Delhi District Court
Mr Rudra Srivastava vs Neeraj Bhatia And Ors on 25 February, 2026
IN THE COURT OF SH. AJAY KUMAR JAIN:
LD. DISTRICT JUDGE (COMMERCIAL COURT) -04 (Digital)
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
OMP (COMM) 4/2024
RUDRA SRIVASTAVA
S/o Late Sh. V. K. Srivastava
R/o. J-601, Catriona Apartment,
Near Ambience Mall, Gurugram, Haryana
.....Petitioner (respondent in arbitration proceedings)
VERSUS
1. NEERAJ BHATIA (Claimant)
S/o Late Sh. N. D. Bhatia
B-100, Shivalik Colony, New Delhi- 110017
2. MRS. SANGEETA SRIVASTAVA
R/o 60A, Sainik Farm,
Neb Sarai, Delhi- 110068
Also At:
House No. 614-A, Raunak Pratham Paradise,
Mitrabhandhu Nagar, Near Ram Mandir, Indore, MP- 452016
3. MRS. KALPANA SRIVASTAVA
W/o Late Sh. V. K. Srivastava
R/o J-601, Catriona Apartment
Near Ambience Mall, Gurugram, Haryana
4. MS. RATUAL VIG
D/o Late Sh. V. K. Srivastava
R/o J-601, Catriona Apartment
Near Ambience Mall, Gurugram, Haryana
5. MS. RADHAPRIAY BANSAL
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 1 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Digitally
signed by
AJAY
AJAY KUMAR
KUMAR JAIN
JAIN Date:
2026.02.25
16:25:06
+0530
W/o Sh. Ayush Bansal
D/o Late Sh. V. K. Srivastava
R/o 14/2/2, Mubarkabad Road, Bastara,
Karnal, Haryana- 132001
6. MS. SHIVANI ARORA
W/o Sh. Gursajan Arora
D/o Late Sh. V. K. Srivastava
R/o Plot No. 11, North Avenue Road,
Punjabi Bagh West, Delhi,
7. MS. SUVARNA JINDAL
W/o Sh. Abhay Jindal
D/o Late Sh. V. K. Srivastava
R/o A3-207, Printer Appartment,
Sector-13, Near Bhagwati Hospital,
Rohini, Sector-14, New Delhi-110085
8. SH. RAVDEEP SINGH SURI
S/o Sh. G. S. Suri
R/o 2A, Mathura Road, Jangpura-B, Delhi.
9. Sh. J.R. ARYAN, DISTRICT JUDGE (RETD.) DELHI
SOLE ARBITRATOR
Having office at : N-80, Greater Kailash-I,
New Delhi- 110048
( Respondent no. 9 is deleted from array of parties vide order dated
26.03.2024.)
.....Respondents
Date of filing/initiation of petition : 05.02.2024
Date when final arguments heard : 12.02.2026
Date of Judgment : 25.02.2026
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 2 of 40
Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
JUDGMENT
1. Vide this judgment, I shall decide the petition under section 34 of Arbitration and Conciliation Act seeking setting aside the impugned award dated 19.09.2023 passed by Ld. Sole Arbitrator, filed by the petitioner Rudra Srivastava.
2. The deceased Mr. V. K. Srivastava is the respondent in the arbitration proceedings, however during the arbitration proceedings, he died. Thereafter, the petitioner Rudra Srivastava is impleaded who also represented the other LRs of deceased Sh. V. K. Srivastava. However, Mrs. Sangeeta Srivastava (first W/o of Late Mr. V. K. Srivastava) participated and contested in the arbitration proceedings. The petitioner Rudra Srivastava in the present petition was proceeded ex-parte in the arbitral proceedings and challenge the impugned award before this court through present petition under section 34 of Arbitration and Conciliation Act.
3. Brief background facts are that claimant/respondent was engaged in business of promotion, development and construction of real estate. The deceased Mr. V. K. Srivastava represented to the claimant that he was owner, holding perpetual lease rights in a residential property bearing no. B-58, admeasuring 200 sq. yards, situated at Rehabilitation Ministry Employees Corporate House Building Society Ltd., known as Shivalik, New Delhi. The deceased Mr. V. K. Srivastava assured claimant that the suit property was free from all and any kind of encumbrances, such as prior sale, lease, mortgage, disputes etc. and fully competent to enter into collaboration agreement, therefore OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 3 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
claimant entered into collaboration agreement dated 09.02.2018. It was agreed between the parties that in addition to incurring entire cost and expenditure towards re-construction of property, the claimant shall pay to the deceased Mr. V. K. Srivastava an amount of Rs. 1,35,00,000/- a non-refundable interest free security deposit. Claimant paid Rs. 25 lakh to the deceased Mr. V. K. Srivastava. The deceased Mr. V. K. Srivastava approached the claimant on 10.02.2018 and requested for payment of Rs. 7 lakhs in cash to honour financial commitment which was paid by claimant and thus the deceased Mr. V. K. Srivastava received total amount of Rs. 32 lakhs. In terms of collaboration agreement, deceased Mr. V. K. Srivastava required to complete the compulsory requirements at his own cost by 15.03.2018, however the deceased Mr. V. K. Srivastava did not comply with terms of agreement. It also came to knowledge of claimant that the deceased Mr. V. K. Srivastava has cheated other party and had entered into agreement in relation to suit property. A contempt case no. 278 of 2020 filed by Smt. Shashi Bala Sawhney in Hon'ble High Court of Delhi is still pending. When the deceased Mr. V. K. Srivastava failed to perform his obligation under the agreement, the claimant sent a legal notice dated 22.05.2018 to the the deceased Mr. V. K. Srivastava, however deceased Mr. V. K. Srivastava neither complied with the said legal notice nor responded to the same. Therefore, the claimant filed civil suit seeking specific performance of collaboration agreement and for permanent injunction and damages, however in view of the arbitration clause, the deceased Mr. V. K. Srivastava moved an application before Hon'ble High Court and OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 4 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Hon'ble Court vide order dated 29.04.2019 directed the parties to take recourse to arbitration for resolution of their dispute. Thereafter, claimant again filed a petition under section 11 (6) of Arbitration & Conciliation Act, pursuant to which the present Arbitrator was appointed. The claimant pleaded the following reliefs/claims as under :
a) Recovery of Rs. 55,04,000/- i.e. Rs. 32 lakhs towards refund of the amount paid to the respondent and Rs.
23,04,000/- towards interest @ 18% per annum from 11.02.2018 till filing of statement of claim
b) An amount of Rs. 5 lakhs towards loss suffered by claimant on account of brach of the agreement on the part of respondent.
c) Claimant prayed for award for the above stated amount with further interest @18% per annum from 26.03.2022 till realisation of the amount i.e. interest for pendente lite and future.
4. The deceased Mr. V. K. Srivastava in his statement of defense before Ld. Sole Arbitrator stated that statement of claim was filed without a proper cause of action and when conversion of suit property to free hold was still pending with concerned authorities i.e. L & DO, Govt. of India. Furthermore, the total consideration amount settled between parties was Rs. 1, 60,00,000/- wherein Rs. 50 lakhs was to be paid a the time of execution of collaboration agreement and balance amount of Rs. 1,10,00,000/- was to be paid by builder within 15 days of conversion of property. The deceased Mr. V. K. Srivastava stated that he made all possible efforts to get conversion of property to free-hold. Being out of funds, requested builder for additional payment from balance amount of Rs. 25 lakhs but the builder refused the same and OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 5 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
backed out and started demanding refund of money. The deceased Mr. V. K. Srivastava refused to refund money as it was builder who backed out from the deal. The deceased Mr. V. K. Srivastava also presented a counter-claim for Rs. 1 Crore.
5. Vide order dated 29.09.2022, issues were framed by the Ld. Arbitrator in claim and in counter-claim.
6. During evidence in claim, claimant examined himself and tendered his affidavit evidence (Ex.CW1/A) and was cross-examined by counsel for the deceased Mr. V. K. Srivastava, however the said counsel on 18.11.2022 conveyed information that the deceased Mr. V. K. Srivastava was passed away on 17.11.2022, and requested to implead LRs on record. Sh. Rudra Srivastava, son of deceased Mr. V. K. Srivastava appeared in arbitration proceedings and got few proceedings adjourned on a request that he is in settlement talks, and his counsel Mr. Arun Malik would be representing him as well as his four sisters also. The matter was fixed for 23.07.2023 to proceed with cross-examination of claimant, however counsels for LRs of the deceased Mr. V.K. Srivastava again requested for adjournment. Evidence by affidavit of Smt. Sangeeta Srivastava was taken on record, however Rudra Srivastava through email sought adjournment which was declined and was proceeded ex-parte. Examination and cross- examination of Smt. Sangeeta Srivastava was concluded and matter was fixed for final hearing. Ld. Arbitrator passed the impugned award dated 19.09.2023 in favour of claimant and against the deceased Mr. V. K. Srivastava through LRs.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 6 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors. Submissions of counsels
7. Ld. counsel for petitioner submitted that the mandate of Ld. Sole Arbitrator had expired/terminated on 14.09.2023, and the Sole Arbitrator ought not have passed any award after termination of its mandate, hence the impugned order dated 19.09.2023 deserves to be set aside. Furthermore, the freehold process of the suit property was already initiated by Late Sh. V. K. Srivastava in the year 2016 and had deposited an amount of Rs. 1 lakh with L & DO. Late Sh. V. K. Srivastava had completed his obligation. The passing of order by Govt. Department is beyond the control of the Late Sh. V. K. Srivastava. Furthermore, the collaboration agreement was executed by playing a fraud upon Late Sh. V. K. Srivastava. The petitioner was proceeded ex- parte on 19.08.2023, however without issuing premptory notice. Ld. counsel for petitioner further submitted that there are arbitrary and systematic violation of principles of natural justice. (relied upon 'Ramanbhai Chhaganbhai Patel Vs. Religare Finvest Ltd., OMP (Comm) 71/2022, DHC' and 'M/s Mittal Pigments Pvt. Ltd. Vs. M/s GAIL Gas Limited, 2023/DHC/001185').
