Delhi District Court
Megha Singh vs Satish Kumar Mishra on 6 March, 2026
IN THE COURT OF MS NEELAM SINGH,
DISTRICT JUDGE (COMMERCIAL)-05, SOUTH-EAST
DISTRICT, SAKET COURTS, NEW DELHI
OMP (COMM) No.- 38/2020
In the matter of
Mrs. Megha Singh
W/o Jai Krishna Singh
Prop. M/s Queens Fairmont Corbett,
Bhav Ambar Vilas Group,
531, GF, Kanishka Residency,
Sector-35, Ashoka Road,
Faridabad, Haryana ....Petitioner
Vs.
Satish Kumar Mishra
S/o A.P. Mishra
R/o Zinnia Tower, Green Valley,
Omaxe RPS Colony,
Sector 41-42,
Surajkund, Faridabad,
Haryana ....Respondent
Date of Institution : 15.12.2020
Date of Final Arguments : 31.01.2026
Date of Judgment : 06.03.2026
Final Decision : Dismissed
Section 34 Arbitration and Conciliation Act, 1996
JUDGMENT
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1. The present petition under Section 34 of the Arbitration and
Conciliation Act, 1996 has been filed on behalf of petitioner
seeking partial setting aside of the arbitral award dated 28.08.2020
passed by the learned Sole Arbitrator, Justice S.P. Garg (Retd.), in
arbitration proceedings titled Satish Kumar Mishra vs. Megha
Singh. The petitioner has consciously restricted the scope of
challenge only to that part of the award whereby a sum of Rs. 8.75
lakhs along with interest has been granted in favour of the
respondent and whereby the petitioner’s counter-claim for
damages has been rejected, while not assailing the portion of the
award that allowed the petitioner’s counter-claim for recovery of
Rs. 10,59,231/- with interest. The petitioner has also prayed that
the rate of interest of 8 % as awarded by the Ld. Arbitrator on the
outstanding balance of Rs.10,59,231 payable to the petitioner shall
be modified to 18% p.a. According to the petitioner, the impugned
portion of the award is legally unsustainable, factually erroneous,
and vitiated by non-consideration of material evidence.
Case of the petitioner
2. It is the case of the petitioner that she is a retired officer of
the Government of India, who opted for voluntary retirement in
the year 2010 after an unblemished career. With the intention of
establishing a sustainable livelihood post-retirement, the petitioner
undertook the project of setting up an eco-friendly wildlife resort
at Dhikuli, Ramnagar, District Nainital, Uttarakhand.
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3. The Petitioner stated that, in order to construct the said
resort, she sold her residential house in Faridabad and, with the
help of a bank loan, private borrowings, her personal savings, and
retirement benefits, financed the project. According to the
Petitioner, the resort was ready for operation from 15th January
2011, but became operational from 1st February 2011 in
accordance with the business plan offered by the Respondent.
4. It is submitted that the resort became operational from
01.02.2011 and required professional marketing support for
attracting tourists and travel agencies. At this stage, the
respondent, who is stated to be a travel agent based in New Delhi,
approached the petitioner and represented that he possessed
extensive experience and connections in the hospitality and
tourism sector. According to the petitioner, the respondent made a
series of representations and assurances to induce her to engage
his services. It is submitted that the respondent assured the
petitioner that he would work exclusively for her resort, would not
market or promote any competing resort in the same area, and
would deploy a dedicated marketing team solely for the
petitioner’s establishment. The respondent further assured that he
would generate assured annual business of more than Rs. 3 crores
and would ensure continuous occupancy of the resort.
5. It is further the petitioner’s case that the respondent assured
that all guest payments would be routed directly to the petitioner’s
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resort accounts, that no payments would be retained by him, and
that complete transparency would be maintained in respect of
room tariffs, commissions, and collections. According to the
petitioner, these assurances played a decisive role in permitting the
respondent to commence business dealings with the resort.
6. The petitioner submitted that the business relationship
between the parties commenced purely on an oral understanding
and on a commission basis, and that the respondent commenced
sending guests to the resort from 15.03.2011.
7. It is the petitioner’s case that the respondent conducted
business with the resort only for a short duration, namely from
15.03.2011 till 28.06.2011. During this period, it is submitted that
the respondent failed to adhere to the assurances of transparency
and exclusivity. The Petitioner contends that she was solely
dependent on the Respondent for business for her resort, and that
the Respondent even admitted during cross-examination that he
was the sole person responsible for providing business to the
Petitioner’s resort. Despite this, the Respondent allegedly diverted
business to other resorts and failed to provide the requisite
business to the Petitioner’s resort. The Petitioner submits that, as
per the alleged agreement, she was entitled to receive business
from the Respondent to the tune of Rs. 25-30 lakhs per month, as
the annual target under the said agreement was Rs. 3 crores.
However, the Respondent allegedly did not perform at all during
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the first one and a half months, i.e., from 19th January 2011 to
March 2011, and even thereafter, his performance during the
operational period was only up to 10% of the annual target of Rs.
3 crores.
8. The petitioner alleged that the respondent conducted
business entirely on credit, collected payments directly from
guests and sponsoring travel agencies, and failed to remit the
collected amounts to the petitioner in a timely manner.
9. It is further submitted that the respondent concealed
material facts from the petitioner, including his simultaneous
engagements with other resorts in the same geographical area. The
petitioner also alleged that the respondent had an independent and
undisclosed arrangement with M/s Sachin Travels Ltd., under
which guest payments were routed to the respondent rather than to
the resort, thereby depriving the petitioner of her legitimate
revenues. The Petitioner submits that there is a second party
involved in the matter, namely the sponsor, M/s Sachin Travel
Ltd., which is a necessary party. It is alleged that the Respondent
directly collected the resort’s revenues from the said sponsor at
higher rates and appropriated the same, contrary to his promises
and in violation of the provisions of the alleged agreement. The
Petitioner submits that the alleged agreement, having been
induced by fraud and suppression of material facts relating to the
Respondent’s prior as well as simultaneous engagements with
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other resorts and the difference in terms of payment with his
sponsor, M/s Sachin Travels Ltd., is vitiated by fraud and is
therefore void ab initio. It is also submitted that the Ld. Arbitrator
did not allow the petitioner’s application moved under relevant
provisions for discoveries and interrogatories related to the
documents pertaining to the respondent’s transactions with
sponsor Sachin Travels Ltd.
10. The petitioner submitted that despite repeated oral and
written requests, the respondent failed to clear outstanding dues
and continued to retain amounts belonging to the resort. According
to the petitioner, the respondent neither provided the assured
volume of business nor acted in a transparent or bona fide manner.
It is stated that due to continuous defaults, the petitioner issued a
clear ultimatum to the respondent that no further guests would be
accepted on credit after 28.06.2011 unless all outstanding dues
were cleared. It is the petitioner’s case that despite such
ultimatum, the respondent continued to collect payments directly
from guests and sponsors and wrongfully retained the same, a fact
which has been noticed in the arbitral award itself.
11. The petitioner submitted that soon thereafter, the respondent
abruptly stopped sending business to the resort and ceased all
communications, leaving the petitioner to deal with mounting
liabilities. As a consequence, the petitioner was unable to service
bank loans, pay staff salaries, or meet operational expenses of the
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resort.
12. It is stated that due to financial stress and lack of working
capital, the resort’s loan account was classified as a Non-
Performing Asset and the lending bank initiated proceedings under
the SARFAESI Act. The petitioner submits that the balance sheet
of the petitioner’s resort clearly proves that the resort of the
petitioner had suffered direct operational loss of Rs. 59,86,389.
The petitioner submits that under severe financial pressure and
threat of enforcement action, she was compelled to sell the resort
in distress in October 2011, resulting in losses exceeding Rs. 4
crores.
13. The petitioner submitted that notwithstanding the above
conduct, the respondent initiated arbitral proceedings claiming an
amount of Rs. 25 lakhs towards alleged professional fees and Rs.
35 lakhs towards interest, solely on the basis of the disputed
agreement dated 19.01.2011. The petitioner asserted no written
agreement was ever executed between the parties. It is stated that
the agreement dated 19.01.2011 was never executed and that the
alleged agreement was never signed by the petitioner. It is the
petitioner’s case that the alleged agreement dated 19.01.2011 was
the replication of the draft sent vide email dated 30.11.2010.
Perusal of the both the documents clearly depicts that four clauses
including the arbitration clause have been added to the alleged
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agreeent, which were conspicously absent in email dated
30.11.2010.
14. The petitioner stated that the respondent approached the
Hon’ble Delhi High Court by filing a petition under Section 11 of
the Arbitration and Conciliation Act, 1996 (ARB.P. 34/2013)
seeking appointment of an arbitrator solely on the basis of the
alleged agreement dated 19.01.2011. Vide order dated 25.09.2018
passed by Hon’ble Ms. Justice Pratibha Singh, a Sole Arbitrator
was appointed. It is submitted that by the same order, the civil suit
(CS (OS) 3019/2014) earlier filed by the petitioner for recovery of
dues and damages was also dismissed in limine, granting liberty to
the petitioner to raise all her objections before the arbitral tribunal.
