Delhi District Court
Central Medical Services Society vs M/S Centurion Laboratories on 6 October, 2025
IN THE COURT OF SH. PULASTYA PRAMACHALA
DISTRICT JUDGE, (COMMERCIAL COURT)-01,
PATIALA HOUSE COURT, NEW DELHI
INDEX
Sl. HEADINGS Page Nos.
No.
1. Memo of Parties 2
2. Description of case 2-5
4. Ground of objection/challenge 5
5. Reply of respondent 6-7
6. Arguments of the parties 7-10
8. Appreciation of Arguments, Facts & Law 10-19
9. Decision 19
Digitally
signed by
PULASTYA
PULASTYA PRAMACHALA
PRAMACHALA Date:
2025.10.06
17:43:50
+0530
OMP (COMM) No.40/2025 (Pulastya Pramachala)
District Judge (Commercial Court)-01,
Page No.1 of 19 Patiala House Court, New Delhi
OMP (COMM) No.40/2025
In the Matter of: -
CENTRAL MEDICAL SERVICE SOCIETY
2nd Floor, Vishva Yuvak Kendra, Chanakyapuri,
New Delhi-110021.
...Petitioner
Versus
M/S CENTURION LABORATORIES,
DIVISION OF CENTURION REMEDIES PVT. LTD.
Plot no. G/5, G/6 and F/19 8.1.D.C Gorwa,
Baroda-390016, India.
...Respondent
Date of Institution : 28.03.2025
Arguments heard on : 10.09.2025
Decided on : 06.10.2025
Decision : Petition is dismissed.
JUDGMENT
DESCRIPTION OF CASE
1. Petitioner i.e. Central Medical Service Society has filed this petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') challenging the impugned Award dated 28.11.2024 as passed by Ld. Arbitrator.
2. Briefly stated, petitioner is a fully autonomous Central Procurement Agency registered under the Societies Registration Act, 1860 for procurement of goods in the health sector. Petitioner had invited bids for supply of Anti-Tuberculosis and Anti-Retroviral drugs through notifications dated 26.10.2016 and 23.11.2016 respectively. As per the tender conditions, every bidder was required to furnish a tender-forwarding letter containing an undertaking that the information supplied was true and correct, and that in the event of any false or incorrect OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.2 of 19 Patiala House Court, New Delhi information, the petitioner would be entitled to terminate the contract without notice. Respondent had submitted such a tender- forwarding letter and a signed declaration stating that it had not been blacklisted for the years 2014-15, 2015-16 and "till date", along with a "No Deviation Certificate". Upon evaluation, the respondent's bid was declared successful. Two Long Term Agreements ("LTAs") dated 21.04.2017 (for ARV drugs) and 11.05.2017 (for Anti-TB drugs) were executed between the parties. In connection therewith, the respondent furnished undertakings dated 11.11.2016 and 14.12.2016 respectively, a bank guarantee No. OGT0017170011218 dated 26.04.2017 in the sum of Rs.74,61,674.94 and a demand draft of Rs.4,92,502/- as performance security. During evaluation of a subsequent tender for supply of seven Anti-TB drugs, the petitioner discovered that the respondent had been blacklisted by Haryana Medical Services Corporation Ltd. (HMSCL) vide order dated 28.12.2016/27.02.2017 for a period of three years on account of submitting forged documents. Though the Hon'ble Punjab & Haryana High Court by interim order dated 10.03.2017 stayed the said blacklisting and permitted the respondent to participate in tender processes subject to disclosure of the order to the inviting authority, the respondent failed to disclose the blacklisting order to the petitioner at the time of execution of the above LTAs. HMSCL by its final order dated 11.09.2017 reaffirmed the blacklisting/debarment of the respondent. Further, on enquiry by the petitioner, Commissioner of Food & Drugs, Gujarat confirmed that certain documents furnished by the respondent namely additional product permissions dated OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.3 of 19 Patiala House Court, New Delhi 05.05.2014, Market Standing Certificate dated 15.12.2016 and Certificates of Pharmaceutical Product dated 15.06.2017 had not been issued by it. By communication dated 01.12.2017, FDCA Gujarat again confirmed that the Market Standing Certificate, product-wise non-conviction certificate etc. submitted by the respondent under Tender 015 were not issued by it. The respondent, in its reply dated 12.12.2017 to the petitioner's show cause notice dated 30.11.2017, stated that the impugned documents had been submitted through an "outside liaison person" and admitted that it did not verify the authenticity of such documents until objections were received.
