Arbitral Tribunal cannot of course make use of its

personal knowledge of the facts of the dispute, which is not a

part of the record, to decide the dispute. But an Arbitral

Tribunal can certainly use its expert or technical knowledge or

the general knowledge about the particular trade in deciding a

matter. In fact, that is why in many arbitrations, persons with

technical knowledge, are appointed as they will be well-

versed with the practices and customs in the respective fields.

All that the arbitrators have referred to is the market practice.

That cannot be considered as using some personal knowledge

of facts of a transaction to decide a dispute.”

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23. In the case at hand, we have noted that the arbitral tribunal,

while deciding the issues, imputed its personal expertise in civil

engineering and concluded that the report submitted by IIT, Madras

may not be conclusive and it was dependent upon several other

factors. However, such findings were not based on any concrete

evidence rather, it was mere assumption based on the personal

knowledge and experience of the tribunal and the same was used to

discard positive evidence adduced by the respondent.

24. The learned Single Judge observed that the Arbitral Tribunal

discarded the report submitted on behalf of Metro Railways holding

that such reports were not independent reports, since they were

prepared subsequent to the commencement of the case for the

purpose of defending the case and also that those were belated. As

noted above, the delay in furnishing the reports corresponded with the

delay in retrieval of the TBM and those were filed at the earliest after

such retrieval. It also held that if the report submitted by the

respondent Metro Railways was liable to be cast-off on the ground of

delay then same logic applied to the report submitted on behalf of the

appellant ITD.

25. In that view of the facts, we are of the opinion that the finding

of learned Single Judge to the effect that the reports produced on

behalf of the respondent Metro Railway were unreasonably discarded,

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cannot be said to be perverse or beyond the scope of Section 34 of the

Act of 1996.

26. Another issue raised by the appellant that the learned Single

Judge, erroneously held that the Arbitral Tribunal turned the contract

on its head. The learned Single Judge noted various provisions of the

contract between the appellant ITD and the respondent Metro

Railways. The impugned judgment and order noted Clause 4.23 of the

GCC with regard to liability in unforeseen physical condition. Learned

Single Judge noted that no report in writing, in terms of such clause,

was brought on record by the appellant. It further noted that even if

such unforeseen physical condition had been reported by the

appellant, it would not have absolved its liability towards third party

risk. It also noted that as per Clause 4.9 of the GCC and Clause 5

(first paragraph) of the SCC, the Contractor was to carry out soil

investigation and it would be deemed that it was satisfied of the same,

before putting in the tender itself. The learned Single Judge noted that

in the present case, a GIR was prepared by Subarna Jurong on the

basis of Constell’s report, which was preceded by a soil investigation

at the instance of the Contractor through its agents. Thus, the

presumption was, as per the contract between the parties, the

Contractor was duly satisfied with the soil condition before entering

into the Contract.

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27. The impugned judgment and order also noted the relevant

clauses of the contract towards third party liability in the following

terms, that’s to say: -

“83. The next important condition of the contract between the

parties is encapsulated in Clause 3.4 of the GCC, in the third

paragraph of which it is provided that no acts/omission of the

Engineer (GC) shall relieve the Contractor of its contractual

duties, responsibilities, obligations and liabilities.

84. Clause 4.1 of the GCC, in its fourth and fifth paragraphs,

casts full responsibility and risk on the Contractor for the

adequacy, stability, safety of site operations, works,

irrespective of approval or consent of the Engineer (emphasis

supplied).

85. The second paragraph of Clause 4.1 of the GCC provides

that it is the Contractor which is to design, manufacture and

execute the work.

86. Thus, the very premise of the impugned award, to the

effect that Metro Railways did not prove that the GC’s

instructions were not followed by the Contractor, is an entirely

irrelevant and extraneous consideration for deciding the

present dispute.

