State Of Chhattisgarh vs Gilcon Project Service Ltd on 25 March, 2026

March 26, 2026

Chattisgarh High Court

State Of Chhattisgarh vs Gilcon Project Service Ltd on 25 March, 2026

Digitally 1 – State Of Chhattisgarh Through – The Chief Executive Officer, (C.G.
signed
by R Rural Road Development Agency), Vikas Bhawan, Civil Lines, Raipur
NIRALA
Chhattisgarh., District : Raipur, Chhattisgarh
2

SPONSORED

2 – The Secretary, Department Of Panchayat And Rural Development,
Mantralaya, Mahanadi Bhawan, Naya Raipur Chhattisgarh.

Appellant (s)
Versus
1 – Gilcon Project Service Ltd. J.V. Scapes Associates, Thacker Tower,
Plot No. 86, Sector 17, 1 Vashi, Navi Mumbai (Maharashtra), District :

Mumbai, Maharashtra
Respondent(s)

ARBA No.39 of 2020

1 – State Of Chhattisgarh Through – The Chief Executive Officer, (C.G.
Rural Road Development Agency), Vikas Bhawan, Civil Lines, Raipur
Chhattisgarh., District : Raipur, Chhattisgarh
2 – The Secretary, Department Of Panchayat And Rural Development,
Mantralaya, Mahanadi Bhawan, Naya Raipur Chhattisgarh.

Appellant (s)
Versus

1 – Gilcon Project Service Ltd. J.V. Scapes Associates, Thacker Tower,
Plot No. 86, Sector 17, 1 Vashi, Navi Mumbai (Maharashtra), District :

Mumbai, Maharashtra
Respondent(s)

ARBA No.42 of 2020

1 – Gilcon Project Service Ltd. J.V. Scapes Associates, Thacker Tower,
Plot No. 86, Sector-17, 1 Vashi, Navi Mumbai (Maharashtra)
Petitioner(s)
Versus

1 – Chief Executive Officer (Cg Rural Road Development Agency),
Vikas Bhawan, Civil Lines, Raipur, Chhattisgarh
2 – Secretary Department Of Panchayat And Rural Development,
Mantralaya, Mahanadi Bhawan, Atal Nagar, Nawa Raipur, Chhattisgarh
Respondent(s)
3

ARBA No. 37 of 2020

1 – State Of Chhattisgarh Through The Chief Executive Officer, (C.G.
Rural Road Development Agency), Vikas Bhawan, Civil Lines, Raipur
(Chhattisgarh), District : Raipur, Chhattisgarh
2 – The Secretary Department Of Panchayat And Rural Development,
Mantralaya, Mahanadi Bhawan, Naya Raipur (Chhattisgarh)
Petitioner(s)
Versus

1 – Gilcon Project Service Ltd. J.V. Scapes Associates, Thacker Tower,
Plot No. 86, Sector 17, 1 Vashi, Navi Mumbai (Maharashtra), District :

Mumbai, Maharashtra
Respondent(s)

ARBA No.41 of 2020

1 – Gilcon Project Service Ltd. J.V. Scapes Associates, Thacker Tower,
Plot No. 86, Sector 17, 1 Vashi, Navi Mumbai Maharashtra., District :

Mumbai, Maharashtra
Appellant (s)
Versus

1 – Chief Executive Officer Chhattisgarh Rural Road Development
Agency, Vikas Bhawan, Civil Lines , Raipur Chhattisgarh., District :

Raipur, Chhattisgarh

2 – Secretary Department Of Panchayat And Rural Development,
Mantralaya , Mahanadi Bhawan, Atal Nagar , Nawa Raipur
Chhattisgarh., District : Raipur, Chhattisgarh
Respondent(s)

For State : Mr. Avinash Singh, GA
For Gilcon Project Service Ltd : Mr. Ankit Pandey, Advocate

Hon’ble Smt. Justice Rajani Dubey
Hon’ble Shri Justice Radhakishan Agrawal
4

CAV Judgment
Per Rajani Dubey. J.

1. The present batch of arbitration appeals arise out of common

order passed by the learned Commercial Court as well as the

learned Arbitrator, as such the same have been clubbed together,

heard together and are being disposed of by a common order.

