Delhi District Court
Mr Rudra Srivastava vs Neeraj Bhatia And Ors on 25 February, 2026
IN THE COURT OF SH. AJAY KUMAR JAIN:
LD. DISTRICT JUDGE (COMMERCIAL COURT) -04 (Digital)
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
OMP (COMM) 4/2024
RUDRA SRIVASTAVA
S/o Late Sh. V. K. Srivastava
R/o. J-601, Catriona Apartment,
Near Ambience Mall, Gurugram, Haryana
.....Petitioner (respondent in arbitration proceedings)
VERSUS
1. NEERAJ BHATIA (Claimant)
S/o Late Sh. N. D. Bhatia
B-100, Shivalik Colony, New Delhi- 110017
2. MRS. SANGEETA SRIVASTAVA
R/o 60A, Sainik Farm,
Neb Sarai, Delhi- 110068
Also At:
House No. 614-A, Raunak Pratham Paradise,
Mitrabhandhu Nagar, Near Ram Mandir, Indore, MP- 452016
3. MRS. KALPANA SRIVASTAVA
W/o Late Sh. V. K. Srivastava
R/o J-601, Catriona Apartment
Near Ambience Mall, Gurugram, Haryana
4. MS. RATUAL VIG
D/o Late Sh. V. K. Srivastava
R/o J-601, Catriona Apartment
Near Ambience Mall, Gurugram, Haryana
5. MS. RADHAPRIAY BANSAL
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 1 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Digitally
signed by
AJAY
AJAY KUMAR
KUMAR JAIN
JAIN Date:
2026.02.25
16:25:06
+0530
W/o Sh. Ayush Bansal
D/o Late Sh. V. K. Srivastava
R/o 14/2/2, Mubarkabad Road, Bastara,
Karnal, Haryana- 132001
6. MS. SHIVANI ARORA
W/o Sh. Gursajan Arora
D/o Late Sh. V. K. Srivastava
R/o Plot No. 11, North Avenue Road,
Punjabi Bagh West, Delhi,
7. MS. SUVARNA JINDAL
W/o Sh. Abhay Jindal
D/o Late Sh. V. K. Srivastava
R/o A3-207, Printer Appartment,
Sector-13, Near Bhagwati Hospital,
Rohini, Sector-14, New Delhi-110085
8. SH. RAVDEEP SINGH SURI
S/o Sh. G. S. Suri
R/o 2A, Mathura Road, Jangpura-B, Delhi.
9. Sh. J.R. ARYAN, DISTRICT JUDGE (RETD.) DELHI
SOLE ARBITRATOR
Having office at : N-80, Greater Kailash-I,
New Delhi- 110048
( Respondent no. 9 is deleted from array of parties vide order dated
26.03.2024.)
.....Respondents
Date of filing/initiation of petition : 05.02.2024
Date when final arguments heard : 12.02.2026
Date of Judgment : 25.02.2026
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 2 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
JUDGMENT
1. Vide this judgment, I shall decide the petition under section 34 of
Arbitration and Conciliation Act seeking setting aside the impugned
award dated 19.09.2023 passed by Ld. Sole Arbitrator, filed by the
petitioner Rudra Srivastava.
2. The deceased Mr. V. K. Srivastava is the respondent in the
arbitration proceedings, however during the arbitration proceedings, he
died. Thereafter, the petitioner Rudra Srivastava is impleaded who also
represented the other LRs of deceased Sh. V. K. Srivastava. However,
Mrs. Sangeeta Srivastava (first W/o of Late Mr. V. K. Srivastava)
participated and contested in the arbitration proceedings. The petitioner
Rudra Srivastava in the present petition was proceeded ex-parte in the
arbitral proceedings and challenge the impugned award before this
court through present petition under section 34 of Arbitration and
Conciliation Act.
3. Brief background facts are that claimant/respondent was engaged
in business of promotion, development and construction of real estate.
The deceased Mr. V. K. Srivastava represented to the claimant that he
was owner, holding perpetual lease rights in a residential property
bearing no. B-58, admeasuring 200 sq. yards, situated at Rehabilitation
Ministry Employees Corporate House Building Society Ltd., known as
Shivalik, New Delhi. The deceased Mr. V. K. Srivastava assured
claimant that the suit property was free from all and any kind of
encumbrances, such as prior sale, lease, mortgage, disputes etc. and
fully competent to enter into collaboration agreement, therefore
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 3 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
claimant entered into collaboration agreement dated 09.02.2018. It was
agreed between the parties that in addition to incurring entire cost and
expenditure towards re-construction of property, the claimant shall pay
to the deceased Mr. V. K. Srivastava an amount of Rs. 1,35,00,000/- a
non-refundable interest free security deposit. Claimant paid Rs. 25 lakh
to the deceased Mr. V. K. Srivastava. The deceased Mr. V. K. Srivastava
approached the claimant on 10.02.2018 and requested for payment of
Rs. 7 lakhs in cash to honour financial commitment which was paid by
claimant and thus the deceased Mr. V. K. Srivastava received total
amount of Rs. 32 lakhs. In terms of collaboration agreement, deceased
Mr. V. K. Srivastava required to complete the compulsory requirements
at his own cost by 15.03.2018, however the deceased Mr. V. K.
Srivastava did not comply with terms of agreement. It also came to
knowledge of claimant that the deceased Mr. V. K. Srivastava has
cheated other party and had entered into agreement in relation to suit
property. A contempt case no. 278 of 2020 filed by Smt. Shashi Bala
Sawhney in Hon’ble High Court of Delhi is still pending. When the
deceased Mr. V. K. Srivastava failed to perform his obligation under the
agreement, the claimant sent a legal notice dated 22.05.2018 to the the
deceased Mr. V. K. Srivastava, however deceased Mr. V. K. Srivastava
neither complied with the said legal notice nor responded to the same.
Therefore, the claimant filed civil suit seeking specific performance of
collaboration agreement and for permanent injunction and damages,
however in view of the arbitration clause, the deceased Mr. V. K.
Srivastava moved an application before Hon’ble High Court and
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 4 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Hon’ble Court vide order dated 29.04.2019 directed the parties to take
recourse to arbitration for resolution of their dispute. Thereafter,
claimant again filed a petition under section 11 (6) of Arbitration &
Conciliation Act, pursuant to which the present Arbitrator was
appointed. The claimant pleaded the following reliefs/claims as under :
a) Recovery of Rs. 55,04,000/- i.e. Rs. 32 lakhs towards
refund of the amount paid to the respondent and Rs.
23,04,000/- towards interest @ 18% per annum from
11.02.2018 till filing of statement of claim
b) An amount of Rs. 5 lakhs towards loss suffered by
claimant on account of brach of the agreement on the part
of respondent.
c) Claimant prayed for award for the above stated amount
with further interest @18% per annum from 26.03.2022
till realisation of the amount i.e. interest for pendente lite
and future.
4. The deceased Mr. V. K. Srivastava in his statement of defense
before Ld. Sole Arbitrator stated that statement of claim was filed
without a proper cause of action and when conversion of suit property
to free hold was still pending with concerned authorities i.e. L & DO,
Govt. of India. Furthermore, the total consideration amount settled
between parties was Rs. 1, 60,00,000/- wherein Rs. 50 lakhs was to be
paid a the time of execution of collaboration agreement and balance
amount of Rs. 1,10,00,000/- was to be paid by builder within 15 days
of conversion of property. The deceased Mr. V. K. Srivastava stated that
he made all possible efforts to get conversion of property to free-hold.
Being out of funds, requested builder for additional payment from
balance amount of Rs. 25 lakhs but the builder refused the same and
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 5 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
backed out and started demanding refund of money. The deceased Mr.
V. K. Srivastava refused to refund money as it was builder who backed
out from the deal. The deceased Mr. V. K. Srivastava also presented a
counter-claim for Rs. 1 Crore.
5. Vide order dated 29.09.2022, issues were framed by the Ld.
Arbitrator in claim and in counter-claim.
6. During evidence in claim, claimant examined himself and
tendered his affidavit evidence (Ex.CW1/A) and was cross-examined
by counsel for the deceased Mr. V. K. Srivastava, however the said
counsel on 18.11.2022 conveyed information that the deceased Mr. V.
K. Srivastava was passed away on 17.11.2022, and requested to
implead LRs on record. Sh. Rudra Srivastava, son of deceased Mr. V.
K. Srivastava appeared in arbitration proceedings and got few
proceedings adjourned on a request that he is in settlement talks, and
his counsel Mr. Arun Malik would be representing him as well as his
four sisters also. The matter was fixed for 23.07.2023 to proceed with
cross-examination of claimant, however counsels for LRs of the
deceased Mr. V.K. Srivastava again requested for adjournment.
Evidence by affidavit of Smt. Sangeeta Srivastava was taken on record,
however Rudra Srivastava through email sought adjournment which
was declined and was proceeded ex-parte. Examination and cross-
examination of Smt. Sangeeta Srivastava was concluded and matter
was fixed for final hearing. Ld. Arbitrator passed the impugned award
dated 19.09.2023 in favour of claimant and against the deceased Mr. V.
K. Srivastava through LRs.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 6 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors. Submissions of counsels
7. Ld. counsel for petitioner submitted that the mandate of Ld. Sole
Arbitrator had expired/terminated on 14.09.2023, and the Sole
Arbitrator ought not have passed any award after termination of its
mandate, hence the impugned order dated 19.09.2023 deserves to be set
aside. Furthermore, the freehold process of the suit property was
already initiated by Late Sh. V. K. Srivastava in the year 2016 and had
deposited an amount of Rs. 1 lakh with L & DO. Late Sh. V. K.
Srivastava had completed his obligation. The passing of order by Govt.
Department is beyond the control of the Late Sh. V. K. Srivastava.
Furthermore, the collaboration agreement was executed by playing a
fraud upon Late Sh. V. K. Srivastava. The petitioner was proceeded ex-
parte on 19.08.2023, however without issuing premptory notice. Ld.
counsel for petitioner further submitted that there are arbitrary and
systematic violation of principles of natural justice. (relied upon
‘Ramanbhai Chhaganbhai Patel Vs. Religare Finvest Ltd., OMP
(Comm) 71/2022, DHC’ and ‘M/s Mittal Pigments Pvt. Ltd. Vs. M/s
GAIL Gas Limited, 2023/DHC/001185’).