Initially, the petitioner was restrained from raising the issue of
forgery of signatures before the Ld. Arbitrator, however, in review
petition (Review Application 408/2018 in ARB.P. 34/2013) filed
by the Petitioner to the aforesaid order, the said restriction was
subsequently lifted.
15. The petitioner states that she filed a review petition before
the Hon’ble High Court seeking clarification and modification of
the said order. Vide order dated 02.11.2018, the Hon’ble High
Court permitted the petitioner to raise all objections before the Ld.
Arbitrator, including objections relating to forgery of signatures.
The petitioner further stated that her Special Leave Petition before
the Hon’ble Supreme Court against the said order was dismissed
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in limine.
16. The Petitioner submits that it filed a complaint with PS
Kalkaji (FIR 08/2013) against the respondent and also filed a
miscellaneous application under section 340 read with Section 195
CrPC. The petitioner had also filed a civil suit [CS(OS)
3019/2014] against the Respondent as defendant no. 1 and M/s
Sachin Travels Ltd. as defendant no. 2 for recovery, which was
disposed of as dismissed by the Hon’ble High Court of Delhi
along with adjudication of the Arbitration petition under Section
11 filed by the Respondent, as already stated above.
17. It is the case of the petitioner that the arbitral proceedings in
the present case are founded upon an alleged agreement dated
19.01.2011, which, according to her, is a forged, fabricated, and
non-existent document. It is asserted that no such agreement was
ever executed between the parties and that the respondent has
relied upon a mere photocopy of an unsigned draft document,
upon which fabricated ink signatures were subsequently placed
with an intent to falsely create contractual obligations. The
petitioner asserts that the alleged agreement was never acted upon,
never produced in original, and never proved in accordance with
law. The petitioner stated that she challenged the jurisdiction of
the tribunal by filing an application under Section 16 of the Act,
specifically raising the issue of forgery and non-existence of the
agreement. It is further submitted that the learned Arbitrator failed
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to frame an issue concerning the alleged forgery of the Petitioner’s
signatures, despite her vehement request made by way of an
application under Section 16, and instead confined the Tribunal’s
examination of the said application only to the alleged tampering
of clauses of the agreement.
18. It is further the case of the petitioner that the Ld. Arbitrator
failed to render a categorical finding on the issue of forgery and
fabrication, despite the same being a jurisdictional issue and
despite specific pleadings, evidence, and applications moved by
the petitioner seeking adjudication of the said issue. The petitioner
submitted that the failure to decide the foundational issue of the
existence and validity of the alleged agreement has resulted in a
grave miscarriage of justice and renders the impugned portion of
the award patently illegal.
19. The petitioner also challenges the finding of the Ld.
Arbitrator with regard to the issue of tampering of the agreement
dated 19.01.2011. The petitioner submits that the finding of the
learned Arbitrator that no questions were put to the Respondent
during cross-examination regarding the alleged tampering of
clauses is perverse and contrary to the arbitral record. It is
contended that the learned Arbitrator failed to take note of and
appreciate the Respondent’s own admissions, which constitute
clinching evidence. In his rejoinder and affidavit of evidence, the
Respondent admitted that the alleged agreement dated 19.01.2011
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 10 of 55
was a replication of the draft sent vide email dated 30.11.2010,
and simultaneously asserted that there was no tampering of the
said agreement. However, on a comparison of the two documents,
it is alleged that four clauses, including the arbitration clause, were
added in the agreement dated 19.01.2011, which were
conspicuously absent in the email dated 30.11.2010.
20. It is further submitted by the petitioner that the Hon’ble
Apex court has clearly laid down that the original or duly certified
copy of the alleged arbitration agreement is a sine-qua-non for
invoking section 11 of the Arbitration and Conciliation Act,1996.
However, in the present case neither the original nor duly certified
copy of the alleged arbitration agreement was brought on record.
21. It is further stated that the petitioner filed a detailed counter-
claim seeking recovery of Rs. 10,59,231/- being the outstanding
resort dues wrongfully retained by the respondent, along with
interest. The petitioner also claimed damages initially quantified at
Rs. 18 crores on account of loss of business, collapse of the resort,
and distress sale. However, due to severe financial constraints and
inability to pay the requisite arbitral fees, the petitioner restricted
her claim for damages to Rs. 1 crore.
22. The petitioner submitted that vide the impugned award, the
Ld. Arbitrator allowed the petitioner’s counter-claim for recovery
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of Rs. 10,59,231/- with interest, thereby acknowledging that the
respondent had wrongfully retained resort revenues. However, the
Ld. Arbitrator rejected the petitioner’s claim for damages on the
ground that loss was not proved, despite extensive documentary
and oral evidence being placed on record.
23. It is further stated that despite recording the findings that
the respondent failed to provide a dedicated team, generate the
agreed amount of business, act exclusively for the Petitioner’s
Resort, and that the Respondent collected payments directly from
guests in complete disregard to the agreement between the parties
that all the payments from guests were to come to the resort
directly, the Ld. Arbitrator proceeded to award a sum of Rs. 8.75
lakhs to the respondent on equitable considerations for the period
between 15.03.2011 and 28.06.2011. The petitioner submitted that
the award of Rs. 8.75 lakhs is internally inconsistent, contrary to
the findings recorded in the award itself, and based on conjectures
rather than evidence. It is her grievance that crucial issues relating
to forgery of the agreement, fraud, breach of fiduciary duty, and
the causal nexus between the respondent’s conduct and the
collapse of the resort were either ignored or inadequately
considered.
24. It is stated that the Petitioner repeatedly sought framing of
issues on the aspect of forgery, permission to lead expert evidence,
summoning of bank records, and examination of material
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witnesses, however, such requests were declined, thereby causing
serious prejudice and denying her a fair opportunity to present her
case.
25. Accordingly, the Petitioner has challenged the validity of
the arbitral award to the extent that it awards a sum of Rs. 8.75
lakhs in favour of the Respondent along with interest and rejects
the Petitioner’s claim for damages, on the ground that, for the
reasons stated hereinabove, the award to the aforesaid extent is
based on an invalid arbitration agreement, inasmuch as the learned
Arbitrator is alleged to have proceeded on the basis of a forged
photocopy of the agreement. It is further contended that even as
per the alleged agreement, the learned Arbitrator failed to grant the
reliefs to which the Petitioner was entitled in law. The award is
thus alleged to be opposed to public policy, bad in law and on
facts and circumstances of the case, radically erroneous, patently
illegal on the face of the record, irrational, perverse, and in
absolute disregard of the fundamental rules of evidence.
Case of the respondent
26. Reply to the present petition has been filed on behalf of
respondent by submitting that the present objections filed by the
petitioner under Section 34 of the Arbitration and Conciliation
Act, 1996, are wholly misconceived and devoid of merit. The
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respondent submits that the petition is liable to be dismissed at the
threshold as the grounds urged do not fall within the scope of
Section 34 of the Act. The Respondent submits that the grounds
taken by the Petitioner are concocted, self-suited, contradictory,
and outside the scope of Section 34 of the Arbitration &
Conciliation Act,1996.
27. The Respondent submits that the Learned Arbitrator has
duly framed all the relevant issues and adjudicated upon them. It is
further submitted on behalf of the Respondent that the arbitral
award is a matter of record and the contents of the same are
admitted and shall prevail over the narration of the petitioner
whenever any contradiction or misconception occurs in narration
of the petitioner with the actual contents of the award.
28. The principal ground raised by the petitioner relates to the
alleged non-existence and forgery of the arbitration agreement
dated 19.01.2011. The respondent submits that this issue has
already been adjudicated and has attained finality. It is contended
that in proceedings under Section 11 of the Act (Arb. P. No.
34/2013), the petitioner disputed her signatures on the agreement.
The photocopy of the agreement was sent to CFSL, and by order
dated 25.09.2018, the Hon’ble High Court of Delhi upheld the
validity and genuineness of the petitioner’s signatures on the
arbitration agreement. The High Court observed that at least
insofar as the arbitration clause was concerned, the signatures of
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Smt. Megha Singh were genuine. The said order was challenged
before the Hon’ble Supreme Court, but the SLP was withdrawn by
the Petitioner. Thus, the issue of existence of the arbitration
agreement has attained finality and cannot be re-agitated in the
present proceedings.
29. The respondent further submits that the learned Arbitrator
specifically framed Issue No. 4 in this regard:
“Whether the claimant has tempered with the terms of the
agreement dated 19.01.2011 and if so, its impact? OPR.”
