ATLANTA LIMITED THR. ITS MANAGING DIRECTORversusUNION OF INDIA REPRESENTED BY CHIEF ENGINEER MILITARY ENGINEERING SERVICE

                        [2022] 1 S.C.R. 609                             609


    ATLANTA LIMITED THR. ITS MANAGING DIRECTOR                          A
                                 v.
   UNION OF INDIA REPRESENTED BY CHIEF ENGINEER
           MILITARY ENGINEERING SERVICE
                  (Civil Appeal No. 1533 of 2017)                       B
                        JANUARY 18, 2022
         [N. V. RAMANA, CJI, A. S. BOPANNA AND
                   HIMA KOHLI, JJ.]
      Administrative Law: Judicial review – Scope of – Interference
                                                                        C
with the arbitral award – Held: Is limited – Award passed by an
Arbitrator can be challenged only on grounds specified in ss.30
and 33 of the Arbitration Act, namely, when there is an error on the
face of the Award or when the Arbitrator has mis-conducted himself
or the proceedings – Nor can the Court substitute its own view on
the conclusion of law or facts as against those drawn by the            D
Arbitrator, as if it is sitting in appeal – Arbitration Act, 1940.
       Arbitration: Arbitrator is the final arbiter of the disputes
between the parties and it is not open to a party to challenge the
Award on the ground that he has drawn his own conclusions or has
failed to appreciate certain facts – It is beyond the jurisdiction of   E
the Appellate Court to assign to itself, the task of construing the
terms and conditions of the contract and its provisions and take a
view on certain amounts awarded in favour of a party – As long as
the Arbitrator has taken a possible view, which may be a plausible
view, simply because a different view from that taken in the Award,
                                                                        F
is possible based on the same evidence, would also not be a ground
to interfere in the Award – In the instant case, the Sole Arbitrator
had given certain cogent reasons for awarding the amount in favour
of the appellant-claimant towards idle hire charges of the parts of
the machineries and equipments and loss of machinery – It was
beyond the domain of the Appellate Court to have examined the           G
reasonableness of the said reasons by reappreciating the evidence
to arrive at a different conclusion – Having regard to the fact that
amounts have been awarded in favour of the appellant-claimant on
the above heads, based on the Report submitted to the Court by the
Court Commissioner for valuing the tools and machinery and
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                                609
610            SUPREME COURT REPORTS                      [2022] 1 S.C.R.


A     premised on the formula offered by the appellant-claimant for
      arriving at the idle hire charges, both being undisputed, there is no
      good reason for the Appellate Court to have interfered in the manner
      it did – Arbitration Act, 1940.
            Disposing the appeal, the Court
B           HELD: 1.1 Court does not sit in appeal over an Award
      passed by an Arbitrator and the only grounds on which it can be
      challenged are those that have been specified in Sections 30 and
      33 of the Arbitration Act, namely, when there is an error on the
      face of the Award or when the Arbitrator has mis-conducted
C     himself or the proceedings. [Para 10][619-F-G; 620-A]
            NTPC Ltd. v. Deconar Services Pvt. Ltd. (2021) SCC
            Online SC 498 Food Corporation of India v. Sreekanth
            Transport (1999) 4 SCC 491 : [1999] 3 SCR 699;
            Kwality Manufacturing Corporation v. Central
D           Warehousing Corporation (2009) 5 SCC 142; Assam
            State Electricity Board and Others v. Buildworth Private
            Limited (2017) 8 SCC 146 : [2017] 7 SCR 123–
            referred to.
             1.2 It is also a well-settled principle of law that challenge
E     cannot be laid to the Award only on the ground that the Arbitrator
      has drawn his own conclusion or failed to appreciate the relevant
      facts. Nor can the Court substitute its own view on the conclusion
      of law or facts as against those drawn by the Arbitrator, as if it is
      sitting in appeal. As long as the Arbitrator has taken a possible
      view, which may be a plausible view, simply because a different
F     view from that taken in the Award, is possible based on the same
      evidence, would also not be a ground to interfere in the Award.
      [Paras 12, 13][621-B-C; 622-B-C]
            State of Rajasthan v. Puri Construction Co. Ltd. And
            Another (1994) 6 SCC 485 : [1994] 3 Suppl. SCR 616;
G           Arosan Enterprises Ltd. v. Union of India and Another
            (1999) 9 SCC 449 : [1999] 2 Suppl. SCR 621,
            Municipal Corporation of Delhi v. Jagan Nath Ashok
            Kumar and Another (1987) 4 SCC 497 : [1988] 1
            SCR 180 – referred to.
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 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED             611
        BY CHIEF ENGG. MILITARY ENGINEERING SERVICE

      2.1 Once the Sole Arbitrator had interpreted the clauses of        A
the contract by taking a particular view and had gone to great
length to analyse several reasons offered by the appellant-claimant
to justify its plea that it was entitled for extension of time to
execute the contract, the Division Bench of the High Court ought
not to have sat over the said decision as an Appellate Court
                                                                         B
and seek to substitute its view for that of the Arbitrator.
[Para 20][626-E-F]
       2.2 In the instant case, having gone through the Award, the
Sole Arbitrator was lucid in his reasoning for taking a particular
view on the interpretation of the terms and conditions of the
contract between the parties. It was for this very reason that the       C
Single Judge had forbore from interfering with the arbitral Award
and dismissed the petition filed by the respondent-Union of India
under Sections 30 and 33 of the 1940 Act. By going into the minute
details of the evidence led before the Sole Arbitrator with a
magnifying glass and the findings returned thereon, the Appellate        D
Court has clearly transgressed the limitations placed on it. In
any case, the reasons offered for taking such a view, are neither
justified nor called for for interfering with the arbitral Award. The
findings returned by the Sole Arbitrator endorsed by the Single
Judge are accepted that there was sufficient justification for the
appellant-claimant to have sought extension of time for completing       E
the work and that the decision of the respondent-Union of India
to terminate the contract, was not for legitimate reasons.
[Paras 21, 22][626-F-H; 627-A-B]
      3.1 The second argument concerns the amount that was
awarded in favour of the appellant-claimant on account of idle           F
hire charges and the value of its machinery and equipment lying
at the site, that has been set aside in the impugned judgment.
Though the appellant-claimant had sought compensation under
several heads, the Sole Arbitrator granted it an amount of
15,35,40,785/- towards idle hire charges and for the value of the        G
machinery, inclusive of interest upto 31st May, 1999. The High
Court appointed an Engineer to ascertain the availability of the
different items and machineries and their value. The Engineer
and Insurance Surveyor submitted a report, just after a year from
the date of termination of the contract, stating inter alia that there
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612            SUPREME COURT REPORTS                      [2022] 1 S.C.R.