8. There is unilateral change of hearing dates without consent
(relied upon ‘Poonam Mittal Vs. M/s Creat Ed Pvt. Ltd. OMP (Misc)
(Comm) 80/2023’ ). The mandate extension secured through
manipulation in petitioner’s absence. The award was passed after
automatic termination of mandate under section 29 A that renders
award void ab initio, relied upon ‘Mohan Lal Fatehpuria Vs. M/s
Bharat Textiles & Ors., 2025 INSC 1409’. Further, fraud vitiates the
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 7 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
collaboration agreement (relied upon ‘Associate Builders Vs. Delhi
Development Authority, C.A No. 10531 of 2014′ and ‘A.V. Papayya
Sastry Vs. Govt. of Andhra Pradesh. (2007) 4 SCC 221′). Awarding the
entire award to one joint contractor is a finding so perverse that it
shocks the judicial conscience (relied upon ‘Ssangyong Engineering &
Construction Co. Ltd. Vs. NHAI, (2019) 15 SCC 131′).
9. Ld. counsel for respondent submitted that the objection raised by
the petitioner regarding impleadment of parties is misconceived. The
Late Sh. V. K. Srivastava has expired on 17.11.2022 which was duly
communicated to the claimant on 18.11.2022.Thereafter, the
claimant/respondent filed application on 31.01.2023 to bring on record
the legal representatives of Late Sh. V. K. Srivastava within 90 days.
Thereafter, moved another application dated 16.10.2023 to implead
other LRs and surviving spouse (Ms. Sangeeta Srivastava), and notice
dated 17.03.2024 was also issued by the Ld. Arbitrator to LRs and Ms.
Sangeeta Srivastava, but all the notices returned with the remark as
‘addressee could not be located’ . Thereafter, on 29.03.2023 a request
was made to Mr. Rudra Srivastava to provide correct particulars of the
LRs. Furthermore, the petitioner sought adjournment through email
dated 10.05.2023 and 10.06.2023 and further failed to participate in
arbitration proceedings on 23.07.2023 and 19.08.2023. In view of
repeated defaults and deliberate non-participation and considering that
the mandate of the arbitral proceedings was due to expire on
14.09.2023, the Sole Arbitrator was constrained to proceed ex-parte
vide order dated 19.08.2023.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 8 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
10. Ld. counsel for respondent submitted that the mandate of Ld.
Sole Arbitrator was due to expire on 14.09.2023 and the arguments in
the matter were duly heard on 09.09.2023, well within the stipulated
period of mandate. The deliberate non-participation and successive
adjournments, the Sole Arbitrator was constrained to proceed ex-parte
so as to ensure that the proceedings were concluded within the statutory
mandate period. Therefore, Sole Arbitrator rightly proceeded to render
the award dated 19.09.2023 strictly in accordance with law and within
the prescribed period. The date of final arguments was on 09.09.2023
which is communicated to the parties vide order dated 19.08.2023,
subsequently, on 09.09.2023, the parties duly advanced their
arguments, hence no ground made out to set aside the impugned award
by way of present petition.
11. Both the parties also filed written submissions.
12. Arguments heard. Record perused.
13. Before adverting to the contentions of the parties, the relevant
paragraphs of the impugned award dated 19.09.2023 passed by Ld.
Sole Arbitrator are reproduced as under :
”
1. …..
2. ….
Claimant’s case as per Statement of Claim
3. Claimant was engaged in business of promotion, development
and construction of real estate and was well established in said
business. Respondent Mr. V.K. Srivastava represented to the Claimant
that he was owner, holding perpetual lease rights in a residential
property B-58, admeasuring 200 sq. yards, situated at Rehabilitation
Ministry Employees Corporate House Building Society Ltd., known as
Shivalik, New Delhi and the said property consisted of basement,
ground floor and first floor with terrace. Respondent desired to get
property re- developed / re-constructed and with Respondent No. 2
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 9 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
approached and requested Claimant to take up the re-development
work of the said property. Entire cost of re-construction was to be
borne by the Claimant. Respondent No. 1 was rather introduced by
Respondent No. 2. Respondent No. 1 Mr.V.K. Srivastava assured
Claimant that suit property was free from all and any kind of
encumbrances, such as prior sale, lease, mortgage, disputes …… prior
Agreement to Sell etc. and thus, Respondent was fully competent to
enter into Collaboration Agreement. Claimant trusted Respondent and
agreed to re-develop property and entered into Collaboration
Agreement dated 09.02.2018 with Respondent No. 1. Copy of
Collaboration Agreement was annexed as Annexure C-1. It was agreed
between parties that in addition to incurring entire cost and
expenditure towards re-construction of property, the Claimant shall pay
to Respondent No. 1 an amount of Rs.1,35,00,000/- (One Crore Thirty
Five Lakhs ) as non-refundable interest free security deposit which will
be a consideration amount against rights in suit property to be
transferred to the Claimant by Respondent No. 1. Claimant paid Rs.25
lakhs by cheque to Respondent No. 1 by the time of execution o f
Collaboration Agreement, as per details below:
i. Cheque No. 000163 dated 11.01.2018 for Rs.5 lakhs.
ii. Cheque No. 000764 dated 09.02.2018 for Rs.20 lakhs.
The cheques drawn on HDFC Bank Ltd., Malviya Nagar, New Delhi,
were got en- cashed by Respondent No. 1. Cheque encashment
certificate from bank was Annexure C-2. Balance consideration amount
of Rs.1,10,00,000/- was agreed to be paid by Claimant to Respondent
No. 1 within 15 days from the date of suit property got converted to
free-hold from lease-hold, process for which had already been initiated
by Respondent No. 1 and Respondent was also required to get
Conveyance Deed registered and then hand over actual physical
possession of the property to the Claimant within 15 days for its
reconstruction.
4. Claimant pleads that the Respondent No. 1 approached
Claimant on 10.02.2018 and requested for payment of Rs.7 lakhs in
cash, needed by him to honour financial commitment. Claimant paid
Rs.7 lakhs to the Respondent and Respondent executed a receipt
Annexure C 3 for the said amount. Respondent thus received a total
amount of Rs.32 lakhs.
5. In terms of Collaboration Agreement, Respondent No. 1 was
required to complete ‘the Compulsory Requirements’ at his own cost
by 15.3.2018. Those Compulsory Requirements were recorded in the
Agreement and one such requirement No. 4 was that Respondent will
get suit property converted into free-hold and get conveyance deed
registered. Claimant contends that having received money, Respondent
with ulterior motives and to cheat Claimant, did not comply with terms
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 10 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
of Agreement. Claimant also came to know that Respondent No. 1 had
cheated other party and had entered into Agreement in relation to suit
property. Statement of Claim refers to a contempt case No. 278 of 2020
filed by Smt. Shashi Bala Sawhney in High Court of Delhi against
Respondent No. 1. Orders dated 17.2.2021 and 3.12.2021 passed by
High Court were Annexure C-4. Respondent started avoiding Claimant
and failed to perform his obligation under the Agreement on one or the
other pretext. Claimant was constrained to send legal notice dated
22.5.2018 to the Respondent, which was sent by speed post, courier on
the correct address and through email and on WhatsApp number of his
mobile phone number, requesting Respondent to perform his part of
contract in terms of Collaboration Agreement and fulfil the
Compulsory Requirement. Respondent neither complied with said legal
notice nor responded to the same. Legal notice was Annexure C 5 and
dispute arose in said background.
6. Claimant filed Civil Suit CS No. 788 / 18 before Civil Court
at Saket, Delhi, seeking specific performance of Collaboration
Agreement and for permanent injunction and damages. Since there was
arbitration clause in the Collaboration Agreement, in view of Section 8
of the Arbitration & Conciliation Act, Respondent moved an
application before Hon’ble Court and vide order dated 29.04.2019,
Hon’ble Court disposed of Suit with direction to parties to take
recourse to arbitration for resolution of their dispute. Copy of Civil Suit
CS No. 788/18 was Annexure C 6. Vide notice dated 3.7.2019,
Claimant invoked arbitration clause of the Collaboration Agreement
and suggested a name as Sole Arbitrator but Respondent did not agree
for the named arbitrator and put forth certain names for appointment of
arbitrator. None of them was acceptable to the Claimant. Claimant thus
filed Petition under Section 11 (6) of the Arbitration & Conciliation Act
and vide Order dated 11.1.2022, Hon’ble Court appointed the present
Arbitral Tribunal.
7. Claimant contends that Respondent failed to perform his
obligations under the Collaboration Agreement and breached material
terms of the Agreement and rather was also looking for prospective
buyers to create third party right or sell or part with possession of the
suit property. Claimant had always been ready and willing to perform
his obligations under the Agreement. Due to breach on the part of
Respondent, Claimant suffered a loss of Rs.5 lakhs and the Respondent
was liable to compensate Claimant for the same.
8. Claimant pleads that he was entitled to recover Rs.32 lakhs
with interest @ 18% per annum from 11.02.2018 till the payment of
the amount. Claimant sets out reliefs / claims as following:
a) Recovery of Rs.55,04,000/- i.e., Rs.32 lakhs towards refund of
the amount paid to the Respondent and Rs.23,04,0000/- towardsOMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 11 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
interest @ 18% per annum from 11.2.2018 till filing of Statement of
Claim
b) An amount of Rs.5 lakhs towards loss suffered by Claimant on
account of breach of the
Agreement on the part of Respondent.
c) Claimant prayed for award for the above stated amount with
further interest @ 18% per annum from 26.03.2022 till realisation of
the amount i.e. interest for pendente lite and future.
9. Claimant also seeks award for Rs.2 lacks towards cost of
litigation including expenses incurred on suit for specific performance
as well in arbitration petition and also the cost of the present arbitration
fee and proceedings.
Defence of the Respondent as per Statement of Defence
10. Respondent No. 1 contested claims and filed SOD. Statement
of Claim was stated to be without a proper cause of action.