2. The arbitration appeals i.e. ARBA Nos.36, 37, 39 & 40 of 2020

have been preferred by the State seeking setting aside the

common order dated 29.02.2020 passed by the learned

Commercial Court as well as the common arbitral award dated

31.08.2018 passed by the learned sole Arbitrator, whereas ARBA

Nos.41 & 42 of 2020 have been preferred by the Gilcon Project

Service Ltd against the common order dated 29.02.2020 passed

by the learned Commercial Court seeking interest on the amount

claimed before it.

3. Brief facts of the case are that two contract agreements, firstly

contact agreement bearing No.24/RC-4/CGRRDA dated

23.10.2007 and secondly contract agreement bearing No.25-

RC/4/CGRRDA dated 23.10.2007 were executed between the

parties. The dispute arose between the parties in relation to both

these agreements. Both the matters were referred for

adjudication to learned sole Arbitrator pursuant to order of this

Court. The dispute arising out of agreement

No.24/RC-4/CGRRDA was registered as Arbitration Application
5

No.7/2014 and the dispute arising out of agreement No.25/RC-

4/CGRRDA was registered as Arbitration Application No.6/2014

before the learned sole Arbitrator. The learned sole Arbitrator

adjudicated both the matters and passed the common arbitral

award dated 31.08.2018. The learned sole Arbitrator treated the

Arbitration Application No.6/2014 as the leading case and

referred to the pleadings and documents filed in Arbitration

Application No.6/14 in the common award. Against the award

dated 31.08.2018, both the parties filed petitions under Section

34 of the Arbitration and Conciliation Act before the learned

Commercial Court and the learned Commercial Court registered

MJC No.40/2018 and MJC No.43/2018 with regard to award

related to contract agreement No.25-R-C/4/CGRRDA which is

registered as Arbitration Application No.6/14 before the learned

sole Arbitrator and MJC No.41/18 and 42/2018 were registered

before the learned Commercial Court pertaining to the contract

agreement No.24-RC-4/CGRRDA, which is registered as

Arbitration Application No.7/14 in MJC No.40/2018. The learned

Commercial Court passed a separate order on 29.02.2020,

against which 4 appeals have been filed by the State, whereas 2

appeals have been filed by Gilcon Project. For ready reference,

the details are described as under:-

Sr. No. Arbitration Appeal No. MJC No. Arbitration
Application
1. ARBA No.39/2020 40 & 43 of 2018 6/14
2. ARBA No.40/2020 40 & 43 of 2018 6/14
6

3. ARBA No.36/2020 41 & 42 of 2018 7/14
4. ARBA No.37/2020 41 & 42 of 2018 7/14
5. ARBA No.41/2020 41 & 42 of 2018 7/14
6. ARBA No.42/2020 40 & 43 of 2018 6/14

4. Learned counsel for the appellant/State submits that there is

error apparent on the face of the award and therefore the same is

against the public policy because learned Sole Arbitrator as well

as the learned Commercial Court travelling beyond the pleadings

as well as the documents had recorded a perverse finding in the

entire arbitral award. The learned Sole Arbitrator as well as the

learned Commercial Court have failed to appreciate and consider

the presence of a clear cut provision of Clause 6.5 of General

Conditions of Contract. The contract was never foreclosed

between the parties and the same was still alive the claimant

Gilcon was required to full the conditions of the contract. The

Arbitrator, being a creature of contract and has a duty to act

within the four corners of the terms and conditions specifically

agreed between the parties to the contract, but it has miserably

failed to appreciate the intent and purport of the contractual

stipulations particularly Clause 6.5 of the General Conditions of

Contract and the learned Commercial Court has also not

considered the same. This clause specifically empowers the

State to recover the excess paid amount to the claimant Gilcon.

The Award is also liable to be set aside because the learned Sole

Arbitrator has not given any findings on the issues framed by him

and also failed to discuss the same while passing the award
7

hence gave an award based on alien procedure of adjudication

under the Law of the Land. Hence the same is liable to be set

aside. The learned Commercial Court has also not considered

the same and wrongly dismissed the arbitration applications of

the State. The Award is in conflict with the public policy of India

and hence for this reason also, it deserves to be quashed. The

learned Arbitrator as well as the learned Commercial Court have

misinterpreted and mis-appreciated the documents and

misconducted the proceedings and misdirected which led to the

passing of erroneous and utterly illegal Award as well as order

which are liable to be quashed.