3. Consequently, the petitioner, by communication dated 14.03.2018, terminated Tender 011 and forfeited the performance security furnished by the respondent on the grounds constituting breach of contract. By e-mail dated 21.03.2018 the petitioner further informed the respondent that risk purchase of 48,87,360 tablets of Nevirapine 50 mg would be carried out at the respondent's risk and cost on account of termination of the ARV Drugs Tender and LTA. The said drug was thereafter purchased from the L-1 bidder at a higher price and the differential amount of Rs.19,46,636/- was recovered from the respondent's outstanding dues.
4. The respondent thereafter filed a reference before the Micro and Small Enterprises Facilitation Council, Gujarat on 04.04.2018 seeking payment of alleged outstanding dues amounting to Rs.7,63,66,506.86. Vide order dated 03.03.2022, the Hon'ble High Court referred the disputes between the parties to a learned OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.4 of 19 Patiala House Court, New Delhi Sole Arbitrator who passed the impugned award dated 28.11.2024.
GROUNDS OF CHALLENGE
5. Aggrieved by the impugned award dated 28.11.2024, petitioner has filed the present objections primarily on the following grounds: -
i. Because the impugned award overlooks documents placed on record and thereby proceeds on an erroneous basis. The impugned award is therefore, perverse and liable to be set aside on the ground of patent illegality. ii. Because the impugned award ignores vital evidence and is therefore, perverse and liable.
iii. Because the arbitral tribunal has rewritten the agreement between the parties.
iv. Because by holding that the terms of the agreement were unconscionable, the arbitral tribunal exceeded its jurisdiction and in effect decided issues that were not before the arbitral tribunal.
v. Because the arbitral award is ridden with inconsistencies and contradictions.
vi. Because the arbitral tribunal has taken into account extraneous considerations which had no bearing on the dispute.
vii. Because the arbitral award merely reproduces the pleadings of the parties and without any cogent reasoning awards the claims sought by the respondent.
viii. Because the arbitral tribunal has wrongly held that the respondent made complete supplies of the tendered drugs; Evidence adduced by the respondent in this regard was fatal to its case, which the tribunal has not considered; the onus of proving that all supplies were completed rested on the respondent.
OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.5 of 19 Patiala House Court, New Delhi REPLY FILED BY THE RESPONDENT
6. The respondent filed a detailed reply contesting the petition. It is contended that the impugned award is the outcome of a judicious, balanced and well-reasoned adjudication by learned Arbitral Tribunal. Respondent has pleaded that, under Section 34 of the Act, re-appreciation or re-evaluation of evidence is impermissible unless the award suffers from patent illegality or is in conflict with the fundamental policy of Indian law. According to the respondent, the award neither violates any provision of substantive law nor offends the fundamental notions of morality or justice. It is averred that the petitioner had floated three tenders and that the respondent was declared successful only in Tender Nos. 007 and 011, with respect to which the Long-Term Agreements were entered into between the parties. Respondent has claimed that it supplied all the contracted drugs and received payment accordingly. In the course of the tender process relating to Tender No. 015, certain documents, alleged by the petitioner to be fabricated, were submitted. Throughout the arbitral proceedings, petitioner relied upon documents pertaining to Tender No. 015, to allege that Tender Nos. 011 and 007 had been wrongly obtained by the respondent. Learned Arbitrator, having noted these facts, passed the award in favour of the respondent.
7. Respondent has further pleaded that, during the arbitral proceedings, petitioner filed an application under Section 16 of the Act contending that the dispute was not arbitrable in view of the plea of fraud raised in its statement of defence. This application was dismissed, and the issue was decided in favour of OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.6 of 19 Patiala House Court, New Delhi the respondent. It is further submitted that performance security could be forfeited only upon a lawful termination of the agreement. The purpose of furnishing such security is to ensure performance of contractual obligations. Respondent has asserted that the petitioner had accepted the medicines after having them tested in its own laboratory and had utilised them; no medicines were returned to the respondent. Consequently, petitioner had no justification to forfeit the performance security. Respondent has emphasised that the Tribunal, being the final authority on facts, has duly considered the entire record, including the documents and submissions of both sides. The allegations that the respondent submitted forged documents and failed to disclose its blacklisting status, have been denied as baseless. Respondent has submitted that at no point during arbitration did the petitioner place any credible evidence to substantiate such grave allegations. It is further contended that the petitioner's failure to place on record the date of the blacklisting order issued by GMSCL amounted to withholding of material information, which impacted the integrity of its own contractual representations. Respondent has contended that, having been unsuccessful on merits before the Tribunal, the petitioner has now levelled unfounded allegations of bias, which are unfair and unsustainable. It is, therefore, prayed that the present petition under Section 34 of the Act be dismissed.
