Delhi High Court
Sng Developers Limited vs Lord Vardhman Buildtech Private … on 11 February, 2026
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 13.01.2026
Judgment pronounced on: 11.02.2026
+ O.M.P. (COMM) 348/2024 & I.A. 36326/2024 (Stay)
SNG DEVELOPERS LIMITED .....Petitioner
Through: Mr. Dharmesh Misra, Senior
Advocate with Mr. Prateek
Gupta and Ms. Vishakha
Kaushik, Advs.
versus
LORD VARDHMAN BUILDTECH PRIVATE LIMITED
.....Respondent
Through: Mr. Sanjeev Kr. Dubey, Senior
Advocate with Mr. Amit
Bhatia, Advocate
+ OMP (ENF.) (COMM.) 223/2024, EX.APPL.(OS) 1644/2024
(U/O 21 Rule 41 (2), EX.APPL.(OS) 1150/2025 (U/O 21 Rule
41 (3) & EX.APPL.(OS) 1582/2025 (Delay of 4 days in filing
the appeal)
LORD VARDHMAN BUILDTECH PRIVATE LIMIED
.....Decree Holder
Through: Mr. Sanjeev Kr. Dubey, Senior
Advocate with Mr. Amit
Bhatia, Advocate
versus
SNG DEVELOPERS LIMITED .....Judgement Debtor
Through: Mr. Dharmesh Misra, Senior
Advocate with Mr. Prateek
Gupta and Ms. Vishakha
Kaushik, Advs.
Signature Not Verified
O.M.P. (COMM) 348/2024 & connected matter Page 1 of 33
Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
17:11:19
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
JUDGMENT
HARISH VAIDYANATHAN SHANKAR, J.
1. The Objection Petition, being O.M.P.(COMM) 348/2024, has
been filed under Section 34 of the Arbitration and Conciliation Act,
19961, assailing the Arbitral Award dated 22.04.20242 passed by the
learned Sole Arbitrator in the arbitration proceedings titled „Lord
Vardhman Buildtech Private Limited v. SNG Developers Limited‟,
whereby the Claimant/Respondent was awarded a sum of Rs. 7.50
Crores towards refund, along with pendente lite and future interest at
the rate of 10% per annum till the date of actual payment.
2. The Enforcement Petition, being OMP(ENF.)(COMM.)
223/2024, has been filed by the Claimant/Decree Holder under
Section 36 of the A&C Act, read with Order XXI Rules 10, 11, 13 and
41 and Section 151 of the Code of Civil Procedure, 19083, seeking
execution and enforcement of the aforesaid Arbitral Award passed in
its favour.
3. For the sake of clarity and uniformity, the parties hereinafter
shall be referred to in the same rank and nomenclature as adopted in
the Objection Petition.
1
A&C Act
2 Impugned Award
3
CPC
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
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4. It is clarified that the Enforcement Petition is subject to the
outcome of the Objection Petition, and in the event the Objection
Petition is allowed, the Enforcement Petition shall consequently fail.
BRIEF FACTS:
5. The Petitioner is the owner of land bearing No. S-5001,
freehold admeasuring approximately 5 acres, situated at Golf
Link-I, Builders Area, P-8, Greater Noida, District Gautam Budh
Nagar, Uttar Pradesh4.
6. During the years 2010-2011, after discussions between the
parties regarding the development of the said land, a Collaboration
Agreement dated 16.03.2010 was executed, under which the
responsibility for obtaining the necessary approvals and undertaking
construction was vested with the Respondent.
7. Subsequently, the Collaboration Agreement was superseded by
an Agreement to Sell dated 05.04.2010, which in turn was superseded
by another Agreement to Sell dated 04.04.2011.
8. Under the Agreement dated 04.04.2011, it was agreed that a
portion of the land admeasuring 2.929 acres of the subject land would
be sold to the Respondent for a total consideration of Rs. 7.50 Crores.
9. As per the said Agreement to Sell dated 04.04.2011, the date
fixed for performance and payment of sale consideration was
20.05.2011, with a provision enabling deferment of execution of the
sale deed, subject to certain conditions.
4
Subject land
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BHATIA
Signing Date:13.02.2026
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10. It is an admitted position between the parties that the
Respondent paid an amount of Rs. 7.50 Crores to the Petitioner, in
pursuance of an agreement dated 04.04.2011.
11. Thereafter, steps were taken in relation to the
partition/bifurcation of the subject land. The proposal, in this regard,
submitted before the Greater Noida Industrial Development Authority
was not approved.
12. On 13.05.2013, the Petitioner sent an email communication
concerning the status of the transaction and the amount paid, whereby
the Petitioner proposed a refund of the paid amount to the
Respondent.
13. On 30.07.2018, the Respondent issued a notice invoking the
Arbitration Clause contained in the Agreement to Sell 04.04.2011 and
proposed the appointment of an arbitrator.
14. The Petitioner responded to the said notice on 23.08.2018,
rejecting the proposal.
15. The Respondent thereafter approached this Court under Section
11 of the A&C Act, and vide Order dated 04.04.2019, this Court
appointed Hon‟ble Mr. Justice B.D. Ahmed (Retd.), former Chief
Justice of Jammu and Kashmir High Court, as the Arbitrator.
16. The learned Arbitrator entered into the reference on 24.04.2019
and conducted preliminary hearings. After pleadings, issues were
framed on 09.08.2019.
17. During the course of proceeding, objections were raised
regarding the admissibility of the Agreement to Sell dated 04.04.2011.
The learned Arbitrator passed an interim award dated 01.11.2021
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By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
17:11:19
dealing with the said objections. The interim award came to be
challenged, and upon rejection of the challenge, the interim award
attained finality.
18. After evidence, at the stage of final arguments, the Respondent
confined its claim to the alternative relief of refund of Rs. 7.50 Crores,
giving up the relief of specific performance.
19. Vide the Impugned Award, the learned Arbitrator directed the
Petitioner to refund a sum of Rs. 7.50 Crores to the Respondent along
with pendente lite and future interest at the rate of 10% per annum till
the date of actual payment.
20. Aggrieved by the Impugned Award, the Petitioner has filed the
Objection Petition under Section 34 of the A&C Act.
