Delhi District Court
Ashok Kumar vs Bombay Mercantile Co Operative Bank Ltd on 15 April, 2026
IN THE COURT OF Sh. RAJESH KUMAR GOEL
District Judge (Commercial Court) -02,
Central, Tis Hazari
OMP (COMM.) No.144/2023
CNR No.DLCT010117602023
In the matter of
( As per amended memo of parties)
Ashok Kumar
S/o Sh. Sadan Lal
R/O 5352-E 3rd Floor,
Laddos Ghati, Shora Kothi,
Pahar Gang,
Delhi -110055 ......Petitioner
Versus
Bombay Mercantile Cooperative Bank Ltd.
Through Its Chairman
At: 36, Netaji Subhash Marg,
Darya Ganj,
New Delhi 110002 ......Respondent
Date of filing of Petition : 21.08.2023
Date of arguments : 11.04.2026
Date of Order : 15.04.2026
Order :
1. Vide this order, I shall dispose of the present
Digitally
RAJESH
signed by
RAJESH
KUMAR
petition/objections under section 34 of Arbitration
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 1 of 33 )
& Conciliation Act, 1996 ( hereinafter referred to as
'Act') filled by the petitioner Ashok Kumar against
the respondent Bombay Mercantile Cooperative
Bank Ltd through its Chairman assailing the award
dated 17.11.2018 passed by the Arbitral Tribunal
( herein after referred to as "Impugned Award").
2. Ashok Kumar who is stated to be the
proprietor of M/s Shakti General Store ( herein after
referred to as 'petitioner') was arrayed as the respondent
no.1 before the Arbitral Tribunal and Bombay
Mercantile Cooperative Bank Ltd (herein after
referred to as "claimant bank") was the Claimant before
the Arbitral Tribunal. Rais Khan and Nasir Khan
were arrayed as R-2 and R-3 respectively before the
Arbitral Tribunal.
3. It is pertinent to mention here that initially the
present petition was filed against three respondents
i.e Bombay Mercantile Cooperative Bank Ltd (R-1),
Rais Khan (R-2) and Nasir Khan (R-3). During the
pendency of the present petition, it was stated on
behalf of the petitioner that he is not pressing any
relief against Rais Khan (R-2) and Nasir Khan(R-3)
Digitally
signed by
RAJESH
and vide order dated 31.05.2024, R-2 and R-3 were
RAJESH KUMAR
KUMAR
dropped from the array of the respondents,
GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
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consequently, amended memo of parties came to be
filed.
Facts of the case:
4. The briefly stated facts of the case is that the
claimant bank is claiming to have extended a loan
facility for working capital to the extent of Rs
2,50,000/- on 10.7.1997 to the petitioner against
execution of the loan document on 15.07.1997; Rais
Khan (R-2) and Nasir Khan (R-2) ( already
dropped) stood as guarantor; the loan had been
granted against the hypothecation of stocks in
trade/working capital; after availing the loan
facility, the petitioner did not adhere to the
financial discipline and a dispute arose. It is being
claimed that as per the provision of Multi State Co-
operative Societies Act,2002, since the petitioner
was the member of the claimant bank, the matter
was referred to the Arbitral Tribunal for
adjudication of the dispute.
Proceedings before the Arbitral Tribunal
5. The Arbitral Tribunal registered the claim on
Digitally
16.08.2014 and notices were directed to be issued to
signed by
RAJESH
RAJESH
KUMAR
KUMAR
GOEL
Date:
the respondents therein including the petitioner; on
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1.11.2014, the Arbitral Tribunal recorded that the
petitioner has been duly served but none is present
on his behalf so the petitioner was proceeded
exparte. Pertinent to mention that Rais Khan (R-2)
and Nasir Khan (R-3) were served through
publication and they were also proceed exparte vide
order dated 30.05.2015 by the Arbitral Tribunal.
6. From the arbitral records, it is evident that on
07.11.2015, the Arbitral Tribunal heard the
arguments on behalf of the claimant bank and it was
observed that the claimant bank has proved its case
beyond doubt against the respondents including
petitioner and the claimant bank was directed to
supply the stamp paper for passing the award.
7. From the proceedings of the Arbitral
Tribunal, it is further evident that the arbitration
proceedings were transferred to another Arbitral
Tribunal on 16.2.2017, on the basis that terms of the
previous Arbitrator had already been completed.
Ultimately the impugned award came to be passed
by the new Arbitral Tribunal .
8. The petitioner has challenged the impugned
Digitally
signed by
RAJESH RAJESH
KUMAR award on the basis of certain grounds as mentioned
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 4 of 33 )
in the petition and the same were reiterated during
the arguments as well. Similarly, the claimant bank
in its reply to the present petition has raised certain
contentions which were reiterated by the Ld.
Counsel for the claimant bank during the arguments.
For the sake of brevity, the averments made in the
pleadings i.e petition and reply filed thereto and the
arguments made are not being produced separately
as it would be reproduction of the same contentions.
That being so, this court would be considering the
respective contentions of the parties raised by way
of the present petition and reply thereto and also the
contentions raised during the arguments.
9. The petitioner has assailed the impugned
award, mainly on the following grounds :
i. The Arbitral Tribunal considered the claim
which was time barred and also the Arbitral
Tribunal took more than two years to
pronounce the award after hearing was
concluded; thus, the impugned award is
against the public policy.
ii. The petitioner never received any notice of the
arbitration proceedings; the arbitration
proceedings were initiated after the gap of 17
years; the petitioner had already left the
address on which the Arbitral Tribunal had
issued the notices.