8. There is unilateral change of hearing dates without consent (relied upon 'Poonam Mittal Vs. M/s Creat Ed Pvt. Ltd. OMP (Misc) (Comm) 80/2023' ). The mandate extension secured through manipulation in petitioner's absence. The award was passed after automatic termination of mandate under section 29 A that renders award void ab initio, relied upon 'Mohan Lal Fatehpuria Vs. M/s Bharat Textiles & Ors., 2025 INSC 1409'. Further, fraud vitiates the OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 7 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
collaboration agreement (relied upon 'Associate Builders Vs. Delhi Development Authority, C.A No. 10531 of 2014' and 'A.V. Papayya Sastry Vs. Govt. of Andhra Pradesh. (2007) 4 SCC 221'). Awarding the entire award to one joint contractor is a finding so perverse that it shocks the judicial conscience (relied upon 'Ssangyong Engineering & Construction Co. Ltd. Vs. NHAI, (2019) 15 SCC 131').
9. Ld. counsel for respondent submitted that the objection raised by the petitioner regarding impleadment of parties is misconceived. The Late Sh. V. K. Srivastava has expired on 17.11.2022 which was duly communicated to the claimant on 18.11.2022.Thereafter, the claimant/respondent filed application on 31.01.2023 to bring on record the legal representatives of Late Sh. V. K. Srivastava within 90 days. Thereafter, moved another application dated 16.10.2023 to implead other LRs and surviving spouse (Ms. Sangeeta Srivastava), and notice dated 17.03.2024 was also issued by the Ld. Arbitrator to LRs and Ms. Sangeeta Srivastava, but all the notices returned with the remark as 'addressee could not be located' . Thereafter, on 29.03.2023 a request was made to Mr. Rudra Srivastava to provide correct particulars of the LRs. Furthermore, the petitioner sought adjournment through email dated 10.05.2023 and 10.06.2023 and further failed to participate in arbitration proceedings on 23.07.2023 and 19.08.2023. In view of repeated defaults and deliberate non-participation and considering that the mandate of the arbitral proceedings was due to expire on 14.09.2023, the Sole Arbitrator was constrained to proceed ex-parte vide order dated 19.08.2023.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 8 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
10. Ld. counsel for respondent submitted that the mandate of Ld. Sole Arbitrator was due to expire on 14.09.2023 and the arguments in the matter were duly heard on 09.09.2023, well within the stipulated period of mandate. The deliberate non-participation and successive adjournments, the Sole Arbitrator was constrained to proceed ex-parte so as to ensure that the proceedings were concluded within the statutory mandate period. Therefore, Sole Arbitrator rightly proceeded to render the award dated 19.09.2023 strictly in accordance with law and within the prescribed period. The date of final arguments was on 09.09.2023 which is communicated to the parties vide order dated 19.08.2023, subsequently, on 09.09.2023, the parties duly advanced their arguments, hence no ground made out to set aside the impugned award by way of present petition.
11. Both the parties also filed written submissions.
12. Arguments heard. Record perused.
13. Before adverting to the contentions of the parties, the relevant paragraphs of the impugned award dated 19.09.2023 passed by Ld. Sole Arbitrator are reproduced as under :
"
1. .....
2. ....
Claimant's case as per Statement of Claim
3. Claimant was engaged in business of promotion, development and construction of real estate and was well established in said business. Respondent Mr. V.K. Srivastava represented to the Claimant that he was owner, holding perpetual lease rights in a residential property B-58, admeasuring 200 sq. yards, situated at Rehabilitation Ministry Employees Corporate House Building Society Ltd., known as Shivalik, New Delhi and the said property consisted of basement, ground floor and first floor with terrace. Respondent desired to get property re- developed / re-constructed and with Respondent No. 2 OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 9 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
approached and requested Claimant to take up the re-development work of the said property. Entire cost of re-construction was to be borne by the Claimant. Respondent No. 1 was rather introduced by Respondent No. 2. Respondent No. 1 Mr.V.K. Srivastava assured Claimant that suit property was free from all and any kind of encumbrances, such as prior sale, lease, mortgage, disputes ...... prior Agreement to Sell etc. and thus, Respondent was fully competent to enter into Collaboration Agreement. Claimant trusted Respondent and agreed to re-develop property and entered into Collaboration Agreement dated 09.02.2018 with Respondent No. 1. Copy of Collaboration Agreement was annexed as Annexure C-1. It was agreed between parties that in addition to incurring entire cost and expenditure towards re-construction of property, the Claimant shall pay to Respondent No. 1 an amount of Rs.1,35,00,000/- (One Crore Thirty Five Lakhs ) as non-refundable interest free security deposit which will be a consideration amount against rights in suit property to be transferred to the Claimant by Respondent No. 1. Claimant paid Rs.25 lakhs by cheque to Respondent No. 1 by the time of execution o f Collaboration Agreement, as per details below:
i. Cheque No. 000163 dated 11.01.2018 for Rs.5 lakhs. ii. Cheque No. 000764 dated 09.02.2018 for Rs.20 lakhs. The cheques drawn on HDFC Bank Ltd., Malviya Nagar, New Delhi, were got en- cashed by Respondent No. 1. Cheque encashment certificate from bank was Annexure C-2. Balance consideration amount of Rs.1,10,00,000/- was agreed to be paid by Claimant to Respondent No. 1 within 15 days from the date of suit property got converted to free-hold from lease-hold, process for which had already been initiated by Respondent No. 1 and Respondent was also required to get Conveyance Deed registered and then hand over actual physical possession of the property to the Claimant within 15 days for its reconstruction.
4. Claimant pleads that the Respondent No. 1 approached Claimant on 10.02.2018 and requested for payment of Rs.7 lakhs in cash, needed by him to honour financial commitment. Claimant paid Rs.7 lakhs to the Respondent and Respondent executed a receipt Annexure C 3 for the said amount. Respondent thus received a total amount of Rs.32 lakhs.
5. In terms of Collaboration Agreement, Respondent No. 1 was required to complete 'the Compulsory Requirements' at his own cost by 15.3.2018. Those Compulsory Requirements were recorded in the Agreement and one such requirement No. 4 was that Respondent will get suit property converted into free-hold and get conveyance deed registered. Claimant contends that having received money, Respondent with ulterior motives and to cheat Claimant, did not comply with terms OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 10 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
of Agreement. Claimant also came to know that Respondent No. 1 had cheated other party and had entered into Agreement in relation to suit property. Statement of Claim refers to a contempt case No. 278 of 2020 filed by Smt. Shashi Bala Sawhney in High Court of Delhi against Respondent No. 1. Orders dated 17.2.2021 and 3.12.2021 passed by High Court were Annexure C-4. Respondent started avoiding Claimant and failed to perform his obligation under the Agreement on one or the other pretext. Claimant was constrained to send legal notice dated 22.5.2018 to the Respondent, which was sent by speed post, courier on the correct address and through email and on WhatsApp number of his mobile phone number, requesting Respondent to perform his part of contract in terms of Collaboration Agreement and fulfil the Compulsory Requirement. Respondent neither complied with said legal notice nor responded to the same. Legal notice was Annexure C 5 and dispute arose in said background.
6. Claimant filed Civil Suit CS No. 788 / 18 before Civil Court at Saket, Delhi, seeking specific performance of Collaboration Agreement and for permanent injunction and damages. Since there was arbitration clause in the Collaboration Agreement, in view of Section 8 of the Arbitration & Conciliation Act, Respondent moved an application before Hon'ble Court and vide order dated 29.04.2019, Hon'ble Court disposed of Suit with direction to parties to take recourse to arbitration for resolution of their dispute. Copy of Civil Suit CS No. 788/18 was Annexure C 6. Vide notice dated 3.7.2019, Claimant invoked arbitration clause of the Collaboration Agreement and suggested a name as Sole Arbitrator but Respondent did not agree for the named arbitrator and put forth certain names for appointment of arbitrator. None of them was acceptable to the Claimant. Claimant thus filed Petition under Section 11 (6) of the Arbitration & Conciliation Act and vide Order dated 11.1.2022, Hon'ble Court appointed the present Arbitral Tribunal.
7. Claimant contends that Respondent failed to perform his obligations under the Collaboration Agreement and breached material terms of the Agreement and rather was also looking for prospective buyers to create third party right or sell or part with possession of the suit property. Claimant had always been ready and willing to perform his obligations under the Agreement. Due to breach on the part of Respondent, Claimant suffered a loss of Rs.5 lakhs and the Respondent was liable to compensate Claimant for the same.
8. Claimant pleads that he was entitled to recover Rs.32 lakhs with interest @ 18% per annum from 11.02.2018 till the payment of the amount. Claimant sets out reliefs / claims as following:
a) Recovery of Rs.55,04,000/- i.e., Rs.32 lakhs towards refund of the amount paid to the Respondent and Rs.23,04,0000/- towards OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 11 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
interest @ 18% per annum from 11.2.2018 till filing of Statement of Claim
b) An amount of Rs.5 lakhs towards loss suffered by Claimant on account of breach of the Agreement on the part of Respondent.
c) Claimant prayed for award for the above stated amount with further interest @ 18% per annum from 26.03.2022 till realisation of the amount i.e. interest for pendente lite and future.
9. Claimant also seeks award for Rs.2 lacks towards cost of litigation including expenses incurred on suit for specific performance as well in arbitration petition and also the cost of the present arbitration fee and proceedings.
