Rajasthan High Court - Jodhpur
Rajasthan Urban Infrastructure ... vs M/S Manda Developer And Builders ... on 18 February, 2026
Author: Yogendra Kumar Purohit
Bench: Yogendra Kumar Purohit
[2026:RJ-JD:8909-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
D.B. Civil Misc. Appeal No. 604/2024
Rajasthan Urban Infrastructure Development Project, A.v.s.
Building, Jawahar Circle, Malviya Nagar, Jaipur Through Deepak
Mandan, Age About 37 Years, Office In Charge And Project
Officer (W.w.) R.u.i.d.p. Camp Bikaner.
----Appellant
Versus
1. M/s Manda Developer And Builders Private Limited,
Shiv Shakti Vihar, Opposite 220 K.v. Power House,
Jaipur Road, Bikaner.
2. Justice H.r. Panwar, Former Judge, Rajasthan High
Court And Sole Mediator, 108 A, 113B, Kanishak
Resort, Pal Bypass Road, Jodhpur.
----Respondents
For Appellant(s) : Mr. Kailash Khatri
For Respondent(s) : Mr. C.S. Kotwani with
Mr. Avdhesh Parashar
Mr. R.P. Garg
HON'BLE MR. JUSTICE ARUN MONGA
HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT
Order (Oral)
18/02/2026
Per: Arun Monga, J.
1. Appeal herein is directed against the judgment and order
dated 24.08.2023 passed by the learned Judge, Commercial
Court, Bikaner in Civil Misc. Case No.56/2022, vide which the
arbitral award dated 01.10.2016 was upheld and the objection
petition preferred by the appellant under Section 34 of the
Arbitration & Conciliation Act, 1996 was dismissed.
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2. Briefly, relevant facts are that a work contract dated
17.02.2003 for construction of new drains, remodeling of existing
drains and development of a landfill site at Bikaner was executed
between Rajasthan Urban Infrastructure Development Project
(RUIDP) and M/s Bharat Construction Company (for short-
company). Disputes having arisen out of the said agreement, the
contractor invoked the arbitration clause. The arbitral proceedings
commenced. During the pendency of the proceedings, M/s Bharat
Construction Company was taken over by M/s Manda Developers
and Builders Private Limited (respondent no.1/claimant herein),
which assumed all its assets and liabilities.
2.2 The learned Sole Arbitrator, vide Award dated 01.10.2016,
partly allowed the claims of the Respondent and rejected the
counter-claim of the Appellant. The details of the amount of
claims/counter claim are tabulated as under :-
Party Amount Award Granted Interest Penalty /
Claimed (₹) (₹) Costs
Respondent 2,49,42,667/- 85,59,164/- 1. Pre- ₹3,00,000
/ Claimant award As
interest @ Arbitration
9% p.a. on Proceeding
₹83,86,567 Cost
from
06.06.2007
to
30.09.2016
=
₹70,34,241
2. Post-
award
interest @
10% p.a.
from date
of award till
realization
Appellant 1,58,79,000/- Counter Claim ---- ----
As counter rejected
claim
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2.3 Aggrieved, the appellant filed objections under Section 34 of the Act of 1996 before the learned Commercial Court, Bikaner seeking setting aside of the award. The respondent contested the objections.
2.4 Upon consideration of the record/pleadings, the learned Commercial Court, vide impugned order dated 24.08.2023, dismissed the objections and upheld the award.
3. Hence, the instant appeal.
4. Learned counsel for the appellant argues that the impugned order dated 24.08.2023 passed by the learned trial Court, rejecting the objection petition under Section 34 of the Arbitration and Conciliation Act, 1996, is contrary to the facts and settled principles of law and therefore liable to be quashed. It is contended that the learned commercial Court mechanically upheld the arbitral award dated 01.10.2016, without examining the fundamental errors apparent on the face of the record. 4.1 It is further argued that the original contract was executed on 17.02.2003 between the appellant and M/s Bharat Construction Company, a proprietorship firm, which was allegedly taken over by respondent No.1 on 31.03.2005. Upon such acquisition, the proprietary concern ceased to exist in the eyes of law. Despite this, the said firm continued to act under the contract until its termination on 05.06.2007 and even initiated arbitration proceedings in its own name. Subsequently, respondent No.1 sought substitution before the learned Sole Arbitrator on the plea of acquisition of assets and liabilities, which was illegally permitted and hence the entire arbitration proceedings are vitiated and liable to be set aside.
(Uploaded on 13/03/2026 at 10:53:16 AM) (Downloaded on 13/03/2026 at 08:52:14 PM) [2026:RJ-JD:8909-DB] (4 of 8) [CMA-604/2024] 4.2. Learned counsel for the appellant thus submits that the initiation and continuation of arbitration proceedings at the instance of a non-existent entity renders the entire proceedings void ab initio, including the appointment of arbitrators and the awards passed therein.
4.3 He would also urge that the learned Sole Arbitrator did not act in neutral manner by proceeding on erroneous assumptions regarding the status of respondent No.1.
4.4 Argument on merits of the impugned order herein is that the learned commercial Court compounded the error by dismissing the objections without proper application of mind or discussion of the documentary evidence on record. The impugned order dated 24.08.2023 thus suffer from patent illegality and non-application of mind and, therefore, deserve to be quashed and set aside.
5. While learned counsel for respondent No. 1, per contra, contends that no interference by this Court is warranted. He submits that the impugned order passed by the learned Commercial Court is founded upon cogent reasoning and sound legal principles. Relying upon the rationale articulated therein, he urges that the order is fully in consonance with the settled position of law and does not call for any appellate interference by this Court. Thus, he seeks dismissal of the appeal.