Collaboration Agreement dated 9.2.2018 was of the nature of
conditional / compulsory and the same was still alive when conversion
of suit property to free hold was still pending with concerned
authorities i.e., L&DO, Government of India and the same was not
under the control and power of the Respondent. Claimant himself
backed out of the deal unilaterally and averments in claim petition were
false and incorrect. Entire Claim Petition was false, misconceived, and
meritless. Claim Petition was not signed and verified and instituted by
the Claimant in accordance with law. It is pleaded that one Mr. Rajesh
Batra impersonated Neeraj Bhatia and signed two sets of Collaboration
Agreement in the presence of Respondent No. 1. Respondent when
received summons in the CS No. 788 / 18 from the court at Saket,
Delhi, Respondent noticed that signatures of the Claimant on both
copies / documents differed from each other. Later, Neeraj Bhatia
signed on one original set of Collaboration Agreement which had been
given to Rajesh Batra and Rajesh Batra was made a witness on the
document in order to deceive Respondent by way of fraud. Other set of
original Collaboration Agreement, given to Respondent, would make
above referred fraud clear.
11. Respondent asserted further that total consideration amount
settled between parties was Rs.1,60,00,000/- (Rs. One crore sixty
lakhs) wherein Rs.50 lakhs was to be paid at the time of execution of
Collaboration Agreement and balance amount of Rs.1,10,00,000 /- was
to be paid by builder within 15 days of conversion of property into
free-hold, which stood already applied, and after getting the
conveyance deed registered.
12. Rajesh Batra impersonated Neeraj Bhatia at initial talks of
negotiation and had handed over cheque dated 11.01.2018 for Rs.5
lakhs and further delivered chequedated 9.2.2018 for Rs.20 lakhs, on
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 12 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
the date of signing of the Collaboration Agreement. It is pleaded that
Rs.7 lakhs was paid by Respondent No. 2 by way of adjustment as the
amount outstanding against Respondent No. 1 in some other business
deal with Respondent No. 2 and thus Rs.7 lakhs was the share of
Respondent No. 2 in this Collaboration Agreement. Receipt for that
amount of Rs.7 lakhs dated 10.2.2018 was written by Mr. Romil Sikka
who was witness on the receipt also. However, seeing the foul play
being played by Rajesh Batra, Mr. Ashudeep Suri, brother of Ravdeep
Suri, Respondent No. 2, refused to sign the receipt. Rs.32 lakhs thus
was paid in above manner in this Agreement and Rs.1,28,00000/-
was to be paid as a balance consideration by the builder. Builder
failed to pay Rs.25 lakhs as promised to be paid at the time of signing
of the Collaboration Agreement. Respondent No. 2 , on coming to
know that Rajesh Batra impersonated Neeraj Bhatia by way of foul
play, objected to genuineness of the Collaboration Agreement and
decided not to proceed further with Agreement.
13. Respondent pleads that he made all possible efforts to get
conversion of property to free-hold but Respondent being out of funds,
requested builder / Rajesh Batra for additional payment from the
balance amount of Rs.25 lakhs but the builder blatantly refused and for
that reason, the Respondent was unsuccessful in getting the property
converted to free-hold, process for which was still pending. Builder
was not ready to wait any more and thus unilaterally backed out and
started demanding refund of money paid to the Respondent.
Respondent refused to refund money as it was builder who backed out
from the deal unilaterally . Respondent suffered a huge goodwill loss of
property to the tune of Rs.1 crore. Goodwill loss of property stood
reflected as there was no builder in the market to redevelop the
property.
14. Respondent No. 2 introduced Romil Sikka and Rajesh Batra
as builders wherein Rajesh Batra impersonated Neeraj Bhatia and then
all talks and meetings were held through Rajesh Batra. After
negotiations and talks, Collaboration Agreement was executed on
9.2.2018. Respondent No. 2 played active role in finalisation of
Collaboration Agreement. Rajesh Batra throughout impersonated
Neeraj Bhatia. It was recorded in the Agreement that the builder after
developing the property at his cost and expenses would be entitled to
second floor and third floor with terrace. Other shares were also
specified in the Agreement. During negotiations, total consideration
was settled at Rs.1,60,00,000/- wherein Rs.50 lakhs was to be paid at
the time of execution of Agreement and balance amount was to be paid
to the builder within 15 days from the date property stood converted to
free-hold. Out of Rs.50 lakhs, Rs.25 lakhs was paid by cheques and
Rs.7 lakhs was by way of adjustment as the amount outstanding against
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 13 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Respondent No. 1 in favour of Respondent No. 2 in some other deal.
Builder thus paid Rs.32 lakhs and balance consideration amount of
Rs.1,28,00,000/- remained to be paid.
15. Respondent asserts that though it was recorded in the
Collaboration Agreement that besides entire cost and expenses for the
re-development of property, builder / Claimant shall pay
Rs.1,35,00,000/- to Respondent but in fact total consideration amount
was settled at Rs.1,60,00,000/-. Collaboration Agreement- was
conditional when some compulsory requirements were recorded to
be performed by the owner / Respondent and one such requirement
was to get the property converted to free-hold and get conveyance deed
registered. Respondent complied with all those compulsory
requirements except as regards conversion of property to free-hold.
Respondent had already applied with L&DO by submitting a request
with fee of Rs.1 lakh paid by chequedated 3.6.2016 and those
documents were shown to the builder. Conversion of property to free
hold was still pending with L&DO and it was not within the control
and power of Respondent. Respondent made all efforts and when he
required more funds for that process and requested builder for more
money, he refused to pay and rather unilaterally backed out from the
Agreement. Respondent No. 1 thus refused to refund the amount to
builder. Respondent strongly refuted the claims and contended that
Claimant was not entitled to recovery of Rs.32 lakhs with interest and
that amount calculated to Rs.55,04,000/- was misconceived claim.
Claimant was not entitled to any such loss or damages for Rs.5 lakhs as
claimed. Claimant was not entitled to interest pendent lite, and future
as claimed and was not entitled to cost of Rs.2 lakhs or further cost for
the present arbitration. Claim Petition was liable to be dismissed.
16. Respondent also presented a counter claim for Rs.1 crore on
a plea that due to breaches on the part of Claimant – builder,
Respondent suffered loss of goodwill of property as no other builder
was willing to take up re-construction or re-development of the
property. Claimant strongly refuted counter claim by filing reply and
filed rejoinder to SOD. Claimant reiterated the claims. Respondent also
reiterated counter claim by filing rejoinder to the reply of the builder –
Respondent in the counter claim.
17. Respondent No. 2, described as builder in the Collaboration
Agreement, was also impleaded in this arbitration by the Claimant but
only as a proforma Respondent against whom no claim was sought to
be prosecuted. Respondent No. 2 filed reply to Statement of Claim and
claimed that out of Rs.25 lakhs paid to the Respondent by cheque by
the Claimant, Rs.9 lakhs was contributed by answering Respondent
No. 2 by depositing said amount by cash in the bank account of the
Claimant as his share in this Collaboration Agreement, Rs.7 lakhs paid
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
in cash to the Respondent No. 1 was in fact the amount owed by
Respondent No. 1 in favour of Respondent No. 2 by way of a friendly
loan and the same stood adjusted in this Collaboration Agreement and
thereby share of consideration of Respondent No. 2 in this Agreement
was 50:50 qua share of the Claimant. Respondent No. 2 prayed to be
transposed as Claimant with equal and proportionate claim and
requested for an award to that extent.
18. Tribunal found prima facie dispute raised by Respondent No.
2 was beyond arbitration reference and on this point all the parties were
heard. Vide order dated 20.09.2022, dispute raised by Respondent No.
2 was held to be beyond arbitral reference and the same could not be
adjudicated before this Tribunal. Issues were set out on 22.09.2022 for
adjudication of disputes and the same are as following:
I. Issues with Onus on the Claimant
a) Whether the Claimant is entitled to recover Rs.32.00 lakh, paid by
claimant to the Respondent-owner under the Collaboration Agreement
dated 09.02.2018 for re- development/reconstruction of property B-58,
Shivalik, New Delhi and the Respondent- owner failed to discharge his
obligations under the Collaboration Agreement and the re-
development could not be executed?
b) Whether Claimant is entitled to Rs.23,04,000/- towards interest @
18% p.a. on the amount of Rs.32.00 lakh for the period from
11.02.2018 till the filing of the present Claim petition against
respondent?
c) Whether Claimant is entitled to Rs.5.00 lakh towards loss suffered
on account of breaches committed by the Respondent-owner?
d) Whether Claimant is entitled to pendent-lite and future interest @
18% p.a. on the Claim amount Rs.60,04,000/-?
e) Whether Claimant is entitled to Rs.2.00 lakh as litigation expenses
including present Arbitration proceedings?
f) Whether Respondent-owner had executed Collaboration
Agreement dated 08.08.2017 with M/S A.B. Promotors Pvt. Ltd.in
respect of same property, which is subject matter of present dispute,
and with suppression of said fact entered the Collaboration Agreement
with claimant with malafide, and that M/S A.B. Promoters Pvt. Ltd.
filed suit CS Comm. No. 425/2021 in a court at Delhi for recovery of
Rs. 41 Lacs ( forty-one lacs) against respondent-owner Mr. V. K.
Srivastava. If so its effect?
II. Issues with Onus on Respondent No.1
g) Whether the Claimant failed to act in terms of Collaboration
Agreement and had not approached the Tribunal with clean hands or
on a valid cause of action?
h) Whether the Collaboration Agreement was in the nature of
Conditional/Compulsory and was still alive, when conversion of
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
property B-58, Shivalik, New Delhi from lease hold to Free-hold was
still pending with the Government authorities and the Claimant backed
out from the deal unilaterally? If so, its effect?
i) Whether one Mr. Rajesh Batra impersonated as the Claimant Mr.
Neeraj Bhatia and signed two sets of Collaboration Agreement and
defrauded the Respondent No.1 or that the Claim Petition has not been
signed, verified, and instituted by the Claimant in accordance with
law? If so, its effect.
j) Whether total consideration amount in this Collaboration
Agreement was settled at Rs.1.60 crore wherein Rs.50.00 lakh was to
be paid at the time of execution of the Collaboration and Rs.1.10 crore
was to be paid by the Claimant-Builder within fifteen days from the
date of the property converted to Freehold? If so, its effect?
k) Whether Rs.7.00 lakh against Receipt dated 10.02.2018, paid in
cash to Respondent No.1, was by way of adjustment as outstanding
against Respondent No.1 in favour of Respondent No.2 in some other
business transaction and the amount was thus paid by Respondent No.2
as his share in the Collaboration Agreement? If so, to what effect?
l) Whether an amount of Rs. 25.00 lakh was agreed to be paid to
Respondent No.1 in cash by the Claimant-Builder at the time of
signing of Collaboration Agreement but was not paid? If so, to what
effect?
m) Whether Respondent had already applied for conversion of
property in question to Freehold on 07.06.2016 and application for
conversion of property B-58, Shivalik, New Delhi was still pending
with L&DO, despite Respondent No.1 -owner having made all efforts
could not get property converted to free hold? If so, to what
effect?
n) Whether the Claimant-Builder unilaterally backed out from the
Agreement causing a huge ‘goodwill’ loss of the property to the
Respondent?