Defence of the Respondent as per Statement of Defence
10. Respondent No. 1 contested claims and filed SOD. Statement of Claim was stated to be without a proper cause of action. Collaboration Agreement dated 9.2.2018 was of the nature of conditional / compulsory and the same was still alive when conversion of suit property to free hold was still pending with concerned authorities i.e., L&DO, Government of India and the same was not under the control and power of the Respondent. Claimant himself backed out of the deal unilaterally and averments in claim petition were false and incorrect. Entire Claim Petition was false, misconceived, and meritless. Claim Petition was not signed and verified and instituted by the Claimant in accordance with law. It is pleaded that one Mr. Rajesh Batra impersonated Neeraj Bhatia and signed two sets of Collaboration Agreement in the presence of Respondent No. 1. Respondent when received summons in the CS No. 788 / 18 from the court at Saket, Delhi, Respondent noticed that signatures of the Claimant on both copies / documents differed from each other. Later, Neeraj Bhatia signed on one original set of Collaboration Agreement which had been given to Rajesh Batra and Rajesh Batra was made a witness on the document in order to deceive Respondent by way of fraud. Other set of original Collaboration Agreement, given to Respondent, would make above referred fraud clear.
11. Respondent asserted further that total consideration amount settled between parties was Rs.1,60,00,000/- (Rs. One crore sixty lakhs) wherein Rs.50 lakhs was to be paid at the time of execution of Collaboration Agreement and balance amount of Rs.1,10,00,000 /- was to be paid by builder within 15 days of conversion of property into free-hold, which stood already applied, and after getting the conveyance deed registered.
12. Rajesh Batra impersonated Neeraj Bhatia at initial talks of negotiation and had handed over cheque dated 11.01.2018 for Rs.5 lakhs and further delivered chequedated 9.2.2018 for Rs.20 lakhs, on OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 12 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
the date of signing of the Collaboration Agreement. It is pleaded that Rs.7 lakhs was paid by Respondent No. 2 by way of adjustment as the amount outstanding against Respondent No. 1 in some other business deal with Respondent No. 2 and thus Rs.7 lakhs was the share of Respondent No. 2 in this Collaboration Agreement. Receipt for that amount of Rs.7 lakhs dated 10.2.2018 was written by Mr. Romil Sikka who was witness on the receipt also. However, seeing the foul play being played by Rajesh Batra, Mr. Ashudeep Suri, brother of Ravdeep Suri, Respondent No. 2, refused to sign the receipt. Rs.32 lakhs thus was paid in above manner in this Agreement and Rs.1,28,00000/- was to be paid as a balance consideration by the builder. Builder failed to pay Rs.25 lakhs as promised to be paid at the time of signing of the Collaboration Agreement. Respondent No. 2 , on coming to know that Rajesh Batra impersonated Neeraj Bhatia by way of foul play, objected to genuineness of the Collaboration Agreement and decided not to proceed further with Agreement.
13. Respondent pleads that he made all possible efforts to get conversion of property to free-hold but Respondent being out of funds, requested builder / Rajesh Batra for additional payment from the balance amount of Rs.25 lakhs but the builder blatantly refused and for that reason, the Respondent was unsuccessful in getting the property converted to free-hold, process for which was still pending. Builder was not ready to wait any more and thus unilaterally backed out and started demanding refund of money paid to the Respondent. Respondent refused to refund money as it was builder who backed out from the deal unilaterally . Respondent suffered a huge goodwill loss of property to the tune of Rs.1 crore. Goodwill loss of property stood reflected as there was no builder in the market to redevelop the property.
14. Respondent No. 2 introduced Romil Sikka and Rajesh Batra as builders wherein Rajesh Batra impersonated Neeraj Bhatia and then all talks and meetings were held through Rajesh Batra. After negotiations and talks, Collaboration Agreement was executed on 9.2.2018. Respondent No. 2 played active role in finalisation of Collaboration Agreement. Rajesh Batra throughout impersonated Neeraj Bhatia. It was recorded in the Agreement that the builder after developing the property at his cost and expenses would be entitled to second floor and third floor with terrace. Other shares were also specified in the Agreement. During negotiations, total consideration was settled at Rs.1,60,00,000/- wherein Rs.50 lakhs was to be paid at the time of execution of Agreement and balance amount was to be paid to the builder within 15 days from the date property stood converted to free-hold. Out of Rs.50 lakhs, Rs.25 lakhs was paid by cheques and Rs.7 lakhs was by way of adjustment as the amount outstanding against OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 13 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Respondent No. 1 in favour of Respondent No. 2 in some other deal. Builder thus paid Rs.32 lakhs and balance consideration amount of Rs.1,28,00,000/- remained to be paid.
15. Respondent asserts that though it was recorded in the Collaboration Agreement that besides entire cost and expenses for the re-development of property, builder / Claimant shall pay Rs.1,35,00,000/- to Respondent but in fact total consideration amount was settled at Rs.1,60,00,000/-. Collaboration Agreement- was conditional when some compulsory requirements were recorded to be performed by the owner / Respondent and one such requirement was to get the property converted to free-hold and get conveyance deed registered. Respondent complied with all those compulsory requirements except as regards conversion of property to free-hold. Respondent had already applied with L&DO by submitting a request with fee of Rs.1 lakh paid by chequedated 3.6.2016 and those documents were shown to the builder. Conversion of property to free hold was still pending with L&DO and it was not within the control and power of Respondent. Respondent made all efforts and when he required more funds for that process and requested builder for more money, he refused to pay and rather unilaterally backed out from the Agreement. Respondent No. 1 thus refused to refund the amount to builder. Respondent strongly refuted the claims and contended that Claimant was not entitled to recovery of Rs.32 lakhs with interest and that amount calculated to Rs.55,04,000/- was misconceived claim. Claimant was not entitled to any such loss or damages for Rs.5 lakhs as claimed. Claimant was not entitled to interest pendent lite, and future as claimed and was not entitled to cost of Rs.2 lakhs or further cost for the present arbitration. Claim Petition was liable to be dismissed.
16. Respondent also presented a counter claim for Rs.1 crore on a plea that due to breaches on the part of Claimant - builder, Respondent suffered loss of goodwill of property as no other builder was willing to take up re-construction or re-development of the property. Claimant strongly refuted counter claim by filing reply and filed rejoinder to SOD. Claimant reiterated the claims. Respondent also reiterated counter claim by filing rejoinder to the reply of the builder - Respondent in the counter claim.
17. Respondent No. 2, described as builder in the Collaboration Agreement, was also impleaded in this arbitration by the Claimant but only as a proforma Respondent against whom no claim was sought to be prosecuted. Respondent No. 2 filed reply to Statement of Claim and claimed that out of Rs.25 lakhs paid to the Respondent by cheque by the Claimant, Rs.9 lakhs was contributed by answering Respondent No. 2 by depositing said amount by cash in the bank account of the Claimant as his share in this Collaboration Agreement, Rs.7 lakhs paid OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 14 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
in cash to the Respondent No. 1 was in fact the amount owed by Respondent No. 1 in favour of Respondent No. 2 by way of a friendly loan and the same stood adjusted in this Collaboration Agreement and thereby share of consideration of Respondent No. 2 in this Agreement was 50:50 qua share of the Claimant. Respondent No. 2 prayed to be transposed as Claimant with equal and proportionate claim and requested for an award to that extent.
18. Tribunal found prima facie dispute raised by Respondent No. 2 was beyond arbitration reference and on this point all the parties were heard. Vide order dated 20.09.2022, dispute raised by Respondent No. 2 was held to be beyond arbitral reference and the same could not be adjudicated before this Tribunal. Issues were set out on 22.09.2022 for adjudication of disputes and the same are as following:
I. Issues with Onus on the Claimant
a) Whether the Claimant is entitled to recover Rs.32.00 lakh, paid by claimant to the Respondent-owner under the Collaboration Agreement dated 09.02.2018 for re- development/reconstruction of property B-58, Shivalik, New Delhi and the Respondent- owner failed to discharge his obligations under the Collaboration Agreement and the re- development could not be executed?
b) Whether Claimant is entitled to Rs.23,04,000/- towards interest @ 18% p.a. on the amount of Rs.32.00 lakh for the period from 11.02.2018 till the filing of the present Claim petition against respondent?
c) Whether Claimant is entitled to Rs.5.00 lakh towards loss suffered on account of breaches committed by the Respondent-owner?
d) Whether Claimant is entitled to pendent-lite and future interest @ 18% p.a. on the Claim amount Rs.60,04,000/-?
e) Whether Claimant is entitled to Rs.2.00 lakh as litigation expenses including present Arbitration proceedings?
f) Whether Respondent-owner had executed Collaboration Agreement dated 08.08.2017 with M/S A.B. Promotors Pvt. Ltd.in respect of same property, which is subject matter of present dispute, and with suppression of said fact entered the Collaboration Agreement with claimant with malafide, and that M/S A.B. Promoters Pvt. Ltd. filed suit CS Comm. No. 425/2021 in a court at Delhi for recovery of Rs. 41 Lacs ( forty-one lacs) against respondent-owner Mr. V. K. Srivastava. If so its effect?
