Authority: High Court at Calcutta (Civil Appellate Jurisdiction)

Order Date: September 2, 2026

Case Overview

  • Parties: Jay Bharat Construction (appellant) versus Union of India (respondent), representing South Eastern Railway.
  • Contract Background: Tender T No. CE/CON/GRC/15/2004 was floated for construction of an electric loco shed to house 100 locos at Bokaro Steel City Station. The contract was awarded by letter dated October 19, 2004 and executed on May 5, 2005. Contract value was Rs 7,32,91,835 and stipulated a 24‑month completion period.
  • Extensions & Notices: The respondent granted an extension on December 8, 2006, extending the contract to June 30, 2007, without invoking liquidated damages. On April 17, 2007 the respondent issued a notice to restart work; a seven‑day notice followed on May 3, 2007, a 48‑hour notice on May 23, 2007, and termination under clause 62 was effected on May 29, 2007.
  • Arbitration: The contract contained an arbitration clause. The appellant filed 13 heads of claim; the respondent filed 7 counter‑claims. The Arbitral Tribunal’s award dated May 24, 2012:
  • Allowed the appellant’s claims for amount due on work done, refund of two security deposits (total Rs 36,97,936), price escalation of PVC (Rs 3,20,016), and price variation.
  • Rejected the remaining appellant claims.
  • Allowed the respondent’s claims for risk and costs, royalty payable to the Jharkhand Government, and value of balance materials (Rs 1,46,284).
  • Rejected the other respondent counter‑claims.
  • Single Judge Decision (Sept 10 2024, AP 780 of 2012): The learned single judge set aside the award, holding the termination was valid, the security deposit could be forfeited, and the award was “patently illegal” under Section 28(3) of the Arbitration Act. The judge also found the award’s risk‑and‑cost portion perverse.
  • Appellant’s Grounds on Appeal: The appellant argued that the award was not patently illegal, cited precedents (Ssangyong Engg. Co. v NHAI, Gayatri Balasamy v ISG Novasoft, Project Director v M. Hakeem, Parsa Kente Collieries v Rajasthan Rajya Vidyut, Delhi Airport Metro Express v DMRC, Uttam Singh Duggal & Sons v Union of India, Kailash Nath Associates v DDA) to support that courts cannot re‑evaluate factual findings or modify awards under Section 34.

Final Outcome

  • The Calcutta High Court set aside the September 10 2024 judgment (AP 780 of 2012) and dismissed that petition.
  • The execution petition (EC No. 3 of 2024) is restored to its original file and number, meaning the arbitration award dated May 24 2012 remains enforceable.
  • APOT 10 of 2025 and all connected applications are disposed of without any order as to costs.

Topics: Arbitration Award Enforcement; Construction Contract Dispute; Court Judgment