II. Counter Claim
a) Whether the Respondent No.1-owner suffered loss of ‘goodwill’
of property as the Claimant backed out of the Collaboration Agreement
unilaterally and the counter claimant was entitled to recover Rs.1.00
crore (one crore) with interest pendent-lite and future as punitive
damages from Mr. Neeraj Bhatia?
19. Claimant examined himself by his affidavit for his
examination-in-chief and his statement was recorded on 2.11.2022
whereby he tendered his affidavit evidence Ex. CW1/A and was cross-
examined by counsel Mr. G.K. Mall, representing Respondent
No. 1. Cross-examination continued on 12.11.2022. Counsel Mr.
Mall then conveyed on the WhatsApp No. of this Tribunal on
18.11.2022 that Respondent Mr. V.K. Srivastava passed away on
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
17.11.2022. Said information was conveyed to the counsel for the
Claimant vide email dated 19.11.2022 by the Tribunal and counsels
were requested to take up the process for bringing Legal
Representatives of Shri V.K. Srivastava on record. Counsel Mr. Mall
declined to appear for any L.R., for no instruction.
20. Application filed by Claimant counsel for bringing LRs on
record was received on 31.01.2023 on email and copy was served upon
counsel representing Respondents. Counsel representing Respondent
did not respond to the application in any manner. On the request of
counsel for the Claimant, notice of application was directed to be sent
to the LRs i.e. wife, one son and 4 daughters of late Shri V.K.
Srivastava on the address on which Mr. Srivastava was served in this
arbitration. Vide proceedings dated 3.3.2023, Smt. Kalpana Srivastava,
wife of late Shri V.K. Srivastava, was found duly served with notice of
impleadment application but she did not appear in the hearing fixed
by the Tribunal and was proceeded ex -parte.
21. Vide proceeding dated 07.03.2023, counsel Mr. Akhil Hasija
representing Claimant informed that deceased Shri V.K. Srivastava had
left behind his earlier wedded wife Smt. Sangeeta Srivastava which
fact was supported from the passport of Shri V.K. Srivastava,
photocopy of the passport placed before the Tribunal. Counsel moved
another application to bring Smt. Sangeeta Srivastava on record, who
was residing in Indore, M.P. She was impleaded and served, and she
appeared in the proceeding, represented by Advocate Mr. Vishal
Bhatnagar. Counsel Mr. Bhatnagar filed defence statement on behalf of
Smt. Sangeeta Srivastava and proceeded to further cross-examine
Claimant on behalf of Smt. Sangeeta Srivastava. Another LR Mr.
Rudra Srivastava, son of deceased Shri V.K. Srivastava, also appeared
in this arbitration on several hearings. He got a few proceedings
adjourned on a request that he was in a process of settlement talks and
that his counsel Mr. Arun Malik would be representing him as well his
four sisters also. He further got one adjournment stating that he was in
the process of getting relinquishment deeds executed in his favour by
his four sisters. It was being impressed on every hearing that mandate
of the Tribunal was going to be over soon and thus adjournments
should be avoided unless it was unavoidable and there was sufficient
Bonafede. Finally, matter was fixed for 23.07.2023 to proceed with
cross-examination of Claimant on behalf of LRs. Counsel Mr.
Bhatnagar appeared on behalf of Smt. Sangeeta and cross-
examined the Claimant. LR Mr. Rudra Srivastava appeared in person
but again requested for adjournment by moving an application dated
13.7.2023 stating therein that process for relinquishment of rights by
his four sisters in his favour was in progress and negotiations for sale
of suit property were also in progress. In the given circumstances, with
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
reasons recorded in proceedings, cross-examination of Claimant was
closed vide proceedings dated 23.07.2023 and the matter was fixed for
examination of Respondent’s evidence, however, with a rider that
cross-examination of Claimant on behalf of other LRs would be re-
opened only for a short duration of half an hour and subject to cost of
Rs.20000/- to be paid by LRs other than Smt. Sangeeta Srivastava to
the Claimant on the next hearing. Next hearing was fixed for
19.08.2023. Evidence by Affidavit of Smt. Sangeeta Srivastava came
on record but request for adjournment was received from Rudra
Srivastava through email and another email was received from
Advocate Mr. Arun Malik. Adjournment request was declined. Issue
raised by Advocate Mr. Malik was also dealt with and 4 daughters LRs
of deceased Shri V.K. Srivastava were proceeded ex-parte.
Examination and cross-examination of Smt. Sangeeta Srivastava
concluded on that date and the matter was fixed for final hearing.
ARGUMENTS OF CLAIMANT
22. Counsel Mr. Hasija argued that Collaboration Agreement
executed between the parties is an undisputed fact by the Respondent.
Defence contention that Mr. Rajesh Batra impersonated Neeraj Bhatia
has not been established by any cogent evidence. Respondent accepts
to have received Rs.25 lakhs by cheques from the Claimant but raised a
dishonest plea that Rs.7 lakhs paid as cash as per demand raised by
Respondent was by way of adjustment of amount outstanding in favour
of Respondent No. 2 against Respondent No.1 in some other deal. Said
plea stands defied by receipt Ex.CW1/7, executed by Respondent
acknowledging the amount Rs.7 lakhs received in cash from the
Claimant. Even otherwise, said contention of Respondent remained
unsubstantiated by any acceptable evidence. It is argued that
Respondent failed to discharge his ‘compulsory obligation’ of getting
property converted to free-hold and thereby breached Collaboration
Agreement.
23. Ld. Counsel argued that plea raised by Respondent No. 2 that
Rs.9 lakhs paid to the Claimant as his contribution and with Rs.7 lakhs
earlier paid to Respondent No. 1 by way of adjustment of the amount
outstanding in favour of Respondent No. 2 and thus made
Respondent’s contribution 50:50, has already been held by Tribunal
beyond the scope of arbitrability before this Tribunal vide order dated
20.09.2022.
24. Ld. Counsel argued that the plea of Respondent No. 1 that
Collaboration Agreement was still surviving when conversion of
property was still pending and that Agreement was compulsory and
conditional and when no consequence of non-performance of
compulsory requirement was provided in the contract, then claims were
without cause of action, was liable to be dismissed in view of law held
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
by Hon’ble High Court of Delhi in Rajasthan Breweries Ltd. vs. Stroh
Breweries Co. (2000) SCC Online Delhi 481 and re-affirmed in Royal
Orchid vs. Kulbir Singh Kohli & Ors. 2022 SCC Online 2519, where it
has been held that MOU being a private commercial transaction, same
could be terminated even without any reason.
25. As regards prosecution of claims against LRs, after demise of
Respondent Shri V.K. Srivastava, counsel relied upon Ravi Parkash
Goel vs. Chandra Prakash Goel (2008) 13 SCC 1667 where it was held
that arbitration Agreement would not be discharged by death o f any
party thereto and would be enforceable against legal representatives of
deceased. Arbitrator would continue to be vested with authority to
adjudicate upon the matter. Same proposition was held in Dr. Papiya
Mukherjee vs. Aruna Bannerjee (2022) SCC Online (Cal) 595.
26. Ld. Counsel argued that Respondent No. 1 having already
entered into a Collaboration Agreement with A&B Promoters in august
2017 in respect of same property and by suppressing said fact entered
into Collaboration Agreement with the Claimant was an act to cheat the
Claimant, entitling Claimant to terminate Agreement, claim the refund
of the amount paid under the Agreement with interest and damages
suffered in the transaction. Counsel argued that amount paid to
Respondent was arranged by Claimant by availing over-draft facility
from bank which stood reflected from Ex.CW-1/R1 and thus interest
claimed on the amount was liable to be granted.
27. Cost as prayed was also liable to be granted considering the
conduct of the Respondent.
28. Written arguments with judgments in support of points
argued were also placed before the tribunal.
ARGUMENTS OF RESPONDENT
29. Counsel Mr. Vishal Bhatnagar representing Smt. Sangeeta LR
argued that arbitration clause stipulated a situation where arbitration
was invocable i.e., the existence of dispute. Whether a dispute did exist
when arbitration was invoked? Ld. Counsel referred to various clauses
of Collaboration Agreement describing as to how the parties were to
proceed, the builder was to pay a consideration amount and then take
up reconstruction of the property and complete the same within a
certain stipulated time. Likewise, the owner Mr. V.K. Srivastava was
required to fulfil certain obligations, described as ‘compulsory
requirements’, in the Agreement by a stipulated date but the Agreement
did not provide for a consequence or repercussion of non- fulfilment of
an obligation on the part of a party to the Agreement. Like, where the
owner was required to get the property converted to free-hold and get
its conveyance deed registered, but non-compliance of the same did not
foresee any consequence, stipulated in the Agreement, dispute would
not be said to have arisen when notice Ex.CW1/7 invoking arbitration
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
was issued by the builder. Counsel argued that if owner Mr.V.K.
Srivastava was lacking / missing or ignoring performance of any part
of his obligation, only remedy available with the builder was to seek
specific performance by filing civil suit. In no situation, cause for
invocation of arbitration clause arose.
30. Counsel argued that Collaboration Agreement specifically
recorded the consideration amount to be paid by builder to the owner
and out of that amount of Rs.1,35,00,000/-, builder paid Rs.25 lakhs by
cheque to the owner which stood recorded in the Agreement. Beyond
that amount of Rs.25 lakhs, any further claim towards refund of the
amount being beyond the amount described in the Agreement, was out
of the scope of arbitrability before this Tribunal. Claim for refund of
Rs.7 lakhs could be prosecuted only in civil court.
