Dismissed

Raj.State Mines and Minerals v. M/S Ace India

Rajasthan HC15 Sept 2025CMA/1851/2006

Case brief

AI extract

What is this about?

Appeal under Section 37 challenging an arbitral award on a limestone transportation contract over quantity-based payment and pre-reference interest. The court held clauses 4(i) and 4(ii) are mutually contradictory and must be read together, found no illegality or perversity in the award or district judge order, upheld the arbitrator's power to grant interest as the contract was silent, and dismiss

What did the court decide?

None granted; appeal dismissed and award with district judge order affirmed, with refund of any deposited/FDR amount plus interest to appellant.

Raj.State Mines and Minerals Vs M/S Ace India — Arbitration | Rajasthan HC (2025)

¶1

[2025:RJ-JP:44637]

¶2

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

¶3

S.B. Civil Miscellaneous Appeal No. 1851/2006

¶4

Rajasthan State Mines And Minerals Ltd. (A Government of Rajasthan Enterprise), Having its Registered Office At C-89-90, Janpath, Lal Kothi Scheme, Jaipur Through its Managing Director.

¶5

----Appellant

¶6

Versus

¶7

M/s ACE India Transport (Pvt.) Ltd., C-8, Bhagirath Colony, Chomu House, Jaipur Through Proprietor Shri Hitesh Garg S/o Shri M.L. Garg, R/o C-9, Bhagirath Colony, Choumu House, Jaipur.

¶8

Shri J.P. Bansal, RHJS (Retd.), Sole Arbitrator, R/o 34, Hari Krishna Somani Marg, Gopal Badi, Jaipur.

¶9

----Respondents

¶10

For Appellant(s)	: Mr. Pranjul Chopra, Adv. with Mr. Ankur Jain, Adv.
For Respondent(s)	: Mr. Suresh Kumar Sahni, Adv.
	Mr. Ram Mohan Sharma, Adv.
	Mr. Mahendra Singh Solanki, Adv.

¶11

HON'BLE MR. JUSTICE CHANDRA PRAKASH SHRIMALI

¶12

Order

¶13

RESERVED ON : 15/09/2025 PRONOUNCED ON : 14/11/2025

¶14

vihykFkhZ dh vksj ls ;g vihy varxZr /kkjk 37 e/;LFkrk ,oa lqyg vf/kfu;e] 1996 fo}ku U;k;ky; ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk fofo/k vkjchVªs'ku izkFkZuk i= la[;k 447@2005 esa ikfjr fu.kZ; o vokMZ fnukad 13-04-2006 ls O;fFkr gksdj vihy esa vafdr vk/kkjksa ij izLrqr dh x;h gS] ftlds ek/;e ls fo}ku U;k;ky; us vihykFkhZ dh /kkjk

[CMA-1851/2006]

[2025:RJ-JP:44637]

(2 of 23)

34 e/;LFkrk ,oa lqyg vf/kfu;e] 1996 dh ;kfpdk vLohdkj dj fo}ku ,dyiap }kjk ikfjr vokMZ@iapkV fnukad 13-07-2005 dh iqf"V dh gSA

¶19

vihy ij mHk; i{kksa dks lquk x;k rFkk vfHkys[k dk voyksdu fd;k x;kA

¶20

vihykFkhZ ds fo}ku vfHkHkk"kd dk cgl ds nkSjku rdZ jgk gS fd fnukad 11-10-1999 dks izR;FkhZ o vihykFkhZ daiuh ds e/; ,d djkj ykbZe LVksu fxfVV;ksa ds ifjogu ds laca/k esa gqvk] ftlds rgr lksuw ykbZe LVksu ekbZUl] tSlyesj ls tSlyesj jsyos LVs'ku rd ykbZe LVksu dh fxfVV;ksa dks ykus vkSj jsyos oSxu esa yksM+ fd;s tkus ds laca/k esa fu"ikfnr gqvkA djkj dh 'krZ 3¼v½ ds vuqlkj eky ds okWY;we ds fglkc ls daiuh ds vf/kdkfj;ksa dks dkWUVªsDVj dh mifLFkfr esa otu dk fu/kkZj.k djuk Fkk vkSj mlesa yxk;s x;s ekdkZ ds vuqlkj dkWUVªsDVj dks eky oSxu esa yksM+ djokuk Fkk rFkk daiuh ds izfrfuf/k;ksa ds crk;s vuqlkj mldk izek.k i= izkIr djuk Fkk vkSj blesa pwd djus dh voLFkk esa fdlh Hkh ikWbZUV ij gksus okys 'kkWVsZt ;k izkIrdrkZ ds ;gka 'kkWVsZt ik;s tkus ij eky dh dher o HkkM+k lfgr ftruk uqdlku daiuh dks gqvk] og dkWUVªsDVj ls izkIr djus dk djkj FkkA nksuksa i{kksa esa tks bdjkjukek fnukad 11-10-1999 dks gqvk] mlds DykWt 4¼ii½ lifBr DykWt 9] 10 o 22 ds rgr jsyos fjflV ¼R.R.½ esa crk;s x;s otu ds vk/kkj ij eky dk Hkqxrku djuk FkkA fo}ku ,dy iap us bdjkjukes ds DykWt 4(i) ds varxZr tks LVhy IykaV dks vf/kd eky Hkstk x;k] mlds vk/kkj ij jkf'k ds Hkqxrku dk vkns'k dj fn;k] tcfd DykWt 4(i) lkekU; izko/kku gS] tks izekf.kr fcy ds Hkqxrku ds le; ykxw gksrk gS rFkk DykWt 4(ii) lifBr DykWt 9 o 10 Hkqxrku ls lacaf/kr

[CMA-1851/2006]

[2025:RJ-JP:44637]

(3 of 23)

fofufnZ"V izko/kku gSa] ftlesa jsyos fjflV ¼R.R.½ esa n'kkZ;s x;s otu ds vk/kkj ij Hkqxrku ds laca/k esa fofufnZ"V izko/kku gSaA izR;FkhZ jsyos fjflV ¼R.R.½ esa ekbZUl ls jsyos LVs'ku rd Hksts x;s eky ifjogu ds laca/k esa Hkqxrku izkIr dj ldrk gS] ysfdu LVhy IykaV esa n'kkZ; x;s otu ds vk/kkj ij eky dk Hkqxrku izkIr ugha dj ldrk gSA lafonk fof/k ds rgr i{kdkjksa ds e/; gqbZ lafonk nksuksa i{kksa esa ck/;dkjh gSA fo}ku ,dy iap nksuksa i{kksa ds e/; fu"ikfnr lafonk ls ckgj tkdj vf/kd eky ifjogu ds laca/k esa LVhy IykaV esa gq, otu ds vk/kkj ij eky dh jkf'k ds Hkqxrku dk vkns'k ugha dj ldrk gSA fdlh lafonk ;k bdjkjukes esa lkekU; fofufnZ"V izko/kku gks] ogka fofufnZ"V izko/kku vf/kd izHkko'kkyh gksrk gSA nksuksa i{kksa ds e/; fu"ikfnr bdjkjukes ds DykWt 4(ii) lifBr DykWt 9] 10 o 22 ds vk/kkj ij jsyos fjflV ¼R.R.½ esa n'kkZ;s x;s otu ds vk/kkj ij gh izR;FkhZ Hkqxrku izkIr dj ldrk gSA ,dy iap ;k U;k;ky; i{kdkjksa ds e/; gq, bdjkjukes@lafonk dks vius fglkc ls ifjofrZr ugha dj ldrs gSaA fo}ku ,dy iap us fook|d la[;k 1 o 2 dks fu.khZr djrs le; ikfjr iapkV ¼vokMZ½ fnukad 13-07-2005 ds }kjk i{kdkjksa ds e/; gqbZ lafonk esa vafdr 'krksZa dks fcuk fdlh U;k;ksfpr vk/kkj ds u;s fljs ls r; dj LVhy IykaV dks tks eky lIykbZ fd;k x;k Fkk] mlds vk/kkj ij izR;FkhZ dks Hkqxrku djus dk vkns'k ns fn;k] tks fof/k esa of.kZr izko/kkuksa o nksuksa i{kksa ds e/; gq, djkj ds foijhr gSA

