THE EXECUTIVE ENGINEER vs M/S TRIMURTI CONSTRUCTION

[2026:RJ-JD:41971-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR
D.B. Civil Miscellaneous Appeal No. 1905/2023
CNR: RJHC010670192023 | URN: CMA / 5314U / 2023
The Executive Engineer, Public Work Department, Kuchaman City
, Parbatsar, Dist. Nagaur, Rajasthan.
----Appellant
Versus
1. M/s Trimurti Construction, Through Partner Pankaj Gupta
S/o Shri Dharmendra Gupta, 12/163 Gurudayal Marg,
Hathibhata, Ajmer.
2. R P Modirataa, Sole Arbitrator, Retired Commandant, Brtf,
C/o Shri Arun Mathur, R/o 468 Krishna Niwas, 7Th B
Road, Sardarpura, Jodhpur
----Respondents
For Appellant(s) : Mr. Ayush Gehlot
For Respondent(s) : Mr. Kuldeep Kumar Shah
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
HON'BLE MR. JUSTICE PRAVEER BHATNAGAR
Judgment
Date of conclusion of arguments:- 20.08.2026
Date on which the judgment was Reserved:- 20.08.2026
Whether the full judgment or only the operative part is
pronounced:- Full Judgment
Date of pronouncement:- 25.08.2026
Per: Praveer Bhatnagar, J.
1. By way of filing the instant appeal, the appellant has assailed
the judgment and order dated 3.6.2023 delivered by the
Commercial Court at Ajmer in Civil Miscellaneous Case No. 45/19.
In the impugned Judgment, the court upheld the Award dated
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11.3.2016 in favour of the respondents and dismissed the
appellant's plea under Section 34 of the Arbitration Act.
2. In brief, the appellant issued a work order valued at Rs.
6,35,43,815 to the respondents via an official order dated 15 May
2013. However, progress was halted due to resistance from
residents and villagers, prompting the appellant to withdraw the
work order. As a result, the respondents filed a formal claim with
the arbitral tribunal, which they contested by submitting a detailed
written reply refuting the respondents' claim under various heads.
After thoroughly reviewing the case, the Tribunal rendered an
arbitral award in favour of the respondents. The appellant
challenged the award by filing an application under Section 34 of
the Arbitration Act before the Commercial Court. After hearing the
arguments, the court dismissed the application and upheld the
arbitral award. Dissatisfied with this outcome, the appellant filed
the current appeal.
3. Learned counsel representing the appellants argues that the
arbitral award was against public policy. They emphasize that the
Arbitral Tribunal failed to properly frame the issues, despite the
serious and complex allegations involved in the case. They
contend that resolving these issues required a meticulous
examination of each party's oral testimony and documentary
evidence, including witness affidavits and relevant
correspondence.
4. Conversely, the respondents’ counsel defends the impugned
order, stating that the appellant explicitly admitted in its written
statement that work could not commence due to persistent
resistance from local villagers, who protested against the project.
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Moreover, the respondents' materials were reportedly stolen,
leading to an FIR.
5. After ensuring a fair hearing for both sides and considering
all submissions, the Tribunal delivered a detailed, well-reasoned
order accepting the respondents' claims on multiple grounds,
including breach of contractual obligations and interference with
project activities. Accordingly, counsel argues that the appeal
lacks merit and should be dismissed. Counsel also cites the
following judgments to support the arguments:
i. 2022 Livelaw (SC) 121 Indian Oil Corporation Ltd.
Through Its Senior Manager V. M/S Shree Ganesh
Petroleum Rajgurunagar Through Its Proprietor Mr.
Laxman Dagdu Thite, decided on 01.02.2022
ii. Civil Appeal No/2023 [Arising Out Of SLP (Civil) No.
8791/2020] M/S Unibros Vs All India Radio, decided on
19.10.2023.
iii. Civil Appeal Nos. 9781-9782 Of 2024 @ SLP (C)
Nos. 8128-8129 Of 2021 Pam Developments Private
Limited Versus State Of West Bengal & Anr. decided on
23.08.2024.
iv. 2020 SCC Online Del 2496: Steel Authority Of India
Ltd. (Sail) Versus Primetals Technologies India Pvt.
Ltd., decided on 12.03.2020
v. Civil Appeal No. 1968 Of 2012, Batliboi
Environmental Engineers Limited Versus Hindustan
Petroleum Corporation Limited And Another, decided
on 21.09.2023.
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6. In the aforesaid backdrop, we have heard the rival
contentions and perused the material available on record.