21. Simultaneously, the Award Holder/ Respondent of the
Objection Petition has initiated execution proceedings for the
enforcement of the said award by filing OMP(ENF.)(COMM.)
223/2024 before this Court.
SUBMISSIONS ON BEHALF OF THE PETITIONER:
22. Learned senior counsel for the Petitioner would submit that the
Impugned Award deserves to be set aside under Section 34 of the
A&C Act as it is vitiated by patent illegality and is also in conflict
with the fundamental policy of Indian law.
23. Learned senior counsel for the Petitioner would submit that,
apart from certain ancillary submissions, the challenge to the
Impugned Award rests on a twofold foundation, inasmuch as the
claims entertained by the learned Arbitrator were ex facie barred by
limitation and the award is perverse since it is founded on no
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BHATIA
Signing Date:13.02.2026
17:11:19
evidence, the reliance placed on balance sheets to infer
acknowledgment of debt being legally untenable.
24. Learned senior counsel for the Petitioner would submit that the
Agreement to Sell dated 04.04.2011 unequivocally fixed 20.05.2011
as the date for performance with only a limited and conditional
deferment not exceeding 120 days and that, even on the most liberal
interpretation of the deferment clause, the outer limit for performance
stood exhausted on 20.09.2011. He would further submit that
thereafter the Respondent admittedly took no steps to enforce the
Agreement and that the correspondence dated 13.05.2013 clearly
evidences a categorical refusal to perform the contract, from which
date alone, at the highest, limitation could be reckoned.
25. Learned senior counsel for the Petitioner would further submit
that despite such refusal of performance, the Respondent neither
sought specific performance nor claimed refund of the alleged
advance within the prescribed period of limitation of three years.
26. Learned senior counsel for the Petitioner would submit that
although the arbitration clause was invoked by notice dated
30.07.2018, no claim for refund was raised at that stage and the
alternative claim for refund of Rs. 7.50 Crores was introduced for the
first time in the Statement of Claim dated 21.05.2019, which was
hopelessly barred by limitation and thus renders the award vulnerable
under Section 34(2)(b)(ii) of the Act.
27. Learned senior counsel for the Petitioner would submit that the
learned Arbitrator erred in law in extending the period of limitation by
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BHATIA
Signing Date:13.02.2026
17:11:19
placing reliance on Section 18 of the Limitation Act, 19635, since the
balance sheets relied upon do not satisfy the mandatory requirements
of a valid acknowledgement of liability. He would further submit that
the only balance sheet bearing a signature contains an alleged
acknowledgement made beyond the prescribed period of limitation,
while the balance sheets purportedly within limitation do not bear the
Petitioner‟s express signature, and therefore, no fresh period of
limitation could have commenced, and the claim is hopelessly time-
barred.
28. Learned senior counsel for the Petitioner would submit that
mere entries in financial statements, in the absence of a clear and
conscious admission of liability made before the expiry of limitation,
cannot extend limitation, and in support of this proposition, reliance
would be placed on the judgment of the Hon‟ble Supreme Court in
Reliance Asset Reconstruction Company Limited v. Hotel Poonja
International Private Limited6.
29. Learned senior counsel for the Petitioner would submit that the
balance sheet for the year 2016-17, which alone bears a signature,
pertains to a period after the expiry of limitation on 12.05.2016 and
was in any event signed only on 30.09.2017, while the balance sheets
of earlier years are unsigned, and therefore none of them constitute a
valid acknowledgment under Section 18 of the Limitation Act.
30. Learned senior counsel for the Petitioner would further submit
that the entry “Advance against sale of School Plot” appearing in the
5
Limitation Act
6
(2021) 7 SCC 352
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BHATIA
Signing Date:13.02.2026
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balance sheets is factually erroneous since the Agreement to Sell was
never in respect of a “School Plot” but pertained to a “Facilities Plot”.
31. Learned senior counsel for the Petitioner would submit that
although the relevance of balance sheets was specifically denied in the
affidavit of admission and denial, procedural directions regarding
admission and denial cannot override substantive statutory
requirements governing proof and admissibility, and the learned
Arbitrator‟s reliance on such documents amounts to a misapplication
of law going to the root of the matter.
32. Learned senior counsel for the Petitioner would submit that the
Impugned Award grants a refund solely on the basis of an
unregistered Agreement to Sell dated 04.04.2011, which was
compulsorily registrable under Section 17 of the Registration Act,
19087 as applicable in the State of Uttar Pradesh, and that by virtue of
Section 49 thereof, such an agreement could not have been received in
evidence for any purpose, including refund.
33. Learned senior counsel for the Petitioner would therefore
submit that the Impugned Award violates Section 18 of the Limitation
Act and Sections 17 and 49 of the Registration Act (as amended and
applicable in Uttar Pradesh), and consequently falls foul of Sections
28(1)(a) and 34(2A) of the A&C Act, warranting interference by this
Court.
SUBMISSIONS ON BEHALF OF THE RESPONDENT:
34. Learned senior counsel appearing for the Respondent would
submit that the present petition is a disguised attempt to re-argue the
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
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matter on merits under the guise of a Section 34 challenge and would
further submit that the scope of interference under Section 34 of the
A&C Act is narrow and does not permit this Court to sit in appeal
over the findings of the learned Arbitrator.
35. Learned senior counsel for the Respondent would submit that
the receipt of Rs. 7.50 Crores by the Petitioner towards sale
consideration is an admitted and undisputed fact acknowledged in
pleadings, correspondence, and the documentary record, and would
further submit that the Petitioner‟s own email dated 13.05.2013
records discussions regarding refund of the said amount and clearly
negates the plea of complete denial of liability.
36. Learned senior counsel for the Respondent would submit that
the Petitioner‟s audited financial statements for the financial years
01.04.2013 to 31.03.2017 consistently reflect the amount of Rs. 7.50
Crores under Footnote „A‟ as “Advance Against Sale of School Plot”,
and would contend that such repeated disclosure evidences a
continuing acknowledgement of liability.
37. Learned senior counsel for the Respondent would submit that
the aforesaid entries constitute an acknowledgement of liability within
the meaning of Section 18 of the Limitation Act, having been made
prior to the expiry of the period of limitation, and would further
submit that the learned Arbitrator has correctly appreciated the
evidentiary value of these documents.
