Delhi District Court
M/S Brahmaputra Infrastructure Ltd vs M/S Pushpa Sales Pvt, Ltd on 16 April, 2026
IN THE COURT OF SH. PULASTYA PRAMACHALA
DISTRICT JUDGE, (COMMERCIAL COURT)-01,
PATIALA HOUSE COURT, NEW DELHI
INDEX
Sl. HEADINGS Page Nos.
No.
1. Memo of Parties 2
2. Description of case 2
3. Brief Facts of the case 2-4
4. Grounds of objection/challenge 4-8
5. Reply of Respondent and Arguments 8
6. Arguments of parties 8-10
7. Appreciation of Arguments, Facts & Law 11-21
8. Decision 21
Digitally
signed by
PULASTYA
PULASTYA PRAMACHALA
PRAMACHALA Date:
2026.04.16
17:24:52
+0530
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.1 of 21 Patiala House Court, New Delhi
OMP (COMM.) No. 87/2020
In the matter of: -
M/s Brahmaputra Infrastructure Ltd.
Brahmaputra House,
A-7, Mahipalpur,
New Delhi-110037.
...Petitioner
Versus
M/s Pushpa Sales Pvt. Ltd.
551 Jha/148, Ramnagar,
Alambagh, Lucknow-226005.
...Respondent
Date of institution : 02.11.2020
Date of reserving judgment : 02.04.2026
Date of pronouncement : 16.04.2026
Decision : Petition is rejected.
JUDGMENT
DESCRIPTION OF THE CASE
1. The present petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (herein after referred to as the Act) has
been filed by the petitioner for setting aside arbitral award dated
17.02.2020.
BRIEF FACTS OF THE CASE
2. Petitioner has averred it is a Public Limited Listed company and
is engaged in the work of engineering, procurement, construction
and real estate including heavy civil construction division and
real estate projects such as Airport, Bridges, Flyovers etc.
Petitioner was awarded work by NBCC India Ltd., which
pertained to carrying out miscellaneous civil work at the 100
bedded ESIC Hospital, Sarojini Nagar, Lucknow. At that site,
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.2 of 21 Patiala House Court, New Delhi
certain items pertaining to operation theater, manifold gas room
equipment and medical gas pipeline equipment were given to the
respondent by the petitioner. Petitioner has averred that as part of
the arrangement arrived at between the parties, various work
orders were placed upon the respondent for supplying items to
the above-mentioned areas and it was decided that the payments
to the respondent would be released completely, once the testing
and commissioning of the items supplied by the respondent had
taken place.
3. Petitioner has further averred that respondent while supplying
items for which work orders had been placed upon it, provided
defective items for an amount of Rs.5.00 lakhs, which was
adjusted from the total payments due to the respondent.
Petitioner has averred that the respondent raised invoices with
regard to the items supplied and the same were booked against
the work orders placed upon the respondent. Petitioner has
further averred that since the NBCC (India) Ltd. could not
provide the site on time for testing and commissioning of the
items supplied by the respondent; a certain amount was withheld
by the petitioner to be released to the respondent as full and final
payment. Petitioner has averred that when the petitioner and
respondent held a joint meeting for reconciliation of records with
regard to the outstanding payments, respondent agreed that an
amount of Rs. 18,96,675/- was due to it from the end of the
petitioner. But respondent reneged on its commitment and
thereafter issued a frivolous e-mail claiming that an amount of
Rs.27,31,311/- was due to it, which was a frivolous amount.
Petitioner has pleaded that respondent executed defective work
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.3 of 21 Patiala House Court, New Delhi
due to which the petitioner had to engage another agency to carry
out the said work for which an additional amount was expended.
Hence, after total deducts from the outstanding amounts, an
amount of Rs. 17,56,033/- is payable and due to the respondent,
and not the amount which has been awarded.