6. In the aforesaid backdrop, we have heard the rival contentions and perused the case file and impugned order.
7. As regards the objection that respondent no.1/claimant was not a competent or authorized entity to pursue the proceedings, we are of the opinion that appellant/objector cannot take a somersault at this stage having not taken any steps at the (Uploaded on 13/03/2026 at 10:53:16 AM) (Downloaded on 13/03/2026 at 08:52:14 PM) [2026:RJ-JD:8909-DB] (5 of 8) [CMA-604/2024] appropriate stage to challenge its substitution. Learned commercial court held that the Arbitral Tribunal's order dated 21- 09-2014 regarding substitution of respondent no.1 in place of the "Company," reveals that when respondent No. 1 filed an application before the Tribunal seeking substitution, the objector expressed "no objection." Accordingly, exercising judicial discretion and based on the objector's no-objection, the Tribunal allowed substitution of claimant in place of the "Company." The objector had submitted no objection before the Tribunal in relation to this substitution, and the Tribunal passed its order dated 21- 09-2014 accordingly. The objector did not initiate any legal proceedings against that order. Therefore, the objector is deemed to have waived this objection. There is nothing wrong with the view taken by either the Arbitral Tribunal or the commercial court. 7.1. The learned commercial court observed that after substitution, claimant sought relief based on the examined testimony of Ramgopal Manda and Hardayal Singh i.e. representatives of the respondent no.1. It observed that status of witnesses is not important; rather, the quality of the evidence is material. Since the objector had waived objection to substitution, and the award was based on the examined witnesses' testimony, the objection regarding absence of oral evidence on behalf of original claimant was found to be not tenable. Once again we are in agreement with the reasoning of the commercial court. 7.2. On merits, the learned commercial court having gone through the record held that Arbitral Tribunal, exercising its judicial discretion, analyzed and evaluated the evidence produced by both parties. Under Section 34, it is not permissible to substitute (Uploaded on 13/03/2026 at 10:53:16 AM) (Downloaded on 13/03/2026 at 08:52:14 PM) [2026:RJ-JD:8909-DB] (6 of 8) [CMA-604/2024] court's own view in place of the Tribunal's evaluation of evidence. The Tribunal, in its findings and award, has duly considered the opinions rendered by the constitutional courts With regard to the alleged violation of contractual provisions, it was held that the Tribunal gave its findings based on the contractual provisions after validly interpreting and analyzing the contract. It held that there is nothing on record to show that the Tribunal's conclusions were contrary to the contractual provisions.
8. Having gone through the case file and the impugned order, we are of the considered view that no case for interference is made out. The learned commercial court, has passed a well- reasoned order founded upon sound principles of law and after proper appreciation of the material available on record, and the reasoning rendered therein calls for no interference by this Court. Let us see how.
9. The objector's (appellant herein) challenge regarding the legal status and substitution of respondent No. 1 is fundamentally barred by the statutory principle of waiver under Section 4 of the Arbitration and Conciliation Act, 1996. When the application for substitution was moved before the Arbitral Tribunal on 21-09- 2014, the objector explicitly stated they had "no objection" to the change. By failing to raise a jurisdictional challenge at the first available opportunity and proceeding with the arbitration on merits, the objector is now legally estopped from resurrecting this grievance. A party cannot participate in a process, take a chance, and then challenge the very composition of the proceedings once the outcome is adverse.
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10. The argument that the award was based on the testimony of "Company" representatives rather than claimant/respondent No.1's own witnesses is merely a distinction without a legal difference. It is the quality and weight of evidence that matters, not the quantity or the specific designation of the witness. Since the witnesses (Ramgopal Manda and Hardayal Singh) had knowledge of the project facts, the Tribunal was well within its rights to rely on their depositions to reach a reasoned conclusion. In any case, one of the witnesses, Ramgopal Manda, was earlier the proprietor of Bharat Construction, and later, upon Respondent No.1 taking over Bharat Construction, he became one of the Directors of Respondent No.1, and thus otherwise also there is no substance in the objection raised by the appellant qua the witness not being from the time when the agreement and/or work was executed.
11. Speaking of the impugned order herein, the scope of judicial review under Section 34 is restricted to specific grounds and does not permit a "merit-based" review of the dispute. Merely because the Tribunal's decided Issues no. 13, 14, 16, and 17 jointly as a matter of procedural efficiency based on the interconnected nature of the correspondence (Annexures C-7 to C-29), such procedural choices by a Tribunal do not constitute any violation of law.
12. Regarding the interpretation of contractual provisions, even if the objector/appellant believes a different interpretation is possible or "better," this Court would refrain to interfere unless the Commercial court/Tribunal's interpretation is patently illegal or "perverse." An interpretation is only perverse if it is one that no reasonable person could possibly reach. In the case in hand, the (Uploaded on 13/03/2026 at 10:53:16 AM) (Downloaded on 13/03/2026 at 08:52:14 PM) [2026:RJ-JD:8909-DB] (8 of 8) [CMA-604/2024] commercial court has noted in its order that Tribunal analyzed the claims in light of the actual conduct and correspondence of the parties, which is a standard and legally sound approach to contract analysis.
13. We are of the opinion that the appellant/objector has failed to demonstrate any illegality appearing on the face of the award. The appeal, being devoid of merit, is accordingly dismissed.
14. All pending applications stand disposed of accordingly.
(YOGENDRA KUMAR PUROHIT),J (ARUN MONGA),J
1-Ishan/-
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