Calcutta High Court
Itd-Itd Cem Joint Venture vs Kolkata Metro Rail Corporation Ltd on 15 July, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
1
IN THE HIGH COURT AT CALCUTTA
COMMERCIAL APPELLATE DIVISION
ORIGINAL SIDE
Present:
The Hon'ble Justice Debangsu Basak
And
The Hon'ble Justice Md. Shabbar Rashidi
APOT/103/2026
ITD-ITD CEM JOINT VENTURE
Vs.
KOLKATA METRO RAIL CORPORATION LTD.
For the Appellant :Mr. Jishnu Saha, Sr. Adv.
Mr. Anal Kumar Ghosh, Adv.
Ms. Hashnuhana Chakraborty, Adv.
Ms. Neelina Chatterjee, Adv.
Ms. Ahana Bhattacharyya, Adv.
For the Respondent :Mr. Sakya Sen, Sr. Adv.
Ms. Sreya Basu, Adv.
Mr. Sunil Gupta, Adv.
Mr. Ankit Dey, Adv.
Mr. Atri Mandal, Adv.
Hearing Concluded on : June 22, 2026
Judgement on : July 15, 2026
DEBANGSU BASAK, J.:-
1. Appellant has assailed the judgment and order dated
May 8, 2026 passed in AP COM 181 of 2024.
2. By the impugned judgment and order, learned Single
Judge has dismissed the petition under Section 34 of the
Arbitration and Conciliation Act, 1996 filed by the appellant
directed against the award dated November 21, 2019.
Digitally signed
SACHIN byKAHAR
SACHIN
KAHAR Date: 2026.07.15
11:29:16 +05’30’
2
3. Learned Senior Advocate appearing for the appellant
has contended that, on March 10, 2010, the parties entered
into a contract. He has referred to the contract documents
namely, the letter of acceptance, the general condition of
contract and the special condition of contract. He has
submitted that, disputes and differences arose between the
parties in relation to such contract which were referred to
arbitration.
4. Learned Senior Advocate appearing for the appellant
has drawn the attention of the Court to the statement of claim
filed by the appellant before the Arbitral Tribunal. Essentially
the claimants had four heads of claims. He has pointed out
the heads of claim in the statement of claim. He has
contended that, claim No. 1 was on account of unrecovered
additional establishment cost due to expansion of Phase 1
part of the work. Claim No. 2 was on account of loss suffered
due to arbitrary reduction in the overhead percentage from 20
per cent to 50 per cent in respect of Phase 1 part of the work
while, claim No. 3 related to loss of interest in respect of
excess recovery and prolonged withholding of retention sum in
respect of Phase 1 part of the work.
3
5. Learned Senior Advocate appearing for the appellant
has pointed out that in the statement of claim, appellant had
prayed for loss on account of interest due to wrongful recovery
on Mobilisation Advance as claim no. 4. He has also pointed
out that, the appellant has claimed declaratory awards in
respect of claim No. 1 and 2.
6. Learned Senior Advocate appearing for the appellant
has contended that, by the award dated November 21, 2019,
the Arbitral Tribunal rejected claim Nos. 1 and 3 while
allowing claim Nos. 2 and 4. He has pointed out that, the
counter claims made by the respondent were also rejected.
7. Learned Senior Advocate appearing for the appellant
has contended that, both the Arbitral Tribunal and the
learned Single Judge exercising jurisdiction under Section 34
of the Act of 1996 mis-read and mis-construed the express
provisions of the contract. He has submitted that, the Arbitral
Tribunal as well as the learned Single Judge has overlooked
the law laid down by the Hon’ble Supreme Court. In support
of such contention, he relied upon 2025 Volume 2 Supreme
Court Cases 417 (OPG Power Generation Private Limited
vs. Enexio Power Cooling Solutions India Private Limited
and Another) and 2019 Volume 15 Supreme Court Cases
4
131 (Ssangyong Engineering and Construction Company
Limited vs. National Highways Authority of India (NHAI)).