4. Respondent filed a complaint before MSME Facilitation Council,
Kanpur for redressal of the alleged recovery and again revised its
amount before the MSME Facilitation council and chose to
recover an amount of Rs. 25,16,742/-. Petitioner appeared before
the MSME Facilitation Council for holding conciliation
meetings, but no amicable settlement could be arrived between
the parties. Thereafter, the Council illegally bestowed powers of
the Arbitral Tribunal upon itself and chose to preside over the
dispute as an Arbitral Tribunal. Petitioner put forth its
contentions, and averments before the Arbitral Tribunal,
however, the said contentions and averments were not taken on
record and appreciated, and the MSME Facilitation Council
acting as the Arbitral Tribunal passed an award dated 17.02.2020
which was signed on 26.06.2020.
GROUNDS OF CHALLENGE
5. Aggrieved by the impugned award dated 17.02.2020, petitioner
has preferred present petition, inter alia, on the following
grounds: –
i. That impugned award passed by the Arbitral Tribunal suffers
from grave infirmity and is wholly perverse, irrational, without
reasons and without considering the materials on record;
ii. That Arbitral Tribunal did not adhere to the due procedure of law
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.4 of 21 Patiala House Court, New Delhi
and did not consider the evidence, which on the face of it
demolished the case of the respondent and thereby acted in
contravention of the established principles of law.
iii. That Arbitral Tribunal conducted proceedings in haste and a
prejudiced manner and did not allow an opportunity of correct
appreciation of evidence which completely proved the assertions
and averments of the petitioner.
iv. That Arbitral Tribunal did not consider the material on record to
see that the respondent had filed a frivolous claim before it and
thus, the claim filed was liable to be rejected as the respondent
has neither submitted copy of RA bills duly certified from
petitioner nor certified bill of those invoices against which the
Respondent is claiming from the petitioner.
v. That Arbitral Tribunal has arrived at finding of the fact, which is
by ignoring or excluding relevant material and taking into
consideration irrelevant material thereby coming to a finding
which is outrageously defying logic and thus, suffers from
infirmity in law and is perverse in nature. In fact, the Arbitral
Tribunal did not follow due procedure of law by not realizing that
the respondent had failed to provide requisite evidence to prove
its alleged claim.
vi. That the Tribunal has conducted itself in a manner whereby it
bestowed upon itself the powers under the Arbitration Act,
subsequent to having acted us a conciliation body with regard to
the same dispute and thus, the constitution of the Arbitral
Tribunal is shrouded in doubt with regard to its veracity as well
as its bias.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.5 of 21 Patiala House Court, New Delhi
vii. That the procedure that needs to be adopted while adjudicating
any claim under due procedure of law, is that the adjudicating
authority needs to be completely unbiased and without prejudice
and in the present case where the impugned award has been
passed, the MSME Facilitation Council was biased and
prejudiced since the said Council had acted both as the
conciliation body as well as the Arbitral Tribunal. Thus, the
Arbitral Tribunal took over from where it had left as a
conciliation body and chose to reprimand the Petitioner herein by
passing the impugned award, which suffers frown grave infirmity
and is perverse in law.
viii. That Arbitral Tribunal failed to appreciate that the respondent had
not tested and commissioned the materials supplied by it and that
the payment due, if any, towards the respondent was to be
remitted only once the testing and commissioning of the material
supplied by it had been administered.
ix. That Arbitral Tribunal wrongly relied upon only on the
documents of the respondent which were also not substantive
evidence of the frivolous claims and thus, the impugned award is
perverse, illegal and opposed to the public policy of India.
x. That Arbitral Tribunal was prejudiced and biased towards the
respondent and hence, wanted to reprimand the petitioner.
xi. That evidence has not been appreciated in its correct perspective
and Arbitral Tribunal had failed to consider the fact that the
respondent had supplied defective material due to which the
respondent had issued a letter acknowledging its mistake and also
giving a rebate and discount to the petitioner for an amount ofOMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.6 of 21 Patiala House Court, New Delhi
Rs. 5,00,000/-.
xii. That Arbitral Tribunal failed to appreciate the contentions of the
petitioner and also failed to consider the fact that in the
reconciliation meetings held between the representatives of the
parties, it had been agreed that the amount due to the respondent
was Rs. 19,96,675/- and the respondent had further given a
rebate/discount of Rs. 1,00,000/- to the petitioner due to the
defective material supplied by it. Thus, the total outstanding
towards the respondent after the reconciliation meeting was Rs.