87. It is clear from the above clauses that, irrespective of any

act or omission of the Engineer, the Contractor has the

contractual obligation to bear the liabilities for any damage

caused to third parties during the project, irrespective of

approval or consent of the Engineer. Since the dispute relates

to stability and safety of the site operations and the works,

the contract casts complete responsibility on the Contractor,

which is admittedly a known commercial entity specialized in

the field of work involved in the project-in-question and, thus,

obviously entered into the contract with its eyes open, taking

calculated commercial risks.

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88. The commercial nature of the transaction itself shows that

the Contractor took a commercial risk upon assessing and

taking into account the soil conditions and other aspects

involved and cannot now resile from such position.

89. On the other hand, the role of the GC (the Employer-

appointed Engineer) in the project is merely supervisory in

nature. Clause 3.2 of the GCC and Clause 2 of the SCC

provide that the GC is merely to watch and inspect the works.

Clause 15.3 of the GCC stipulates insurance in respect of

third-party damages. Clause 14.5 of the GCC is clear in that

the Contractor is liable for all risks other than the employer's

risks, as enumerated in Clause 14.3 (which are not attracted

in the present case).”

28. After noting the aforesaid clauses of the contract, the learned

Single Judge observed that such provisions were completely

overlooked by the Arbitral Tribunal which rendered the arbitral award

patently perverse. The Arbitral Tribunal was obliged to give due

weightage to the terms of the contract and the trade usages prevalent

to the nature of the contract. However, the tribunal completely ignored

the terms of the contract and turned the entire liability upon the

respondent, Metro Railway against the explicit terms of the contract.

29. As discussed, the appellant failed to bring on record any

communication made by it in writing with regard to unforeseen

physical condition. Moreover, the clauses of the contract specifically

affixed any third party liability upon the contractor i.e. the appellant.

Nevertheless, by the arbitral award, the respondent was held

22

responsible for the third party risk upon the respondent Metro

Railway, inspite of the specific clauses of the contract. There is

absolutely no reason assigned in the award for such shift of liability.

In such circumstances, we find no reason to hold that the findings of

learned Single Judge are perverse.

30. In Ssangyong Engineering & Construction Company

Limited (supra) Supreme Court noted that a finding based on no

evidence at all or an award which ignores vital evidence in arriving at

its decision would be perverse and liable to be set aside on the ground

of patent illegality. Similarly, in Ramesh Kumar Jain (supra), the

Hon’ble Supreme Court observed that,

“35. Considering the aforesaid precedents, in our considered

view, the said terminology of ‘patent illegality’ indicates more

than one scenario such as the findings of the arbitrator must

shock the judicial conscience or the arbitrator took into

account matters he shouldn't have, or he must have failed to

take into account vital matters, leading to an unjust result; or

the decision is so irrational that no fair or sensible person

would have arrived at it given the same facts. A classic

example for the same is when an award is based on “no

evidence” i.e., arbitrators cannot conjure figures or facts out of

thin air to arrive at his findings. If a crucial finding is

unsupported by any evidence or is a result of ignoring vital

evidence that was placed before the arbitrator, it may be a

ground the warrants interference. However, the said

parameter must be applied with caution by keeping in

mind that “no evidence” means truly no relevant

evidence, not scant or weak evidence. If there is some

23

evidence, even a single witness's testimony or a set of

documents, on which the arbitrator could rely upon or

has relied upon to arrive at his conclusions, the court

cannot regard the conclusion drawn by the arbitrator

as patently illegal merely because that evidence has

less probative value. This thin line is stood crossed only

when the arbitral tribunal's conclusion cannot be

reconciled with any permissible view of the evidence.”

[Emphasis supplied]

31. As noted above, the Arbitral Tribunal not only overlooked the

terms of the contract but also ignored the evidence led by the

respondent, and that too, according to the learned Single Judge, with

a single stroke of pen without assigning any reason, would surely

invite the application of the principle of patent illegality.

