Delhi High Court
Sahaj Bharti Travels vs Hcl Technologies Ltd on 23 April, 2026
Author: Subramonium Prasad
Bench: Subramonium Prasad
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 23rd APRIL, 2026
IN THE MATTER OF:
+ O.M.P. (COMM) 180/2026, I.A. 9690/2026, I.A. 9691/2026, I.A.
9692/2026
SAHAJ BHARTI TRAVELS .....Petitioner
Through: Mr. Dushyant Yadav, Mr. Pankaj
Kumar Yadav and Mr. Sudhir Yadav,
Advocates.
versus
HCL TECHNOLOGIES LTD .....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The present Petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as “the Act”) has been filed
by the Petitioner challenging an Award dated 04.09.2025 passed by the
learned Arbitral Tribunal (hereinafter referred to as “Tribunal”) while
adjudicating the disputes that arose between the parties herein.
2. Shorn of unnecessary details, facts of the case as discernible from the
material on record are as follows:
a. The Petitioner is a proprietorship firm engaged in the business of
providing transport Services on contractual basis and is an
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experienced company in the field of providing Employee transport
Services. The Respondent is an Indian multinational information
technology (IT) services and consulting company having its
registered office at 806, Siddarth, 96, Nehru Place, New Delhi-
110019.
b. The Petitioner and the Respondent entered into a Service
Agreement dated 19.11.2015 w.e.f from 20.04.2015 to 30.04.2018
(hereinafter referred to as (“Agreement”). The agreement between
the parties was mutually extended till 31.12.2018c. As per the agreement entered between the parties, the Petitioner
was to deploy and operate the vehicles specifically described in
Schedule-A of the agreement for the purpose of commutation for
the Respondent’s employees from various points in the NCR to all
facilities of the Respondent company spread over the Delhi-NCR
region.
d. As per clause 28 of the agreement, the payment terms were also
decided amongst the parties, and the Petitioner had to submit the
bills to the Respondent on the 5th of every month for the services
rendered for the previous month. The payment of the said invoice
was to be released within 45 days of receipt of invoices. While the
Petitioner was theoretically supposed to raise invoices based on
actual services, the practice involved the Respondent sending its
own data/calculations based on which the Petitioner then raised
invoices based on those figures.
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e. An important term of the agreement was with respect to the
Minimum Running Guarantee of 7000 KM/cab/month on
cumulative basis for dedicated registered fleet with HCL which
was effective from 1.09.2015.
f. Clause 39 of the agreement stated that no terms or conditions of
the agreement could be modified, amended or waived except by
the written agreement signed by both the parties.
g. For setting the terms of the Minimum Running Guarantee, the
parties held a meeting on 02.12.2015. It was discussed that the
vehicle should fall under the category of vintage as prescribed
under the agreement, and all the vehicles should be GPS enabled.
h. The Respondent vide its email dated 9.12.2015 requested the
Petitioner firm along with other vendors to furnish the ODO meter
reading of each and every vehicle for the last 4 months and the
said data was sent by the Petitioner firm on 10.12.2015. The
Respondent shared the working on the Minimum Running
Guarantee payment vide their email dated 14.01.2016. It is the
case of the Petitioner that the invoices shared by the Respondent
were completely absurd which was pointed out by the Petitioner
there and then vide his email dated 16.01.2016, 20.01.2016 and
28.01.2016.
i. Subsequently, on 8.07.2016, the Respondent sent an email to the
Petitioner, thereby informing of its decision that the arrangement
with respect to the MG payment shall continue only till
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31.07.2016. The Petitioner alleged this withdrawal caused severe
financial constraints, eventually forcing it to sell its vehicles at
heavy losses.
j. During the subsistence of the agreement, Petitioner called upon the
Respondent to settle the claim towards the outstanding payment of
the Minimum Running Guarantee. On 28.05.2018, the parties
decided to bifurcate the payments to Minimum Guarantee into two
trenches. One tranche of payment comprised of Minimum Running
Guarantee payment from September 2015 to July, 2016 and the
other tranche comprised of payment from August 2016 to
December 2018. On 29.11.2018, the Respondent offered a one-
time settlement of Rs. 20,58,818, which was rejected by the
Petitioner.
k. Being aggrieved by non-payment towards Minimum Running
Guarantee under the Agreement, the Petitioner issued a demand
notice under the Insolvency and Bankruptcy Code, 2016 on 08.05.