¶25

blds vfrfjDr nksuksa i{kksa esa tks lafonk@bdjkjukek fu"ikfnr gqvk] mlesa izh&jsQjsUl C;kt dk dksbZ djkj nksuksa i{kdkjksa esa ugha gqvk Fkk] blds ckotwn Hkh fo}ku ,dy iap us vius vkyksP; vokMZ esa fnukad 12-10-2002 ls 16-08-2003 rd izh&jsQjsUl ihfj;M esa 9 izfr'kr okf"kZd dh nj ls C;kt

[CMA-1851/2006]

[2025:RJ-JP:44637]

(4 of 23)

fnyok;s tkus esa fof/kd Hkwy o =qfV dh gSA fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj us fofo/k vkjchVªs'ku izkFkZuk i= la[;k 447@2005 esa ikfjr vkyksP; vkns'k fnukad 13-04-2006 esa Hkh vihykFkhZ ds }kjk mBk;s x;s fcUnqvksa ij dksbZ fopkj ugha dj fof/k fo:) fu.kZ; ikfjr fd;k gSA vr% fo}ku ,dy iap }kjk ikfjr vokMZ fnukad 13-07-2005 o fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk ikfjr vkyksP; vkns'k fnukad 13-04-2006 vikLr fd;k tkdj vihykFkhZ }kjk izLrqr vihy Lohdkj dh tkosA

¶30

izR;FkhZ ds fo}ku vfHkHkk"kd dk cgl ds nkSjku ;g rdZ jgk gS fd ,dy iap us nksuksa i{kksa dks lqudj vokMZ ikfjr fd;k gSA rRi'pkr fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj us nksuksa i{kksa dks lqudj vihykFkhZ dk izkFkZuk i= varxZr /kkjk 34 e/;LFkrk ,oa lqyg vf/kfu;e] 1996 vLohdkj dj [kkfjt dj fn;kA nks leorhZ l{ke izkf/kdkjh@U;k;ky; }kjk ,d gh fu.kZ; fn;k x;k gS] ,slh fLFkfr esa mPp U;k;ky; ,sls ekeyksa esa vihyh; U;k;ky; dh gSfl;r ls dk;Z ugha dj ldrk gSA izR;FkhZ }kjk [kku ij tks dkaVs ¼osfczt½ yxk;s x;s Fks] os lgh :i ls uki&rkSy dk dke ugha djrs FksA djkj dh 'krksZa ds vuqlkj eky dks [kku ij rksyus ds ckn jsyos LVs'ku ij Hkh otu djkuk Fkk vkSj mDr dk;Z vihykFkhZ dks djuk Fkk] ysfdu muds }kjk jsyos LVs'ku ij dkaVk ugha yxk;s tkus ds dkj.k eky dk otu ugha fd;k tk ldkA mDr eky dks fdlh ifCyd osfczt ij daiuh ds [kpsZ ij rqyokuk Fkk] tks 'krZ vkKkRed Fkh] mls vihykFkhZ us iwjk ugha fd;kA bl laca/k esa vihykFkhZ dh vksj ls 3 lnL;ksa dh lfefr cuk;h x;h Fkh] ftUgksaus Hkh izR;FkhZ ds i{k esa fu.kZ; fn;k FkkA izR;FkhZ }kjk tks eky ifjogu fd;k x;k o oSxu esa yksM+

[CMA-1851/2006]

[2025:RJ-JP:44637]

(5 of 23)

fd;k x;k] og jsyos fjflV ¼R.R.½ esa n'kkZ;h x;h ek=k ls vf/kd FkkA vihykFkhZ dks rhljh ikVhZ eSllZ fe=k ,l-ds nokc ds dgus ds vk/kkj ij eky yksM+ o fMLisp fd;k x;kA izR;FkhZ }kjk jsyos fjflV ¼R.R.½ esa n'kkZ;s x;s eky ls vf/kd eky yksM+ dj vf/kd eky LVhy IykaV esa igqapk;k] blds laca/k esa le;≤ ij vkifÙk izR;FkhZ }kjk vihykFkhZ dks dh x;h] ftldks vihykFkhZ us ewy tokc o izkFkZuk i= esa Lohdkj fd;k gSA izR;FkhZ ds }kjk vf/kd eky] tks fd LVhy IykaV ij fMLisp gqvk] mlh ds vk/kkj ij mlus eky dk Hkqxrku izkIr fd;k x;k gS] uk dh jsyos fjflV ¼R.R.½ esa n'kkZ;h x;h ek=k ds vk/kkj ijA bl laca/k esa izn'kZ&3 ls 9 rd dh vkifÙk;ka Hkh izR;FkhZ }kjk dh x;h Fkha o vf/kd eky yksM+ o fMLisp gksus ckcr fcy o Dyse izLrqr fd;s x;s FksA fo}ku ,dy iap us djkj dh 'krksZa ds vuq:i DykWt 4(i) esa of.kZr izko/kkuksa ds rgr fof/klEer vokMZ ikfjr fd;k gSA ,dy iap us ,fDll eSVsfj;y fMLisPM dk VªkaliksVsZ'ku ,oa oSxu yksfMax dk Hkqxrku ,t ij ,Dpqvy DokfUVVh fMLisPM ,aM fjflIV ck; nh LVhy IykaV] tks fd jsyos fjflV ¼R.R.½ esa n'kkZ;h x;h ek=k ls vf/kd gS] ds laca/k esa jkf'k izkIr djus dk vf/kdkjh crk;k gS] tks fd dkuwuu lgh gSA bl laca/k esa ,dy iap }kjk dksbZ dkuwuh o rF;kRed Hkwy ugha dh gS] ftls fo}ku ftyk U;k;k/kh'k }kjk Hkh Lohdkj fd;k x;k gSA izR;FkhZ us dHkh Hkh jsyos fjflV ¼R.R.½ esa n'kkZ;s x;s otu dks Lohdkj ugha fd;k gS] uk gh mlds vk/kkj ij Hkqxrku izkIr fd;k gSA vihykFkhZ dks vf/kd eky fn;s tkus ds laca/k esa Hkqxrku ds laca/k esa le; ij vkifÙk Hkh dh x;h gSA LVhy IykaV esa tks eky fMLisp gqvk rFkk ogka tks eky dk otu fd;k x;k] og [kku ij yxs dkaVs ij gq, otu o jsyos LVs'ku ij gq, otu ls vf/kd FkkA daiuh us Hkh vf/kd eky dk Hkqxrku lacaf/kr LVhy IykaV ls mBk;k gSA

