This is an appeal u/s 37(1) (c) of the Arbitration & Conciliation Act, 1996

(hereinafter referred to as the “Act”) against the Judgment and Order dated

20.01.2022 passed by the Ld. Single Judge of this Hon'ble Court rejecting a

petition preferred by the Appellant herein u/s 34 of the Act. The Appellant had

filed the aforesaid Section 34 Petition, impugning an Arbitral Award dated

22.09.2021 passed by the Ld. Sole Arbitrator. By the aforesaid award the Ld.

Sole Arbitrator proceeded to dismiss in entirety the claims raised by the

Appellant and decided the dispute in favour of the Respondent.

That the Petitioner and Respondent into Agreement dated 17.09.2009, pursuant

to which the Respondent proceeded to issue Release Order dated 18.09.2009 by

way of which the Petitioner was awarded the work of brand visibility of BSNL

PCO Glow Sign Board (Double sided)-Lit Boards (hereinafter referred to as

“Lit Board”) and PCO signage (flange double sided)-Non-Lit Boards

(hereinafter referred to as “Non-Lit Board”). That the Agreement was a broad-

based agreement solely for Empanelment and the work carried out by the

Petitioner was governed by the Release Order. That the Petitioner proceeded to

complete the work as per the contractual requirements. As per the provisions of

the Release Order, the invoices of the Respondent had to be paid within 15

days. Clause 10 and 11 of the Release Order provided as under:

“10. All bills must be accompanying by a site photographs, a certificate of

completion duly verified by the Dealers/PCO owner/DSA/Retailers. Random
checking may be carried out @15% by circles in order to verify the claims of
vendor’s and ensure proper installation and quality of the workmanship &
material.
 11. Payments will be done by respective territorial circle within 15 days
of submission of bills on a rolling work completion on monthly basis after
receipt of the report and bill as per para 10 above”
(emphasis supplied)

However, contrary to the aforesaid provisions, the Respondent failed to clear

the invoices raised by the Appellant within the stipulated period of 15 days. At

the time of submission of the invoices, the Respondent never raised an issue that

the invoices submitted by the Appellant were defective or they lacked proper

documentation. No verification was done by the Respondent within the period

of 15 days from the submission of the invoices. Even after repeated requests by

the Appellant the invoices remained unpaid. The Respondent finally carried out

the verification after considerable delay. In certain cases, such verification was

carried out after a period of one year from the submission of invoices. On the

basis of these verifications carried out by the Respondent after considerable

delay, the Respondent denied payment to the Appellant on the ground that the

installations done by the Appellant were not found. The Respondent further

proceeded to illegally impose liquidated damages on the Respondent. It is

significant to point out that as per the terms of the contract there was no

obligation on the Appellant to maintain or to provide security to the Boards

installed.

The Appellant raised a dispute with respect to the non-payment of invoices. In

the Award dated 22.09.2021, the Ld. Arbitrator rejected the claims raised by the

Appellant on the basis of the verifications conducted by the Respondent after

considerable delay from the date of submission of the invoices. The Ld.

Arbitrator failed to consider the evidence placed on record by the Claimant to

demonstrate that the work was actually done by the Claimant. The Ld.

Arbitrator further failed to appreciate that as per the contractual requirements,

the verification had to be carried out by the Respondent within a period of 15

days from the date of submission of invoices. However, the Arbitrator rejected

the claims raised on the ground that as per the verification done by the

Respondent, months after the installation, the boards were not found at the site.

The Arbitrator failed to appreciate the provisions of the contract whereby the

invoices had to be paid by the Respondent within 15 days. The Arbitrator noted

that the Appellant had placed material on record to demonstrate that the work

had been done by it as per contractual provisions, but choose not to consider

such documents. Further, imposition of liquidated damages by the Respondent

was upheld merely on the ground that the Appellant was aware of such

imposition.

By the impugned order, the Ld. Single Judge failed to set aside the aforesaid

Award of the Ld. Arbitrator. The impugned order is challenged inter-alia on the

following grounds:

a. The Ld. Single Judge failed to appreciate that the Ld. Arbitrator had rewritten
the terms of the contract. The invoices of the Appellant had to be paid within

15 days. Any verification by the Respondent was required to be done within

these 15 days. Further, the payment of the invoices were not contingent on
 the verification by the Respondent. There was no provision in the contract

which entitled the Respondent to conduct verification even after delay of more

than a year. The award was therefore patently illegal and contrary to the terms

of the contract and should have been set aside.

b. Further, the Appellant was not responsible for the maintenance and security of
the installed boards. The payment to the Appellant was dependent upon the

work of installation done by it. Such installation work was evident from the

supporting documents provided with the invoices. At the time of submission of

the invoices, the Respondent never disputed these documents. The payment

to the Appellant was not dependent on the availability of the installations at the

location after a period of almost a year. The award has imposed a liability on

the Appellant which was not contemplated by the Contract. The award was

thus patently illegal and deserves to set aside.

c. The Appellant led evidence to prove that the work of installation was done by
it as per the contractual requirements. The Ld. Award as well as the Ld. Single

Judge failed to consider the evidence in view of the verification reports of the

Respondent which were done after considerable delay. The Ld. Arbitrator

holds, that “There is no denying that the Claimant has filed plethora of

documents signifying installations of boards. But prudence requires payments

for the boards physically present on verification.” It is therefore clear that i.

The Ld. Arbitrator failed to consider the documents placed on record by the

Claimant to signify the work done and ii. The Ld. Arbitrator had made the

aforesaid clauses 10 and 11 redundant by holding that the payments were

contingent on the verification, even when such verification was conducted

after one year. The Ld. Single Judge also notes that “In order to succeed,
 CCL had to simply prove that the installations had been successfully carried

out. The only way it could have been done this, was by cogent evidence.”

However, the Ld. Single Judge upheld the non-consideration of the cogent

evidence by the Ld. Arbitrator. It is therefore submitted that the award is based

on non-consideration of the relevant evidence and is therefore patently illegal.

d. Further, the Ld. Arbitrator had upheld the imposition of Liquidated Damages
on the ground that the Appellant was aware of such imposition. The Ld. Single

Judge upheld the imposition of Liquidated Damages even when there was no

pleadings or evidence of damages or loss being suffered by the Respondent.

It is submitted that the award and the impugned order is therefore contrary to

the binding precedent of superior courts and is contrary to the fundamental

policy of Indian Law. It is therefore submitted that the impugned order

deserves to be set aside.

e. Further, the award was based on perverse reasoning. The Award was based
on reasoning which no reasonable person would have adopted. The payment

made to an agency for installation of Boards had to be made on the basis of

the boards installed. The payment could not be made contingent on the

availability of such boards after one year by which time the boards could have

been removed by the act of third parties. The PCO owners could have shut

shop or could have moved to newer technology. The Contract therefore

provided for payment within 15 days of the submission of invoice. It was

unfathomable for any agency to ensure that the 1000s of boards installed by it

remained at site even after more than one year. Verification done after months

could not have been relied upon as proof of the actual work done by the

Appellant. It is therefore submitted that the Ld. Single Judge erred in

 upholding the perverse rationality adopted by the Ld. Arbitrator.

In light of the aforesaid, it is submitted that the Impugned order has upheld

an award which has been passed without any consideration of the terms of

the contract, suffered from patent illegality, and was based on the non-

consideration of the relevant material.

Hence, the present Appeal.