31. Finally, Ld. Counsel raised a point that Collaboration
Agreement was insufficiently stamped and the Agreement providing
for title and interest in immovable property to be created as per share
recorded in the Agreement between parties and consideration amount
agreed in the transaction being Rs.1,35,00,000/-, document required
compulsory registration in terms of section 17 of the Registration Act.
In absence of proper stamp on the document, same was liable to be
impounded and was inadmissible in evidence till appropriate stamp
with penalty was got assessed and paid. Since the document was un-
registered, it could not be looked into for evidence of the facts recorded
in it. Ld. Counsel argued that claims set up before this Tribunal were
liable to be dismissed.
32. Written submissions in soft copy were also received on
18.09.2023.
33. Ld. Counsel Mr. Hasija in rebuttal arguments had
reemphasised submissions made in support of the claims. He argued
that Rs.7 lakhs, paid in cash, was amount towards payment of
consideration, paid on the request of the Respondent and Respondent
executed a receipt for the same and thus it formed part of dispute with
amount earlier paid by cheque. On the point of Collaboration
Agreement insufficiently stamped, counsel had referred to Section 36
of the Stamp Act and relied upon Delhi High Court judgment in a case
ARG Outlier Media Pvt. Ltd. v. HT Media Ltd. OMP (Comm)
161/2023 decided on 04.07.2023 to contend that instrument once
admitted in evidence without objection, document was to be taken into
consideration.
ANALYSIS AND FINDINGS
34. Respondent No. 1 admitted having executed Collaboration
Agreement Ex. CW-1/8 with the Claimant on 9.2.2018 for re-
construction / re-development of his residential house property B-58,
Shivalik, New Delhi. Builder- Claimant paid Rs.32 lakhs (Rupees 25
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
lakhs by cheque and Rs.7 lakhs in cash) towards part consideration to
the Respondent. Total consideration, agreed between parties, was
Rs.1,35,00,000/- and the same was recorded in the Agreement, besides
entire cost and expenses for re-development of property to be
constructed in accordance with the plan sanctioned by the authorities
was to be incurred by the Claimant- builder. Re-constructed property
was to comprise basement, stilt, ground floor, first floor, second floor
and third floor with open terrace. Allocation of share in this property
was recorded in the Agreement, whereby second and third floor with
the terrace was to go to the share of the builder i.e., the Claimant.
These facts are undisputed except that Respondent Shri V.K. Srivastava
contended that one Mr. Rajesh Batra impersonated Neeraj Bhatia in the
talks and during execution of the Collaboration Agreement. Plea
however remained un – substantiated by any supporting material or by
any evidence. Even otherwise to say as to how the Claimant was
defrauded, has also not been proved. Another dispute on these facts,
raised by Respondent No. 2 was that out of Rs.32 lakhs, Rs.7 lakhs
paid in cash, was in fact his contribution in this Agreement as
Respondent No. 1 owed that amount to the answering Respondent. This
contention of Respondent No. 2 with further plea that he contributed
Rs.9 lakhs in this Agreement by depositing amount in the bank account
of the Claimant, were held to be beyond arbitral reference and thus
beyond the scope of adjudication in this arbitration, was decided by
Tribunal vide order dated 20.09.2022. As such, Respondent Shri
V.K. Srivastava admitted having received Rs.32 lakhs from the
Claimant builder, primarily his defence plea was that Claimant builder
himself unilaterally withdrew from the Agreement and thus Respondent
declined to refund the amount of Rs.32 lakhs, particularly when
Respondent suffered a huge goodwill loss of property. Respondent
emphasised that conversion of property to free hold was still pending
with L&DO, GOI and in that process, he had no control if it was taking
time. Issue on this point with onus on Respondent was No. 1.
35. Thus, onus was on the Respondent to establish that
Collaboration Agreement was still surviving, being conditional /
compulsory and that when conversion of property to free hold was still
pending with authorities, Claimant backed out from the Agreement
unilaterally, the claimant was at fault and in breach of the Agreement.
Ld. Counsel for the Respondent argued that where no consequence of
non-performance of obligation by parties was provided in the
Agreement, no dispute could be said to have arisen. Whether
contention was acceptable?
36. It is relevant to note that Agreement contained certain
obligations to be discharged by parties and obligations of Respondent
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
owner, spelt out as ‘compulsory requirements’, were described in the
Collaboration Agreement.
37. One such compulsory requirement to be discharged by
Respondent owner Shri V.K. Srivastava was to get property converted
into free-hold in his name and get the conveyance deed registered. This
obligation with other obligations was agreed to be performed by a
stipulated date i.e., 15.03.2018. Builder’s obligation to complete the re-
construction of property, was stipulated to be within 15 months from
the date of receipt of the sanctioned plan from authorities or from the
date vacant possession of property was given by the owner after its
conversion to free-hold, whichever was later.
38. Chapter IV of the Indian Contract Act deals with ‘Time and
Place’ for performance of the contract. Section 50 provides for
performance in the manner or at time, prescribed or sanctioned by
promisee. Provision reads that performance of any promise may be
made in any manner or at any time which the promissee prescribes or
sanctions. In Hanuman Prasad Gupta v. Hira lal, AIR 1971 SC206,
Court held that promise must be performed at the place and the manner
agreed by the parties. In Bishambar Nath Agarwal v. Kishan Chand,
AIR 1990 All. 65, Court held that when a contract states that a
particular act in furtherance of the contract is to be done in a
particular manner, it should be done in that manner.
39. Reference may also be made to the provisions of Section 39
of the Indian Contract Act which provides that when a party to the
contract had refused to perform or disabled himself from performing
his promise in its entirety, the promisee may put an end to the contract
unless by words or conduct, he signifies his acquiescence in its
continuation. In AS Motors Pvt. Ltd. v. UOI (2013) SCC 114 it has
been held that renunciation may occur when one party refuses to
perform his obligation under the contract in some essential respect,
either by expressly declaring so or by words or by conduct
demonstrating an intention not to perform. In Universal Cargo Career
Corporation v. Citati (1957) 2 All ER 70 the Court held that when
conduct of the promisor is such as to lead a reasonable person to
conclusion that he will not be able to perform by the time the
performance arise, promisee may treat it as a renunciation of contract
and sue for damages forthwith.
40. Deliberating on expression ‘in its entirety’ it has been
observed that it is a kind of refusal which affects a vital part of contract
and prevents the promisee from getting in substance, what he bargained
for.
41. While examining provisions of section 55 of the Contract Act,
which deals with effect of failure to perform at a fixed time in a
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
contract in which time is essential, Hon’ble Supreme Court in K.S.
Vidyanadam v. Pairavan, AIR 1997 SC1751 held :
“it means that in exercising its discretion, the court should bear in mind
that when the parties prescribe certain time limit for taking steps by
one or the other party, it must have significance and said time limit
cannot be ignored altogether on ground that it has not to be the essence
of the contract”
42. Hon’ble Supreme Court in Hind Construction Contractors v.
State of Maharashtra AIR 1979 SC 720, cited with approval a passage
in Helsbury Law of England;
“Where time has not been made of essence of the contract or, by reason
of waiver, the time fixed has ceased to be applicable, the employer may
by notice fix a reasonabletime for completion of work and dismiss the
contractor on failure to complete by the date so fixed”
43. In the present case, Respondent owner Mr. V.K. Srivastava
agreed/promised to get property converted to free-hold within a
specified period and then hand over its vacant possession to the builder
for its re-construction, certainly the act of conversion of property
was to be completed within the stipulated period i.e., by
15.03.2018 as agreed and recorded in the Agreement. Admittedly,
Respondent failed to discharge the obligation. Claimant builder having
paid a substantial amount of Rs.32 lakhs towards part consideration in
the Agreement, was justified to call upon Respondent – owner to fulfil
his obligation by sending a legal notice dated 22.5.2018. Admittedly,
Respondent owner Mr. V.K. Srivastava even did not respond to legal
notice and the Claimant builder felt compelled to seek remedy of
specific performance of the Agreement by filing civil suit No.
883/2018, filed in District Court, Saket, Delhi. Respondent, without
filing any defence, invoked arbitration clause by moving application
under section 8 of the Arbitration & Conciliation Act. It was only in the
present arbitration proceedings, while filing Statement of Defence,
Respondent raised a plea of Collaboration Agreement still surviving
and accused the Claimant builder of unilateral withdrawal from
Agreement. This SOD was received by the Tribunal on 30.06.2022.
Would the Respondent owner, a promisor having promised to carry out
an obligation of getting property converted to free-hold and get the
conveyance deed executed by 15.3.2018, be justified in saying that
Agreement was compulsory / conditional or that was still surviving,
and that Claimant builder withdrew from the same unilaterally?
Certainly, in no uncertain words, the answer would be no. It has come
on record that prior to entering into Collaboration Agreement with the
Claimant builder, Respondent – owner had executed similar
Collaboration Agreement in August 2017 with A&B Promoters and that
amounted to breach of the terms of the present Agreement whereby the
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
owner – Respondent assured the builder – Claimant that property B- 58
Shivalik was free from any kind of encumbrances or disputes.
Respondent – owner Mr. V.K. Srivastava was not entitled to seek an
escape by saying that conversion of property was still pending or that
he had no control over that process. He should have considered any
such plea before binding himself to get it done within a stipulated time
as agreed and recorded in the Collaboration Agreement.
44. Respondent himself admits that he had executed a
Collaboration Agreement with A&B Promoters in August 2017 when
during cross-examination of Claimant on 12.11.2022 a suggestion was
given that the Claimant while executing Collaboration Agreement
dated 9.2.2018, was aware and was in knowledge of earlier
Collaboration Agreement with A&B Promoters. The Claimant strongly
refuted and denied the suggestions. Beyond it, there is no evidence or
material to suggest that Claimant was aware of earlier Collaboration
Agreement at the time of execution of the present Collaboration
Agreement. Claimant admitted that the Collaboration Agreement of the
present case was brought to his office after it had been signed by Mr.
V.K. Srivastava and the Agreement was bearing signature of witness
Mr. Rajesh Batra and then only he signed the Agreement in his office
and Mr. Srivastava was not present at that point of time. Even if Mr.