[CMA-1851/2006]

[2025:RJ-JP:44637]

(6 of 23)

[kku ij yxs dkaVs lgh izdkj ls dsfyczsVsM ugha Fks vkSj daiuh ds dUotZu QSDVj ds vk/kkj ij okWY;weSfVªd i)fr Hkh oSKkfud i)fr ugha FkhA

¶39

blds vfrfjDr ,dy iap }kjk e/;LFkrk ,oa lqyg vf/kfu;e dh /kkjk 34 dh en 2¼1½ ds rgr ikfjr vokMZ fujLr ugha fd;k tk ldrk gS] D;ksafd fo}ku ,dy iap }kjk i{kdkjku ds e/; fookfnr fcUnq cukdj mu ij dkj.k lfgr foLr`r :i ls viuk fu.kZ; fn;k gS rFkk 'krksZa dk lgh vFkZ fudkydj viuk vkns'k ikfjr fd;k gSA fo}ku ,dy iap us djkj ds DykWt 4(i) o 4(ii) ds laca/k esa nksuksa DykWtksa dks lgh :i ls i<+dj mudk lgh :i ls foospu fd;k gSA DykWt 4(ii) fofufnZ"V izko/kku gks vkSj DykWt 4(i) ij fo}ku ,dy iap fopkj gh ugha djsaxs] ,slk uk rks djkj esa fn;k x;k gS] uk fof/k vuqlkj ,slk laHko gSA tgka dksbZ fookn gks] rc nksuksa DykWtksa ij fopkj djrs gq, U;k;ky;@l{ke izkf/kdkjh dks fu.kZ; nsuk gksrk gSA mlh vuq:i fo}ku ,dy iap vkSj fo}ku ftyk U;k;k/kh'k us fu.kZ; ikfjr fd;k gS] tks fof/k vuqdwy ekuk tk ldrk gSA fof/k esa of.kZr izko/kkuksa ds rgr gh fo}ku ,dy iap us fnukad 12-10-2002 ls 16-08-2003 rd izh&jsQjsUl ihfj;M+ dk 9 izfr'kr C;kt fnyok;k gS] ftlesa gLr{ksi fd;s tkus dk dksbZ U;k;ksfpr vk/kkj ugha gSA vr% vihykFkhZ dh vihy vLohdkj dj [kkfjt dh tkosA

¶40

izR;FkhZ ds fo}ku vfHkHkk"kd us vius rdksZa ds leFkZu esa fuEufyf[kr fofu'p; izLrqr fd;s%&

¶41

Rashtriya Ispat Nigam Ltd. Vs. Dewan Chand Ram Saran; (2012) 5 SCC 306

¶42

Avishek Goenka Vs. Union of India & Anr.; (2012) 5 SCC 321,

¶43

National Highways Authority of India Vs. ITD Cementation India Ltd.; (2015) 14 SCC 21

(7 of 23)

[2025:RJ-JP:44637]

[CMA-1851/2006]

Municipal Corporation of Delhi Vs. M/s Jagan Nath Ashok Kumar & Anr.; (1987) 4 SCC 497

¶48

State of Rajasthan Vs. Nav Bharat Construction Company; (2010) 2 SCC 182

¶49

Petition(s) for Special Leave to Appeal (C) No.2516/2023, Rajasthan State Mines and Minerals Ltd. Vs. M/s ACE Construction Mines and Minerals Cooperative Society Ltd. (Supreme Court)

¶50

S.B. Civil Misc. Appeal No.1423/2013, Rajasthan State Mines and Mineral Ltd. Vs. M/s ACE Construction Mines and Minerals Co-operative Society Ltd. reserved on 23.11.2022 & pronounced on 29.11.2022 (Rajasthan High Court)

¶51

S.B. Civil Misc. Appeal No.1851/2006, Rajasthan State Mines and Minerals Ltd. Vs. M/s ACE India Transport(Pvt) Ltd. (Rajasthan High Court)

¶52

eSaus mHk; i{kksa ds rdksZa ij euu fd;k rFkk i=koyh o izLrqr fofu'p;ksa dk /;kuiwoZd voyksdu fd;kA

¶53

orZeku izdj.k esa vihykFkhZ ,oa izR;FkhZ ds e/; ewy fookn vkiwfrZ fd;s x;s eky dh ek=k dks ysdj gSA izR;FkhZ ds vuqlkj mlus tks eky vihykFkhZ dks fn;k vFkkZr vkiwfrZ dh] mlls de ek=k dk Hkqxrku vihykFkhZ }kjk mudks fd;k x;k gSA ogha vihykFkhZ dk rdZ gS fd nksuksa i{kksa ds e/; gq, djkj ds DykWt 4(ii) ds eqrkfcd izR;FkhZ dks jsyos fjflV ¼R.R.½ esa of.kZr otu ds vuqlkj gh Hkqxrku fd;k tk ldrk gSA

¶54

fo}ku ,dy iap }kjk ikfjr iapkV fnukad 13-07-2005 esa dqy 5 fook|d fojfpr fd;s x;s gSa] ftuesa ls fook|d la[;k 1 o 2 nksuksa vihykFkhZ ds fo:) fu.khZr fd;s x;s vkSj ;g ekuk x;k fd izR;FkhZ }kjk vf/kd ek=k esa ykbZe LVksu vihykFkhZ dks fn;k x;k gS vkSj vf/kd ek=k esa fd;s x;s eky ds ifjogu dk Hkqxrku LVhy IykaV esa gq, otu ds vk/kkj ij izR;FkhZ vihykFkhZ ls izkIr djus dk vf/kdkjh gSA fo}ku ,dy iap us

[CMA-1851/2006]

[2025:RJ-JP:44637]

(8 of 23)

fook|d la[;k 3] 4 o 5 izR;FkhZ@DysesaV ds fo:) fu.khZr fd;k gSA mDr fook|dksa ds laca/k esa izR;FkhZ dh vksj ls dksbZ vkifÙk ugha dh x;h gS] uk gh dksbZ vihy dh x;h gSA fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk fofo/k vkjchVªs'ku izkFkZuk i= la[;k 447@2005 esa ikfjr vkns'k fnukad 13-04-2006 esa ewyr% fook|d la[;k 1 o 2 ds laca/k esa gh foospu fd;k x;k gSA