A     were 21 items of machinery available at the site and their collective
      market value was 2,72,95,000/- and that the condition of most
      of the machineries had deteriorated and they were no longer
      usable. The High Court allowed the appellant-claimant to remove
      21 items of the machinery lying at the site, subject to it furnishing
      a bank guarantee for a sum of 2.73 crores within three weeks.
B
      Though permission was granted to the appellant-claimant to take
      delivery of the said machineries after furnishing a bank guarantee,
      it did not do so on taking a plea that when the respondent-Union
      of India was approached for inspection of the machineries and to
      verify tampering/missing parts, the latter had refused to prepare
C     any inventory and had stated that the machineries and equipments
      will be released on a “as is where is basis”. The Sole Arbitrator
      observed that after termination of the contract of the appellant-
      claimant, the balance contract work was got completed by the
      respondent-Union of India through the Border Road Organization
      [BRO] on 23rd December, 1995 and till that time, the tools and
D
      machinery had remained with the respondent-Union of India.
      [Paras 23, 24][627-B-C, E-H; 628-A-C]
             3.2 Finding fault with the respondent-Union of India of
      having failed to mitigate the damages by handing back the tools
      and machineries to the appellant-claimant at least immediately
E     after 23rd December, 1995, in the arbitral Award held that the
      appellant-claimant was entitled to idle hire charges from 2nd April,
      1992, the date of termination of the contract, till 23rd December,
      1995, the date of completion of the balance contract work by the
      BRO. Relying on the report of the Valuer appointed by the Court
F     to give a Report relating to the machineries at the site and their
      condition and valuation and further, noting that both sides had
      accepted the said Report, the Sole Arbitrator held that it was
      fairly considered it safe to rely on the said Report for purposes of
      assigning valuation to the tools and machinery. Even for purposes
      of computing the idle hire charges of the machineries for the
G     period between 2 nd April, 1992 to 23 rd December, 1995, the
      calculation given by the appellant-claimant based on a particular
      formula, was not objected to by the respondent-Union of India.
      Premised on the said formula, a sum of           6,77,41,386/- was
      awarded in favour of the appellant-claimant towards idle hire
H
 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED            613
        BY CHIEF ENGG. MILITARY ENGINEERING SERVICE

charges of machineries and equipment with interest payable @            A
18% p.a. and a sum of 2,72,95,000/- was granted to the appellant-
claimant towards the value of the tools and machineries totalling
to a sum of     15,35,40,785/- inclusive of interest. [Para 25]
[628-D-H]
      3.3 The Appellate Court has set aside the aforesaid claim         B
by taking a view that the Sole Arbitrator lost sight of the fact that
once the High Court had passed an order granting permission to
the appellant-claimant to remove the equipment and machineries
from the site in the proceedings initiated by it and still they were
not removed, then it has none else to blame but itself for the          C
situation. Holding that the Sole Arbitrator had misconducted
himself by observing that the claimant “may be correct” in not
taking the machineries without an inventory when they were
available at the site, the Appellate Court held that the appellant-
claimant was not entitled to any amount towards the value of the
tools and machineries, having been awarded idle hire charges            D
for the very same equipments. [Para 26][629-A-C]
      3.4 The aforesaid conclusion drawn by the Appellate Court
is manifestly erroneous and flies in the face of the settled legal
position that the Arbitrator is the final arbiter of the disputes
between the parties and it is not open to a party to challenge the      E
Award on the ground that he has drawn his own conclusions or
has failed to appreciate certain facts. It is beyond the jurisdiction
of the Appellate Court to assign to itself, the task of construing
the terms and conditions of the contract and its provisions and
take a view on certain amounts awarded in favour of a party. The        F
Sole Arbitrator had given certain cogent reasons for awarding
the amount in favour of the appellant-claimant towards idle hire
charges of the parts of the machineries and equipments and loss
of machinery. It was beyond the domain of the Appellate Court to
have examined the reasonableness of the said reasons by
reappreciating the evidence to arrive at a different conclusion.        G
Having regard to the fact that amounts have been awarded in
favour of the appellant-claimant on the above heads, based on
the Report submitted to the Court by the Court Commissioner
for valuing the tools and machinery and premised on the formula
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614            SUPREME COURT REPORTS                      [2022] 1 S.C.R.


A     offered by the appellant-claimant for arriving at the idle hire
      charges, both being undisputed, there is no good reason for the
      Appellate Court to have interfered in the manner it did.
      [Para 27][629-C-G]
             4. The terms and conditions of the contract referred by the
B     respondent-Union of India, namely, Clauses 7, 11, 54 and 70 have
      been duly noted, discussed and declared as inapplicable to the
      fact situation by the Sole Arbitrator, by relying on the facts of the
      case, the conduct of the parties and some other material terms
      and conditions of the contract, which in his view disentitled the
      respondent-Union of India from claiming that it was justified in
C     refusing to extend the time as prayed for by the appellant-claimant,
      to complete the project. Therefore the submission made on behalf
      of the respondent-Union of India that the Sole Arbitrator had
      misconducted himself is rejected. Having held so, none of the
      decisions cited on the aspect of “excepted matters” would be of
D     any assistance to the respondent-Union of India. [Para 29]
      [630-B-D]
            Rajasthan State Mines and Minerals Ltd. v. Eastern
            Engineering Entereprises and Another (1999) 9 SCC
            283 : [1999] 2 Suppl. SCR 710 – held inapplicable.
E           Grid Corporation of Orissa Ltd. And Another v. Balasore
            Technical School (2000) 9 SCC 552; General Manager,
            Northern Railway and Another v. Sarvesh Chopra
            (2002) 4 SCC 45 : [2002] 2 SCR 156; K.P.Poulose v.
            State of Kerala and Another (1975) 2 SCC 236 : [1975]
F           Suppl. SCR 214 – referred to.
                             Case Law Reference
      [1999] 3 SCR 699               referred to             Para 8
      (2000) 9 SCC 552               referred to             Para 8
G     [2002] 2 SCR 156               referred to             Para 8
      [1999] 2 Suppl. SCR 710        held inapplicable       Para 8
      [1975] Suppl. SCR 214          referred to             Para 8
      (2009) 5 SCC 142               referred to             Para 10
H
    ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                615
           BY CHIEF ENGG. MILITARY ENGINEERING SERVICE