II. Issues with Onus on Respondent No.1
g) Whether the Claimant failed to act in terms of Collaboration Agreement and had not approached the Tribunal with clean hands or on a valid cause of action?
h) Whether the Collaboration Agreement was in the nature of Conditional/Compulsory and was still alive, when conversion of OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 15 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
property B-58, Shivalik, New Delhi from lease hold to Free-hold was still pending with the Government authorities and the Claimant backed out from the deal unilaterally? If so, its effect?
i) Whether one Mr. Rajesh Batra impersonated as the Claimant Mr. Neeraj Bhatia and signed two sets of Collaboration Agreement and defrauded the Respondent No.1 or that the Claim Petition has not been signed, verified, and instituted by the Claimant in accordance with law? If so, its effect.
j) Whether total consideration amount in this Collaboration Agreement was settled at Rs.1.60 crore wherein Rs.50.00 lakh was to be paid at the time of execution of the Collaboration and Rs.1.10 crore was to be paid by the Claimant-Builder within fifteen days from the date of the property converted to Freehold? If so, its effect?
k) Whether Rs.7.00 lakh against Receipt dated 10.02.2018, paid in cash to Respondent No.1, was by way of adjustment as outstanding against Respondent No.1 in favour of Respondent No.2 in some other business transaction and the amount was thus paid by Respondent No.2 as his share in the Collaboration Agreement? If so, to what effect?
l) Whether an amount of Rs. 25.00 lakh was agreed to be paid to Respondent No.1 in cash by the Claimant-Builder at the time of signing of Collaboration Agreement but was not paid? If so, to what effect?
m) Whether Respondent had already applied for conversion of property in question to Freehold on 07.06.2016 and application for conversion of property B-58, Shivalik, New Delhi was still pending with L&DO, despite Respondent No.1 -owner having made all efforts could not get property converted to free hold? If so, to what effect?
n) Whether the Claimant-Builder unilaterally backed out from the Agreement causing a huge 'goodwill' loss of the property to the Respondent?
II. Counter Claim
a) Whether the Respondent No.1-owner suffered loss of 'goodwill' of property as the Claimant backed out of the Collaboration Agreement unilaterally and the counter claimant was entitled to recover Rs.1.00 crore (one crore) with interest pendent-lite and future as punitive damages from Mr. Neeraj Bhatia?
19. Claimant examined himself by his affidavit for his examination-in-chief and his statement was recorded on 2.11.2022 whereby he tendered his affidavit evidence Ex. CW1/A and was cross- examined by counsel Mr. G.K. Mall, representing Respondent No. 1. Cross-examination continued on 12.11.2022. Counsel Mr. Mall then conveyed on the WhatsApp No. of this Tribunal on 18.11.2022 that Respondent Mr. V.K. Srivastava passed away on OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 16 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
17.11.2022. Said information was conveyed to the counsel for the Claimant vide email dated 19.11.2022 by the Tribunal and counsels were requested to take up the process for bringing Legal Representatives of Shri V.K. Srivastava on record. Counsel Mr. Mall declined to appear for any L.R., for no instruction.
20. Application filed by Claimant counsel for bringing LRs on record was received on 31.01.2023 on email and copy was served upon counsel representing Respondents. Counsel representing Respondent did not respond to the application in any manner. On the request of counsel for the Claimant, notice of application was directed to be sent to the LRs i.e. wife, one son and 4 daughters of late Shri V.K. Srivastava on the address on which Mr. Srivastava was served in this arbitration. Vide proceedings dated 3.3.2023, Smt. Kalpana Srivastava, wife of late Shri V.K. Srivastava, was found duly served with notice of impleadment application but she did not appear in the hearing fixed by the Tribunal and was proceeded ex -parte.
21. Vide proceeding dated 07.03.2023, counsel Mr. Akhil Hasija representing Claimant informed that deceased Shri V.K. Srivastava had left behind his earlier wedded wife Smt. Sangeeta Srivastava which fact was supported from the passport of Shri V.K. Srivastava, photocopy of the passport placed before the Tribunal. Counsel moved another application to bring Smt. Sangeeta Srivastava on record, who was residing in Indore, M.P. She was impleaded and served, and she appeared in the proceeding, represented by Advocate Mr. Vishal Bhatnagar. Counsel Mr. Bhatnagar filed defence statement on behalf of Smt. Sangeeta Srivastava and proceeded to further cross-examine Claimant on behalf of Smt. Sangeeta Srivastava. Another LR Mr. Rudra Srivastava, son of deceased Shri V.K. Srivastava, also appeared in this arbitration on several hearings. He got a few proceedings adjourned on a request that he was in a process of settlement talks and that his counsel Mr. Arun Malik would be representing him as well his four sisters also. He further got one adjournment stating that he was in the process of getting relinquishment deeds executed in his favour by his four sisters. It was being impressed on every hearing that mandate of the Tribunal was going to be over soon and thus adjournments should be avoided unless it was unavoidable and there was sufficient Bonafede. Finally, matter was fixed for 23.07.2023 to proceed with cross-examination of Claimant on behalf of LRs. Counsel Mr. Bhatnagar appeared on behalf of Smt. Sangeeta and cross- examined the Claimant. LR Mr. Rudra Srivastava appeared in person but again requested for adjournment by moving an application dated 13.7.2023 stating therein that process for relinquishment of rights by his four sisters in his favour was in progress and negotiations for sale of suit property were also in progress. In the given circumstances, with OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 17 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
reasons recorded in proceedings, cross-examination of Claimant was closed vide proceedings dated 23.07.2023 and the matter was fixed for examination of Respondent's evidence, however, with a rider that cross-examination of Claimant on behalf of other LRs would be re- opened only for a short duration of half an hour and subject to cost of Rs.20000/- to be paid by LRs other than Smt. Sangeeta Srivastava to the Claimant on the next hearing. Next hearing was fixed for 19.08.2023. Evidence by Affidavit of Smt. Sangeeta Srivastava came on record but request for adjournment was received from Rudra Srivastava through email and another email was received from Advocate Mr. Arun Malik. Adjournment request was declined. Issue raised by Advocate Mr. Malik was also dealt with and 4 daughters LRs of deceased Shri V.K. Srivastava were proceeded ex-parte. Examination and cross-examination of Smt. Sangeeta Srivastava concluded on that date and the matter was fixed for final hearing. ARGUMENTS OF CLAIMANT
22. Counsel Mr. Hasija argued that Collaboration Agreement executed between the parties is an undisputed fact by the Respondent. Defence contention that Mr. Rajesh Batra impersonated Neeraj Bhatia has not been established by any cogent evidence. Respondent accepts to have received Rs.25 lakhs by cheques from the Claimant but raised a dishonest plea that Rs.7 lakhs paid as cash as per demand raised by Respondent was by way of adjustment of amount outstanding in favour of Respondent No. 2 against Respondent No.1 in some other deal. Said plea stands defied by receipt Ex.CW1/7, executed by Respondent acknowledging the amount Rs.7 lakhs received in cash from the Claimant. Even otherwise, said contention of Respondent remained unsubstantiated by any acceptable evidence. It is argued that Respondent failed to discharge his 'compulsory obligation' of getting property converted to free-hold and thereby breached Collaboration Agreement.
23. Ld. Counsel argued that plea raised by Respondent No. 2 that Rs.9 lakhs paid to the Claimant as his contribution and with Rs.7 lakhs earlier paid to Respondent No. 1 by way of adjustment of the amount outstanding in favour of Respondent No. 2 and thus made Respondent's contribution 50:50, has already been held by Tribunal beyond the scope of arbitrability before this Tribunal vide order dated 20.09.2022.
24. Ld. Counsel argued that the plea of Respondent No. 1 that Collaboration Agreement was still surviving when conversion of property was still pending and that Agreement was compulsory and conditional and when no consequence of non-performance of compulsory requirement was provided in the contract, then claims were without cause of action, was liable to be dismissed in view of law held OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 18 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
by Hon'ble High Court of Delhi in Rajasthan Breweries Ltd. vs. Stroh Breweries Co. (2000) SCC Online Delhi 481 and re-affirmed in Royal Orchid vs. Kulbir Singh Kohli & Ors. 2022 SCC Online 2519, where it has been held that MOU being a private commercial transaction, same could be terminated even without any reason.
25. As regards prosecution of claims against LRs, after demise of Respondent Shri V.K. Srivastava, counsel relied upon Ravi Parkash Goel vs. Chandra Prakash Goel (2008) 13 SCC 1667 where it was held that arbitration Agreement would not be discharged by death o f any party thereto and would be enforceable against legal representatives of deceased. Arbitrator would continue to be vested with authority to adjudicate upon the matter. Same proposition was held in Dr. Papiya Mukherjee vs. Aruna Bannerjee (2022) SCC Online (Cal) 595.
26. Ld. Counsel argued that Respondent No. 1 having already entered into a Collaboration Agreement with A&B Promoters in august 2017 in respect of same property and by suppressing said fact entered into Collaboration Agreement with the Claimant was an act to cheat the Claimant, entitling Claimant to terminate Agreement, claim the refund of the amount paid under the Agreement with interest and damages suffered in the transaction. Counsel argued that amount paid to Respondent was arranged by Claimant by availing over-draft facility from bank which stood reflected from Ex.CW-1/R1 and thus interest claimed on the amount was liable to be granted.
27. Cost as prayed was also liable to be granted considering the conduct of the Respondent.
28. Written arguments with judgments in support of points argued were also placed before the tribunal.
ARGUMENTS OF RESPONDENT
29. Counsel Mr. Vishal Bhatnagar representing Smt. Sangeeta LR argued that arbitration clause stipulated a situation where arbitration was invocable i.e., the existence of dispute. Whether a dispute did exist when arbitration was invoked? Ld. Counsel referred to various clauses of Collaboration Agreement describing as to how the parties were to proceed, the builder was to pay a consideration amount and then take up reconstruction of the property and complete the same within a certain stipulated time. Likewise, the owner Mr. V.K. Srivastava was required to fulfil certain obligations, described as 'compulsory requirements', in the Agreement by a stipulated date but the Agreement did not provide for a consequence or repercussion of non- fulfilment of an obligation on the part of a party to the Agreement. Like, where the owner was required to get the property converted to free-hold and get its conveyance deed registered, but non-compliance of the same did not foresee any consequence, stipulated in the Agreement, dispute would not be said to have arisen when notice Ex.CW1/7 invoking arbitration OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 19 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
was issued by the builder. Counsel argued that if owner Mr.V.K. Srivastava was lacking / missing or ignoring performance of any part of his obligation, only remedy available with the builder was to seek specific performance by filing civil suit. In no situation, cause for invocation of arbitration clause arose.