V.K. Srivastava had already signed the Agreement by the time it was
brought to Claimant and that he signed it in his office but by that time
part consideration of Rs.25 lakhs by two cheques drawn by the
Claimant in favour of Respondent had been received, it does not
invalidate the Agreement, unless one party had a case that the terms of
the Agreement were altered or changed from what were discussed and
reduced in writing. It has also come in evidence during cross-
examination of Claimant that the Collaboration Agreement was got
drafted by Respondent Mr. V.K. Srivastava and the Claimant supported
said fact that terms & conditions of the present case were identical
with terms & conditions of Collaboration Agreement executed by Mr.
V.K. Srivastava with A&B Promoters in August 2017 and copy of that
Agreement was placed on record as Ex.CW-1/8. Suggestion was given
to the Claimant in cross-examination that he signed Collaboration
Agreement- at point C subsequently after 9.2.2018 with ulterior
motive. Claimant refuted the suggestion. It is un – understandable what
ulterior motive the Claimant had or achieved even if he put his
signatures on Agreement subsequently. Respondent admits to have
received a consideration amount of Rs.25 lakhs by cheques till the
signing of the Agreement and he got them encashed. Another amount
of Rs.7 lakhs was received by him in cash on 10.02.2018 i.e., the next
day of execution of the Agreement, for which he executed a receipt
in favour of the Claimant.
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45. Claimant asserts in cross-examination that only after 15-20
days of signing of the present Collaboration Agreement- he came to
know about Mr. V.K. Srivastava having already executed Collaboration
Agreement with Mr. Khurana, related to A&B Promoters. Suggestion
was given to the Claimant during cross-examination, and he refuted
the same, that Mr.V.K. Srivastava was supposed to pay Rs.20 lakhs to
the concerned department for conversion of property to free-hold and
Claimant promised to pay that amount but failed and thus non –
discharge of said obligation was on account of default on the part of the
Claimant. Except a suggestion, there is no material to support this
contention of the Respondent.
46. Claimant was confronted with Collaboration Agreement
Ex.C.1 to see that there was no clause regarding cancellation /
discharge of the Agreement. Point when examined in terms of Chapter
IV of the Indian Contract Act, certainly if Collaboration Agreement
executed on 9.2.2018 when required promisor Respondent / owner Mr.
Srivastava to get the property converted to free-hold by 15.3.2018 and
then provided 15 months’ time for the promisee builder to complete re-
construction of the building, even in absence of such a clause in
Agreement, aggrieved party was entitled to invoke provisions of the
Contract Act. Even otherwise, Claimant – builder kept asking Mr.V.K.
Srivastava to fulfil his obligation, earlier by sending legal notice dated
22.05.2018 and then by filing civil su it seeking specific performance
of the Agreement. It was only in the present arbitration, after about 4
years that the Claimant asked for refund of the amount paid to the
Respondent with interest and damages. There appears no reason or a
ground to see anything in favour of the Respondent. Claimant was put
to a suggestion during cross-examination that Mr. Rajesh Batra had put
his signatures on the Agreement by misrepresenting himself as Neeraj
Bhatia. Claimant denied the same. There is no substance in this
contention as signatures of Claimant on the agreement and on
Statement of Claim appeared same and similar on a bare look. Finally,
a suggestion was put to the Claimant and he denied that he had
malafide intention to entangle Respondent Mr. V.K. Srivastava by
paying him a small amount and to grab his valuable property. This is
rather for Respondent to ask himself why he signed the Agreement and
accepted Rs.32 lakhs towards part consideration. Before putting the
above defence suggestion, several questions were put regarding role of
Mr. Ravdeep Suri, Respondent No. 2 in this Agreement. Claimant –
builder took a plea since beginning that Ravdeep Suri was rather a
friend of Respondent Mr. V.K. Srivastava and participated only in the
talks in that capacity. Another suggestion to the Claimant in cross-
examination was that consideration amount settled between parties in
the Agreement was Rs.1,60,00,000/-, the Claimant refuted the same.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 25 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
No further clarity came on record from Respondent as to why he
signed the Agreement which recorded consideration amount at
Rs.1,35,00,000/-.
47. Claimant was then cross-examined by counsel Mr. Vishal
Bhatnagar on behalf of Smt. Sangeeta Srivastava and witness stated
that the fact that she was the legally wedded wife of Mr. V.K.
Srivastava came to his knowledge from the passport of Mr. V.K.
Srivastava. Photocopy of the passport was annexed with application
seeking impleadment of Smt. Sangeeta Srivastava as L.R. He admitted
that there was no privity of contract with Smt. Sangeeta Srivastava.
Witness was put a question that his prayers as per Statement of Claim
could not be correlated with any specific clause in the
Collaboration Agreement and the witness admitted but explained that
he had paid money in January / February 2018 and the Collaboration
Agreement did not proceed towards execution on account of defaults
on the part of Respondent No. 1, his claims were for refund of money
and damages. Witness admitted that there was no clause in Agreement
providing for damages but explained that his claim for damages was on
time value of money and further explained, when asked, that had he
invested Rs.32 lakhs in some other project / venture, earning @ 18%
per annum would have accrued to him. Witness admitted there was no
clause in the Agreement providing for payment of interest as claimed.
Witness admitted there was no clause providing as to how the
Agreement would stand terminated in case obligations described as
‘compulsory requirements’ remained unfulfilled. Said point has been
dealt with by Tribunal when the matter needs to be examined in context
of Chapter IV of the Indian Contract Act. Witness refuted that Mr. V.K.
Srivastava had complied with all requirements. It is a matter of record
that property was not converted to free-hold till filing of Statement of
Claim or even till filing of SOD. Claimant denied if the reliefs prayed
in this arbitration were beyond the scope of Collaboration Agreement
or no dispute even arose for invoking arbitration. Claimant was also
cross-examined by counsel Mr. Onkar Nath Pandey for and on behalf
of Respondent No. 2. Witness stated that role of Respondent No. 2 was
contemplated to be an active partner only during re-development of
property but since the Agreement did not proceed further, stage for the
said role did not come up. Witness further explained that Ravdeep
Respondent No. 2 represented to the court, where the Claimant had
filed civil suit for specific performance and gave a statement that since
he had no role in the project, he be deleted from array of parties and on
the next hearing he remained absent and was proceeded ex-parte.
Claimant refuted suggestion that Ravdeep was equal partner with the
Claimant in this Agreement and should be entitled to equal amount in
the award if passed in Claimant’s favour. Dispute raised by
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 26 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Respondent No. 2 has already been held to be beyond arbitral
reference and not be adjudicated in this arbitration vide order dated
20.9.2022.
48. Smt. Sangeeta Srivastava tendered affidavit Ex. RW-1/A for
her examination-in-chief and deposed that Agreement dated 9.2.2018
was a right in rem which the Claimant could have claimed from
Respondent Mr. V.K. Srivastava alone and her share would not be sabo
taged. Such a contention is contrary to law. She was impleaded in the
capacity of LR, to represent the estate of deceased Respondent Shri
V.K. Srivastava and certainly she is liable to satisfy decree / award, if
passed, to the extent she inherits the estate. There is no point in
contention if the claims sought to be prosecuted were right in rem or
right in personam.
49. Another issue (d) with onus on Respondent was if the
consideration amount in this Agreement was Rs.1,60,00,000/- wherein
Rs.50 lakhs was agreed to be paid at the time of execution of the
Agreement. Plea raised in SOD was only verbal, not supported by any
material and rather was contrary to what was recorded in the
Collaboration Agreement. Respondent admitted to have signed and
executed the Agreement. Only material on record is a question put to
the Claimant in cross-examination that consideration amount was
agreed at Rs.1,60,00,000/- which is unacceptable when the parties
agreed for consideration amount at Rs.1,35,00,000/- as the same was
recorded in the Agreement. Respondent Mr. V.K. Srivastava failed
to establish any of the issues (a) to (h), onus of proving the same was
on Respondent. In view of the discussion recorded above, all these
issues are decided against the Respond ent.
Issues with onus on the Claimant
50. In view of findings recorded above that when the Respondent
failed and defaulted in discharge of his obligation to get property,
subject matter of Agreement, to free-hold by 15.3.2018 as was
stipulated in the Agreement and then hand over its vacant possession to
the claimant for its re-construction, certainly, by virtue of provisions of
Chapter IV of Indian Contract Act, promisor Mr. V.K. Srivastava was
at fault and in breach of the terms of the Agreement. Claimant – builder
was entitled to claim refund of Rs.32 lakhs, paid as part consideration
in this Collaboration Agreement.
51. Ld. Counsel Mr. Bhatnagar raised the argument that
Collaboration Agreement- being insufficiently stamped and being un-
registered, same was liable to be impounded and liable to be left out
from being considered as valid evidence till its deficient stamp with
penalty under the provisions of Stamp Act was got assessed and paid
and the document was got registered. Reliance was placed on N.N.
Globel Mercantile p. Ltd. (2023)7 SCC Online 495 in support of
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 27 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
argument. Counsel for the Claimant Mr. Hasija countered-argued in
rebuttal and already referred to Section 36 of the Stamp Act and had
relied upon Delhi High Court judgment in ARG Outliar Media Pvt.
Ltd. v. HT Media Ltd. OMP (Comm) 161/2023, decided on 4.7.2023.
52. Provisions of Section 36 of The Stamp Act have not been
discussed in N.N. Globel case. Section 36 of the Stamp Act deals
with admission of instruments that were not to be questioned. It
provides that where an instrument has been admitted in evidence, such
admission shall not, except as provided in Section 61, be called in
question at any stage of the same suit or proceedings on the ground that
instrument has not been duly stamped. In the judgment relied upon by
Ld. Counsel Mr. Hasija Hon’ble Court while debating on the
provisions of Section 36 of the Stamp Act, referred to Hon’ble
Supreme Court judgment in a case Javer Chand & ors. Vs. Pukhraj
Surana (1962) 2 SCR 333 wherein Hon’ble Supreme Court referring to
Section 36 of the Indian Stamp Act, held that when a document has
once been admitted in evidence, such admission cannot be called into
question at any stage of the suit or the proceedings on the ground that
the instrument had not been duly stamped. The only exception
recognised by Section 36 is the class of cases contemplated by section
61. Section 36 does not admit of any other exceptions. Once the court,
rightly or wrongly, decided to admit the document in evidence, so far
as the parties are concerned, the matter is closed; it is not open either to
the Trial Court itself or court of appeal or revision court to go behind
the order admitting such instrument in evidence; such an order is not
one of those judicial orders which are liable to be reviewed or revised
by the same court or even by a court of superior jurisdiction.
