Delhi District Court
Union Of India vs M/S Enkay Enterprises on 24 April, 2025
IN THE COURT OF SH. NIKHIL CHOPRA, DISTRICT
JUDGE (COMMERCIAL COURT)-06, CENTRAL DISTRICT,
TIS HAZARI COURT, DELHI
OMP (Comm) No.102/2024
CNR No.- DLCT01-018664-2024
Union of India,
Through Central Organization
For Modernization of Workshop (COFMOW),
Railway Offices Complex, Tilak Bridge,
New Delhi-110002.
......Petitioner
Versus
M/s Enkay Enterprises,
605, Padma Tower-II, 22 Rajendra Place,
New Delhi-110008.
....Respondent
Date of Institution : 30.11.2024
Final arguments : 21.04.2025
Date of decision : 24.04.2025
ORDER
1. Orders disposes off a petition under Section 34 of the Arbitration & Conciliation, 1996 challenging the Award dated 04.09.2024 passed by the sole Arbitrator.
2. COFMOW (Central Organization for Modernization OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 1 of 38 of Workshop), an agency entrusted with planning and procurement of machine tools and allied equipments for Indian Railways, invited Tender bearing no.G806370 for supply, installation and commissioning of coil spring, scragging and load deflection testing machines (two numbers). The respondent qualified the tender process. The letter of acceptance dated 13.12.2019, accordingly, stood issued. Subsequently, a contract dated 14.01.2020 came to be executed. The total cost of the machines were agreed as Rs.3,27,09,697.02/-. The due date of delivery of machines was agreed to be 270 days i.e. by 10.10.2020.
3. The respondent could not deliver the machines and in terms of its letter dated 13.08.2020 requested for extension.
4. The petitioner, in turn, vide its letter dated 14.09.2020 called upon the respondent that an all inclusive rate of Rs.1,40,00,000/- has been quoted by the respondent in respect of the machines, as against the subsequent tender bearing no.G 807270, opened on 17.02.2020. The respondent was also called upon/advised to accept the counter offer.
5. The respondent accepted and confirmed the offer of Rs.1,40,00,000/- in terms of letter dated 05.10.2020 and 22.10.2020 for supply of the machines at the rate of OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 2 of 38 Rs.1,40,00,000/-.
6. An amendment was also communicated by the petitioner in terms of letter dated 05.102.2020 and the delivery was also re-fixed to be by 31.03.2021. The respondent supplied the machines, however, its personnel for commissioning could not be deputed. Though the time for commissioning was agreed for 90 days i.e. till 31.06.2021, the machines could only be commissioned on 17.01.2022 i.e. with delay of around 6 months.
7. The petitioner made certain deductions towards liquidated damages on account of late commissioning of the machines and late submission of the Performance Bank Guarantee.
8. As is the case of the respondent, the arbitration was invoked by the respondent at the time of reduction of the price and, accordingly, upon appointment of the learned Arbitrator filed a claim qua reduced price of machines, liquidated damages deducted by the petitioner, as well as claimed interest thereon under the MSME Act alongwith litigation expenses.
9. Ld. Arbitrator in terms of his Award dated 04.09.2024 awarded a sum of Rs.23,54,248/- i.e. the amount equivalent to the reduction of rate of machines OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 3 of 38 originally agreed between the parties, while holding that the present petitioner had misused the dominant position and wrongfully resorted to the fall price clause; awarded a sum of Rs.19,52,381/- holding that the deductions have been wrongfully effected; awarded Rs.5,03,774/- as interest and a sum of Rs.2,50,000/- towards litigation expenses.
10. The Award dated 04.09.2024 stood communicated to the parties through an even dated e-mail.
11. The petitioner has challenged the same under Section 34, primarily on the following grounds:-
1. The Award of the amount towards reduced price is erroneous and is based on assumption of misuse of dominant position.
2. Ld. Arbitrator has overlooked the terms of the contract as the price stood reduced on the basis of the subsequent tender of the respondent.
3. Ld. Arbitrator has wrongfully opined that both the machines had different specifications.
4. Ld. Arbitrator has erred in interpreting the application for price fall clause and clause 1600(Section 1) of the bid documents.
5. Ld. Arbitrator erred in granting a sum of Rs.19,52,381/-
ignoring that the 'Vivad se Vishwas' scheme was not applicable and that there have been substantial delay on the part of the respondent.
6. Ld. Arbitrator has wrongfully granted interest, ignoring the terms of the contract prohibiting the grant of interest.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 4 of 38Besides, the Award is also assailed on the ground that the Ld. Arbitrator has ignored the correspondence between the parties and is against the evidence placed.
12. Pursuant to directions, the Arbitral record has also been placed on record by the Ld. Arbitrator
13. I have heard the learned counsel for the parties and have also gone through the written submissions filed by the parties.
14. Main contentions of learned counsel for the petitioner are:-
1. The impugned Award is against the law and facts of the case inasmuch as, the Ld. Arbitrator has ignored the basic terms of the contract and proceeded to award the sums equivalent to the reduction in price, wrongfully holding that there was misuse of dominant position by the petitioner.
2. Ld. Arbitrator could not have altered the terms of the contract as it is beyond his jurisdiction and authority.
3. Ld. Arbitrator is a creature of the contract and cannot traverse beyond the terms or even alter the terms of the contract.
4. Ld. Arbitrator has wrongfully awarded the amount deducted by the petitioner on account of the delay in commissioning of the machines without actually returning any findings on the delay cause by the respondent.
5. Ld. Arbitrator has wrongfully assumed that there was any duress or undue influence exercised by the petitioner while calling the respondent to agree for a lower price of the machines and has also wrongfully observed that the machines were different so as to justify the award of claim no.1 as to reduced price, without there being any evidence OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 5 of 38 at all.
6. Ld. Arbitrator has also ignored the fact that a valid and biding agreement qua the supply of machines with an all inclusive price @ Rs.1,40,00,000/- each had come into existence and further that not only the respondent had accepted the proposal to supply the machines at such rate unhesitatingly and without any objection, but also had proceeded to supply and commission the same.
7. The very claim of duress or undue influence on the part of the petitioner has gone unsubstantiated has also stands negated by the respondent's own conduct in supplying and commissioning the machines after accepting the proposal and its proceeding with the supplies at the new rates agreed between the parties.
