Dismissed

State of Rajasthan v. M/S Devendra Pal Singh

Rajasthan HC4 Jul 2025CMA/6763/2011

Case brief

AI extract

What is this about?

Appeals under Section 37 challenged confirmation of two arbitral awards in a canal construction contract dispute. The court held the awards were detailed, reasoned and plausible, no patent illegality or public-policy conflict existed, and dismissed the appeals affirming the awards.

What did the court decide?

None granted to appellant; appeals dismissed and arbitral awards dated 29.11.2004 and 20.05.2005 as confirmed by order dated 01.03.2011 upheld.

State of Rajasthan Vs M/S Devendra Pal Singh — Arbitration | Rajasthan HC (2025)

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[2025:RJ-JP:24780]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Civil Miscellaneous Appeal No. 6760/2011

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State of Rajasthan through the Executive Engineer, Irrigation Department, Division Alwar, Alwar.

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----Non-Claimant/Appellant

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Versus

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M/s Devendra Pal Singh r/o 10, Poultry Estate, Agra Road, Jaipur.

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----Claimant/Respondent

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Connected With

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S.B. Civil Miscellaneous Appeal No. 6763/2011 State of Rajasthan through the Executive Engineer, Irrigation Department, Division Alwar, Alwar.

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----Non-Claimant/Appellant

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Versus

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M/s Devendra Pal Singh r/o 10, Poultry Estate, Agra Road, Jaipur.

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----Claimant/Respondent

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For Appellant(s)	: Mr.	Gopal Krishan Sharma,AGC
For Respondent(s)	: Mr.	Devi Dutta Sharma
	Mr.	Vishnu Kumar

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HON'BLE MR. JUSTICE MANEESH SHARMA

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Order

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04/07/2025

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The present miscellaneous appeals have been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Arbitration Act'), challenging the judgment dated 01.03.2011 passed by the Learned District and Sessions Judge, Alwar in Civil Misc. Nos. 141/2005 and 474/2005, whereby the challenge to the arbitral award(s) under Section 34 of the Arbitration Act filed by the non-claimant/appellant has been dismissed.

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At the outset, it is required to be noted that by the impugned order, the learned District and Sessions Judge, Alwar in exercise of its powers under Section 34 of the Arbitration Act has confirmed the award(s) passed by the learned Arbitrator.

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Nevertheless as regards to an order passed under Section 34 of the Arbitration Act (either setting aside the award or upholding the award) an appeal is provided under Section 37 of the Arbitration Act, however, the contours of the proceedings under Section 37 are more limited in terms of scope and ambit of challenge under Section 34 of the Arbitration Act.

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Therefore the short question that is posed for consideration before this court is, whether in the facts and circumstances of the case, the learned District and Sessions Judge, Alwar is justified in confirming the award(s), while dismissing the application under Section 37 of the Arbitration Act.

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The brief facts of the case are that Agreements Nos. 8/86-87 and 9/86-87 were executed between the Executive Engineer, Irrigation Department, Division Alwar, Rajasthan (present appellant) and M/s. Devendra Pal Singh (present respondent) for construction work of Jhiroli Canal from Chain zero to Chain 120 (Agreement No. 8/ 86-87) and Chain 120 to Chain Tail (Agreement No. 9/ 86-87), Minor Irrigation Project, Alwar. During the subsistence of the said agreements, certain disputes arose between the parties. Therefore, relying on Clause 23 of the contract, the claimant/respondent raised a dispute, therefore vide order no. F8(8) ASI/I/Cell/94/2701 dated 20.09.1998, Shri S.C. Saxena, Director (Dam), ID & R Irrigation Unit, Jaipur (Retired), was appointed as the sole Arbitrator.

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Before the learned Arbitrator, the claimant/respondent filed its statement of claim of Rs.3,43,110/- and [(Rs.2,62,264/- + 73,597/-) (including Item No.9)] plus interest, mainly on the

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following grounds:

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(i) Labour remainaing idle due to late issue of cement;

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(ii) Cutlivators hinderances;

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(iii) Late compaction of E/W;

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(iv) Shortage of budget;

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(v) Mixer Machine and Vibrator charges; and

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(vi) Escalation charges (excavated hard soil contrary to Schedule G, ordinary soil)

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The non-claimant/appellant filed its statement of defence and counter-claim of Rs.2,58,812/- plus interest @ 18% and Rs.2,46,293/- plus interest @ 18% and Rs. 50,000/- towards cost of Arbitration. Thereafter, rejoinders were filed by the claimant/respondent. Subsequently, a reply to the said rejoinder was also filed by the non-claimant/appellant.

