Delhi District Court
Megha Singh vs Satish Kumar Mishra on 6 March, 2026
IN THE COURT OF MS NEELAM SINGH,
DISTRICT JUDGE (COMMERCIAL)-05, SOUTH-EAST
DISTRICT, SAKET COURTS, NEW DELHI
OMP (COMM) No.- 38/2020
In the matter of
Mrs. Megha Singh
W/o Jai Krishna Singh
Prop. M/s Queens Fairmont Corbett,
Bhav Ambar Vilas Group,
531, GF, Kanishka Residency,
Sector-35, Ashoka Road,
Faridabad, Haryana ....Petitioner
Vs.
Satish Kumar Mishra
S/o A.P. Mishra
R/o Zinnia Tower, Green Valley,
Omaxe RPS Colony,
Sector 41-42,
Surajkund, Faridabad,
Haryana ....Respondent
Date of Institution : 15.12.2020
Date of Final Arguments : 31.01.2026
Date of Judgment : 06.03.2026
Final Decision : Dismissed
Section 34 Arbitration and Conciliation Act, 1996
JUDGMENT
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 1 of 55
1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 has been filed on behalf of petitioner seeking partial setting aside of the arbitral award dated 28.08.2020 passed by the learned Sole Arbitrator, Justice S.P. Garg (Retd.), in arbitration proceedings titled Satish Kumar Mishra vs. Megha Singh. The petitioner has consciously restricted the scope of challenge only to that part of the award whereby a sum of Rs. 8.75 lakhs along with interest has been granted in favour of the respondent and whereby the petitioner's counter-claim for damages has been rejected, while not assailing the portion of the award that allowed the petitioner's counter-claim for recovery of Rs. 10,59,231/- with interest. The petitioner has also prayed that the rate of interest of 8 % as awarded by the Ld. Arbitrator on the outstanding balance of Rs.10,59,231 payable to the petitioner shall be modified to 18% p.a. According to the petitioner, the impugned portion of the award is legally unsustainable, factually erroneous, and vitiated by non-consideration of material evidence.
Case of the petitioner
2. It is the case of the petitioner that she is a retired officer of the Government of India, who opted for voluntary retirement in the year 2010 after an unblemished career. With the intention of establishing a sustainable livelihood post-retirement, the petitioner undertook the project of setting up an eco-friendly wildlife resort at Dhikuli, Ramnagar, District Nainital, Uttarakhand.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 2 of 553. The Petitioner stated that, in order to construct the said resort, she sold her residential house in Faridabad and, with the help of a bank loan, private borrowings, her personal savings, and retirement benefits, financed the project. According to the Petitioner, the resort was ready for operation from 15th January 2011, but became operational from 1st February 2011 in accordance with the business plan offered by the Respondent.
4. It is submitted that the resort became operational from 01.02.2011 and required professional marketing support for attracting tourists and travel agencies. At this stage, the respondent, who is stated to be a travel agent based in New Delhi, approached the petitioner and represented that he possessed extensive experience and connections in the hospitality and tourism sector. According to the petitioner, the respondent made a series of representations and assurances to induce her to engage his services. It is submitted that the respondent assured the petitioner that he would work exclusively for her resort, would not market or promote any competing resort in the same area, and would deploy a dedicated marketing team solely for the petitioner's establishment. The respondent further assured that he would generate assured annual business of more than Rs. 3 crores and would ensure continuous occupancy of the resort.
5. It is further the petitioner's case that the respondent assured that all guest payments would be routed directly to the petitioner's OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 3 of 55 resort accounts, that no payments would be retained by him, and that complete transparency would be maintained in respect of room tariffs, commissions, and collections. According to the petitioner, these assurances played a decisive role in permitting the respondent to commence business dealings with the resort.
6. The petitioner submitted that the business relationship between the parties commenced purely on an oral understanding and on a commission basis, and that the respondent commenced sending guests to the resort from 15.03.2011.
7. It is the petitioner's case that the respondent conducted business with the resort only for a short duration, namely from 15.03.2011 till 28.06.2011. During this period, it is submitted that the respondent failed to adhere to the assurances of transparency and exclusivity. The Petitioner contends that she was solely dependent on the Respondent for business for her resort, and that the Respondent even admitted during cross-examination that he was the sole person responsible for providing business to the Petitioner's resort. Despite this, the Respondent allegedly diverted business to other resorts and failed to provide the requisite business to the Petitioner's resort. The Petitioner submits that, as per the alleged agreement, she was entitled to receive business from the Respondent to the tune of Rs. 25-30 lakhs per month, as the annual target under the said agreement was Rs. 3 crores. However, the Respondent allegedly did not perform at all during OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 4 of 55 the first one and a half months, i.e., from 19th January 2011 to March 2011, and even thereafter, his performance during the operational period was only up to 10% of the annual target of Rs. 3 crores.