18,96,6751-xiii. That Arbitral Tribunal also tailed to appreciate that the petitioner
had to get the defective work done by the respondent, rectified
through another agency on debit basis for which it incurred an
additional expenditure of Rs.1,40,642/-thereby clearly reflecting
the lackluster performance of the respondent with regard to the
scope of work assigned to it and thereby bringing the total
outstanding amount down to Rs. 17,56,033/-
xiv. That Arbitral Tribunal has completely failed to appreciate that the
respondent not only supplied defective material but also did not
complete the testing and commissioning of the said installed
materials.
xv. That the Arbitral Tribunal failed to consider the cardinal principle
that the claim under the MSMED Act is based upon unpaid
invoices and the respondent failed to produce even one invoice as
part of its complaint.
xvi. That Arbitral Tribunal failed to appreciate that the respondent
prior to filing the complaint, had been claiming an amount of Rs.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.7 of 21 Patiala House Court, New Delhi
27,31,311/- and thereafter, filed a claim of 25,16.7421/-
establishing the frivolous nature of the claim.
REPLY OF RESPONDENT
6. Respondent filed its reply opposing the present petition and has
contended that the petition is liable to be dismissed and the
challenge to award rendered by the MSEFC is ex-facie not
maintainable, as the MSEFC has gone into every aspect of the
arbitration case, pursuant to which the said award stands
rendered. Respondent has averred that it is admitted case that the
debt was owed by the petitioner company to the respondent.
Accordingly, respondent has prayed for dismissal of the present
petition.
ARGUMENTS OF PARTIES
7. Ld. counsel for petitioner argued that this court has no
jurisdiction under MSME Act, as work order is not covered.
Petitioner averred that respondent was not registered under
MSME. Ld. counsel averred that there were contradictions in
claim in the pleadings of respondent still, ld. Tribunal allowed
the claim. Ld. counsel argued that evidence between the parties
was not appreciated by ld. Tribunal and no opportunity was given
to be heard, to lead evidence or to produce witness.
8. Ld. counsel for petitioner argued on the lines of plea taken in the
petition. Ld. counsel also argued that the petitioner was not
granted opportunity to cross-examine and lead evidence.
Respondent had filed a malicious and frivolous claim before the
MSME Facilitation Council, which was contradictory in nature
and was thus, liable to be rejected. In support of its case, ld.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.8 of 21 Patiala House Court, New Delhi
counsel for petitioner relied upon following judgments: –
i. S.P. Chengalvaraya Naidu v. Jagannath; 1994 (I) OLR (SC) 201;
ii. Hindustan Lever Ltd. v. Shiv Khullar and Anr.; FAO 127/06
decided on 28.03.2008iii. Sunil Kukreja v. North West Sales and Marketing Limited; OMP
(COMM) 456/2017 decided on 24.04.2018;
iv. ONGC Ltd. v. Saw Pipes Ltd. (2003) 5 SCC 705
9. Ircon International Limited v. Pioneer Fabricators, 2023 SCC
OnLine Del 1811;
10. Kone Elevator v. State of Tamil Nadu, (2014) 7 SCC 1;
11. M/s Shree Gee Enterprises v. Union of India 2015 SCC OnLine
Del 13169;
12. Sterling & Wilson Pvt. Ltd. v. Union of India, 2017 SCC OnLine
Bom 6829;
13. Tata Power Co. Ltd. v. Genesis Engineering Co., 2023 SCC
OnLine Del 2366.
14. Per contra, ld. counsel for respondent argued that respondent
filed certificate of registration with DIC, Lucknow, which was
sufficient substitute of registration under MSMED Act. Ld.
counsel further argued that Arbitral Tribunal and FC were same
and award refers to opportunity given by FC to the petitioner. Ld.
counsel argued that the judgment in the case of Hindustan
Petroleum (para 49/50) overrules arguments which distinguished
between work contract and other kind of contract under MSMED
Act.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.9 of 21 Patiala House Court, New Delhi
15. Ld. counsel for respondent further argued that the objection
petition lacks territorial jurisdiction as the venue and seat of
arbitration was at Kanpur and that petitioner company has
ignored Section 24 of MSMED Act 2006, which clearly
stipulates that provision of Section 15 to 23 shall have an
overriding effect over any other law in force. In support of his
submissions, ld. counsel for respondent has relied upon following
case laws: –
i. Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt.