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Thereafter, the claimant/respondent was examined himself as a witness, and three (3) witnesses were examined by the nonclaimant/appellant.

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On the basis of pleadings of the parties the learned Arbitrator framed three the following three (3) issues for consideration on 22.09.2003:

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(i) Preliminary Objections; (ii) Claim of the Claimant and interest; and (iii) Counter-claim of the non-Claimant and interest on it.

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Thereafter, the learned Arbitrator decided the issue No. (i) and (iii) against the non-claimant/appellant, whereas issue No. (ii) was partly decided in favour of the claimant/respondent, and accordingly, after a detailed deliberation, discussion, and consideration of the arguments advanced and documents produced, the learned Arbitrator, in Agreement No. 8/86-87, vide

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his award dated 29.11.2004, allowed the claim filed by the claimant/respondent and awarded a sum of Rs. 2,63,137/- under the following heads:

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Description	Amount Awarded
(i) Loss of Rs. 94800/- to the claimant due to his labour remainingunengaged	72700 /-
(ii) Loss of Rs. 10080/- as filling reaches were not compacted in time	10080 /-
(iii) Loss of Rs. 5200/- due to late decision of not to usepolythene film underliningin fillingreaches	5200 /-
(iv) Loss of Rs. 8570/- due to cultivators' hindrance during execution of work	8570 /-
(v)Loss of Rs. 4200/- due to rain cuts filling	Nil
(vi) Payment to the claim of Rs. 50090/- as charges for mixer machine & plate vibrator with tenderpremium of Rs. 191%	50090 /-
(vii) Claim of Rs. 53674/- due to excavation done in hard soil whereas in 'G' schedule it was taken as ordinarysoil	Nil
(viii) Claim of Rs. 116497/- as price escalation charges which was paid to him, recovered, restored & again recovered	116497 /-
Total claim awarded to claimant	2,63,137 /-

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Accordingly, the learned Arbitrator directed that the awarded amount be paid along with 12% simple interest per annum, with a further direction that if the amount is not paid within three (3) months, the rate of interest shall increase from 12% to 15%, accruing from three months after the date of the award till actual realisation. Simultaneously, the counter-claim filed by the nonclaimant/appellant was rejected.

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Similarly, after detailed deliberation, discussion, and consideration of the documents produced, the learned Arbitrator, in Agreement No. 9/86-87, vide award dated 20.05.2005, allowed the claim filed by the claimant/respondent and awarded a sum of

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Rs. 3,16,860/- under the following heads:

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Description	Amount Awarded
(i) Loss of Rs. 71100/- to the claimant due to his	57000 /-
labour remainingunengaged
(ii) Loss of Rs. 9360/- as filling reaches were not compacted in time	9360 /-

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(iii) Loss of Rs. 6350/- due to late decision of not 6350 /- to use polythene film underlining in filling reaches (iv) Loss of Rs. 7900/- due to cultivators' 7900 /- hindrance during execution of work (v) Loss of Rs. 7600/- due to rain cuts filling Nil (vi) Payment to the claim of Rs. 31915/- as 31915 /- charges for mixer machine & plate vibrator with tender premium of Rs. 191% (vii) Claim of Rs. 33612/- due to excavation done 33612 /- in hard soil whereas in 'G' schedule it was taken as ordinary soil (viii) Claim of Rs. 97126/- as price escalation 97126 /- charges which was paid to him, recovered, restored and again recovered (ix) Claim of Rs. 73597/- as lead charge for 73597 /- transporting the earth from Av. distance of 8 chains for the reach ch 137 to ch 161 Total claim awarded to claimant 3,16,860 /-

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Accordingly, the learned Arbitrator directed that the awarded amount be paid along with 12% simple interest per annum, with a further direction that if the amount is not paid within three (3) months, the rate of interest shall increase from 12% to 15%, accruing from three months after the date of the award till actual realization. Simultaneously, the counter-claim filed by the nonclaimant/appellant was rejected.

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Being aggrieved by the said awards, the non-claimant/appellant preferred applications under Section 34 of the Arbitration Act, and prayed for setting aside the arbitral award(s) dated 29.11.2004 and 20.05.2005.

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The submission of the learned counsel for the non-claimant/appellant before the learned court below was that the learned Sole Arbitrator had not assigned any reasons while passing the award and had failed to frame necessary issues, which was contrary to the provisions of the Arbitration Act. Thus, the non-claimant/appellant prayed for setting aside the arbitral award under Section 34 of the Arbitration Act.