[2017] 7 SCR 123                  referred to                Para 11           A
[1994] 3 Suppl. SCR 616           referred to                Para 12
[1999] 2 Suppl. SCR 621           referred to                Para 13
[1988] 1 SCR 180                  referred to                Para 13
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1533                      B
of 2017.
      From the Judgment and Order dated 20.07.2010 of the High Court
of Judicature at Madras in O.S. Appeal No.177 of 2009 and M.P. No.1
of 2010.
      Ms. Meenakshi Arora, Sr. Adv., Chirag M. Shroff, Advs. for the           C
Appellant.
     Sanjay Jain, ASG, Ashok Kumar Panda, Sr. Adv., D. L.
Chidananda, Ms. Meenakshi Grover, Bhuvan Mishra, Chandra Prakash,
Mukesh Kumar Maroria, Advs. for the Respondent.
          The Judgment of the Court was delivered by                           D
          HIMA KOHLI, J.
       1. The appellant-claimant has preferred this appeal against the
judgment and order dated 20th July, 2010 passed by the Division Bench
of the High Court of Madras partly allowing the appeal preferred by the
respondent-Union of India under Section 39 of the Arbitration Act1, 1940       E
and interfering with the order dated 19th January, 2009 passed by the
learned Single Judge in O.P No. 663 of 1999, a petition filed by the
respondent-Union of India under Sections 30 and 33 of the 1940 Act
against the arbitral Award dated 24th June, 1999. Vide judgment dated
19th January, 2009, the learned Single Judge had dismissed the said petition   F
filed by the respondent-Union of India and had upheld the Award. The
Division Bench of the High Court has, however, set aside the amount
awarded by the learned Sole Arbitrator in favour of the appellant herein
towards idle hire charges and value of the tools and machineries. Further,
the findings returned in the Award relating to extension of time and illegal
termination of the contract by the respondent-Union of India in favour         G
of the appellant-claimant were also set aside. On the remaining issues,
the order of the learned Single Judge was duly confirmed and the decree
upheld.

1
    In short ‘1940 Act’                                                        H
616            SUPREME COURT REPORTS                          [2022] 1 S.C.R.


A            2. A conspectus of the facts of the case, relevant for disposing of
      the present appeal, are as follows:
              On 16th November, 1988, the appellant-claimant, a construction
      company, entered into a contract with the respondent-Union of India for
      construction of a runway and allied works at the Naval Air Station,
B     Arakonam for a total contract price of 19,58,94,190/-[Rupees Nineteen
      Crores fifty eight lakhs ninety four thousand one hundred and ninety].
      As per the contract, the work was to be completed within a period of 21
      months from the date of the commencement, ending on 23rd August,
      1990. It is the stand of the respondent-Union of India that the site was
      handed over to the appellant-claimant on 24th November, 1988 and
C     reckoned from the said date, the date of completion of the contract
      would have expired on 23rd August, 1990. On the contrary, the appellant’s
      stand is that it could commence the work only on 1st January, 1989, since
      the site was heavily waterlogged due to the rainy season. During the
      course of execution of the work, the appellant-claimant sought extension
D     of time for completion of the project for 45 fortnights w.e.f. 15th July,
      1992 as the probable target date. The respondent-Union of India granted
      extension of time thrice, firstly upto 31st December, 1990, then upto 30th
      June, 1991 and lastly upto 31st March, 1992. By Mid-March, 1992, the
      appellant-claimant claims to have completed the substantial work of
      construction of the runway and taxi track to the extent of 72%. Since
E     the respondent-Union of India proposed to have the runway inaugurated
      by the then President of India on 11th March, 1992, the appellant-claimant
      had to hand back the site on 9th March, 1992 whereafter, for security
      reasons, the station became a restricted area. As a result, the appellant-
      claimant had to request the respondent-Union of India to issue passes
F     for its staff, operators and labourers to complete the balance work. But
      no entry passes were issued. Instead, vide letter dated 2nd April, 1992
      the contract was terminated with immediate effect by the Chief Engineer,
      who declined to extend the time any further for completion of the work
      which was otherwise to expire on 31st March, 1992.
G            3. Aggrieved by the aforesaid termination order, the appellant-
      claimant invoked the Arbitration Clause in the contract executed by the
      parties and a Sole Arbitrator was appointed to adjudicate the disputes
      between them. Several claims were raised by the appellant-claimant
      before the learned Sole Arbitrator. The respondent-Union of India also
      raised counter claims. The learned Sole Arbitrator framed as many as
H
 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                      617
  BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