2019, and filed a petition before the National Company Law
Tribunal (NCLT). On 17.01.2022, the NCLT allowed the petition
but it was later set aside by the National Company Law Appellate
Tribunal (NCLAT) on 26.05.2022.
l. Following the NCLAT order, the Petitioner invoked the arbitration
clause on 27.07.2022 and a Sole Arbitrator was appointed by the
Delhi High Court on 16.07.2023
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3. Before the Tribunal, the Petitioner sought to recover a total of Rs.
3,27,15,438/- from the Respondent, representing unpaid Minimum Running
Guarantee dues up to the expiration of the agreement on December 31,
2018, along with 12% interest per annum and the costs of the proceedings.
4. The Tribunal framed the following issues:
“a. Whether the Claimant is entitled to an Award
amounting to Rs.79,71,771/-? OPC
b. Whether the Claimant is entitled to an interest on the
amount of Rs.79,71,771/- from the month of September
2015 till 12th of October 2023 @ 12% per annum?
OPC
c. Whether the Claimant is entitled to an Award
amounting to Rs.2,47,43,667/- OPC
d. Whether the Claimant is entitled to an interest on the
amount of Rs.2,47,43,667/- from the month of
September 2016 till 12th of October, 2023 @ 12% per
annum? OPC
e. Whether the Claimant is entitled to the cost of the
proceedings, if so, how much?
f. Relief.”
5. While answering issues, the Tribunal clubbed the Issues (a) and (c)
and Issues (b) and (d). Issues (a) and (c) deal with the entitlement of the
Claimant i.e., Petitioner herein, for the amounts of Rs.79,71,771/- and
Rs.2,47,43,667/- for the two trenches respectively. The Tribunal held that
the claims to be barred by limitation. Since the claims under Issues (a) and
(c) were barred by limitation, Issues (b) and (d) did not arise for
consideration. As far as costs are concerned, the Tribunal directed the
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Parties to bear their own costs. Resultantly, the Petitioner being aggrieved
by the rejection of all the claims, has approached this Court under Section
34 of the Act, raising objections to the Award.
6. The issue which this Court has to consider is whether the decision of
the Tribunal in rejecting the claims of the Petitioner on the ground of
limitation, is hit by any of the parameters under Section 34 of the Act or not.
7. The Tribunal held that the Minimum Running Guarantee payment
arose on monthly basis but the Petitioner has clubbed the claims which arose
on month to month basis cumulatively. The Tribunal has tabulated the
amounts claimed for each month under Issues (a) and (c) in the form of a
chart which reads as under:
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8. The Tribunal held that the application under Section 11(6) of the Act
was filed by the Petitioner only on 07.12.2022 which is after 4 years from
the date the last services were delivered.
9. The Tribunal held that even otherwise, the Petitioner has not raised
monthly invoices within 60 days as per the terms of the primary Agreement
and hence the entire claims arising from September 2015 to December 2018
are barred by limitation. The Tribunal, after applying the directives in the
Order passed by the Apex Court in Suo Motu Writ Petition (Civil) No.
3/2020 In Re: Cognizance for Extension of Limitation, held that the
Petitioner is not entitled to the extended period of limitation as granted by
the Apex Court.
10. On the aspect of Section 14 of the Limitation Act 1963, the Tribunal
rejected the plea of the Petitioner that as it had approached the NCLT under
Section 9 of the Insolvency and Bankruptcy Code, 2016, it is therefore
entitled to the benefit of Section 14 of the Limitation Act as it was pursuing
proceedings before a wrong forum with bona fide intent. The Tribunal
reasoned that as the NCLAT dismissed the Petitioner’s application as one
being without any merit, it was not entitled to the benefit of Section 14 of
the Limitation Act.
11. Learned Counsel for the Petitioner submits that the impugned award
suffers from an error apparent on the face of the record with respect to the
Tribunal’s findings on the aspect of Limitation that its claims are time
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barred. It is stated that the agreement between the parties was executed on
19.11.2015 though the same was effective from 20.04.2015 to 30.04.2018. It
is submitted that during the course of the agreement, the parties executed
three addenda namely, the first addendum executed on 17.07.2017 effective
till 30.04.2018, the second addendum dated 22.01.2018 effective from
01.05.2018 to 30.06.2018 and the third addendum dated 01.07.2018
effective from 01.07.2018 to 30.09.2018. Under the said arrangement, there
was no alteration in the Minimum Running Guarantee obligations until
30.04.2018 and hence the obligations of the parties continued in their
original form.
