Delhi District Court
Simentech India Pvt Ltd vs Bharat Heavy Electricals Ltd on 10 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) 02/2024
M/S SIMENTECH INDIA PRIVATE LIMITED
Regd. Office:
B21/109E, Vinayaka Kamachha,
Varanasi, Uttar Pradesh- 221010
.....Petitioner (respondent in arbitration proceedings)
VERSUS
BHARAT HEAVY ELECTRICALS LIMITED
Regd. Office:
BHEL House, Siri Fort, New Delhi- 110049
Also at :
Power Sector Northern Region
Plot No. 25, Sector-16A, Distt. Gautam Budh Nagar,
Noida - 201301, U.P
.....Respondent (claimant in arbitration proceedings)
Date of filing/initiation of petition : 20.01.2024
Date when final arguments heard : 27.01.2026
Date of Judgment : 10.02.2026
JUDGMENT
1. Vide this judgment, I shall decide the petition under section 34 of Arbitration and Conciliation Act seeking aside the impugned award dated 18.05.2022 and the rectified award dated 30.05.2022 passed by Ld. Sole Arbitrator, filed by the petitioner.
Digitally OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 1 of 23 signed by M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited AJAY AJAY KUMAR KUMAR JAIN JAIN Date:
2026.02.10 16:19:31 +0530
2. Brief background facts are that respondent/claimant is a govt. company had floated a tender for civil works through NIT dated 14.08.2018. The petitioner emerged as the successful tenderer through reverse auction process. Accordingly, LOA dated 08.10.2018 was issued with contract value of Rs. 3,49,215.7/-. As per LOA, the successful tenderer was to deposit Rs. 17,45,908/- (as security deposit) in the manner outlined under clause No. 1.10 of GCC before start of work. The petitioner failed to make the security deposit, though had deposited EMD of Rs. 7,60,000/-. The petitioner through its letters/emails dated 17.11.2018 and 29.11.2018 expressed its inability to submit the security deposit. The petitioner vide its email dated 06.12.2018 sought extension of time till 05.04.2019 for submission of the security deposit and start the work immediately after that. The claimant/respondent issued risk and cost notice dated 28.12.2018, however petitioner reiterated its stands taken in email dated 06.12.2018, through its letter dated 04.01.2019.
3. The claimant/respondent terminated the contract through its termination letter dated 08.01.2019 and on the same day, the claimant/respondent awarded the work to M/s Rad Tech Buildcon Pvt. Ltd. through LOA dated 08.01.2019 for contract value of Rs. 4,35,00,000/-. On 19.01.2019, the claimant/respondent lodged a claim for Rs. 1,07,56,843 through letter dated 19.01.2019. On 04.10.2019 claimant issued notice invoking arbitration which was responded by petitioner on 14.10.2019. Vide order dated 12.05.2021, Hon'ble High OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 2 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited Court of Delhi after recording the statement of MD of petitioner appointed Sole Arbitrator.
4. Claimant/respondent filed its statement of claim dated 22.06.2021, thereafter petitioner filed statement of defense and its counter-claim. On completion of pleadings, issues were framed on 08.11.2021. Both the parties filed affidavit of evidence, however it was decided that they would not cross-examine and re-examine the witnesses and would proceeds on affidavits.
