Libertatem Magazine

Tripura High Court: Appeal by State of Tripura Stands Dismissed After Employer Moves High Court Aggrieved by the Decision of Both Arbitrator and District Court

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The State of Tripura vs M/S N.G.Bhattacharjee Construction Company


An appeal was filed by the state of Tripura (Employer) against a judgement declared by the district judge, for setting aside the arbitral award dated 24.09.2014 which had been dismissed. After the series of disputes arising between Employer and Contractor N.G.Bhattacharjee Construction Company.

Facts of the case 

Through  Notice Inviting Tender issued by the Employer, Contractor and Employer advanced to a contract for the completion of the stipulated work within two years from the date of the formal agreement. The issue was that the Contractor did not receive the site to enable him to work upon. Regarding the same, the Contractor sent several letters even mentioning that he was ready with required manpower and machinery at the site. Despite the several letters, there was a significant amount of delay due to which the Contractor suffered financial loss. The Employer replied for the same stating that due to the inefficiency of soil the project has to be cancelled and informed to contact for refund. However, the Contractor was not willing to accept the unilateral cancellation of the work order and proposed to the Employer to strengthen the bearing capacity of the site by doing necessary civil engineering works, else to provide an alternative site for execution of the work as per terms of the tender.

However, this proposal was refused and hence the Contractor-asked for compensation stating that there has been a breach of contract on behalf of the Employer. This issue was taken to the arbitrator and the decision was given in favour of the Contractor. The Employer aggrieved by this decision further took the matter to the Court of the District Judge, West Tripura at Agartala which dismissed the appeal.

Arguments made on behalf of the Appellant

Mr Nepal Majumder, learned counsel appearing for the Employer, has argued that there is no merit in the claim of the Contractor. Furthermore stated that the Arbitrator, as well as the learned District Judge, failed to appreciate the fact that the Employer had to terminate the works contract because of the soil testing report confirming poor subsoil condition at the site. The council also stated that The Contractor was not entitled to the damages claimed by him because he could not establish by evidence that he invested any capital for execution of work.

Arguments made on behalf of the Respondent

Mr Suman Bhattacharjee learned counsel representing the Contractor stated that the arbitral award was awarded after proper appreciation of evidence and facts and circumstances of the case. Furthermore stated that in the recommendation part of the Geotechnical Investigation Report, various measures were suggested for the improvement of the load-bearing capacity of the soil which was not fulfilled by the Employer. The learned counsel even stated that such unilateral cancellation of the works contract by the Employer is a clear breach of contract for which the Contractor is entitled to the damages claimed by him.

The Decision of the Court

After a thorough review of all the shreds of evidence present, the arguments presented from both sides and referring to the previous ratio of district court and arbitrator, the court stated that the ratio given by the arbitrator is a plausible view which cannot be disturbed in the exercise of limited jurisdiction and scope of this appeal which has also been confirmed by the district court.

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