5. Learned counsel for Gilcon Project strongly opposes the

submission made by the State counsel and submits that the

learned Trial Court have failed to appreciate that the respondents

have illegally, without authority of law and in irrational manner

has not allowed interest ante-lite and pendent-lite interest on the

aforesaid awarded sum. The learned Commercial Court erred in

law by not allowing the interest on the aforesaid awarded sum

and only allowing the claims of the appellant. The learned

Commercial Court erred by not allowing the ante-lite, pendent-lite

and post-lite interest as the same are mandatory in nature as the

awarded sum is knowingly and illegally withheld by the State. The

learned Commercial Court erred in not considering the fact of

award of interest while allowing the admitted and other claims.

The learned Commercial Court erred in not considering the fact
8

that Gilcon Project is entitled to the interest as the State has

illegally, arbitrary and wrongfully withheld the payment of the

claimant Gilcon. Therefore, the appeals of the Gilcon Project

deserve to be allowed. Reliance has been placed on the

judgments rendered by the Hon’ble Supreme Court in the matters

of Gayatri Balasamy vs ISG Novasoft Technologies Limited,

reported in (2025) 7 SCC1, Haryana Tourism Limited vs

Kandhari Beverages Limited, reported in (2022) 3 SCC 237, C

& C Constructions Limited vs Ircon International Limited,

reported in (2025) 4 SCC 234, Punjab State Civil Supplies

Corporation Limited and another vs Ramesh Kumar and

Company and others, reported in (2021) 16 SCC 138, Delhi

Airport Metro Express Private Limited vs Delhi Metro Rail

Corporation Limited, reported in (2022) 1 SCC 131 and this

Court’s order dated 01.10.2020 passed in ABA No.29/2018 in

between Bhilai Steel Plant Steel Authority of India Limited

and another vs International Commerce Limited.

6. Heard learned counsel for the parties and perused the material

available on record.

7. It is clear from the record of the learned Commercial Court that

two contract agreements, firstly contact agreement bearing

No.24/RC-4/CGRRDA dated 23.10.2007 and secondly contract

agreement bearing No.25-RC/4/CGRRDA dated 23.10.2007

were executed between the parties. The dispute arose between
9

the parties in relation to both these agreements. Both the matters

were referred for adjudication to learned sole Arbitrator pursuant

to order of this Court High Court. The dispute arising out of

agreement No.24/RC-4/CGRRDA was registered as Arbitration

Application No.7/2014 and the dispute arising out of agreement

No.25/RC-4/CGRRDA was registered as Arbitration Application

No.6/2014 before the learned sole Arbitrator. The learned sole

Arbitrator adjudicated both the matters and passed the common

arbitral award dated 31.08.2018. The learned sole Arbitrator

treated the Arbitration Application No.6/2014 as the leading case

and referred to the pleadings and documents filed in Arbitration

Application No.6/14 in the common award. Against the award

dated 31.08.2018, both the parties filed petitions under Section

34 of the Arbitration and Conciliation Act before the learned

Commercial Court and the learned Commercial Court registered

MJC No.40/2018 and MJC No.43/2018 with regard to award

related to contract agreement No.25-R-C/4/CGRRDA which is

registered as Arbitration Application No.6/14 before the learned

sole Arbitrator and MJC No.41/18 and 42/2018 were registered

before the learned Commercial Court pertaining to the contract

agreement No.24-RC-4/CGRRDA, which is registered as

Arbitration Application No.7/14 in MJC No.40/2018. The learned

Commercial Court passed the common order dated 29.02.2020,

whereby, allowed the arbitration applications filed by the Gilcon

Project to the extent of rejection of claim No.1, which pertains to
10

claim of Rs.44.06 and 64,99,051/- in ARBA No.41/2020 and

Rs.4,08,441/- in ARBA No.42/2020. The learned Commercial

Court set aside the finding recorded by the learned Arbitrator in

this regard but has not directed the State to pay the said amount

to Gilcon Project however granted liberty to the parties that they

are free to begin arbitration again, if they so desire. The

arbitration applications filed by the State have been dismissed,

against which 4 appeals have been filed by State, however the

Gilcon Project has also filed two appeals but it is only seeking

interest on the aforesaid amount and has not made any prayer

that the aforesaid amount be directed to be paid to it by the

State.

