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