38. Learned senior counsel for the Respondent would submit that
the denial of the balance sheets by the Petitioner before the learned
Arbitrator in its affidavit of admission and denial was evasive and
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BHATIA
Signing Date:13.02.2026
17:11:19
non-compliant with the standards applicable to commercial disputes,
and would contend that the absence of a specific denial as to the
existence, execution, or genuineness of the documents amounts to an
admission from which the Petitioner cannot subsequently resile.
39. Learned senior counsel for the Respondent would submit that
during cross-examination, the Petitioner‟s witness admitted that the
financial statements were duly signed and uploaded with the Registrar
of Companies, and would contend that these admissions demolish the
plea that the balance sheets were unsigned and fully justify the finding
of acknowledgement recorded by the learned Arbitrator.
40. Learned senior counsel for the Respondent would submit that
the claim for refund is not founded on enforcement of the Agreement
to Sell dated 04.04.2011 but is based on the admitted receipt of
money, and would contend that the relief of refund is severable and
constitutes a collateral transaction permissible under Section 49 of the
Registration Act as amended and applicable in Uttar Pradesh.
41. Learned senior counsel for the Respondent would submit that
none of the grounds urged by the Petitioner satisfy the threshold for
interference under Section 34 of the A&C Act, and would further
submit that the Impugned Award is reasoned, well-considered, and
free from perversity or patent illegality.
42. Learned senior counsel for the Respondent would therefore
pray that the present petition under Section 34 of the A&C Act be
dismissed and the Impugned Award be upheld and enforced, and
would further seek continuation and culmination of the execution
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
17:11:19
proceedings in OMP(ENF.)(COMM.) 223/2024 in terms of the
Award.
ANALYSIS:
43. This Court has carefully considered the submissions advanced
on behalf of both sides and, with their able assistance, has perused the
Arbitral Award and the material placed before this Court.
44. At the outset, it is apposite to note that this Court remains
conscious of the limited scope of its jurisdiction while examining an
objection petition under Section 34 of the A&C Act. There is a
consistent and evolving line of precedents whereby the Hon‟ble
Supreme Court has authoritatively delineated and settled the contours
of judicial intervention in such proceedings. In this regard, a three-
Judge Bench of the Hon‟ble Supreme Court, after an exhaustive
consideration of a catena of earlier judgments, in OPG Power
Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P)
Ltd.8, while dealing with the grounds of conflict with the public policy
of India and patent illegality, grounds which have also been urged in
the present case, made certain pertinent observations, which are
reproduced hereunder:
“Relevant legal principles governing a challenge to an arbitral
award
30. Before we delve into the issue/sub-issues culled out above, it
would be useful to have a look at the relevant legal principles
governing a challenge to an arbitral award. Recourse to a court
against an arbitral award may be made through an application for
setting aside such award in accordance with sub-sections (2), (2-A)
and (3) of Section 34 of the 1996 Act. Sub-section (2) of Section
34 has two clauses, (a) and (b). Clause (a) has five sub-clauses
which are not relevant to the issues raised before us. Insofar as
8
(2025) 2 SCC 417Signature Not Verified
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BHATIA
Signing Date:13.02.2026
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clause (b) is concerned, it has two sub-clauses, namely, (i) and (ii).
Sub-clause (i) of clause (b) is not relevant to the controversy in
hand. Sub-clause (ii) of clause (b) provides that if the Court finds
that the arbitral award is in conflict with the public policy of India,
it may set aside the award.
Public policy
31. “Public policy” is a concept not statutorily defined, though it
has been used in statutes, rules, notification, etc. since long, and is
also a part of common law. Section 23 of the Contract Act, 1872
uses the expression by stating that the consideration or object of an
agreement is lawful, unless, inter alia, opposed to public policy.
That is, a contract which is opposed to public policy is void.
*****
37. What is clear from above is that for an award to be against
public policy of India a mere infraction of the municipal laws of
India is not enough. There must be, inter alia, infraction of
fundamental policy of Indian law including a law meant to serve
public interest or public good.
*****
The 2015 Amendment in Sections 34 and 48
42. The aforementioned judicial pronouncements were all prior to
the 2015 Amendment. Notably, prior to the 2015 Amendment the
expression “in contravention with the fundamental policy of Indian
law” was not used by the legislature in either Section 34(2)(b)(ii)
or Section 48(2)(b). The pre-amended Section 34(2)(b)(ii) and its
Explanation read:
*****
44. By the 2015 Amendment, in place of the old Explanation to
Section 34(2)(b)(ii), Explanations 1 and 2 were added to remove
any doubt as to when an arbitral award is in conflict with the public
policy of India.
45. At this stage, it would be pertinent to note that we are dealing
with a case where the application under Section 34 of the 1996 Act
was filed after the 2015 Amendment, therefore the newly
substituted/added Explanations would apply [Ssangyong Engg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131].
46. The 2015 Amendment adds two Explanations to each of the
two sections, namely, Section 34(2)(b)(ii) and Section 48(2)(b), in
place of the earlier Explanation. The significance of the newly
inserted Explanation 1 in both the sections is two-fold. First, it
does away with the use of words : (a) “without prejudice to theSignature Not Verified
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BHATIA
Signing Date:13.02.2026
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generality of sub-clause (ii)” in the opening part of the pre-
amended Explanation to Section 34(2)(b)(ii); and (b) “without
prejudice to the generality of clause (b) of this section” in the
opening part of the pre-amended Explanation to Section 48(2)(b);
secondly, it limits the expanse of public policy of India to the three
specified categories by using the words “only if”.
Whereas, Explanation 2 lays down the standard for adjudging
whether there is a contravention with the fundamental policy of
Indian law by providing that a review on merits of the dispute shall
not be done. This limits the scope of the enquiry on an application
under either Section 34(2)(b)(ii) or Section 48(2)(b) of the 1996
Act.
47. The 2015 Amendment by inserting sub-section (2-A) in
Section 34, carves out an additional ground for annulment of an
arbitral award arising out of arbitrations other than international
commercial arbitrations. Sub-section (2-A) provides that the Court
may also set aside an award if that is vitiated by patent illegality
appearing on the face of the award. This power of the Court is,
however, circumscribed by the proviso, which 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.