30. Counsel argued that Collaboration Agreement specifically recorded the consideration amount to be paid by builder to the owner and out of that amount of Rs.1,35,00,000/-, builder paid Rs.25 lakhs by cheque to the owner which stood recorded in the Agreement. Beyond that amount of Rs.25 lakhs, any further claim towards refund of the amount being beyond the amount described in the Agreement, was out of the scope of arbitrability before this Tribunal. Claim for refund of Rs.7 lakhs could be prosecuted only in civil court.
31. Finally, Ld. Counsel raised a point that Collaboration Agreement was insufficiently stamped and the Agreement providing for title and interest in immovable property to be created as per share recorded in the Agreement between parties and consideration amount agreed in the transaction being Rs.1,35,00,000/-, document required compulsory registration in terms of section 17 of the Registration Act. In absence of proper stamp on the document, same was liable to be impounded and was inadmissible in evidence till appropriate stamp with penalty was got assessed and paid. Since the document was un- registered, it could not be looked into for evidence of the facts recorded in it. Ld. Counsel argued that claims set up before this Tribunal were liable to be dismissed.
32. Written submissions in soft copy were also received on 18.09.2023.
33. Ld. Counsel Mr. Hasija in rebuttal arguments had reemphasised submissions made in support of the claims. He argued that Rs.7 lakhs, paid in cash, was amount towards payment of consideration, paid on the request of the Respondent and Respondent executed a receipt for the same and thus it formed part of dispute with amount earlier paid by cheque. On the point of Collaboration Agreement insufficiently stamped, counsel had referred to Section 36 of the Stamp Act and relied upon Delhi High Court judgment in a case ARG Outlier Media Pvt. Ltd. v. HT Media Ltd. OMP (Comm) 161/2023 decided on 04.07.2023 to contend that instrument once admitted in evidence without objection, document was to be taken into consideration.
ANALYSIS AND FINDINGS
34. Respondent No. 1 admitted having executed Collaboration Agreement Ex. CW-1/8 with the Claimant on 9.2.2018 for re- construction / re-development of his residential house property B-58, Shivalik, New Delhi. Builder- Claimant paid Rs.32 lakhs (Rupees 25 OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 20 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
lakhs by cheque and Rs.7 lakhs in cash) towards part consideration to the Respondent. Total consideration, agreed between parties, was Rs.1,35,00,000/- and the same was recorded in the Agreement, besides entire cost and expenses for re-development of property to be constructed in accordance with the plan sanctioned by the authorities was to be incurred by the Claimant- builder. Re-constructed property was to comprise basement, stilt, ground floor, first floor, second floor and third floor with open terrace. Allocation of share in this property was recorded in the Agreement, whereby second and third floor with the terrace was to go to the share of the builder i.e., the Claimant. These facts are undisputed except that Respondent Shri V.K. Srivastava contended that one Mr. Rajesh Batra impersonated Neeraj Bhatia in the talks and during execution of the Collaboration Agreement. Plea however remained un - substantiated by any supporting material or by any evidence. Even otherwise to say as to how the Claimant was defrauded, has also not been proved. Another dispute on these facts, raised by Respondent No. 2 was that out of Rs.32 lakhs, Rs.7 lakhs paid in cash, was in fact his contribution in this Agreement as Respondent No. 1 owed that amount to the answering Respondent. This contention of Respondent No. 2 with further plea that he contributed Rs.9 lakhs in this Agreement by depositing amount in the bank account of the Claimant, were held to be beyond arbitral reference and thus beyond the scope of adjudication in this arbitration, was decided by Tribunal vide order dated 20.09.2022. As such, Respondent Shri V.K. Srivastava admitted having received Rs.32 lakhs from the Claimant builder, primarily his defence plea was that Claimant builder himself unilaterally withdrew from the Agreement and thus Respondent declined to refund the amount of Rs.32 lakhs, particularly when Respondent suffered a huge goodwill loss of property. Respondent emphasised that conversion of property to free hold was still pending with L&DO, GOI and in that process, he had no control if it was taking time. Issue on this point with onus on Respondent was No. 1.
35. Thus, onus was on the Respondent to establish that Collaboration Agreement was still surviving, being conditional / compulsory and that when conversion of property to free hold was still pending with authorities, Claimant backed out from the Agreement unilaterally, the claimant was at fault and in breach of the Agreement. Ld. Counsel for the Respondent argued that where no consequence of non-performance of obligation by parties was provided in the Agreement, no dispute could be said to have arisen. Whether contention was acceptable?
36. It is relevant to note that Agreement contained certain obligations to be discharged by parties and obligations of Respondent OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 21 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
owner, spelt out as 'compulsory requirements', were described in the Collaboration Agreement.
37. One such compulsory requirement to be discharged by Respondent owner Shri V.K. Srivastava was to get property converted into free-hold in his name and get the conveyance deed registered. This obligation with other obligations was agreed to be performed by a stipulated date i.e., 15.03.2018. Builder's obligation to complete the re- construction of property, was stipulated to be within 15 months from the date of receipt of the sanctioned plan from authorities or from the date vacant possession of property was given by the owner after its conversion to free-hold, whichever was later.
38. Chapter IV of the Indian Contract Act deals with 'Time and Place' for performance of the contract. Section 50 provides for performance in the manner or at time, prescribed or sanctioned by promisee. Provision reads that performance of any promise may be made in any manner or at any time which the promissee prescribes or sanctions. In Hanuman Prasad Gupta v. Hira lal, AIR 1971 SC206, Court held that promise must be performed at the place and the manner agreed by the parties. In Bishambar Nath Agarwal v. Kishan Chand, AIR 1990 All. 65, Court held that when a contract states that a particular act in furtherance of the contract is to be done in a particular manner, it should be done in that manner.
39. Reference may also be made to the provisions of Section 39 of the Indian Contract Act which provides that when a party to the contract had refused to perform or disabled himself from performing his promise in its entirety, the promisee may put an end to the contract unless by words or conduct, he signifies his acquiescence in its continuation. In AS Motors Pvt. Ltd. v. UOI (2013) SCC 114 it has been held that renunciation may occur when one party refuses to perform his obligation under the contract in some essential respect, either by expressly declaring so or by words or by conduct demonstrating an intention not to perform. In Universal Cargo Career Corporation v. Citati (1957) 2 All ER 70 the Court held that when conduct of the promisor is such as to lead a reasonable person to conclusion that he will not be able to perform by the time the performance arise, promisee may treat it as a renunciation of contract and sue for damages forthwith.
40. Deliberating on expression 'in its entirety' it has been observed that it is a kind of refusal which affects a vital part of contract and prevents the promisee from getting in substance, what he bargained for.
41. While examining provisions of section 55 of the Contract Act, which deals with effect of failure to perform at a fixed time in a OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 22 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
contract in which time is essential, Hon'ble Supreme Court in K.S. Vidyanadam v. Pairavan, AIR 1997 SC1751 held :
"it means that in exercising its discretion, the court should bear in mind that when the parties prescribe certain time limit for taking steps by one or the other party, it must have significance and said time limit cannot be ignored altogether on ground that it has not to be the essence of the contract"
42. Hon'ble Supreme Court in Hind Construction Contractors v. State of Maharashtra AIR 1979 SC 720, cited with approval a passage in Helsbury Law of England;
"Where time has not been made of essence of the contract or, by reason of waiver, the time fixed has ceased to be applicable, the employer may by notice fix a reasonabletime for completion of work and dismiss the contractor on failure to complete by the date so fixed"
43. In the present case, Respondent owner Mr. V.K. Srivastava agreed/promised to get property converted to free-hold within a specified period and then hand over its vacant possession to the builder for its re-construction, certainly the act of conversion of property was to be completed within the stipulated period i.e., by 15.03.2018 as agreed and recorded in the Agreement. Admittedly, Respondent failed to discharge the obligation. Claimant builder having paid a substantial amount of Rs.32 lakhs towards part consideration in the Agreement, was justified to call upon Respondent - owner to fulfil his obligation by sending a legal notice dated 22.5.2018. Admittedly, Respondent owner Mr. V.K. Srivastava even did not respond to legal notice and the Claimant builder felt compelled to seek remedy of specific performance of the Agreement by filing civil suit No. 883/2018, filed in District Court, Saket, Delhi. Respondent, without filing any defence, invoked arbitration clause by moving application under section 8 of the Arbitration & Conciliation Act. It was only in the present arbitration proceedings, while filing Statement of Defence, Respondent raised a plea of Collaboration Agreement still surviving and accused the Claimant builder of unilateral withdrawal from Agreement. This SOD was received by the Tribunal on 30.06.2022. Would the Respondent owner, a promisor having promised to carry out an obligation of getting property converted to free-hold and get the conveyance deed executed by 15.3.2018, be justified in saying that Agreement was compulsory / conditional or that was still surviving, and that Claimant builder withdrew from the same unilaterally? Certainly, in no uncertain words, the answer would be no. It has come on record that prior to entering into Collaboration Agreement with the Claimant builder, Respondent - owner had executed similar Collaboration Agreement in August 2017 with A&B Promoters and that amounted to breach of the terms of the present Agreement whereby the OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 23 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
owner - Respondent assured the builder - Claimant that property B- 58 Shivalik was free from any kind of encumbrances or disputes. Respondent - owner Mr. V.K. Srivastava was not entitled to seek an escape by saying that conversion of property was still pending or that he had no control over that process. He should have considered any such plea before binding himself to get it done within a stipulated time as agreed and recorded in the Collaboration Agreement.