ARGUMENTS OF THE PARTIES
8. Petitioner argued that respondent submitted forged and fabricated documents for procurement of critical health supplies & is a OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.7 of 19 Patiala House Court, New Delhi habitual offender in this regard. Further argued that when the respondent was called upon to furnish an explanation for having submitted the forged/false documents, respondent did not attempt to prove that the documents were genuine and authentic. Rather in its defence respondent merely stated the documents in question were submitted/given through an "outside liaison person" and admitted that they did not verify the authenticity of the documents till objections were received against them. In the Tender Forwarding Letters submitted along with the bid, respondent affirmed that all 'information furnished by their firm is true & correct and in the event that the information is found to be incorrect/untrue, then their department/organization shall without giving any notice or reason therefor, summarily reject the bid or terminate the contract'. Petitioner argued that in any event, the respondent ought not have been permitted to avoid the civil and contractual consequences of having submitted such documents along with the bid. Petitioner relied upon the decision of Hon'ble Delhi High Court in J. Duncan Healthcare Pvt. Ltd. vs. CMSS, 2024:DHC:5349, wherein a similar factual backdrop of the tenderer (J. Duncan) having submitted forged documents and criminal proceedings in this regard having been initiated, Hon'ble Court had observed as follows: - "The fact that the PBGs turned out to be forged, regardless of Petitioner's claims of ignorance, underscores a significant lapse in due diligence, and thus, the Petitioner cannot disassociate from this act of fraud by pleading ignorance or shifting blame to third parties such as Mizuna. While the Petitioner may have taken legal actions against Mizuna and its directors for criminal breach of trust and OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.8 of 19 Patiala House Court, New Delhi cheating, this does not mitigate their responsibility or avoid contractual consequences of submitting forged documents."
9. Petitioner further argued that respondent having committed a wrong by tendering forged documents, could not have sought to claim any benefit or refund in these proceedings. (Municipal Committee, Katra vs. Ashwani Kumar, 2024 SCC OnLine 840) Petitioner argued that the respondent is a habitual offender. Even previously the respondent had furnished false undertakings and failed to disclose the fact that it had been blacklisted. Petitioner argued that the respondent was blacklisted by 3 State Agencies, a fact it was obligated to disclose by virtue of the tender and the order passed by the Punjab and Haryana High Court. Petitioner argued that the respondent failed to prove that any payments were in fact due and payable to it. Petitioner also argued that petitioner had sufficiently complied with the principles of natural justice. Petitioner argued that SCN dated 30.11.2017 tabulated the documents that were confirmed by FDCA Gujarat to be forged and/or not issued by it, which were furnished by respondent under Tender 007. Petitioner relied upon the judgment of Hon'ble Supreme Court in Gorkha Security Services vs. Govt. (NCT of Delhi), (2014) 9 SCC 105, wherein it was held that: -
"20. Thus, there is no dispute about the requirement of serving show-cause notice. We may also hasten to add that once the show-cause notice is given and opportunity to reply to the show-cause notice is afforded, it is not even necessary to give an oral hearing. The High Court has rightly repudiated the appellant's attempt in finding foul with the impugned order on this ground. Such a contention was specifically repelled in Patel Engg. [Patel Engg. Ltd. v.
OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.9 of 19 Patiala House Court, New Delhi Union of India, (2012) 11 SCC 257: (2013) 1 SCC (Civ)445].
10. Petitioner also argued that respondent's attempt at seeking to avoid liability by averring that the SCN was issued to and the criminal complaint was filed against a distinct entity, was calculated to mislead the Tribunal and was even otherwise without merit. Ld. counsel for the petitioner also relied upon: -
i. Associate Builders vs. DDA, (2015) 3 SCC 49 ii. Ssangyong Engg & Construction Co. Ltd. vs. NHAI (2019) 15 SCC 131;
iii. MCD vs. Naresh Kumar Gupta & Company Pvt. Ltd.2011 (123) DRJ 439 iv. Morgan Securities & Credits Pvt. Ltd. vs. Samtel Display Systems Ltd. 2023 SCC OnLine Del 8018
11. Per contra, learned counsel for respondent opposed the petition and advanced submissions broadly on the lines of the reply filed on behalf of respondent. He reiterated that the impugned award is a reasoned and judicious determination by learned Arbitral Tribunal, and contended that no ground under Section 34 of the Act has been made out to warrant interference. He submitted that petitioner's objections amount to a mere re-appreciation of evidence, which is impermissible in law.
