Delhi District Court
Gorkha Security Services vs Govt.Of Nct Of Delhi on 17 February, 2026
IN THE COURT OF DR. SUGANDHA AGGARWAL,
DISTRICT JUDGE, PATIALA HOUSE COURTS, NEW DELHI
ARBTN NO. 333-18
Gorkha Security Services
Through its Authorised Representative
Sh. Sonu Kumar,
M-8, Vardhman City-2 Plaza,
Asaf Ali Road, Delhi-110002
.........Plaintiff
Versus
Govt.of NCT of Delhi
Through its Secretary
Health & Family Welfare Department,
I.P. Estate, New Delhi-110002.
Also through:
The Medical Superintendent,
Janakpuri Super Specialty Hospital,
C-2B, Janakpuri, New Delhi
........ Defendant
Date of filing the suit : 21.02.2018
Date when reserved for order : 08.01.2026
Date of Order : 17.02.2026
JUDGMENT
1. This order shall decide the petition filed under Section 34 of the SUGANDHA AGGARWAL ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi Page 1 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:06:32 +0530 Arbitration and Conciliation Act challenging the arbitration award dated 22.11.2017 (hereinafter after referred to as 'impugned award').
PLEADINGS
2. The facts as averred in the petition are that the petitioner is a registered partnership firm engaged in the business of providing security surveillance and other manpower services. The petition has been filed through its authorised representative namely Sh. Sonu Kumar.
3. It is further averred that the petitioner received the copy of the impugned award on 24.11.2017 passed by the learned Sole Arbitrator.
4. The petitioner has averred that it was awarded a contract of providing nursing orderlies and peon personnel at the address of the respondent vide a contract dated 05.03.2012 which was to be effective from 06.03.2012. The petitioner deposited a sum of Rs. 2,72,972/- by way of an FDR with the respondent as security which was duly acknowledged by the respondent. It is further averred that the petitioner deputed the requisite number of nursing orderlies and peon personnel and also furnished a list of proposed manpower to be deployed. The petitioner successfully discharged its duty and the contractual period was extended from time to time.
5. It is further contended that till July, 2013 the respondent has paid the amount against the bills raised by the petitioner, however, from August, 2013 till October, 2014, the respondent did not make any payment. Therefore, a sum of Rs. 42,80,880/- was outstanding. The petitioner wrote many letters to the respondent requesting it to clear the dues.
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6. It is further contended that instead of clearing the dues the respondent asked the petitioner to give the proof of deposit of EPF and ESIC contribution of the deployed personnel. The petitioner provided all the requisite information vide various letters and also gave an undertaking that it has already disbursed the wages to the deployed personnel and shall file consolidated challans of EPF and ESIC. It is further submitted that despite this undertaking the respondent did not pay the outstanding dues nor refunded the security amount. Aggrieved with the same the petitioner issued a legal notice dated 08.12.2014 which was replied by the respondent vide letter dated 24.12.2014. As outstanding dues were not paid by the respondent, the petitioner initiated the arbitration clause thereby claiming refund of the security amount of Rs. 2,72,972/-, recovery of sum of Rs. 42,80,880/- as dues from August, 2013 to October, 2014 and interest on the outstanding dues. Both the parties participated in the arbitration proceedings and by the impugned award all the claims of the petitioner were rejected.
7. It is contended in the petition that the learned Arbitrator has not appreciated the facts as per law. The petitioner has provided to the respondent the list of deployed personnel mentioning the individual PF code numbers and ESIC UAN numbers. All other requisite documents were also deposited with the respondent. Learned Arbitrator failed to appreciate clause no. 35, 36 and 37 of the contract which entitled the respondent to recover amount from petitioner only in case of directions of the legal authorities. It is further submitted that as per the contract between the parties the respondent had no authority to withheld the outstanding dues of the petitioner for want of ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA Page 3 of 16 AGGARWAL Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:06:45 +0530 submission of the challans pertaining to EPF and ESIC. The act of the respondent was beyond the terms of the contract and the learend Arbitrator failed to appreciate the same. It is further contended that the learned Arbitrator erred in doubting the genuineness of ESIC challans which were placed on record by the petitioner during the arbitration proceedings. It was not within the jurisdiction of the learned Arbitrator to assess the genuineness of the challans placed before it. It is further contended that the findings of the learned Arbitrator are contrary to the terms of the contract and the learned Arbitrator has failed to appreciate the terms of the contract executed between the parties. Hence, the present petition has been filed seeking to set aside the impugned award.