44. Respondent himself admits that he had executed a Collaboration Agreement with A&B Promoters in August 2017 when during cross-examination of Claimant on 12.11.2022 a suggestion was given that the Claimant while executing Collaboration Agreement dated 9.2.2018, was aware and was in knowledge of earlier Collaboration Agreement with A&B Promoters. The Claimant strongly refuted and denied the suggestions. Beyond it, there is no evidence or material to suggest that Claimant was aware of earlier Collaboration Agreement at the time of execution of the present Collaboration Agreement. Claimant admitted that the Collaboration Agreement of the present case was brought to his office after it had been signed by Mr. V.K. Srivastava and the Agreement was bearing signature of witness Mr. Rajesh Batra and then only he signed the Agreement in his office and Mr. Srivastava was not present at that point of time. Even if Mr. V.K. Srivastava had already signed the Agreement by the time it was brought to Claimant and that he signed it in his office but by that time part consideration of Rs.25 lakhs by two cheques drawn by the Claimant in favour of Respondent had been received, it does not invalidate the Agreement, unless one party had a case that the terms of the Agreement were altered or changed from what were discussed and reduced in writing. It has also come in evidence during cross- examination of Claimant that the Collaboration Agreement was got drafted by Respondent Mr. V.K. Srivastava and the Claimant supported said fact that terms & conditions of the present case were identical with terms & conditions of Collaboration Agreement executed by Mr. V.K. Srivastava with A&B Promoters in August 2017 and copy of that Agreement was placed on record as Ex.CW-1/8. Suggestion was given to the Claimant in cross-examination that he signed Collaboration Agreement- at point C subsequently after 9.2.2018 with ulterior motive. Claimant refuted the suggestion. It is un - understandable what ulterior motive the Claimant had or achieved even if he put his signatures on Agreement subsequently. Respondent admits to have received a consideration amount of Rs.25 lakhs by cheques till the signing of the Agreement and he got them encashed. Another amount of Rs.7 lakhs was received by him in cash on 10.02.2018 i.e., the next day of execution of the Agreement, for which he executed a receipt in favour of the Claimant.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 24 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
45. Claimant asserts in cross-examination that only after 15-20 days of signing of the present Collaboration Agreement- he came to know about Mr. V.K. Srivastava having already executed Collaboration Agreement with Mr. Khurana, related to A&B Promoters. Suggestion was given to the Claimant during cross-examination, and he refuted the same, that Mr.V.K. Srivastava was supposed to pay Rs.20 lakhs to the concerned department for conversion of property to free-hold and Claimant promised to pay that amount but failed and thus non - discharge of said obligation was on account of default on the part of the Claimant. Except a suggestion, there is no material to support this contention of the Respondent.
46. Claimant was confronted with Collaboration Agreement Ex.C.1 to see that there was no clause regarding cancellation / discharge of the Agreement. Point when examined in terms of Chapter IV of the Indian Contract Act, certainly if Collaboration Agreement executed on 9.2.2018 when required promisor Respondent / owner Mr. Srivastava to get the property converted to free-hold by 15.3.2018 and then provided 15 months' time for the promisee builder to complete re- construction of the building, even in absence of such a clause in Agreement, aggrieved party was entitled to invoke provisions of the Contract Act. Even otherwise, Claimant - builder kept asking Mr.V.K. Srivastava to fulfil his obligation, earlier by sending legal notice dated 22.05.2018 and then by filing civil su it seeking specific performance of the Agreement. It was only in the present arbitration, after about 4 years that the Claimant asked for refund of the amount paid to the Respondent with interest and damages. There appears no reason or a ground to see anything in favour of the Respondent. Claimant was put to a suggestion during cross-examination that Mr. Rajesh Batra had put his signatures on the Agreement by misrepresenting himself as Neeraj Bhatia. Claimant denied the same. There is no substance in this contention as signatures of Claimant on the agreement and on Statement of Claim appeared same and similar on a bare look. Finally, a suggestion was put to the Claimant and he denied that he had malafide intention to entangle Respondent Mr. V.K. Srivastava by paying him a small amount and to grab his valuable property. This is rather for Respondent to ask himself why he signed the Agreement and accepted Rs.32 lakhs towards part consideration. Before putting the above defence suggestion, several questions were put regarding role of Mr. Ravdeep Suri, Respondent No. 2 in this Agreement. Claimant - builder took a plea since beginning that Ravdeep Suri was rather a friend of Respondent Mr. V.K. Srivastava and participated only in the talks in that capacity. Another suggestion to the Claimant in cross- examination was that consideration amount settled between parties in the Agreement was Rs.1,60,00,000/-, the Claimant refuted the same.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 25 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
No further clarity came on record from Respondent as to why he signed the Agreement which recorded consideration amount at Rs.1,35,00,000/-.
47. Claimant was then cross-examined by counsel Mr. Vishal Bhatnagar on behalf of Smt. Sangeeta Srivastava and witness stated that the fact that she was the legally wedded wife of Mr. V.K. Srivastava came to his knowledge from the passport of Mr. V.K. Srivastava. Photocopy of the passport was annexed with application seeking impleadment of Smt. Sangeeta Srivastava as L.R. He admitted that there was no privity of contract with Smt. Sangeeta Srivastava. Witness was put a question that his prayers as per Statement of Claim could not be correlated with any specific clause in the Collaboration Agreement and the witness admitted but explained that he had paid money in January / February 2018 and the Collaboration Agreement did not proceed towards execution on account of defaults on the part of Respondent No. 1, his claims were for refund of money and damages. Witness admitted that there was no clause in Agreement providing for damages but explained that his claim for damages was on time value of money and further explained, when asked, that had he invested Rs.32 lakhs in some other project / venture, earning @ 18% per annum would have accrued to him. Witness admitted there was no clause in the Agreement providing for payment of interest as claimed. Witness admitted there was no clause providing as to how the Agreement would stand terminated in case obligations described as 'compulsory requirements' remained unfulfilled. Said point has been dealt with by Tribunal when the matter needs to be examined in context of Chapter IV of the Indian Contract Act. Witness refuted that Mr. V.K. Srivastava had complied with all requirements. It is a matter of record that property was not converted to free-hold till filing of Statement of Claim or even till filing of SOD. Claimant denied if the reliefs prayed in this arbitration were beyond the scope of Collaboration Agreement or no dispute even arose for invoking arbitration. Claimant was also cross-examined by counsel Mr. Onkar Nath Pandey for and on behalf of Respondent No. 2. Witness stated that role of Respondent No. 2 was contemplated to be an active partner only during re-development of property but since the Agreement did not proceed further, stage for the said role did not come up. Witness further explained that Ravdeep Respondent No. 2 represented to the court, where the Claimant had filed civil suit for specific performance and gave a statement that since he had no role in the project, he be deleted from array of parties and on the next hearing he remained absent and was proceeded ex-parte. Claimant refuted suggestion that Ravdeep was equal partner with the Claimant in this Agreement and should be entitled to equal amount in the award if passed in Claimant's favour. Dispute raised by OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 26 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Respondent No. 2 has already been held to be beyond arbitral reference and not be adjudicated in this arbitration vide order dated 20.9.2022.
48. Smt. Sangeeta Srivastava tendered affidavit Ex. RW-1/A for her examination-in-chief and deposed that Agreement dated 9.2.2018 was a right in rem which the Claimant could have claimed from Respondent Mr. V.K. Srivastava alone and her share would not be sabo taged. Such a contention is contrary to law. She was impleaded in the capacity of LR, to represent the estate of deceased Respondent Shri V.K. Srivastava and certainly she is liable to satisfy decree / award, if passed, to the extent she inherits the estate. There is no point in contention if the claims sought to be prosecuted were right in rem or right in personam.
49. Another issue (d) with onus on Respondent was if the consideration amount in this Agreement was Rs.1,60,00,000/- wherein Rs.50 lakhs was agreed to be paid at the time of execution of the Agreement. Plea raised in SOD was only verbal, not supported by any material and rather was contrary to what was recorded in the Collaboration Agreement. Respondent admitted to have signed and executed the Agreement. Only material on record is a question put to the Claimant in cross-examination that consideration amount was agreed at Rs.1,60,00,000/- which is unacceptable when the parties agreed for consideration amount at Rs.1,35,00,000/- as the same was recorded in the Agreement. Respondent Mr. V.K. Srivastava failed to establish any of the issues (a) to (h), onus of proving the same was on Respondent. In view of the discussion recorded above, all these issues are decided against the Respond ent.
Issues with onus on the Claimant
50. In view of findings recorded above that when the Respondent failed and defaulted in discharge of his obligation to get property, subject matter of Agreement, to free-hold by 15.3.2018 as was stipulated in the Agreement and then hand over its vacant possession to the claimant for its re-construction, certainly, by virtue of provisions of Chapter IV of Indian Contract Act, promisor Mr. V.K. Srivastava was at fault and in breach of the terms of the Agreement. Claimant - builder was entitled to claim refund of Rs.32 lakhs, paid as part consideration in this Collaboration Agreement.
51. Ld. Counsel Mr. Bhatnagar raised the argument that Collaboration Agreement- being insufficiently stamped and being un- registered, same was liable to be impounded and liable to be left out from being considered as valid evidence till its deficient stamp with penalty under the provisions of Stamp Act was got assessed and paid and the document was got registered. Reliance was placed on N.N. Globel Mercantile p. Ltd. (2023)7 SCC Online 495 in support of OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 27 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
argument. Counsel for the Claimant Mr. Hasija countered-argued in rebuttal and already referred to Section 36 of the Stamp Act and had relied upon Delhi High Court judgment in ARG Outliar Media Pvt. Ltd. v. HT Media Ltd. OMP (Comm) 161/2023, decided on 4.7.2023.