33 issues and on evaluating the evidence and hearing the parties                  A
pronounced a detailed Award dated 24th June, 1999, running into 506
pages, wherein a sum of 25,96,87,442.89p[Rupees Twenty five crores
ninety six lakhs eighty seven thousand four hundred forty two and eighty
nine paise] was awarded in favour of the appellant-claimant, inclusive
of interest upto 31st May, 1999. Further, future interest was directed to
                                                                                  B
be paid by the respondent-Union of India from 1st June, 1999 at the rate
of 18% per annum on the principal amount of 14,12,50,907.55p.[Rupees
Fourteen crores twelve lakhs fifty thousand nine hundred and seven and
fifty paise], till realization. As regards the counter-claim of the respondent-
Union of India, the learned Sole Arbitrator awarded a sum of 1,42,255/-
[Rupees One lakh forty two thousand two hundred and fifty five] in its            C
favour in respect of Claim No. 6 along with future interest.
       4. Aggrieved by the Award dated 24th June, 1999, the respondent-
Union of India moved a petition under Section 30 read with Section 33
of the 1940 Act, which was dismissed by the learned Single Judge vide
order dated 19th January, 2009 and a decree was passed in terms of the            D
Award holding that the appellant-claimant herein would be entitled to
interest at the rate of 12% per annum on the principal amount from the
date of the decree, i.e., 19th January, 2009, till the date of payment. The
judgment dated 19th January, 2009 was challenged in an intra-court appeal
filed by the respondent-Union of India. By the impugned judgment, the
Division Bench has set aside the amount awarded in favour of the                  E
appellant-claimant towards idle hire charges and the value of the tools
and machineries. Further, the findings returned in the Award in respect
of the extension of time and illegal termination of the contract on the
part of the respondent-Union of India, were also set aside. Hence, the
present appeal.                                                                   F
       5. We may note that arguments have been addressed in the present
appeal only on two issues, viz. (i) reasonableness of the extension of
time and validity of the termination of the contract on the part of the
respondent-Union of India; and (ii) the claim granted in favour of the
appellant-claimant in respect of idle hire charges at the site from 02 nd         G
April, 1992 to 23rd December,1995, with interest from 24th December,
1995 to 31st December,1999 and the value of the tools and machineries.
        6. Ms. Meenakshi Arora, learned Senior Advocate appearing for
the appellant-claimant assailed the impugned judgment and submitted
that it was for cogent reasons that the learned Sole Arbitrator had ruled         H
618                SUPREME COURT REPORTS                         [2022] 1 S.C.R.


A     in favour of the appellant-claimant in respect of the claim relating to
      reasonableness of the extension of time granted by the respondent-Union
      of India for completing the project and a related claim pertaining to the
      validity of the decision taken by the respondent-Union of India to terminate
      the contract.
B            The claim of the appellant-claimant in respect of idle hire charges
      and the value of the machinery and its equipment lying at the site was
      also awarded in its favour for justified reasons and has been erroneously
      turned down by the Division Bench. It was canvassed that the Appellate
      Court has erred in re-appreciating the evidence led by the parties which
      was duly scrutinized and evaluated by the learned Sole Arbitrator and
C     upheld by the learned Single Judge. Learned senior counsel contended
      that the scope of interference by courts in arbitral Awards made under
      the old Act, viz., the Arbitration Act, 1940, is fairly limited. Courts do not
      sit in appeal over an Award passed by the learned Arbitrator, nor do
      courts interfere with the Award only on the ground that the Arbitrator
D     has taken a possible view, though a different view could have been taken
      on the very same evidence. Stating that the present case is not one
      where the Award suffers from any patent perversity or an error of law;
      nor has the learned Sole Arbitrator mis-conducted himself on the
      proceedings, learned senior counsel submitted that the Appellate Court
      has exceeded its jurisdiction by substituting its own opinion in place of
E     the conclusions arrived at by the learned Sole Arbitrator. To buttress the
      argument on the scope of interference by courts in an arbitral Award
      passed under the 1940 Act, reliance has been placed on NTPC Ltd. v.
      Deconar Services Pvt. Ltd.2.
             7. Per contra, Mr. Sanjay Jain, learned Additional Solicitor General
F     appearing for the respondent-Union of India, supported the impugned
      judgment and submitted that the Appellate Court had every reason to set
      aside the Award in respect of the findings returned by the learned Sole
      Arbitrator on the aspect of reasonableness of extension of time, validity
      of the termination of the contract by the respondent-Union of India as
G     also the claim of idle cost of the machinery and plant awarded in favour
      of the appellant-claimant. He submitted that the issues relating to
      reasonableness of extension of time and validity of termination of the
      contract were “excepted matters” in terms of Clauses 7, 11, 54 and 70
      of the contract governing the parties, which aspects were completely
      2
H         (2021) SCC Online SC 498
    ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                      619
     BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

overlooked by the Sole Arbitrator; that the issue relating to the validity of        A
termination of the contract on the part of the respondent-Union of India
was also covered under “excepted matters” by virtue of Clauses 54
and 70 of the contract and that the Sole Arbitrator had travelled beyond
the terms of the contract by allowing the claim for idling cost of plant
and machinery in favour of the appellant-claimant.
                                                                                     B
        8. It was submitted on behalf of the respondent-Union of India
that allowing idling charges in favour of the appellant-claimant amounted
to a patent illegality in the Award for the reason that in a separate
proceeding initiated by the appellant-claimant, the High Court had
permitted it to lift its material from the site, post termination of the contract,
an option which it elected not to exercise, for reasons best known to it.            C
To buttress his argument that an “excepted matter” cannot be
adjudicated by an Arbitrator, the decisions in Food Corporation of India
v. Sreekanth Transport 3, Grid Corporation of Orissa Ltd. And
Another v. Balasore Technical School 4 and General Manager,
Northern Railway and Another v. Sarvesh Chopra5 have been cited.                     D
On the scope of Sections 30 and 33 of the Arbitration Act, 1940, reliance
has been placed on the decision of this Court in Rajasthan State Mines
and Minerals Ltd. v. Eastern Engineering Entereprises and Another 6
and on the aspect of the Sole Arbitrator mis-conducting himself or the
proceedings, reference has been made to in K.P. Poulose v. State of
Kerala and Another7.                                                                 E

       9. We have heard the arguments advanced by learned counsel
for the parties and carefully perused the records. Before dealing with
the submissions made on behalf of the parties, it is considered apposite
to examine the scope of interference by courts in arbitral Awards passed
under the Arbitration Act, 1940.                                                     F

       10. The consistent view taken in several judicial pronouncements
is that the Court does not sit in appeal over an Award passed by an
Arbitrator and the only grounds on which it can be challenged are those
that have been specified in Sections 30 and 33 of the Arbitration Act,
namely, when there is an error on the face of the Award or when the                  G

3
  (1999) 4 SCC 491
4
  (2000) 9 SCC 552
5
  (2002) 4 SCC 45
6
  (1999) 9 SCC 283
7
  (1975) 2 SCC 236                                                                   H
620                SUPREME COURT REPORTS                        [2022] 1 S.C.R.