8. We have perused the award and order passed by the learned

Arbitrator and the learned Commercial Court. The learned sole

Arbitrator framed 5 issues which are as under:-

“1. Whether Demand Notice of Annexure-3 dated
01.08.2013 Issued by respondents for recovery of Rs.
1,83,34,640/- (Rupees one crore eighty three lacs
thirty four thousand six hundred and forty only) is
illegal, arbitrary, contrary to terms of contract and also
barred by limitation?

2. Whether the claimant is entitled for a total sum of
Rs.61,82,587/- (Rupees sixty one lacs eighty two
thousand five hundred and eighty seven only) as
descried in summary of the statement of claims?

3. Whether the mode of calculation followed by the 3.
respondents for payment to the claimant towards
escalation, is just & proper and in accordance with the
terms & conditions of contract?

4. Whether the claimant’s claim for a total sum of
Rs.61,82,587/- (Rupees sixty one lacs eighty two
11

thousand five hundred and eighty seven only) is barred
by limitation?

5. Reliefs & cost?”

9. A close scrutiny of the award passed by the learned Arbitrator

shows that the learned Arbitrator has elaborately dealt with

factual matrix culminating in dispute between the parties. The

award broadly deals with the interpretation of the various clauses

and rights and obligations of the parties. It has also dealt with all

documentary evidence on record. The learned Arbitrator has also

dealt with Issue No.4 which is related to limitation of claim of

Rs.61,82,587/-. The learned Arbitrator after appreciating the

evidence available on record decided the issue No.1 in favour of

the claimant Gilcon Project however the learned Arbitrator

decided Issue Nos.2 & 4 against the claimant and in favour of

State, against which the parties approached the learned

Commercial Court. The learned Commercial Court after

appreciating the evidence available on record partly allowed the

arbitration applications filed by Gilcon Project and set aside the

finding of the learned Arbitrator pertaining to rejection of admitted

amount of Rs.44.06 Lakhs and Rs.64,99,051/- in MJC

Nos.41/2018 & 42/2018 and amount of Rs.4,08,441/- in MJC

Nos.40/2018 & 43/2018.

10. This Court in Bhilai Steel Plant Steel Authority of India

Limited (supra) discussed the scope of Section 34 of the Act in

para 25, which is as under:-

“25. Before adverting to the Award, which was
challenged by the appellant by filing an application
under Section 34 of the Act of 1996, it is necessary to
state the legal position with regard to scope of
interference by the Courts against an award passed
by the Arbitrator chosen by the parties, in the light of
statutory scheme engrafted under the Act of 1996.

It needs no authority to state the well settled
legal position that while entertaining challenge to the
legality and validity of Award passed by the Arbitrator,
the Court entertaining application under Section 34 of
the Act of 1996 does not act as a Court of appeal
much less Court of appeal on facts. The scope of
interference against an Award is expressly limited by
the provisions contained under the Act of 1996. The
approach of the Court would not be to undertake an
independent assessment of the oral or documentary
evidence led by the parties to dispute before the
Arbitrator, to arrive its own independent conclusion
and finding on facts. The law is settled that while
entertaining an application under Section 34 of the Act
of 1996, the Court is required to see whether the
Award suffers from those defects which have been
specifically enumerated as ground of challenge to
Award. The grounds, on which, the Award can be
challenged have been exhaustively enumerated in
Section 34 itself. If any of such grounds or more than
one grounds are made out, it would be permissible for
the Court to interfere with the award. However, in a
case where none of the grounds as mentioned in
Section 34 are made out, then the hands of the Court
are tied and no interference against the award would
be permissible, even if there is an error of fact or even
mere error of law.”

11. Section 34 of the Act, 1996 reads as under:-

“34. Application for setting aside arbitral awards.

(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).