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However, the learned court below, after considering the record of the case, held that the impugned arbitral award(s) did not fall within the contours of challenge qua Section 34 and observed that: The parties had rightly invoked the arbitration clause; the Sole Arbitrator, Mr. S.C. Saxena, had passed a detailed and reasoned award after meticulous consideration of facts and documents and after granting due opportunity to both the parties, the non-claimant/appellant failed to establish any illegality thereby warranting any interference under Section 34 of the Arbitration Act. Accordingly, the application(s) for setting aside the arbitral award(s) was dismissed vide order dated 01.03.2011, and the award(s) dated 29.11.2004 and 20.05.2005 were upheld.

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Aggrieved by the awards dated 29.11.2004 and 20.05.2005, as well as the rejection of the application(s) filed under Section 34 of the Arbitration Act (order dated 01.03.2011), the nonclaimant/appellant has filed the present appeal under Section 37 of the Arbitration Act. 16. The counsel for the non-claimant/appellant submits that: The impugned awards and the impugned order dated 01.03.2011 are arbitrary and perverse, causing loss to the exchequer; and the awards are against the public policy of India and should be set aside, and the claims filed by the claimant/respondent be dismissed.

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Per contra, the learned counsel for the claimant/respondent supported the arbitral awards dated 29.11.2004 and 20.05.2005 passed by the learned Sole Arbitrator and the impugned order dated 01.03.2011 passed by the learned lower court, and submitted that: There were no legal infirmities in the awards or the lower Court’s dismissal of the Section 34 applications; and the

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scope of appeal under Section 37 is very narrow, and since no infirmity exists, the appeal may kindly be dismissed.

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The learned counsel for the claimant/respondent further argued that setting aside an arbitral award is subject to the limitations provided under Section 34 of the Arbitration Act, beyond which no interference is permissible.

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Before considering the issue on merits it would be apt to refer the relevant provisions of Section 34 and Section 37 of the

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Arbitration Act, which reads as under:

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“ Section 34. Application for setting aside arbitral awards.

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(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

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(2) An arbitral award may be set aside by the Court only if--

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(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--

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(i) a party was under some incapacity, or

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(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

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(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

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(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

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Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

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(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

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(b) the Court finds that--

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(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

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(ii) the arbitral award is in conflict with the public policy of India.

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[Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--

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(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or

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(ii) it is in contravention with the fundamental policy of Indian law; or

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(iii) it is in conflict with the most basic notions of morality or justice.

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Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.]

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[(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:

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Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.]

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(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

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Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

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(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

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(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement.

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(6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.”

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" Section 37. Appealable orders.

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(1) [Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:--

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(a) refusing to refer the parties to arbitration under

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section 8;

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(b) granting or refusing to grant any measure under section 9;

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(c) setting aside or refusing to set aside an arbitral award under section 34.

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(2) Appeal shall also lie to a court from an order of the arbitral tribunal-(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

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(b) granting or refusing to grant an interim measure under section 17.

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(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court."

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Heard and considered the submissions made by the respective parties, and perused the material available on record. 21. The record of the case reveals that a dispute arose between the parties under Agreements Nos. 8/86-87 and 9/86-87 regarding the termination of work on Jhiroli Canal from Chain zero to Chain 120 (Agreement No. 8/ 86-87) and Chain 120 to Chain Tail (Agreement No. 9/ 86-87), Minor Irrigation Project, Alwar.

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Pursuant to the dispute, the claimant/respondent invoked Clause 23 of the aforesaid agreements, and thereafter a Sole Arbitrator was appointed. The learned Sole Arbitrator, after detailed examination of the claimant/respondent’s submissions and the non-claimant/appellant’s defence, allowed the claims and directed payment of Rs. 2,63,137/- and Rs. 3,16,860/-, respectively, with 12% interest per annum (as mentioned in the awards).

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The contention of the non-claimant/appellant’s counsel that the learned Arbitrator in violation to the public policy of India, passed the award without framing issues is untenable, as the award demonstrates that issues were framed and duly considered; further no part of the award(s) can be termed to be in conflict with the public policy of India.

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That the other submission of the learned counsel for the appellant that the award is causing loss to the exchequer lacks merit in view of the limited scope provided under Section 34 of the Arbitration Act.

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Further, it is a settled proposition of law that a court can set aside an arbitral award only on the grounds specified under the Arbitration Act, as interpreted by the Hon’ble Supreme Court in

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Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. in (2019) 20 SCC 1 , wherein it was observed in Paragraph 24:

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"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. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute

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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."