8. Ld. Arbitrator, thus, could not have unsettled the terms of the contract in the name of duress or undue influence as no such duress or undue influence stood proved in the arbitration proceedings.
9. The Ld. Arbitrator has wrongfully presumed that the deductions qua the liquidated damages on account of delay in commissioning of the machines and submissions of Performance Bank Guarantee are liable to be refunded on account of 'VIVAD SE VISHWAS' Scheme even though the same does not apply to the fact situation.
15. Main contentions of learned counsel for the respondent are:-
1. The Award is well reasoned, and based on evidence and is not liable to be interfered with. The Award is a speaking one and the Ld. Arbitrator has dealt with the contentions of both the sides at length, while returning his findings.
2. The scope of jurisdiction under Section 34 of the Arbitration & Conciliation Act, 1996 is very limited and the Court would not have the jurisdiction to either examine the reasoning as the Arbitrator is the best judge as to quality and quality of the evidence.OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 6 of 38
3. The Court is not sitting in appeal and cannot dwelve upon errors of fact or law, much less unless any patent illegality or gross violation of public policy is manifested from the face of the Award itself.
4. The Ld. Arbitrator has rightfully held that the petitioner had used its dominant position thereby compelling the respondent to reduce the prices even though the machines were different implying price difference between the set of machines, and the petitioner being in a dominant position had made the respondent agree upon in terms under duress and without any consent.
5. A similar petition involving Award on same lines, pending between the parties has been decided by the Ld. District Judge (Commercial), Tis Hazari Courts, wherein the Ld. District Judge had dismissed the challenge of the petitioners. The dismissal of said petition under Section 34 filed by the petitioner vindicates the stand of the respondent and correctness of the Award on same lines.
6. Petition had threatened to cancel the order and forfeit the bank guarantee and thus, Respondent was to subjected to forceful conditions, coercion, undue influence. The petitioner vide its letter dated 14.09.2020 had threatened the respondent while misusing its dominant position in order to cause a wrongful loss.
7. The Respondent was forced to accept the price of a different contract and had to suffer a reduction of price from Rs.1,63,54,848/- per machine to Rs.1,40,00,000/- per machine.
8. The price fall clause being relied upon by the petitioner does not either find any place in contract, nor is otherwise applicable to the kind/nature of contract between the parties. Thus, the petitioner could not have decided to alter the price or even to force the respondent to agree thereon.
9. The respondent had already submitted the Performance Bank Guarantee dated 13.01.2020 for Rs.32,31,000/- and Performance Bank Guarantee dated 01.03.2024 for OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 7 of 38 Rs.9,69,300/- and as such could not have been claimed guilty of belated compliance in this respect.
10. The petitioner has wrongfully deducted sums of money on the pretext of delay, as not only the VIVAD SE VISHWAS Scheme was to be applied in its true spirit, but also the petitioner was estopped from claiming any delay, having itself issued amendment and fixed fresh schedule.
16. Time now to deal with contentions.
17. The questions that are foregrounded for consideration are:-
1. Whether grant of reduction of price on the ground of duress/coercion/misuse of dominance is a patent illegality vitiating the Award;
2. Whether the Award of sum deducted by petitioner is unjust, and is patent illegality vitiating the Award.
18. Before proceeding further, a reference to the letter exchanged between the parties regarding the change in price/reduction in price, seems to be desirable.
19. The respondent, vide its letter dated 13.08.2020 requested the petitioner to refix the schedule of delivery extending the date of delivery to February, 2021. The contents of letter are reproduced as under:-
"Our Ref: EKE/2020-21/G-806370/01 Date : 13-08-2020 To The PCMM Central Organization for Modemization of Workshops OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 8 of 38 Railway Offices Complex, Tilak Bridge New Delhi 110 002 Sub: COMOW Contract No. COFMOW/TR/S/P-2/G-806370 Dated 14.01.2020 for Procurement of Coil Spring Scragging and Load Deflection Testing Machine.
Respected Sir This is in reference to above cited Purchase Order placed on us and we would like to thank you for the same.
We are MSME registered, annexing the certificate for you're for reference.
Unfortunately due to the Pandemic SARS COVID-19, to contain the spread our Nation went into Lock down from March 23 2020 and till today operations Pan India have not been resumed in complete and efficient manner, as evident even Government Offices are working with Staggered Staff roosters and timings.
As of now we are unable to ascertain how much time it shall take to resume pre-lockdown production capacity and work strength, hence we seek your assistance in this difficult times to please RE-FIX the delivery period of the Contract up to Feb 28 2021 without imposition of any Liquidated Penalty Charges.
We are sure that by Feb, 28 2021, we would have had the machine inspected and Supplied to the Consignee.
We seek Delivery Period Re-Fixation on priority basis to enable us place the Inspection Call upon RITES and coordinate with Consignee for pre-dispatch Inspection at our Factories.
Thanking you and assuring you of our best cooperation at all times.
For ENKAY ENTERPRISES"
20. The petitioner, in terms of its response dated 14.09.2020 called upon the respondent to accept counter offer rate of Rs.1,40,00,000/- per machine, as quoted by respondent in subsequent tender bearing no.C-807270, OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 9 of 38 opened on 17.02.200. The contents of said letter are as under:-
"संख्या : /आई. आर/ G-806370 दिनाँक :
14.09.2020
M/s. Enkay Enterprises,
05, Padma Tower-II, 22 Rajindra Place, New Delhi - 110 008 Sub:- This office Cotract No. COFMOW/R/G-806370 dated 14.01.20 for supply of Coil Spring Scraggingand load deflection testing machine.
Ref:- Your letter No.EKE/2020-21/G-806370 dated 13.08.2020.
***** In reference to above, it is intimated that all inclusive rate of Rs.1,40,00,000/- (Rs. One crore forty lakh only) each has been quoted by you against subsequent tender No. C-807270 opened on 17.02.20 for the subject machine.
In view of above, it is advised lo accept counter offer rate & submit price break-up of the same for further consideration of your request for re-fixation of delivery period."