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

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

(i) a party was under some incapacity, or

(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

(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

(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:

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

(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

(b) the Court finds that-

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

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

1[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,

(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

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

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

Explanation 2.–For the avoidance of doubt, the test
as to whether there is a contravention with the
14

fundamental policy of Indian law shall not entail a
review on the merits of the dispute.]”

12. The Hon’ble Apex Court in Haryana Tourism Limited (supra)

held in paras 9 & 10 as under:-

“9. As per settled position of law laid down by this
Court in a catena of decisions, an award can be set
aside only if the award is against the public policy of
India. The award can be set aside under Sections
34/37 of the Arbitration Act, if the award is found to be
contrary to: (a) fundamental policy of Indian law, or (b)
the interest of India; or (c) justice or morality, or (d) if it
is patently illegal. None of the aforesaid exceptions
shall be applicable to the facts of the case on hand.
The High Court has entered into the merits of the
claim and has decided the appeal under Section 37 of
the Arbitration Act as if the High Court was deciding
the appeal against the judgment and decree passed
by the learned trial court. Thus, the High Court has
exercised the jurisdiction not vested in it under
Section 37 of the Arbitration Act. The impugned
judgment and order! passed by the High Court is
hence not sustainable.

10. In view of the above and for the reasons stated
above, the present appeal succeeds. The impugned
judgment and order¹ passed by the High Court is
hereby quashed and set aside. The award passed by
the arbitrator and the order passed by the Additional
District Judge under Section 34 of the Arbitration Act
overruling the objections are hereby restored.”

13. The Hon’ble Apex Court in Punjab State Civil Supplies

Corporation Limited (supra) held in para 10 as under:-

“10. While considering a petition under Section 34 of
the 1996 Act, it is well-settled that the court does not
act as an appellate forum. The grounds on which
interference with an arbitral award is contemplated are
structured by the provisions of Section 34. The District
Judge had correctly come to the conclusion that there
was no warrant for interference with the arbitral award
under Section 34. The High Court seems to have
proceeded as if it was exercising jurisdiction in a
15

regular first appeal from a decree in a civil suit. The
jurisdiction in a first appeal arising out of a decree in a
civil suit is distinct from the jurisdiction of the High
Court under Section 37 of the 1996 Act arising from
the disposal of a petition challenging an arbitral award
under Section 34 of the 1996 Act.”

14. The Hon’ble Apex Court in Delhi Airport Metro Express Private

Limited (supra) held in paras 28, 29 & 30 as under:-

“28. This Court has in several other judgments
interpreted Section 34 of the 1996 Act to stress on the
restraint to be shown by courts while examining the
validity of the arbitral awards. The limited grounds
available to courts for annulment of arbitral awards are
well known to legally trained minds. However, the
difficulty arises in applying the well-established
principles for interference to the facts of each case
that come up before the courts. There is a disturbing
tendency of courts setting aside arbitral awards, after
dissecting and reassessing factual aspects of the
cases to come to a conclusion that the award needs
intervention and thereafter, dubbing the award to be
vitiated by either perversity or patent illegality, apart
from the other grounds available for annulment of the
award. This approach would lead to corrosion of the
object of the 1996 Act and the endeavours made to
preserve this object, which is minimal judicial
interference with arbitral awards. That apart, several
judicial pronouncements of this Court would become a
dead letter if arbitral awards are set aside by
categorising them as perverse or patently illegal
without appreciating the contours of the said
expressions.

29. Patent illegality should be illegality which goes to
the root of the matter. In other words, every error of
law committed by the Arbitral Tribunal would not fall
within the expression ‘patent illegality’. Likewise,
erroneous application of law cannot be categorised as
patent illegality. In addition, contravention of law not
linked to public policy or public interest is beyond the
scope of the expression ‘patent illegality’. What is
prohibited is for courts to re-appreciate evidence to
conclude that the award suffers from patent illegality
appearing on the face of the award, as courts do not
sit in appeal against the arbitral award. The
permissible grounds for interference with a domestic
16

award under Section 34(2-A) on the ground of patent
illegality is when the arbitrator takes a view which is
not even a possible one, or interprets a clause in the
contract in such a manner which no fair-minded or
reasonable person would, or if the arbitrator commits
an error of jurisdiction by wandering outside the
contract and dealing with matters not allotted to them.
An arbitral award stating no reasons for its findings
would make itself susceptible to challenge on this
account. The conclusions of the arbitrator which are
based on no evidence or have been arrived at by
ignoring vital evidence are perverse and can be set
aside on the ground of patent illegality. Also,
consideration of documents which are not supplied to
the other party is a facet of perversity falling within the
expression ‘patent illegality’.