¶59

vihykFkhZ ds }kjk bl vihy esa eq[;r% nks fcUnq mBk;s x;s gSaA izFke fcUnq ;g gS fd izR;FkhZ nksuksa i{kdkjksa ds e/; gq, djkj fnukad 11-10-1999 ds DykWt la[;k 4(ii) lifBr /kkjk 9] 10 o 22 ds vk/kkj ij jsyos fjflV ¼R.R.½ esa fn;s x;s otu ds vk/kkj ij gh eky dk Hkqxrku izkIr djus dk vf/kdkjh gS] tcfd LVhy IykaV ij gq, otu ds vk/kkj ij eky dk Hkqxrku izkIr djus dk vf/kdkjh ugha gS rFkk DykWt 4(ii) fofufnZ"V izko/kku gksus ds dkj.k DykWt 4(i) ij izHkkoh gS vkSj DykWt 4(ii) esa of.kZr jsyos fjflV ¼R.R.½ ds vk/kkj ij eky dk Hkqxrku fd;k tkuk pkfg,A vihykFkhZ dh vksj ls nwljk rdZ ;g j[kk x;k gS fd fo}ku ,dy iap us fnukad 1210-2002 ls 16-08-2003 rd izh jsQjsUl ihfj;M+ dk C;kt izR;FkhZ dks fnyok;k gS] tks muds }kjk ugha fnyok;k tk ldrk gSA mDr nksuksa fopkj.kh; fcUnqvksa dk foospu djrs le; loZizFke nksuksa i{kksa ds e/; gq, djkj ds DykWt 4(i) o 4(ii) dks ;gka mYysf[kr fd;k tkuk mfpr gksxk%&

¶60

4. i. The Contractor will be eligible to receive his remuneration from the Corporation in respect of the complete work done by hin as per details given in the work order/ agreement on monthly basis for the work completed (wagon loaded would mean work completed) within 10 days of receipt of their duly verified bill for such quantity only as is actually despatched/sold by the Corporation to the various users/ buyers from time to

[2025:RJ-JP:44637]

[CMA-1851/2006]

(9 of 23)

time. No advance against unsold/undespatched stocks shall be payable to the Contractor.

¶65

ii. for the purpose of payment (for transportation and wagon loading, stacking, watch & ward, etc.) weight mentioned in the RR shall be treated and taken as final, However, this payment will be subject to the maximum of the weight of the material transported from mines to the railway station on cumulative basis after adjustment of opening & closing stock at the railway station. The monthly payment will be subject to Clause-2 (II) hereinabove."

¶66

mDr bdjkjukes ds DykWt 4(i) dk voyksdu djsa rks izR;FkhZ] vihykFkhZ@dkWjiksjs'ku ls muds }kjk tks laiw.kZ dk;Z fd;k x;k gS] tks odZ vkWMZj esa gS ¼oSxu esa tks eky yksM+ gksus ij dk;Z iw.kZ gksuk ekuk tkosxk½ rFkk tks okLro esa dkWjiksjs'ku }kjk fofHkUu mi;ksxdrkZvksa dks fMLisp@lsy fd;k gS] mldk Hkqxrku izkIr djus dk vf/kdkjh gSA bl izko/kku dks ;fn n`f"Vxr j[ksa rks ;g Li"V gksrk gS fd izR;FkhZ ml dk;Z dk Hkqxrku izkIr djus dk vf/kdkjh gS] tks izR;FkhZ us djkj ds eqrkfcd ;k dk;kZns'k ds eqrkfcd lEikfnr fd;k gS rFkk mDr eky vihykFkhZ@dkWjiksjs'ku }kjk mlds fofHkUu mi;ksxdrkZvksa vkSj [kjhnnkjksa dks fMLisp fd;k x;k gks ;k lsy fd;k x;k gksA nwljh rjQ DykWt 4(ii) dk voyksdu djsa rks mlesa ;g mYysf[kr fd;k x;k gS fd jsyos fjflV ¼R.R.½ esa tks otu n'kkZ;k x;k gS] og vafre gksxk vkSj mlh ds vk/kkj ij izR;FkhZ dks Hkqxrku fd;k tk,xkA lkFk gh DykWt 4(ii) esa ;g DykWt fn;k x;k gS fd%&

¶67

"ii. ................ However, this payment will be subject to the maximum of the weight of the material transported from mines to the railway station on cumulative basis after adjustment of opening & closing stock at the railway station. The monthly payment will be subject to Clause2 (II) hereinabove."

[CMA-1851/2006]

[2025:RJ-JP:44637]

(10 of 23)

bl izdj.k esa izR;FkhZ }kjk bdjkjukes ds DykWt 4(i) ds vuqlkj ;g dFku fd;k x;k gS fd vihykFkhZ@dkWjiksjs'ku us LVhy IykaV dks tks eky cspk] ogka ij eky [kjhnrs le; mldk tks otu fd;k x;k] mlh ds vuqlkj Hkqxrku djuk pkfg, Fkk] D;ksafd mlh ds vuq:i izR;FkhZ@DysesaV us djkj ds vuqca/k ds vuq:i ykbZe LVksu dh fxfV~V;ksa dk ifjogu vihykFkhZ dks fd;kA ogha vihykFkhZ dk dFku jgk gS fd vuqca/k ds DykWt 4(ii) ds vuqlkj dsoy jsyos fjflV ¼R.R.½ esa of.kZr otu ds vuq:i gh izR;FkhZ Hkqxrku izkIr djus dk vf/kdkjh gSA

¶72

fo}ku ,dy iap us DykWt 4(i) o 4(ii) esa fojks/kkHkkl gksus ds dkj.k vkSj gkjeksfu;l baVjfizVs'ku djus dk mudk nkf;Ro gksus vkSj vU; vk/kkjksa dks foosfpr djrs gq, ;g ekuk gS fd izR;FkhZ@DysesaV us le;≤ ij vihykFkhZ@dkWjiksjs'ku dks i= fy[kdj ;g lwfpr fd;k fd jsyos fjflV ¼R.R.½ esa tks eky nf'kZr fd;k x;k gS] og okLrfod eky ls de gSA bl laca/k esa izR;FkhZ dh vksj ls nLrkost Hkh iznf'kZr djok;s x;s gSa vkSj ;g Li"V fd;k x;k gS fd izR;FkhZ us i= fnukad 06-11-2000] 30-03-2001] 04-04-2001] 25-08-2001] 08-01-2002] 10-05-2002 o 12-08-2002 ds }kjk ;g lwfpr fd;k x;k fd mlus vf/kd eky dk ifjogu fd;k gSA blds ckotwn Hkh vihykFkhZ@dkWjiksjs'ku dh vksj ls dksbZ tokc bl izdj.k esa ugha fn;k x;kA bl laca/k esa vihykFkhZ@dkWjiksjs'ku }kjk tks lfefr xfBr dh x;h] mUgksaus Hkh ;g ekuk fd okWY;we ds vuqlkj otu dh x.kuk djus dk rjhdk lgh ugha gS vkSj jsyos fjflV ¼R.R.½ esa of.kZr otu }kjk iznf'kZr otu vkSj okWY;we ds vk/kkj ij fudkys otu esa varj gks ldrk gS vkSj blh dkj.k LVhy IykaV ij otu djus ij eky T;knk fudykA

[CMA-1851/2006]

[2025:RJ-JP:44637]

(11 of 23)

fo}ku ,dy iap us ;g ekuk gS fd okLro esa eky fMLisp djus ls igys jsyos fjflV ¼R.R.½ esa tks otu n'kkZ;k x;k gS og lgh ugha Fkk] D;ksafd vihykFkhZ@dkWjiksjs'ku us eky dk otu djus ds fy, mfpr midj.k dh O;oLFkk fMLisp LVs'ku ij ugha dj j[kh FkhA ,slh fLFkfr esa DykWt 4(i) dk gokyk nsrs gq, LVhy IykaV }kjk eky [kjhnrs le; tks eky dk otu fd;k x;k] mlds vk/kkj ij jkf'k dk Hkqxrku djus dk fu.kZ; fn;k] D;ksafd ogh eky daiuh }kjk ifjogu fd;k x;k] ftl eky dks vihykFkhZ }kjk LVhy IykaV dks fn;k x;kA

