IN THE HON’BLE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. OMP(M) 102 of 2001. Judgment Reserved on 24.3.2008. Date of decision March 31, 2008. H.P. Housing Board and another …Petitioners. Versus M/S Vijay Construction Works …Respondents. Coram: The Hon’ble Mr. Justice Dev Darshan Sud, J. Whether approved for reporting?1 No. For the petitioners: Mr. C.N.Singh, Advocate. For the respondent: Mr. Suneet Goel, Advocate. Dev Darshan Sud, J. This petition has been preferred by the respondent before the arbitrator objecting to the award made in favour of the claimant-respondent. A number of grounds have been raised for urging that the award is illegal and against the Public Policy of India as contemplated by Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter referred to as ‘the Act’). The main contention of 1 Whether Reporters of Local Papers are allowed to see the judgment? Yes - 2 - the learned counsel appearing for the objector is that Claim No. 2 as put forth by the respondent – claimant was illegal and no award could have been made as the evidence on record did not disclose any actionable default attributable to the petitioner. The petition was admitted on the following three issues: 1. Whether the award in question is against the Public Policy of India and, therefore, liable to be set aside? OPP. 2. Whether the Arbitrator had acted contrary to the terms and conditions of the agreement and exceeded his jurisdiction in making the award as alleged? OPP. 3. Relief. Issues 1 and 2 Parties have filed their affidavits in support of their rival contentions. Needless to say, that the judgment in the present case would be rendered only on the material on record before the arbitrator and no fresh evidence or embellishment of the material on record can be permitted. Considering claim No. 2 as urged before the arbitrator, the award shows that he has considered - 3 - in detail the evidence on record and has quantified the claim in accordance with settled principles of assessment. The scope of this Court in proceedings under Section 34 of the Act are confined to the principles as laid down by the Hon’ble Supreme Court of India. The phrase “Public Policy” was considered in Oil & Natural Gas Corporation Ltd. V. Saw Pipes Ltd. , (2003) 5 SCC 705. The Court held: “(31) Therefore, in our view, the phrase 'public Policy of India' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/ judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to - 4 - the term 'public policy' in Renusagar case, 1994 Supp (1) SCC 644, it is required to be held that the award could be set aside if it is patently illegal. Result would be- award could be set aside if it is contrary to- (a) fundamental policy of Indian law; or (b) the interest of India; or (c) justice or morality, or (d) in addition, if it is patently illegal. Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the Court. Such award is opposed to public policy and is required to be adjudged void.” In MCDermott International Inc. v. Burn Standard Co. Ltd. and Others , (2006) 11 SCC 181, these principles have been reiterated and it was further held that pure questions of fact cannot be interfered with in proceedings under Section 34 of the Act. In Numaligarh Refinery Ltd. v. Daelim Industrial Co. Ltd., (2007) 8 SCC 466, the - 5 - established principle of law that the Court will not sit as a Court of appeal over the award of the arbitrator and will not interfere with findings of fact has been reiterated. The determination of damages is a pure question of fact. The submissions made by the learned counsel appearing for the petitioner that the award as made is against the public policy cannot be accepted. There is no material on record to show that the award comes within the prohibition as enumerated by the Hon’ble Supreme Court in Oil and Natural Gas Commission’s case (supra). Merely because the arbitrator has made an award in favour of the claimant would not mean that the award is against the fundamental policy of Indian law or the interest of India or is illegal per se. The determination made by the arbitrator has been on a consideration of the material on record and evaluation of the claims/counter claims as filed. The award shows that while dealing with this claim, the arbitrator has dealt with in detail the number of days by which implementation of the contract was delayed for no fault on the part of the claimant but for the acts of the petitioner. He also determines - 6 - that during this period, the claimant had to maintain the site, tool, plant, equipment, labour, machinery and other equipments and could not have retrenched his labour / staff, for which purpose he was incurring expenses. Extension of time granted is not a panacea to compensate the claimant for the overruns incurred by him for no fault on his part. The determination of quantum of damages has been made on sound principles by considering each and every item of the claim the number of days delay which was unjustified, and calculating the overruns on the material on record which has remained unrebutted. I do not find from the award or from the material on record anything which may show that the award made by the arbitrator is either perverse or opposed to the Public Policy of India. There is also nothing on record to establish that the award made is against and contrary to the contract entered into between the parties. The arbitrator has in fact restricted the claim of the claimant for delay to a lesser number of days than claimed. This has - 7 - been done on the basis of the evidence, oral and documentary, before him. In these circumstances, both these issues are decided against the objector. Issue No. 3 (Relief) Issues 1 and 2 having been decided against the objector-claimant, no relief can be granted to the objector. This petition is dismissed. There shall be no order as to costs. March 31, 2008 (PC). (Dev Darshan Sud), J.