12. I heard learned counsels for the parties and have perused the materials on record of the case as well as the arbitral proceedings.
APPRECIATION OF ARGUMENTS, FACTS & LAW
13. It is well-settled that while exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996, the Court does OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.10 of 19 Patiala House Court, New Delhi not act as an appellate forum to re-appreciate or re-evaluate the evidence on record. Its inquiry is confined to examining whether the impugned award suffers from any infirmity as contemplated under Section 34(2) of the Act, such as violation of the fundamental policy of Indian law, breach of the principles of natural justice, or patent illegality which goes to the root of the matter and shocks the conscience of the Court.
14. Hon'ble Supreme Court in case of Ssangyong Engineering & Construction Co. Ltd. vs. National Highways Authority of India, 2019 SCC OnLine SC 677 held that under Section 34 (2A) of the Act, a decision which is perverse while no longer being a ground for challenge under "public policy of India", would certainly amount to a patent illegality appearing on the face of the award. A finding based on the documents taken behind the back of the parties by the arbitrator would also qualify as a decision based on no evidence inasmuch as such decision is not based on evidence led by the parties and therefore, would also have to be characterized as perverse. It was held that a finding based on no evidence at all or an award which ignores vital evidence in arriving at its decision, would be perverse and liable to be set aside on the ground of patent illegality.
15. Hon'ble Supreme Court in the matter of PSA SICAL Terminals Pvt. Ltd. vs. Board of Trustees of V.O Chidambranar Port Trust Tuticorin, 2021 SCC OnLine SC 508, reiterated its view as taken in MMTC Limited Vs. Vedanta Limited reported as (2019) 4 SCC 163, and held as follows: -
"12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.11 of 19 Patiala House Court, New Delhi 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."
16. Hon'ble Delhi High Court in the case of National Highway Authority of Indiav Vs Unitech-NCC (JV) [2025 SCC OnLine Del 4280], after referring to various judgments passed by Hon'ble Supreme Court, summarized the legal principles dealing with requirements to challenge an arbitral award under Section 34 of Arbitration and Conciliation Act, 1996, in the following manner: -
"12. I proceed, therefore, to distil some of the relevant principles that emerge from the decisions cited supra.
13. The principles that emerge From the decisions cited earlier, the following principles emerge:
(i) An arbitral award cannot be interfered with on grounds not envisaged by Section 34(2) or (3) of the 1996 Act.
(ii) Section 34 jurisdiction is not appellate. Interference with arbitral awards is generally proscribed, and is to be limited to rare and exceptional cases.
(iii) Interference on the ground that another, more appropriate and perhaps better, view, different from that adopted by the arbitrator, is possible, is impermissible.
(iv) There can be no interference with factual findings of an arbitral tribunal, unless they are perverse. A possible view by the arbitrator, on the facts, has to be respected.
The arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon.
OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.12 of 19 Patiala House Court, New Delhi
(v) "Perversity" exists where-
(a) the arbitral tribunal ignores or excludes relevant material, or
(b) the arbitral tribunal takes into consideration irrelevant material, or
(c) the finding is so outrageously in defiance of logic as to suffer from the vice of irrationality.
(vi) If there is no evidence, or the evidence is thoroughly unreliable in the sense that no reasonable person would act on it, there is perversity. Where there is some acceptable evidence on record, on which the arbitral tribunal relies, the conclusion would not be perverse.
(vii) The Section 34 Court cannot look into the merits of the dispute.
(viii) An award is in conflict with the public policy of India if it
(a) is patently violative of a statutory provision, or
(b) reflects an approach by the arbitral tribunal which is not judicial, or
(c) has been passed in violation of the principles of natural justice, or
(d) is patently illegal, which would include a case in which
(i) the award is in patent contravention of applicable substantive law, or
(ii) the award patently breaches the 1996 Act, or
(iii) the award militates against the interests of the nation, or
(iv) the award is shocking to the judicial conscience, or
(v) the award ignores the specific terms of the contract, which would not include a case of mere erroneous contractual interpretation, unless the error of interpretation was fundamental, as in Ssangyong Engineering, which resulted in the award being contrary OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.13 of 19 Patiala House Court, New Delhi to the "most basic notions of justice", which shocked the judicial conscience, in which the arbitral tribunal substituted a clause in the contract with another.