Digitally
signed by
RAJESH RAJESH
KUMAR iii. The invoking of the arbitration clause by the
KUMAR GOEL
claimant bank was not proper as the petitioner
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
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never agreed to the same.
iv. The petitioner ceases to be the member of the
claimant bank since the year 2004 and the
liabilities have already been discharged; not
even a single document was produced by the
claimant bank before the Arbitral Tribunal
indicating that the petitioner was still the
member of the claimant bank.
v. The proceedings, as conducted by the Arbitral
Tribunal are against the established legal
norms and the Tribunal has considered the
evidence which was never proved or was not
on record; there is apparent illegality in the
impugned award.
vi. Regarding the limitation, it was stated that in
terms of section 31 (5) of the Act, the Arbitral
Tribunal was supposed to serve the signed
copy of the award on the petitioner which was
never served; the petitioner was supplied the
copy of the award alongwith the execution
petition on 26.05.2023 and then only, the
petitioner came to know about the passing of
the impugned award. The present petition was
instituted on 21.8.2023 which is within the
period of limitation.
vii. Ld. Counsel for the petitioner has referred to
few judicial authorities in the petition but the
copies of the following only were placed on
record:-
(a) Delhi Development Authority vs M/S
R.S.Sharma and Company, New Delhi. CA
2424/2002, SC D.o.D 26.8.2008.
(b) Mercedes Benz Financial Services India
Pvt. Ltd Vs M/S Khokher Enterprises, EFA
(Comm) 5/2023, DHC, D.o.D 16.01.2024
(c) Dakshin Haryana Bijli Vitran Nigam Ltd vs
M/s Navigant Technologies Pvt. Ltd, AIR
Digitally 2021 SC 2493.
signed by
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 6 of 33 )
10. The claimant bank has contested the present
petition raising following contentions which were
reiterated by the Ld. Counsel for the claimant bank
during the arguments also:-
(a) Since, the petitioner is the member of the
claimant bank which is duly registered
under Multi State Co-operative Societies
Act,2002 ( herein after referred to as "
societies Act") therefore, under section
84 of the societies Act, in case of dispute
the Central Registrar of the societies has
been empowered to refer the dispute to
the Arbitral Tribunal; accordingly, the
present dispute was referred to the
Arbitral Tribunal.
(b) By referring to the provision of section 85
of the societies Act, it was stated that the
claim filed by the claimant bank was
within the period of limitation which was
duly considered by the Arbitral Tribunal.
(c) The petitioner was duly served the notice
issued by the Arbitral Tribunal but despite
that the petitioner did not appear and he
was proceeded exparte; the contention of
the petitioner that he has already left the
given address is contrary to the record
because one of the addresses of the
petitioner, as mentioned in the claim
petition filed before the Arbitral Tribunal,
is the same address which has been
mentioned by the petitioner in the present
petition.
(d) The petitioner has not placed on record
any document even before this court
Digitally
signed by
indicating that he ceases to be a member
RAJESH RAJESH
KUMAR of the claimant bank since the year 2004.
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
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(e) Ld. Counsel for the claimant bank has
placed reliance on the case titled as
NAJMUS SEHAR vs. Bombay Mercantile
Bank & Ors, 2023 DHC 3664 Del.
11. I have perused the record and heard the Ld.
Counsel for the petitioner and the respondent. I have
also gone through the case laws cited at the bar.
Whether the present petition is within limitation or not?
12. In the present case, the impugned award is
dated 17.11.2018. The present petition has been
filed on 21.08.2023. On the face of it one can say
that the same is barred by limitation. Ld. Counsel
for the petitioner by referring to the provision of
section 31(5) of the Act, pointed out that Arbitral
Tribunal was supposed to supply the signed copy of
the award which has not been supplied till date,
therefore, the limitation could have started from the
date when the said copy is supplied. According to
the petitioner, the petitioner was never served the
signed copy of the impugned Award and the
petitioner came to know about the impugned award
when the appearance was put on behalf of the
petitioner before the Ld. Executing Court on
Digitally
26.05.2023; the present petition was filed on
signed by
RAJESH
RAJESH
KUMAR
KUMAR
GOEL
Date:
21.08.2023 which is well within the period of
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
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limitation.
13. Ld. Counsel for the claimant bank stated that
the petitioner was proceeded exparte as he did not
join the proceedings despite the service of the notice
issued by the Arbitral Tribunal. One of the
addresses of the petitioner was the same as
furnished by the petitioner in the present
proceedings, therefore, the petitioner has no right to
say that the petitioner was never served the copy of
the impugned award.
14. Since the determination of the preliminary
issue of limitation goes to the root of the matter,
therefore, firstly, I would be deciding the issue
regarding the limitation.
15. Before proceeding further, it is relevant to
refer to Section 34(3) of the A&C Act, which reads
as under:--
"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.
Digitally Provided that if the Court is satisfied that the applicant
signed by
RAJESH RAJESH
KUMAR
was prevented by sufficient cause from making the
KUMAR GOEL
Date: application within the said period of three months it may
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entertain the application within a further period of thirty
days, but not thereafter."
16. A plain reading of Section 34(3) of the Act,
shows that the statutory period of limitation for
filing the Objections under Section 34 of the Act,
against the Award is three months. As per the
Proviso to the Section, an extended period of 30
days is available and the Court has powers to
condone the delay provided, sufficient cause is
shown for not filing the petition within the statutory
period.