30. Section 34 (2) (b) refers to the other grounds on
which a court can set aside an arbitral award. If a
dispute which is not capable of settlement by
arbitration is the subject-matter of the award or if the
award is in conflict with public policy of India, the
award is liable to be set aside. Explanation (1),
amended by the 2015 Amendment Act, clarified the
expression ‘public policy of India’ and its connotations
for the purposes of reviewing arbitral awards. It has
been made clear that an award would be in conflict
with public policy of India only when it is induced or
affected by fraud or corruption or is in violation of
Section 75 or Section 81 of the 1996 Act, if it is in
contravention with the fundamental policy of Indian
law or if it is in conflict with the most basic notions of
morality or justice.”

15. The Hon’ble Apex Court in C&C Constructions Limited (supra)

held in paras 34 & 35 as under:-

“34. As far as scope of interference in an appeal
under Section 37 of the Arbitration Act is concerned,
the law is well settled. In Larsen Air Conditioning &
Refrigeration Co. v. Union of India in para 15, this
Court held thus: (SCC p. 478)
“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
17

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.
(emphasis in original and supplied).

35. In Konkan Railway Corpn. Ltd. v. Chenab Bridge
Project in para 18, this Court held thus: (SCC p. 93)
“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 Lid. v. Vedanta Ltd. 9, is akin to
the jurisdiction of the court under Section 34 of the
Act. 10 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.”

16. The Hon’ble Apex Court in Gayatri Balasamy (supra) held in

paras 47, 60, 61, 62, 87, 87.1, 87.2 & 87.3 as as under:-

“47. Section 33 of the 1996 Act (Annexure A)
empowers an arbitrator, upon request, to correct
and/or re-interpret the arbitral award, on limited
grounds. This includes the correction of
computational, clerical or typographical errors, as
well as giving interpretation on a specific point or a
part of the award, when mutually agreed upon by the
parties. Section 33(3) enables the Tribunal to suo
motu correct any errors within thirty days of delivering
the award. Section 33(4) grants wider powers. It
permits the Arbitral Tribunal, upon compliance with
specified manner of request, to make an additional
award on claims presented before the arbitral
proceedings but omitted from the arbitral award.

60. While exercising this power, the Court must also
remain mindful that the Arbitral Tribunal has already
rendered its decision. If the award suffers from
serious acts of omission, commission, substantial
injustice, or patent illegality, the same may not be
remedied through an order of remand. Clearly, there
cannot be a lack of confidence in the Tribunals’ ability
18

to come to a fair and balanced decision when an
order of remit is passed.

61. Thus, an order of remand should not be passed
when such order would place the Arbitral Tribunal in
an invidious or embarrassing position. Additionally,
remand may be inappropriate when it does not serve
the interests of the parties, particularly in time-
sensitive matters or where it would lead to undue
costs and inefficiencies. Once an order of remand is
granted, the Arbitral Tribunal has the authority to vary,
correct, review, add to, or modify the award. Notably,
under Section 34(4), the Tribunal’s powers, though
confined, remain nonetheless substantial. This
stands in contrast to the Court’s narrow role under
the rest of Section 34.

62. This Court in Kinnari Mullick v. Ghanshyam Das
Damani, referred to and laid down the preconditions
for exercising the power of remand under Section
34(4). It held that the Court cannot exercise the
power of remand suo motu in the absence of a
written request by one of the parties. Secondly, once
an application under Section 34(1) has been decided
and the award set aside, the Court becomes functus
officio and cannot thereafter remand the matter to the
Arbitral Tribunal. Consequently, the power under
Section 34(4) cannot be invoked after the Court has
disposed of the Section 34(1) application.