A     learned Arbitrator has mis-conducted himself or the proceedings. In this
      context, we may usefully refer to Kwality Manufacturing Corporation
      v. Central Warehousing Corporation8, where it has been observed as
      follows:
                  “10. At the outset, it should be noted that the scope of
B              interference by courts in regard to arbitral Awards is
               limited. A court considering an application under Section
               30 or 33 of the Act, does not sit in appeal over the findings
               and decision of the arbitrator. Nor can it reassess or
               reappreciate evidence or examine the sufficiency or
               otherwise of the evidence. The award of the arbitrator is final
C              and the only grounds on which it can be challenged are those
               mentioned in Sections 30 and 33 of the Act. Therefore, on the
               contentions urged, the only question that arose for consideration
               before the High Court was, whether there was any error apparent
               on the face of the award and whether the arbitrator misconducted
D              himself or the proceedings.”
                                                             [emphasis added]
             11. In Assam State Electricity Board and Others v. Buildworth
      Private Limited9, where the learned Arbitrator has taken a particular
      view on the construction of the provisions of the contract, the Court had
E     held as below:
                   “13. The arbitrator has taken the view that the provision for
               price escalation would not bind the claimant beyond the scheduled
               date of completion. This view of the arbitrator is based on a
               construction of the provisions of the contract, the correspondence
F              between the parties and the conduct of the Board in allowing the
               completion of the contract even beyond the formal extended date
               of 6-9-1983 up to 31-1-1986. Matters relating to the
               construction of a contract lie within the province of the
               Arbitral Tribunal. Moreover, in the present case, the view which
G              has been adopted by the arbitrator is based on evidentiary material
               which was relevant to the decision. There is no error apparent on
               the face of the record which could have warranted the interference
               of the court within the parameters available under the Arbitration

      8
          (2009) 5 SCC 142
      9
H         (2017) 8 SCC 146
     ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                   621
      BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

          Act, 1940. The arbitrator has neither misconducted himself in the        A
          proceedings nor is the awarded otherwise invalid.”
                                                         [emphasis added]
       12. It is also a well-settled principle of law that challenge cannot
be laid to the Award only on the ground that the Arbitrator has drawn his
own conclusion or failed to appreciate the relevant facts. Nor can the             B
Court substitute its own view on the conclusion of law or facts as against
those drawn by the Arbitrator, as if it is sitting in appeal. This aspect has
been highlighted in State of Rajasthan v. Puri Construction Co. Ltd.
And Another10, where it has been observed thus:
             “26. The arbitrator is the final arbiter for the dispute              C
          between the parties and it is not open to challenge the award
          on the ground that the arbitrator has drawn his own
          conclusion or has failed to appreciate the facts. In Sudarsan
          Trading Co. v. State of Kerala [Sudarsan Trading Co. v. State
          of Kerala, (1989) 2 SCC 38] it has been held by this Court that
          there is a distinction between disputes as to the jurisdiction of the    D
          arbitrator and the disputes as to in what way that jurisdiction should
          be exercised. There may be a conflict as to the power of the
          arbitrator to grant a particular remedy. One has to determine the
          distinction between an error within the jurisdiction and an error in
          excess of the jurisdiction. Court cannot substitute its own              E
          evaluation of the conclusion of law or fact to come to the
          conclusion that the arbitrator had acted contrary to the bargain
          between the parties. Whether a particular amount was liable to
          be paid is a decision within the competency of the arbitrator. By
          purporting to construe the contract the court cannot take
          upon itself the burden of saying that this was contrary to               F
          the contract and as such beyond jurisdiction. If on a view
          taken of a contract, the decision of the arbitrator on certain
          amounts awarded is a possible view though perhaps not
          the only correct view, the award cannot be examined by
          the court. Where the reasons have been given by the                      G
          arbitrator in making the award the court cannot examine
          the reasonableness of the reasons. If the parties have selected
          their own forum, the deciding forum must be conceded the power
          of appraisement of evidence. The arbitrator is the sole judge of
10
     (1994) 6 SCC 485                                                              H
622                SUPREME COURT REPORTS                            [2022] 1 S.C.R.


A               the quality as well as the quantity of evidence and it will not be for
                the court to take upon itself the task of being a Judge on the
                evidence before the arbitrator.”
                                                                 [emphasis added]
             13. As long as the Arbitrator has taken a possible view, which
B     may be a plausible view, simply because a different view from that taken
      in the Award, is possible based on the same evidence, would also not be
      a ground to interfere in the Award. In Arosan Enterprises Ltd. v. Union
      of India and Another 11, this Court has held as follows:
                    “36. Be it noted that by reason of a long catena of cases, it is
C               now a well-settled principle of law that reappraisal of evidence
                by the court is not permissible and as a matter of fact exercise of
                power by the court to reappraise the evidence is unknown to
                proceedings under Section 30 of the Arbitration Act. In the event
                of there being no reasons in the award, question of interference
D               of the court would not arise at all. In the event, however, there
                are reasons, the interference would still be not available within
                the jurisdiction of the court unless of course, there exist a total
                perversity in the award or the judgment is based on a wrong
                proposition of law. In the event however two views are possible
                on a question of law as well, the court would not be justified in
E               interfering with the award.”
           (Also refer Municipal Corporation of Delhi v. Jagan Nath
      Ashok Kumar and Another12)
             14. In Rajasthan State Mines & Minerals Ltd.(supra), relied on
      by the respondent – Union of India, on a conspectus of the case law
F     relating to an Award made under the Arbitration Act, 1940 and the scope
      of interference by courts in such an arbitral Award, the legal position
      was summarized by the court in the following words :
                “44. From the resume of the aforesaid decisions, it can be stated
                that:
G
                    (a) it is not open to the court to speculate, where no reasons
                are given by the arbitrator, as to what impelled arbitrator to arrive
                at his conclusion.
      11
           (1999) 9 SCC 449
      12
H          (1987) 4 SCC 497
ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                  623
 BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