21. The respondent is found to have objected to the above proposal of the petitioner, in terms of its letter dated 27.09.2020. The respondent has also heavily relied upon the said letter to canvass its argument as to duress, coercion and undue influence. It has been a vehement contention of the learned counsel for the respondent that the respondent had also invoked arbitration in terms of the said letter. The contents of the letter are reproduced as under:-
"Our Ref: EKE/2020-21/G-806370 Date: 27.09.2020 To OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 10 of 38 The PCMM Central Organization for Modemization of Workshops Railway Offices Complex, Tilak Bridge New Delhi 110 002 Suh: COFMOW Contract No.COFMOW/IRS/P-2/G-306370 Dated 14.01.2020 for Procurement of Coll Spring Scragging and Load Defection Testing Machine.
Ref.: Our Letter Ref. No. EKE/2020-21/G-806370/01 dated 13-08-2020.Your Letter Ref. No. COTMOW/IR/G-804370 4
dated. 14-09-2020.
Respected Sir, This in in reference to above cited Purchase Order and the letters referred as above.
Against our requests made you vide our letter dated 13-08- 2020 and several meetings held in your office in the month of July and August wherein we had requested your office to consider the unfortunate spread COVID- 19 and the global pandemic which lend to National Lockdown for almost 100 days, other MSME reliefs being granted by the Central Government, to enable your office RE-FIX our delivery period without imposing any Liquidated Damages as it was a Force Majeure situation.
We are surprised to read the contents of your letter dated 14-09-2020, wherein you have asked for our acceptance to a lower rate vide our counter offer matching the prices for another Tender No. G B07270 received by your office.
We are struggling with Financial Crisis, Shortage of Labor, Shortage of Raw Materials and your organization rather than understanding the situation, giving us relief as announced by the Government for MSME (Extension of Time Period for up to 6 Months), is unilaterally implying lower cost on us even of both the tenders are different and hence cannot be treated as similar __ We wish to invoke arbitration as per relevant contractual terms and conditions to seek justice, while we in this struggling time have no other option but to accept lower counter offer prices under protest to seek justice via arbitration.
Thanking you and assuring you of our best cooperation at all times.OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 11 of 38
For ENKAY ENTERPRISES"
22. However, there seems to be a shift in stand of the respondent, as is clear from the respondent's communication dated 05.10.2020, the contents whereof are reproduced as under:-
Our Ref: EKE/2020-21/G-806370/02 Date: 05-10-2020 To The PCMM Central Organization for Modernization of Workshops Railway Offices Complex, Tilak Bridge New Delhi 1 10 002 Sub: COFMOW Contract No. COFMOW/IR/S/P-2/G-806370 Dated 14.01.2020 for Procurement of Coil Spring Scragging and Load Deflection Testing Machine.
Ref. COFMOW Letter No. COFMOW/IR/G-806370 dated 14-09-2020.
Respected Sir This is in reference to above cited subject.
With reference to your above letter received we have been advised to accept the Counter Offer Rate for consideration of our Request for Refixation of Delivery Period.
In this regard we wish to confirm our acceptance to the All Inclusive Counter Offer Rate of Rs 1,40, 00,000.00 (One Crore Forty Lakhs Only) for each Machine.
Now we request you to kindly refix our Delivery Period upto March 31 2021 at the earliest and oblige.
Thanking you and assuring you of our best cooperation at all times.
For ENKAY ENTERPRISES"
23. It is clearly noticeable from the said letter that the respondent had accepted the all-inclusive price of OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 12 of 38 Rs.1,40,00,000/- for each machine while requesting for re fixation of the delivery period until 31.03.2021. The said communication has also been stressed upon as very crucial by the petitioner side while contending that the offer made in terms of letter dated 14.09.2020 had been unhesitatingly accepted without any reservation and that a new contract had formed qua the price of the machines. The said letter is also stated to have become final and binding as against the respondent, as it communicated unconditional acceptance.
24. Attention of the Court is also invited towards subsequent letter dated 22.10.2020 wherein the respondent is shown to have provided price break-up and reiterated the acceptance of the counter offer. The contents thereof are reproduced as under:-
Our Ref: EKE/2020-21/G-806370/Counter Offer Acceptance Date : 22-10-2020 To The Principal Chief Materials Manager Central Organization for Modernization of Workshop Railway Office Complex, Tilak Bridge New Delhi 110002 Sub: COFMOW Contract No. COFMOW/IR/S/P-2/G-806370 dt. 14-01-2020 for Supply of Coil Spring Scragging And Load Defection Testing Machine.
Ref: COFMOW Letter Ref. No. COFMOW/IR/G-806370 dated 19-10-2020.
Dear Sir, This is in reference to the above mentioned Subject letter.
We hereby convey our acceptance to the counter offer as OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 13 of 38 proposed by you against the above cited tender.
In this regard we are providing you with the Price Break Up per machine against our Acceptance of the Counter Offered Price for Rs. 1,40,37,343/- Per Machine against Tender No. G-807270.
S. BASIC MACHINE Price (in Rs. )
No. Per M/c.
1 Price of Coil Spring 1,30,27,643/-
Scragging and Load
Deflection Testing Machine
for LHB & IRY Coaches
2 Concomitant Accessories as
per Annexure A 9,09,500/-
3 Preventive Maintenance
Charges for 2 Years 100/-
4 Foundation, Installation,
Commissioning & Proving 100/-
Test Charges
5 25. Comprehensive
A.M.C. for 5 Year (20.000) 1,00,000/-
Per Year)
26. Total Cost of 1
Machine Inclusive of GST 1,40,37,343
(@ 18%
Thanking you with regards.
For ENKAY ENTERPRISES"
27. Turning back to the question no.1 above. While it is the contention of the petitioner that the respondent had in clear terms agreed to the price without any reservation, and has also proceeded to deliver and install the machines, and further that the respondent did not raise any claim or objection, until receiving full and final payments from the petitioner, the respondent side, on the other hand, has contended that the delivery and installation of the machines did not take away the respondent's right to claim OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 14 of 38 the amount which was coercively got reduced from the petitioner. Learned counsel for the respondent has also contended that there is a categorical finding of duress/coercion as well as undue influence, which is opposed by the petitioner side on the ground that the same is merely assumptive and without any evidence.
28. The respondent side has also impressed upon the Court that the reasonableness of the reasons adopted by the Ld. Arbitrator cannot be examined in the proceedings under Section 34 of the Arbitration & Conciliation Act, 1996, as it is settled law that the Arbitrator is the best judge of quality and quantity of evidence. Petitioner side, on the other hand, has contended that nothing prevents the Court from looking into the records so as to find whether there was any evidence at all or whether the findings are merely on the basis of assumptions and informations as the grounds of 'patent illegality' and 'public policy' cannot be narrowed down to such as a disability of Court.