17. The Limitation Period of 3 months plus 30
days is inelastic and inflexible, and any delay of
even one day beyond this period cannot be
condoned by the Court as has been held by the
Hon'ble Supreme Court of India in the case of
Union of India vs. Popular Construction, (2001) 8 SCC
470 and Simplex Infrastructure Ltd. vs. Union of India
2019 (2) SCC 455.
18. Here I may also refer to the provisions of
Section 31 of the Act, as pressed into service by the
Ld. Counsel for the petitioner. Under Sect5ion 31 of
the Act, there is a legal requirement of signing the
Digitally
signed by
RAJESH RAJESH
KUMAR arbitral award by a sole arbitrator, or the members
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 10 of 33 )
of a Tribunal. Section 31 provides that:
"31. Form and contents of arbitral award.--(1) An
arbitral award shall be made in writing and shall be
signed by the members of the Arbitral Tribunal.
(2) For the purposes of sub-section (1), in arbitral
proceedings with more than one arbitrator, the signatures
of the majority of all the members of the Arbitral
Tribunal shall be sufficient so long as the reason for any
omitted signature is stated.
***
(4) The arbitral award shall state its date and the place
of arbitration as determined in accordance with Section
20 and the award shall be deemed to have been made at
that place.
(5) After the arbitral award is made, a signed copy shall
be delivered to each party.”
19. Section 31(1) of the Act is couched in
mandatory terms, and provides that an arbitral
award shall be made in writing. An award takes
legal effect only after it is signed by the Arbitrator,
which gives it authentication. The legal requirement
under sub-section (5) of Section 31 of the Act is the
delivery of a copy of the award signed by the
members of the arbitral tribunal / arbitrator, and not
any copy of the award. On a harmonious
construction of Section 31(5) read with Section
34(3) of the Act, the period of limitation prescribed
for filing objections would commence only from the
date when the signed copy of the award is delivered
RAJESH
Digitally
signed by
RAJESH
to the party making the application for setting aside
KUMAR
KUMAR GOEL
Date:
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Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
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the award.(Dakshin Haryana Bijli Vitran Nigam Ltd. v.
Navigant Technologies (P) Ltd., (2021) 7 SCC 657 and
Union of India v. Tecco Trichy Engineers &
Contractors, (2005) 4 SCC 239).
20. Coming back to the present case, I have
perused the Arbitral records and tried to find out
even the copy of any communication, tracking
report, postal receipts indicating that after passing
the impugned award, efforts were made to send the
copy of the impugned award to the petitioner but the
same could not be traced. Here I may mention that
the service of notice on the petitioner issued by the
Arbitral Tribunal to join the arbitration proceedings
cannot be equated with the statutory requirements of
sending the signed copy of the Award to the
petitioner.
21. The consequences of non appearance of the
petitioner before the Arbitral Tribunal despite the
service would have been to proceed exparte against
the petitioner which course had taken place in the
present case. Even if the petitioner was exparte and
the petitioner did not join the arbitral proceedings,
Digitally
signed by
it did not absolve the Arbitral Tribunal from sending
RAJESH
RAJESH
the signed copy of the impugned award.
KUMAR
KUMAR GOEL
Date:
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22. In the given circumstances, nothing has been
brought on record or even shown prima facie
indicating that the signed copy of the Impugned
Award was either sent or served on the petitioner.
Thus, the contention of the petitioner that he has
received the copy of Impugned Award on
26.05.2023 needs to be accepted. The present
petition was instituted on 21.08.2023, which is
within the period of limitation. Therefore, the
contention of the claimant bank that the present
petition is barred by limitation being devoid of
merits, is hereby rejected.
Whether the impugned award is against public policy
and also if there is patent illegality or not?
23. It is no more res integra that the legislative
intent with which the 1996 Act is made, Section 5
and Section 34 of the 1996 Act would make it clear
that judicial interference with the arbitral awards is
limited to the grounds in Section 34. While deciding
applications filed under Section 34 of the Act,
Courts are mandated to strictly act in accordance
within the confines of Section 34, refraining from
Digitally
appreciation or re-appreciation of matters of fact as
signed by
RAJESH
RAJESH
KUMAR
KUMAR
GOEL
Date:
well as law. Thus, the judicial interference, if any, is
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provided inter-alia only by means of Sections 34
and 37 of the Act respectively.
24. The bare perusal of section 34 mandates a
narrow lens of supervisory jurisdiction to set aside
the arbitral award strictly on the grounds and
parameters enumerated in sub-section (2) & (3)
thereof, which inter-alia provide for the grounds on
which an arbitral award is liable to be set aside.
25. According to the aforesaid provision of law,
the interference is permitted where the award is
found to be in contravention to public policy of
India i.e. if the award is induced or affected by fraud
or corruption or is in contravention with the
fundamental policy of Indian law or it is in conflict
with most basic notions of morality and justice.
Thus, a plain reading of Section 34 reveals that the
scope of interference by the court with the arbitral
award under Section 34 is very limited and the court
is not supposed to travel beyond the aforesaid scope
to find out if the award is good or bad.