         (b) It is not open to the court to admit to probe the mental        A
    process by which the arbitrator has reached his conclusion where
    it is not disclosed by the terms of the Award.
        (c) If the arbitrator has committed a mere error of fact or law
    in reaching his conclusion on the disputed question submitted for
    his adjudication then the Court cannot interfere.                        B
       (d) If no specific question of law is referred, the decision of
    the arbitrator on that question is not final, however much it may
    be within his jurisdiction and indeed essential for him to decide the
    question incidentally. In a case where specific question of law
    touching upon the jurisdiction of the arbitrator was referred for        C
    the decision of the arbitrator by the parties, then the finding of the
    arbitrator on the said question between the parties may be binding.
       (e) In a case of non-speaking Award, the jurisdiction of the
    court is limited. The Award can be set aside if the arbitrator acts
    beyond his jurisdiction.                                                 D
       (f) To find out whether the arbitrator has travelled beyond his
    jurisdiction, it would be necessary to consider the agreement
    between the parties containing the arbitration clause. The arbitrator
    acting beyond his jurisdiction is a different ground from the error
    apparent on the face of the Award.                                       E
       (g) In order to determine whether arbitrator has acted in excess
    of his jurisdiction what has to be seen is whether the claimant
    could raise a particular claim before the arbitrator. If there is a
    specific term in the contract or the law which does not permit or
    give the arbitrator the power to decide the dispute raised by the        F
    claimant or there is a specific bar in the contract to the raising of
    the particular claim then the Award passed by the arbitrator in
    respect thereof would be in excess of jurisdiction.
        (h) The Award made by the Arbitrator disregarding the terms
    of the reference or the arbitration agreement or the terms of the
                                                                             G
    contract would be a jurisdictional error which requires ultimately
    to be decided by the Court. He cannot Award an amount which is
    ruled out or prohibited by the terms of the agreement. Because of
    specific bar stipulated by the parties in the agreement, that claim
    could not be raised. Even if it is raised and referred to arbitration
    because of wider arbitration clause such claim amount cannot be          H
624             SUPREME COURT REPORTS                               [2022] 1 S.C.R.


A           awarded as agreement is binding between the parties and the
            arbitrator has to adjudicate as per the agreement………….
                (i) The arbitrator could not act arbitrarily, irrationally, capriciously
            or independently of the contract. A deliberate departure or
            conscious disregard of the contract not only manifests the disregard
B           of his authority or misconduct on his part but it may tantamount to
            mala fide action.
               (j) The arbitrator is not a conciliator and cannot ignore the law
            or misapply it in order to do what he thinks just and reasonable;
            the arbitrator is a tribunal selected by the parties to decide the
C           disputes according to law.”
           15. In a recent ruling in NTPC (supra), decided by a three Judge
      Bench of this Court, drawing strength from the decision in Kwality
      Manufacturing Corporation (supra), it has been held thus:
               “13. From the above pronouncements, and from a catena of
D           other judgments of this Court, it is clear that for the objector/
            appellant in order to succeed in their challenge against an arbitral
            award, they must show that the award of the arbitrator suffered
            from perversity or an error of law or that the arbitrator has
            otherwise misconducted himself. Merely showing that there
E           is another reasonable interpretation or possible view on
            the basis of the material on the record is insufficient to
            allow for the interference by the Court [See State of
            U.P. v. Allied Constructions, (2003) 7 SCC 396; Ravindra
            Kumar Gupta and Company v. Union of India, (2010) 1 SCC
            409; Oswal Woollen Mills Limited v. Oswal Agro Mills
F           Limited, (2018) 16 SCC 219].”
                                                                 [emphasis added]
             16. Keeping in mind the above parameters, we may now proceed
      to examine the pleas taken by the learned counsel for the appellant-
      claimant on the aspect of reasonableness of the extension of time granted
G
      by the respondent-Union of India to complete the work, coupled with
      the validity of the decision of the Union of India to terminate the contract
      between the parties held in its favour and turned down by the Appellate
      Court and whether the Appellate Court erred in setting aside the amount
      awarded to the appellant-claimant on account of idle hire charges and
H     the value of its machinery and equipment lying at the site.
 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                 625
  BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

       17. The first limb of the arguments advanced by learned counsel       A
for the appellant-claimant to assail the impugned judgment, whereby the
findings returned by the learned Sole Arbitrator to the effect that the
appellant-claimant was entitled to extension of time for completing the
work and the Union of India ought not to have terminated the contract,
the learned Arbitrator had framed the following three issues :
                                                                             B
      “1.    What were the causes and which party was responsible
             for non-completion of the work within the time stipulated
             for its completion including the extended time ?
      2.     Whether the extension of time granted upto 31.3.1992 was
             adequate and commensurate with the delay caused by the          C
             factor considered in issue No.1 above?
      3.     Whether the termination of the contract by the respondent
             was wrongful and illegal as stated by the claimant?”
       18. After painstakingly sifting through the voluminous documents
brought on record with a toothcomb, the aforesaid three issues being         D
intertwined, were answered in favour of the appellant-claimant. Accepting
as many as twenty reasons cited by the counsel for the appellant-claimant
that had caused a delay in completing the work that necessitated extension
of time, ranging from water logged conditions at the site due to which,
the work could not commence till 31st December,1988, increase in the         E
quantity of the work required to be executed, changes ordered by the
respondent-Union of India from time to time without granting any
extension of time or fixing proper rates for extra work, orders issued by
the respondent-Union of India for procuring and deploying of sophisticated
machinery and equipment that were not originally contemplated, non-
availability of petroleum products due to the Gulf crisis, piecemeal         F
extensions granted by the respondent-Union of India, stoppage of work
for inauguration of the runway, non-issue of entry passes to labourers
and removal of operators and staff of the operators, etc., it was held in
the Award that the appellant-claimant could not be blamed for non-
completion of the work within the stipulated time, including the extended    G
time and that the respondent-Union of India ought to have extended the
date of completion of the contract upto 31st May, 1993. The learned Sole
Arbitrator also returned a finding that the extension of time granted by
the respondent-Union of India upto 31st March, 1992, was inadequate
and not commensurate with the delays caused for the factors referred
to hereinabove.                                                              H
626             SUPREME COURT REPORTS                           [2022] 1 S.C.R.