12. It is the case of the Petitioner that for the purpose of calculating
limitation, the Tribunal has overlooked the fact that the dispute with respect
to the Minimum Running Guarantee Payment was continuing in nature as
parties were actively communicating on the issue starting from January 2016
and the last communication being on 25.06.2019. This demonstrates that the
dispute was alive and subsisting throughout the contractual period thereby
negating the findings on limitation.
13. It is submitted by the Learned Counsel for the Petitioner that as the
cause of action was continuing in nature, it squarely falls within the ambit of
Section 22 of the Limitation Act
14. The Learned Counsel for the Petitioner submits that the Tribunal has
erred in the application of Section 14 of the Limitation Act to the facts of the
present case. The Petitioner is entitled to the benefit of Section 14 of the
Limitation Act, 1963 as the petition before the NCLT was filed on
06.08.2019 and the same was filed in good faith and with a bona fide belief
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in the correctness of the advice rendered by the Petitioner’s previous
counsel. In light of this, the period from 06.08.2019 to 22.05.2022, during
which the petitioner was pursuing bona fide proceedings before the NCLT
and NCLAT is liable to be excluded for computation of Limitation under
Section 14 of the Limitation Act. Reliance has been placed on Roopinder
Singh vs. Emaar MGF limited & Ors., (2025) SCC OnLine Del 8255.
15. Learned Counsel for the Petitioner submits that Section 14 of the
Limitation Act needs to be construed liberally and with due diligence and
cannot be measured by any absolute standard. Due diligence is a measure of
prudence or activity expected from and ordinarily exercised by a reasonable
and prudent person under the particular circumstances.
16. Further reliance is placed on the Order passed by the Apex Court in
Suo Motu Writ Petition (Civil) No. 3/2020 In Re: Cognizance for
Extension of Limitation wherein the period from15.03.2020 till 28.02.2022
stood excluded for the purpose of calculating limitation. It is submitted by
the Counsel for the Petitioner that the agreement was valid till 31.12.2018.
Thereafter, it was automatically terminated as there was no consensus
among the parties to continue with the aforesaid agreement. So, the period
of limitation should begin from 01.01.2019 and the period of 3 years was to
expire on 30.12.2021. Since the period from 15.03.2020 till 28.02.2022
stood excluded, the period of limitation after excluding the period from
15.03.2020 till 28.02.2022 would expire on 31.01.2024 as the period of
limitation would commence from 01.03.2022 after the COVID period and
the notice invoking arbitration was sent on 27.08.2022.
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17. Heard the Learned Counsel for the Petitioner and perused the material
on record.
18. In 2015, there were major amendments in the Arbitration and
Conciliation Act and the grounds for challenging an arbitral Award have
been narrowed down by the amendments. Section 34 of the Act lays down
the grounds on which an Award can be set aside. Section 34(2)(b)(ii) of the
Act states that an Award can be set aside if it is in conflict with the Public
Policy of India. Explanation-1 to Section 34(2)(b) of the Act explains as to
when it can be said that an Award is in conflict with the Public Policy of
India. It states that an Award is in conflict with the Public Policy of India
only if it is induced or affected by fraud or corruption, is in violation of
Sections 75 or Section 81, is in contravention with the Fundamental Policy
of India or is in conflict with the most basic notions of morality or justice.
19. In the facts of the present case, a perusal of the tabulated chart
reproduced above indicates that all the claims prior to March 2017 are
patently hit by limitation as the period within which claims could be raised
expired before 15.03.2020 i.e. prior to the implementation of lockdown due
to the COVID-19 pandemic. The approach of the Tribunal in criticising the
Petitioner for clubbing the periods cannot be faulted with and this approach
cannot be said to be in conflict with the Public Policy of India. Payment was
to be made by the Respondent separately for each month and therefore the
limitation for each month would start separately. Though the demand notice
was sent on 08.05.2019 but the demand notice cannot give rise to a separate
cause of action. The notice under Section 21 of the Act was sent on
27.08.2022.