Ltd.;
ii. M/s Bhandari Udyog v. Industrial Facilitation Council and Anr.
(Civil Appeal no. 2077 of 2015, decided on 20.02.2015 by
Hon’ble Supreme Court.
iii. Ssangyong Engineering and Construction Co. Ltd. vs. NHAI
(2019) 15 SCC 131;
iv. Salar Jung Museum and Ors. v. Design Team Consultants Pvt.ltd.
OMP (COMM) 44/2017;
v. Associate Builders v. Delhi Development Authority, AIR 2015
SUPREME COURT 620;
vi. DDA v. Anand Associates, 151(2008) DLT 18;
vii. Goodyear India Ltd. v. Norton Intech Rubbers Pvt. Ltd. (2012) 6
SCC 345;
viii. M/s. Tirupati Steels v. M/s Shubh Industrial Component &Anr.,
(2022) 7 SCC 429;
ix. Hindustan Petroleum Corporation ltd. vs. West Bengal State
MSME (2023 SCC Online Cal 1700).
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.10 of 21 Patiala House Court, New Delhi
APPRECIATION OF ARGUMENTS, FACTS & LAW
16. First of all, I shall deal with the question of territorial jurisdiction
of this court, as per objection taken by respondent. According to
respondent, since arbitration took place in Kanpur, U.P.,
therefore, courts in Kanpur only shall have the jurisdiction to
entertain objection against the award. However, petitioner has
argued that Kanpur was only a venue of arbitration and not the
seat of arbitration. It was argued that in such circumstances, the
agreement between the parties to confer jurisdiction on the court
at New Delhi only, shall have the field. Petitioner relied upon the
purchase order, to point out jurisdiction clause in the same.
Reliance was placed on certain case laws including following
one.
17. In Indian Oil Corporation Ltd. v. FEPL Engineering (P) Ltd.
(2019:DHC:4923:DB), Hon’ble Delhi High Court held that: –
“Undoubtedly, the MSME Act is a special legislation dealing
with Micro,Small and Medium Enterprises and would have
precedence over the general law. There are decisions of
several Courts holding that the provisions of MSME Act
would override the provisions of the Contract between the
parties. However, we are not engaged with the said
controversy and, in fact, we had made it clear to the learned
counsel for the Appellant, during the course of arguments,
that the questions relating to the jurisdiction of the MSME
Council to act as an Arbitrator and other similar issues will
not be examined by us, as the learned Single Judge has not
considered any of those aspects and has decided the objection
petition only on the ground of territorial jurisdiction.
However, this does not mean that the jurisdiction clause
agreed between the parties has to be given a go-by. The
overriding effect of the MSME Act, cannot be construed to
mean that the terms of the agreement between the partiesOMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.11 of 21 Patiala House Court, New Delhi
have also been nullified. Thus, jurisdiction of the MSME
Council which is decided on the basis of the location of the
supplier, would only determine the ‘VENUE’, and not the
‘SEAT’ of arbitration. The ‘SEAT’ of arbitration would
continue to be governed in terms of the arbitration agreement
between the parties, which in the present case as per
jurisdiction Clause No. 35 is New Delhi. As a result, in terms
of the decision of the Supreme Court in Indus Mobile (supra),
it would be the Courts at New Delhi that would have
exclusive jurisdiction to entertain the petition under Section
34 of the Act.”