8. Learned Senior Advocate appearing for the appellant
has contended that, both the Arbitral Tribunal and the
learned Single Judge has interpreted the relevant Clauses of
the contract incorrectly. Misreading the contract and failing to
apply the law are patent illegality committed by the Arbitral
Tribunal which has vitiated the award. In support of such
contention he has relied upon 2024 Volume 6 Supreme
Court Cases 357 (Delhi Metro Rail Corporation Limited vs.
Delhi Airport metro Express Private Limited), 2007
Volume 13 Supreme Court Cases 43 (K. N. Sathyapalan
vs. State of Kerala and Another), 2017 Volume 8 Supreme
Court Cases 146 (Assam State Electricity board and
Others vs. Buildworth Private Limited) and 2012 SCC
OnLine Bom 1373 (Union of India vs. Suraj Infrastructure
Pvt. Ltd. and Another).
9. Learned Senior Advocate appearing for the appellant
has contended that since, the parties agreed to rely upon
documents only and not to adduce oral evidence, Arbitral
Tribunal has erred in holding that, no evidence was placed in
5
support of the claim of the appellant. Learned Trial Judge has
erred in concurring with such view of the Arbitral Tribunal.
10. Learned Senior Advocate appearing for the appellant
has contended that, while rejecting claim No. 1, Arbitral
Tribunal had proceeded on the basis of the modification of the
contract. He has referred to the consideration of the Arbitral
Tribunal with regard to claim No. 1 in this regard. He has
contended that, the Arbitral Tribunal did not appreciate
Clauses 8.3 and 8.4.1 of the contract. The interpretation of
such clauses of the contract by the Arbitral Tribunal is
unreasonable.
11. Referring to claim No. 3, learned Senior Advocate
appearing for the appellant has contended that, Clause 8.3 of
the contract do not bar such claim. He has contended that,
cost variation is governed by Clause 12 of the contract. He has
referred to cost variation and incidents of variation. He has
contended that, there is no clause for adjustment. There is
also no provision for inclusion of additional cost.
12. Learned Senior Advocate appearing for the appellant
has contended that, in support of claim No. 3, appellant relied
upon the Chartered Account Certificate which is more than
sufficient evidence to establish such claim. The parties had
6
agreed not to advance any oral evidence. Arbitration had
proceeded on the basis of documents. Therefore, the Arbitral
Tribunal has erred in holding that there is no evidence in
support of claim no. 3. He has relied upon 2006 Volume 11
SCC 181 (McDermott International INC. vs. Burn
Standard Co. Ltd. and Others) in this regard.
13. Learned Senior Advocate appearing for the appellant
has contended that, claim No. 3 is based on Clause No. 25 of
the contract. He has contended that, the Arbitral Tribunal did
not consider Clause No. 25 of the contract.
14. On the scope and ambit of powers under Section 34
and 37 of the Act of 1996, learned Senior Advocate appearing
for the appellant has relied upon 2025 Volume 2 Supreme
Court Cases 417 (OPG Power Generation Private Limited
vs. Enexio Power Cooling Solutions India Private Limited
and Another).
15. Learned Senior Advocate appearing for the respondent
has submitted that, the contract value was never reduced to
the variation in the alignment of the work. He has contended
that, while, a portion of the initial value of the contract was
deleted, due to the variation in the alignment, additional value
was added to the contract. He has pointed out that, the initial
7
contract for Rs. 908 crores was enhanced to a contract for Rs.
1,279 crores on the variation of the alignment.
16. Learned Senior Advocate appearing for the respondent
has contended that, the award contains sufficient reasons as
to the ground for rejection of the respective claims of the
parties. He has referred to the award in this regard.
17. Learned Senior Advocate appearing for the respondent
has contended that, the award correctly interprets Clauses
2.2, 8.3.3, 12.3 of the general condition of Contract as also
clause 23.1 of the special condition of contract. He has
contended that, since the Arbitral Tribunal remained within
its jurisdiction in interpreting the materials place before it, no
interference is called for by the Court exercising powers under
Section 34 of the Act of 1996.