30. The respondent relied upon the findings of the Tribunal in
respect of the said issue, wherein, after considering the record, the
Tribunal held that no material evidence was produced to
substantiate the allegation of tampering. It was observed that no
suggestions regarding forgery or fabrication were put in cross-
examination, and no cogent evidence was led by the petitioner to
establish tampering. The respondent submits that the petitioner did
not include any witness in her list to prove forgery, and a private
handwriting expert was sought to be introduced at a belated stage
without permission. The learned Arbitrator disallowed such
evidence, and no specific challenge has been made in the present
petition to that order.
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31. The respondent submits that once the CFSL report has
established the authenticity of the petitioner’s signatures and the
same has been upheld by the Hon’ble High Court, the allegation
that the Arbitrator acted on a forged photocopy is untenable. It is
contended that the petitioner is misusing the process of law by
repeatedly raising the same issue which has already been
adjudicated. It is also submitted that the petitioner herself admitted
in Criminal Revision No. 68/2017 (order dated 21.12.2017) that a
draft agreement had been prepared, thereby admitting the
existence of an agreement between the parties.
32. With regard to the petitioner’s challenge concerning
damages, the respondent submits that the learned Arbitrator has
adjudicated Issue No. 9 in detail and rejected the petitioner’s
counter-claim for Rs. 1 crore. The respondent further places
reliance upon the findings of the Tribunal in respect of the said
issue wherein the Tribunal recorded that the alleged damages were
remote, imaginary and unsupported by cogent evidence. It was
observed that no nexus was established between the alleged losses
and any act of the claimant-Respondent, and that no documentary
proof of loss was produced. The Tribunal further held that
compensation under Section 73 of the Contract Act requires proof
of actual loss, which was not established. It was also noted that
criminal proceedings initiated by the petitioner, including FIR No.
08/2013 and subsequent revisions and petitions up to the Hon’ble
High Court and Hon’ble Supreme Court, did not result in findings
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in her favour. It is submitted by the respondent that the petitioner
had filed criminal proceedings on these grounds against the
respondent, however, she has drastically failed to obtain any relief
or findings against the respondent.
33. The respondent submits that the petitioner had earlier
instituted separate proceedings before the Hon’ble High Court,
being CS (OS) No. 3019/2014, wherein she initially claimed
damages to the tune of Rs. 20 crores and subsequently sought
amendment of the plaint, reducing the claim to Rs. 20 lakhs. It is
contended that such drastic and unexplained variation in the
quantum of damages reflects a speculative and unsubstantiated
approach. The respondent further submits that the present prayer
seeking damages of Rs. 1 crore is equally untenable and amounts
to an abuse of the process of law.It is further asserted that the
petitioner has failed to place on record any cogent documentary
evidence to substantiate the damages claimed. Rather, the
petitioner has consistently altered and fluctuated the amount of
damages at different stages, first before the Hon’ble High Court
and thereafter before the learned Arbitrator,thereby undermining
the credibility of the claim.
34. The respondent has placed on record a detailed chronology
of litigations initiated by the petitioner, including criminal
proceedings, revision petitions, petitions before the Hon’ble High
Court, SLP before the Hon’ble Supreme Court (withdrawn), and
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complaint under Section 200 Cr.P.C. It is contended that the
petitioner has left no stone unturned against the respondent and is
attempting to re-agitate issues which have already attained finality.
The present petition is described as another attempt to reopen
concluded findings under the guise of Section 34.
35. With respect to the amount awarded by the Learned
Arbitrator, the respondent submits that the Ld. Arbitrator awarded
a sum of Rs. 8.75 Lakhs in favor of the respondent along with 8%
interest only for the period from 15.03.2011 to 28.06.2011, during
which services were rendered by the Respondent to the
Petitioner’s Resort. However, the respondent submits that he is
entitled to get remuneration for the entire period until the resort
was sold. The Respondent has filed a separate Section 34 petition
challenging the award passed by the Ld. Arbitrator in this regard.
36. Regarding the claim of Rs. 10,59,231/-, it is contended that
the recoverable amount related to M/s Sachin Travels Pvt. Ltd.,
and not the respondent personally. The petitioner herself had taken
a similar stand in earlier proceedings. It is submitted that efforts
under the Negotiable Instruments Act also failed due to
jurisdictional issues and the demise of the concerned person.
Hence, the prayer for recovery in the present petition is stated to
be unsustainable.
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37. It is further submitted that the arbitration agreement was
entered into only between the Petitioner and the Respondent, and
no third party had privity of contract. The allegation that the
Respondent concealed any agreement from a third party is,
therefore, specifically denied. It is further submitted that the
learned Arbitrator disallowed the impleadment application on the
ground that the transactions between the proposed party and the
Respondent were outside the scope of the arbitration agreement,
which was confined to the agreement executed solely between the
Petitioner and the Respondent.The narration concerning M/s
Sachin Travel is stated to be unwarranted and irrelevant. It is also
submitted that Mr. Sachin Jagatdar, who was running M/s Sachin
Travel, has expired, and this fact was brought on record before the
Hon’ble High Court by the Respondent. The contents of the said
paragraphs are, therefore, denied.
38. The respondent denies that the award is opposed to public
policy. It is submitted that the allegations are merely an attempt to
bring the petition within the scope of Section 34(2)(b)(ii) of the
Act without any substantive basis. The respondent asserts that the
Arbitrator framed all relevant issues, considered the evidence, and
rendered findings based on record.
39. It is denied that the award given in favor of the Respondent
and against the Petitioner is invalid, illegal, without jurisdiction,
or suffers from patent illegality. The respondent reiterates that the
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issue of forgery was duly framed and adjudicated. The opinion of
the CFSL has been upheld, and the private expert’s opinion cannot
override it. The respondent further submits that interlocutory
orders passed by the learned Arbitrator, including disallowing
additional witnesses and discovery applications, have not been
specifically challenged and have thus attained finality.
40. The respondent also specifically denies allegations of
misconduct, fraud, breach of fiduciary duty, secret profiteering, or
concealment of documents. It is submitted that the petitioner has
failed in criminal proceedings on similar allegations, and the
agreement between the parties cannot be termed void ab initio.
41. The Respondent further submits that no document has been
placed on record by the Petitioner to establish that the sale of the
resort was a distress sale and not one undertaken for huge profits.
It is contended that, had it been a distress sale, the Petitioner
would have placed the relevant sale documents on record without
hesitation. The Respondent submits that the Petitioner has
deliberately withheld the sale consideration details, as the resort
was sold to earn substantial profit. It is further asserted that, since
the resort was sold for huge profits, the alleged non-payment of
salaries of staff, if any, was a deliberately created situation
adopted as a tactic by the Petitioner to project that she was facing
losses and was therefore unable to pay staff salaries. The
Respondent also submits that the balance sheet of the Petitioner’s
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resort depicting an operational loss of Rs. 59,86,389 may have
been created in the books of accounts to serve the Petitioner’s own
interests and that the same has no concern with the Respondent.
42. It is contended that since the resort was sold within a few
months of its opening, even while construction was ongoing, the
allegation that adequate business was not provided by the
Respondent as agreed does not arise. According to the
Respondent, the Petitioner herself defaulted on the terms of the
agreement by selling the resort within a short span of its
commencement for her own financial gain.
43. It is further submitted by the Respondent that the Petitioner
deliberately concealed the vital fact that the resort was not
completely constructed; that all committed rooms were not ready;
that the swimming pool was not functional; and that there were
various other incomplete aspects of the resort, all attributable to
the Petitioner herself. It is contended that, despite these
shortcomings, the Respondent managed to send guests to the
resort, which is stated to be established through the testimony of
witnesses on the arbitral record. Therefore, the calculation made
by the Petitioner regarding assumed business of Rs. 25-30 lakhs
per month is stated to be based on presumptions, whims and
fancies, and has no basis in view of the deficiencies in the resort
and the fact that it was sold within a few months of opening for
huge profit.
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Replication
44. The plaintiff has filed a replication to the reply on the
section 34 petition submitted by the Respondent. In the said
replication, the petitioner has categorically denied all the
allegations and contentions raised by the Respondent. The
Petitioner has reiterated, reaffirmed and relied upon the averments
of the Section 34 Petition and maintains that the present petition
has been filed on a valid grounds. It is reiterated by the petitioner
that the alleged agreement dated 19.01.2011 is merely a
replication of the draft sent vide email dated 30.11.2010, however,
four clauses, including the arbitration clause, were subsequently
added in the alleged agreement dated 19.01.2011, which were
conspicuously absent in the email dated 30.11.2010. It is
specifically pleaded that the arbitral proceedings are founded upon
a forged, fabricated, and non-existent document, and that the
respondent relied upon a mere photocopy of an unsigned draft,
upon which fabricated ink signatures were subsequently placed to
falsely create contractual obligations. It is further stated that the
alleged agreement was never acted upon, never produced in
original, and never proved in accordance with law. It is averred
that the petitioner was initially restrained from raising the issue of
forgery before the learned Arbitrator, however, in Review
Application No. 408/2018 in ARB.P. 34/2013, the said restriction
was lifted by order dated 02.11.2018, thereby permitting the
petitioner to raise all objections, including forgery. It is further
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pleaded that neither the original nor a duly certified copy of the
alleged arbitration agreement was brought on record while
invoking Section 11 of the Arbitration and Conciliation Act,
1996.It is stated that the petitioner had filed a complaint with PS
Kalkaji (FIR No. 08/2013) and had also moved an application
under Section 340 read with Section 195 CrPC in relation to the
alleged forgery.It is further asserted that despite specific
applications under Section 16 of the Act, the learned Arbitrator
failed to frame an issue on forgery of signatures and confined
consideration only to alleged tampering of clauses. It is pleaded
that the learned Arbitrator failed to render a categorical finding on
the issue of forgery and fabrication, despite the same being a
jurisdictional issue. It is further averred that the petitioner had
initially quantified damages at Rs. 18 crores but later restricted the
claim to Rs. 1 crore due to financial constraints and inability to
pay arbitral fees. It is contended that the award of Rs. 8.75 lakhs to
the respondent is internally inconsistent with the findings recorded
in the award itself and is based on conjectures rather than
evidence.