29. True that the Court is less likely to intervene to the extent of examining the evidence, however, at the same time, it cannot be ignored that the Award is supposed to be made on the basis of some evidence. Having regard to the submissions of the learned counsel for the respondent, there appears to be no impediment in examining the issue in greater detail.OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 15 of 38
30. At this stage, a reference to the relevant portions of the Award appears to be desirable:-
"4.1.3 AT's Analysis and Conclusion
i) Respondent's action to offer price reduction, on receipt of request for Delivery Period extension from the Claimant, in terms of Clause 1602 (iii) of bid documents part I of the Bio Documents is not in order.
The clause referred by Respondent is sub-para of Clause 1602 which states in bold "Quantity Option Clause". The Clause states that "The purpose of reasonable notice for the exercise of (-) 30% Option clause consequent to decrease in prices subsequent to the placement of contract will be served by giving a reasonable opportunity to the contractor to unconditionally agree to accept such lower rates for the quantity supplied on the date of reduction/ decrease of prices or the (-) 30 % quantity option clause." A sample reading of the clause makes it apparent that the reference to reduction in price is in terms of "for the exercise of (-) 30% option clause consequent to decrease in prices".
a. There was no mention of this clause while issuing the letter dated 14.09.2020. b. The para relates to "Quantity Option Clause". Therefore, the exercise would have been justified in relation to the same, and if Respondent desired to take the benefit of said price reduction, they should have offered Claimant to "accept such lower rates for the quantity unsupplied on the date of reduction/ decrease of prices or the (-) 30% quantity, whichever is less". The Respondent did not exercise the option in terms of the agreed terms of the contract.
ii) Respondent also in their submissions have nowhere argued price reduction being in terms of the price fall clause, whereas their 'advice to accept counter offer rate' of price reduction 'for further consideration' of request for re-fixation of delivery period without mention of any clause of the contract, in actual amounts to the same.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 16 of 38iii) The two types of machines, one in the contract under consideration and other due to which price reduction was offered, do not bear the same specification. Clause 2.3.5 stated in the new tender does not find mention in the specifications of the machine in the subject matter. Annexure I specifying the number of springs to be tested is also different. Therefore, comparison of prices for those two types of machines was not in order.
iv) Respondent has averred that "In the letter dated 22.10.2020 the claimant has accepted the counter offer without any opposition". This was an exercise of 'dominant position' by the Respondent, who did so because they could. It was well established that the machines were likely to be ready for inspection, if not ready, from the fact that vide their various letters Claimant had been requesting for refixation of delivery period to 28.02.2021 and finally vide letter dated 05.10.2020 to 31.03.2021, and completing supply of duly inspected machine on 30.03.2021. Having invested in the manufacturer of these two special machines which likely could only find use against the order, the Claimant could not but was forced to accept the counter offer to salvage some of its investment. Furthermore the offer itself was not in order as the contract did not have any such clause, nor were the machines the same.
In view of the above, the AT agrees with Claimant's averment that the said imposition of reduced price was under undue influence, by the way of coercion and by misuse of dominant position by the Respondent. The said imposition was done by overlooking the terms of the contract, guidelines issued by the Ministry of Railways and by ignoring the principles of natural justice.
The AT therefore tends to agree with the averments and submissions of Respondent. The claim is accepted.
Amount of Award: Rs. 23,54,248.00"
31. There appears to be considerable force in the contentions of the learned counsel for the petitioner. On OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 17 of 38 anxious consideration of the material placed, in the light of the submissions made by learned counsel for the parties, the said finding appears to be unjust and unsubstantiated for a multitude of reasons.
32. The Ld. Arbitrator seems to have clearly missed the point that in terms of letter dated 05.10.2020 and 22.10.2020, the respondent had agreed to provide machines on a lower price. The acceptance of the counter offer to supply machines at the reduced price resulted into a modified agreement binding upon the parties. The price being a material term of the contract could not have casually unsettled by the Ld. Arbitrator, as it is also settled law that the Arbitrator is bound by the terms of the contract. The said proposition alone, however, by itself, may not debar a claim for damages by respondent. It is the respondent's claim that agreeing to the reduced price was on account of duress, coercion, and undue influence. In order to maintain such a proposition, and to claim the balance price as damages, the respondent was under a heavy burden to prove existence of circumstances to the effect that there was no other option available with the respondent, but to accept the offer.
33. The petitioner's case is that there was no duress, undue influence or coercion and simply because there is a price reduction on account of the subsequent tender for the OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 18 of 38 similar machines by respondent itself, the respondent cannot claim any duress. It is the submission of the petitioner that if the respondent was not willing for the price reduction, nothing prevented the respondent from pursuing its request for arbitration, but on the contrary, the respondent not only agreed to supply and commissioned the machine and waited until the entire payment was made, before it started raising claim for the reduced price on the false pretext of duress/coercion.
34. Having regard to the contentions of learned counsel for the parties and considering the submissions of the petitioner that the finding of duress/undue influence is without any actual evidence and is assumptive in nature, the Court needs to look into the question as to existence of evidence as to duress or coercion.
35. Before proceeding further, a reference to case law relating to proof of duress in the context of commercial contracts appears to be desirable. In Goyal MG Gases Ltd. Vs. Double Dot Finance Ltd. [2009 (2) ARBLR 655 (Delhi)], the Hon'ble High Court of Delhi examined the aspect of duress, claimed by Appellant before the Hon'ble High Court, after having received the entire amount in full and final settlement. Though the observations have been made in context of a full and final settlement, the Court has emphasized that mere financial pressure is not enough.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 19 of 38The Court observed as under:-
"3. The learned Single Judge by the impugned judgment has held that there was no coercion or duress exercised against the appellant when the receipt dt 1.2.99 was signed receiving the amount of Rs. 1,15,00,000/-. The learned Single Judge in the impugned judgment has held as under:
36. Coming to the question as to what is "coercion or "duress" in commercial contracts, we may refer to the Privy Council case "Pao On and Ors. v. Lau Yiu and Anr." reported in 1979 (3) of England Reporter Page-65. Economic duress in commercial context was dealt with by their Lordships and it was held that in contractual relations, a mere financial pressure is not enough. It was also held that the question as to whether at the time the person making a contract allegedly under coercion had or not any alternative course open to him which could be an adequate legal remedy and whether after entering into the contract, he took steps or not to avoid it are matters which are relevant for determining as to whether he acted voluntarily or not. It was also held that the compulsion has to be of a nature which deprives a party of his freedom of exercising free will leaving no alternative course open to him. Therefore, the 'coercion' or 'duress' required for vitiating 'free consent' has to be of the category under which the person under 'duress' is left with no other option but to give consent and is unable to take an independent decision, which is in his interest. Bargaining and thereafter accepting an offer by give and take to solve one's financial difficulties cannot be treated as 'coercion' or 'duress' for the reason that in trade and commerce every day such situations arise and decisions are taken by parties some of which they might not have taken but for their immediate financial requirements and economic emergencies.