¶77

bl izdj.k esa i{kdkjksa esa eq[;r% fookn ;g gS fd i{kdkjksa ds e/; vuqca/k ds DykWt 4(i) ds vuq:i vkf/kD; eky dk Hkqxrku izR;FkhZ@DysesaV dks fd;k tkos ;k DykWt 4(ii) esa of.kZr izko/kkuksa ds rgr jsyos fjflV ¼R.R.½ esa of.kZr otu ds vk/kkj ij vkf/kD; eky dk Hkqxrku izR;FkhZ dks fd;k tkosA bl rF; ij fopkj djus ds fy, vuqca/k ds DykWt 4(i) o 4(ii) nksuksa dks la;qDr :i ls ns[kk tkuk gksrk gSA vuqca/k ds DykWt 4(i) ds vuqlkj izR;FkhZ@DysesaV ml eky dh okLrfod ek=k dk Hkqxrku izkIr djsxk] tks eky vihykFkhZ@dkWjiksjs'ku vkSj fofHkUu mi;ksxdrkZvksa@xzkgdksa dks iznÙk fd;k gS ;k cspk ¼Dispatch/Sold½ gSA tcfd DykWt 4(ii) ds vuqlkj jsyos fjflV ¼R.R.½ esa of.kZr otu ds vuq:i eky dk Hkqxrku fd;k tkosxkA jsyos fjflV ¼R.R.½ esa of.kZr otu oLrqr% lgh otu gS] bl rF; dks vihykFkhZ dh vksj ls Li"V ugha fd;k x;k gS vkSj bl rF; dks fo}ku ,dy iap us vius vkyksP; vkns'k fnukad 13-07-2005 esa Hkh mYysf[kr fd;k gSA izR;FkhZ@DysesaV us vkf/kD; eky fn;k] bl laca/k esa dksbZ fookn ugha gSA jsyos fjflV ¼R.R.½ esa of.kZr otu ls vf/kd eky oSxu

[CMA-1851/2006]

[2025:RJ-JP:44637]

(12 of 23)

esa izR;FkhZ@DysesaV }kjk yksM+ fd;k x;k] bl laca/k esa izR;FkhZ@DysesaV us vihykFkhZ dks izn'kZ&3 ls izn'kZ&9 i= Hkh fy[ks gSaA

¶82

,slh fLFkfr esa vihykFkhZ dk ;g drZO; Fkk fd og bl rF; dks ns[krk vkSj izR;FkhZ@DysesaV dks bl laca/k esa rF; Hkh Li"V djrk vkSj fy[krk fd vkf/kD; eky] tks LVhy IykaV }kjk izkIr fd;k x;k ;k oSxu esa yksM+ fd;k x;k] mldk Hkqxrku ugha fd;k tk,xk] ysfdu vihykFkhZ us izR;FkhZ@DysesaV }kjk izsf"kr fd;s x;s i=ksa dk dksbZ tokc ugha fn;kA vihykFkhZ dh vksj ls tks lfefr cuk;h x;h] mlus Li"V :i ls fjiksVZ nh gS fd okWY;wesfVªd eSFkM+ ds }kjk tks eky dk otu fd;k x;k gS] og ges'kk lgh ugha gksrk gSA LVhy IykaV ij tc eky dk otu fd;k x;k] og otu xyr Fkk] bl rF; dks vihykFkhZ dh vksj ls Li"V ugha fd;k x;k gSA fo}ku ,dy iap us vuqca/k ds DykWt 4(i) o 4(ii) esa of.kZr izko/kku fojks/kkHkklh gksus ds dkj.k vkSj rF;ksa ds vk/kkj ij ;g ekuk gS fd okLro esa eky fMLisp djus ls igys jsyos fjflV ¼R.R.½ esa tks otu n'kkZ;k x;k Fkk og lgh ugha Fkk] D;ksafd vihykFkhZ@dkWjiksjs'ku us eky dk otu djus ds fy, mi;qDr midj.kksa dh O;oLFkk fMLisp LVs'ku ij ugha dj j[kh FkhA ,slh fLFkfr esa vuqca/k ds DykWt 4(i) dks mYysf[kr djrs gq, LVhy IykaV } kjk eky [kjhnrs le; tks otu n'kkZ;k x;k] mls lgh ekurs gq, Hkqxrku dk vkns'k fn;k x;k gSA D;ksafd nksuksa i{kdkjksa ds e/; gq, vuqca/k ds DykWt 4(i) esa ;g Li"V :i ls fy[kk x;k gS fd vihykFkhZ@dkWjiksjs'ku }kjk eky cspus ij Øsrk dks Hksth x;h okLrfod ek=k dk gh Hkqxrku izR;FkhZ izkIr djus dk vf/kdkjh gksxkA

¶83

fo}ku ,dy iap us vuqca/k ds DykWt 4(i) o 4(ii) dh O;k[;k djrs gq, izR;FkhZ@DysesaV dks Hkqxrku ;ksX; jkf'k dk vfHkfu/kkZj.k nksuksa DykWtksa dks

[CMA-1851/2006]

[2025:RJ-JP:44637]

(13 of 23)

la;qDr :i ls n`f"Vxr j[krs gq, vkSj vU; rF;ksa ds vk/kkj ij Hkqxrku ;ksX; ek=k ¼Quantity½ dk fu/kkZj.k fd;k gSA ,slh fLFkfr esa ;g ugha dgk tk ldrk gS fd i{kdkjksa ds e/; gq, vuqca/k dh 'krksZa ds foijhr fo}ku ,dy iap us iapkV ikfjr fd;k gksA vkf/kD; eky ds ifjogu fd;k x;k] mldk dksbZ fojks/k vihykFkhZ@dkWjiksjs'ku us ugha fd;k gSA vihykFkhZ@dkWjiksjs'ku }kjk vuqca/k esa of.kZr 'krksZa ds vuqlkj eky rqyokus dh fofufnZ"V O;oLFkk ugha dh x;hA ,sls esa vuqca/k ds DykWt 4(i) ds vuqlkj izR;FkhZ@DysesaV xarO; ij igqaps eky dh ek=k ¼Quantity½ ds vuqlkj Hkqxrku izkIr djus dk vf/kdkjh gSA vihykFkhZ@dkWjiksjs'ku }kjk eky dk otu fMLisp LVs'ku ij djokus dh O;oLFkk ugha dh x;h vkSj eky ds otu ds ckjs esa okWY;we ds vk/kkj ij tks fu"d"kZ fudkyk x;k Fkk] mlds laca/k esa vihykFkhZ@dkWjiksjs'ku dh lfefr dk ;g fu"d"kZ Fkk fd ;g rjhdk QqyiwzQ ugha gSA ,slh fLFkfr esa fo}ku ,dy iap us i{kdkjksa ds e/; gq, vuqca/k ds DykWt 4(ii) dks ugha ekus tkus esa esjs fouez er esa dksbZ fof/kd Hkwy o =qfV ugha dh gSA