26. It is also, a settled proposition of law as has
been constantly observed by Hon’ble Supreme
Digitally
signed by
RAJESH RAJESH
KUMAR Court that the courts exercising jurisdiction under
KUMAR GOEL
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section 34 do not sit in appeal over the arbitral
award hence they are not expected to examine the
legality, reasonableness or correctness of findings
on facts or law unless they come under any of
grounds mandated in the said provision.
27. Also, pertinent to note that an arbitral award
is not liable to be interfered with only on the ground
that the award is illegal or is erroneous in law that
too upon reappraisal of the evidence adduced before
the arbitral trial. Even an award which may not be
reasonable or is non-speaking to some extent cannot
ordinarily be interfered with by the courts. It is also
well settled that even if two views are possible there
is no scope for the court to reappraise the evidence
and to take the different view other than that has
been taken by the Arbitral Tribunal. The view taken
by the Arbitral Tribunal is normally acceptable and
ought to be allowed to prevail. Further, for setting
aside of the impugned order on the ground of
“patent illegality”, as raised in the present cases
also, there must be patent illegality appearing on the
face of the award, which refers to such illegality as
Digitally
goes to the root of the matter but which does not
signed by
amount to mere erroneous application of the law.
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
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28. There are a plethora of judgments on the
settled proposition of law. Instead of loading this
order with judgements, I may just give their
references i.e. Bharat Coking Coal Ltd. v. L.K. Ahuja,
(2001) 4 SCC 86 , Dyna Technology Private Limited v.
Crompton Greaves Limited, (2019) 20 SCC 1, Konkan
Railway Corporation Limited v. Chenab Bridge Project
Undertaking,(2023) 9 SCC 85, MMTC Ltd. v. Vedanta
Ltd. (Supra), Ssangyong Engg. & Construction Co. Ltd.
v. NHAI, (2019) 15 SCC 131 ) and Batliboi
Environmental Engineers Ltd. v. Hindustan Petroleum
Corpn. Ltd., (2024) 2 SCC 375
29. Hence, in the light of the settled proposition
of law, the contentions so raised on behalf of the
petitioner need to be examined.
30. I have carefully perused the Arbitral records
including the impugned award. Having gone
through the records, it would be difficult to approve
the impugned award, consequently is liable to be set
aside.
31. One of the contentions raised on behalf of the
Digitally
RAJESH
signed by
RAJESH
KUMAR
petitioner is that there is an inordinate delay in
KUMAR GOEL
Date:
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concluding the arbitral proceedings and the
impugned award was passed almost after two years
after hearing the arguments. The issue of delay in
the delivery of an arbitral award is relevant now
only in the context of the period prior to insertion of
Section 29A in the Act , which put in place stringent
timelines for passing of an arbitral award. During
that earlier era, the question as to whether long
delay in the passing of the award would impact its
validity, to the extent of that award being set aside
on that ground under Section 34 of the Act, was
considered by different courts. In this regard I may
refer to the recent case of Lancor Holdings Limited
vs Prem Kumar Menon and others, 2025 SCC OnLine
SC 2319, wherein it was observed:-
“14. Now, turning to the statutory scheme, we may
first note that Section 23 of the Act of 1940 provided
that the Court shall, by order, refer the matter in
difference in any suit to the arbitrator and shall, in the
order, specify such time as it thinks reasonable for the
making of the award. Section 28(1) of the Act of 1940
empowered the Court, if it thought fit, irrespective of
whether the time for making the award had expired or
not and whether the award had been made or not, to
enlarge the time for making the award. Section 28(2)
thereof dealt with enlargement of time for making the
award with the consent of the parties and stated that
any provision in the arbitration agreement, whereby
the arbitrator was empowered to enlarge the time for
Digitally
signed by making the award without the consent of the parties,
RAJESH
RAJESH
KUMAR
KUMAR
GOEL
would be void and of no effect.
Date:
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However, no such time stipulations found mention in
the Act of 1996 till the insertion of Section 29A
therein, vide Amendment Act No. 3 of 2016, with
retrospective effect from 23.10.2015. Thereby, time
for the making of domestic arbitral awards was
mandatorily fixed by requiring the same to be
pronounced within 12 months from the date of
completion of the pleadings under Section 23(4) of the
Act of 1996. Power to extend that time was conferred
upon the parties, under Section 29A(3) of the Act of
1996, subject to a maximum period of 6 months.
Section 29A(4) of the Act of 1996, however,
empowered the Court to grant further extension of
time if sufficient cause was shown therefor.
15. Prior to insertion of Section 29A in the statute
book, in the event of failure of an arbitrator to act
without undue delay, recourse was provided under
Section 14 of the Act of 1996 to dual remedies – by
approaching the arbitrator first and, then, the Court.
Section 14(1)(a) states that the mandate of an
arbitrator would stand terminated if he either becomes
de jure or de facto unable to perform his functions or,
for other reasons, fails to act without undue delay.