48. Explanation 1 to Section 34(2)(b)(ii), specifies that an arbitral
award is in conflict with the public policy of India, only if:
(i) the making of the award was induced or affected by fraud or
corruption or was in violation of Section 75 or Section 81; or
(ii) it is in contravention with the fundamental policy of Indian law;
or
(iii) it is in conflict with the most basic notions of morality or
justice.
49. In the instant case, there is no allegation that the making of the
award was induced or affected by fraud or corruption, or was in
violation of Section 75 or Section 81. Therefore, we shall confine
our exercise in assessing as to whether the arbitral award is in
contravention with the fundamental policy of Indian law, and/or
whether it conflicts with the most basic notions of morality or
justice. Additionally, in the light of the provisions of sub-section
(2-A) of Section 34, we shall examine whether there is any patent
illegality on the face of the award.
50. Before undertaking the aforesaid exercise, it would be apposite
to consider as to how 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” have been construed.
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BHATIA
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In contravention with the fundamental policy of Indian law
51. As discussed above, till the 2015 Amendment the expression
“in contravention with the fundamental policy of Indian law” was
not found in the 1996 Act. Yet, in Renusagar Power Co.
Ltd. v. General Electric Co., 1994 Supp (1) SCC 644, in the
context of enforcement of a foreign award, while construing the
phrase “contrary to the public policy”, this Court held that for a
foreign award to be contrary to public policy mere contravention of
law would not be enough rather it should be contrary to:
(a) the fundamental policy of Indian law; and/or
(b) the interest of India; and/or
(c) justice or morality.
*****
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.
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).
*****
Patent illegality
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BHATIA
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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 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 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 v. DDA, (2015) 3 SCC 49, 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].
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) of the 1996 Act. Similarly, violating terms of the
contract, in effect, is in contravention of Section 28(3) of the 1996
Act.
68. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019)
15 SCC 131 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. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131]. Further, it
was observed, reappreciation of evidence is not permissible under
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BHATIA
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this category of challenge to an arbitral award [See Ssangyong
Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131].
Perversity as a ground of challenge
69. Perversity as a ground for setting aside an arbitral award was
recognised in ONGC Ltd. v. Western Geco International Ltd.,
(2014) 9 SCC 263. Therein it was observed that an arbitral
decision must not be perverse or so irrational that no reasonable
person would have arrived at the same. It was observed that if an
award is perverse, it would be against the public policy of India.
70. In Associate Builders v. DDA, (2015) 3 SCC 49 certain tests
were laid down to determine whether a decision of an Arbitral
Tribunal could be considered perverse. In this context, it was
observed that where:
(i) a finding is based on no evidence; or
(ii) an Arbitral Tribunal takes into account something irrelevant to
the decision which it arrives at; or
(iii) ignores vital evidence in arriving at its decision, such decision
would necessarily be perverse.
However, by way of a note of caution, it was observed that when a
court applies these tests it does not act as a court of appeal and,
consequently, errors of fact cannot be corrected. Though, a
possible view by the arbitrator on facts has necessarily to pass
muster as the arbitrator is the ultimate master of the quantity and
quality of evidence to be relied upon. It was also observed that an
award based on little evidence or on evidence which does not
measure up in quality to a trained legal mind would not be held to
be invalid on that score.
71. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019)
15 SCC 131, which dealt with the legal position post the 2015
Amendment in Section 34 of the 1996 Act, it was observed that a
decision which is perverse, while no longer being a ground for
challenge under “public policy of India”, would certainly amount
to a patent illegality appearing on the face of the award. It was
pointed out that an award based on no evidence, or which ignores
vital evidence, would be perverse and thus patently illegal. It was
also observed that a finding based on documents taken behind the
back of the parties by the arbitrator would also qualify as a
decision based on no evidence inasmuch as such decision is not
based on evidence led by the parties, and therefore, would also
have to be characterised as perverse [ See Ssangyong Engg. &
Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131].
72. The tests laid down in Associate Builders v. DDA, (2015) 3
SCC 49 to determine perversity were followed in Ssangyong
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Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 and
later approved by a three-Judge Bench of this Court in Patel Engg.
Ltd. v. North Eastern Electric Power Corpn. Ltd., (2020) 7 SCC
167.
73. In a recent three-Judge Bench decision of this Court in DMRC
Ltd. v. Delhi Airport Metro Express (P) Ltd., (2024) 6 SCC 357,
the ground of patent illegality/perversity was delineated in the
following terms: (SCC p. 376, para 39)
“39. In essence, the ground of patent illegality is available
for setting aside a domestic award, if the decision of the
arbitrator is found to be perverse, or so irrational that no
reasonable person would have arrived at it; or the
construction of the contract is such that no fair or
reasonable person would take; or, that the view of the
arbitrator is not even a possible view. A finding based on
no evidence at all or an award which ignores vital
evidence in arriving at its decision would be perverse and
liable to be set aside under the head of “patent illegality”.
An award without reasons would suffer from patent
illegality. The arbitrator commits a patent illegality by
deciding a matter not within its jurisdiction or violating a
fundamental principle of natural justice.”
Scope of interference with an arbitral award
74. The aforesaid judicial precedents make it clear that while
exercising power under Section 34 of the 1996 Act the Court does
not sit in appeal over the arbitral award. Interference with an
arbitral award is only on limited grounds as set out in Section 34 of
the 1996 Act. A possible view by the arbitrator on facts is to be
respected as the arbitrator is the ultimate master of the quantity and
quality of evidence to be relied upon. It is only when an arbitral
award could be categorised as perverse, that on an error of fact an
arbitral award may be set aside. Further, a mere erroneous
application of the law or wrong appreciation of evidence by itself
is not a ground to set aside an award as is clear from the provisions
of sub-section (2-A) of Section 34 of the 1996 Act.
75. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.,
(2019) 20 SCC 1, paras 27-43, a three-Judge Bench of this Court
held that courts need to be cognizant of the fact that arbitral awards
are not to be interfered with in a casual and cavalier manner, unless
the court concludes that the perversity of the award goes to the root
of the matter and there is no possibility of an alternative
interpretation that may sustain the arbitral award. It was observed
that jurisdiction under Section 34 cannot be equated with the
normal appellate jurisdiction. Rather, the approach ought to be to
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respect the finality of the arbitral award as well as party’s
autonomy to get their dispute adjudicated by an alternative forum
as provided under the law.”