¶88

ekuuh; mPpre U;k;ky; us fofHkUu fofu'p;ksa esa Hkh ;g vfHkfu/kkZfjr fd;k gS fd e/;LFkrk ,oa lqyg vf/kfu;e] 1996 dh /kkjk 34 ds varxZr ,dy iap }kjk ikfjr fu.kZ; ij fopkj djrs le; ,dy iap }kjk fn;s x;s fu.kZ; o foospu ij U;k;ky; vihyh; U;k;ky; dh rjg dk;Z ugha dj ldrk gS vkSj ,dy iap }kjk fn;k x;k fu.kZ; vafre o ck/;dkjh gksrk gS] tc rd fd vf/kfu;e dh /kkjk 34(2) ds varxZr mDr iapkV esa gLr{ksi djus dk dksbZ U;k;ksfpr vk/kkjk ugha gksA e/;LFkrk ,oa lqyg vf/kfu;e] 1996 dh /kkjk 34(2)] ftlds rgr fo}ku ,dy iap ds

[CMA-1851/2006]

[2025:RJ-JP:44637]

(14 of 23)

fu.kZ; dks pqukSrh nh tk ldrh gS] mls ;gka mYysf[kr fd;k tkuk mfpr gksxk%&

¶93

" ¼2½ dksÃ ekè;LFke~ iapkV U;k;ky; }kjk rHkh vikLr fd;k tk ldsxk] ;fn& ¼d½ vkosnu djus okyk i{kdkj [ eè;LFk vfèkdj.k ds vfHkys[k ds vkèkkj ij ;g fl) djrk gS fd ] &

¶94

¼ i ½ dksÃ i{kdkj vleFkZrk ls xzLr Fkk] ;k

¶95

¼ ii ½ ekè;LFke~ djkj ml fofèk ds] ftlds vèkhu i{kdkjksa us mls fd;k gS ;k bl ckjs esa dksÃ ladsr u gksus ij] rRle; ço`Ùk fdlh fofèk ds vèkhu fofèkekU; ugÈ gS( ;k

¶96

¼ iii ½ vkosnu djus okys i{kdkj dks] eè;LFk dh fu;qfä dh ;k ekè;LFke~ dk;Zokfg;ksa dh mfpr lwpuk ugÈ nh xÃ Fkh] ;k og viuk ekeyk çLrqr djus esa vU;Fkk vleFkZ Fkk( ;k

¶97

¼ iv ½ ekè;LFke~ iapkV ,sls fookn ls lacafèkr gS tks vuqè;kr ugÈ fd;k x;k gS ;k ekè;LFke~ ds fy, fuosnu djus ds fy, j[k x, fucaèkuksa ds Hkhrj ugÈ vkrk gS ;k mlesa ,slh ckrksa ds ckjs esa fofu'p; gS tks ekè;LFke~ ds fy, çLrqr fo"k;{ks= ls ckgj gS %

¶98

ijUrq ;fn] ekè;LFke~ ds fy, fuosfnr fd, x, fo"k;ksa ij fofu'p;ksa dks mu fo"k;ksa ds ckjs esa fd, x, fofu'p;ksa ls i`Fkd~ fd;k tk ldrk gS] ftUgsa fuosfnr ugÈ fd;k x;k gS] rks ekè;LFke~ iapkV ds dsoy ml Hkkx dks] ftlesa ekè;LFke ds fy, fuosfnr u fd, x, fu"k;ksa ij fofu'p; gS] vikLr fd;k tk ldsxk( ;k

¶99

¼ v ½ ekè;LFke~ vfèkdj.k dh lajpuk ;k ekè;LFke~ çfØ;k] i{kdkjksa ds djkj ds vuqlkj ugÈ Fkh] tc rd fd ,slk djkj bl Hkkx ds micaèkksa ds fojksèk esa u gks vkSj ftlls i{kdkj ugÈ gV ldrs Fks] ok ,sls djkj ds vHkko esa] bl Hkkx ds vuqlkj ugÈ Fkh( ;k ¼[k½ U;k;ky; dk ;g fu"d"kZ gS fd&

¶100

¼ i ½ fookn ds fo"k;&oLrq] rRle; çoÙk fofèk ds vèkhu ekè;LFke~ }kjk fuiVk, tkus ;ksX; ugÈ gS( ;k

¶101

¼ ii ½ ekè;LFke~ iapkV Hkkjr dh yksd uhfr ds fo#) gSA "

[CMA-1851/2006]

[2025:RJ-JP:44637]

(15 of 23)

bl laca/k esa ekuuh; mPpre U;k;ky; }kjk fuEufyf[kr fofu'p;ksa esa ;g vfHkfu/kkZfjr fd;k gS fd%&

¶106

PSA Sical Terminals Pvt. Ltd. Vs. Board of Trustees of V.O. Chidambranar Port Trust Tuticorin & Ors. Reported in AIR 2021 SC 4661

¶107

"42. It will thus appear to be a more settled legal position, that in an application under Section 34, the court is not expected to act as an appellate court and reappreciate the evidence. The scope of interference would be limited to grounds provided under Section 34 of the Arbitration Act. The interference would be so warranted when the award is in violation of "public policy of India", which has been held to mean "the fundamental policy of Indian law". A judicial intervention on account of interfering on the merits of the award would not be permissible. However, the principles of natural justice as contained in Section 18 and 34(2)(a)(iii) of the Arbitration Act would continue to be the grounds of challenge of an award. The ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basic notions of morality or justice". It is only such arbitral awards that shock the conscience of the court, that can be set aside on the said ground. An award be set aside on the ground of patent illegality appearing on the face of the award and as such, which goes to the roots of the matter. an illegality with regard to a mere erroneous application of law would not be a ground for interference. Equally, reappreciation of evidence would not be permissible on the ground of patent illegality appearing on the face of the award.

¶108

43. A decision which is perverse, though would not be a ground for challenge under public policy of India", would certainly amount to a patent illegality appearing on the face of the award. However, 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.

[2025:RJ-JP:44637]

[CMA-1851/2006]

(16 of 23)

44. To understand the test of perversity, it will also be appropriate to refer to paragraph 31 and 32 from the judgment of this Court In-Associate Builders (supra), which read thus:

¶113

"31. The third juristic ristic principle is that a decision which is perverse or so irrational that no reasonable person would have arrived at the same is important and requires some degree of explanation. It is settled law that where:

¶114

(i) a finding is based on no evidence, or

¶115

(ii) an Arbitral Tribunal takes, Into account irrelevant to the decision which it arrives at; or

¶116

(iii) Ignores vital evidence in arriving at its decision, such decisior would necessarily be perverse.