Section 14(2) states that, if a controversy remains
concerning any of the grounds referred to in Section
14(1)(a), a party may, unless otherwise agreed by the
parties, apply to the Court to decide on the termination
of the arbitrator’s mandate. Though it is argued before
us that recourse must necessarily be taken to this
remedy under Section 14(2) if a party is aggrieved by
long delay on the part of an arbitrator in delivering the
arbitral award, we may observe that, in reality, a party
to an arbitration proceeding would not willingly
choose to incur the risk of provoking the wrath of the
arbitrator by moving such an application as, in the
event of failing in that endeavour, the very same
arbitrator would continue with the arbitration
proceedings and deliver a verdict. Being human, an
Digitally
signed by
arbitrator, who is unsuccessfully subjected to a
RAJESH RAJESH
KUMAR proceeding seeking the termination of his/her mandate
KUMAR GOELGOEL Date:
2026.04.16
under Section 14(2), on grounds of his/her personal
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failure, may well be prone to bias against the party
who had subjected him to such process. Therefore,
notwithstanding this remedy provided by the statute, to
what extent it has actually been of use is open to
question. Though Section 34(2)(b) of the Act of 1996
speaks of an award being set aside if it is in conflict
with the public policy of India and Explanation 1
thereto elucidates that an award would be construed to
be so if it is against the most basic notions of morality
or justice or if the making of the award was induced or
affected by fraud or corruption, it would be rather
difficult for a party to establish the bias that may
develop if the arbitrator bears a grudge against the
party who had unsuccessfully taken him/her to Court
under Section 14(2) of the Act of 1996. Therefore, one
would not ordinarily come across an instance of a
party to the arbitration unilaterally approaching the
Court under Section 14(2) of the Act of 1996, thereby
taking on the risks involved therein.
16. It is perhaps for this reason that the Act of 1996
came to be amended, with retrospective effect from
23.10.2015, so as to curb possible delays on the part of
arbitrators more effectively. The Statement of Objects
and Reasons dated 25.11.2015 of Amendment Act No.
3 of 2016 sets out that the Act of 1996 was enacted to
provide for speedy disposal of cases relating to
arbitration with least amount of intervention by the
Courts but, with passage of time, some difficulties in
the applicability of the Act of 1996 were noticed.
Therefore, amendments were proposed to be made in
the Act of 1996 to facilitate and encourage alternative
dispute mechanisms, especially arbitration, ‘for
settlement of disputes in a more user-friendly, cost
effective and expeditious disposal of cases, as India
was committed to improve its legal framework to
obviate delay in disposal of cases’. In this regard, an
amendment was proposed that an arbitral tribunal
should make its award within a period of 12 months
from the date it enters upon the reference, giving
Digitally
signed by
liberty to the parties to extend such period up to 6
RAJESH RAJESH
KUMAR months, beyond which extension could only be
KUMAR GOEL
GOEL Date:
2026.04.16
granted by the Court on sufficient cause being shown.
12:47:24
+0530Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 19 of 33 )
17. Notably, on the issue of a ‘dilatory arbitrator’,
Russel on Arbitration17 states that an arbitral tribunal
is required to conduct proceedings and adopt
procedures that would avoid unnecessary delay and
refusal or failure to conduct the proceedings or make
an award with reasonable dispatch can lead to that
tribunal’s removal, although the delay would have to
be truly exceptional so as to cause substantial injustice
to the applicant. As to what would be reasonable
dispatch was stated to depend on circumstances – for
instance, a decision in a ‘documents-only’ case may be
expected more quickly than in an arbitration where the
testimony of many witnesses has to be considered. It
was further stated that a delay of 12 months in
publishing an award was inordinate and was capable
of founding an application to have that award set
aside.
18. Similarly, on ‘Duty to act promptly’ in Chapter 5,
titled ‘Powers, Duties, and Jurisdiction of an Arbitral
Tribunal’, Redfern and Hunter18 states thus:
An arbitral tribunal has an obvious moral
obligation to carry out its task with due
diligence. Justice delayed is justice denied.
Some systems of law endeavour to ensure that
an arbitration is carried out with reasonable
speed by setting a time limit within which an
arbitral tribunal must make its award. The time
limit fixed is sometimes as short as six months
(as in the ICC rules), although generally it may
be extended by consent of the parties, or at the
initiative of the institution or the tribunal. If an
award is not made within the time allowed, the
authority of the arbitral tribunal may be regarded
as having terminated, with the risk that any
award will be null and void. Some systems of
law provide that an arbitrator who fails to
proceed with reasonable speed in conducting the
arbitration and making his or her award may be
removed by a competent court, and deprived of
any entitlement to remuneration. The Model
Digitally
signed by
RAJESH
Law provides that the mandate of an arbitrator
RAJESH KUMAR terminates if he or she ‘fails to act without
KUMAR GOELGOEL Date:
2026.04.16 undue delay'.
12:47:22
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 20 of 33 )
The learned authors pointed out that though the
above sanctions may act as a spur to the indolent
arbitrator, they do not compensate a party who
suffered financial loss as a result of delay in the
conduct of the arbitration. It was noted that
delay in the conduct of an arbitration may have
serious financial consequences as awards of
interest rarely compensate a party for the
financial loss suffered in the interim. It was
pointed out that faced with increasing delays in
the conduct of arbitrations, major institutions
revised their rules to improve the speed and
efficiency of arbitrations. Though the above
observations were made in the context of
international arbitrations, the same principle
would hold good for domestic arbitrations also.
Therefore, when the Arbitrator presently took
years together to deliver the Award, the least
that the parties would expect is a quietus being
given to their disputes instead of being relegated
to another round of arbitration/litigation. The
Arbitrator, therefore, failed to live up to that
minimal expectation reposed in him by law and
by the parties themselves.