A             19. Declaring that termination of the contract by the respondent-
      Union of India was wrongful and illegal, issues No.1 to 3 were answered
      in favour of the appellant-claimant. Agreeing with the aforesaid
      conclusions arrived at in the Award, the learned Single Judge declined to
      interfere therein. However, the Appellate Court differed with the
      concurrent findings given in the Award and the judgment impugned before
B
      it. Even though the Appellate Court was conscious of the limitations that
      are imposed on a Court when deciding a challenge laid to the arbitral
      Award made under the 1940 Act, and despite acknowledging the same
      in the impugned judgment, it did not show any restrain and not only did it
      proceed to reappreciate the terms and conditions of the contract as also
C     the evidence adduced by the parties before the learned Sole Arbitrator.
      Instead, the Award was faulted on the ground that the learned Sole
      Arbitrator had gone on the basis what he felt reasonable. The Appellate
      Court went on to hold that the Sole Arbitrator had rewritten the contract
      only because, in his opinion, extension of time ought to have been granted
      by the respondent-Union of India upto 31st May, 1993. After holding so,
D
      the Appellate Court went into minute details to justify the order of the
      Accepting Authority of the respondent-Union of India to grant an
      extension of 596 days for completion of the contract and observed that
      the said Officer’s decision was final and binding.
             20. We are of the opinion that once the learned Sole Arbitrator
E     had interpreted the clauses of the contract by taking a particular view
      and had gone to great length to analyse several reasons offered by the
      appellant-claimant to justify its plea that it was entitled for extension of
      time to execute the contract, the Division Bench of the High Court ought
      not to have sat over the said decision as an Appellate Court and seek to
F     substitute its view for that of the learned Arbitrator.
             21. In the instant case, having gone through the Award, we find
      that the learned Sole Arbitrator was lucid in his reasoning for taking a
      particular view on the interpretation of the terms and conditions of the
      contract between the parties. It was for this very reason that the learned
G     Single Judge had forbore from interfering with the arbitral Award and
      dismissed the petition filed by the respondent-Union of India under
      Sections 30 and 33 of the 1940 Act. By going into the minute details of
      the evidence led before the learned Sole Arbitrator with a magnifying
      glass and the findings returned thereon, the Appellate Court has clearly
      transgressed the limitations placed on it. In any case, we are of the
H
 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                     627
  BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

opinion that the reasons offered for taking such a view, are neither justified   A
nor called for for interfering with the arbitral Award.
       22. We accept the findings returned by the learned Sole Arbitrator
endorsed by the learned Single Judge that there was sufficient justification
for the appellant-claimant to have sought extension of time for completing
the work and that the decision of the respondent-Union of India to               B
terminate the contract, was not for legitimate reasons.
       23. The second argument concerns the amount that was awarded
in favour of the appellant-claimant on account of idle hire charges and
the value of its machinery and equipment lying at the site, that has been
set aside in the impugned judgment. This point was covered in Issue              C
No.17 framed by the learned Sole Arbitrator, as below :
       “17. Is the claimant entitled to Rs.25,45,88,460.00 for the loss of
            his overhead and profit, loss of idle hire charges of
            machinery and equipment, loss on account of missing parts,
            loss suffered due to wrongful and illegal encashment of              D
            Bank Guarantee and for compensation of extra expenditure
            incurred due to price rise during the extended period as
            claimed in his claim No.3 ?”
        24. Though the appellant-claimant had sought compensation
under several heads, the learned Sole Arbitrator granted it an amount            E
of 15,35,40,785/- [Rupees Fifteen Crores thirty five lakhs forty
thousand seven hundred and eighty five] towards idle hire charges
and for the value of the machinery, inclusive of interest upto 31st
May, 1999. For arriving at the above figure, reliance was placed on
the report of an Engineer appointed by the Division Bench of the High
Court of Madras in a separate proceeding filed by the appellant-claimant         F
praying inter alia that it be permitted to take back the machinery, tools
and equipment lying at the site of the Naval Air Station, Arakonam after
the value was assessed by an approved valuer. The High Court appointed
an Engineer to ascertain the availability of the different items and
machineries and their value. The Engineer and Insurance Surveyor                 G
submitted a report, just after a year from the date of termination of the
contract, stating inter alia that there were 21 items of machinery available
at the site and their collective market value was 2,72,95,000/-[Rupees
Two Crores seventy two lakhs ninety five thousand] and that the condition
of most of the machineries had deteriorated and they were no longer
usable. Vide order dated 21st July, 1993, the High Court allowed the             H
628            SUPREME COURT REPORTS                           [2022] 1 S.C.R.