¶117

32. A good working test of perversity is contained in two judgments. In Excise and Taxation Officer cum Assessing Authority v. Gopi Nath & Sons [1992 Supp (2) SCC 312], It was held: (SCG p. 317, para 7) "7. It is, no doubt, true that if a finding of fact is arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant material or if the finding so outrageously defies logic as to suffer from the vice of irrationality incurring the blame of being perverse, then, the finding is rendered Infirm in law." In Kuldeep Singh v. Commr. of Police [(1999) 2 SCC 10: 1999 SCC (L&S) 429], it was held: (SCC p. 14, para 10) "10. A broad distinction has, therefore, to be maintained between the decisions which are perverse and those which are not. If a decision is arrived at on no evidence or evidence which is thoroughly and no reasonable person would act upon it, the order would be perverse. But if there is some evidence on record which is acceptable and which could be relied upon, howsoever compendious it may be, the conclusions would not be treated as perverse and the findings would not be interfered with."

[2025:RJ-JP:44637]

[CMA-1851/2006]

(17 of 23)

State of Rajasthan Vs. Nav Bharat Construction Company; (2010) 2 SCC 182

¶122

"18. In this connection, we may refer to a decision of this Court in Bhagawati Oxygen Ltd. v. Hindustan Copper Ltd. In that decision, this Court observed in para 25 as follows: (SCC pp. 472-73)

¶123

"25. This Court has considered the provisions of Section 30 of the Act in several cases and has held that the court while exercising the power under Section 30, cannot reappreciate the evidence or examine correctness of the conclusions arrived at by the arbitrator. The e jurisdiction is not appellate in nature and an award passed by an arbitrator cannot be set aside on the ground that it was erroneous. It is not open to the court to interfere with the award merely because in the opinion of the court, another view is equally possible. It is only when the court is satisfied that the arbitrator had misconducted himself or the proceedings or the award had been improperly procured or is 'otherwise' invalid that the court may set aside such award."

¶124

"20. That apart, the law is also settled as referred to hereinearlier that the jurisdiction of the court under Section 30 of the Act is not appellate in nature and the award passed by the umpire cannot be set aside on the ground that it was erroneous. It is also not open to the court to interfere with the award merely because in the opinion of the court, another view is equally possible. Keeping in view these principles as laid down by this Court in the aforesaid two decisions, let us now consider the award passed by the umpire in respect of the claims of the respondent excluding Claims 2 and 26."

¶125

National Highways Authority of India Vs. ITD Cementation India Ltd.; (2015) 14 SCC 2

¶126

"25. It is thus well settled that construction of the terms of a contract is primarily for an arbitrator to decide. He is entitled to take the view which he holds to be the correct one after

[2025:RJ-JP:44637]

[CMA-1851/2006]

(18 of 23)

considering the material before him and after interpreting the provisions of the contract. The Court while considering challenge to an arbitral award does not sit in appeal over the findings and decisions unless the arbitrator construes the contract in such a way that no fair-minded or reasonable person could do."

¶131

Rashtriya Ispat Nigam Ltd. Vs. Dewan Chand Ram Saran; (2012) 5 SCC 306

¶132

"43. In any case, assuming that Clause 9.3 was capable of two interpretations, the view taken by the arbitrator was clearly a possible if not a plausible one. It is not possible to say that the arbitrator travelled outside his jurisdiction, or that the view taken by him was against the terms of contract. That being the position, the High Court had no reason to interfere with the award and substitute its view place of the interpretation accepted by arbitrator.

¶133

44. The legal position in this behalf has been summarised in para 18 of the judgment of this Court in SAIL v. Gupta Brother Steel Tubes Ltd. and which has been referred to above. Similar view has been taken later in Sumitomo Heavy Industries Ltd. v. ONGC Ltd. 10 to which one of us (Gokhale, J.) was a party. The observations in para 43 thereof are instructive in this behalf."

¶134

mijksDr fofu'p;ksa esa vfHkfu/kkZfjr fl)karksa ds vk/kkj ij ;fn vuqca/k esa ijLij fojks/kkHkklh izko/kku gksa] rks nksuksa izko/kkuksa dks n`f"Vxr j[krs gq, fu"d"kZ fudkyuk gksrk gSA bl izdj.k esa vuqca/k ds DykWt 4(i) o 4(ii) esa eky ds Hkqxrku ds laca/k esa ijLij fojks/kkHkklh izko/kku gSaA vkf/kD; eky dk ifjogu gqvk gS vkSj ml laca/k esa izR;FkhZ@DysesaV }kjk dbZ i= vihykFkhZ@dkWjiksjs'ku dks fy[ks x;s] ysfdu mudk dksbZ tokc vihykFkhZ@dkWjiksjs'ku }kjk ugha fn;k x;kA dkWjiksjs'ku us LVhy IykaV dks tks eky cspk] ogka ij eky [kjhnrs le; mUgksaus tks eky dk otu fd;k] mlh ds vuqlkj vuqca/k ds DykWt 4(i) ds vuqlkj Hkqxrku fd;s tkus ds

[CMA-1851/2006]

[2025:RJ-JP:44637]

(19 of 23)

laca/k esa fo}ku ,dy iap }kjk ikfjr vkns'k fnukad 13-07-2005 vkSj fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk ikfjr vkns'k fnukad 13-04-2006 esa dksbZ fof/kd Hkwy o =qfV utj ugha vkrh gSA D;ksafd vihykFkhZ@dkWjiksjs'ku us eky dk otu fMLisp LVs'ku ij djokus ds fy, i;kZIr O;oLFkk ugha dh vkSj eky ds otu ds laca/k esa okWY;we ds vk/kkj ij tks fu"d"kZ fudkyk x;k] mlds laca/k esa Lo;a vihykFkhZ@dkWjiksjs'ku dh lfefr dk ;g rdZ Fkk fd ;g rjhdk QqyizwQ ugha gSA jsyos fjflV ¼R.R.½ esa of.kZr otu lgh otu gks] ;g fLFkfr Li"V ugha gS vkSj bl laca/k esa foLrr :i ls fo}ku ,dy iap us vkns'k fnukad 13-07-2005 esa foospu fd;k gS] ftldh iqf"V ftyk U;k;k/kh'k us vius vkns'k fnukad 13-04-2006 esa dh gS] ftldh iqujkofÙk ;gka fd;k tkuk U;k;ksfpr izrhr ugha gksrk gSA fo}ku ,dy iap }kjk ikfjr vkns'k yksd uhfr ds fo:) gks ;k fof/k fo:) gks ;k fof/k esa of.kZr izko/kkuksa ds foijhr gks ;k fo}ku ,dy iap us vuqca/k esa of.kZr 'krksZa ls foijhr tkdj viuk er ,oa foospu fn;k gks] ;g Li"V ugha gqvk gSA ,slh fLFkfr esa fo}ku ,dy iap }kjk ikfjr vkns'k ij ;g U;k;ky; vihyh; U;k;ky; dh 'kfDr;ksa ds vuq:i dk;Z ugha dj ldrh gSA fo}ku ,dy iap }kjk vkyksP; vkns'k fnukad 13-07-2005 ,oa fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk ikfjr vkyksP; vkns'k fnukad 13-04-2006 fof/k fo:) ,oa =qfViw.kZ ugha ekus tk ldrs gSaA

¶139

tgka rd fo}ku ,dy iap }kjk vkyksP; vkns'k esa fnukad 12-10-2002 ls 16-08-2003 rd izh&jsQjsUl ihfj;M+ dk C;kt fnyok;s tkus dk iz'u gS] bl laca/k esa ekuuh; mPpre U;k;ky; ds fofu'p; M/S Interstate Construction Vs. National Projects Construction Corporation LTD.; 2025 INSC 699 ds lqlaxr Hkkx dks ;gka m)fjr fd;k tkuk U;k;ksfpr gksxk%&