45. I have heard arguments advanced on behalf of both the
parties and have perused the case file as well as original arbitral
record. I have also considered the oral and written submissions
advanced on behalf of both sides.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 23 of 55
Points of Consideration before the Court
46. The scope of judicial review under Section 34 of the
Arbitration and Conciliation Act, 1996, is limited. Section 34 of
the Arbitration and Conciliation Act, 1996 is reproduced as under:
“Section 34. Application for setting aside arbitral awards.
(1) Recourse to a Court against an arbitral award may be made
only by an application for setting aside such award in
accordance with sub-section (2) and sub-section (3).
(2) An arbitral award may be set aside by the Court only if–
(a) the party making the application 1[establishes on the basis
of the record of the arbitral tribunal that]–
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which
the parties have subjected it or, failing any indication thereon,
under the law for the time being in force; or
(iii) the party making the application was not given proper
notice of the appointment of an arbitrator or of the arbitral
proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by
or not falling within the terms of the submission to arbitration,
or it contains decisions on matters beyond the scope of the
submission to arbitration:
Provided that, if the decisions on matters submitted to
arbitration can be separated from those not so submitted, only
that part of the arbitral award which contains decisions on
matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral
procedure was not in accordance with the agreement of the
parties, unless such agreement was in conflict with a provision
of this Part from which the parties cannot derogate, or, failing
such agreement, was not in accordance with this Part; or
(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, orOMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 24 of 55
(ii) the arbitral award is in conflict with the public policy of
India.
1[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.]
[(2A) An arbitral award arising out of arbitrations other than
international commercial arbitrations, may also be set aside by
the Court, if the Court finds that the award is vitiated by patent
illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the
ground of an erroneous application of the law or by
reappreciation of evidence.]
(3) An application for setting aside may not be made after three
months have elapsed from the date on which the party making
that application had received the arbitral award or, if a request
had been made under section 33, from the date on which that
request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was
prevented by sufficient cause from making the application within
the said period of three months it may entertain the application
within a further period of thirty days, but not thereafter.
(4) On receipt of an application under sub-section (1), the Court
may, where it is appropriate and it is so requested by a party,
adjourn the proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to resume the
arbitral proceedings or to take such other action as in the
opinion of arbitral tribunal will eliminate the grounds for setting
aside the arbitral award.
[(5) An application under this section shall be filed by a party
only after issuing a prior notice to the other party and such
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 25 of 55
application shall be accompanied by an affidavit by the
applicant endorsing compliance with the said requirement.
(6) An application under this section shall be disposed of
expeditiously, and in any event, within a period of one year from
the date on which the notice referred to in sub-section (5) is
served upon the other party.]”
47. Before examining the objections raised by the petitioner, it
is necessary to briefly note the statutory framework governing
interference with an arbitral award under Section 34 of the
Arbitration and Conciliation Act, 1996. Section 5 of the
Arbitration and Conciliation Act, 1996 restricts judicial
intervention in arbitral proceedings and provides that no judicial
authority shall intervene except where so provided in Part I of the
Act. Section 34 constitutes the statutory mechanism through
which a party may seek recourse against an arbitral award. Section
34(1) stipulates that recourse to a court against an arbitral award
may be made only by an application for setting aside the award in
accordance with Section 34(2) and Section 34(3) of the Act.
Section 34(2)(a) enumerates limited grounds on which an arbitral
award may be set aside. These include circumstances where a
party was under incapacity, the arbitration agreement was not
valid under the applicable law, the party was not given proper
notice of appointment of the arbitrator or of the arbitral
proceedings, the party was otherwise unable to present its case, the
award deals with disputes beyond the scope of submission to
arbitration, or the composition of the arbitral tribunal or arbitral
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 26 of 55
procedure was not in accordance with the agreement between the
parties.
48. Section 34(2)(b) further provides that an award may be set
aside if the subject matter of the dispute is not capable of
settlement by arbitration under the law or if the award is in
conflict with the public policy of India. Explanation I to the
provision clarifies that an award would be in conflict with public
policy only if the making of the award was induced by fraud or
corruption, or it contravenes the fundamental policy of Indian law,
or is in conflict with the most basic notions of morality or justice.
Explanation II makes it clear that no review on the merits of the
dispute shall be undertaken while examining whether the award
contravenes the fundamental policy of Indian law. Further, Section
34(2-A) provides that in the case of domestic arbitrations, an
award may be set aside if it is vitiated by patent illegality
appearing on the face of the award. However, the proviso makes it
explicit that an award shall not be set aside merely on the ground
of an erroneous application of law or by reappreciation of
evidence. Thus, the legislative scheme makes it clear that the
jurisdiction of the Court under Section 34 is narrow and
supervisory in nature. The Court does not sit in appeal over the
arbitral award. It is well settled that the Court cannot re-evaluate
the evidence or substitute its own view for that of the arbitrator
merely because another view may be possible.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 27 of 55
49. In the present case, the arbitral award under challenge is a
detailed and well-reasoned award, in which the learned Arbitrator
has examined the pleadings, documentary material and oral
evidence of the parties before returning findings on each issue
framed for adjudication. The objections raised by the petitioner in
the present proceedings substantially seek a re-appreciation of the
evidence and reconsideration of findings of fact, which is
impermissible within the limited scope of Section 34 of the Act.
50. The scope of judicial review under Section 34 of the
Arbitration and Conciliation Act, 1996, is circumscribed by
specific and limited grounds. It is well-established that the court
does not sit in appeal over the arbitral award and cannot re-
appreciate the evidence or re-examine the merits of a dispute as
would ordinarily be done in a regular appeal, unless there are
compelling reasons such as a breach of the fundamental policy of
Indian law, is in conflict with the most basic notions of morality or
justice, or a patent illegality appearing on the face of the award.
The Apex Court has time and again held that the jurisdiction
conferred on a Court under Section 34 is narrowly tailored.
51. The learned Arbitrator has passed a reasoned award,
analyzing each issue framed before him. The findings are based on
evidence, supported by reasoning, and consistent with law. Merely
because the Petitioner disagrees with the conclusions reached by
the Arbitrator cannot be a ground for interference under Section34.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 28 of 55
It is well established that the Court exercising jurisdiction under
Section 34 cannot act as a second arbitral forum. The legislative
intent under the 1996 Act is to minimize judicial interference and
promote finality of arbitral awards.
52. Section 34 of the Arbitration and Conciliation Act, 1996
allows a party to challenge an arbitral award on limited grounds,
such as if the award is in conflict with public policy, or if the
tribunal acted in a manner that violated the principles of natural
justice or if the award is otherwise in violation of the law.
However, in the present case, the petitioner has failed to establish
that the award is contrary to public policy or that the Sole
Arbitrator’s conduct in passing the award was flawed in any way.
53. It is well-settled that arbitral tribunals enjoy a wide degree
of autonomy and discretion in determining the facts, applying the
law, and rendering awards. The role of the Courts in reviewing
arbitral awards is extremely limited, and this Court can only
interfere if the award is found to be patently illegal or against the
public policy of India or if the award explicitly falls within the
purview of the other grounds enumerated in Section 34 and as
already discussed above. In this case, the petitioner has failed to
demonstrate any such illegality or irregularity in the award passed
by the Sole Arbitrator. The petitioner’s objections are seek a re-
appreciation of the evidence and reconsideration of findings of
fact, which do not meet the threshold required for setting aside the
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 29 of 55
award under Section 34.