37. The legal position that emerges, therefore, is that the Arbitrator has jurisdiction OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 20 of 38 to adjudicate a dispute in regard to the existence of 'full and final settlement'. In case the plea of 'full and final settlement' between the parties is accepted by the Arbitrator, no Award can be passed in favour of a claimant but in case this plea is rejected, the Arbitrator would be well within his rights to pass an Award in respect of the claims filed before him. The Arbitrator can go into the question as to whether the 'accord and satisfaction' recorded between the parties was voluntary or not inasmuch as 'free consent' remains the foundation of all agreements including the agreement in regard to the settlement of disputes between the parties. However, the plea of coercion, undue influence or duress raised by a party to challenge the 'accord and satisfaction' cannot be accepted lightly merely upon word of mouth. The facts and circumstances, material on record and conduct of the parties at the time of signing the settlement agreement and soon thereafter have to be looked into. It need not be stated that the burden to establish this plea remains on the party which raises it.
38. If such pleas are sustained, the sanctity and purpose of 'amicable settlement' between the parties would stand totally eroded. Amicable resolution of disputes and negotiated settlements is 'public policy of India'. Section 89 of the Code of Civil Procedure, Arbitration and Conciliation Act, 1996 as well as Legal Services Authorities Act, 1995 call upon the Courts to encourage settlement of legal disputes through negotiations between the parties. If amicable settlements are discarded and rejected on flimsy pleas, the parties would be wary of entering into negotiated settlements and making payments thereunder as a shrewed party after entering into a negotiated settlement, may pocket the amount received under it and thereafter challenge the settlement and re-agitate the dispute causing immeasurable loss and harassment to the party making payment thereunder. This tendency has to be checked and such litigants OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 21 of 38 discouraged by the Courts. It would be in consonance with public policy of India. The Arbitrator, therefore, had acted against public policy of India by accepting the plea as raised by the respondent No. 1 and thereafter, passing an Award. The view taken by the Arbitrator was absolutely capricious, unfair and unreasonable and as such, the impugned Award dated 29.11.2002 passed by him is liable to be set aside.
12. A reading of the Award of the Arbitrator also shows that the relevant points which were determinative of the issues as stated in para 4 above with regard to the receipt of Rs. 1,15,00,000/- by the appellant in full and final settlement have been unnecessarily given a go bye and only a lip service has been paid to the same by referring to the same without discussing as to how the same are not important or clinching. We are conscious of the position in law relied upon by the appellant by citing Hindustan Tea Co. v. K. Sashikant & Co. and Anr.
MANU/SC/0002/1986 : AIR1987SC81 to the effect that no interference with the award is warranted on the ground that the Arbitrator arrived at a wrong conclusion or failed to appreciate the facts. Municipal Corporation of Delhi v. Jagan Nath Ashok Kumar and Anr.MANU/SC/0013/1987 : [1988]1SCR180 was also cited to urge that the reasonableness of the reasons for the award cannot be challenged. However, in the present case the Arbitrator has failed to follow the law laid down in Nathani Steels Ltd. v. Associated Constructions to the effect that once there is a full and final settlement such a dispute does not remain an arbitrable dispute by merely observing that the cases cited are distinguishable without stating any reasons therefor. Thus this Court is sustaining the judgment of the single judge as we are satisfied that the dispute was finally settled and could not have been arbitrated upon. However in the facts of the present case we are also of the view that the findings of the Arbitrator are grossly unconscionable and do OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 22 of 38 not even deal with the legal position espoused by the respondent before the Arbitrator. The award is thus vitiated as no reasonable person could have arrived at the conclusion of coercion arrived at by the Arbitrator and the learned Single Judge was justified in allowing the objections preferred by the respondent.
39. In NTPC Ltd. Vs. SPML Infra Ltd. [AIR 2023 SC 1974], the Hon'ble Supreme Court of Delhi dealt with the plea of duress in the context of settlement agreement between the parties, conduct of parties and subsequent request for reference of claims to Arbitration. The Hon'ble Supreme Court of India held that simple narration of bare facts would not suffice. The Hon'ble Supreme Court of India observed as under:-
44. A simple narration of the bare facts, as indicated above, leads us to conclude that the allegations of coercion and economic duress are not bona fide, and that there were no pending claims between the parties for submission to arbitration. The Respondent's claim fits in the description of an attempt to initiate "ex facie meritless, frivolous and dishonest litigation". We will endeavor to give reasons for our conclusion.
45. The whole dispute revolves around the solitary act of the Appellant, NTPC, in not returning the Bank Guarantees despite the successful completion of work. This continued even after SPML issued the No-
Demand Certificate and NTPC released the final payment. These undisputed facts led to the institution of the Writ Petition before the Delhi High Court. There were no allegations of coercion or economic duress compelling SPML to withdraw any pending claims under the subject contract as a condition for the return of the Bank Guarantees. On the OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 23 of 38 contrary, the only allegation by SPML was with respect to NTPC's "illegal" action of interlinking the release of the Bank Guarantees with some other contracts. This was precisely the argument before the High Court, and, in fact, this submission is recorded by the High Court while issuing notice and injuncting NTPC. This fact clearly indicates that the plea of coercion and economic duress leading to the Settlement Agreement is an afterthought.