52. Provisions of Section 36 of The Stamp Act have not been discussed in N.N. Globel case. Section 36 of the Stamp Act deals with admission of instruments that were not to be questioned. It provides that where an instrument has been admitted in evidence, such admission shall not, except as provided in Section 61, be called in question at any stage of the same suit or proceedings on the ground that instrument has not been duly stamped. In the judgment relied upon by Ld. Counsel Mr. Hasija Hon'ble Court while debating on the provisions of Section 36 of the Stamp Act, referred to Hon'ble Supreme Court judgment in a case Javer Chand & ors. Vs. Pukhraj Surana (1962) 2 SCR 333 wherein Hon'ble Supreme Court referring to Section 36 of the Indian Stamp Act, held that when a document has once been admitted in evidence, such admission cannot be called into question at any stage of the suit or the proceedings on the ground that the instrument had not been duly stamped. The only exception recognised by Section 36 is the class of cases contemplated by section
61. Section 36 does not admit of any other exceptions. Once the court, rightly or wrongly, decided to admit the document in evidence, so far as the parties are concerned, the matter is closed; it is not open either to the Trial Court itself or court of appeal or revision court to go behind the order admitting such instrument in evidence; such an order is not one of those judicial orders which are liable to be reviewed or revised by the same court or even by a court of superior jurisdiction.
53. Admittedly, the point was raised for the first time. Collaboration Agreement- has been admitted in evidence with no objection. Document when admitted and exhibited for evidence and no objection of any kind having been raised, admission of document now could not be questioned in view of above-referred law held by Hon'ble High Court. Even otherwise the facts were not in dispute that parties agreed for redevelopment of a property and the owner agreed to get property converted to free hold by a specified date of a month time or so but failed to discharge obligation even for next four years. Claimant- builder asked for refund of amount paid as part consideration. Only contention raised by respondent was that agreement was still surviving. Claimant-builder did not ask for enforcement of agreement but only for refund of amount on undisputed facts, admittedly received from claimant. Same way if the document remained un-registered, the same could be looked into for collateral purposes. In the present case, Respondent admitted having executed Collaboration Agreement and admitted having received Rs.32 lakhs from the Claimant towards part OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 28 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
consideration. When the facts asserted by the Claimant were not disputed and only defence pleaded and pressed by Respondent was that the Agreement was still surviving, which plea was liable to be dismissed as discussed and has been dismissed by the Tribunal, even if Agreement was unregistered, claims were liable to be decided on admitted facts.
54. Claimant has asked for an award of Rs.23,04,000/- towards interest @ 18% per annum on the amount of Rs.32 lakhs from 11.2.2018 till filing of Statement of Claim. Statement of Claim was filed on 26.3.2022 i.e. about 4 years after the execution of Agreement. Admittedly, the Collaboration Agreement- did not contain any clause providing for interest in case there was breach on the part of either party but then there is no clause prohibiting payment of interest on the amount if the Agreement failed on account of breach and default on the part of Respondent. Section 73 of the Indian Contract Act provides for damages / compensation when the contract is broken, against the party who has committed breach of the contract. Conversion of property to free-hold was to be carried out by the owner Mr. V.K. Srivastava by 15.03.2018 and then the Claimant - builder had 15 months' time to complete the re-construction of property. Thus, time would be deemed by the parties as the essence of the contract though no consequence of breach was recorded in the Agreement. Statement of Claim was filed in March 2022 and then SOD was filed and by that time about 4 years period had passed but status of property as regards its conversion to free hold remained the same. Claimant suffered loss and he deposed in the evidence that had he invested this amount of Rs.32 lakhs in some other venture, he would have earned profit @ 18% per annum. Though such a rate of interest @ 18% per annum remains in the realm of speculative mode, I consider with rising economy and keeping in view conduct of Respondent that he had entered into Collaboration Agreement earlier in 2017 with another builder, caring least that two Collaboration Agreements will invite legal troubles and in fact brought the builders into a legal battle, Claimant certainly lost all his investment entirely on account of breaches and defaults of Respondent and the loss deserved to be compensated adequately.
55. Claimant also asked for Rs.5 lakhs towards loss suffered on account of breach committed by Respondent. When the loss was going to be considered by allowing interest on the principal amount to be paid to the Claimant by the Respondent, there is no scope for allowing another loss, particularly in absence of any evidence in support.
56. Claimant has asked for interest @ 18% per annum, pre- reference, pendent lite and future on the sum claimed in this arbitration. Provisions of Section 37 of the Arbitration & Conciliation Act leave it to the discretion of the arbitral Tribunal to award interest OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 29 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
on the sum claimed in absence of any clause barring grant of interest in the contract. Provisions of Section 37 of the Act have been discussed in Jupitor Rubber Pvt. Ltd. v. UOI 2020 (6) RAJ 475.
57. In this case the Arbitrator declined interest on a reasoning that the arbitrator will have the power to award interest only when the contract between the parties so provided. This reasoning by the arbitrator was found contrary to the provisions of Section 31 (7) (a) of the Arbitration & Conciliation Act which stipulates that the arbitral Tribunal has power to grant interest on a claim for payment of money, at such rate as it deemed reasonable, for the whole or any part of the period between the date on which cause of action arose and the date on which the award was made, unless otherwise agreed by the parties. Hon'ble High Court of Delhi in the above referred judgment relied upon Supreme Court judgment in Jai Prakash Associates Ltd. v. Tehri Hydro Development Corporation India Ltd ., 2019 SCC Online Hon'ble Supreme Court 143 wherein Hon'ble Supreme Court held as under :
"13. Insofar as power of the arbitral Tribunal in granting pre- reference and / or pendente lite interest is concerned, the principles which can be deduced from the various judgments are as summed up below:
a. A constitution Bench judgment of this court in the case of Secretary, Irrigation Departmnt, Govt. of Odissa v. GC Roy exhaustively dealt with this issue, namely, power of the Arbitral Tribunal to grant pre-reference and pendent lite interest .......the Constitution Bench also considered the principal for grant of interest applying the common law principles. It held that under the general law, the arbitrator is empowered to award interest for the pre-reference, pendente lite and post award period."
58. Further elaborating law while referring to various judgments, Hon'ble Court observed and held :
"it is clear from the above that the court decided to fall back on general principle that a person who is deprived of the use of money to which he is legitimately entitled to, has a right to be compensated for the deprivation and, therefore, such compensation may be called interest compensation or damages."
59. During arguments, Ld. Counsel for the Claimant referred to bank statement of account of the Claimant from HDFC Bank and the document is exhibit CW-1/R1 whereby primarily the cheque for Rs.20 lakhs paid to the Respondent is shown cleared / paid to Respondent on 09.02.2018, but then counsel referred to this document on a point that it was an OD (Over Draft ) limit account being availed by the Claimant and thereby whatever amount Claimant paid to Respondent, was being burdened with interest by the bank on this OD account. In OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 30 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
the given circumstances and facts, where Respondent retained money of the Claimant for more than 4 years without any justifiable cause, this Tribunal considers to award interest on the amount of Rs. 32,00,000 claimed in this arbitration @ 15% per annum in Claimant's favour since the cause of action arose in Claimant's favour which was somewhere in May 2018 when legal notice was given to the Respondent requesting to proceed with the Collaboration Agreement by fulfilling obligations. As seen above, statement of claim was filed somewhere in about four years of that cause of action. Accordingly, interest for the pre-reference and pendente lite till making of award @ 15% per annum on the amount of Rs.32 lakhs is awarded for a period of 4 years. Future interest from the date of award till the payment of the award amount is also granted @ 15% per annum on the principal amount of Rs.32 lakhs.
60. Claimant has also asked for costs. Arbitrator's fee on the value of claims and counter claim was fixed in accordance with Schedule IV of the Act and was directed to be shared equally by both the parties subject to order on costs in the award. Claimant paid Rs.3,50,000/-. Respondent had paid Rs.1,50,000/- and since thereafter, the fee was not being paid by the Respondent, his counter claim was liable to be ignored and dismissed and the same was recorded in proceedings also. Even otherwise, the counterclaim remained un- substantiated and un-supported by any material. In such circumstances, Tribunal restricted its fee already paid by the parties. In the given facts, I find the fee paid by the Claimant i.e. Rs.3,50,000/- deserves to be awarded in Claimant's favour. Claimant must have spent on litigation, as claimed in this arbitration, in getting legal notice issued and in filing suit for specific performance and then filing arbitration petition before Hon'ble High Court, I consider that a sum of Rs.1,50,000/- as further cost deserves to be awarded in Claimant's favour.
Counter claim
61. Respondent Mr. V.K. Srivastava filed counter claim, claiming Rs.1 crore. Counter claim was based on pleading and contention as pleaded in the Statement of Defence. It was asserted that since Claimant builder backed out from the deal unilaterally with ulterior motive to grab the property, Respondent / counter Claimant suffered a loss of goodwill of the property as no other builder came forward to take up the re-development of the property and the counter Claimant assessed loss at Rs.1 crore. It was pleaded that builder assured to resolve the issue but he appeared to be dishonest and thus the builder was liable to pay Rs.1 crore as damages for the breach of the contract. A valuation report in support of counter claim, prepared by a Chartered OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 31 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
Engineer, B. Tech (Civil) 'Chetan Sharma & Associates' was filed and as per that report, date of valuation was chosen as on 07.06.2022.
62. This Tribunal has recorded findings that breach of Collaboration Agreement was by the counter Claimant and not by the builder Mr. Neeraj Bhatia. Counter claim remained un - prosecuted as no evidence in support of claim was examined. Valuation report remained un- proved. Counter Claimant failed to pay his part of fee calculated on the counter claim and thus Tribunal declined to adjudicate on the counter claim. Counter Claim was liable to be dismissed and the same is dismissed.
AWARD
63. An award for payment of Rs.32 lakhs with interest @ 15% per annum for a period of 4 years is passed in favour of Mr. Neeraj Bhatia, the Claimant, against the Respondent Mr. V.K. Srivastava through LRs till passing of award. From the date of award, interest @ 15 % per annum on the principal amount of Rs.32 lakhs shall also be paid till the date of the realisation of entire award amount.
64. Arbitration fee of Rs. 3,50,000/- (Three lacs fifty thousand) paid by respondent and further litigation fee Rs. 1,50,000/- (one lac fifty thousand) is also awarded in claimant's favour against respondent..."