18. Learned Senior Advocate appearing for the respondent
has relied upon (2020) 15 Supreme Court Cases 401 (K.
Marappan (Dead) Through Sole Legal Representatives
Balasubramanian Versus Superintending Engineer
T.B.P.H.L.C. Circle Anantapur) in support of his contention
with regard to the interpretation of contractual labourers.
19. Learned Senior Advocate appearing for the respondent
has drawn the attention of the Court to the various Clauses of
8
the contract. He has relied upon Clause 23.1 of the Special
Conditions of Contract and Clause 12.3 of the General
Conditions of Contract. He has contended that, pre-bid
meetings were held. In course of execution of the contract, the
appellant had asked for extension of time which were granted.
He has referred to such extension of time made by the
appellant and contended that, such extension of time was
sought without reserving any right to claim damages. He has
referred to Clauses 8.3 and 8.4.1 which governs extension of
time to complete the contract.
20. Learned Senior Advocate appearing for the respondent
has also referred to the letter extending the time for execution
of the contract dated December 21, 2016. He has pointed out
that, the appellant accepted such extension without any
complain. According to him, once, the appellant had accepted
such extension without reserving any claim for damages,
Clause 8.3 of the contract comes into operation.
21. Learned Senior Advocate appearing for the respondent
has contended that, the value of the contract after change of
alignment was decided upon. Such decision was
communicated to the appellant. Appellant had submitted a
techno-commercial offer on December 20, 2015 and revised
9
the same on April 7, 2016 and May 6, 2016. Respondent had
accepted revised offer on November 8, 2016. The appellant did
not reserve the right to claim damages on account of change
of alignment.
22. Learned Senior Advocate appearing for the respondent
has contended that, the parties had acted on the basis of
Clause 8.3.1 of the General Conditions of Contract at all
stages contemporaneously. The claim for damages is an
afterthought.
23. Learned Senior Advocate appearing for the respondent
has contended that, claim Nos. 1 and 3 were rightly rejected
by the Arbitral Tribunal. He has relied upon 2026 Volume 3
Supreme Court Cases 186 (Jan De Nul Dredging India
Private Limited vs. Tuticorin Port Trust) and 2024 SCC
OnLine 2632 (Punjab State Civil Supplies Corporation
Limited and Another vs. Sanman Rice Mills and Others)
with regard to the powers of the Court under Section 37 of the
Act of 1996.
24. Party had entered into a contract for design and
construction of underground section of Metro Railway from
Central Station to Subhas Sarovar on February 9, 2010 at a
price of Rs. 815,66,63,700/-. Contract had specified the
10
period of completion to be 217 weeks from the commencing
date as stipulated in the notice to proceed which is the same
as the letter of acceptance.
25. Under the contract, appellant had to complete the
design and construction of underground section from Central
Station to Subhas Sarovar within 217 weeks that is, on or
before April 8, 2014 commencing from February 9, 2010 being
the date of the letter of acceptance.
26. In order to give effect to such contract, parties had
entered into a written document on March 10, 2010.
27. In course of completion of contract, appellant had from
time to time sought extension of time which were granted.
Appellant had sought four extensions of time commencing
from its first letter dated January 21, 2013 till its last letter
dated April 7, 2018. Request for extension of time on the part
of the appellant was unqualified and the respondent had also
granted unqualified extension of time.
28. Parties had agreed to a revised contract due to the
alteration in the route of the underground tunnel. Respondent
had issued an Amendment Order dated November 8, 2016
and fixed the price of Rs. 1279, 81, 02, 403/-.