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20. At this juncture, it is apposite to extract the relevant portion of the
Order dated 10.01.2022 passed by the Apex Court in Suo Motu Writ
Petition (Civil) No. 3/2020 – In Re: Cognizance for Extension of Limitation
wherein the Apex Court has laid down the guidelines for calculating the
limitation, and the same reads as under:
“5. Taking into consideration the arguments advanced
by learned counsel and the impact of the surge of the
virus on public health and adversities faced by litigants
in the prevailing conditions, we deem it appropriate to
dispose of the M.A. No. 21 of 2022 with the following
directions:
I. The order dated 23.03.2020 is restored and in
continuation of the subsequent orders dated
08.03.2021, 27.04.2021 and 23.09.2021, it is
directed that the period from 15.03.2020 till
28.02.2022 shall stand excluded for the purposes
of limitation as may be prescribed under any
general or special laws in respect of all judicial
or quasi-judicial proceedings.
II. Consequently, the balance period of limitation
remaining as on 03.10.2021, if any, shall become
available with effect from 01.03.2022.
III. In cases where the limitation would have
expired during the period between 15.03.2020 till
28.02.2022, notwithstanding the actual balance
period of limitation remaining, all persons shall
have a limitation period of 90 days from
01.03.2022. In the event the actual balance
period of limitation remaining, with effect from
01.03.2022 is greater than 90 days, that longer
period shall apply.
IV. It is further clarified that the period from
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15.03.2020 till 28.02.2022 shall also stand
excluded in computing the periods prescribed
under Sections 23 (4) and 29A of the Arbitration
and Conciliation Act, 1996, Section 12A of the
Commercial Courts Act, 2015 and provisos (b)
and (c) of Section 138 of the Negotiable
Instruments Act, 1881 and any other laws, which
prescribe period(s) of limitation for instituting
proceedings, outer limits (within which the court
or tribunal can condone delay) and termination of
proceedings.” (emphasis supplied)
21. A perusal of Paragraph III indicates that if the limitation expired
during the period between 15.03.2020 and 28.02.2022, notwithstanding the
actual balance period of limitation remaining, all persons shall have a
limitation period of 90 days from 01.03.2022.
22. In the present case, the Tribunal has rightly concluded that the
Limitation of three years for MG payments for the entire trench from
September 2015 to December 2018 is barred by Limitation. Limitation for
the above entire period expired on 31.12.2021. Now as per the Apex Court’s
directive, all persons were entitled to a buffer period of 90 days from
01.03.2022 in case the period of limitation expired between 15.03.2020 and
28.02.2022. Computing the period of 90 days from 01.03.2022, the notice
under Section 21 of the Act should ideally have been sent on or before
30.05.2022, but it was only sent on 27.08.2022 which is beyond the period
of limitation. Hence, the decision of the Tribunal rejecting the claims of the
Petitioner on the ground that the claims are barred by limitation does not
warrant any interference.
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23. Now, the only issue that has to be decided is whether the Petitioner is
entitled to the benefit of exclusion of the time when it was pursuing
proceedings before the NCLT and NCLAT.
24. The condition precedents for availing the benefit under Section 14 of
the Limitation Act have been discussed in a catena of judgements. The Apex
Court in HPCL Bio-Fuels Ltd. v. Shahaji Bhanudas Bhad, 2024 SCC
OnLine SC 3190, observed as under:-
“80. Section 2 of the Limitation Act provides certain
definitions. Some of them which are pertinent to the
present discussion are reproduced hereinbelow:
“In this Act, unless the context otherwise requires,–
(a) “applicant” includes–
(i) a petitioner;
(ii) any person from or through whom an applicant
derives his right to apply;
(iii) any person whose estate is represented by the
applicant as executor, administrator or other
representative;
xxx xxx xxx
(b) “application” includes a petition;
xxx xxx xxx
(h) “good faith” – nothing shall be deemed to be
done in good faith which is not done with due care
and attention;
xxx xxx xxx
(j) “period of limitation” means the period of
limitation prescribed for any suit, appeal or
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application by the Schedule, and “prescribed
period” means the period of limitation computed in
accordance with the provisions of this Act;
xxx xxx xxx
(l) “suit” does not include an appeal or an
application;
81. Section 2(l) as reproduced above clearly provides
for a distinction between a „suit‟ and an „application‟
under the Limitation Act. Thus, the clear intention of
the legislature was that they are not to be considered
as the same for the purpose of Limitation Act.