54. The Hon’ble Supreme Court in MMTC Limited v. Vedanta
Limited, [Civil Appeal No. 1862 of 2014], held that the Court
must not act as an appellate forum to re-appreciate evidence or
interfere with the findings of the arbitral tribunal unless there is a
patent illegality or a violation of the public policy of India. The
relevant paragraphs of the judgment are reproduced as under:
“11. As far as Section 34 is concerned, the position is
well−settled by now that the Court does not sit in
appeal over the arbitral award and may interfere on
merits on the limited ground provided under Section
34(2)(b)(ii), i.e. if the award is against the public
policy of India. As per the legal position clarified
through decisions of this Court prior to the
amendments to the 1996 Act in 2015, a violation of
Indian public policy, in turn, includes a violation of
the fundamental policy of Indian law, a violation of
the interest of India, conflict with justice or morality,
and the existence of patent illegality in the arbitral
award. Additionally, the concept of the “fundamental
policy of Indian law” would cover compliance with
statutes and judicial precedents, adopting a judicial
approach, compliance with the principles of natural
justice, and Wednesbury reasonableness.
Furthermore, “patent illegality” itself has been held
to mean contravention of the substantive law of India,
contravention of the 1996 Act, and contravention of
the terms of the contract.
It is only if one of these conditions is met that the
Court may interfere with an arbitral award in terms
of Section 34(2)(b)(ii), but such interference does not
entail a review of the merits of the dispute, and is
limited to situations where the findings of theOMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 30 of 55
arbitrator are arbitrary, capricious or perverse, or
when the conscience of the Court is shocked, or when
the illegality is not trivial but goes to the root of the
matter. An arbitral award may not be interfered with
if the view taken by the arbitrator is a possible view
based on facts. (See Associate Builders v. DDA,
(2015) 3 SCC 49). Also see ONGC Ltd. v. Saw Pipes
Ltd., (2003) 5 SCC 705; Hindustan Zinc Ltd. v.
Friends Coal Carbonisation, (2006) 4 SCC 445; and
McDermott International v. Burn Standard Co. Ltd.,
(2006) 11 SCC 181).
It is relevant to note that after the 2015 amendments
to Section 34, the above position stands somewhat
modified. Pursuant to the insertion of Explanation 1
to Section 34(2), the scope of contravention of Indian
public policy has been modified to the extent that it
now means fraud or corruption in the making of the
award, violation of Section 75 or Section 81 of the
Act, contravention of the fundamental policy of
Indian law, and conflict with the most basic notions
of justice or morality. Additionally, sub−section (2A)
has been inserted in Section 34, which provides that
in case of domestic arbitrations, violation of Indian
public policy also includes patent illegality appearing
on the face of the award. The proviso to the same
states that an award shall not be set aside merely on
the ground of an erroneous application of the law or
by re−appreciation of evidence.
12. As far as interference with an order made under
Section 34, as per Section 37, is concerned, it cannot
be disputed that such interference under Section 37
cannot travel beyond the restrictions laid down under
Section 34. In other words, the Court cannot
undertake an independent assessment of the merits of
the award, and must only ascertain that the exercise
of power by the Court under Section 34 has not
exceeded the scope of the provision. Thus, it is
evident that in case an arbitral award has been
confirmed by the Court under Section 34 and by the
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 31 of 55
Court in an appeal under Section 37, this Court must
be extremely cautious and slow to disturb such
concurrent findings.
13. Having noted the above grounds for interference
with an arbitral award, it must now be noted that the
instant question pertains to determining whether the
arbitral award deals with a dispute not contemplated
by or not falling within the terms of the submission to
arbitration, or contains decisions on matters beyond
the scope of the submission to arbitration. However,
this question has been addressed by the Courts in
terms of the construction of the contract between the
parties, and as such it can be safely said that a
review of such a construction cannot be made in
terms of re-assessment of the material on record, but
only in terms of the principles governing interference
with an award as discussed above.”
55. The principle laid down in Associate Builders v. Delhi
Development Authority, [(2015) 3 SCC 49], also emphasizes that
interference is warranted only in cases when the arbitral award is
in conflict with the public policy of India, i.e. is against
fundamental policy of Indian Law, interest of India, justice or
morality or suffers from patent illegality. It was also held that
construction of the terms of a contract is primarily for an arbitrator
to decide unless the arbitrator construes the contract in such a way
that it could be said to be something that no fair-minded or
reasonable person could do.
56. The grounds for setting aside an arbitral award under
Section 34 are limited and specific. The petitioner has failed to
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 32 of 55
establish any of these grounds. It is a settled position of law that
the jurisdiction of this Court under Section 34 is supervisory and
not appellate. The Court is not to sit in appeal over the findings of
the Arbitrator. Re-appreciation of evidence or substitution of the
Court’s own view in place of that of the Arbitrator is
impermissible. Interference is warranted only when the award is
shown to be patently illegal, perverse, contrary to the fundamental
policy of Indian law, or opposed to public policy.
57. The Hon’ble Supreme Court in Ssangyong Engineering &
Construction Co. Ltd. v. National Highway Authority of India,
[Civil Appeal No. 4779 of 2019], clarified that an award can be set
aside on public policy grounds only if it shocks the conscience of
the Court. The arbitral award in this case does not meet this
threshold. The Tribunal’s findings are based on a careful
consideration of the evidence and the contractual terms agreed
upon by the parties. Below are the reproduced relevant paragraphs
of the judgment:
“23. What is clear, therefore, is that the expression
“public policy of India”, whether contained in
Section 34 or in Section 48, would now mean the
“fundamental policy of Indian law” as explained in
paragraphs 18 and 27 of Associate Builders (supra),
i.e., the fundamental policy of Indian law would be
relegated to the “Renusagar” understanding of this
expression. This would necessarily mean that the
Western Geco (supra) expansion has been done away
with. In short, Western Geco (supra), as explained in
paragraphs 28 and 29 of Associate Builders (supra),OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 33 of 55
would no longer obtain, as under the guise of
interfering with an award on the ground that the
arbitrator has not adopted a judicial approach, the
Court’s intervention would be on the merits of the
award, which cannot be permitted post amendment.
However, insofar as principles of natural justice are
concerned, as contained in Sections 18 and 34(2)(a)
(iii) of the 1996 Act, these continue to be grounds of
challenge of an award, as is contained in paragraph
30 of Associate Builders (supra).
24. It is important to notice that the ground for
interference insofar as it concerns “interest of India”
has since been deleted, and therefore, no longer
obtains. Equally, the ground for interference on the
basis that the award is in conflict with justice or
morality is now to be understood as a conflict with
the “most basic notions of morality or justice”. This
again would be in line with paragraphs 36 to 39 of
Associate Builders (supra), as it is only such arbitral
awards that shock the conscience of the court that
can be set aside on this ground.
25. Thus, it is clear that public policy of India is now
constricted to mean firstly, that a domestic award is
contrary to the fundamental policy of Indian law, as
understood in paragraphs 18 and 27 of Associate
Builders (supra), or secondly, that such award is
against basic notions of justice or morality as
understood in paragraphs 36 to 39 of Associate
Builders (supra). Explanation 2 to Section 34(2)(b)
(ii) and Explanation 2 to Section 48(2)(b)(ii) was
added by the Amendment Act only so that Western
Geco (supra), as understood in Associate Builders
(supra), and paragraphs 28 and 29 in particular, is
now done away with.
26. Insofar as domestic awards made in India are
concerned, an additional ground is now available
under sub-section (2A), added by the Amendment Act,
2015, to Section 34. Here, there must be patent
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 34 of 55
illegality appearing on the face of the award, which
refers to such illegality as goes to the root of the
matter but which does not amount to mere erroneous
application of the law. In short, what is not subsumed
within “the fundamental policy of Indian law”,
namely, the contravention of a statute not linked to
public policy or public interest, cannot be brought in
by the backdoor when it comes to setting aside an
award on the ground of patent illegality.
27. Secondly, it is also made clear that re-
appreciation of evidence, which is what an appellate
court is permitted to do, cannot be permitted under
the ground of patent illegality appearing on the face
of the award.
28. To elucidate, paragraph 42.1 of Associate
Builders (supra), namely, a mere contravention of the
substantive law of India, by itself, is no longer a
ground available to set aside an arbitral award.
Paragraph 42.2 of Associate Builders (supra),
however, would remain, for if an arbitrator gives no
reasons for an award and contravenes Section 31(3)
of the 1996 Act, that would certainly amount to a
patent illegality on the face of the award.
29. The change made in Section 28(3) by the
Amendment Act really follows what is stated in
paragraphs 42.3 to 45 in Associate Builders (supra),
namely, that the construction of the terms of a
contract is primarily for an arbitrator to decide,
unless the arbitrator construes the contract in a
manner that no fair-minded or reasonable person
would; in short, that the arbitrator’s view is not even
a possible view to take.
Also, if the arbitrator wanders outside the contract
and deals with matters not allotted to him, he
commits an error of jurisdiction. This ground of
challenge will now fall within the new ground added
under Section 34(2A).
30. What is important to note is that a decision which
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 35 of 55
is perverse, as understood in paragraphs 31 and 32
of Associate Builders (supra), while no longer being
a ground for challenge under “public policy of
India”, would certainly amount to a patent illegality
appearing on the face of the award. Thus, a finding
based on no evidence at all or an award which
ignores vital evidence in arriving at its decision
would be perverse and liable to be set aside on the
ground of patent illegality.