7. It is admitted that, in response to the claim submitted by the
respondents before the Arbitral Tribunal, the appellant filed a
written reply, raising specific objections to the facts outlined in
paragraphs 1 and 2 of the claimant's petition, which reads as
follows:
“CLAIM NO. 1: IDLING OF MEN FROM 03.06.13 TO 10.10.13 (130
DAYS): RS 12,49,665/-
1. FACTS OF THE CLAIM:
That though the date of commencement of work was 25.05.13, but it took
some time to collect the labour required for-the work and the claimant was
able to muster the labour by 03.06.13 and then he took all these labour
with the bajri and stones to the site on 06.06.13 and since then all these
labour and staff were available at site waiting for the instruction and
police protection tο start the work but inspite of various meetings with the
residents and local MLA as well as administrative officers, no fruit full
result came out and the local residents did not permit the labour to
continue with the work. The claimant had to put more men on vigilance to
safe guard the machines lying at the site. It was only after recommendation
of withdrawal of the work by the respondent that the claimant released the
labour after paying their dues. In this view the entire labour was sitting
idle at site from 03.06.13 to 10.10.13 the details of idling of men is given
below:-
S.No Particulars Period Cost
1 Labour-30 03.06.13 to 30.06.13
(Annexure-13)
Rs.1,84,440/-
2 Labour-30 01.07.13 to 31.07.13
(Annexure-14)
Rs.2,10,825/-
3 Labour-30 01.08.13 to 31.08.13
(Annexure-15)
Rs.2,02,140/-
4 Labour-30 01.09.13 to 30.09.13
(Annexure-16)
Rs.1,99,440/-
5 Labour-30 01.10.13 to 31.10.13
(Annexure-17)
Rs.73,350/-
6 Ashok Kumar
(Foreman)
Salary @ Rs.20,000/-p.m.
(from 01.06.13 to 10.10.13)
(Annexure-18)
Rs.86,670/-
7 Aman Sharma
(Supervisior)
Salary @ Rs.15,000/-p.m.
(from 01.06.13 to 10.10.13)
(Annexure-19)
Rs.65,000/-
8 Aakash Bhargav Salary @ Rs.25,000/-p.m. Rs.1,08,330/-
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(Site Engineer) (from 01.06.13 to 10.10.13)
(Anneuxre-20)
9 Mannu Kumar
(Munnim)
Salary @ Rs.12,000/-p.m.
(from 01.06.13 to 10.10.13)
(Annexure-21)
Rs.52,000/-
10 Jakir Hussain
(Driver)
Salary @ Rs.6,000/- p.m.(from
01.06.13 to 10.10.13)
(Annexure-22)
Rs.25,800/-
11 Vijay Kumar
(Chowkidar)
Salary @ Rs.9500/- p.m.(from
01.06.13 to 12.10.13)
(Annexure-23)
Rs.41,670/-
Total 12,49,665/-
2. POINT IN ISSUE.
In view of above submissions of facts of the claim, the point in issue is loss
of Rs 12,49,665/- against the idling of labour and staff from 03.06.13 to
10.10.13 except the chowkidar who was kept upto 12.10.13, with interest
@18% p.a. from 10.10.13 till date of payment.
3. RELIEF:
The claimant prays that this claim may kindly be allowed and the award
may kindly be passed in favour of claimant of Rs.12,49,665/- on account
of idling of Labour and staff from 10.10.13 till date of payment with
interest @18% p.a. in terms of Section 34 of the Interest Act and Section
31(7) of Arbitration and Conciliation Act, 1996.”
8. And thus claim Rs.12,49,665/- in the aforesaid head.
Similarly, in claim No. 2, the respondent has claimed Rs.
19,56,000/-, stating that the machinery was lying idle at the site.
In this head, the respondent has claimed Rs.19,56,000/-.
Similarly, in the other heads also, the claimant has specifically
claimed various quantum of amounts. Though the reply filed by
the appellant before the arbitral tribunal is not paragraph-wise, in
paragraphs 6 and 9 of the reply, the following averments were
made:-
“6. That the averments made by the claimant in para no.6 of the
claim petition are not admitted in the manner they have been
stated. In this regard, it is respectfully submitted that the claimant
has not engaged any permanent or temporary labour at site. Only
one JCB machine was brought at site on 19.6.2013 from 11.00 a.m.
to 4.00 p.m. with 2 supervisors and 3 Beldars. Also, claimant
brought, one tractor trolly Bajri at site in presence of non- claimant.
9. That the averments made by the claimant in para no.9 of the
claim petition are not disputed so far as they are in conformity with
the record of the case. In the respectful submissions of the non-
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claimant, the fact of engagement of men/machineries at site was
denied vide letters dated 9.9.2013 and 20.9.2013. Further, it was,
duly communicated to the claimant that if the dispute of the land is
not sorted out, the action for withdrawal of work/contract would be
taken. Not only that, but the Site In-charge Assistant Engineer, PWD
Sub Division Makrana also reported vide letter dated 2.9.2013 that
the claimant or his any representative has not contacted him for
start of the work.
The appellant has also reiterated its specific denial of the
respondent’s claims in para 8 of its reply.