82. In Section 11(6) of the Act, 1996, the words „the
appointment shall be made, on an application of the
party‟ are used, thereby signifying that a Section 11
petition is in the nature of an „application‟ and cannot
be considered to be a „suit‟ for the purposes of the
Limitation Act. Even otherwise, „application‟ under the
Limitation Act includes a „petition‟, thereby leaving no
room for any doubt that a Section 11(6) petition is to
be treated as an application.
83. As a petition under Section 11(6) of the Act, 1996
is not a suit, hence it would not be governed by sub-
section (1) of Section 14 of the Limitation Act.
Instead, it would be governed by sub-section (2) of
Section 14 of the Limitation Act. Some of the
conditions required to be fulfilled for seeking the
benefit of exclusion under Section 14(2) are
materially different from those required under
Section 14(1) and are as follows:
i. Both the earlier and the subsequent proceeding
must be civil proceedings;
ii. Both the earlier and subsequent proceedings must
be between the same parties;
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iii. The earlier and subsequent proceeding must be
for the same relief;
iv. The earlier proceeding must have failed owing to a
defect of jurisdiction of the earlier court or any other
cause of a like nature;
v. The earlier proceedings must have been prosecuted
in good faith and with due-diligence; and
vi. Both the earlier and the subsequent proceedings
are before a court.” (emphasis supplied)
25. In view of the above, the Tribunal has rightly declined the benefit of
the aforesaid section to the Petitioner on the ground that the NCLAT
dismissed its claim on merits and not on the question of jurisdiction.
26. In M.P Steel Corporation v. Commissioner of Central Excise, (2015)
7 SCC 58, the Apex Court has observed as under:-
“49. The language of Section 14, construed in the light
of the object for which the provision has been made,
lends itself to such an interpretation. The object of
Section 14 is that if its conditions are otherwise met,
the plaintiff/applicant should be put in the same
position as he was when he started an abortive
proceeding. What is necessary is the absence of
negligence or inaction. So long as the plaintiff or
applicant is bona fide pursuing a legal remedy which
turns out to be abortive, the time beginning from the
date of the cause of action of an appellate proceeding
is to be excluded if such appellate proceeding is from
an order in an original proceeding instituted without
jurisdiction or which has not resulted in an order on
the merits of the case. If this were not so, anomalous
results would follow. Take the case of a plaintiff or
applicant who has succeeded at the first stage of what
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turns out to be an abortive proceeding. Assume that, on
a given state of facts, a defendant-appellant or other
appellant takes six months more than the prescribed
period for filing an appeal. The delay in filing the
appeal is condoned. Under Explanation (b) of Section
14, the plaintiff or the applicant resisting such an
appeal shall be deemed to be prosecuting a
proceeding. If the six month period together with the
original period for filing the appeal is not to be
excluded under Section 14, the plaintiff/applicant
would not get a hearing on merits for no fault of his, as
he in the example given is not the appellant. Clearly
therefore, in such a case, the entire period of nine
months ought to be excluded. If this is so for an
appellate proceeding, it ought to be so for an original
proceeding as well with this difference that the time
already taken to file the original proceeding i.e. the
time prior to institution of the original proceeding
cannot be excluded. Take a case where the limitation
period for the original proceeding is six months. The
plaintiff/applicant files such a proceeding on the
ninetieth day i.e. after three months are over. The said
proceeding turns out to be abortive after it has gone
through a chequered career in the appeal courts. The
same plaintiff/applicant now files a fresh proceeding
before a court of first instance having the necessary
jurisdiction. So long as the said proceeding is filed
within the remaining three month period, Section 14
will apply to exclude the entire time taken starting from
the ninety-first day till the final appeal is ultimately
dismissed. This example also goes to show that the
expression “the time during which the plaintiff has
been prosecuting with due diligence another civil
proceeding” needs to be construed in a manner which
advances the object sought to be achieved, thereby
advancing the cause of justice.”
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27. It is apposite to state that an application under Section 9 of the IBC
and an application under Section 11(6) of the Act are sought for parallel
reliefs and hence fails to meet the parameters set out in the HPCL Bio-Fuels
Ltd (supra).
28. This Court now proceeds to see whether the order of the Tribunal is
hit by the parameters laid down under Section 34 of the Arbitration &
Conciliation Act. The Apex Court in OPG Power Generation (P) Ltd. v.