19. However, the undeniable fact remains that Section
34 of the Act of 1996 does not postulate delay in the
delivery of an arbitral award as a ground, in itself, to
set it aside. There is no gainsaying the fact that
inordinate delay in the pronouncement of an arbitral
award has several deleterious effects. Passage of time
invariably debilitates frail human memory and it
would be well-nigh impossible for an arbitrator to
have total recall of the oral evidence, if any, adduced
by witnesses; and the submissions and arguments
advanced by the parties or their learned counsel. Even
if detailed notes were made by the arbitrator during the
process, they would be a poor substitute to what is
fresh in the mind immediately after conclusion of the
hearings in the case. More importantly, such delay, if
unexplained, would give rise to unnecessary and
Digitally
signed by
wholly avoidable speculation and suspicion in the
RAJESH RAJESH
KUMAR minds of the parties. Absolute faith and trust in the
KUMAR GOEL
system is essential to make it work the way it is
Date:
GOEL 2026.04.16
12:47:21
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 21 of 33 )
intended to. Once that belief is shaken, it would lead to
a breakdown of that system itself. A situation that is to
be eschewed at all costs.
20. That being said, we must also recognize that, in the
usual course, long delay in the passing of arbitral
awards is not the norm. However, when an instance of
undue delay in the delivery of an arbitral award
occasionally crops up, given the weighty
preponderance of judicial thought on the issue with
which we are in respectful agreement, we are of the
considered opinion that each case would have to be
examined on its own individual facts to ascertain
whether the delay was of such import and impact on
the final decision of the arbitral tribunal, whereby that
award would stand vitiated due to the lapses
committed by the arbitral tribunal owing to such delay.
We are also conscious of the fact that there must be a
balance between the pace of the arbitration,
culminating in an arbitral award, and the satisfactory
meaningful content thereof. In this regard, in his
seminal article, titled ‘Arbitrators and Accuracy’19,
Professor William W Park says thus:
‘Although good case management values speed
and economy, it does so with respect for the
parties’ interest in correct decisions. The parties
have no less interest in correct decisions than in
efficient proceedings. An arbitrator who makes
the effort to listen before deciding will enhance
both the prospect of accuracy and satisfaction of
the litigants’ taste for fairness. In the long run,
little satisfaction will come from awards that are
quick and cheap at the price of being
systematically wrong.
Therefore, keeping in mind these competing
interests, it is only in cases where the negative
effect of the delay in the delivery of an arbitral
award is explicit and adversely reflects on the
findings in the said award, that such delay, and
Digitally
more so, if it remains unexplained, can be
signed by
RAJESH
construed to be a factor to set aside that award.
RAJESH
KUMAR
KUMAR
GOEL Once all the requirements, referred to supra, are
Date:
GOEL 2026.04.16
12:47:25
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 22 of 33 )
fulfilled in a given case and the arbitral award
therein is clearly riddled with the damaging
effects of the delay, it can be construed to be in
conflict with the public policy of India, thereby
attracting Section 34(2)(b)(ii) of the Act of
1996, or Section 34(2A) thereof as it may also
be vitiated by patent illegality. Further, it would
not be necessary for an aggrieved party to
invoke the remedy under Section 14(2) of the
Act of 1996 as a condition precedent to laying a
challenge to a delayed and tainted award under
Section 34 thereof. Both provisions would
operate independently as the latter is not
dependent on the former. This being the legal
position, we would have to examine whether the
present arbitral award suffers from any such
malady owing to the delay, whereby its very
validity would stand vitiated. Further, we would
also have to see whether the award is liable to be
set aside for falling short, as it did not resolve
the disputes between the parties but their
positions stood altered irreversibly owing to the
interim orders passed during the arbitral
proceedings. Lastly, if the award is liable to be
set aside, the relief to be granted.
******************
47. Arbitration, an alternative dispute resolution
mechanism, is envisioned as a substitute to time-
consuming and costly litigation in Courts. The aim and
objective of this mechanism is to ensure settlement of
disputes between parties with minimum intervention
by the Court. That is the reason why Section 34 of the
Act of 1996 is crafted in a manner so as to restrict the
grounds on which the arbitrator’s award can be set
aside. Unless the limited grounds stipulated in the
provision are made out, an arbitral award cannot be
invalidated. However, the very objective of the
exercise would be lost if, after the entire process, an
arbitrator fails to resolve the disputes between the
parties and leaves them high and dry with advice to
Digitally
signed by
initiate a fresh round of arbitration/litigation once
RAJESH RAJESH
KUMAR again. In his article, ‘Arbitrators and Accuracy’
KUMAR GOEL
GOEL Date:
2026.04.16
(supra), Professor William W Park says as follows:
12:47:24
+0530Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 23 of 33 )
“An arbitrator’s primary duty remains the
delivery of an accurate award, resting on a
reasonably ascertainable picture of reality.
Litigants wanting only quick or cheap solutions
can roll dice, and have no need of lawyers.
Evidentiary tools in arbitration should balance
sensitivity toward cost and delay against the
parties’ interest in due process and correct
decisions. If arbitration loses its moorings as a
truth-seeking process, nostalgia for a golden age
of simplicity will yield to calls for reinvention of
an adjudicatory process aimed at discovering the
facts, finding the law, and correctly construing
contract language…. Much of the criticism of
arbitration’s cost and delay thus tells only half the
story, often with subtexts portending a cure worse
than the disease. An arbitrator’s main duty lies not
in dictating a peace treaty, but in delivery of an
accurate award that rests on a reasonable view of
what happened and what the law says.’