5. After hearing the arguments, the impugned award dated 18.05.2022 was passed, however due to clerical error, the original award rectified on 30.05.2022 and rectified award was passed. Submissions of counsels
6. Ld. counsel for petitioner submitted that LOA/LOI cannot be construed as a contract because the acceptance of LOA is based on the pre-condition of payment of Security Deposit (relied upon 'South Eastern Coal Fields Vs. S Kumar's Associations AKM (JV) (2021) 9 SCC 166'). It is further submitted that acceptance of contract may be unconditional but LOA/LOI is not a contract but an intent to execute a contract. The execution of contract/commencement of work is conditional upon payment of SD as per LOA/LOI dated 08.10.2018 r/w Clause 1.10.2 of GCC. Furthermore, as per Clause 1.14 of GCC, the tenderer shall submit an unqualified acceptance to LOI/LOA within stipulated period and shall be required to execute an agreement in the prescribed form within reasonable time after the acceptance of LOA/LOI. This implies that acceptance of LOI/LOA will be OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 3 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited unqualified only after payment of security deposit being pre-condition. The contract could be executed only after acceptance of LOA/LOI after payment of SD. Ld. Counsel for petitioner submitted that if the tenderer fails to deposit SD, then cancellation to execute any contract is not termination as there cannot be any termination of a non-existent contract. The earnest money will be forfeited if the contractor fails to deposit the required security deposit. There is no termination contract as per Clause 2.7 of GCC. No notice of 14 days but only 8 days given, there is no ground of termination under 2.7.2.1 as mentioned in the notice. Rick and cost calculation amount flawed. It is further submitted that Ld. Sole Arbitrator erroneously used LOA and contract synonymously. The parties never executed the contract agreement as per Clause 1.4 of GCC. Simentech even not started work as payment of security deposit was a condition before start of work. Ld. Sole Arbitrator failed to interpret the moot question i.e. whether LOA is a concluded contract or not in the present case. (relied upon 'Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes Ltd. , (2003) 5 SCC 705, 'Base Enterprises Vs. Heavy Engg. Corporation Ltd. & Ors., 2020 SCC OnLine Jhar 1749' and 'PAM Developments Vs. State of West Bengal, 2024 SCC OnLine SC 2247'). Ld. counsel for petitioner submitted that Ld. Arbitrator erroneously held that petitioner was in breach of the letter of award dated 08.10.2019 (LOA) and impugned award/rectified award is liable to be set aside.
7. Ld. counsel for claimant/respondent submitted that respondent issued notice inviting tender dated 14.08.2018 for works, and petitioner OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 4 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited filed its bid by way of letter dated 28.08.2018 and offered to carry out work detailed in NIT. The respondent accepted the offer made by petitioner and issued LOA dated 08.10.2018 which was signed and accepted by the petitioner alongwith BOQ. The petitioner, is bound by the terms of GCC, is also clear from various documents, therefore it is clear and admitted case of parties that both the parties are bound by the terms of GCC, and that any mandatory, mechanical and formal execution of contract under Clause 1.14 did not prevent the parties from being bound by GCC.
8. Ld. counsel for respondent/claimant further submitted that counsel for petitioner heavily relied upon the judgment of Hon'ble Supreme Court in case'South Eastern Coalfields (Supra)' , however the Hon'ble Court did not hold that all LOAs are non-contracts but had passed the order in facts of the said case where the provisions of NIT clearly provided that the contract will be formed subject to deposit of performance security, which is not the case in the present case where Clause 1.14 states that responsibility starts with issuance of LOA. The facts of that case are very different as in the facts of that judgment, the GCC was not part of NIT. Clause 34 of NIT of South Eastern Coal Fields (supra) asks for integrity pact while in this case same is not applicable. Ld. Counsel for respondent/claimant submitted that as per clause 1.14 of GCC, the responsibility starts from issuance of LOA and tenderer shall accept the LOA, and then parties shall execute a contract before raising first running bill, therefore, the security deposit is not a condition precedent to entering into a binding contract. Ld. Counsel for OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 5 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited respondent submitted that respondent/claimant did not breach LOA and petitioner itself never utilized the benefit of Clause 1.10.3 as it never paid the balance amount of Rs. 1,12,954/- or even made any communication regarding the same.
9. Ld. counsel for respondent further submitted that respondent rightfully terminated the contract in view of provisions of GCC and petitioner is also liable to pay the risk and costs to the respondent. The impugned award is not in conflict with the public policy and is not vitiated by patent illegality. There is no infirmity in the impugned award, hence the present petition is liable to be dismissed.
10. Both the parties are also filed written submissions.
11. Arguments heard. Record perused.
12. Before adverting to the contentions of the parties, the relevant paragraphs of the impugned rectified award dated 30.05.2022 passed by Ld. Sole Arbitrator are reproduced as under :
"......
The Claimant filed its statement of claim dated 22.06.2021 along-with annexures on 23.06.2021.