18. Above-mentioned judgment makes it clear that place of holding
arbitration proceedings in a statutory arbitration under MSMED
Act, cannot be the decisive factor. The purchase orders placed on
the record, were not disputed by respondent. In the arbitral
record, such purchase orders were not placed, and the respondent
had placed invoices raised by it, only. The purchase orders issued
by petitioner had jurisdictional term to provide for exclusive
jurisdiction of New Delhi. The invoices issued by respondent had
the term as “Subject to Lucknow jurisdiction”. It is well apparent
that respondent would have supplied goods and services only on
the basis of purchase orders of petitioner. Therefore, the terms
mentioned in the purchase orders are deemed to be accepted by
respondent. In that situation, the exclusive jurisdiction clause
mentioned in the purchase order shall have the field, thereby
providing for jurisdiction of this court.
19. Now, I shall deal with the objections of the petitioner, as taken in
the petition. One objection has been taken against the arbitration
proceedings conducted by Facilitation Council (FC) itself. It is
pleaded by petitioner that after holding conciliation proceedings,
same body could not have conducted arbitration proceedings. It
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.12 of 21 Patiala House Court, New Delhi
is also alleged that FC was biased against the petitioner. All such
issues were dealt with by Supreme Court in the case of Gujarat
State Civil Supplies Corporation Ltd v. Mahakali Foods Private
Ltd (2022 SCC OnLine SC 1492, wherein Hon’ble Supreme
Court held that: –
“34. The upshot of the above is that:
(i) Chapter-V of the MSMED Act, 2006 would override the
provisions of the Arbitration Act, 1996.
(ii) No party to a dispute with regard to any amount due under
Section 17 of the MSMED Act, 2006 would be precluded
from making a reference to the Micro and Small Enterprises
Facilitation Council, though an independent arbitration
agreement exists between the parties.
(iii) The Facilitation Council, which had initiated the
Conciliation proceedings under Section 18(2) of the MSMED
Act, 2006 would be entitled to act as an arbitrator despite the
bar contained in Section 80 of the Arbitration Act.
(iv) The proceedings before the Facilitation
Council/institute/centre acting as an arbitrator/arbitration
tribunal under Section 18(3) of MSMED Act, 2006 would be
governed by the Arbitration Act, 1996.
(v) The Facilitation Council/institute/centre acting as an
arbitral tribunal by virtue of Section 18(3) of the MSMED
Act, 2006 would be competent to rule on its own jurisdiction
as also the other issues in view of Section 16 of the
Arbitration Act, 1996.
(vi) A party who was not the ‘supplier’ as per the definition
contained in Section 2(n) of the MSMED Act, 2006 on the
date of entering into contract cannot seek any benefit as the
‘supplier’ under the MSMED Act, 2006. If any registration is
obtained subsequently the same would have an effect
prospectively and would apply to the supply of goods and
rendering services subsequent to the registration.
20. Thus, as per legal principles explained and held by Supreme
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.13 of 21 Patiala House Court, New Delhi
Court, there cannot be any objection against arbitration being
held/conducted by FC itself, and for the reasons of holding
conciliation proceedings FC cannot be termed as biased in
arbitration proceedings.
21. Petitioner referred to the case of Oil & Natural Gas Corporation
Ltd. v. Western Geco international Ltd, Civil Appeal No.3415 Of
2007 decided on 04.09.2014, wherein Hon’ble Supreme Court
held as under: –
“26. What then would constitute the ‘Fundamental policy of
Indian Law’ is the question. The decision in Saw Pipes Ltd.
(supra) does not elaborate that aspect. Even so, the expression
must, in our opinion, include all such fundamental principles as
providing a basis for administration of justice and enforcement
of law in this country. Without meaning to exhaustively
enumerate the purport of the expression “Fundamental Policy
of Indian Law”, we may refer to three distinct and fundamental
juristic principles that must necessarily be understood as a part
and parcel of the Fundamental Policy of Indian law. The first
and foremost is the principle that in every determination
whether by a Court or other authority that affects the rights of a
citizen or leads to any civil consequences, the Court or
authority concerned is bound to adopt what is in legal parlance
called a ‘judicial approach’ in the matter. The duty to adopt a
judicial approach arises from the very nature of the power
exercised by the Court or the authority does not have to be
separately or additionally enjoined upon the for a concerned.