(ix) The Court cannot interfere with an arbitral award on the ground that it does not do justice, in the opinion of the Court, as that would require examination of the merits of the dispute, which is proscribed.
(x) Infraction of fundamental policy of Indian law includes a law meant to serve public interest or public good. Mere Page 26 of 56 O.M.P. (COMM) 23/2017 infraction of the municipal laws of India does not render the award violative of the fundamental policy of Indian law.
(xi) An arbitral award infracts the fundamental policy of Indian law if it contravenes all or any of the fundamental principles which provide a basis for administration of justice and enforcement of law in the country. This would include, for example,
(a)violation of the principles of natural justice,
(b) disregarding orders of precedentially superior Courts, or their binding effect, or
(c) violating laws linked to public good or public interest.
(xii) "Justice" is nothing more or less than exact conformity to some obligatory law.
(xiii) "Morality" includes agreements which cannot be enforced given the prevailing mores of the day. That said, an arbitral award can be set aside on the ground that it is contrary to the most basic concepts of morality only if it shocks the judicial conscience of the Court.
(xiv) An unreasoned award is patently illegal.
(xv) In the matter of interpretation of contractual covenants by the arbitral tribunal, the following principles apply:
(a) An interpretation which is completely unacceptable, OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.14 of 19 Patiala House Court, New Delhi in that it is one which no fair-minded or reasonable person would take, merits interference. If the arbitrator adopts a view which is not a possible view, it merits interference. An impossible view is one which no reasonable body of persons could possibly have taken.
(b) The arbitral tribunal, being a creature of the contract, cannot travel beyond it.
(c) An arbitral tribunal cannot rewrite the contract, or substitute one clause with another.
(d) An arbitral tribunal cannot foist, on a party, a covenant which is not to be found in the contract and is not binding on it.
(e) An arbitral tribunal cannot proceed ex debito justitiae, de hors the contract.
(f) The arbitral tribunal must also take into account the usages of trade applicable to the transaction, while interpreting the contract.
(g) An arbitrator has the jurisdiction to interpret a contract having regards to its terms and conditions, conduct of the parties including correspondences exchanged, circumstances of the case, the manner in which the parties worked out the contract, and pleadings of the parties. Thus viewed, if the interpretation accorded by the arbitrator to the contract is based on a possible view, the Court would not interfere.
(h) An unexpressed term can also be read into an agreement if such a term was always and obviously intended by the parties thereto. It must be a term which goes without saying, which is necessary to give business efficacy to the contract and which, although tacit, forms part of the contract. It must, however,
(a) be just and equitable,
(b) be necessary to give business efficacy to the contract, in that, if the contract is effective without it, the term will not be implied, OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.15 of 19 Patiala House Court, New Delhi
(c) be obvious, in that it "goes without saying",
(d) be capable of clear expression, and
(e) not contradict any term of the contract."
17. Petitioner herein was respondent in the arbitral proceedings.
Petitioner has alleged that ld. Arbitrator did not consider the materials on the record. However, following observations made by ld. Arbitrator would reflect a different scenario: -
"It is useful to mention here that the date of order of blacklisting has not been mentioned either in the Statement of Defence or in the Index of documents filed along with Statement of Defence or Defence or in the Index of documents filed along with Statement of Defence or Annexure R-6. Even Annexure R-6 at page 527 of the bunch of SOD does not contain any date. The Respondent has tried to withhold material information from this Tribunal. The date of order of blacklisting would be material in the sense if it is after submitting of tender by the Claimant, the claimant cannot be held guilty of concealing the same."
18. Petitioner in the petition before this court also, did not mention as to which particular piece of evidence was overlooked by ld. Arbitrator. On the other hand, discussions made by ld. Arbitrator in the Award in question show the kind of evidence led by petitioner before ld. Arbitrator. Some relevant part of the same resulting into decision taken by ld. Arbitrator are as follows: -
"She admitted that Fact Finding Committees are formed and reports are obtained before taking decision to terminate contract. Starting from page no. 584 to 593 does not contain reference to report of any Fact Finding Committee. The last para of last page 593 refers to the directions and approval of the Competent Authority for the purpose of debarring the claimant to participate in tenders for a period of two years. She admitted that OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.16 of 19 Patiala House Court, New Delhi Ex.RW1/18 does not pertain to subject tenders of the present matter. She specifically admitted that respondent always gives show cause notice, gives personal hearings before taking a decision to terminate a contract. She admitted that show cause notice Ex.RW1/11 pertains to tender No.007. She would have to check whether any show cause notice for tender No. 011 was issued. At present, she was unable to find any such show cause notice issued from the record.