46. We will now examine whether the allegations of coercion and economic duress in the execution of the Settlement Agreement are bona fide or not. This inquiry has a direct bearing on the arbitrability of the dispute. It was during the subsistence of the Writ Petition and the High Court's interim order, when SPML had complete protection of the Court, that the parties entered into the Settlement Agreement. This agreement was comprehensive. It inter alia provided for (i) the release of Bank Guarantees by NTPC, (ii) the withdrawal of SPML's Writ Petition, (iii) restraining NTPC from filing contempt proceedings against SPML for letting the Bank Guarantees expire, and finally, (iv) restraining SPML from initiating any proceedings under the subject contract, including arbitration. The Settlement Agreement also recorded that there were no subsisting issues pending between the parties.
47 . The plea of coercion and economic duress must be seen in the context of the execution of the Settlement Agreement not being disputed, and its implementation leading to the release of the Bank Guarantees on 30.06.2020 also not being disputed. Almost three weeks after the release of the Bank Guarantees, a letter of repudiation was issued by SPML on 22.07.2020. This letter was issued about two months after the Settlement Agreement was executed and in fact during the subsistence of the Writ OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 24 of 38 Petition. After reaping the benefits of the Settlement Agreement, the Writ Petition was withdrawn on 21.09.2020. It is thereafter that the present application Under Section 11(6) of the Act was filed. The sequence of events leads us to conclude that the letter of repudiation was issued only to wriggle out of the terms of the Settlement Agreement.
40. In Union of India (UOI) and Ors Vs. Master Construction Co. [2011 (2) ARBLR 105 (SC)] , Hon'ble Supreme Court of India dealt with a question as to appointment of an Arbitrator on the basis that no claim certificates had been obtained under financial duress and coercion. The request for appointment was resisted by the petitioner on the ground of discharge of contract. The Court observed that mere allegation as to financial duress would not suffice observing:-
"28. The above certificates leave no manner of doubt that upon receipt of the payment, there has been full and final settlement of the contractor's claim under the contract. That the payment of final bill was made to the contractor on June 19, 2000 is not in dispute. After receipt of the payment on June 19, 2000, no grievance was raised or lodged by the contractor immediately. The concerned authority, thereafter, released the bank guarantee in the sum of Rs. 21,00,000/- on July 12, 2000. It was then that on that day itself, the contractor lodged further claims.
29. The present, in our opinion, appears to be a case falling in the category of exception noted in the case of Boghara Polyfab Private Limited (Para 25, page 284). As to financial duress or coercion, nothing of this kind is established prima facie. Mere allegation that no-claim certificates have been obtained OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 25 of 38 under financial duress and coercion, without there being anything more to suggest that, does not lead to an arbitrable dispute.
30. The conduct of the contractor clearly shows that `no claim certificates' were given by it voluntarily; the contractor accepted the amount voluntarily and the contract was discharged voluntarily."
41. The broader take away from the decisions in Goyal MG Gases Ltd. Vs. Double Dot Finance, NTPC Ltd. Vs. SPML Infra Ltd. and Union of India (UOI) and Ors Vs. Master Construction Co. are:-
(i) bare plea of duress or the compulsion would not suffice and there has to be specific averments and proof of such duress/compulsion;
(ii) financial pressure cannot be always claimed as duress; and
(iii) conduct of party needs to be seen to find out whether the act is under duress or not.
42. There are various reasons that nudge the Court to come to this conclusion. Firstly, the claim of reduced amount being a claim for damages, in essence, ought to have been proved with cogent and reliable evidence. A simple assertion without any concrete evidence as to difference of machines or actual difference of the cost ought to have been brought on record. Simply because the machines did not match each other in one or two OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 26 of 38 specifications, would not necessarily mean that the respondent had suffered damages. This necessitated concrete evidence to base a conclusion on, rather than just an inference.
43. Ld. Arbitrator seems to have ignored that it was the price quoted by Respondent itself in the subsequent tenders that the petitioner sought price parity with. Being a public entity, its seeking the price parity cannot be looked upon as opportunism, or unjust enrichment for itself. The respondent, thus, was heavily burdened to prove that the difference of cost has resulted into an injury, capable of being without grant of damages. On the contrary, respondent is found to have taken some time to respond, and in fact responded decisively, accepting the term as to supplying the machine at lower price. Had it not been finally prudent for the respondent, it would have pursued its intent to get the dispute arbitrated.
44. As of duress, it ought to have been proved by some credible evidence to the effect that there was no other option but to agree. On the contrary, the respondent is found to have accepted the counter offer for reduction of the price unhesitatingly and without any reservation. Undoubtedly, at a prior point of time, the respondent has objected to the price reduction as well as sought invoking arbitration, but considering its subsequent conduct over OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 27 of 38 considerable period of time wherein not only the extensions were sought, machines were supplied and commissioned, there appears to be clear waiver even if there were some objection at the beginning. The Court, cannot be oblivious of the fact in terms of the law discussed above, a mere financial pressure would not amount to duress. The lack of evidence as to duress thus makes the finding as questionable.
45. Reduction in prices might have altered the profitability, but the respondent cannot be heard to say that it had suffered damages to the tune of reduction in prices in the absence of evidence.
46. There is another jurisdictional aspect which cannot be ignored. The Ld. Arbitrator being a creature of the contract could not unsettle the terms of the contract or travel beyond the same.
47. In Satyanarayan Construction Co. V. Union of India (2011) 5SCC101 Hon'ble Supreme Court observed as under:-
"13. Thus, as per the contract, the contractor was to be paid for cutting the earth and sectioning to profile etc. @ Rs. 110 per cubic meter. There may be some merit in the contention of Mr. Tandale that contractor was required to spend huge amount on the rock blasting work but, in our view, once the rate had been fixed in the contract for a particular Work the contractor was not entitled to claim additional amount merely because he had to spend more for carrying out such work.OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 28 of 38
undertaken by the Arbitrator in determining the rate for the work at serial No. 3 of Schedule 'A' was beyond his competence and authority. It was not open to Arbitrator to rewrite the terms of the contract and award the contractor a higher rate for the work for which rate was already fixed in the contract. The Arbitrator having exceeded his authority and power the High Court cannot be said to have committed any error in upsetting the Award passed by the Arbitrator with regard to claim No. 4."