11
29. It would be apposite to set out the chart of changes in
the original contract as appearing in the award herein. Such
changes are as follows:-
SN DETAILS AMOUNT (INR CRORE)
I Original Contract Price for the work of 908.63
section Subhas Sarobar - Phool Bagan -
Sealdah - Central Station
ii Price of work deleted from Sealdah - (-) 250.68
Central Station
Iii Revised Contract Price for Phase I - 657.95
Subhas Sarobar - Phool Bagan - Sealdah
(i-ii_
Iv Contract price for Phase II Sealdah – (+) 621. 86
Central Station
V Total Revised Contract Price (iii+iv) 1279.81
30. Disputes and differences had arisen between the
parties. Such disputes had been referred to the Arbitral
Tribunal. In the arbitration proceedings, appellant had
submitted its statement of claim, respondent had submitted
counter claim of facts/statement of defence and counter
claims and the appellant had submitted a rejoinder with the
respondent submitting a sub-rejoinder.
31. Arbitral Tribunal had held six sittings of the
arbitration. Arbitral Tribunal had published the award on
November 21, 2019.
32. In the statement of claims, appellant had made four
principal claims which are as follows:-
12
Claim Items of Claims Amount (INR)
No
01 Claim on account of unrecovered 177,77,50,000
additional establishment cost due to
extension of Phase 1 part of work
02 Claim on account of loss suffered due to 1,68,24,647
arbitrary reduction in the overhead (OH)
% age in respect of Phase 1 part of work
03 Claim on account of loss of interest in 27,93,38,134
respect of excess recovery and
prolonged withholding of retention sum
in respect of Phase 1 part of work
04 Claim towards lost interest due to 1,52,62,207
wrongful recovery of interest on
mobilization advance.
Total: 208,91,74,988
33. Respondent had made counter claim in the arbitration
which is as follows:-
1 Undue claim of OH & 1,49,73,213
profit for some
variation works
34. Arbitral Tribunal had rejected claims no. 1 and 3 of the
appellant and the counter claim of the respondent. Arbitral
Tribunal had allowed claims no. 2 and 4 of the appellant.
35. While rejecting claim No. 1 of the appellant which is on
account of unrecovered additional establishment costs due to
extension of Phase I part of the work, Arbitral Tribunal has
considered clauses 8.3 and 8.4 of the General Conditions of
Contract. Arbitral Tribunal has considered Section 29 of the
13
Indian Contract Act, 1872. Arbitral Tribunal has also
considered the authorities cited before it.
36. On claim No. 1, Arbitral Tribunal has held that, there
was delay in completion of the assignment done on account of
delay in handover of works sought, traffic restriction imposed
by Kolkata Traffic Police and assignment of additional work
due to employee variation. Arbitral Tribunal has held that,
unqualified extension of time sought for by the appellant and
granted by the respondent were with due consideration to
Clauses 2.2 and 8.3 of the General Conditions of Contract.
37. Arbitral Tribunal has referred to Clauses 2.2 and 8.3 of
the General Conditions of Contract as one of the grounds to
deny claim no. 1 of the appellant. Such Clauses are as
follows:-
2.2 The Employer shall grant the Contractor right
of access to possession of the Site progressively for
the Completion of Works. Such right and
possession may not be exclusive to the Contractor.
The Contractor will draw modify the schedule for
completion of Works according to progressively
possession/right of such sites.
If the Contractor suffers delay form failure on the
part of the Employer to grant right of access to or
possession of the Site, the Contractor shall give
notice to the Engineer in a period of 28 days of
such occurrence. After receipt of such notice the
Engineer shall proceed to determine any extension
14
of time to which the Contractor is entitled any shall
notify the Contractor accordingly.
8.3 In case of delay on the part of the Contractor,
the Contractor shall be liable to pay liquidated
damages and any other compensation for the
damages suffered by the Employer as per Clause
8.5. This is without prejudice to the right of the
Employer to rescind the Contract.
Failure or delay by the Employer or the Engineer to
hand over to the Contractor the Site necessary for
execution of Works, or any part of the Works to give
necessary notice to commence the Works or to
provide necessary Drawings or instructions or
clarifications or to supply any material plant or
machinery which under the Contract is the
responsibility of the Employer shall in no way
affect or vitiate the Contract or alter the character
thereof or entitle the Contractor to damages or
compensation thereof but in any such case, the
Engineer shall extend the time period for the
completion of the Contract as in his opinion is/are
reasonable.