Enexio Power Cooling Solutions (India) (P) Ltd., (2025) 2 SCC 417 has
explained the expressions: (a) in contravention with the Fundamental Policy
of Indian Law; (b) in conflict with the most basic notions of morality or
justice; and (c) patent illegality. While explaining the term “in contravention
with the Fundamental Policy of Indian Law”, the Apex Court in OPG Power
Generation (P) Ltd. (supra) has observed as under:
“55. The legal position which emerges from the
aforesaid discussion is that after “the 2015
Amendments” in Section 34(2)(b)(ii) and Section
48(2)(b) of the 1996 Act, the phrase “in conflict with
the public policy of India” must be accorded a
restricted meaning in terms of Explanation 1. The
expression “in contravention with the fundamental
policy of Indian law” by use of the word
“fundamental” before the phrase “policy of Indian
law” makes the expression narrower in its application
than the phrase “in contravention with the policy of
Indian law”, which means mere contravention of law is
not enough to make an award vulnerable. To bring the
contravention within the fold of fundamental policy of
Indian law, the award must contravene all or any of
such fundamental principles that provide a basis for
administration of justice and enforcement of law in this
country.
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56. Without intending to exhaustively enumerate
instances of such contravention, by way of illustration,
it could be said that:
(a) violation of the principles of natural justice;
(b) disregarding orders of superior courts in
India or the binding effect of the judgment of a
superior court; and
(c) violating law of India linked to public good or
public interest, are considered contravention of the
fundamental policy of Indian law.
However, while assessing whether there has been a
contravention of the fundamental policy of Indian law,
the extent of judicial scrutiny must not exceed the limit
as set out in Explanation 2 to Section 34(2)(b)(ii).”
While explaining the term “in conflict with the most basic notions of
morality or justice”, the Apex Court in OPG Power Generation (P) Ltd.
(supra) has observed as under:
“57. In Renusagar [Renusagar Power Co.
Ltd. v. General Electric Co., 1994 Supp (1) SCC 644]
this Court held that an arbitral award is in conflict
with the public policy of India if it is, inter alia,
contrary to “justice and morality”. Explanation 1,
inserted by the 2015 Amendment, makes it clear that an
award is in conflict with the public policy of India,
inter alia, if it conflicts with the “most basic notions of
morality or justice”.
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58. Justice is the virtue by which the
society/court/Tribunal gives a man his due, opposed to
injury or wrong. Justice is an act of rendering what is
right and equitable towards one who has suffered a
wrong. Therefore, while tempering justice with mercy,
the court must be very conscious, that it has to do
justice in exact conformity with some obligatory law,
for the reason that human actions are found to be just
or unjust on the basis of whether the same are in
conformity with, or in opposition to, the law [Union of
India v. Ajeet Singh, (2013) 4 SCC 186, para 26 :
(2013) 2 SCC (Cri) 347 : (2013) 2 SCC (L&S) 321] .
Therefore, in “judicial sense”, justice is nothing more
nor less than exact conformity to some obligatory law;
and all human actions are either just or unjust as they
are in conformity with, or in opposition to, the law [P.
Ramanatha Aiyar’s Advanced Law Lexicon, 6th Edn.,
Vol. III, p. 2621.] .
59. But, importantly, the term “legal justice” is not
used in Explanation 1, therefore simple conformity or
non-conformity with the law is not the test to determine
whether an award is in conflict with the public policy
of India in terms of Explanation 1. The test is that it
must conflict with the most basic notions of justice. For
lack of any objective criteria, it is difficult to
enumerate the “most basic notions of justice”. More
so, justice to one may be injustice to another. This
difficulty has been acknowledged by many renowned
jurists, as is reflected in the observations of this Court
in State (NCT of Delhi) v. Gurdip Singh Uban [State
(NCT of Delhi) v. Gurdip Singh Uban, (2000) 7 SCC
296] , extracted below : (SCC p. 310, para 23)
“23. The words “justice” and “injustice”, in our
view, are sometimes loosely used and have different
meanings to different persons particularly to those
arrayed on opposite sides. “One man’s justice is
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another’s injustice” [Ralph Waldo Emerson
: Essays (1803-82), First Series, 1841, “Circles”].
Justice Cardozo said:„The web is entangled and
obscure, shot through with a multitude of shades and
colors, the skeins irregular and broken. Many hues that
seem to be simple, are found, when analysed, to be a
complex and uncertain blend. Justice itself, which we
are wont to appeal to as a test as well as an ideal, may
mean different things to different minds and at different
times. Attempts to objectify its standards or even to
describe them have never wholly succeeded.‟ (Selected
Writings of Cardozo, pp. 223-224, Falcon
Publications, 1947).”