87. Accordingly, the questions of law referred to by
Gayatri Balasamy are answered by stating that the
Court has a limited power under Sections 34 and 37
of the 1996 Act to modify the arbitral award. This
limited power may be exercised under the following
circumstances:

87.1. When the award is severable, by severing the
“invalid” portion from the “valid” portion of the award,
as held in Part II of our Analysis;

87.2. By correcting any clerical, computational or
typographical errors which appear erroneous on the
face of the record, as held in Parts IV and V of our
Analysis;

87.3. Post-award interest may be modified in some
circumstances as held in Part IX of our Analysis;
and/or
87.4. Article 142 of the Constitution applies, albeit,
the power must be exercised with great care and
19

caution and within the limits of the constitutional
power as outlined in Part XII of our Analysis.”

17. In light of above in the present case, we found that the appellant

State has failed to raise any ground enumerated under Section

37 of the Act. The learned Commercial Court minutely

appreciated all grounds of application filed by the State and

Gilcon Project and rightly passed the order and rightly rejected

the applications of the State sans merit and rightly allowed the

claim No.1 of the Gilcon Project, which is in respect of admitted

amount withheld by the State. Thus, we do not find any illegality

or irregularity in the order passed by the learned Commercial

Court.

18. In so far as the appeals filed by the Gilcon Project is concerned, it

is clear from the order of the learned Commercial Court that the

learned Commercial Court allowed the claim No.1 of the Gilcon

Project in both the appeals, which is an admitted amount of

Rs.44.06 Lakhs and Rs.64,99,051/- in ARBA No.41/2020 with

respect to MJC Nos.41/2018 & 42/2018 and amount of

Rs.4,08,441/- in ARBA No.42/2020 with respect to MJC

Nos.40/2018 & 43/2018.

19. The learned Commercial Court in its order dated 29.02.2020 in

MJC Nos.41/2018 & MJC No.42/2018 held in relevant para 46 as

under:-

“Further, the application u/s 34 of the Arbitration and
Conciliation Act, 1996 filed by the Gilcon Ltd (MJC
41/18) is to be allowed to the extent of rejection of
20

admitted amoutn of Rs.44.06 lacs which was withheld
by the CGRRDA toward final bill of Gilcon Ltd and the
amount of Rs.64,99,051 /- (Rupees Sixty Four Lakhs
Ninety Nine Thousand Fifty One) the amount of
escalation bill not paid by the CGRRDA. Thereafore,
this Court set aside the impugned Arbitral Award to
the said extent.”

20. The learned Commercial Court in its order dated 29.02.2020 in

MJC Nos.40/2018 & MJC No.43/2018 held in relevant para 42 as

under:-

“Further, the application u/s 34 of the Arbitration and
Conciliation Act, 1996 filed by the Gilcon Ltd (MJC
40/18) is to be allowed to the extent of rejection of
admitted amount of Rs.4,08,441/- (Rupees Four
Lakhs Eight Thousand Four Hundred Forty One)
which was withheld by the CGRRDA toward final bill
of Gilcon Ltd. Therefore, this Court set aside the
impugned Arbitral Award to the said extent.”

21. It is clear that both the orders passed by the learned Commercial

Court are silent on interest part, thus it would be expedient in the

interest of justice to award interest on the aforesaid sum in favour

of Gilcon Project Limited. Accordingly, interest @ 6% is awarded

on the aforesaid sum, which will be payable from the date of

completion of contract to its actual realization.

22. In the result, the appeals filed by the State i.e. ARBA Nos.36, 37,

39 & 40 of 2020 are dismissed. However, the appeals filed by the

Gilcon Project Service Ltd. i.e. ARBA Nos.41 & 42 of 2020 are

allowed to the extent indicated herein above.

                    Sd/-                                             Sd/-
               Rajani Dubey                                  Radhakishan Agrawal
                  Judge                                            Judge
Nirala

Source link

Welcome to Airr News

Welcome to Airr News

Forever

Recommended

1-Year

1-Month

Welcome to Airr News

Forever

Recommended

1-Year

1-Month

Welcome to Airr News

State Of Chhattisgarh vs Gilcon Project Service Ltd on 25 March, 2026

Chattisgarh High Court