48. The Arbitrator in this case took nearly 4 years to
conclude that he had no equitable relief to offer both
parties but held in favour of one side in all respects,
leaving it to the parties to start litigating again. He
conveniently opined that proper pleadings and
evidence had not been placed before him and,
therefore, he was constrained to relegate the parties to
another round of litigation, ignoring the fact that he
had already altered their positions and had benefitted
one party at the expense of the other. This approach on
the part of the Arbitrator, after dithering for nearly 4
years, served absolutely no purpose and reflected total
non-application of mind. The delay in the making of
the Award resulted in nearly four valuable years
passing away with no benefit to show for it. When the
public policy underlying resort to arbitration is to
make it a time-saving mechanism for resolving
disputes, this unexplained and pointless delay of the
Arbitrator in concluding the matter clearly pitted his
ineffective and futile Award against the public policy
of India.
Digitally
signed by
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:23
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 24 of 33 )
32. Adverting to the case at hand, in the present
case, the arbitral proceedings were initiated at the
request of the respondent in the month of August,
2104; the proceedings as recorded by the Arbitral
Tribunal indicate that the final arguments were
heard on 03.10.2015 and proceedings came to be
adjourned for 07.11.2015 for pronouncement of
order/award; on 07.11.2015 the respondent was
directed to supply the requisite stamp papers on or
before 16.01.2016. Subsequently the matter was
assigned to a new Arbitral Tribunal who appears to
have taken the charge of the proceedings on
16.02.2017 i.e after one year from the last
proceedings dated 16.01.2016 but the impugned
award came to be passed on 17.11.2018 which after
around three years from the date when arguments
were concluded.
33. From the aforesaid proceedings, as recorded
by the Arbitral Tribunal, it is evident that there is
exceptional delay in pronouncement of the
impugned award. Practically, the proceedings were
concluded by the Arbitral Tribunal on 3.10.2015 but
Digitally
the impugned award came to be passed on
signed by
17.11.2018. Not only that, after the termination of
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:21
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 25 of 33 )
the mandate of the first Arbitral Tribunal, it took
around one year to appoint the new Arbitral
Tribunal which is also not a reasonable time. It is
not the case that the dispute was so complex or the
number of the witnesses examined by the parties
were in large numbers and the Tribunal was to go
through the voluminous records. The petitioner
( respondent therein) has already been proceeded
exparte; only one witness has been examined by the
claimant bank who has placed reliance on 19-20
documents. Having said so, the final decision from
the Arbitral Tribunal was expected more quickly but
instead there was an inordinate delay in passing the
impugned award causing substantial injustice to the
petitioner.
34. Even if there was no mandatory provision
prior to the insertion of section 29 A of the Act,
still it was bounden duty of the Arbitral Tribunal to
carryout its task with due diligence and promptly
keeping in mind the basic principle of justice
“Justice delayed is Justice Denied”. In the present
case, the Arbitral Tribunal took years together to
Digitally
deliver the award and there is no explanation
signed by
available on record as to why such a delay occurred.
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:20
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 26 of 33 )
Even the administrative inactiveness in referring to
the matter to new Arbitral Tribunal cannot a ground
to sustain the impugned award in the given facts and
circumstances of the present case and is liable to be
set aside, solely on this ground.
35. In addition to that, the way the Arbitral
Tribunal has recorded and appreciated the evidence
is not at all acceptable. It is true that arbitration
proceedings are not bound by the strict technical
rules of the Evidence Act, 1872 or the Bhartiya
Sakshya Adhiniyam, 2023, as the case may be. But
at the same time, no adjudicating authority can be
allowed to avoid the basic parameters meant for
taking on record the evidence. The flexibility as
mandated by Section 19(1) of the Act, allowing the
Tribunal to determine the admissibility, relevance,
and weight of evidence is based on fairness and
efficiency rather than on rigid procedural hurdles.
Pertinent to mention that while not bound by the
“sensu stricto” (strict) provisions of the Evidence
Act, Tribunals generally adhere to its underlying
principles while recording the evidence.
36.
Digitally
signed by
RAJESH
Coming back to the case at hand, the
RAJESH KUMAR
KUMAR
petitioner was proceeded exparte by the Arbitral
GOEL
Date:
GOEL 2026.04.16
12:47:25
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 27 of 33 )
Tribunal on 01.11.2014 and the rest of the
respondents on 30.05.2015 and the case came to be
adjourned for exparte evidence on 22.08.2015. The
proceedings dated 22.08.2015 would reveal that the
claimant bank filed the evidence by way of affidavit
(dated 13.07.2015) and exparte evidence of the
claimant bank was closed and the case came to be
adjourned for arguments; proceedings dated
07.11.2015 indicate that Arbitral Tribunal arrived at
a conclusion that the claimant bank has proved its
case beyond doubt and directed the claimant bank to
arrange stamp papers for passing the award.
37. Subsequently, at this stage the proceedings
were transferred to the new Arbitral Tribunal. The
new Arbitral Tribunal vide order dated 16.02.2017,
again directed the claimant bank to file exparte
evidence and proceedings came to be adjourned for
24.10.2018. A fresh evidence by way of affidavit
dated 18.10.2018 was filed by the claimant bank
and consequently the impugned award came to be
passed.