(emphasis in original)
60. In Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC
(Civ) 204] , while this Court was dealing with the
concept “public policy of India”, in the context of a
Section 34 challenge prior to the 2015 Amendment, it
was held that an award can be said to be against
justice only when it shocks the conscience of the court [
See Associate Builders case, (2015) 3 SCC 49, para 36
: (2015) 2 SCC (Civ) 204] . The Court illustrated by
stating that where an arbitral award, without
recording reasons, awards an amount much more than
what the claim is restricted to, it would certainly shock
the conscience of the court and render the award
vulnerable and liable to be set aside on the ground that
it is contrary to justice.
61. In Ssangyong [Ssangyong Engg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 :
(2020) 2 SCC (Civ) 213] , which dealt with post the
2015 Amendment scenario, it was observed that an
argument to set aside an award on the ground of being
in conflict with “most basic notions of justice”, can be
raised only in very exceptional circumstances, that is,
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when the conscience of the court is shocked by
infraction of some fundamental principle of justice.
Notably, in that case the majority award created a new
contract for the parties by applying a unilateral
circular, and by substituting a workable formula under
the agreement by another, dehors the agreement. This,
in the view of the Court, breached the fundamental
principles of justice, namely, that a unilateral addition
or alteration of a contract can never be foisted upon an
unwilling party, nor can a party to the agreement be
liable to perform a bargain not entered with the other
party [ See Ssangyong Engg. case, (2019) 15 SCC 131,
para 76 : (2020) 2 SCC (Civ) 213] . However, a note
of caution was expressed in the judgment by observing
that this ground is available only in very exceptional
circumstances and under no circumstance can any
court interfere with an arbitral award on the ground
that justice has not been done in the opinion of the
court because that would be an entry into the merits of
the dispute.
62. In the light of the discussion above, in our view,
when we talk about justice being done, it is about
rendering, in accord with law, what is right and
equitable to one who has suffered a wrong. Justice is
the virtue by which the society/court/Tribunal gives a
man his due, opposed to injury or wrong. Dispensation
of justice in its quality may vary, dependent on person
who dispenses it. A trained judicial mind may dispense
justice in a manner different from what a person of
ordinary prudence would do. This is so, because a
trained judicial mind is likely to figure out even minor
infractions of law/norms which may escape the
attention of a person with ordinary prudence.
Therefore, the placement of words “most basic
notions” before “of justice” in Explanation 1 has its
significance. Notably, at the time when the 2015
Amendment was brought, the existing law with regard
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to grounds for setting aside an arbitral award, as
interpreted by this Court, was that an arbitral award
would be in conflict with public policy of India, if it is
contrary to:
(a) the fundamental policy of Indian law;
(b) the interest of India;
(c) justice or morality; and/or is
(d) patently illegal.
63. As we have already noticed, the object of
inserting Explanations 1 and 2 in place of earlier
explanation to Section 34(2)(b)(ii) was to limit the
scope of interference with an arbitral award, therefore
the amendment consciously qualified the term
“justice” with “most basic notions” of it. In such
circumstances, giving a broad dimension to this
category [ In conflict with most basic notions of
morality or justice.] would be deviating from the
legislative intent. In our view, therefore, considering
that the concept of justice is open-textured, and notions
of justice could evolve with changing needs of the
society, it would not be prudent to cull out “the most
basic notions of justice”. Suffice it to observe, they [
Most basic notions of justice.] ought to be such
elementary principles of justice that their violation
could be figured out by a prudent member of the public
who may, or may not, be judicially trained, which
means, that their violation would shock the conscience
of a legally trained mind. In other words, this ground
would be available to set aside an arbitral award, if
the award conflicts with such elementary/fundamental
principles of justice that it shocks the conscience of the
Court.
64. The other ground is of morality. On the question
of morality, in Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC
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(Civ) 204] , this Court, after referring to the provisions
of Section 23 of the Contract Act, 1872; earlier
decision of this Court in Gherulal [Gherulal
Parakh v. Mahadeodas Maiya, 1959 SCC OnLine SC 4
: AIR 1959 SC 781] ; and Indian Contract Act by
Pollock and Mulla, held that judicial precedents have
confined morality to sexual morality. And if “morality”
were to go beyond sexual morality, it would cover such
agreements as are not illegal but would not be
enforced given the prevailing mores of the day. The
Court also clarified that interference on this ground
would be only if something shocks the Court’s
conscience [ See Associate Builders case, (2015) 3
SCC 49, para 39 : (2015) 2 SCC (Civ) 204] .”