38. Arbitral Tribunal, in addition to these two Clauses of
the contract has cited that, claim no. 1 of the appellant cannot
be granted in view of, the claim not being substantiated.
Arbitral Tribunal has given reasons for rejection of the same
on such account in paragraph 3.1.3 (vi).
39. In paragraph 3.1.3 (v) in addition to clauses 2.2 and
8.3 of the General Conditions of Contract, Arbitral Tribunal
15
has stated that the claim no. 1 of the appellant was time
barred.
40. Arbitral Tribunal has rejected claim no. 3 of the
appellant on account of loss of interest in respect of excess
recovery and prolonged withholding of retention sum
extension phase in respect of Phase 1 part of the work.
Arbitral Tribunal has noted the respective contentions on
such issue. It has held that, the value of the original contract
price remained at Rs. 908.63 crores till its approval of the
variation on November 8, 2016. It has noted that, even after
approval of such variation, the contract was revised and not
concluded. It has noted that the appellant had accepted the
fact that the respondent initially demanded Rs. 10 crores on
account of deduction in amount of revised contract and later
converted the entire cash retention amount to bank guarantee
on mutual consent. In the factual matrix, Arbitral Tribunal
had rejected the claim No. 3.
41. Arbitral Tribunal had rejected the counter claim made
by the respondent. Respondent is not before us claiming that
such rejection of the counter claim by the Arbitral Tribunal is
wrong.
16
42. Scope of challenge to an award passed by an Arbitral
Tribunal, has been considered by various authorities. In OPG
Power Generation (supra) Supreme Court after noticing
previous authorities, has held that, disregarding orders of
Supreme Court and the binding effect of the judgment of a
Supreme Court could be regarded as being contrary to the
fundamental policy of the Indian Law. It has explained that
perversity arises where a finding is based on no evidence or
where irrelevant material was taken into account or where
vital evidence was ignored.
43. Ssangyong Engg. & Construction (supra) has held
that, the interpretation of the contract is within the domain of
the arbitrator. It has held that, unless the interpretation of the
contract by the arbitrator is such that no fair minded or
reasonable person could accept, the Court should not
intervene. It has explained patent illegality to mean that a
glaring illegality going to the root of the award including the
deciding matters beyond the scope of the arbitration,
contradicting India’s substantive law or the Act of 1996 or in
violation of the terms of the contract or being so unreasonable
or irrational which tantamount to an error apparent on the
face of the award.
17
44. In DMRC (supra) Supreme Court has held that, while
Courts must respect arbitral awards, Courts nonetheless can
set aside the award where the interpretation of the contract by
the Arbitrator is irrational or so unreasonable that no prudent
person could adopt it. It has held that, Court can set aside the
award if the interpretation of the terms and conditions of the
contract is not a possible view.
45. K.N. Sathyapalan (supra) has held that, where the
contractor in the contract fails to perform its obligations then,
the arbitrator may award compensation for the costs incurred
even in absence of an express escalation clause.
46. Assam SEB (supra) has held that, where the view
taken by the arbitrator on the interpretation of the contract
and the conduct of the parties, is a plausible view, then, Court
should not interfere merely because a different view should be
taken. It has held that, where the Arbitral Tribunal is not
guilty of mis-conduct or where there were no errors on face of
the award, and the award is supported by materials on record,
view taken by arbitrator must be upheld.
47. Suraj Infrastructures (supra) has held that, the
Arbitral Tribunal or the Court is not prohibited from granting
compensation, if such case is made out and proved. It has
18
observed that, compensation can be granted if the delay in
execution of the work occurred due to conduct or the act of
the other party to the contract.
48. McDermott International Inc. (supra) has held that
for raising the claim on account of breach of contract, there
need not be an invoice. It has noted that there are various
formula for the purpose of calculating the quantum of
compensation receivable by the party to the contract.