9. It is also undisputed that the Arbitral Tribunal decided the
case in favour of the respondent without framing any contested
questions of fact or recording any evidence regarding the parties'
disagreements. Before relying on the claimant's documents, the
Arbitral Tribunal also did not seek the appellants' admission/denial
of them.
10. We begin by thoroughly examining sub-clauses (i) and (ii) of
clause (b) within Sub-section (2) of Section 34, which specify the
detailed provisions and stipulations outlined in these particular
sub-Sections.
“34. Application for setting aside arbitral award. –
xx xx xx
(2) An arbitral award may be set aside by the Court only if –
(a) ...
(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.
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 fundamental policy of Indian law
shall not entail a review on the merits of the dispute.”
Section 34(2)(b) contains two sub-clauses, both giving the court the
power to set aside an award. The first states that an award can be
overturned if the subject matter isn’t capable of resolution through
arbitration under the applicable law at the time. The second allows for
setting aside an award if it conflicts with India's public policy.
According to Explanation No. 1, an award is deemed to clash with
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India's public policy only if it was affected by or involved fraud,
corruption, or similar misconduct, or if it violates the core principles
of Indian law or goes against basic notions of morality and justice.
11. The current award has been challenged under Section 34(b),
with the argument that it breaches fundamental principles of
Indian law and contradicts basic notions of justice, including the
principle of natural justice.
12. The Apex Court has clearly elucidated what defines the
"public policy of India" in the case of ONGC Ltd. v. Saw Pipes Ltd.
(2003) 5 SCC 705. Relevant portion whereof is reproduced
hereinbelow:-
“ 31…, the phrase ‘public policy of India’ used in Section 34 in
context is required to be given a wider meaning. It can be stated
that the concept of public policy connotes some matter which
concerns public good and the public interest. What is for public
good or in public interest or what would be injurious or harmful
to the public good or public interest has varied from time to time.
However, the award which is, on the face of it, patently in
violation of statutory provisions cannot be said to be in public
interest. Such award/judgment/decision is likely to adversely affect
the administration of justice.”
13. In Bharat Coking Coal Ltd. Vs. L.K. Ahuja (2004) 5 SCC 109,
the Honble Apex Court reaffirmed the principle that a claim for
such loss of profit will only be considered when supported by
adequate evidence and observed as under:-
“24. ... It is not unusual for the contractors to claim loss of profit
arising out of diminution in turnover on account of delay in the
matter of completion of the work. What he should establish in such
a situation is that had he received the amount due under the
contract, he could have utilised the same for some other business
in which he could have earned profit. Unless such a plea is raised
and established, claim for loss of profits could not have been
granted. In this case, no such material is available on record. In
the absence of any evidence, the arbitrator could not have
awarded the same.”
14. Yet again, the Honble Apex Court in the matter of Unibros vs
All India Radio (2023 SCC OnLine SC 1366) on 19.10.2023 held as
under:
“ The arbitral award in question, in our opinion, is patently illegal
in that it is based on no evidence and is, thus, outrightly perverse;
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therefore, again, it is in conflict with the “public policy of India”
as contemplated by section 34(2)(b) of the Act.”
15. Thus, the above Legal precedents make it clear that an
arbitral award issued without properly identifying key issues of
serious disputed facts—and without evidence or a fair hearing—
violates natural justice. When a decision is based solely on
pleadings, especially where facts remain contested, it breaches
fundamental principles of justice. Furthermore, if an arbitral award
is made contrary to the core procedures and principles of natural
justice, Section 34 of the Arbitration and Conciliation Act, 1996,
treats such an award as against public policy.
16. The learned Commercial Court dismissed the appellant-
State’s application solely because, under Section 34, courts lack
the authority to re-examine or re-appreciate evidence. However,
this reasoning seems to conflict with well-established legal
principles, particularly as the appellants had explicitly challenged
factual issues outlined in paragraphs 6, 8 & 9 of their written reply
before the Arbitral Tribunal. Their objection directly concerns
disputed questions of fact, which should have been decided based
on oral or documentary evidence. The arbitral award, however,
lacked crucial material because it was based only on the claim
itself. This suggests that both parties’ evidence should have been
considered, and without it, the Tribunal’s conclusion appears to
contravene public policy. The Commercial Court failed to
thoroughly scrutinize the pleadings submitted before the Tribunal,
instead adopting a flawed view that re-evaluating the evidence
was unnecessary, and dismissed the application under Section 34.
Such an approach contradicts established legal principles. The
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Tribunal’s decision to reject the Appellants' application under
Section 34 cannot stand.
17. Resultantly, the appeal is allowed; the Commercial Court's
order confirming the award and rejecting the application under
Section 34 is set aside, and the award passed by the arbitral
Tribunal in favour of the respondent is also set aside.
18. Stay application and all pending applications are disposed of
accordingly.
(PRAVEER BHATNAGAR),J (DR.PUSHPENDRA SINGH BHATI),J
KP Singh Dewasi/- Dhananjay Sharma
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