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Issues Involved:
1. Validity of the arbitration award. 2. Alleged misconduct of one of the arbitrators. 3. Errors and omissions in the award. 4. Award of damages and interest. Summary: 1. Validity of the Arbitration Award: The arbitration award concerning the construction of the Mahi Bajaj Sagar Dam was challenged by the appellant, State of Rajasthan, on various grounds, including misinterpretation of contract clauses and improper consideration of evidence. The Court held that the arbitrators had not taken into consideration any matter outside the scope of reference and had relied upon materials on record to base their findings. The Court concluded that the appellant failed to demonstrate that the findings were fanciful or without basis. The award was upheld as it did not demonstrate any gross error apparent on the face of the record or misconduct by the arbitrators. 2. Alleged Misconduct of One of the Arbitrators: The appellant contended that one of the arbitrators, Sri A.B. Rohatgi, had disqualified himself by accepting a brief from the respondent in a different case. The Court noted that the appellant was aware of this fact but did not raise any objection during the arbitration proceedings. It was held that the appellant's participation in the proceedings without objection amounted to acquiescence, and the objection raised after 270 days was time-barred u/s 119 of the Limitation Act. Thus, the objection was rejected. 3. Errors and Omissions in the Award: The appellant alleged various errors and omissions in the award, such as misinterpretation of contract clauses and improper consideration of evidence. The Court emphasized that an arbitrator is the final arbiter of the dispute, and errors in fact or law do not constitute misconduct warranting interference with the award. The Court reiterated that it is not open to challenge the award on the ground that the arbitrator has drawn his own conclusion or failed to appreciate the facts. The award was upheld as it was not patently unjust or perverse. 4. Award of Damages and Interest: The respondent contractor sought modification of the award to include interest from the date of breach and at an enhanced rate. The Court held that the arbitrators had quantified the total damages suffered by the respondent at Rs. 1 crore, taking into consideration all relevant facts. The Court declined to award interest from the date of breach or to enhance the rate of interest. The appellant was allowed to withdraw the amount realized from the sale of the respondent's assets after satisfying the award. The prayer for additional costs was also rejected. The application was disposed of without any order as to costs, and the interim application was also disposed of.
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