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That further the scope of judicial review for an arbitral award is very narrow and in order to escape the agony of a protracted trial, in order to save time and expense arbitration was developed as an alternative Dispute Resolution Forum.

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From the various judgments of the Hon'ble Supreme Court in Punjab State Civil Supplies Corporation Limited and Ors. v. Sanman Rice Mills and Ors. in 2024 INSC 74 ; MMTC Limited v. Vedanta Limited in (2019) 4 SCC 163 ; and Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking in (2023) 9 SCC 85 , it is now well-settled that arbitral award cannot be interfered with in routine and once it is found that view of Arbitrator is a plausible one. The Court cannot reverse it by interfering with the award.

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Further, while elucidating on the limited scope of interference under Section 37 of the Arbitration Act, the Hon’ble Apex Court in Bombay Slum Redevelopment Corporation Pvt. Ltd. v. Samir Narain Bhojwani in 2024 INSC 478 held as under:

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“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 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.”

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Further, the Hon'ble Apex Court as recently on 31.01.2025 in the matter of M/S C&C Constructions Ltd vs Ircon International Ltd reported in (2025) 4 SCC 234 , it was held as

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under:

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"34. As far as scope of interference in an appeal under Section 37 of Arbitration Act is concerned, the law is well settled. In the case of Larsen Air Conditioning and Refrigeration Company v. Union of India and Ors.3 in paragraph 15, this court held thus:

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“15. The limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality i.e. that “illegality must go to the root of the matter and cannot be of a trivial nature”; and that the Tribunal “must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground” [ref : Associate Builders, SCC p. 81, para 42]. The other ground would be denial of natural justice. In appeal, Section 37 of the Act grants narrower scope to the appellate court to review the findings in an award, if it has been upheld, or substantially upheld under Section 34.”

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(emphasis added)

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35. In the case of Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking4 in paragraph 18, this court held thus:

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“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.”

¶137

Thus, it is clear that, the Appellate Court while hearing an appeal

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under Section 37 of the Arbitration Act will not sit on the order of

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the arbitrator by re-examining, re-appreciating and reappraising

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the material placed before the learned Arbitrator, even if there are two views that are possible, and the view taken by the learned Arbitrator is a plausible one, then also the Court is not justified in interfering with the award by adopting its own interpretation.

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In the present case the award(s) passed by the learned Arbitrator reveals the award(s) were passed by the sole Arbitrator after giving them complete opportunity to adduce their respective evidence and have further meticulously examined the evidence brought on record and in fact the award was detailed and wellreasoned. Further the scope of interference as defined in Section 37 and 34 of Arbitration Act is very limited and from perusal of the award(s) as well as the impugned order, it is clear that neither award(s) suffer from infirmity as provided under Section 34 of Arbitration Act nor the order passed by the learned Court below under the provisions of Section 34 suffers from any legal infirmity as per the provisions of Section 37 of the Arbitration Act or as per the directions of the Hon'ble Apex Court in Dyna Technologies (Supra) Punjab State Civil Supplies Corporation Limited (Supra) ; MMTC Limited (Supra) ; Konkan Railway Corporation Limited (Supra); and Bombay Slum Redevelopment Corporation (Supra) .

¶145

Since the scope of appeal under Section 37 of the Arbitration Act is narrowly circumscribed and the Appellate court should primarily consider only legal infirmities such as patent illegalities, jurisdictional errors or conflict with the public policy of India etc.. as provided under Section 34 of the Arbitration Act, and should refrain from interfering with the orders while re-assessing factual or evidentiary issues.

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Jurisdiction of courts under Section 37 is akin to the jurisdiction of the Court under Section 34. Scope of interference by a Court in an appeal under Section 37 of the Arbitration Act in examining an order setting aside or refusing to set aside an award is restricted and subjected to statutory grounds as per Section 34 of the Arbitration Act.

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Thus, considering the limited scope of interference this Court find absolutely no merit in the appeal, and accordingly the appeals filed by the non-claimant/appellant against the arbitral awards dated 29.11.2004 and 20.05.2005 respectively, and the impugned order dated 01.03.2011 are dismissed.

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Pending application(s), if any, stands disposed of.

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(MANEESH SHARMA),J

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SOURAV /46-47

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Whether reportable: Yes/No

State of Rajasthan v. M/S Devendra Pal Singh

Case brief

What is this about?

What did the court decide?

State of Rajasthan v. M/S Devendra Pal Singh

Case brief

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What did the court decide?

What the court decided

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