48. In Indian Oil Corporation Ltd. V Shree Ganesh Petroleum, Rajgurunagar 2022 INSC 130, Hon'ble Supreme Court has considered in Arbitral Tribunal failing to act in terms of the contract or ignoring specific terms of the Contract as a patent illegality. The Court observed:-
"44. An Arbitral Tribunal being a creature of contract, is bound to act in terms of the contract under which it is constituted. An award can be said to be patently illegal where the Arbitral Tribunal has failed to act in terms of the contract or has ignored the specific terms of a contract.
45. However, a distinction has to be drawn between failure to act in terms of a contract and an erroneous interpretation of the terms of a contract. An Arbitral Tribunal is entitled to interpret the terms and conditions of a contract, while adjudicating a dispute. An error in interpretation of a contract in a case where there is valid and lawful Submission of arbitral disputes to an Arbitral Tribunal is an error within jurisdiction.
46. The Court does not sit in appeal over the award made by an Arbitral Tribunal. The Court does not ordinarily interfere with interpretation made by the Arbitral Tribunal of a contractual provision, unless such interpretation is patently unreasonable or OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 29 of 38 perverse. Where a contractual provision is ambiguous or is capable of being interpreted in more Court cannot interfere with the arbitral award, only because the Court is of the opinion that another possible interpretation would have been a better.
47. In Associate Builders (supra), this Court held that an award ignoring the terms of a contract would not be in public interest. In the instant case, the award in respect of the lease rent and the lease term is in patent disregard of the terms and conditions of the lease agreement and thus against public policy. Furthermore, in Associate Builders (supra) the jurisdiction of the Arbitral Tribunal to adjudicate a dispute itself was not in issue. The Court was dealing with the circumstances in which a Court could look into the merits of an award.
48. In this case, as observed above, the impugned award insofar as it pertains to lease rent and lease period is patently beyond the scope of the competence of the Arbitrator appointed in terms of the dealership agreement by the Director (Marketing) of the Appellant.
49. The lease agreement which was in force for a period of 29 years with effect from 15th April, 2005 specifically provided for monthly lease rent of Rs. 1750 per month for the said plot of land on which the retail outlet had been set up. It is well settled that an Arbitral Tribunal, or for that matter, the Court cannot alter the terms and conditions of a valid contract executed between the parties with their eyes open."
49. It is settled law that finding must be based on evidence on admission. Thawardas Pherumal Vs. Union of India (UOI) [1955 INSC 18], the Hon'ble Supreme Court of India has held that :-
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 30 of 38".....Facts must be based either on evidence or on admissions; they cannot be found to exist from a mere contention by one side especially when they are expressly denied by the other."
50. The Ld. Arbitrator has returned to the finding of the duress in the following terms:-
4.1.3 AT's Analysis and Conclusions
iv) Respondent has averred that "In the letter dated 22.10.2020 the claimant has accepted the counter offer without any opposition". This was an exercise of 'dominant position' by the Respondent, who did so because they could. It was well established that the machines were likely to be ready for inspection, if not ready, from the fact that vide their various letters Claimant had been requesting for refixation of delivery period to 28.02.2021 and finally vide letter dated 05.10.2020 to 31.03.2021, and completing supply of duly inspected machine on 30.03.2021. Having invested in the manufacturer of these two special machines which likely could only find use against the order, the Claimant could not but was forced to accept the counter offer to salvage some of its investment. Furthermore the offer itself was not in order as the contract did not have any such clause, nor were the machines the same.
51. The aforesaid findings indicate a clear misreading of the evidence as also ignoring material evidence. Letter dated 13.08.2020 of the respondent cannot be interpreted in a manner that the machines were ready or would have been likely ready for inspection or even that the respondent had invested in two special machines by that time. The letter, on the contrary, would indicate that there is not even a whisper of any investments having been made by the OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 31 of 38 respondent after the execution of the contract on 14.01.2020 as the lockdown was itself imposed in March, 2020. The letter does not even subject to any investment made by the respondent by the said date or any status of preparation of machines and even it is not the case that the machines were likely to be ready for inspection if not ready. The entire reasoning is assumptive rather than based on facts.
52. Ld. Arbitrator seems to have proceeded on considerations of equity, ignoring that the relationship between the parties is a commercial one and are regularized by the terms of the contract. An arbitrator has no jurisdiction to decide matters ex-debito justitiae.
53. In National Hydroelectric Power vs. General Electric Company FAO(OS) 554/2010 decided on 29.04.2013, Hon'ble High Court of Delhi observed:-
"74. Merely because it may have appeared to the Arbitral Tribunal- equitable and fair to grant escalation/price variation by adopting a different formula or, different indices, than what is agreed to between the parties expressly in the contract, is no ground for the Arbitral Tribunal to depart from the express agreement between the parties. Once the parties have laid down the formula by which escalation/price variation shall be computed, only that formula can be applied, and it is not open to the Arbitral Tribunal to either vary the formula or apply indices different from those prescribed in the formula contained in the contract. Unfortunately, the learned Single Jude has not examined the objections raised by the appellant in depth. No doubt, OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 32 of 38 the scope of interference with an Arbitral Tribunal is limited. But it does not mean that the Court will not examine in depth the objections raised by the objector falling within that limited scope.
54. Thus, it is clear that an award would not be immune from judicial review or interference in case the basic terms or conditions of the very contact are found to have been transgressed. The restraint to look into the interpretation of a Provision by the Ld. Tribunal is also not an absolute concept and is subject to just exceptions. In a recent decision, in Union Of India & Anr. vs M/S Jindal Rail Infrastructure Limited [O.M.P. (COMM) 227/2019], Hon'ble High Court of Delhi has observed as under:-
"65. As stated above, the said award is based on interpretation of Clause 2.4 of the Agreement (renumbered as Clause 2.8 of the Agreement), as according to the Arbitral Tribunal, the said clause did not entitle the Railways to place an order for additional quantities at the price quoted by tenderer, if there was a substantial increase in the market value or the cost of manufacturing of wagons. This was not a case set up by JRIL in its Statement of Claims.
68. A commercial contract between the parties cannot be avoided on the ground that one of the parties subsequently finds it commercially unviable to perform the same. The Arbitral Tribunal has, essentially, re-worked the bargain between the parties and re- written the contract. This is, clearly, impermissible.