8. Respondent has filed the written reply to the objections. In the reply it is stated that the petition is not maintainable as the petitioner has not filed sufficient court fees as per the claims made in the arbitration proceedings. It is further submitted that the grounds on the basis of which the impugned award is challenged to are beyond the purview of Section 34 of the Arbitration and Conciliation Act. Therefore, the present petition is not maintainable.
9. It is further submitted that the learned Sole Arbitrator has passed a well reasoned award. The petitioner has violated the terms and conditions of the contract executed between the parties and therefore, his claims were rightly rejected by the learned Arbitrator.
10. It is further submitted that as per clause 4 of the contract the petitioner was required to get the PF number allotted by RPFC and against the said SUGANDHA ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi AGGARWAL Page 4 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:06:51 +0530 number PF subscription was to be deducted for the persons engaged. The said clause was in accordance with Section 36-B of the Employees' Provident Fund Scheme, 1952. Further, as per clause 47 and 48 of the contract the petitioner was required to provide the relevant records to the department as a proof of depositing employees contribution towards PF/ESI etc. every three months. But same was not complied by the petitioner.
11. It is submitted that the claim of the petition was false and frivolous and the steps taken by respondent was well within the ambit of the contract. It is further submitted that the petitioner was given ample opportunity and respondent has issued several letters and reminders to provide the necessary documents i.e. the Certificate/Challans of the contributions paid towards the EPF/ESI for each personnel employed by the petitioner. The same were not complied with by the petitioner. It is further submitted that petitioner has not disclosed any new ground to challenge the award and therefore the present petition is not maintainable.
12. Arguments were addressed on behalf of both the parties. Same were heard. Both the parties have filed the written arguments also. Same are also considered.
13. Learned counsel for the petitioner has argued that the learned Arbitrator has gone beyond the contractual terms. He was not having any jurisdiction to assess the veracity of the challans placed on record by the petitioner. Prior to August, 2013, the respondent had made all the payments. It is further argued that as per clause 25 of the agreement the respondent could have deducted the amount due to the petitioner if there was any order from the authority but ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA AGGARWAL Page 5 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:06:57 +0530 there was no such order. As per the terms of the contract if there was no lapse in payment of wages to the personnel fulfillment of statutory dues would have been the liability of the contractor i.e. the petitioner. Therefore, in these circumstances, respondent had no authority to reject the claim of the petitioner. It is further submitted that the learned Arbitrator has breached the principles of natural justice.
14. In support of his contentions petitioner has relied upon the following judgments: a. CARS 24 Services Limited VS. SEA Gate Facility Management (P) Limited 2022 SCC OnLine Del 1336, b. M/s Tool Room & Training Centre VS. M/s Delhi Industrial Security Guards 2011 SCC OnLine Del 333, and c. Dr. Baba Saheb Ambedkar Hospital VS. Gorkha Security Services 2017 SCC OnLine 11635.
15. Ld. counsel for respondent has argued that the agreement executed between the parties was never disputed by the petitioner, despite repeated requests the petitioner failed to provide the proof of allotment of PF code number in respect of each personnel, amount of monthly PF subscription deducted from the payments made to each employee and details of such other statutory dues. It is further argued that the documents relied upon by the petitioner or submitted to the respondent could not prove that stand taken by the petitioner that it has duly informed the allotment of PF code number to the respondent as required by the contract in question. It is further argued that the falsity of the claims of the petitioner was exposed when the Ld. Sole Arbitrator observed that there was tempering done in the documents relied upon by the petitioner during arbitration proceedings.
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16. It is argued that in these circumstances, there was no infirmity in the impugned award. Ld. Arbitrator has framed issues based on the claim and the reply filed by the parties before it in the arbitration proceedings and has passed a detailed award giving finding on each of the issue. It is argued that in these circumstances, no ground is made out to set aside the impugned award.
FINDINGS
17. I have considered the rival contentions and have perused the record.
18. The petitioner has challenged the impugned award primarily on the ground that the Ld. Arbitrator has failed to appreciate the terms of agreement entered between the parties, exceeded its jurisdiction while giving finding on the correctness of the challans filed by the petitioner during arbitration proceedings and that the said conduct is against the public policy. All these grounds pertain to the merits of the case. As per Section 34 of the Arbitration and Conciliation Act the scope of interference by the court is very limited. Certain grounds of challenge are enumerated in the said Section and the court can interfere in the arbitration award only with respect to the said grounds.