Additionally, a finding based on documents taken
behind the back of the parties by the arbitrator would
also qualify as a decision based on no evidence
inasmuch as such decision is not based on evidence
led by the parties, and therefore, would also have to
be characterised as perverse.”
58. The petitioner has not demonstrated any patent illegality in
the arbitral award. The Tribunal’s decision is based on a correct
interpretation of the contract terms and conditions and a fair
assessment of the evidence. There is no manifest error or gross
irregularity that warrants setting aside the award. The Tribunal’s
decision aligns with the contractual terms agreed upon by the
parties.
59. The petitioner’s claim that the arbitral Tribunal’s decision
was arbitrary is not supported by the record. The Tribunal
provided a detailed and reasoned award, explaining its findings
and the basis for its conclusions. The Tribunal’s reasoning was
logical, coherent, and based on the evidence presented. This Court
reiterates the principle that the Arbitral Tribunal’s commercial
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 36 of 55
wisdom should not be questioned by the courts. The Tribunal is
best placed to understand the nuances of the dispute and the
commercial realities. As held in MMTC Limited v. Vedanta
Limited, [Civil Appeal No. 1862 of 2014], the Tribunal’s decision
should be respected unless it is manifestly arbitrary or
unreasonable.
60. One of the principal objections raised by the petitioner is
that the arbitral tribunal lacked jurisdiction as the agreement dated
19.01.2011 is allegedly forged and tampered with, and therefore
there was no valid arbitration agreement between the parties.The
issue concerning the existence of the arbitration agreement already
stood adjudicated in the Section 11 proceedings before the
Hon’ble High Court of Delhi in ARB.P. 34/2013. The Hon’ble
High Court specifically examined the allegations of forgery raised
by the petitioner and referred the matter to the Central Forensic
Science Laboratory (CFSL) for examination of the signatures.
After considering the CFSL report and the material placed on
record, the Hon’ble High Court categorically held that the
signatures of the petitioner on the arbitration agreement were
genuine and that a valid arbitration agreement existed between the
parties. The Court observed that the CFSL report did not reveal
any fundamental difference between the questioned signatures and
the admitted signatures of the petitioner.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 37 of 55
61. The Hon’ble High Court further held that although the
petitioner may have disputes regarding the contents of the
agreement, the question regarding the existence of the arbitration
agreement stood established. The Court accordingly referred the
disputes between the parties to arbitration and observed that the
petitioner was at liberty to raise all other objections before the
learned Arbitrator. The Hon’ble High Court observed inter alia:
“10. All the above facts, combined with the CFSL report show
that there exists an arbitration agreement between the
parties……The factual narration above is sufficient for this
Court to hold that there exists an arbitration agreement
between the parties and the signature is not forged. Even
apart from the CFSL report, there are other facts that support
the existence of the arbitration agreement.
*****************************
1. For the reasons stated above i.e. the pleadings in the suit, the
order passed in the revision petition as also the CFSL report,
this Court finds that the signatures of Smt. Megha Singh in so
far as the arbitration agreement is concerned, are valid and
genuine. The challenge to the same is untenable.
2. The disputes between the parties are referred to the sole
arbitration of Justice S.P. Garg (Retired) Judge. The Learned
Arbitrator shall consider all the objections of the Respondent in
respect of the terms of the agreement between the Petitioner
and Respondent. Smt Megha Singh is permitted to raise all her
objections and claims before the Ld. Arbitrator. This Court has
not expressed an opinion on the various clauses of the
agreement or the merits of the disputes between the parties.
18. The suit is liable to be rejected with liberty to the Plaintiff to
raise all her claims and seek reliefs before the Ld. Arbitrator,
except insofar as it relates to her signatures in respect of the
arbitration agreement. All allegations, objections and claims of
the Respondent are left open. ”
62. Thus, the issue regarding the existence and validity of the
arbitration agreement already stood concluded in the Section 11
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 38 of 55
proceedings.
63. The petitioner thereafter filed Review Application No.
408/2018 in ARB.P. 34/2013, wherein the Hon’ble High Court
reiterated that the examination undertaken in the earlier judgment
was limited to determining the existence of the arbitration
agreement and clarified that the remaining disputes could be
raised before the learned Arbitrator.
64. The said objection raised by the Petitioner has also been
duly considered and dealt with by the learned Arbitrator in the
impugned award. The relevant findings recorded in the award are
reproduced hereunder:
“28. On perusal of the record, it reveals that the respondent has
disputed the execution of the agreement dated 19.01.2011 with the
claimant. This plea was taken by the respondent at the time of
contesting the proceedings under Section 11 of the Arbitration
and Conciliation Act, 1996 before the Hon’ble Delhi HighCourt
in Arb. P. No.34/2013. The respondent had placed on record the
‘photocopy of the agreement dated 19.01.2011 claiming that the
original agreement was in the possession of the respondent. The
respondent had denied her signatures on the agreement. The
photocopy of the agreement was sent to CFSL and finally, vide
order dated 25.09.2018 (Ex.CW1/8), the petition filed by the
petitioner was allowed. The Hon’ble High Court observed:
“The facts in the present case reveal that there are disputes
between the parties. While Smt. Megha Singh alleges that the
signatures on the agreement are fabricated, she does not dispute
the existence of an agreement. While it is her stand that the
agreement is an oral agreement, it Is Mr. Mishra’s stand that the
agreement is in writing and he has placed a copy on record which
contain her original signatures as per the CFSL report, Thus, at
least in so far as the arbitration clause is concerned, the
signatures of Smt. Megha Singh are to be taken as authentic andOMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 39 of 55
genuine. Once this is held so, the question as to whether there is
any tempering with the other clauses, difference in the terms
agreed etc., are questions to be determined by the Ld.
Arbitrator…”
29. In Para No. 12 of the order, the Hon’ble High Court
further observed:
“For the reasons stated above i.e. the pleadings in the suit, the
order passed in the revision petition as also the CFSL report, this
court finds that the signatures of Smt. Megha Singh, in so far as
the arbitration agreement is concerned, are valid and genuine.
The challenge to the same is untenable.”
30. The order dated 25.09.18 was challenged before the
Hon’ble Supreme Court. However, the respondent opted to
withdraw the SLP. The issue of ‘existence of the arbitration
agreement, by virtue of agreement dated 19.01.2011 has, thus,
attained finality and the respondent can’t be permitted to
challenge its ‘existence’ in the present proceedings.”
65. In view of the aforesaid findings, it is evident that the issue
regarding the existence and validity of the arbitration agreement
had already been conclusively determined by the Hon’ble Delhi
High Court in proceedings under Section 11 of the Arbitration and
Conciliation Act, 1996. The learned Arbitrator has also duly
considered the said aspect in the impugned award and has returned
a finding after examining the material placed on record. The said
order having attained finality, the Petitioner cannot be permitted to
reopen or re-agitate the same issue in the present proceedings
under Section 34 of the Act.
66. As already reiterated above it is settled law that the scope of
interference under Section 34 of the Act is limited, and this Court
does not sit in appeal over the findings of the learned Arbitrator.
Re-appreciation of evidence or re-examination of factual findings
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 40 of 55
is impermissible unless the award is shown to be patently illegal
or contrary to the fundamental policy of Indian law. No such
ground has been made out in the present case.
67. Accordingly, this Court finds no merit in the said objection
raised by the Petitioner, and the same is liable to be rejected.
68. The petitioner has further contended that the agreement
dated 19.01.2011 was tampered with and that the learned
Arbitrator failed to properly adjudicate this issue. The record of
the arbitral proceedings, however, show otherwise. The Ld.
Arbitrator specifically framed a separate issue, Issue No. 4, to deal
with the said objection of the Petitioner-
“Whether the claimant has tampered with the terms of the
agreement dated 19.01.2011 and if so, its impact? OPR”
69. The framing of the above issue itself demonstrates that the
learned Arbitrator duly considered the objection raised by the
petitioner and afforded the parties an opportunity to lead evidence
on the said issue. Dealing with the said objection of the Petitioner,
the Arbitral Tribunal has duly recorded the following findings-
“31. Regarding the allegations that the ‘agreement’ was tempered
with, this Tribunal is of the view that no material evidence has
emerged to substantiate it. Nothing has been disclosed by the
respondent as to which term and condition of the ‘agreement’ has
been tempered with. In his evidence by way of affidavit Ex. PX).
CW1 Satish Kumar Mishra proved the execution of theOMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 41 of 55
‘agreement” dated 19.01.2011 between the parties. In the cross-
examination, the claimant was not at all questioned if there was
any tempering with the terms and conditions of the ‘agreement’.
No suggestions were put to the claimant if the ‘agreement’ dated
19.01.2011 was forged and fabricated or its terms were tempered
with by the claimant.”