45. The principal challenge mounted by the Petitioner is directed
against the finding of the learned Arbitral Tribunal on the issue of
limitation, more particularly the reliance placed by the learned
Arbitrator upon the Respondent‟s balance sheets/financial statements
as constituting acknowledgements of liability under Section 18 of the
Limitation Act. In this context, the learned Arbitrator undertook a
detailed examination of the issue of limitation. The relevant extract
from the Arbitral Award, wherein the learned Arbitrator recorded the
discussion and findings on limitation, is reproduced hereinbelow:
“Discussion & Finding on Limitation
27. After considering the arguments made on behalf of the parties,
the Tribunal is of the view that the Claim for refund of Rs. 7.50
crores is not bar by limitation. First of all, it is an accepted position
that the Respondent by itsemail dated 13.05.2013 had offered to
refund the said amount of Rs. 7.50 crores. So, the starting point of
limitation, even as per the Respondent would be 13.05.2013.
28. Secondly, the Claimant has been able to establish that as per
the extracts from the balance sheets/financial statements of the
Respondent the amount of Rs 7.50 crores has been admitted as an
“ADVANCE AGAINST SALE OF SCHOOL PLOT”. This
appears in the statements for the financial year 2013-14 right up to
the financial year 2016-17. Clearly, the acknowledgments were
made prior to the expiration of the original period of limitation that
within three years w.e.f. 14.05.2013. These documents filed by the
Claimant as Additional List of Documents on 30.07.2019 have
been denied’ by the Respondent in its affidavit of admission/ denial
of document for the reason – “As the same has no relevance in the
facts and circumstances of the case”. It is pertinent to point out that
in the order dated 09.05.2019 the Tribunal had made clear in
paragraph 7.8 thereof that in the Affidavits of Admission/Denial,
the parties were to list and describe such of the documents the
existence/genuineness of which are in dispute, setting out the
reasons therefor in brief. It was also made clear that in the absenceSignature Not Verified
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of the same, the document shall be available for being read in
evidence, dispensing with the need of formal proof thereof.
However, the question of evidentiary value to be attached to the
document was to remain open for consideration at the final
hearing. It is therefore clear that Respondent has made an evasive
denial on the purported reason of relevance. The denial was to be
with regard to the existence/genuineness of the documents. There
is no such denial. Hence, the existence /genuineness of said
extracts from the balance sheets/financial statements have not been
disputed by the Respondent and will be deemed to be in existence
and genuine. The Respondent cannot be permitted to detract from
this position. For the same reason the Respondent cannot now take
the stand the papers alleged and purported to be balance sheets are
mere incomplete papers and sheets and not balance sheets. The
Respondent has not produced any contrary evidence to establish
that its financial statements/balance sheets were otherwise.
29. The law is well settled, as demonstrated by the Claimant with
reference to the decisions in Larsen & Tubro (supra), N.S. Atwal
(supra) and Asset Reconstruction (supra), that an entry in a
balance sheet/ financial statement would amount to an
acknowledgement of liability under section 18 of the Limitation
Act, 1963. The amount of Rs 7.50 crores has been clearly reflected
in the said statements as an “ADVANCE AGAINST SALE OF
SCHOOL PLOT”. This amounts to an acknowledgement of
liability under section 18 of the Limitation Act, 1963. This has
been done consistently in the Statements of financial years 2013-14
to 2016-17 and not just in the financial statement for the financial
year 2016-17 (as was wrongly sought to suggested by the
Respondent). Each such acknowledgment was made within the
prescribed period of limitation and resulted in a fresh period of
limitation computed from the time when the acknowledgment was
made. It is not the case of the Respondent that the financial
statements were not prepared and signed as per law. It is also not
the case of the Respondent that the Respondent did not file the
Annual Returns as is the requirement in law. The Respondent has
also not produced any evidence to controvert the position that the
expression ADVANCE AGAINST SALE OF SCHOOL PLOT
was in respect of some other transaction with someone else. The
suggestion to the contrary by the Respondent is bereft of any
evidence. When the Claimant categorically submitted that the sum
of Rs 7.50 crores mentioned in the financial statements as “advance
against sale of school plot” specifically related to the amount of Rs.
7.50 crores advanced to the Respondent and acknowledged by the
Respondent in, inter alia, the email dated 13.05.2013, as a
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constituent of its jural relationship with the Respondent, the burden
was on the Respondent to show that the said reference in the
financial statements was with reference to some other transaction
with some other entity. The Respondent has not produced any such
evidence or even any pleading to this effect.
30. For all these reasons, the Respondent’s plea of the bar of
limitation in respect of the Claimant’s claim for refund of the
amount of Rs. 7.50 crores is not tenable. The claim is within time.
31. Hence, Issue 1, in respect of the alternative claim of refund
of Rs. 7.50 crores is decided against the Respondent by holding
that said claim is within time and is not barred by limitation.
Issue 7, for the reasons already indicated above, is decided by
holding that the Claimant is entitled to the refund of the sum of
Rs.7.5 crores from the Respondent which the Respondent shall
refund to the Claimant.”
46. A careful, holistic, and contextual reading of the aforesaid
reasoning adopted by the learned Arbitrator in dealing with the plea of
limitation raised by the Petitioner herein reveals the following
essential facets of the arbitral findings:
(a) The learned Tribunal, after considering the submissions
advanced by both parties, categorically held that the claim for
refund of Rs. 7.50 crores was not barred by limitation.
(b) The learned Tribunal found it to be an admitted position that, by
way of an email dated 13.05.2013, the Petitioner itself had
offered to refund the said amount, and therefore, even as per the
Petitioner‟s own case, the period of limitation could commence
only from 13.05.2013.
(c) The learned Tribunal accepted the Respondent‟s reliance on the
Petitioner‟s balance sheets/financial statements for the financial
years 2013-14 to 2016-17, which consistently reflected the
amount of Rs. 7.50 crores as “Advance Against Sale of School
Plot”.
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(d) These entries were held to constitute valid acknowledgements
of liability within the meaning of Section 18 of the Limitation
Act, and each such acknowledgement was found to have been
made prior to the expiry of the prescribed limitation period,
thereby giving rise to a fresh period of limitation.