32. OPG Power Generation (P) Ltd. (supra) noted that

“84. An Arbitral Tribunal must decide in accordance with the

terms of the contract. In a case where an Arbitral Tribunal

passes an award against the terms of the contract, the award

would be patently illegal. However, an Arbitral Tribunal has

jurisdiction to interpret a contract having regard to terms and

conditions of the contract, conduct of the parties including

correspondences exchanged, circumstances of the case and

pleadings of the parties. If the conclusion of the arbitrator is

based on a possible view of the matter, the Court should not

intefere. But where, on a full reading of the contract, the view

of the Arbitral Tribunal on the terms of a contract is not a

possible view, the award would be considered perverse and

as such amenable to interference.”

24

33. We have noted hereinbefore that the contract between the

parties required the contractor to report in writing, any unforeseen

physical condition to the employer. No evidence of such report has

been brought on record. Moreover, inspite of such report, according to

the contract, the contractor accepted the liability of any third party

risk. Nevertheless, the Arbitral Tribunal went beyond the contract and

affixed such liability upon the employer i.e. the respondent Metro

Railway, apparently without any reason assigned in this regard which

rendered the award patently illegal and liable to be set aside.

34. In Jan De Nul Dredging Indian Pvt. Ltd. (supra) the Hon’ble

Supreme Court observed on the jurisdiction under Section 37 of the

Act of 1996 in the following terms: -

“36. The gist of the aforesaid decisions is that the jurisdiction

of the court under Section 37 of the Act is akin to the

jurisdiction of the court under Section 34 of the Act, and,

therefore, the scope of interference by the court in appeal

under Section 37 cannot go beyond the grounds on which

challenge can be made to the award under Section 34 of the

Act. Moreover, the courts exercising powers under Sections 34

and 37, do not act as a normal court, and therefore, ought not

to interfere with the arbitral award on a mere possibility of an

alternative view.”

35. Similar ratio was laid down in the case of Konkan Railway

Corpn. Ltd. (supra). The Hon’ble Supreme Court noted the principles

25

regarding of scope of Section 34 and 37 of the Arbitration and

Conciliation Act in following terms: -

“18. At the outset, we may state that the jurisdiction of the

court under Section 37 of the Act, as clarified by this Court in

MMTC Ltd. v. Vedanta Ltd. is akin to the jurisdiction of the

court under Section 34 of the Act. Scope of interference by a

court in an appeal under Section 37 of the Act, in examining

an order, setting aside or refusing to set aside an award, is

restricted and subject to the same grounds as the challenge

under Section 34 of the Act.

19. Therefore, the scope of jurisdiction under Section 34 and

Section 37 of the Act is not akin to normal appellate

jurisdiction. 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. In Dyna Technologies (P)

Ltd. v. Crompton Greaves Ltd. , this Court held : (Dyna

Technologies case [Dyna Technologies (P) Ltd. v. Crompton

Greaves Ltd., (2019) 20 SCC 1] , SCC p. 12, paras 24-25)

“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 which may sustain the arbitral

award. Section 34 is different in its approach and

cannot be equated with a normal appellate jurisdiction.

26

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. 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.”