Ex.RW1/16 pertains to tender No. 011. She could not tell whether any show cause notice was given before terminating contract of said tender. There is no termination order on record between show cause notice Ex.RW1/11 and order forfeiting performance security Ex.RW1/17 regarding tender No. 007.
What to say more the Respondent did not get the verification done even subsequently, in the tenders in question. It has tried to use the material collected by it in altogether different tender No. 015, in the present tenders No. 007 and 011. it is a novel way of collecting the evidence in one case and using the same in another case. Rather it is the Respondent who has failed to controvert the aforesaid averments, in the Statement of Defence. No such suggestion has been put up in the cross-examination of CW-1, RW-1 did not utter even a single word about non-supply of medicines by Claimant.
Once the Respondent had accepted the medicines, after having got it tested from its own Lab, there does not remain any scope for coming forward with the allegations of Claimant having played any fraud upon the Respondent. Even if the certificate of Trade & Quality submitted by Claimant was found to be false, the least possible expected from Respondent was that it should have got the medicines supplied by the Claimant tested to find out whether the same were genuine and of required standard or not. The Respondent did not do so, for the reasons best known to it.
OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.17 of 19 Patiala House Court, New Delhi I may add that strictly speaking the Respondent should have got the certificate verified before accepting the tender and before awarding the contract. It cannot be heard to say that it blindly accepted the tender and awarded the contract.
In the light of aforesaid decisions, I find that the Long- Term Agreement and forwarding letter are unconscious in nature and cannot be interpreted to hold that Claimant had forgone his right of hearing which is part of principles of natural justice. The conduct of the Respondent in issuing the show cause notice strengthens my view. If no show cause notice was required, the Respondent should not have given any show cause notice. Once the Respondent chose to issue to show cause notice, it means the Respondent itself was under
the impression that show cause notice is required to be given. Now having found fault in the show cause notice, it cannot take somersault and U-turn to contend that no show cause notice was required.
Termination order dated 14.03.2018 pertains to tender No. 011. RW-1 in her cross-examination dated 16.10.2024 admitted that Long-Term Agreement of Tender No. 011 was terminated without affording any opportunity of hearing or without issuing show cause notice. In the succeeding lines, she tried to make out show cause notice given before forfeiting performance security vide letter Ex.RW-1/17 is already on record at page 539 which is Ex.RW-1/11. But the said show cause notice pertains to Tender No. 007 and not Tender No.
011. Still further there is no documentary proof on record to show that said show cause notice was sent through speed-post or mail was delivered to the Claimant. Merely writing on the top of show cause notice at page 539 that the same was sent through speed-post is not enough. The Respondent should have filed postal receipt or track report."
OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.18 of 19 Patiala House Court, New Delhi
19. It is case of petitioner before this court also that it came to know about alleged forged documents furnished by respondent, during enquiry being made in the process of a different tender no.15. Petitioner has not taken plea that respondent did not supply any medicine as per two tenders awarded to respondent. Petition is also silent in respect of any test if conducted over the medicines supplied by respondent or medicines supplied by respondent failing such test. In such situation, remarks of ld. Arbitrator that petitioner herein should have made all such enquiry in respect of documents furnished by respondent before awarding the tenders to respondent, are very apt and relevant. After having awarded the tenders and also availing the supplies against such tenders, the action of petitioner was in fact at least debatable. It is well settled law that u/s 34 of the Act court is not supposed to substitute the opinion of Arbitrator with its own on the basis of a different reasoning. In the present case, I do find that the opinion framed by ld. Arbitrator is plausible one. Hence, no ground is made out to interfere with the award in question.
DECISION
20. In view of foregoing discussions and observations, objection petition under Section 34 of the Act is dismissed.
File be consigned to the Record Room after due compliance.
Digitally signed by PULASTYA PULASTYA PRAMACHALA PRAMACHALA Date: 2025.10.06 17:43:57 +0530 Pronounced in the (PULASTYA PRAMACHALA) Open Court on this District Judge (Commercial Court)-01, th
06 Day of October, 2025 Patiala House Court, New Delhi OMP (COMM) No.40/2025 (Pulastya Pramachala) District Judge (Commercial Court)-01, Page No.19 of 19 Patiala House Court, New Delhi