14. Ld. Arbitrator in its analysis and findings observed that the the deceased Mr. V. K. Srivastava admitted to have executed the collaboration agreement (Ex.CW1/8) and the claimant has paid Rs. 32 lakhs towards part consideration to the deceased Mr. V. K. Srivastava. However, a plea is also raised that one Rajesh Batra impersonated Neeraj Bhatia in the talks during collaboration agreement but said plea is not substantiated. The respondent no. 2 (in arbitration proceedings) Sangeeta Srivastava w/o of the deceased Mr. V. K. Srivastava also contended that she contributed Rs. 9 lakhs in the bank account of the claimant but this plea was held to be beyond arbitral reference as decided vide order dated 20.09.2022 and the said order is not challenged. Another plea dealt by the Ld. Arbitrator that the deceased Mr. V. K. Srivastava admitted having received Rs. 32 lakhs from OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 32 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
claimant, however raised defense that the claimant himself unilaterally withdrew from the agreement and the deceased Mr. V. K. Srivastava declined the refund of amount because the conversion of property to free hold is still pending with L & DO. The Ld. Arbitrator observed that one compulsory requirement to be discharged by the deceased Mr. V. K. Srivastava to get the property converted into free hold by stipulated date i.e. 15.03.2018, therefore this defense not available to the deceased Mr. V. K. Srivastava.
15. There is contention was also raised on behalf of respondents in arbitration proceedings that if consideration amount of Rs. 1,60,00,000/- wherein Rs. 50 lakh was agreed to paid at the time of execution of agreement. This plea in SOD (statement of defense) is only verbal without any other material, therefore not acceptable. The Ld. Arbitrator found that the deceased Mr. V. K. Srivastava was at fault and in breach of terms of agreement, thus claimant was entitled to claim refund of Rs. 32 lakh paid as part consideration in the collaboration agreement.
16. The petitioner not contended the merits of the impugned award, however submitted that the petitioner is proceeded ex-parte without notice. But, this plea is not tenable because the petitioner Rudra Srivastava appeared in the present proceedings and sought adjournment through email dated 10.05.2023, 10.06.2023 and further failed to participate on 23.07.2023 and 19.08.2023. The mandate of the arbitral proceedings is bound to expire on 14.09.2023, therefore the sole arbitrator was constrained to proceed ex-parte vide order dated OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 33 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
19.08.2023. The petitioner cannot be allowed to take advantage of its own mistakes, and was rightly proceeded ex-parte. The arguments were heard on 09.09.2023 prior to the expiry date of the mandate i.e. 14.09.2023, therefore it cannot be held that mandate ceased to exists when the impugned award was passed.
17. Ld. counsel for petitioner submitted that the Ld. Arbitrator re- scheduled the final hearing from 09.09.2023 to 13.09.2023 cannot be appreciated as mandate is going to expire on 14.09.2023. The petitioner is found to be deliberately prolonging the proceedings before the Ld. Arbitrator, and it is apparent that the petitioner wants the mandate of the Arbitrator to expire without conclusion of arbitration proceedings. The plea raised regarding the non-communication of the date of proceedings to the petitioner by Ld. Arbitrator cannot be appreciated in present proceedings, particularly when the conduct of the petitioner himself is to delay the proceedings and the entire defense of raised before the Ld. Arbitrator is found to be meritless.
18. On overall appreciation of material on record, I do not found any illegality leave aside the patent illegality in the impugned award passed by Ld. Arbitrator. The present award is not against to the public policy. The Ld. Arbitrator passed the award after proper appreciation of material on record, and this court also cannot re-appreciate the case on merits. No ground made out to interfere in the impugned award.
19. Scope of interference under section 34 of Arbitration and Conciliation Act with Arbitrator's award is very limited. The Court would not be justified in reappraising the material on record and OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 34 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
substituting its own view in place of the view taken by 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 as held by Hon'ble Supreme Court in the case of Navodaya Mass Entertainments Ltd. v. J.M. Combines reported in (2015) 5 SCC 698.
20. Hon'ble Supreme Court in the case of 'Sutlej Construction Ltd. v. State (UT of Chandigarh) reported in (2018) 1 SCC 718' has held that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice. Paragraph nos. 10 to 13 of the said judgment are extracted below:-
"10. We are not in agreement with the approach adopted by the learned Single Judge. The dispute in question had resulted in a reasoned award. It is not as if the arbitrator has not appreciated the evidence. The arbitrator has taken a plausible view and, an in our view, as per us the correct view, that the very nature of job to be performed would imply that there has to be an area for unloading and that too in the vicinity of 5 km as that is all that the appellant was to be paid for. The route was also determined. In such a situation to say that the respondent owed no obligation to make available the site cannot be accepted by any stretch of imagination. The unpreparedness of the respondent is also apparent from the fact that even post-termination it took couple of years for the work to be carried out, which was meant to be completed within 45 days. The ability of the appellant to comply with its obligations was interdependent on the respondent meeting its obligations in time to facilitate appropriate areas for unloading of the earth and for its compacting. At least it is certainly a plausible view.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 35 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
11. It has been opined by this Court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice".
12. The approach adopted by the learned Additional District Judge, Chandigarh was, thus, correct in not getting into the act of re-appreciating the evidence as the first appellate court from a trial court decree. An arbitrator is a chosen Judge by the parties and it is on limited parameters can the award be interfered with. 13. The learned Single Judge ought to have restrained himself from getting into the meanderings of evidence appreciation and acting like a second appellate court. In fact, even in second appeals, only questions of law are to be determined while the first appellate court is the final court on facts. In the present case, the learned Single Judge has, thus, acted in the first appeal against objections dismissed as if it was the first appellate court against a decree passed by the trial court."
21. The scope of interference with an arbitral award under Section 34 of the Act has been considered and discussed by Hon'ble Supreme Court in a judgment rendered in the case of 'MMTC Ltd. v. Vedanta Ltd. reported in (2019) 4 SCC 163' . Paragraph nos. 11 to 14 of the said judgment are extracted below:
"11. As far as Section 34 is concerned, the position is well- settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 36 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
judicial approach, compliance with the principles of natural justice, and Wednesbury reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts.
13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, sub-section (2-A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.
14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 37 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
22. In the case of 'Maharashtra State Electricity Distribution Company Ltd. v. Datar C.C.L. Ltd. reported in (2018) 3 SCC 133' it has been held by Hon'ble Supreme Court that "the proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto."
23. Hon'ble High Court of Delhi in case title 'National Building Construction Corporation Vs. M/s Sharma Enterprises, OMP (Comm) 215/2022 dated 19.11.2025' after relying the judgment of Hon'ble Apex Court in 'Consolidated Construction Consortium Limited v. Software Technology Parks of India, 2025 SCC OnLine SC 956 ' crystallize the scope of Section 34 of Arbitration and Conciliation Act as under :
"...........
46. Scope of Section 34 of the 1996 Act is now well crystallized by a plethora of judgments of this Court. Section 34 is not in the nature of an appellate provision. It provides for setting aside an arbitral award that too only on very limited grounds i.e. as those contained in subsections (2) and (2A) of Section 34. It is the only remedy for setting aside an arbitral award. An arbitral award is not liable to be interfered with only on the ground that the award is illegal or is erroneous in law which would require re-appraisal of the evidence adduced before the arbitral tribunal. If two views are possible, there is no scope for the court to re-
appraise the evidence and to take the view other than the one taken by the Arbitrator. The view taken by the arbitral tribunal is ordinarily to be accepted and allowed to prevail. Thus, the scope of interference in arbitral matters is only confined to the extent envisaged under Section 34 of the Act. The court exercising powers under Section 34 has OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 38 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
perforce to limit its jurisdiction within the four corners of Section 34. It cannot travel beyond Section 34. Thus, proceedings under Section 34 are summary in nature and not like a full-fledged civil suit or a civil appeal. The award as such cannot be touched unless it is contrary to the substantive provisions of law or Section 34 of the 1996 Act or the terms of the agreement.
47. Therefore, the role of the court under Section 34 of the 1996 Act is clearly demarcated. It is a restrictive jurisdiction and has to be invoked in a conservative manner. The reason is that arbitral autonomy must be respected and judicial interference should remain minimal otherwise it will defeat the very object of the 1996 Act........"
24. Ld. Arbitrator has passed the award upon consideration of material placed before him. There is nothing on record that the relevant material is not placed before the Ld. Arbitrator. There is nothing perverse or patent illegality in the findings of the Ld. Arbitrator.
25. The Ld. Sole Arbitrator has drawn inferences and conclusions after the factual appreciation in the light of the legal principles. The views of the Ld. Sole Arbitrator can not be found fault with only for the reason that some other views can emerge by appreciating the same set of facts and evidence, until and unless it is shown that such a view is totally obnoxious and unsupported by the sound legal principles.
26. This Court cannot substitute its own views or the views of the parties with the view taken by the Ld. Arbitral Tribunal, if the view taken by the Ld. Arbitrator is not in conflict with the settled legal position. There is nothing to suggest that the findings and conclusions rendered by the Ld. Arbitrator are per-se perverse, illegal or non- sustainable or against public policy.
OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 39 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.
27. Accordingly, the present petition under Section 34 of the Arbitration and Conciliation Act as pressed into service by the petitioner is therefore not sustainable within the scope and ambit of the provision, therefore, liable to be dismissed and accordingly dismissed and disposed of.
28. File be consigned to record room after necessary compliance. Digitally signed by Announced in open court AJAY AJAY KUMAR on 25th February 2026 KUMAR JAIN (Ajay Kumar Jain) JAIN Date:
2026.02.25 District Judge, Comm-04 (Digital) 16:25:18 +0530 South District, Saket Courts, Delhi OMP (COMM) 04/24, Dt. 25.02.2026 Page nos. 40 of 40 Rudra Sirvastava Vs. Neeraj Bhatia & Ors.