A     appellant-claimant to remove 21 items of the machinery lying at the site,
      subject to it furnishing a bank guarantee for a sum of 2.73 crores
      within three weeks. Though permission was granted to the appellant-
      claimant to take delivery of the said machineries after furnishing a bank
      guarantee, it did not do so on taking a plea that when the respondent-
      Union of India was approached for inspection of the machineries and to
B
      verify tampering/missing parts, the latter had refused to prepare any
      inventory and had stated that the machineries and equipments will be
      released on a “as is where is basis”. The learned Sole Arbitrator
      observed that after termination of the contract of the appellant-claimant,
      the balance contract work was got completed by the respondent-Union
C     of India through the Border Road Organization [BRO] on 23rd December,
      1995 and till that time, the tools and machinery had remained with the
      respondent-Union of India.
              25. Finding fault with the respondent-Union of India of having
      failed to mitigate the damages by handing back the tools and machineries
D     to the appellant-claimant at least immediately after 23rd December, 1995,
      in the arbitral Award held that the appellant-claimant was entitled to idle
      hire charges from 2nd April, 1992, the date of termination of the contract,
      till 23rd December, 1995, the date of completion of the balance contract
      work by the BRO. Relying on the report of the Valuer appointed by the
      Court to give a Report relating to the machineries at the site and their
E     condition and valuation and further, noting that both sides had accepted
      the said Report, the learned Sole Arbitrator held that it was fairly
      considered it safe to rely on the said Report for purposes of assigning
      valuation to the tools and machinery. It is noteworthy that even for
      purposes of computing the idle hire charges of the machineries for the
F     period between 2nd April, 1992 to 23rd December, 1995, the calculation
      given by the appellant-claimant based on a particular formula, was not
      objected to by the respondent-Union of India. Premised on the said
      formula, a sum of 6,77,41,386/- [Rupees Six Crores seventy seven
      lakhs forty one thousand three hundred and eighty six] was awarded in
      favour of the appellant-claimant towards idle hire charges of
G
      machineries and equipment with interest payable @ 18% p.a. and a
      sum of 2,72,95,000/- [Rupees Two Crores Seventy two lakhs ninety
      five thousand] was granted to the appellant-claimant towards the value
      of the tools and machineries totalling to a sum of 15,35,40,785/-[Rupees
      Fifteen Crores thirty five lakhs forty thousand seven hundred eighty
H     five], inclusive of interest.
 ATLANTA LIMITED THR. ITS M.D. v. UNION OF INDIA REPRESENTED                    629
  BY CHIEF ENGG. MILITARY ENGINEERING SERVICE [HIMAKOHLI, J.]

       26. The Appellate Court has set aside the aforesaid claim by taking      A
a view that the learned Sole Arbitrator lost sight of the fact that once the
High Court had passed an order granting permission to the appellant-
claimant to remove the equipment and machineries from the site in the
proceedings initiated by it and still they were not removed, then it has
none else to blame but itself for the situation. Holding that the learned
                                                                                B
Sole Arbitrator had misconducted himself by observing that the claimant
“may be correct” in not taking the machineries without an inventory
when they were available at the site, the Appellate Court held that the
appellant-claimant was not entitled to any amount towards the value of
the tools and machineries, having been awarded idle hire charges for the
very same equipments.                                                           C
        27. The aforesaid conclusion drawn by the Appellate Court is
manifestly erroneous and flies in the face of the settled legal position
that the Arbitrator is the final arbiter of the disputes between the parties
and it is not open to a party to challenge the Award on the ground that he
has drawn his own conclusions or has failed to appreciate certain facts.        D
It is beyond the jurisdiction of the Appellate Court to assign to itself, the
task of construing the terms and conditions of the contract and its
provisions and take a view on certain amounts awarded in favour of a
party. It is reiterated that the learned Sole Arbitrator had given certain
cogent reasons for awarding the amount in favour of the appellant-
                                                                                E
claimant towards idle hire charges of the parts of the machineries and
equipments and loss of machinery. It was beyond the domain of the
Appellate Court to have examined the reasonableness of the said reasons
by reappreciating the evidence to arrive at a different conclusion. Having
regard to the fact that amounts have been awarded in favour of the
appellant-claimant on the above heads, based on the Report submitted            F
to the Court by the Court Commissioner for valuing the tools and
machinery and premised on the formula offered by the appellant-claimant
for arriving at the idle hire charges, both being undisputed, we see no
good reason for the Appellate Court to have interfered in the manner it
did.
                                                                                G
       28. The submission made on behalf of the respondent-Union of
India that the learned Sole Arbitrator had misconducted himself, is also
unmerited. On the contrary, the conclusions are consistent with his findings
and the records reveal that material documents were thoroughly
examined by the learned Sole Arbitrator in the correct perspective. Nor
                                                                                H
630              SUPREME COURT REPORTS                        [2022] 1 S.C.R.


A     are we persuaded by the plea that the learned Sole Arbitrator acted in
      excess of his jurisdiction by taking upon himself, the task to decide some
      of the disputes raised, when purportedly, they were specifically barred
      in the contract, described as “excepted matters”.
             29. Having carefully perused the Award, we find that the terms
B     and conditions of the contract referred to by learned ASG appearing for
      the respondent-Union of India, namely, Clauses 7, 11, 54 and 70 have
      been duly noted, discussed and declared as inapplicable to the fact
      situation by the learned Sole Arbitrator, by relying on the facts of the
      case, the conduct of the parties and some other material terms and
      conditions of the contract, which in his view disentitled the respondent-
C     Union of India from claiming that it was justified in refusing to extend
      the time as prayed for by the appellant-claimant, to complete the project.
      We therefore reject the submission made on behalf of the respondent-
      Union of India that the learned Sole Arbitrator had misconducted himself.
      Having held so, none of the decisions cited on the aspect of “excepted
D     matters” would be of any assistance to the respondent-Union of India.
      Nor will the reliance placed by learned ASG on Para 44(g) of the decision
      in Rajasthan State Mines and Minerals Ltd. (supra) be of any benefit
      to the respondent-Union of India.
            30. In view of the discussion above, the impugned judgment dated
         th
E     20 July, 2010 passed by the Division Bench of the High Court cannot
      be sustained and is quashed and set aside, while restoring the judgment
      dated 19th June, 2009 passed by the learned Single Judge and upholding
      the decree granted in favour of the appellant-claimant in terms of the
      Award along with interest.

F           31. The appeal is disposed of alongwith pending applications, if
      any, while leaving the parties to bear their own costs.


      Devika Gujral                                            Appeal disposed of.


G




H