(e) The learned Tribunal observed that the denial of these
documents by the Petitioner herein in its affidavit of
admission/denial was evasive in nature, inasmuch as the denial
was premised solely on alleged irrelevance and not on the
existence or genuineness of the documents, contrary to the
express procedural directions issued by the Tribunal.
(f) In view of such evasive denial, the learned Tribunal held that
the existence and genuineness of the balance sheets stood
admitted, and the Petitioner could not thereafter be permitted to
contend that the documents were incomplete, fabricated, or not
genuine.
(g) The learned Tribunal further noted that the Petitioner failed to
produce any contrary material or evidence to demonstrate that
its financial statements were otherwise, or that the entries
therein pertained to some other transaction with a third party.
(h) Relying upon settled judicial precedents, the learned Tribunal
reaffirmed the legal position that entries in balance sheets and
financial statements can constitute acknowledgements of
liability under Section 18 of the Limitation Act.
(i) The learned Tribunal expressly rejected the Petitioner‟s
contention that the acknowledgement existed only in theSignature Not Verified
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financial year 2016-17, holding instead that consistent
acknowledgements were made across multiple financial years,
each within the subsisting period of limitation.
(j) The learned Tribunal held that once the Respondent herein
established that the balance sheet entries related to the very
same sum of Rs. 7.50 crores acknowledged in the email dated
13.05.2013, the burden shifted upon the Petitioner to establish
otherwise, which burden the Petitioner failed to discharge.
(k) Consequently, the learned Tribunal held that the plea of
limitation raised by the Petitioner was untenable and that the
claim for refund was well within time in terms of the Limitation
Act.
(l) The issues framed in this regard were accordingly decided by
holding that the Respondent was entitled to a refund of Rs. 7.50
crores from the Petitioner.
47. Upon a careful consideration of the entire material on record
and the arguments advanced by the parties before this Court, no
infirmity, perversity, or legal error is found in the aforesaid findings
rendered by the learned Arbitrator. This Court, therefore, affirms the
same in its entirety.
48. A further perusal of the Arbitral Award reveals that the learned
Arbitrator has not relied upon the balance sheets to establish the
existence of the underlying liability, as the receipt of the amount of
Rs. 7.50 crores by the Respondent was never in dispute. On the
contrary, the receipt of the said amount stands expressly admitted in
the pleadings as well as in the contemporaneous correspondence
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between the parties, including the email dated 13.05.2013, wherein the
Respondent unequivocally referred to the refund of the said amount.
The balance sheets were thus relied upon only for the limited and
specific purpose of examining the issue of limitation, namely, whether
there existed an acknowledgement in writing sufficient to extend the
period of limitation under Section 18 of the Limitation Act.
49. The learned Tribunal has, in a reasoned and legally sound
manner, correctly taken note of the fact that in the affidavit of
admission and denial filed by the Petitioner, there was no specific or
categorical denial with respect to the existence or genuineness of the
balance sheets and financial statements relied upon by the
Respondent. Instead, the Petitioner merely stated that the said
documents were “of no relevance”. Such a response, in law, cannot be
construed as a valid or specific denial within the meaning of the
procedural regime applicable to commercial disputes, which mandates
clear, precise, and reasoned denials, particularly in relation to the
existence and authenticity of documents placed on record. A denial on
the ground of alleged irrelevance does not address the foundational
requirement of disputing whether the document exists or whether it is
genuine, and therefore fails to satisfy the threshold prescribed for an
affidavit of admission and denial.
50. In the absence of any challenge to the existence or authenticity
of the balance sheets, the learned Tribunal was justified in proceeding
on the basis that the documents stood admitted for the purposes of
evidence. The Petitioner‟s failure to comply with these legal
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requirements disentitled it from subsequently contending that the
documents were incomplete, fabricated, or otherwise unreliable.
51. Significantly, the learned Tribunal has also relied upon
admissions elicited during the course of cross-examination of the
witness produced on behalf of the Petitioner, which unequivocally
establish that the financial statements in question were duly signed
and thereafter uploaded with the Registrar of Companies. Despite the
initial evasiveness displayed by the witness, the subsequent answers
clearly acknowledge that the financial statements had been signed by
him and that the same were uploaded by the Chartered Accountant in
the prescribed format before the Registrar of Companies.
52. In the face of such categorical admissions, the contention
advanced by the Petitioner that the balance sheets were unsigned or
lacked authenticity is rendered wholly untenable. The learned
Tribunal, on the basis of this material admission and the documentary
record placed before it, has drawn a factual inference which is neither
perverse nor contrary to the evidence on record. Such a finding
squarely falls within the realm of factual appreciation and, therefore,
is not open to interference in proceedings under Section 34 of the
A&C Act. The relevant extract of the Arbitral Award, referring to the
said cross-examination, is reproduced hereunder:
“Q.56. [Attention of the witness is drawn to the certified copy of
duly audited annual financial statement for the period from
01.04.2016 to 31.03.2017 (at page 1 to 126 of Claimants
application dated 22.10.2019) filed by the Respondent Company
before the Registrar of Companies.]
Is it correct that the above referred financial statement (at pages 1
to 126) of the Respondent Company?
Ans. These are unsigned documents and I am unable to recognise
the same. I can cross check with my record and revert.”
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*****
Q77. (Attention of the witness is drawn to his answer to question
no. 56.)
Can you now answer question no. 56?
Ans. I have not been able to check with the documents filed before
the Registrar of Companies. I would require some more time to do
so.
*****
Q81. (Attention of the witness is drawn to question no. 77) Can
you answer question no. 56 now?
Ans. I signed the financial statement of the company whereas, as
per the Chartered Accountant the said information, signed by me in
the financial statement of the company is uploaded in the format
provided by the ROC.
*****
Q82. Can you answer as to whether the information contained in
the format provided by the ROC are correct to your knowledge?
Ans. Since my CA has uploaded the said informations therefore the
informations are correct.”
(emphasis supplied)
53. In any event, the objections raised by the Petitioner to the
Award are manifestly hyper-technical in nature. The challenge
premised on the alleged non-signing of the balance sheets during the
years in which the limitation is claimed to have expired is wholly
misconceived. Not only does the balance sheet for the financial year
2016-17 bear the requisite signatures, but the said period also overlaps
with the earlier financial years relied upon for the purpose of
acknowledgement.