The Respondent filed its statement of defence and its counter claim, both dated 05.10.2021 along-with annexures and affidavit of admission and denial on 07.10.2021. The Claimant also filed its rejoinder to the Statement of Defence and its own Statement of Defence to the Counter Claim of Respondent on 25.10.2021. The Respondent filed its rejoinder dated 29.10.2021 to the Statement of Defence of the Claimant on 01.11.2021. The Pleadings were, thus, completed on 01.11.2021. The Claimant filed its affidavit of admission and denial on 06.11.2021. The follow issues were framed on 08.11.2021:-
1. Whether the Respondent is in breach of the letter of Award dated 08.10.2018 OPC
2. Whether the Respondent is bound by the terms of the General Terms and Conditions, which are part of the Tender Document bearing No. BHEL/NR/SCT/GAIL VIJAVPUR/MAIN CIVIl & EW/1120 dated 14.10.2018. OPC OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 6 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited
3. Whether the Claimant is entitled to Risk & cost amount of Rs,58,07, 799? OPC
4. Whether any of the parties is ~ntitfed to payment of interest, if so at what rate and for which period? Onus of proof on respective parties.
5. Whether any of the parties is entitled to the cost of litigation?
Onus of proof on respective parties.
6. Whether the Respondent is entitled to recover Earnest Money amounting to Rs.7,60,000? OPR
7. Whether the Respondent is entitled to recover the salaries to the tune of Rs.1,40,000 ana Rs.60,000 towards Director's visit for meeting with BHEL Vijaypur, MP? OPR
8. Whether the Respondent is entitled to recover an amount of Rs.34,91,816 towards loss due to termination of job? And, OPR
9. Whether the Respondent is entitled to recover an amount of Rs.8,01,326.88? OPR The Claimant filed and tendered its Affidavit by way of evidence, dated 20.12.2021. It had been decided by the parties, at the initial stage (i.e. on 08.11.2021) that that they would not cross examine and re-examine the witnesses and would proceed with Affidavits by way of evidence of witnesses.
The arguments were commenced by the Claimant on 02.02.2022 and concluded on 01.03.2022. On 01.03.2022, the Respondent tendered Affidavits by way of evidence dated 18.12.2021. At this stage, the Respondent also wanted to file supplementary affidavit to introduce some more documents (in support of his counter claim). He was allowed to make a formal application for the same.
The Respondent filed an application u/s 151 CPC seeking permission to file the additional documents through supplementary affidavit. Both, the parties argued on 08.03.2022. The Respondent failed to satisfy the sole arbitrator on the justification for filing the additional documents at this belated stage. The Claimant relied upon Punjab & Haryana High Court judgement in case of Mohit others vs Rishpal in C.R. No.4297 of 5102 2017(0&M), rendered on 01.02.2019,also. The application was, accordingly, rejected.
The Respondent advanced its arguments through its Counsel on the Claim of the Claimant as well as on its own Counter Claim. The Claimant also advanced some arguments in rejoinder. The award was reserved on 08.03.2022.
findings, Issue wise
1. Whether the Respondent is in breach of the letter Award dated 08.10.2018 The Claimant argued that the Respondent failed to submit Security Deposit and to commence the work thereafter. He relied upon emails of Respondent dated 17th Nov.,2018 and 06.12.2018 being Annexures C-9 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 7 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited and C-12 respectively. In rebuttal, the Respondent tried to argue that it wanted that the Security Deposit be collected by the Claimant from the Respondent through deduction from its bills. He placed- the reliance on Cl.1.10 (Page 170 of the Claim Statement), but the Claimant did not agree. However, it was found that the pre-condition of applicability of Clause 1.10.3{vi) was payment of 50% of the SD (including EMD) in the prescribed forms like cash, local cheque, Securities from Indian Post.Office, B.G.s and FDRs. The Estimated amount of contract being Rs.3,49,18,157, the 5% of the same being SD comes out to be Rs.17,45,907 and the SD% of the same would be Rs.8,72,954. The Respondent had already paid Rs. 7,60,000 towards EMD. The differential amount comes to Rs. 1,12,954 which the Respondent failed to pay. The second argument of the Respondent that it had started the work even without payment of Security Deposit (as is borne out from mail dated 17.11.2018 from the claimant (annexure C-8) also does not stand, as apparently it is incorrect interpretation. Moreover, the Claimant in subsequent letters dated 26.11.2018 (Annexure C-10), and the Claimant dated 06.12.2018 (Annexure C-12 & C-13 respectively) required the Respondent to make Security Deposit and start the work immediately thereafter and the Respondent never disputed this. letter of the Respondent dated 29.11.2018 {annexure C-11), also confirms that the work had not been started till then. The Respondent is, thus, clearly in breach of the terms of the Contract. The issue is, thus, decided in favour of the Claimant and against the Respondent.
