Itd-Itd Cem Joint Venture vs Kolkata Metro Rail Corporation Limited on 12 March, 2026

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    Calcutta High Court

    Itd-Itd Cem Joint Venture vs Kolkata Metro Rail Corporation Limited on 12 March, 2026

    Author: Debangsu Basak

    Bench: Debangsu Basak

                                                                          2026:CHC-OS:81-DB
                  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.

    SPONSORED

    Mr. Ankit Dey, Adv.

    Mr. Atri Mandal, Adv.

    Mr. Subhrojit Mookherjee, Adv.

    Hearing concluded on           :   12.02.2026
    
    
    Judgment on                    :   12.03.2026
                                         2
    
                                                                                 2026:CHC-OS:81-DB
    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
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    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
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    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.

    21

    2026:CHC-OS:81-DB

    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB

    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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

    2026:CHC-OS:81-DB
    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.]



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