70. There is no dispute that the interpretation of a contract falls within the jurisdiction of an arbitral tribunal and an arbitral award based on a plausible interpretation of a contract cannot be interfered with under the provisions of Section 34 of the A&C Act.OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 33 of 38
75. In cases where it is found that the terms of the contract do not clearly express the intentions of the parties, it is open to seek recourse to various tools of interpretation. This would include interpreting a contract in a manner that would make commercial sense as it is assumed that men of commerce would have intended it so. However, it is not open to re- work a bargain that was struck between the parties on the ground that it is commercially difficult for one party to perform the same.
76. The decision of the Arbitral Tribunal to award the difference between the price quoted by the tenderers and the price quoted by JRIL, is unsustainable. It amounts to re-writing the contract between the parties. The impugned award is in conflict with the fundamental policy of Indian law and is vitiated by patent illegality."
55. It is not disputed that an amendment in the order was also issued pursuant to the acceptance of the counter offer communicated to the respondent in terms of letter dated 14.09.2020 which was not only responded to quite decisively by means of acceptance but also acted upon without any hesitation or objection. Once the respondent had accepted the same, a valid contract had come into existence which could not have lightly or casually interfered into by the Ld. Arbitrator. The reasoning that goes behind the award of reduced price is more of assumption on the basis of duress, rather than being based on any actual evidence. The letter dated 14.09.2020 of the petitioner could not be said to be a threat for cancellation of the order or forfeiture of the Performance Bank Guarantee as is sought to be contended by the learned counsel for the respondent.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 34 of 3856. The respondent had initially objected to the reduction of price and invoked the arbitration. However, its subsequent conduct until it received the entire payment as per the amended contract goes on to show that it retained an abiding interest in performance of the amended contract. The Court cannot be oblivious of the fact that during the currency of the amended contract, the respondent did never approach the Court for appointment of the Arbitrator or raise objections as to the validity of the amended contract.
57. Question no.1 as mentioned above stands answered in affirmative.
58. Turing to the question no.2 i.e. relating to deductions. Ld. Tribunal's findings with respect to deductions are reproduced as under:-
4.2.3 AT's Analysis and Conclusion:
i) Ministry of Finance, Government of India's Memo no. F.1/1/2023 PPD dated 11.04.2023, vide S.No. 2 (iv) defined 'Eligibility Condition' as "where original delivery period/ completion period stipulated in contract was between 19.02.2020 and 31.03.2022 (both dates are inclusive).
ii) The contract specified 'Original dates' of supply as 10.10.2020 and commissioning as 15.01.2021. Therefore, the said GOI memo becomes applicable in the present case.
iii) The Memo provides for relief from deductions of LD, Bid Security as well as performance security. It also provides for revocation of debarment, if any.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 35 of 38iv) It is also seen from the details submitted by the Claimant from IRFPS portal that the first requests for consideration under said Memo was made by Claimant on 01.05.2023 & 02.05.2023. These requests were rejected by Respondent 27.06.2023. Claimant again repeated the same requests on 01.06.2023 & 30.07.2023, which were rejected on various dates subsequently. Approval of request of the Claimant for arbitration is dated 28.07.2023. Therefore, the Respondent's submission that rejection of VSVT request was on account of matter being sub-judice (under arbitration) is partial representation of facts.
v) The Government of India, Ministry of Finance's OM dated 06.02.2023 on the Subject matter explicitly states "Vivad se Vishwas I- Relief for MSMEs". It is reiterated vide OM dated 11.04.2023 statinig "Vivad se Vishwa I- Relief for MSMEs: Revised Order" on subject matter. The intent of GOI is clear spelt out as "Government has been getting many references from Micro, Small and Medium Enterprises (MSMEs) regarding difficulties being faced by them in the last two years due to Covid 19 pandemic. The Government had provided certain benefits to the industry (including MSMEs) in Government contracts in the past." and " Para 1. In order to further support MSMEs, it has been decided to provide relief in all contracts..."
vi) The Respondent has submitted details of deductions amounting to Rs.15,44,124.00 (1,50,410.00 + 13,93,714.00) only against claimed under payment of Rs.20,55,138.00 (13,24,028.00 + 7,31,110.00) by the Claimant. No details/ explanation of difference in the two amounts has been submitted by the Respondent even after being asked. Therefore, AT includes that the entire amount of Rs.20,55,138.00 are the deductions related to various LDs in the subject case. In accordance with GOI directives under "vivad se Vishwas-I" (VSVI I) 95% of the said amount is due to refund to the Claimant.
The claim accepted is Rs.19,52,381 (20,55,138.00 x OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 36 of 38 95%).
Amount of Award : Claim Rs.19,52,381.00
59. Learned counsel for the petitioner has contended that there was delay in submission of Performance Bank Guarantee as well as commissioning of the machines. Respondent side, on the other hand, has vehemently contended that the Government of India, Ministry of Finance has floated a scheme for the purposes of providing reliefs to MSMEs and as per the same, the deductions on the basis of delay, if any assumed to be existing, cannot be sustained and that the award of the amount on this count is duly explained by the Ld. Arbitrator.
60. The respondent side has also demonstrated from the record that the submissions of the Performance Bank Guarantee was within time. The petitioner side has not been able to provide any explanation as to why the submission of Performance Bank Guarantee is treated as delayed.
61. Although the petitioner side seeks to assail the applicability of the scheme, going by the overall reasoning, the Court is of the view that the view adopted by the Ld. Arbitrator is one of the plausible views as to the benefit of the scheme. The reasoning set forth in the Award does not call for any interference, the view being one of the plausible views.
OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 37 of 3862. No other point has been pressed, nor is made out from the submissions made. Question no.2 is, accordingly, answered.
63. The Court does not have any power to modify or alter the Award. Resultantly, the petition is allowed and the Award dated 04.09.2024 is set aside.
64. The application for stay of operation of the Award is also disposed off having become infructuous at this stage.
65. Needless to say that parties shall be at liberty to pursue their remedies in accordance with law as far as the adjudication afresh is concerned.
66. Arbitral record be sent back.
67. Parties to bear their own costs.
68. File be consigned to record room after due compliance.
Digitally signedDictated and Announced today NIKHIL by NIKHIL CHOPRA i.e. on 24th day of April, 2025 CHOPRA Date:
2025.04.29 17:50:39 in the open Court +0530 (NIKHIL CHOPRA) District Judge (Commercial Court-06) Central, Tis Hazari Court, Delhi 24.04.2025 OMP (Comm) 102/2024 Union of India Vs. M/s Enkay Enterprises Page 38 of 38