2. Whether the Respondent is bound by the terms of the General Terms and Conditions, which are part of the Tender Document bearing No. BHEL/NR/SCT/GAllVIJAYPUR/MAIN CIVIl & EW/1l20 dated 14.10.2018.
The Claimant in its arguments on the issue, referred to LOA dated 08.10.2018 (at pages 199-214 Of The Statement of Claim). At page 199, it refers to the Tender no.BHEL/NR/SCT/GAIL VIJAYPUR/MAIN CIVIL & EW/1120, Bid of the Respondent bearing No. STIPL/BHEL/18-19/06 dated 28.08.2018(Technical & Price bid), Reverse Auction conducted on 01/10/2018 and the Price Bid {submitted in 7104 EPS) by the respondent on 03.10.2018 and it is dearly mentioned:
"With reference to the above documents and correspondence, we are pleased to issue LOA for subject work as detailed in tender specifications and above documents on rates_, terms and conditions summarised below. All other terms and conditions shall be governed by the documents above......All the above referred documents shall constitute integral part of the Contract."
The conditions specifically mentioned in the LOA are Rates and Contract Value, Security Deposit, and Commencement & Completion of work. All OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 8 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited other conditions mentioned in the Tender Documents and the documents (themselves) constitute integral part of the Contract. Moreover, the Respondent has in its letters dated 28.08.2018 (at page184 and189 of the Statement of Claim) has given its acceptance to the terms and Conditions of the Tender in unequivocal terms. During the arguments also, the Respondent ..has conceded that GCC forms part of lOA. So, this issue is also decided in favour of the Claimant and against the Respondent.
3. Whether the Claimant is entitled to Risk & cost amount of Rs,58,07,799?
The Claimant has relied upon Clause 2.7 (page 174 of the Claim Statement) of GCC for termination of the contract and award of the contract to M/s Rad Tech Buildcon Pvt. Ltd. The Claimant has stated in para 23 of its Statement of Claim that a notice for termination of the contract and getting executed at the risk & cost of the Respondent (Annexure C-13) was issued by the Claimant to the Respondent on 28.12.2018. In response, the Respondent vide its letter dated 04.01.2019(Annexure C-14), reiterated its request for allowing it to make security deposit by sth April,2019 and commence the work immediately thereafter and complete the same within 6 months from the start of the work and alternatively sought cancellation of the Contract under Clause 2.5.2 of the GCC. The respondent in para 3 of Statement of Defence has simply stated that the said notice was wrongly issued and challenged the right of the Claimant to issue such a notice on the reason that neither TCC nor GCC was signed by the Respondent. This stand of the Respondent is not acceptable in view of the above finding given in respect of issue no.2. The Claimant, thereafter, proceeded to terminate the Contract vide its letter dated 08.01.2019(Annexure C-15) and award the contract at risk and cost of the Respondent to M/s Rad Tech Buildcon Pvt. ltd. vide LOA dated 08.01.2019 (AnAexure C-16). Through its response, dated 09.01.2019 (Annexure C17), the Respondent reiterated its stand taken in its letter dated 04.01.2019(Annexure C-14). The Claimant lodged its Risk & Cost Claim for Rs.1,07,56,843 upon the Respondent through its letter dated 19.01.2019(Annexure C-19). After the confirmation of appointment of the Arbitrator by the Hon'ble High Court, the Claimant filed a Claim Statement with a claim for Rs.58,07,799.82 (risk & cost amount) +interest @18%on the same from the due date till the realization along-with applicable GST and costs litigation.