What must be remembered is that the importance of Judicial
approach in judicial and quasi judicial determination lies in the
fact so long as the Court, Tribunal or the authority exercising
powers that affect the rights or obligations of the parties before
them shows fidelity to judicial approach, they cannot act in an
arbitrary, capricious or whimsical manner. Judicial approach
ensures that the authority acts bonafide and deals with the
subject in a fair, reasonable and objective manner and that its
decision is not actuated by any extraneous consideration.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.14 of 21 Patiala House Court, New Delhi
Judicial approach in that sense acts as a check against flaws and
faults that can render the decision of a Court, Tribunal or
Authority vulnerable to challenge. In Ridge v. Baldwin [1963 2
All ER 66], the House of Lords was considering the question
whether a Watch Committee in exercising its authority under
Section 191 of the Municipal Corporations Act, 1882 was
required to act judicially. The majority decision was that it had
to act judicially and since the order of dismissal was passed
without furnishing to the appellant a specific charge, it was a
nullity. Dealing with the appellant’s contention that the Watch
Committee had to act judicially, Lord Reid relied upon the
following observations made by Atkin L.J. in [1924] 1 KB at
pp. 206,207:
“Wherever any body of persons having legal authority to
determine questions affecting the rights of subjects, and
having the duty to act judicially, act in excess of their
legal authority, they are subject to the controlling
jurisdiction of the King’s Bench Division exercised in
these writs.”
28. Equally important and indeed fundamental to the policy of
Indian law is the principle that a Court and so also a quasi-
judicial authority must, while determining the rights and
obligations of parties before it, do so in accordance with the
principles of natural justice. Besides the celebrated ‘audi
alteram partem’ rule one of the facets of the principles of
natural justice is that the Court/authority deciding the matter
must apply its mind to the attendant facts and circumstances
while taking a view one way or the other. Non-application of
mind is a defect that is fatal to any adjudication. Application of
mind is best demonstrated by disclosure of the mind and
disclosure of mind is best done by recording reasons in support
of the decision which the Court or authority is taking. The
requirement that an adjudicatory authority must apply its mind
is, in that view, so deeply embedded in our jurisprudence that it
can be described as a fundamental policy of Indian Law.
29. No less important is the principle now recognised as a
salutary juristic fundamental in administrative law that a
decision which is perverse or so irrational that no reasonable
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.15 of 21 Patiala House Court, New Delhi
person would have arrived at the same will not be sustained in
a Court of law. Perversity or irrationality of decisions is tested
on the touchstone of Wednesbury’s principle of reasonableness.
Decisions that fall short of the standards of reasonableness are
open to challenge in a Court of law often in writ jurisdiction of
the Superior courts but no less in statutory processes where
ever the same are available.”
22. Petitioner has alleged that Arbitral Tribunal did not grant
opportunity to petitioner to lead evidence and proper hearing was
not done. In this respect, it is relevant to note that on 23.12.2019,
FC terminated the conciliation proceedings and decided to
conduct arbitration. Prior to that date, petitioner had been seeking
time to conciliate the accounts with respondent, but same was not
done. On 23.12.2019 FC directed petitioner to file written
statement with affidavit within 15 days. However, petitioner
never filed any reply or written statement to the claim of
respondent. Copy of claim petition of respondent was already
supplied to petitioner vide letter dt. 23.09.2019. Thus, petitioner
had been only gaining time before FC, be it conciliation
proceedings or arbitration proceedings. Therefore, it was not the
situation that petitioner was not granted any opportunity by FC.
Hence, I do not find any merit in such allegations of petitioner.
23. Arbitral Tribunal had framed following issues during arbitral
proceedings, which are as under: –
“1- Whether Buyer has failed to discharge its liabilities
imposed u/s 15 of the “Act 27 of 2006”?
2- Whether the supplier is entitled to get sum of
Rs.25,16,742/- balance liquidated amount from the buyer?”
3- Whether buyer is liable to pay interest u/s 16 of “Act 27 of
2006”?
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.16 of 21 Patiala House Court, New Delhi
4- To what relief, if any, is the supplier entitled.”
24. The issue wise findings given by Arbitral Tribunal are as under: –
” Issue No. 1
It is liability of Buyer to make payment of balance amount
of Rs.25,16,742/-against the supplied material within 45 days
of the delivery of goods/invoices u/s 15 of “Act 27 of 2006”.