36. The Hon’ble Supreme Court defined the latitude of Section 37

of the Act of 1996. It laid down that the scope of the intervention of

the Court in arbitral matters is virtually prohibited, if not absolutely

barred and that the interference is confined only to the extent

envisaged under Section 34 of the Act. The appellate power of Section

37 of the Act is limited within the domain of Section 34 of the Act. It is

exercisable only to find out if the Court, exercising power under

Section 34 of the Act, has acted within its limits as prescribed

thereunder or has exceeded or failed to exercise the power so

conferred. The Appellate Court has no authority of law to consider the

matter in dispute before the Arbitral Tribunal on merits so as to find

27

out as to whether the decision of the Arbitral Tribunal is right or

wrong upon reappraisal of evidence as if it is sitting in an ordinary

Court of appeal. It is only where the Court exercising power under

Section 34 has failed to exercise its jurisdiction vested in it by Section

34 or has travelled beyond its jurisdiction that the Appellate Court can

step in and set aside the order passed under Section 34 of the Act. Its

power is more akin to that superintendence as is vested in Civil

Courts while exercising revisionary powers. The arbitral award is not

liable to be interfered unless a case for interference as set out in the

earlier part of the decision, is made out. It cannot be disturbed only

for the reason that instead of the view taken by the arbitral tribunal,

the other view which is also a possible view is a better view according

to the Appellate Court.

37. In the case at hand, the learned Single Judge was not

confronted with a situation that two views were possible and it altered

the view accepted by the arbitral tribunal. Rather, the learned Single

Judge found that the award was passed completely overlooking the

terms of the contract between the parties as well as upon discarding

the evidence produced by the respondent without assigning any

reason for such rejection. According to learned Single Judge, the

reasoning provided by the tribunal in arriving at the conclusion were

manifestly against the public policy as well as principles of natural

justice and were patently perverse. Nothing has been demonstrated

28

that in passing the impugned judgment and order, the learned Single

Judge exceeded its jurisdiction vested in it under Section 34.

38. In Som Datt Builders Ltd. (supra) it was held that where the

arbitrator has referred to facts of the case and has noticed some

reasoning which in view of the arbitrator was sufficient to arrive at a

conclusion for granting relief, award cannot be stated to be

unreasoned. The arbitrator is not expected to write an elaborate

judgment and where the arbitrator has noticed contentions of the

counsel, it cannot be said that the arbitrator failed in stating reasons

for the award.

39. Similar views were laid down in Dyna Technologies (P) Ltd.

(supra) which noted that 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.

40. In Bombay Slum Redevelopment Corpn. (P) Ltd. (supra), the

Hon’ble Supreme Court laid down that,

“26. The jurisdiction of the appellate court dealing with an

appeal under Section 37 against the judgment in a petition

under Section 34 is more constrained than the jurisdiction of

29

the Court dealing with a petition under Section 34. It is the

duty of the appellate court to consider whether Section 34

Court has remained confined to the grounds of challenge that

are available in a petition under Section 34. The ultimate

function of the appellate court under Section 37 is to decide

whether the jurisdiction under Section 34 has been exercised

rightly or wrongly. While doing so, the appellate court can

exercise the same power and jurisdiction that Section 34 Court

possesses with the same constraints.”

41. Similarly in Damodar Valley Corporation (supra) it was

noted by this Court that while exercising powers under Section 37 of

the Act of 1996 we are required to find out whether the Court

exercising powers under Section 34 of the Act 1996 acted within its

limits as prescribed there under or exceeded or failed to exercise the

power so conferred.

42. In the instant case, however, the learned Single Judge

proceeded to set aside the arbitral award ostensibly on the ground

that the evidence produced by the respondent Metro Railway was

discarded without assigning any reason, merely on the ground that it

was a stale report prepared belated, after the initiation of the arbitral

proceeding. The delay in the retrieval of the parts of TBM was

absolutely not taken into consideration by the arbitral tribunal.

43. In the light of discussions made hereinbefore, we are of the

opinion that the learned Single Judge did not exceed its jurisdiction or

fail to exercise its jurisdiction vested in it under the provisions of

30

Section 34 of the Act of 1996. Therefore, we find no reason to interfere

with the impugned judgment and order.

44. Consequently, the instant appeal being APOT No. 298 of 2025

is hereby dismissed however, without any order as to costs. With the

disposal of main case, connected applications, if any, shall also stand

disposed of accordingly.

45. Urgent photostat certified copy of this judgment, if applied

for, be supplied to the parties on priority basis upon compliance of all

formalities.

[MD. SHABBAR RASHIDI, J.]

46. I agree.

[DEBANGSU BASAK, J.]