[2025:RJ-JP:44637]

[CMA-1851/2006]

(20 of 23)

"32. This position has been clarified by a recent decision of this Court in Pam Developments Private Limited Vs. State of West Bengal. After extracting Section 31 (7) of the 1996 Act, this Court held that power of the arbitrator to grant pre-reference interest, pendente lite interest and post award interest under Section 31(7) of the 1996 is now fairly well settled. The Bench, thereafter, culled out the following legal propositions in this regard highlighting the difference in the position of law qua the Arbitration Act, 1940 vis-à-vis the 1996 Act:

¶144

23. The power of the arbitrator to grant pre-reference interest, pendente lite interest, and post-award interest under Section 31(7) of the Act is fairly well-settled. The judicial determinations also the difference in the position of law under the Arbitration Act, 1940. The following propositions can be summarised from a survey these cases:

¶145

23.1. Under the Arbitration Act, 1940, there was no specific provision that empowered an arbitrator to grant interest. However, through judicial pronouncements, this Court has affirmed the power of the arbitrator to grant pre-reference, pendente lite, and post-award interest on the rationale that a person who has been deprived of the use of money to which he is legitimately entitled has a right to be compensated for the same. When the agreement does not prohibit the grant of interest and a party claims interest, it is presumed that interest is an implied term of the agreement, and, therefore, the arbitrator has the power to decide the same.

¶146

23.2. Under the Act, this Court has adopted a strict construction of contractual clauses that prohibit the grant of interest and has held that the arbitrator has the power to award interest unless there is an express, specific provision that excludes the jurisdiction of the arbitrator from awarding interest for the dispute in question.

[2025:RJ-JP:44637]

[CMA-1851/2006]

(21 of 23)

23.3. Under the 1996 Act, the power of the arbitrator to grant interest is governed by the statutory provision in Section 31 (7). This provision has two parts. Under clause (a), the arbitrator can award interest for the period between the date of cause of action to the date of the award, unless otherwise agreed by the parties. Clause (b) provides that unless the award directs otherwise, the sum directed to be paid by an arbitral award shall carry interest @ 2% higher than the current rate of interest, from the date of the award to the date of payment (referring to the post 23.10.2015 position).

¶151

23.4. The wording of Section 31(7)(a) marks a departure from the Arbitration Act, 1940 in two ways: first, it does not make an explicit distinction between pre-reference and pendente lite interest as both of them are provided for under this sub-section; second, it sanctifies party autonomy and restricts the power to grant pre-reference and pendente lite interest the moment the agreement bars payment of interest, even if it is not a specific bar against the arbitrator.

¶152

23.5. The power of the arbitrator to award prereference and pendente lite interest is not restricted when the agreement is silent on whether interest can be awarded or does not contain a specific term that prohibits the same.

¶153

23.6. While pendente lite interest is a matter of procedural law, pre-reference interest is governed by substantive law. Therefore, the grant of pre-reference interest cannot be sourced solely in Section 31(7)(a) (which is a procedural law), but must be based on an agreement between the parties (express or implied), statutory provision (such as Section 3 of the Interest Act, 1978), or proof of mercantile usage.

[2025:RJ-JP:44637]

[CMA-1851/2006]

(22 of 23)

24. In view of the above, the High Court had no reason to interfere with the arbitral award with respect to grant of pre-reference interest, since the contract between the parties does not prohibit the same."

¶158

"34. Thus, what Section 31(7)(a) has done is that there is now a statutory recognition of the power of the arbitral tribunal to grant pre-reference interest from the date on which the cause of action arose till the date on which the award is made. There was a vacuum in the Arbitration Act, 1940 as there was no such provision for granting pre-reference interest. It was through judicial pronouncements that such power of the arbitrator to grant pre-reference interest was conferred. Now under Section 31(7)(a) of the 1996 Act, such power is statutorily recognized."

¶159

orZeku izdj.k esa i{kdkjku ds e/; gq, vuqca/k esa C;kt ds laca/k esa dksbZ 'krZ ugha gSA izh&jsQjsUl C;kt ;k vU; dksbZ C;kt ugha fnyk;k tk,xk] ,slk Hkh fo'ks"k DykWt vuqca/k esa ugha gSA ,slh fLFkfr esa tgka vuqca/k esa Ctkt ds laca/k esa fdlh Hkh DykWt esa dqN Hkh of.kZr ugha gks vkSj vuqca/k ekSu gks] ogka mijksDr fofu'p; esa vfHkfu/kkZfjr fl)karksa dks n`f"Vxr j[krs gq, fo}ku ,dy iap us fnukad 12-10-2002 ls 16-08-2003 rd izh&jsQjsUl vof/k dk C;kt fnyok;s tkus esa dksbZ fof/kd Hkwy o =qfV ugha dh gSA ,sls esa mijksDr foospu ds vk/kkj ij vihykFkhZ }kjk izLrqr vihy varxZr /kkjk 37 e/;LFkrk ,oa lqyg vf/kfu;e] 1996 vLohdkj dj [kkfjt fd;s tkus ;ksX; gSA

¶160

ifj.kker% vihykFkhZ }kjk izLrqr vihy varxZr /kkjk 37 e/;LFkrk ,oa lqyg vf/kfu;e] 1996 vLohdkj dj [kkfjt dh tkrh gS rFkk fo}ku ,dy iap }kjk ikfjr vkns'k fnukad 13-07-2005 ,oa fo}ku ftyk U;k;k/kh'k] t;iqj uxj] t;iqj }kjk ikfjr vkns'k fnukad 13-04-2006 iq"V fd;k tkrk

[CMA-1851/2006]

[2025:RJ-JP:44637]

(23 of 23)

gSA bl izdj.k esa vkyksP; iapkV dh ikyuk esa ;fn fdlh izdkj dh jkf'k tek gqbZ gS vFkok ,Q-Mh-vkj- gqbZ gS] rks mDr leLr jkf'k ;k ,Q-Mh-vkje; C;kt vihykFkhZ okil izkIr djus dk vf/kdkjh gksxk rFkk fo}ku ,dy iap }kjk ikfjr iapkV ds vuq:i izR;FkhZ@DysesaV vihykFkhZ ls jkf'k izkIr djus dk vf/kdkjh gksxkA

¶165

(CHANDRA PRAKASH SHRIMALI),J

¶166

MANISH SAINI /Res.

Raj.State Mines and Minerals v. M/S Ace India

Case brief

What is this about?

What did the court decide?

Raj.State Mines and Minerals v. M/S Ace India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

United India Insurance Co. Ltd. Vs Kailash and Ors.

Iffco-Tokio Gen Insurance Co. Ltd. Vs Smt Urmila Devi and Others

Smt Geeta and Others Vs Kailash and Others

Mishrilal Raigar S/O Nanagram Vs Ramu Meena S/O Shri Shyoji Meena

Sunil Kumar S/O Shri Sohan Lal Vs Manager, Rajasthan Transport Corporation

Varsha W/O Late Shri Gaurav Sharma Vs Union of India through the General Manager