Risk & Cost calculation was made as per Clause 2.7.2.1 of GCC as follows:-
Risk & Cost amount=[(A-B) +Ax H/100)] Where:
A=Value of Balance Scope of Work (*) as per rates of new Contract i.e.LOA-2 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 9 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited B= A=Value of Balance Scope of Work(*) as per rates of new Contract i.e. LOA-I, being paid to the Contractor at the time of termination of the Contract i.e. inclusive of PVC & ORC, if any.
H=Overhead Factor to be taken as 5 In case (A-B) is less than O(zero), value of (A-B) shall be taken as O(zero) *Balance Scope of work in case of termination of Contract. In the present case, since the work done till termination of the Contract was zero(O), so, the total work awarded through LOA dated08.10.2018 remained as balance.
The Calculation is as under:-
[(2,34,85,106.89-1,88,51,562.41) +{2,34,85,106.89x5/100)] [46,33,544.48+ 11,74,255.34] =58,07,799.82107 Where Value of work as per LOA-2, carried out by Radtech=2,34,85,106.89 Value of work as per rates of items in lOA-1, on the quantities actually used in the Contract execution =1,88,51,562.41 Both the above figures were verified from the Chart [(Annexure C-26), the corrected copy of which was filed by the Claimant during the arbitration (before 15.02.2022) The Claim of the Claimant is supported by copy of measurement book showing the· actual quantities of items/work executed by the Claimant through its risk & cost Contractor M/s Radtech (Annexure C-24), proof of payments to M/s Radtech (AnnexureC-25) and Affidavit by way of evidence of the witness of the Claimant, namely Sh. G.V. Rajashekhar, which are uncontroverted. The Claimant has relied upon the judgement of Orissa High Court in case of Sainik Mining & Allied Services Ltd.
Mahanadi Coal Fields Ltd. (2010 SCC Online Ori.39) also. The Claim of the Claimant to the tune of Rs.58,07,799.82 is, thus, allowed. This issue is also decided in favour of the Claimant and against the Respondent.
4. Whether any of the parties is entitled to payment of interest, if so at what rate for which period? The party which has been prejudiced (put to loss) due to breach by the defaulting party and no fault on his own account, needs to be compensated by the defaulting party. In the present case, the Claimant is entitled to payment of interest on the amount which the defaulting party, i.e. the Respondent is required to pay. The Contract between the parties does not bar the award of interest, at the same time, the contract is also silent on the rate of interest on delayed payments. The interest claimed is at the rate of 18% per annum. The Claimant relied upon the judgement of Hon'ble Supreme Court of India in case of Bhagwati Oxygen ltd. Vs Hindustan Copper ltd.[(2005}6SCC462], wherein the interest was allowed at rate of 18% per annum, on the OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 10 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited ground that the loan was advanced by HCl (the Respondent in that case) to BOl (the Claimant in that case.) The facts of the said case are different from the present arbitration, so the interest cannot be allowed@18% per annum. The Claimant then relied upon the judgement dated 30.07.2021 passed by Delhi High Court in case of Union of India vs. Saraogi Builders ltd., wherein interest was allowed at the rate of 14% per annum for the period for which payment was delayed. The Hon'ble High Court found the rate of interest not grossly unreasonable. The Claimant also showed a document purported to be of HDFC Bank, downloaded from the internet. The document showed the range of interest rates starting from 11.90% and upto 21.35%. The document is dated.03.02.2022. Considering that the rates of bank interest were lower during 2020 and 20211 the rate of interest for the pendente light period is allowed at 10% and the future interest would @18% per annum from the date of award. No pre-claim interest is allowed, in the circumstances of the case. This issue is also decided in favour of the Claimant and against the Respondent.