38. From the Arbitral Proceedings, it is evident
Digitally
signed by
RAJESH
that there are two sets of evidence filed by the
RAJESH KUMAR
KUMAR
claimant bank by way of affidavits i.e affidavit
GOEL
Date:
GOEL 2026.04.16
12:47:24
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 28 of 33 )
dated 13.07.2015 and the second affidavit dated
18.10.2018. I fail to understand when the claimant
bank has already led the evidence by filing the
evidence by way of affidavit dated 13.07.2015, why
and under what circumstances, a fresh affidavit was
directed to be filed and consequently, the affidavit
dated 18.10.2018 came to by filed. Once the
proceeding had reached at the final stage, there was
no occasion to ask for a fresh affidavit and take on
record the same.
39. Be that as it may, it appears that the Arbitral
Tribunal has considered the evidence filed by way
of the affidavit dated 18.10.2018. In these
circumstances, the affidavit dated 13.07.2015 has
lost its value.
40. Having said so, in the affidavit dated
18.10.2018, the claimant bank has placed reliance
on the following documents, as referred to in the
affidavit. :-
Photocopy of the General Power of Ex CW1/A
Attorney in favour of the Deponent
The Deponent’s affidavit of ex-parte ExCW1/B
evidence
Digitally
signed by
Application for loan facility ExCW1/C & ExCW1/D
RAJESH RAJESH
KUMAR alongwith sanction letter
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:25
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 29 of 33 )
Promissory Receipt ExCW1/E
Aggreement for loan/Over Draft ExCW1/F
Guarantee for loan ExCW1/G
Hypothecation agreement ExCW1/H
Reminder sent to borrower ExCW1/I
Bank Share receipts ExCW1/J, ExCW1/K,
ExCW1/L,ExCW1/M,
ExCW1/N & ExCW1/ODemand Notices dated 21.6.2012 & ExCW1/P & ExCW1/Q
5.6.2014
Overdue Statement of account ExCW1/R
41. However, in the impugned award, in para
no.25, the Arbitral Tribunal has referred to the
documents as under:-
The General Power of Attorney ExCW1/1 (OSR)
The membership record of the ExCW1/2(colly)
respondents
The application for loan facility ExCW1/3 (colly)Demand Promissory Note joint and ExCW1/4
several of signed by the borrowers and
guarantors
Agreement for overdraft ExCW1/5 (colly)
Hypothecation agreement ExCW1/6(colly)
Demand notices ExCW1//7
(collectively)
Statement of Account till ExCW1/8 (colly)
Reference Notice ExCW1//9
Digitally
signed by
Postal Receipts ExCW1/10
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:22
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 30 of 33 )
42. A comparison of the documents as referred to
in the affidavit dated 18.10.2018 with the
documents as referred to in the impugned award
would throw light on the way the evidence has been
considered and appreciated by the Arbitral Tribunal
which is being detailed as under:-
(a) The nomenclature and the exhibit marks given
to the documents, as referred to in the impugned
award, is not the same as referred to in the
affidavit dated 18.10.2018. I am conscious of
the fact that this variation may not be so crucial
for setting aside the impugned award but it
indicates the casual approach of the Arbitral
Tribunal in taking the evidence on record,
which would be an additional ground to make a
dent in the impugned award. The evidence filed
by way of affidavit is nothing but the
examination in chief of the witness which is
required to be considered while passing the final
order/award and the adjudicating authority is
not supposed to go beyond the same.
(b) It is evident that the affidavit dated 18.10.2018
was never tendered in evidence by the witness.
RAJESH
Digitally
signed by
RAJESH
This irregularity also could have been ignored
KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:25
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 31 of 33 )
but in the impugned award, an impression has
been given that witness has produced the
original of General Power of Attorney referred
to as CW1/1 (OSR). Meaning thereby, the
original of the said Attorney was produced
which was seen and returned by the Arbitral
Tribunal but there is nothing on record
suggesting as to when the original of the said
document was produced as the affidavit dated
18.10.2018 was never tendered in evidence.
Moreover, even on the documents, as referred to
in the impugned award, there is no endorsement
of exhibit marks.
(c) Further, in the impugned award, the
membership record of the petitioner has been
referred to as ExCW1/2 (colly), but the entire
affidavit dated 18.10.2018 filed by the claimant
bank is silent about the said record, though, it
has been deposed that the petitioner is the
member of the claimant bank but no record as
referred to by the Arbitral Tribunal was placed
on record. In the background of the fact that no
Digitally
such record of membership was available on
signed by
record, it is not known as to which record was
RAJESH
RAJESH KUMAR
KUMAR GOEL
Date:
GOEL 2026.04.16
12:47:22
+0530
Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 32 of 33 )
assigned ExCW1/2(colly)? This has created a
serious doubt on the legality of the impugned
award. It appears that Arbitral Tribunal has
considered the evidence which was never
brought on record, which is not permissible and
there is apparent illegality in the impugned
award which goes to the root of the matter.
43. In view of my aforesaid discussion, I am of
the opinion that there was inordinate delay in
passing the impugned award making the award
against the public policy and also it suffers from
illegality which goes to the root of the matter.
Consequently, the impugned award is set aside.
Thus, the present petition is disposed off
accordingly.
44. File be consigned to record room, as per rules.
45. The Arbitration Record be sent back.
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2026.04.16
12:48:06 +0530
(Rajesh Kumar Goel)
District Judge (Commercial)-02
Central, Tis Hazari Courts
15.04.2026
Announced in the Open Court
today i.e:15.04.2026
(digitally signed on 16.04.2026)Ashok Kumar Vs Bombay Mercantile Cooperative Bank Ltd
OMP (Comn) (144/2023 ) Date of order 15.04.2026 (Page 33 of 33 )