53. Admittedly, the point was raised for the first time.
Collaboration Agreement- has been admitted in evidence with no
objection. Document when admitted and exhibited for evidence and no
objection of any kind having been raised, admission of document now
could not be questioned in view of above-referred law held by Hon’ble
High Court. Even otherwise the facts were not in dispute that parties
agreed for redevelopment of a property and the owner agreed to get
property converted to free hold by a specified date of a month time or
so but failed to discharge obligation even for next four years. Claimant-
builder asked for refund of amount paid as part consideration. Only
contention raised by respondent was that agreement was still
surviving. Claimant-builder did not ask for enforcement of agreement
but only for refund of amount on undisputed facts, admittedly received
from claimant. Same way if the document remained un-registered, the
same could be looked into for collateral purposes. In the present case,
Respondent admitted having executed Collaboration Agreement and
admitted having received Rs.32 lakhs from the Claimant towards part
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 28 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
consideration. When the facts asserted by the Claimant were not
disputed and only defence pleaded and pressed by Respondent was that
the Agreement was still surviving, which plea was liable to be
dismissed as discussed and has been dismissed by the Tribunal, even if
Agreement was unregistered, claims were liable to be decided on
admitted facts.
54. Claimant has asked for an award of Rs.23,04,000/- towards
interest @ 18% per annum on the amount of Rs.32 lakhs from
11.2.2018 till filing of Statement of Claim. Statement of Claim was
filed on 26.3.2022 i.e. about 4 years after the execution of Agreement.
Admittedly, the Collaboration Agreement- did not contain any clause
providing for interest in case there was breach on the part of either
party but then there is no clause prohibiting payment of interest on the
amount if the Agreement failed on account of breach and default on the
part of Respondent. Section 73 of the Indian Contract Act provides for
damages / compensation when the contract is broken, against the party
who has committed breach of the contract. Conversion of property to
free-hold was to be carried out by the owner Mr. V.K. Srivastava by
15.03.2018 and then the Claimant – builder had 15 months’ time to
complete the re-construction of property. Thus, time would be deemed
by the parties as the essence of the contract though no consequence of
breach was recorded in the Agreement. Statement of Claim was filed in
March 2022 and then SOD was filed and by that time about 4 years
period had passed but status of property as regards its conversion to
free hold remained the same. Claimant suffered loss and he deposed in
the evidence that had he invested this amount of Rs.32 lakhs in some
other venture, he would have earned profit @ 18% per annum. Though
such a rate of interest @ 18% per annum remains in the realm of
speculative mode, I consider with rising economy and keeping in view
conduct of Respondent that he had entered into Collaboration
Agreement earlier in 2017 with another builder, caring least that two
Collaboration Agreements will invite legal troubles and in fact brought
the builders into a legal battle, Claimant certainly lost all his
investment entirely on account of breaches and defaults of Respondent
and the loss deserved to be compensated adequately.
55. Claimant also asked for Rs.5 lakhs towards loss suffered on
account of breach committed by Respondent. When the loss was going
to be considered by allowing interest on the principal amount to be
paid to the Claimant by the Respondent, there is no scope for allowing
another loss, particularly in absence of any evidence in support.
56. Claimant has asked for interest @ 18% per annum, pre-
reference, pendent lite and future on the sum claimed in this
arbitration. Provisions of Section 37 of the Arbitration & Conciliation
Act leave it to the discretion of the arbitral Tribunal to award interest
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 29 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
on the sum claimed in absence of any clause barring grant of interest in
the contract. Provisions of Section 37 of the Act have been discussed
in Jupitor Rubber Pvt. Ltd. v. UOI 2020 (6) RAJ 475.
57. In this case the Arbitrator declined interest on a reasoning that
the arbitrator will have the power to award interest only when the
contract between the parties so provided. This reasoning by the
arbitrator was found contrary to the provisions of Section 31 (7) (a) of
the Arbitration & Conciliation Act which stipulates that the arbitral
Tribunal has power to grant interest on a claim for payment of money,
at such rate as it deemed reasonable, for the whole or any part of the
period between the date on which cause of action arose and the date on
which the award was made, unless otherwise agreed by the parties.
Hon’ble High Court of Delhi in the above referred judgment relied
upon Supreme Court judgment in Jai Prakash Associates Ltd. v. Tehri
Hydro Development Corporation India Ltd ., 2019 SCC Online
Hon’ble Supreme Court 143 wherein Hon’ble Supreme Court held as
under :
“13. Insofar as power of the arbitral Tribunal in granting pre-
reference and / or pendente lite interest is concerned, the
principles which can be deduced from the various judgments are
as summed up below:
a. A constitution Bench judgment of this court in the case of
Secretary, Irrigation Departmnt, Govt. of Odissa v. GC Roy
exhaustively dealt with this issue, namely, power of the Arbitral
Tribunal to grant pre-reference and pendent lite interest …….the
Constitution Bench also considered the principal for grant of
interest applying the common law principles. It held that under
the general law, the arbitrator is empowered to award interest for
the pre-reference, pendente lite and post award period.”
58. Further elaborating law while referring to various judgments,
Hon’ble Court observed and held :
“it is clear from the above that the court decided to fall back on general
principle that a person who is deprived of the use of money to which he
is legitimately entitled to, has a right to be compensated for the
deprivation and, therefore, such compensation may be called interest
compensation or damages.”
59. During arguments, Ld. Counsel for the Claimant referred to
bank statement of account of the Claimant from HDFC Bank and the
document is exhibit CW-1/R1 whereby primarily the cheque for Rs.20
lakhs paid to the Respondent is shown cleared / paid to Respondent on
09.02.2018, but then counsel referred to this document on a point that
it was an OD (Over Draft ) limit account being availed by the
Claimant and thereby whatever amount Claimant paid to Respondent,
was being burdened with interest by the bank on this OD account. In
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 30 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
the given circumstances and facts, where Respondent retained money
of the Claimant for more than 4 years without any justifiable cause,
this Tribunal considers to award interest on the amount of Rs.
32,00,000 claimed in this arbitration @ 15% per annum in Claimant’s
favour since the cause of action arose in Claimant’s favour which was
somewhere in May 2018 when legal notice was given to the
Respondent requesting to proceed with the Collaboration Agreement
by fulfilling obligations. As seen above, statement of claim was filed
somewhere in about four years of that cause of action. Accordingly,
interest for the pre-reference and pendente lite till making of award @
15% per annum on the amount of Rs.32 lakhs is awarded for a period
of 4 years. Future interest from the date of award till the payment of
the award amount is also granted @ 15% per annum on the
principal amount of Rs.32 lakhs.
60. Claimant has also asked for costs. Arbitrator’s fee on the
value of claims and counter claim was fixed in accordance with
Schedule IV of the Act and was directed to be shared equally by both
the parties subject to order on costs in the award. Claimant paid
Rs.3,50,000/-. Respondent had paid Rs.1,50,000/- and since thereafter,
the fee was not being paid by the Respondent, his counter claim was
liable to be ignored and dismissed and the same was recorded in
proceedings also. Even otherwise, the counterclaim remained un-
substantiated and un-supported by any material. In such circumstances,
Tribunal restricted its fee already paid by the parties. In the given
facts, I find the fee paid by the Claimant i.e. Rs.3,50,000/- deserves to
be awarded in Claimant’s favour. Claimant must have spent on
litigation, as claimed in this arbitration, in getting legal notice
issued and in filing suit for specific performance and then filing
arbitration petition before Hon’ble High Court, I consider that a sum of
Rs.1,50,000/- as further cost deserves to be awarded in Claimant’s
favour.
Counter claim
61. Respondent Mr. V.K. Srivastava filed counter claim, claiming
Rs.1 crore. Counter claim was based on pleading and contention as
pleaded in the Statement of Defence. It was asserted that since
Claimant builder backed out from the deal unilaterally with ulterior
motive to grab the property, Respondent / counter Claimant suffered a
loss of goodwill of the property as no other builder came forward to
take up the re-development of the property and the counter Claimant
assessed loss at Rs.1 crore. It was pleaded that builder assured to
resolve the issue but he appeared to be dishonest and thus the builder
was liable to pay Rs.1 crore as damages for the breach of the contract.
A valuation report in support of counter claim, prepared by a Chartered
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 31 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Engineer, B. Tech (Civil) ‘Chetan Sharma & Associates’ was filed and
as per that report, date of valuation was chosen as on 07.06.2022.
62. This Tribunal has recorded findings that breach of
Collaboration Agreement was by the counter Claimant and not by the
builder Mr. Neeraj Bhatia. Counter claim remained un – prosecuted as
no evidence in support of claim was examined. Valuation report
remained un- proved. Counter Claimant failed to pay his part of fee
calculated on the counter claim and thus Tribunal declined to
adjudicate on the counter claim. Counter Claim was liable to be
dismissed and the same is dismissed.
AWARD
63. An award for payment of Rs.32 lakhs with interest @ 15%
per annum for a period of 4 years is passed in favour of Mr. Neeraj
Bhatia, the Claimant, against the Respondent Mr. V.K. Srivastava
through LRs till passing of award. From the date of award, interest @
15 % per annum on the principal amount of Rs.32 lakhs shall also be
paid till the date of the realisation of entire award amount.
64. Arbitration fee of Rs. 3,50,000/- (Three lacs fifty thousand)
paid by respondent and further litigation fee Rs. 1,50,000/- (one lac
fifty thousand) is also awarded in claimant’s favour against
respondent…”
14. Ld. Arbitrator in its analysis and findings observed that the the
deceased Mr. V. K. Srivastava admitted to have executed the
collaboration agreement (Ex.CW1/8) and the claimant has paid Rs. 32
lakhs towards part consideration to the deceased Mr. V. K. Srivastava.
However, a plea is also raised that one Rajesh Batra impersonated
Neeraj Bhatia in the talks during collaboration agreement but said plea
is not substantiated. The respondent no. 2 (in arbitration proceedings)
Sangeeta Srivastava w/o of the deceased Mr. V. K. Srivastava also
contended that she contributed Rs. 9 lakhs in the bank account of the
claimant but this plea was held to be beyond arbitral reference as
decided vide order dated 20.09.2022 and the said order is not
challenged. Another plea dealt by the Ld. Arbitrator that the deceased
Mr. V. K. Srivastava admitted having received Rs. 32 lakhs from
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
claimant, however raised defense that the claimant himself unilaterally
withdrew from the agreement and the deceased Mr. V. K. Srivastava
declined the refund of amount because the conversion of property to
free hold is still pending with L & DO. The Ld. Arbitrator observed that
one compulsory requirement to be discharged by the deceased Mr. V.