There is no oral or documentary evidence before us inspire
confidence that the buyer made compliance of the liability
fixed and mentioned under section-15 of “Act 27 of 2006”
The issue is decided accordingly.
Issue No. 2
The supplier has filed Affidavit, certified copies of secondary
evidence for goods supplied, C.A certified copy of ledger
account showing balance amount of Rs.25,16,742/- in the
account of buyer. During the reference proceedings buyer has
not filed objection any certified documents regarding payment
of balance amount of Rs.25,16,742/-in the account of supplier.
The “FC” therefore held as per reference documentary
evidence, that supplier is entitled to get balance Liquidated
amount of Rs. 25,16,742/- from buyer.
The issue is decided accordingly.
Issue No. 3
The “FC” already held that supplier is entitled to get the
balance amount of Rs. 25,16,742/-. Further u/s 16 of “Act 27 of
2006” there is statutory obligation on buyer to pay interest on
amount due on delayed payment for the period of delay.
Therefore “FC” held that supplier is entitled to get interest on
balance amount of Rs.25,16,742/- from the date and rate
according to u/s 16 of “Act 27 of 2006”
The issue is decided accordingly.
Issue No. 4
In the light of our finding on issues 1 to 3, Supplier firm is
entitled for balance amount of Rs. 25,16,742/- and interest as
per provision u/s 16 of “Act 27 of 2006” pendente lite and
future till final payment.
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.17 of 21 Patiala House Court, New Delhi
The issue is decided accordingly.”
25. The question is that when petitioner had not filed any written
statement to the claim petition of respondent, then on what fact
evidence was to be led by petitioner. Petitioner had not even
bothered to challenge the claim of respondent for disputing the
factual contents of the same, by filing any pleading. In that
situation there could not be any occasion to ask petitioner to lead
evidence. Arbitral record and order passed during proceedings,
show that petitioner had never asked for such opportunity. Hence,
such contentions of petitioner are liable to be rejected and the
cited case laws do not apply to the facts of this case.
26. Petitioner has taken plea that it was case of “work order” which
is not covered under MSMED Act, hence, such matter could not
have been entertained by FC under MSMED Act. It was further
argued that respondent was not registered under MSMED Act, at
the time of award of work. Such argument was responded by ld.
counsel for respondent and he referred to the certificate of
registration with DIC, Lucknow, and submitted that same
reflected registration under MSMED Act. However, it is worth to
be seen that no such plea was taken before FC during arbitration
proceedings. Such question involved a question of fact that
whether respondent was registered under MSMED Act, and had
to be decided on the basis of evidence. Had petitioner raised such
question before FC in arbitration proceedings, it could have
occasion to decide it as per evidence produced by respondent. As
far as argument of “work order” is concerned, suffice is to note
that in the relied upon cases viz. Shree Gee and Sterling (supra),
courts had been dealing with altogether different facts, wherein
OMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.18 of 21 Patiala House Court, New Delhi
some benefits to MSME under the policy, were subject matter of
appreciation. The policy contemplated preference and in that
context, courts held “work order” beyond the scope of such
policy. Otherwise, ruling in the case of Hindustan Petroleum
(supra) does not support the argument of petitioner.
27. In the case of Salar Jung Museum v. Design Team, 2020 (3) ARB
L R 639, Hon’ble Delhi High Court held that: –
“18. However, it is not disputed that this jurisdictional
objection was not raised by the museum before the learned
arbitrator at any stage. The question, therefore, arises as to
whether it can be taken for the first time in proceedings under
Section 34 of the Act. Mr. Pattjoshi cited the judgment of the
Supreme Court in Lion Engineering to argue that a
jurisdictional objection can be entertained for the first time
under Section 34 of the Act. In Lion Engineering, it was
contended (before a three judge bench of the court) that the
arbitrator’s jurisdiction was circumscribed by a special statute,
the Madhya Pradesh Madhyastham Adhikaran Adhiniyam,
1983, which provided for a specific tribunal to adjudicate the
disputes in question. Although this plea had not been taken
before the arbitrator, the court held that it could be urged before
the court under Section 34 of the Act. An earlier decision to the
contrary, MSP Infrastructure Limited v. Madhya Pradesh Road
Development Corporation Limited, (2015) 13 SCC 713: (2014)