49. K. Marappan (supra) has held that, it would not be
open to contractor to claim compensation which arises on
account of the work delayed or suffered from hindrance. In the
facts of that case, Court has considered Clause 59 of the
contract.
50. On the aspect of scope of powers under Sections 34
and 37 of the Act of 1996 is concerned, Punjab State Civil
Supplies Corporation (supra) has held that, the scope under
Section 37 of the Act of 1996 is narrow. It has held that the
Court under Section 37 of the Act of 1996 is to evaluate
whether or not the Court exercised correct parameters while
evaluating a challenge under Section 34 of the Act of 1996.
51. Jan De Nul Dredging (supra) has held that, Court
exercising powers under Sections 34 and 37 of the Act of 1996
19
are not Appeal Courts. They are not to interfere with the
award of the Arbitral Tribunal on the mere possibility of an
alternative view.
52. In the facts and circumstances of the present case, the
view taken by the Arbitral Tribunal, in so far as such Arbitral
Tribunal proceeding to disallow the two claims of the
appellant are concerned, cannot be classified as perverse or
patently unreasonable nor can it be said to have overlooked
the provisions of law.
53. The appellant has premised claim No. 1 on the ground
of extension of phase 1 part of the work. Arbitral tribunal has
taken into consideration the prayer for extension of time made
by the appellant and the grant thereof by the respondent. The
appellant had requested for extension of time to complete the
contract under phase 1, unconditionally which the respondent
had granted. Moreover, change of alignment of the work was
proposed during the execution of the contract by the
appellant. It was done within the extended period. The
appellant had participated in the process of change of
alignment and the cost that would be incurred.
54. Original contract value had been changed with the
consent of the respondent. While the original contract price
20
was for Rs. 908.63, the revised contract Price was Rs. 1,
279.81. Amendment order was issued on November 8, 2016.
Such Amendment order was issued within the extended
period of the contract for execution of the phase 1. Time to
complete the original phase I contract after extension was to
expire on April 7, 2018.
55. The modified price of the contract had been arrived at
after negotiation. In any event, the appellant after having
accepted the modified price cannot be allowed to turn around
to claim damages.
56. The view of the Arbitral Tribunal as recorded in the
award on such aspect therefore cannot be said to be perverse
or not a plausible view.
57. So far as claim No. 3 is concerned, again, the view
expressed by the Arbitral Tribunal on such aspect cannot be
termed to be perverse or not a plausible view. Arbitral tribunal
took into account the recovery made and the notification of
the contract as also release of the retention money. Contract
allowed the respondent to retain a portion of the bill amount.
The finding of the Arbitral Tribunal that, the respondent
cannot be saddled with interest on account of alleged
21
withholding of retention money in respect of the phase 1 part
of the work is plausible.
58. The Arbitral Tribunal in its award had discussed at
length the terms and conditions of the contract and the
factual matrix within which the claims were lodged. It has
returned the findings as noted above. These findings returned
by the Arbitral Tribunal are plausible.
59. Courts under Sections 34 and 37 of the Act of 1996
are not to sit in appeal over the decision of the Arbitral
Tribunal. Courts are not required to re-apprise the evidence
and come to a different finding. Courts exercising powers
under Section 34 of the Act of 1996 is not required to
substitute its views with that of the Arbitral Tribunal when,
the view taken by the Arbitral Tribunal is a plausible view.
60. Learned Single Judge has dealt with the rival
contentions of the parties raised under Section 34
proceedings. Learned Single Judge in the impugned judgment
and order has held that, the award does not suffer from any
infirmity requiring interference.
61. We are of the view that the Learned Single Judge has
correctly exercised parameters of Section 34 of the Act of 1996
in evaluating the challenge to the award. We do not find any
22
ground to interfere with the impugned judgment and order or
the award.
62. APOT 103 of 2026 is dismissed without any order as to
costs.
[DEBANGSU BASAK, J.]
63. I agree.
[MD. SHABBAR RASHIDI, J.]