70. Upon appreciation of the pleadings, documents and oral
testimony on record, the Ld. Arbitrator has returned a cogent and
reasoned finding on the said issue. The petitioner, in the present
petition, has merely reiterated the allegation of tampering without
identifying the specific clauses alleged to have been altered or
placing any cogent documentary evidence to substantiate the
allegation. The present challenge therefore essentially invites this
Court to reassess the evidentiary record and substitute its own
conclusions for those of the arbitrator, which is impermissible
within the limited scope of Section 34 unless the grounds
stipulated under the statutory mandate of section 34 are made out,
which is not the case in the present case.
71. The petitioner has also contended that the arbitration
proceedings were vitiated as the original or certified copy of the
arbitration agreement was not filed. This contention of the
Petitioner is also devoid of any merit. The very same objection
was raised before the Hon’ble High Court during the Section 11
proceedings.The Hon’ble Delhi High Court specifically observed
that the copy of the agreement containing the original signatures
of the parties would suffice for the purposes of the proceedings. In
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 42 of 55
its order dated 25.09.2018 in ARB.P. 34/2013, the Hon’ble High
Court duly observed as under:
“….It was also alleged that the original agreement
having not been filed before the Court, the matter is not
liable to be referred to arbitration…
3. In rejoinder, the Petitioner has placed on record the
copy of the agreement containing the original signatures
of the Respondent. Vide order dated 24th March, 2014,
this Court passed the following directions: “The
petitioner has filed, along with the rejoinder as
Annexure-2, photocopy of the agreement dated
19.01.2011 stated to have been arrived at with the
respondent, which allegedly contains original signatures
of the parties. According to the petitioner, the original of
the agreement is in the possession of the respondent.
Since the petitioner has placed on record a copy of the
agreement which allegedly contains the signatures of
the parties in original, the same would suffice.
Accordingly, the said document filed as Annexure-2 at
pages 186 to 190 of the Part-I file be sealed and be sent
to the CFSL for obtaining fresh report in terms of the
order dated 26.07.2013. Adjourned to 21.05.2014.”
72. Once the Hon’ble High Court exercising jurisdiction under
Section 11 was satisfied regarding the existence of the arbitration
agreement and referred the disputes to arbitration, the petitioner
cannot be permitted to reopen the same issue in the guise of a
challenge under Section 34.
73. It is also noteworthy that the Petitioner has adopted
mutually inconsistent stands in the present proceedings. On the
one hand, the Petitioner has sought to completely deny the
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 43 of 55
existence of any written agreement between the parties. On the
other hand, the Petitioner has relied upon the very same alleged
draft agreement to contend that the Respondent failed to fulfill his
obligations thereunder, particularly the assurance of generating
business to the tune of approximately Rs. 3 crores per annum for
the Petitioner’s resort and of dealing exclusively with the
Petitioner. On this basis, the Petitioner has further contended that
despite recording these findings in the award with regard to the
Respondent’s failure to adhere to his part of obligations, the
learned Arbitrator erroneously awarded a sum of Rs. 8,75,000/- in
favour of the Respondent.
74. Such a course is legally impermissible. A party cannot be
permitted to approbate and reprobate, or to accept and reject the
same instrument depending upon its convenience. Once the
Petitioner seeks to rely upon the terms of the agreement for the
purpose of alleging breach and claiming reliefs, the Petitioner
cannot simultaneously deny the very existence of the said
agreement.
75. The petitioner has further assailed the impugned arbitral
award on the ground that the learned Sole Arbitrator rejected the
petitioner’s claim for damages despite extensive documentary and
oral evidence having been placed on record.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 44 of 55
76. A perusal of the arbitral award reveals that the learned
Arbitrator had framed a specific issue in this regard, namely Issue
No. 9 – “Whether the respondent is entitled to recover damages
restricted to Rs. 1 crore from the claimant? OPR.” The said issue
has been duly considered and adjudicated in detail by the learned
Arbitrator after examining the pleadings, evidence, and
submissions of the parties.
77. While dealing with the said issue, the learned Arbitrator
first examined the circumstances in which the Petitioner started
the resort business and subsequently sold the same. The Tribunal
noted that the decision of the Petitioner to seek voluntary
retirement and start the resort was an independent decision taken
by her in consultation with her husband. It was further observed
that when the Petitioner first met the claimant-Respondent in
October 2010, the structure of the resort was already complete and
finishing work was in progress. The learned Arbitrator therefore
held that the claimant-Respondent could not be blamed for the
Petitioner’s independent decision to leave her government job and
enter into a new business venture.
78. Furthermore, the Tribunal also considered the circumstances
surrounding the sale of the resort and recorded that the Petitioner
had herself started searching for buyers in July/August 2011 and
there was no material on record to suggest that the claimant-
Respondent had instigated or compelled the Petitioner to sell the
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 45 of 55
resort. It was further noted that the claimant-Respondent had not
even been informed about the decision of the Petitioner to sell the
resort and that there was no evidence to show that any
consultation had taken place between the parties prior to such sale.
79. The learned Arbitrator further observed that the apparent
reason for the sale of the resort was that the business expectations
of the Petitioner were not fulfilled during the short period the
resort remained operational. However, in the absence of any
evidence demonstrating that the claimant-Respondent was
responsible for the sale of the resort or for the alleged financial
losses suffered by the Petitioner herein, the claimant-Respondent
could not be held liable for the same. The Tribunal also relied
upon the admissions made by the Petitioner during cross-
examination. It was noted that the Petitioner admitted that she had
not made any written complaint to the claimant-Respondent
regarding non-fulfilment of business procurement, nor had she
objected to the rates being charged from guests. The Petitioner
further admitted that she had not issued any written
communication expressing grievance against the claimant-
Respondent’s conduct of business and had not taken any steps to
terminate the arrangement with the claimant-Respondent during
the period the resort remained operational.The Tribunal further
referred to Section 55 of the Indian Contract Act and noted that the
Petitioner had the option to terminate the arrangement if the
claimant-Respondent failed to perform his obligations. However,
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 46 of 55
admittedly no such termination or avoidance of the contract took
place during the period the resort remained operational. The
findings of the Tribunal in this regard are reproduced as under:
“62. The sole purpose to engage the claimant was to procure
business for the resort. The claimant had assured to generate
business to the tune of Rs.3 crore in the first year itself. However,
it did not happen for various reasons for which both the parties
have blamed each other. The fact remains if the claimant was in
breach of the terms and conditions of the
agreement/understanding or he was allegedly sending the guests
on ‘commission basis’ unilaterally, there was no compulsion for
the respondent not to dispense with or terminate the services of
the claimant. Under Section 55 of the Contract Act, the promisee
is given the option to avoid the contract when the promisor fails
to perform the contract. However, at no stage, during the period
the resort remained in operation, the respondent terminated the
services of the claimant or avoided the contract. The respondent
was at liberty to engage any other independent person for
marketing the resort. In the cross-examination, the respondent
admitted that she had not approached any independent person for
marketing the resort when the claimant did not provide any
business throughout the month of February, 2011. It has come in
the cross-examination of the respondent that she had introduced
the claimant to Mandeep Gandhi and had informed him that the
claimant used to market for her resort. She did not complain to
Mandeep Gandhi if the claimant had not provided business to her
in terms of the agreement/understanding. It has further come on
record that Mandeep Gandhi had paid Rs.2 lacs to the claimant
but the said amount was returned by the claimant to Mandeep
Gandhi. The respondent did not examine Mandeep Gandhi to
ascertain as to how and under what circumstances cheque of Rs.
2 lacs was given to the claimant and why it was returned by him.
Apparently, till that time i.e. sale of resort, the respondent had no
grievance against the claimant.Ld. Counsel for the respondent
has failed to impress as to how the claimant whose only job was
to procure business for the resort of the réspondent on payment of
‘fee’ was liable for all the losses allegedly suffered by the
respondent for running the resort or in its alleged distress sale.
Admittedly, from 19.01.2011 till the sale of resort, no payments
whatsoever were made to the claimant for the services provided
by him.”
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 47 of 55
80. The learned Arbitrator analyzed the evidence on record and
returned a categorical finding that the petitioner had failed to
establish any actual loss attributable to the claimant-Respondent.
The Tribunal noted that the petitioner had not produced cogent
evidence to substantiate the alleged losses or to establish any
nexus between the claimant-Respondent’s conduct and the alleged
damages. The learned Arbitrator specifically observed that the
alleged losses were not supported by reliable evidence and that the
claim for damages was speculative in nature. The award records as
under:
“64.The respondent has not proved by adducing any cogent and
clinching evidence that the alleged losses suffered by her have
any nexus with the claimant or that he was responsible for it.
Apparently, the damages sought by the respondent are remote and
unreasonable.”
81. The Tribunal further elaborated the settled legal position
governing claims for damages under section 73 of the Indian
Contract Act, 1872 and held that compensation under the law can
only be granted where actual loss is proved. Section 73 explicity
highlights legislative intent by stating that such compensation is
not to be given for any remote and indirect loss or damage
sustained by reason of the breach. In this regard, the learned
Arbitrator observed:
“64. ……………………..It is clear that if loss in terms of money
can be determined, the party claiming the compensation must
prove the loss suffered by him. Existence of loss is sine qua non
under Section 73 of the Contract Act. In the instant case, no loss
is proved to have been suffered by the respondent on account ofOMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 48 of 55
the alleged breach of contract by the claimant. Compensation can
be given only for the damages or loss suffered. If damages/loss is
not suffered, the law does not provide for a windfall.”