54. That apart, a perusal of the balance sheets across the relevant
financial years reveals a consistent and unambiguous disclosure in the
“Footnotes” section recording the receipt of an amount of Rs.
7,50,000,000/- as “Advance against sale of School Plot”. This
consistent accounting treatment across multiple years further fortifies
the finding of acknowledgement of liability.
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55. This court is also of the considered opinion that the Petitioner
cannot, at this belated stage, seek to contend that the reference to
“Advance against sale of School Plot” is erroneous on the ground that
the underlying agreement pertained only to a “Facilities Plot”. Such an
argument is not only unjustified but also clearly an attempt to raise
unnecessarily hyper-technical objections. The footnotes in the balance
sheets are based on disclosures furnished by the Petitioner itself, and
any alleged misdescription arising therefrom cannot be permitted to
operate to the detriment of the Respondent.
56. As regards the contention that the signatures on the balance
sheets were appended after the expiry of the limitation period and,
therefore, Section 18 of the Limitation Act would not apply, the same
is again an argument rooted in excessive technicality. The learned
Arbitrator is not bound by the strict rules of evidence, and the
substance of the material on record must prevail over form. Once it is
an admitted position that the balance sheet for the financial year 2016-
17 bears the same footnotes as the balance sheets of the preceding
years, it necessarily follows that the 2016-17 balance sheet operates as
a reaffirmation and acknowledgement of the earlier entries. The
learned Tribunal has, therefore, rightly rejected this contention and
drawn a logical and legally sustainable inference based on the
cumulative material on record.
57. It is pertinent to note that on all these facets, apart from making
bald oral assertions, the Petitioner has failed to lead any positive or
cogent evidence before the learned Arbitrator to substantiate its claim
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that the balance sheets for the prior years were either unsigned or
invalid.
58. The legal position that balance sheets constitute
acknowledgements of liability under Section 18 of the Limitation Act
is no longer res integra. The Hon‟ble Supreme Court in Asset
Reconstruction Company (India) Ltd. v. Bishal Jaiswal9, after
considering the relevant provisions, including those of the Indian
Evidence Act, 187210, has held that statutory compulsion in the
preparation of balance sheets does not, by itself, negate such
acknowledgement. The relevant portion of the aforesaid judgment is
reproduced herein below:
“16. The next question that this Court must address is as to whether
an entry made in a balance sheet of a corporate debtor would
amount to an acknowledgment of liability under Section 18 of the
Limitation Act.
17. Several judgments of this Court have indicated that an entry
made in the books of accounts, including the balance sheet, can
amount to an acknowledgment of liability within the meaning of
Section 18 of the Limitation Act. Thus, in Mahabir Cold
Storage v. CIT, 1991 Supp (1) SCC 402, this Court held : (SCC p.
409, para 12)
“12. The entries in the books of accounts of the appellant
would amount to an acknowledgment of the liability to
M/s Prayagchand Hanumanmal within the meaning of
Section 18 of the Limitation Act, 1963 and extend the
period of limitation for the discharge of the liability as
debt.”
*****
35. A perusal of the aforesaid sections would show that there is no
doubt that the filing of a balance sheet in accordance with the
provisions of the Companies Act is mandatory, any transgression
of the same being punishable by law. However, what is of
importance is that notes that are annexed to or forming part of such
9
(2021) 6 SCC 366
10
Evidence Act
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financial statements are expressly recognised by Section 134(7).
Equally, the auditor’s report may also enter caveats with regard to
acknowledgments made in the books of accounts including the
balance sheet. A perusal of the aforesaid would show that the
statement of law contained in Bengal Silk Mills Co. v. Ismail
Golam Hossain Ariff, 1961 SCC OnLine Cal 128, that there is a
compulsion in law to prepare a balance sheet but no compulsion to
make any particular admission, is correct in law as it would depend
on the facts of each case as to whether an entry made in a balance
sheet qua any particular creditor is unequivocal or has been entered
into with caveats, which then has to be examined on a case by case
basis to establish whether an acknowledgment of liability has, in
fact, been made, thereby extending limitation under Section 18 of
the Limitation Act.”
59. In light of the settled legal position, whether a balance sheet
entry constitutes an acknowledgement under Section 18 of the
Limitation Act depends upon the facts of each case. In the present
case, the learned Tribunal has rightly held that the consistent
reflection of Rs. 7.50 crores as “Advance against sale of School Plot”
across successive financial years, without any qualification, amounts
to an unequivocal acknowledgement of subsisting liability.
60. Accordingly, the contention advanced on behalf of the
Petitioner that the Impugned Award is vitiated by a case of “no
evidence” is wholly misconceived and devoid of merit. The material
placed on record amply supports the findings returned by the learned
Arbitral Tribunal, and it cannot be said that the conclusions drawn are
either unsupported by evidence or perverse. Consequently, no ground
is made out for interference under Section 34 of the A&C Act on the
plea of patent illegality, and the said argument of the Petitioner is,
therefore, rejected.
61. So far as the objection raised by the Petitioner on the ground of
non-registration of the Agreement to Sell is concerned, the same is
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wholly misconceived and devoid of merit. The learned Arbitral
Tribunal neither granted the relief of specific performance nor relied
upon the said Agreement to Sell for the purpose of creating, declaring,
assigning, limiting, or extinguishing any right, title, or interest in
immovable property. The learned Tribunal referred to the said
document only for a collateral purpose, namely, to appreciate the
nature of the underlying transaction between the parties and to
examine the admissions made by them in that context.
62. Any such limited reliance on an unregistered document for
collateral purposes is legally permissible and well settled. The
Hon‟ble Supreme Court, in K.B. Saha and Sons Pvt. Ltd. v.
Development Consultant Ltd.11, and Korukonda Chalapathi Rao v.
Korukonda Annapurna Sampath Kumar12, has authoritatively held
that while an unregistered document cannot be received in evidence to
affect immovable property or to enforce substantive rights arising
therefrom, it may nevertheless be looked into for collateral purposes,
including to ascertain the nature of the transaction or the conduct and
admissions of the parties. In view thereof, the objection of the
Petitioner on this count deserves to be rejected.