5. Whether any of the parties is entitled to the cost of litigation? In terms of Section 31-A(2}(a), generally, the unsuccessful party in the arbitration has to pay the costs to the successful party. There is no reason, for the arbitrator to deviate in this case from the general rule. Accordingly, the Respondent shall bear the costs in this case. The costs are determined as follows:
1. Costs incurred by the Claimant for engaging the counsel: Rs.1,70,000
2. Arbitral fee paid by the Claimant : Rs.2,31,621 Total : Rs. 4,01,621 The Respondent is liable to pay Rs.4,01,621 by way of costs to the Claimant. This issue is also decided in favour of the Claimant and against the Respondent.
6. Whether the Respondent is entitled to recover Earnest Money amounting to Rs. 7,60,000 The Claimant had through its Notice Invoking Arbitration, dated 04.102019(Annexure C-20) intimated that it had forfeited the EMD of Rs. 7,60,000, -which was not challenged by the Respondent. The Respondent did not dispute the position, in its response through letter dated 14.10.2019(Annexure C-21). legally, the Claimant (BHEL) has a right under Clause 2.5.2 to cancel the contract, if the contractor fails to start the work within stipulated time as per lOI/lOA or as intimated by BHEL{the Claimant in this case). The EMD and/or SO with BHEL (the Claimant in this case) will stand forfeited without any further reference to him (in that case).
The Respondent, by not depositing the Security Deposit and starting the work, thereafter, has rendered the contract to be terminated/cancelled. The scheduled date of start is mentioned as date after 1 week of issue of OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 11 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited lOA in Clause 6.2 of Technical Conditions of Contract (TCC). Actual date of start of Contract Period is date of handing over of site to the Contractor. Therefore, it is dear that the Scheduled date of start was 15.10.2018 and the Respondent was under legal obligation to make security deposit before 15.10.2018, in terms of lOA read with Clause 1.10.2 of GCC. However, there was breach by the Respondent in this regard, as he could not make this security deposit even till date of termination i.e. by 08.01.2019, thus, rendering EMD liable to forfeiture. The Claimant has relied upon the judgement of Orissa High Court in case of Sainik Mining &ey Allied Services Vs Mahanadi Coal Fields ltd. (Supra). Moreover, the Respondent has failed to make out any case for recovery of EMD, as the burden of proof was upon him, which was not discharged by him. Accordingly, it is found that the Claimant was within its legal right to forfeit the EMD. This issue is also decided in favour of the Claimant and against the Respondent.
7. Whether the Respondent is entitled to recover the salaries to the tune of Rs. 1,40,000 and Rs. 60,000 towards Director's visit for meeting with BHEL Vijaypur, MP?
As stated above, the Respondent had breached the conditions of lOA and the Contract. There was no breach of terms and conditions by the Claimant. As such, there is no basis of the counterclaims of the Respondent to the tune of Rs.1,40,000 and Rs.60,000. The Respondent failed to bring evidences like bank statements etc. within the time given. So much so, that there. was huge delay in filing of Statements of Defence and Counter-Claim. The Respondent chose not to file the said evidences even along-with Statement of Defence and Counter-Claim and the Counter Claim of the Respondent for the amounts of Rs.1,40,000 and Rs.60,000 as rejected as non-maintainable. This issue is also decided in favour of the Claimant and against the Respondent
8. Whether the Respondent is entitled to recover an amount of Rs.34,91,816 towards loss due termination of job? At the risk of repetition, it is stated that there was no breach of terms and conditions by the Claimant. As such, there is no basis of the counterclaims of the Respondent to the tune of Rs.34,91,816. The Respondent also failed to bring evidences to support the counterclaim. So much so, that there was huge delay in filing of Statements of Defence and Counter-Claim. The Respondent chose not to file the said evidences even along-with Statement of Defence and Counter-Claim and the Counter Claim of the Respondent for the amount of Rs. Rs.34/91,816 is rejected as non-maintainable.
9. Whether the Respondent is entitled to recover an amount of Rs . 8,01,326.88 At the risk of repetition, it is stated that there was no breach of terms and conditions by the Claimant. As such, there is no basis of the OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 12 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited counterclaims of the Respondent to the tune of Rs.8,01,326.88. The Respondent had also failed to bring any evidence within the time given, after having chosen not to file the said evidences even along-with Statement of Defence and Counter-Claim and the Counter Claim of the Respondent for the amount of Rs.8,01,326.88 is rejected as non- maintainable. This issue is also decided in favour of the Claimant and against the Respondent.