19. Section 34 of Arbitration and Conciliation Act reads as follows:
"1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if--
(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--
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(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA AGGARWAL Page 8 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:14 +0530 agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
[Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] [(2A) An arbitral award arising out of arbitrations other than SUGANDHA AGGARWAL ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi Page 9 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:20 +0530 international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.] XXXXXXX"
20. From the reading of above Section it is clear that the remedy provided under the Section could not be converted into a remedy of appeal. It is only if the petitioner is able to prove any of the grounds given in the Section 34 of Arbitration and Conciliation Act that the arbitration award can be set aside. The contentions relating to the facts of case can not be considered by the court in the petition under section 34 of Arbitration and Conciliation Act. Reference in this regard be made to the judgment in the case titled as Delhi Development Authority vs M/s Bhardwaj Brothers FAI (OS) No.285/14 & CM no. 10351/14, 10352/14 &10354/14 . Similar view was taken by the Hon'ble Apex Court in the case of M/s Navodya Mass Entertainment vs M/s J.M Combines Civil Appeal no. 7128-7129 of 2011, wherein it is held as under :-
"In our opinion, the scope of interference of the court is very limited. Court would not be justified in reappraising the material on record and substituting SUGANDHA ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi AGGARWAL Page 10 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:26 +0530 its own view in place of the Arbitrator's view. Where there is an error apparent on the face of the record or the Arbitrator has not followed the statutory legal position, then and then only it would be justified in interfering with the award published by the Arbitrator. Once, the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail".
21. Same was reiterated by the Hon'ble Supreme Court recently in case titled as Punjab State Civil Supplies Corporation Limited & Anr. VS. M/s Sanman Rice Mills & Ors. Civil Appeal arising out of SLP No. 27669 of 2018 decided on 27.09.2024, wherein it was held as under:
"9. The object of the Act is to provide for a speedy and inexpensive alternative mode of settlement of dispute with the minimum of intervention of the courts. Section 5 of the Act is implicit in this regard and prohibits interference by the judicial authority with the arbitration proceedings except where so provided in Part-I of the Act. The judicial interference, if any, is provided inter- alia only by means of Sections 34 and 37 of the Act SUGANDHA ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi AGGARWAL Page 11 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:32 +0530 respectively.
10. Section 34 of the Act provides for getting an arbitral award set aside by moving an application in accordance with sub- Section (2) and sub-Section (3) of Section 34 of the Act which inter-alia provide for the grounds on which an arbitral award is liable to be set aside. One of the main grounds for interference or setting aside an award is where the arbitral award is in conflict with the public policy of India i.e. if the award is induced or affected by fraud or corruption or is in contravention with the fundamental policy of Indian law or it is in conflict with most basic notions of morality and justice. A plain reading of Section 34 reveals that the scope of interference by the court with the arbitral award under Section 34 is very limited and the court is not supposed to
1.travel beyond the aforesaid scope to find out if the award is good or bad."
22. Thus, the objections under Section 34 of Arbitration and Conciliation Act have to be considered while keeping in mind that the object of referring a dispute to the arbitration is to have speedy and inexpensive mode of settlement of the dispute. If the said remedy is converted into appeal then the object of the Act itself would be defeated.
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23. It is contended by the petitioner that the impugned award infringes public policy. Though it has not been explained as to how the impugned award is against public policy, it is submitted that because the Arbitrator had no authority to give a finding on the genuineness of the challans placed on record by the petitioner during the arbitration proceedings, therefore the impugned award is against public policy.
24. The Hon'ble Supreme Court has laid down the circumstances in which an arbitration award can be held to be against public policy in the case Punjab State Civil Supplies Corporation Limited & Anr. VS. M/s Sanman Rice Mills & Ors. (Supra), and has held that infringement of public policy would be only in case where the award is induced or effected by fraud or corruption or is contravention with the fundamental policy of the Indian law. No such fact has been disclosed in the present petition. Admittedly, the petitioner himself has invoked the arbitration clause. He was given a fair opportunity of being heard. In fact, during arbitration proceedings he was given an opportunity to place on record the ESI challans which he had not originally submitted with the respondent despite repeated letters.