4 Arb LR 428 (SC), was overruled.
19. In my view, the judgment in Lion Engineering is
distinguishable. The objection in that case arose from a statute
which governed jurisdiction of the arbitrator. The court,
therefore, held that the public policy ground of challenge under
Section 34 could be invoked by the aggrieved party. In the
present case, in contrast, the challenge is not based upon any
inherent lack of jurisdiction in the arbitrator but upon the
reference order itself. In such a case, the party concerned
cannot be permitted to participate in the arbitration
proceedings, contest the claim on merits, and thereafter raise a
jurisdictional objection. The underlying difference stems fromOMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.19 of 21 Patiala House Court, New Delhi
the concept of consensual dispute resolution itself. Even in a
case where a particular dispute is referred to the arbitrator, and
the claimant thereafter seeks adjudication of other claims as
well, if the respondent does not object, it can be taken to have
agreed to submit the subsequent claims also to arbitration. If
there were a statutory bar to submission of the additional claim,
akin to the situation in Lion Engineering (or perhaps some
other ground relatable to public policy), the situation may be
different. However, where the jurisdictional objection is
capable of waiver by the affected party, the failure to raise it
before the arbitrator signifies consent to the arbitrator’s
jurisdiction. A party cannot, in such a case,??? participate in the
proceedings without demur and then seek to assail the validity
of the proceedings in the face of an unfavourable award.
20. This approach is, in my view, also consistent with the
recent judgment of the Supreme Court in Quippo Construction
Equipment Limited v. Janardan Nirman Pvt. Limited, 2020
SCC OnLine SC 419 [Civil Appeal No. 2378/2020, decided on
29.04.2020]. In the said judgment, the court held that an
objection regarding the venue of arbitration and holding of a
common arbitration arising out of several agreements could not
be taken at the stage of Section 34 by a party which did not
participate in the proceedings at all. Paragraphs 23 and 24 of
the judgment are reproduced below:
“23. It was possible for the respondent to raise submissions that
arbitration pertaining to each of the agreements be considered
and dealt with separately. It was also possible for him to
contend that in respect of the agreement where the venue was
agreed to be at Kolkata, the arbitration proceedings be
conducted accordingly. Considering the facts that the
respondent failed to participate in the proceedings before the
arbitrator and did not raise any submission that the arbitrator
did not have jurisdiction or that he was exceeding the scope of
his authority, the respondent must be deemed to have waived
all such objections.
24. In the circumstances, the respondent is now precluded from
raising any submission or objection as to the venue of
arbitration, the conclusion drawn by the court at Alipore whileOMP (COMM.) No. 87/2020 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.20 of 21 Patiala House Court, New Delhi
dismissing Miscellaneous Case No. 298 of 2015 was quite
correct and did not call for any interference. The High Court, in
our view, was in error in setting aside said order. In any case,
the fact that the cause title showed that the present appellant
was otherwise amenable to the jurisdiction of the Alipore
Court, could not be the decisive or determining criteria.”
(emphasis supplied)
21. Although the objector in Quippo Construction had not
participated in the arbitration proceedings at all, I do not see a
difference in principle between such a case and a case where
the objector had participated but not raised the objection.”
DECISION
28. In view of foregoing discussions, observations and findings, I
find that none of the grounds under S. 34 of the Act, have been
established in this case. Hence, petition is rejected.
File be consigned to record room after due compliance.
Digitally signed by PULASTYA PULASTYA PRAMACHALA PRAMACHALA Date: 2026.04.16 17:24:57 +0530 Pronounced in the (PULASTYA PRAMACHALA) Open Court on this District Judge (Commercial Court)-01, 16th Day of April, 2026 Patiala House Court, New Delhi OMP (COMM.) No. 87/2020 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.21 of 21 Patiala House Court, New Delhi