In the result, all the issues are decided in favour of the Claimant and against the Respondent.
Conclusion It is decided that the Claimant is entitled to the following:
1. Risk & Cost Claim: Rs.58,07,799.82
2. Interest pendente lite@1O% (for the period from 04.10.2019 [the date of arbitration invocation Notice) Till18.05.2022 Rs. 15,24,348.55
3. Costs Rs. 4,01,621.00 Total Rs. 77,33,769.37 The Claims to the extent mentioned above are allowed and all the other claims are rejected in terms of the award, the respondent is found liable to pay Rs. 77,33,769. 37 to the Claimant. The amount shall carry future interest @18% p.a. on the abovementioned awarded amount, till actual payment.
Before I dose, I would like to thank both the parties and their counsels for the co-operation, they have rendered to enable me to give the award in such a short time."
13. In respect to issue no. 1 whether the respondent (petitioner herein) is in breach of letter award dated 08.10.2018. Ld. Arbitrator observed that the estimated amount of the contract being Rs. 3,49,18,157/-, 5% for the same being SD which comes out about Rs. 17,45,907/- and the 50 % of the same would be Rs. 8,72,954/-. The petitioner herein already paid Rs. 7,60,000/- toward EMD. The differential amount of Rs. 1,12,954/- is not paid by the petitioner herein. The petitioner herein argued before the Ld. Arbitrator that it had OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 13 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited started the work even without payment of Security Deposit, however the same is controverted by claimant through subsequent letter dated 26.11.2018 and 06.12.2018 asking the petitioner to make the SD and start the work. The letter of the respondent dated 29.11.2018 also confirmed that the work has not started till then, therefore the respondent is clearly in breach of the terms of the contract.
14. The issue no. 2 is whether the petitioner is bound by the terms of the GCC which are part of the tendered documents dated 14.10.2018. The condition specifically mentioned in the LOA are the Rates and Contract Value and Security Deposit, and commencement and completion of work. All the other conditions mentioned in the tendered documents and the document themselves constitute integral part of it. The petitioner (herein) in its letter dated 28.08.2018 has given its acceptance to the terms at condition of the tender in unequivocal terms. The petitioner (herein) also conceded that GCC forms part of LOA, therefore Ld. Arbitrator decided this issue in favour of claimant/respondent.
15. The issue no. 3 whether the claimant is entitled to risk and cost amount of Rs. 58,07,799/-. Ld. Arbitrator observed that the claimant has relied upon clause 2.7 of GCC for termination of contract and award of contract to M/s Radtech Buildcon Pvt. Ltd. The petitioner (herein) in the statement of defense took plea that the notice of termination was wrongly issued for the reason that neither TCC nor GCC was signed by the respondent, however Ld. Arbitrator observed the issue no. 2 decided against the respondent thus this stand not OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 14 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited acceptable. The claimant in terms of the GCC terminated the contract and awarded the contract at risk and cost of the petitioner (herein) to M/s Radtech Buildcon Pvt. Ltd. Ld. Arbitrator found that the claim of the claimant is supported by copy of the measurement book showing the actual quantities of the items executed by the claimant through risk and cost by contractor M/s Radtech, proof of payment to M/s Radtech Buildcon Pvt. Ltd and the affidavit by way of evidence of claimant's witness i.e. G. V. Rajashekhar which was uncontroverted. The other issues are also decided in favour of claimant/respondent.
16. There is nothing in the submissions of the petitioner that the petitioner is not in the breach of letter of award dated 08.10.2018. There is no dispute regarding the non-payment of the differential amount of Rs. 1,12,954/- towards security deposit and the petitioner (herein) again and again sought time for payment of security deposit, even not started any work. The only plea taken in the present petition is that LOI/LOA is not a binding contract where there is a pre-condition on the acceptance of LOA to execute the contract. The relevant condition for deposit of security as per GCC is 1.10.2. 'The security deposit should be furnished before the start of the work by the contractor'.