K. Srivastava to get the property converted into free hold by stipulated
date i.e. 15.03.2018, therefore this defense not available to the deceased
Mr. V. K. Srivastava.
15. There is contention was also raised on behalf of respondents in
arbitration proceedings that if consideration amount of Rs.
1,60,00,000/- wherein Rs. 50 lakh was agreed to paid at the time of
execution of agreement. This plea in SOD (statement of defense) is
only verbal without any other material, therefore not acceptable. The
Ld. Arbitrator found that the deceased Mr. V. K. Srivastava was at fault
and in breach of terms of agreement, thus claimant was entitled to
claim refund of Rs. 32 lakh paid as part consideration in the
collaboration agreement.
16. The petitioner not contended the merits of the impugned award,
however submitted that the petitioner is proceeded ex-parte without
notice. But, this plea is not tenable because the petitioner Rudra
Srivastava appeared in the present proceedings and sought adjournment
through email dated 10.05.2023, 10.06.2023 and further failed to
participate on 23.07.2023 and 19.08.2023. The mandate of the arbitral
proceedings is bound to expire on 14.09.2023, therefore the sole
arbitrator was constrained to proceed ex-parte vide order dated
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
19.08.2023. The petitioner cannot be allowed to take advantage of its
own mistakes, and was rightly proceeded ex-parte. The arguments were
heard on 09.09.2023 prior to the expiry date of the mandate i.e.
14.09.2023, therefore it cannot be held that mandate ceased to exists
when the impugned award was passed.
17. Ld. counsel for petitioner submitted that the Ld. Arbitrator re-
scheduled the final hearing from 09.09.2023 to 13.09.2023 cannot be
appreciated as mandate is going to expire on 14.09.2023. The petitioner
is found to be deliberately prolonging the proceedings before the Ld.
Arbitrator, and it is apparent that the petitioner wants the mandate of
the Arbitrator to expire without conclusion of arbitration proceedings.
The plea raised regarding the non-communication of the date of
proceedings to the petitioner by Ld. Arbitrator cannot be appreciated in
present proceedings, particularly when the conduct of the petitioner
himself is to delay the proceedings and the entire defense of raised
before the Ld. Arbitrator is found to be meritless.
18. On overall appreciation of material on record, I do not found any
illegality leave aside the patent illegality in the impugned award passed
by Ld. Arbitrator. The present award is not against to the public policy.
The Ld. Arbitrator passed the award after proper appreciation of
material on record, and this court also cannot re-appreciate the case on
merits. No ground made out to interfere in the impugned award.
19. Scope of interference under section 34 of Arbitration and
Conciliation Act with Arbitrator’s award is very limited. The Court
would not be justified in reappraising the material on record and
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
substituting its own view in place of the view taken by Arbitrator. Once
the Arbitrator has applied his mind to the matter before him, the Court
cannot reappraise the matter as if it were an appeal and even if two
views are possible, the view taken by the Arbitrator would prevail as
held by Hon’ble Supreme Court in the case of Navodaya Mass
Entertainments Ltd. v. J.M. Combines reported in (2015) 5 SCC 698.
20. Hon’ble Supreme Court in the case of ‘Sutlej Construction Ltd.
v. State (UT of Chandigarh) reported in (2018) 1 SCC 718′ has held
that when it comes to setting aside of an award under the public policy
ground, it would mean that the award should shock the conscience of
the court and would not include what the court thinks is unjust on the
facts of the case seeking to substitute its view for that of the arbitrator
to do what it considers to be “justice. Paragraph nos. 10 to 13 of the
said judgment are extracted below:-
“10. We are not in agreement with the approach adopted by
the learned Single Judge. The dispute in question had
resulted in a reasoned award. It is not as if the arbitrator has
not appreciated the evidence. The arbitrator has taken a
plausible view and, an in our view, as per us the correct view,
that the very nature of job to be performed would imply that
there has to be an area for unloading and that too in the
vicinity of 5 km as that is all that the appellant was to be paid
for. The route was also determined. In such a situation to say
that the respondent owed no obligation to make available the
site cannot be accepted by any stretch of imagination. The
unpreparedness of the respondent is also apparent from the
fact that even post-termination it took couple of years for the
work to be carried out, which was meant to be completed
within 45 days. The ability of the appellant to comply with
its obligations was interdependent on the respondent meeting
its obligations in time to facilitate appropriate areas for
unloading of the earth and for its compacting. At least it is
certainly a plausible view.
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Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
11. It has been opined by this Court that when it comes to
setting aside of an award under the public policy ground, it
would mean that the award should shock the conscience of
the Court and would not include what the Court thinks is
unjust on the facts of the case seeking to substitute its view
for that of the arbitrator to do what it considers to be
“justice”.
12. The approach adopted by the learned Additional District
Judge, Chandigarh was, thus, correct in not getting into the
act of re-appreciating the evidence as the first appellate court
from a trial court decree. An arbitrator is a chosen Judge by
the parties and it is on limited parameters can the award be
interfered with. 13. The learned Single Judge ought to have
restrained himself from getting into the meanderings of
evidence appreciation and acting like a second appellate
court. In fact, even in second appeals, only questions of law
are to be determined while the first appellate court is the
final court on facts. In the present case, the learned Single
Judge has, thus, acted in the first appeal against objections
dismissed as if it was the first appellate court against a
decree passed by the trial court.”
21. The scope of interference with an arbitral award under Section
34 of the Act has been considered and discussed by Hon’ble Supreme
Court in a judgment rendered in the case of ‘MMTC Ltd. v. Vedanta
Ltd. reported in (2019) 4 SCC 163′ . Paragraph nos. 11 to 14 of the said
judgment are extracted below:
“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 aOMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 36 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
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.
12. 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 the 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.
13. It is relevant to note that after the 2015 Amendment 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 (2-A) 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.
14. 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 court in an appeal under Section 37, this Court
must be extremely cautious and slow to disturb such
concurrent findings.”
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 37 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
22. In the case of ‘Maharashtra State Electricity Distribution
Company Ltd. v. Datar C.C.L. Ltd. reported in (2018) 3 SCC 133′ it
has been held by Hon’ble Supreme Court that “the proposition of law
that the Arbitral Tribunal is the master of evidence and the findings of
fact which are arrived at by the arbitrators on the basis of evidence on
record are not to be scrutinised as if the Court was sitting in appeal now
stands settled by catena of judgments pronounced by this Court without
any exception thereto.”
23. Hon’ble High Court of Delhi in case title ‘National Building
Construction Corporation Vs. M/s Sharma Enterprises, OMP (Comm)
215/2022 dated 19.11.2025’ after relying the judgment of Hon’ble
Apex Court in ‘Consolidated Construction Consortium Limited v.
Software Technology Parks of India, 2025 SCC OnLine SC 956 ‘
crystallize the scope of Section 34 of Arbitration and Conciliation Act
as under :
“………..
46. Scope of Section 34 of the 1996 Act is now well
crystallized by a plethora of judgments of this Court.
Section 34 is not in the nature of an appellate provision. It
provides for setting aside an arbitral award that too only on
very limited grounds i.e. as those contained in subsections
(2) and (2A) of Section 34. It is the only remedy for setting
aside an arbitral award. An arbitral award is not liable to be
interfered with only on the ground that the award is illegal
or is erroneous in law which would require re-appraisal of
the evidence adduced before the arbitral tribunal. If two
views are possible, there is no scope for the court to re-
appraise the evidence and to take the view other than the
one taken by the Arbitrator. The view taken by the arbitral
tribunal is ordinarily to be accepted and allowed to prevail.
Thus, the scope of interference in arbitral matters is only
confined to the extent envisaged under Section 34 of the
Act. The court exercising powers under Section 34 has
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 38 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
perforce to limit its jurisdiction within the four corners of
Section 34. It cannot travel beyond Section 34. Thus,
proceedings under Section 34 are summary in nature and
not like a full-fledged civil suit or a civil appeal. The award
as such cannot be touched unless it is contrary to the
substantive provisions of law or Section 34 of the 1996 Act
or the terms of the agreement.
47. Therefore, the role of the court under Section 34 of the
1996 Act is clearly demarcated. It is a restrictive jurisdiction
and has to be invoked in a conservative manner. The reason
is that arbitral autonomy must be respected and judicial
interference should remain minimal otherwise it will defeat
the very object of the 1996 Act……..”
24. Ld. Arbitrator has passed the award upon consideration of
material placed before him. There is nothing on record that the relevant
material is not placed before the Ld. Arbitrator. There is nothing
perverse or patent illegality in the findings of the Ld. Arbitrator.
25. The Ld. Sole Arbitrator has drawn inferences and conclusions
after the factual appreciation in the light of the legal principles. The
views of the Ld. Sole Arbitrator can not be found fault with only for the
reason that some other views can emerge by appreciating the same set
of facts and evidence, until and unless it is shown that such a view is
totally obnoxious and unsupported by the sound legal principles.
26. This Court cannot substitute its own views or the views of the
parties with the view taken by the Ld. Arbitral Tribunal, if the view
taken by the Ld. Arbitrator is not in conflict with the settled legal
position. There is nothing to suggest that the findings and conclusions
rendered by the Ld. Arbitrator are per-se perverse, illegal or non-
sustainable or against public policy.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 39 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
27. Accordingly, the present petition under Section 34 of the
Arbitration and Conciliation Act as pressed into service by the
petitioner is therefore not sustainable within the scope and ambit of the
provision, therefore, liable to be dismissed and accordingly dismissed
and disposed of.
28. File be consigned to record room after necessary compliance. Digitally
signed by
Announced in open court AJAY
AJAY
KUMAR
on 25th February 2026 KUMAR JAIN
(Ajay Kumar Jain) JAIN Date:
2026.02.25
District Judge, Comm-04 (Digital) 16:25:18
+0530
South District, Saket Courts, DelhiOMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 40 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
