Pam Developments Private Limited v. State of West Bengal & Anr., 2024 (SC) 613
Facts: The State of West Bengal awarded Pam Developments Pvt. Ltd. a contract to widen and strengthen the Egra Bajkul road, with an 18-month completion deadline starting December 23, 2010. The project faced delays, completing five months late on November 9, 2012. The appellant submitted a bill for ₹77,85,290, along with seven additional claims, citing delays caused by the State. The State denied liability, leading to arbitration. On January 30, 2018, the Arbitrator awarded ₹1,37,25,252 with interest to the appellant.
Issue: Is every arbitral tribunal and court bound to examine what the contract stipulates between the parties?
Observation: The Supreme Court emphasized that courts and arbitral tribunals must examine contract clauses in arbitration-related proceedings. It upheld the Calcutta High Court's decision to set aside the arbitrator's award for losses due to idle machinery and labor, as these claims were
prohibited under the contract. However, the Supreme Court disagreed with the High Court's assertion that timely bill payments warranted interference. It concluded that the High Court's reasoning regarding the arbitrator's oversight was insufficient to nullify the award.
Furthermore, the testimony of P.W.-3, the informant's 3-year-old son, was questioned, as the delay in implicating Kishan (almost 50 days) was inconsistent with his claims of witnessing the incident. The court observed that there was no supporting evidence in the initial FIR or during the inquest to suggest Kishan’s involvement, contradicting P.W.-3's account.