25. In the case of Konkan Railway Corporation Limited Vs. Chenab Bridge Project Undertaking (2023) 9 SCC 85, the Hon'ble Supreme Court has reiterated that the scope of jurisdiction under Section 34 of Arbitration and Conciliation Act is not like a normal appellate jurisdiction and the court should not interfere with the arbitral award lightly in a casual and cavalier manner. It was further held that the mere possibility of an alternative view of the facts or interpretation of the contract does not entitle the courts to reverse ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA Page 13 of 16 AGGARWAL Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:43 +0530 the findings of the arbitral tribunal.
26. In the present case also the only grievance raised by the petitioner is regarding the interpretation of the terms of the contract by the Ld. Arbitrator. This court cannot act as an appellate court to re-appreciate the terms of agreement entered into between the parties or to assess if the findings returned on the same by the Ld. Arbitrator were correct or incorrect. The petitioner has himself stated that while raising bills he had given an undertaking to the respondent that he shall furnish the challans but the challans were not furnished. It is also an admitted fact that these challans were filed during arbitration proceedings. Ld. Arbitrator observed that the same were tempered. In these circumstances, there is no such apparent error which requires intervention by this court under Section 34 of Arbitration and Conciliation Act.
27. Ld. counsel for the petitioner has also referred to certain judgments in support of his contentions. However, the same are not applicable to the facts of the present case. M/s Tool Room & Training Centre VS. M/s Delhi Industrial Security Guards (Supra), was a regular first appeal filed before the Hon'ble High Court. As already discussed above the scope of interference by the appellate court is much wider than the scope of interference by the court considering a petition under Section 34 of Arbitration and Conciliation Act. Hence, the said judgment is not applicable in the present case.
28. In CARS 24 Services Limited VS. SEA Gate Facility Management (P) Limited (Supra), there were documents to show that the respondent therein has complied with the statutory directions and have furnished the requisite ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA Page 14 of 16 AGGARWAL Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:07:56 +0530 challans regarding payment of PF and other statutory dues unlike the present matter.
29. Similarly the facts in the case of Dr. Baba Saheb Ambedkar Hospital VS. Gorkha Security Services (Supra), are different from the facts in the present case. In fact, in Dr. Baba Saheb Ambedkar Hospital VS. Gorkha Security Services (Supra), it has been reiterated by the Hon'ble High Court that when a court is applying "the public policy" test to an arbitration award, it does not act as an appellate court and consequently error of fact cannot be corrected. It was further held that if the Arbitrator has taken a view of the facts that is possible or plausible based on the evidence on record, then the court must accept that view, even if the court might have reached a different conclusion. It was held by the Hon'ble High Court that the court cannot give a finding whether the appreciation of evidence undertaken by the arbitrator was sufficient and correct or not if the award is based on the appreciation of evidence even if it is little in quantity or quality. In the present case also the Ld. Arbitrator has given the findings based on the admitted documents placed during arbitration proceedings. In fact, opportunity was given to the petitioner to place on record the ESI challans during arbitration proceedings. The arguments by the petitioner that the Ld. Arbitrator has wrongfully doubted the veracity of the said challans cannot be considered in the present petition. As discussed above, this is a settled law that the court cannot review if the appreciation of evidence carried out by the Ld. Arbitrator was correct or not until and unless it is against the public policy.
30. Hence, in view of the above discussion I do not find any merit in the ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi SUGANDHA AGGARWAL Page 15 of 16 Digitally signed by SUGANDHA AGGARWAL Date: 2026.02.17 17:08:05 +0530 present petition and the same is dismissed.
31. File be consigned to record room after due compliance.
Digitally signed by SUGANDHA SUGANDHA AGGARWAL
AGGARWAL Date:
2026.02.17
17:08:09 +0530
(DR. SUGANDHA AGGARWAL)
District Judge-04
PHC-New Delhi-17.02.2026
This judgment contains 16 pages and all pages have been duly signed by me.
Digitally signed by SUGANDHAAnnounced in the open court on SUGANDHA AGGARWAL 17th February 2026 AGGARWAL Date: 2026.02.17 17:08:14 +0530 (DR. SUGANDHA AGGARWAL) District Judge-04, Patiala House Court, New Delhi ARBTN NO. 333-18 Gorkha Security Services Vs. Govt.Of NCT Of Delhi Page 16 of 16