81. Applying the said principle to the facts of the case, the
learned Arbitrator concluded that no material had been produced
to demonstrate that any loss had been suffered on account of the
claimant-Respondent’s alleged breach. The Tribunal further held:
“The damages sought by the respondent are imaginary and have
no nexus with the activities of the claimant.No worthwhile
evidence has come to show if the claimant was responsible in any
manner for any loss allegedly suffered by the respondent. No
independent public witness was examined by the respondent to
substantiate and corroborate her case.”
82. The learned Arbitrator also noted that no independent
witness or documentary evidence had been led by the petitioner to
substantiate the alleged losses, thereby rendering the claim for
damages unsustainable. The learned Arbitrator also took note of
the fact that litigation between the parties commenced only after
the claimant-Respondent served a legal notice dated 13.08.2012
seeking consultancy charges, whereafter the Petitioner initiated
criminal proceedings against the claimant-Respondent. The
Tribunal recorded that the claimant-Respondent had been
discharged in the said criminal case and that the subsequent
remedies pursued by the Petitioner did not yield any favourable
outcome.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 49 of 55
83. Furthermore, a bare perusal of the record, however, reveals
that the Petitioner had initially raised a claim for damages
amounting to Rs. 21.5 crores. Subsequently, the Petitioner
restricted the said claim to Rs. 2 crores and thereafter further
reduced the claim to Rs. 1 crore before the Arbitral Tribunal. The
said successive and substantial reductions in the quantum of
damages claimed itself casts doubt on the credibility and
substantiation of the Petitioner’s claim. The same prima facie
indicates that the claim for damages was speculative and
unsupported by cogent material.
84. In view of the aforesaid findings, the learned Arbitrator
concluded that the respondent had failed to establish entitlement to
damages.
85. This Court finds that the above findings are based on
appreciation of the evidence on record, including the admissions
made during cross-examination of the Petitioner herein, and
constitute a reasoned determination of the issue framed by the
Tribunal. The petitioner has failed to demonstrate that the said
findings suffer from perversity, patent illegality, or violation of the
fundamental policy of Indian law so as to warrant interference
under Section 34 of the Arbitration and Conciliation Act, 1996. It
is settled law that in proceedings under Section 34, this Court does
not sit in appeal over the findings of the arbitral tribunal and
cannot undertake a re-appreciation of evidence merely because
another view may be possible. Accordingly, the objection raised
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 50 of 55
by the petitioner assailing the rejection of the claim for damages is
without merit and is hereby rejected.
86. Furthermore, it is the objection of the petitioner that despite
recording findings that the respondent had failed to generate
adequate business for the petitioner’s resort and had not achieved
the projected business of approximately Rs. 3 crore per annum,
and further noting that the respondent was not working
exclusively for the petitioner, the Ld. Arbitrator nevertheless
awarded a sum of Rs. 8.75 lakhs in favour of the respondent
towards consultancy charges. This Court has considered the said
objection and finds no merit in the same.
87. A perusal of the arbitral award reveals that the Ld.
Arbitrator has dealt with the issue of consultancy charges in detail
while adjudicating Issue No. 1 and Issue No. 4, and has
interpreted the terms of the agreement in a balanced and
harmonious manner after appreciating the entire evidence on
record. The Tribunal has noted that as per the agreement dated
19.01.2011, the respondent was entitled to consultancy charges of
Rs. 2.5 lakhs per month, however, the respondent had failed to
generate the anticipated volume of business and had effectively
provided business only for a limited period. Taking into account
the factual matrix, the Ld. Arbitrator consciously refrained from
awarding the consultancy charges for the entire contractual period.
Instead, the Tribunal limited the entitlement of the respondent
only to the period during which he had actually rendered services
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 51 of 55
and brought guests to the resort, namely from 16.03.2011 to
28.06.2011, thereby ensuring that the respondent was
compensated only for the work actually performed.
88. The Tribunal has specifically observed that the respondent
had not provided any business prior to 15.03.2011 and had
stopped bringing guests after 28.06.2011, and therefore he could
not be permitted to claim consultancy charges for the entire
contractual duration as that would amount to unjust enrichment.
Accordingly, the consultancy fee was restricted to the said
operative period only.
89. Thus, far from granting the claim mechanically, the Ld.
Arbitrator moderated the contractual entitlement in order to do
complete justice and equity between the parties, while ensuring
that neither party derived an unfair advantage. It is further
noteworthy that during the course of evidence, the petitioner’s
husband had admitted that no consultancy charges were paid to the
respondent despite the business brought by him to the resort. The
Tribunal has taken this admission into account while determining
the respondent’s limited entitlement to remuneration. Furthermore,
with regard to the Petitioner’s repeated objection concerning the
alleged reliance upon a tampered and forged agreement dated
19.01.2011, the Ld. Arbitrator duly recorded that even the email
dated 30.11.2010 sent by the Respondent to the Petitioner’s
husband-receipt of which has not been denied also incorporates
that the respondent would be entitled to Rs. 2.5 lakhs per month as
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 52 of 55
consultancy fee for marketing the resort of the respondent. The
same is reproduced as under-
“33. This Tribunal is of the view that the claimant shall be
entitled to consultancy charges/remuneration @ Rs.2.5/- lacs per
month as agreed to in the ‘agreement’ only for the period, he
effectively worked for the resort to provide business under the
‘agreement’. In the e-mail dated 30.11.2010 (Annexure 7) sent by
the claimant to the respondent’s husband J. K. Singh, the final
terms and conditions were sent for approval after meeting. The
receipt of this e-mail has not been denied. This email also
incorporates that the claimant would be entitled to Rs.2.5/-lacs
per month as consultancy fee for marketing of the resort of the
respondent. It lends credence to the claimant’s contention that he
was entitled to receive Re 2.5/. lac per month as consultancy fee.”
90. In light of the above reasoning, this Court finds that the Ld.
Arbitrator has adopted a fair, balanced and reasoned approach
while awarding the sum of Rs. 8.75 lakhs in favour of the
respondent. The finding is based on appreciation of evidence,
interpretation of contractual terms and equitable considerations,
which fall squarely within the domain of the arbitral
tribunal.Accordingly, the objection raised by the petitioner against
the award of Rs. 8.75 lakhs towards consultancy charges is found
to be devoid of merit and is hereby rejected.
91. The Arbitrator has not altered the contractual terms; rather,
he interpreted the agreement dated 19.01.2011 in accordance with
the statutory limitations imposed by the Contract Act and the
settled jurisprudence of the Hon’ble Supreme Court. Interpretation
of contract terms falls squarely within the domain of the arbitrator,
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 53 of 55
as held in McDermott International Inc. v. Burn Standard Co.
Ltd. [(2006) 11 SCC 181].
92. The finality of arbitral decisions is a cornerstone of
arbitration. The petitioner’s challenge to the award lacks
substantive merit and does not meet the high threshold for setting
aside an arbitral award. The Tribunal provided both parties with
adequate opportunity to present their cases. The Tribunal’s
adherence to due process and fair hearing principles ensures that
the award is not vitiated by procedural irregularities.
93. In the circumstances, I find no ground to hold that the
award suffers from patent illegality or perversity. The objections
are founded on re-agitation of factual disputes already adjudicated
upon by the Arbitrator. This Court cannot reappreciate such
findings under the limited ambit of Section 34.
CONCLUSION
94. In view of the foregoing discussion, this Court finds that
none of the objections raised by the petitioner disclose any ground
warranting interference with the impugned arbitral award within
the limited scope of judicial review under Section 34 of the
Arbitration and Conciliation Act, 1996. The grounds urged by the
petitioner are essentially directed at re-appreciation of evidence
and reconsideration of findings of fact returned by the learned
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 54 of 55
Arbitrator, which is impermissible in proceedings under Section
34. The arbitral award demonstrates that all the concerns and
issues raised by the parties were duly considered and adjudicated
by the learned Arbitrator through a reasoned analysis of the
pleadings, evidence and contractual terms. No patent illegality,
perversity or violation of the fundamental policy of Indian law has
been shown by the petitioner.
95. Accordingly, the objections raised by the petitioner fall
outside the scope of interference under Section 34 of the Act and
the present petition is dismissed, leaving the parties to bear their
own costs. File be consigned to record room after due
compliance.
Announced & dictated Digitally signed
in the open Court on this
Neelam by Neelam singh
Date:
6th day of March, 2026 singh 2026.03.06
16:21:30 +0530
(NEELAM SINGH)
District Judge
(Commercial Court-05)
South-East District, Saket Courts,
New Delhi
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 55 of 55