While explaining the term “patent illegality”, the Apex Court in OPG Power
Generation (P) Ltd. (supra) has observed as under:
“65. Sub-section (2-A) of Section 34 of the 1996
Act, which was inserted by the 2015 Amendment,
provides that an arbitral award not arising out of
international commercial arbitrations, may also be set
aside by the Court, if the Court finds that the award is
visited by patent illegality appearing on the face of the
award. The proviso to sub-section (2-A) states that an
award shall not be set aside merely on the ground of
an erroneous application of the law or by
reappreciation of evidence.
66. In Saw Pipes [ONGC Ltd. v. Saw Pipes Ltd.,
(2003) 5 SCC 705] , while dealing with the phrase
“public policy of India” as used in Section 34, this
Court took the view that the concept of public policy
connotes some matter which concerns public good and
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public interest. If the award, on the face of it, patently
violates statutory provisions, it cannot be said to be in
public interest. Thus, an award could also be set aside
if it is patently illegal. It was, however, clarified that
illegality must go to the root of the matter and if the
illegality is of trivial nature, it cannot be held that
award is against public policy.
67. In Associate Builders [Associate
Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC
(Civ) 204] , this Court held that an award would be
patently illegal, if it is contrary to:
(a) substantive provisions of law of India;
(b) provisions of the 1996 Act; and
(c) terms of the contract [ See also three-Judge
Bench decision of this Court in State of
Chhattisgarh v. SAL Udyog (P) Ltd., (2022) 2 SCC 275
: (2022) 2 SCC (Civ) 776] .
The Court clarified that if an award is contrary to the
substantive provisions of law of India, in effect, it is in
contravention of Section 28(1)(a) [ “28. Rules
applicable to substance of dispute.–(1) Where the
place of arbitration is situated in India–(a) in an
arbitration other than an international commercial
arbitration, the Arbitral Tribunal shall decide the
dispute submitted to arbitration in accordance with the
substantive law for the time being in force in
India;***(2)***(3) While deciding and making an
award, the Arbitral Tribunal shall, in all cases, take
into account the terms of the contract and trade usages
applicable to the transaction.”(As substituted by Act 3
of 2016 w.e.f. 23-10-2015)Prior to substitution by Act
3 of 2016, sub-section (3) of Section 28 read as
under:”28. (3) In all cases, the Arbitral Tribunal shall
decide in accordance with the terms of the contract
and shall take into account the usages of the trade
applicable to the transaction.”] of the 1996 Act.
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Similarly, violating terms of the contract, in effect, is in
contravention of Section 28(3) of the 1996 Act.
68. In Ssangyong [Ssangyong Engg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 :
(2020) 2 SCC (Civ) 213] this Court specifically dealt
with the 2015 Amendment which inserted sub-section
(2-A) in Section 34 of the 1996 Act. It was held that
“patent illegality appearing on the face of the award”
refers to such illegality as goes to the root of matter,
but which does not amount to mere erroneous
application of law. It was also clarified that what is not
subsumed within “the fundamental policy of Indian
law”, namely, the contravention of a statute not linked
to “public policy” or “public interest”, cannot be
brought in by the backdoor when it comes to setting
aside an award on the ground of patent illegality [
See Ssangyong Engg. case, (2019) 15 SCC 131, para
37 : (2020) 2 SCC (Civ) 213] . Further, it was
observed, reappreciation of evidence is not permissible
under this category of challenge to an arbitral award [
See Ssangyong Engg. case, (2019) 15 SCC 131, para
38 : (2020) 2 SCC (Civ) 213] .”
29. It is settled law that the Arbitral Tribunal is the master of evidence
and this court does not have the jurisdiction to re-appreciate the evidence
based on which the impugned award is passed. Regardless, after a perusal of
the impugned award, this Court cannot say that conclusion of the Tribunal is
so perverse that it would shock the conscience of this Court.
30. As none of the parameters as discussed in OPG Power Generation (P)
Ltd. (supra) are attracted herein, interference under Section 34 of the Act is
not warranted by this Court.
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31. Resultantly, the Petition is dismissed along with pending
application(s), if any.
SUBRAMONIUM PRASAD, J
APRIL 23, 2026
vg
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