63. So far as the reliance placed by the Petitioner on the decision in
Hotel Poonja International (supra) is concerned, the same is wholly
misplaced. The said judgment was rendered in a completely different
factual background and in the context of a distinct nature of
proceedings. As already discussed hereinabove, the factual matrix in
which the balance sheet has been relied upon in the present case is
11
(2008) 8 SCC 564
12
(2022) 15 SCC 475
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materially different from the cited decision. In the present matter, the
balance sheet has been referred to for a limited and legally permissible
purpose, having regard to the admissions made by the parties and the
surrounding material on record. In contrast, the reliance on the balance
sheet in Hotel Poonja International (supra) arose in an altogether
different context and for a different legal purpose. Consequently, the
ratio of the said judgment does not apply to the facts of the present
case and does not advance the case of the Petitioner in any manner.
64. The objection raised by the Petitioner that the notice invoking
arbitration did not raise the issue of refund is clearly misconceived
and unsustainable. At the stage of issuance of a notice under Section
21 of the A&C Act, there is no requirement that a detailed or
exhaustive list of claims must be set out therein. The provision does
not contemplate that the notice invoking arbitration should enumerate
all claims which the parties may ultimately seek to raise or pursue in
the arbitral proceedings.
65. A notice under Section 21 of the A&C Act is essentially a
procedural requirement intended to signal the commencement of
arbitration and to convey the intention of a party to refer disputes to
arbitration. The mere non-enunciation or absence of a specific claim
in such notice does not render the arbitral proceedings invalid, nor
does it vitiate the adjudication of a claim which, though not expressly
articulated in the notice, is subsequently raised before and duly
considered by the learned Arbitral Tribunal. This position of law
stands affirmed by the judgment of the Hon‟ble Supreme Court in
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Bhageeratha Engineering v. State of Kerala13. The relevant portion
of the said judgment is reproduced hereunder:
“16. Secondly, the object of Section 21 of A&C Act, is only for the
purpose of commencement of arbitral proceedings is also well
settled. Section 21 is concerned only with determining the
commencement of the dispute for the purpose of reckoning
limitation. There is no mandatory prerequisite for issuance of a
Section 21 notice prior to the commencement of Arbitration.
Issuance of a Section 21 notice may come to the aid of parties and
the arbitrator in determining the limitation for the claim. Failure to
issue a Section 21 notice would not be fatal to a party in
Arbitration if the claim is otherwise valid and the disputes
arbitrable.”
66. At this stage, it is apposite to take note of Section 19 of the
A&C Act, which expressly provides that arbitral proceedings are not
bound by the strict provisions of the CPC or the Evidence Act. The
legislative intent underlying this provision is to ensure that arbitration
remains a flexible, efficient, and less formal dispute resolution
mechanism, free from the rigours and technicalities that govern
conventional civil trials. This principle has been reaffirmed by the
Division Bench of this Court in Mapex Infrastructure (P) Ltd. v.
National Highways Authority of India14.
67. In view of Section 19 of the A&C Act, an Arbitral Tribunal is
vested with wide procedural discretion to determine the admissibility,
relevance, materiality, and weight of the evidence placed before it.
The Tribunal is entitled to receive and rely upon documentary and oral
material in a manner it considers appropriate, including acting upon
admissions made by the parties, whether express or implied, and
drawing reasonable inferences therefrom. The assessment of the
13
(2026) SCC Online SC 5
14
2025 SCC OnLine Del 8242
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BHATIA
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probative value of such material squarely falls within the exclusive
domain of the Arbitral Tribunal, and courts exercising jurisdiction
under Section 34 of the A&C Act do not sit in appeal over such
determinations.
68. The only limitation on this procedural flexibility is that the
arbitral process must adhere to, inter alia, the fundamental principles
of fairness, equality of treatment, and natural justice, including
affording both parties a full and reasonable opportunity to present
their respective cases. So long as these foundational safeguards are
observed, the manner in which the Tribunal chooses to conduct the
proceedings or evaluate the material before it cannot be faulted merely
because it departs from the strict rules of the CPC or the Evidence
Act.
69. In the present case, no material irregularity or violation of the
Principles of Natural Justice has been demonstrated. The approach
adopted by the learned Arbitral Tribunal in receiving and appreciating
the evidence is fully consistent with the autonomy and flexibility
conferred upon it under Section 19 of the A&C Act. Consequently, no
infirmity, much less any patent illegality or conflict with the public
policy of India, warranting interference under Section 34 of the A&C
Act, can be discerned in the Impugned Award.
CONCLUSION:
(I) O.M.P. (COMM) 348/2024
70. In view of the foregoing reasons and the detailed analysis
undertaken hereinabove, this Court is of the considered opinion that
the learned Arbitral Tribunal has assigned cogent, well-reasoned, and
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BHATIA
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sustainable grounds in support of the Impugned Award. No perversity,
infirmity, or patent illegality has been demonstrated by the Petitioner
so as to warrant interference with the Impugned Award.
71. Consequently, the petition bearing O.M.P. (COMM) 348/2024,
which challenges the Impugned Award on the premise that the claim
for refund is barred by limitation, is wholly devoid of merit. This
Court further finds that the Impugned Award does not disclose any
conflict with the public policy of India, nor does it suffer from patent
illegality within the meaning of Section 34 of the A&C Act.
72. Accordingly, the present petition, along with pending
application(s), if any, stands dismissed.
(II) OMP(ENF.)(COMM.) 223/2024
73. In view of the objection petition, being O.M.P. (COMM)
348/2024, being devoid of merit, the same is consequently dismissed,
and the present execution petition shall proceed for the enforcement of
the Award.
74. Inasmuch as the Award is in the nature of a money decree, the
Judgment Debtor is directed to deposit the entire awarded amount,
along with up-to-date interest, with the Registry of this Court within a
period of four (4) weeks from today.
75. Accordingly, list the matter on 16.03.2026 for further
proceedings.
HARISH VAIDYANATHAN SHANKAR, J.
FEBRUARY 11, 2026/sm/jk
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Digitally Signed
By:HARVINDER KAUR
BHATIA
Signing Date:13.02.2026
17:11:19