17. Clause 1.14 GCC relates to execution of contract agreement, as under :
1.14 EXECUTION OF CONTRACT AGREEMENT The successful tenderer's responsibility under this contract commences from the date of issue of the Letter of Intent/ Award by Bharat Heavy Electricals Limited. The Tenderer shall submit an unqualified acceptance to the Letter of Intent/Award within the period stipulated therein. The successful tenderer shall be OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 15 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited required to execute an agreement in the prescribed form, with BHEL, within a reasonable time after the acceptance of the Letter of Intent/Award, and in any case before releasing the first running bill. The contract agreement shall be signed by a person duly authorized/empowered by the tenderer.
18. This clause categorically stated that the responsibility under this contract commences from the date of issue of letter of intent/award. There is no dispute over the issue of letter of award dated 08.10.2018. The claim submitted before the Ld. Arbitrator that the petitioner failed deposit the security amount, however it is argued by petitioner herein before Ld. Arbitrator that the security deposit be collected by the claimant from the petitioner (herein) through deduction from its bills. Ld. Arbitrator found that the petitioner (herein) not deposited the entire security deposit and not started the work, therefore is clearly in breach of terms of the contract. The second related issue is that the petitioner (herein) is bound by the terms and condition of GCC which is also part of tender documents. The respondent/claimant conceded that the GCC forms part of the letter of award (LOA). Therefore, in terms of the Clause 2.7 of GCC, the contract was terminated and given to M/s Radtech Buildcon Pvt. Ltd.
19. As the GCC forms the part of LOA, both the parties are bound by terms of the GCC. Therefore, the formal execution of contract under Clause 1.14 did not prevent the parties from being bound by the terms of GCC.
20. The plea raised by petitioner (herein) that there is no concluded contract (relied upon 'South Eastern Coal Field (Supra)), however, the facts of the said case are different from the present case. In present OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 16 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited case, the terms of the GCC are binding and as per Clause 1.14 of GCC, responsibility starts from the issuance of LOA and the tenderer shall thereafter accept the LOA and then the parties shall execute a contract before releasing the first running bill. The security deposit is not a condition precedent for entering in binding contract but only for execution of contract. The petitioner (herein) also not raised any plea before the Ld. Arbitrator that there is no concluded contract between the parties. The judgment of South Eastern Coal Fields (supra) as relied by the petitioner is no help to the petitioner in the present case.
21. The Ld. Arbitrator also found that the claimant is entitled for risk and cost upon termination of contract and accepted the termination as valid. No argument raised before the Ld. Arbitrator over the calculation of the risk and cost during arbitration proceedings, hence, any contrary plea in present proceedings cannot be entertained. Even otherwise, the contract was rightly terminated, and the plea before the Ld. Arbitrator regarding the challenge to the notice of termination by the petitioner is that the petitioner not signed TCC and GCC which is rightly repelled by the Ld. Arbitrator. The petitioner cannot be allowed to drag the contract indefinitely over non-deposit of deferential amount of security deposit of Rs. 1,12,954/-.
22. 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 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 17 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited material on record, and this court also cannot re-appreciate the case on merits. No ground made out to interfere in the impugned award.
23. 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 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.
24. 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 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 18 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited 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.
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."
25. 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 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 19 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited 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 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 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 20 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited 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."
26. 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."
27. 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-
OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 21 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited 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 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........"
28. 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.
29. 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.
30. 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 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 22 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited rendered by the Ld. Arbitrator are per-se perverse, illegal or non- sustainable or against public policy.
31. 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.
32. File be consigned to record room after necessary compliance. Announced in open court on 10th February 2026 (Ajay Kumar Jain) District Judge, Comm-04 (Digital) South District, Saket Courts, Delhi Digitally signed by AJAY AJAY KUMAR KUMAR JAIN JAIN Date:
2026.02.10 16:19:39 +0530 OMP (COMM) 02/24, Dt. 10.02.2026 Page nos. 23 of 23 M/s Simentech India Pvt. Ltd. Vs. Bharat Heavy Electricals Limited