8. The petitioner alleged that the respondent conducted business entirely on credit, collected payments directly from guests and sponsoring travel agencies, and failed to remit the collected amounts to the petitioner in a timely manner.
9. It is further submitted that the respondent concealed material facts from the petitioner, including his simultaneous engagements with other resorts in the same geographical area. The petitioner also alleged that the respondent had an independent and undisclosed arrangement with M/s Sachin Travels Ltd., under which guest payments were routed to the respondent rather than to the resort, thereby depriving the petitioner of her legitimate revenues. The Petitioner submits that there is a second party involved in the matter, namely the sponsor, M/s Sachin Travel Ltd., which is a necessary party. It is alleged that the Respondent directly collected the resort's revenues from the said sponsor at higher rates and appropriated the same, contrary to his promises and in violation of the provisions of the alleged agreement. The Petitioner submits that the alleged agreement, having been induced by fraud and suppression of material facts relating to the Respondent's prior as well as simultaneous engagements with OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 5 of 55 other resorts and the difference in terms of payment with his sponsor, M/s Sachin Travels Ltd., is vitiated by fraud and is therefore void ab initio. It is also submitted that the Ld. Arbitrator did not allow the petitioner's application moved under relevant provisions for discoveries and interrogatories related to the documents pertaining to the respondent's transactions with sponsor Sachin Travels Ltd.
10. The petitioner submitted that despite repeated oral and written requests, the respondent failed to clear outstanding dues and continued to retain amounts belonging to the resort. According to the petitioner, the respondent neither provided the assured volume of business nor acted in a transparent or bona fide manner. It is stated that due to continuous defaults, the petitioner issued a clear ultimatum to the respondent that no further guests would be accepted on credit after 28.06.2011 unless all outstanding dues were cleared. It is the petitioner's case that despite such ultimatum, the respondent continued to collect payments directly from guests and sponsors and wrongfully retained the same, a fact which has been noticed in the arbitral award itself.
11. The petitioner submitted that soon thereafter, the respondent abruptly stopped sending business to the resort and ceased all communications, leaving the petitioner to deal with mounting liabilities. As a consequence, the petitioner was unable to service bank loans, pay staff salaries, or meet operational expenses of the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 6 of 55 resort.
12. It is stated that due to financial stress and lack of working capital, the resort's loan account was classified as a Non- Performing Asset and the lending bank initiated proceedings under the SARFAESI Act. The petitioner submits that the balance sheet of the petitioner's resort clearly proves that the resort of the petitioner had suffered direct operational loss of Rs. 59,86,389. The petitioner submits that under severe financial pressure and threat of enforcement action, she was compelled to sell the resort in distress in October 2011, resulting in losses exceeding Rs. 4 crores.
13. The petitioner submitted that notwithstanding the above conduct, the respondent initiated arbitral proceedings claiming an amount of Rs. 25 lakhs towards alleged professional fees and Rs. 35 lakhs towards interest, solely on the basis of the disputed agreement dated 19.01.2011. The petitioner asserted no written agreement was ever executed between the parties. It is stated that the agreement dated 19.01.2011 was never executed and that the alleged agreement was never signed by the petitioner. It is the petitioner's case that the alleged agreement dated 19.01.2011 was the replication of the draft sent vide email dated 30.11.2010. Perusal of the both the documents clearly depicts that four clauses including the arbitration clause have been added to the alleged OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 7 of 55 agreeent, which were conspicously absent in email dated 30.11.2010.
14. The petitioner stated that the respondent approached the Hon'ble Delhi High Court by filing a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (ARB.P. 34/2013) seeking appointment of an arbitrator solely on the basis of the alleged agreement dated 19.01.2011. Vide order dated 25.09.2018 passed by Hon'ble Ms. Justice Pratibha Singh, a Sole Arbitrator was appointed. It is submitted that by the same order, the civil suit (CS (OS) 3019/2014) earlier filed by the petitioner for recovery of dues and damages was also dismissed in limine, granting liberty to the petitioner to raise all her objections before the arbitral tribunal. Initially, the petitioner was restrained from raising the issue of forgery of signatures before the Ld. Arbitrator, however, in review petition (Review Application 408/2018 in ARB.P. 34/2013) filed by the Petitioner to the aforesaid order, the said restriction was subsequently lifted.
15. The petitioner states that she filed a review petition before the Hon'ble High Court seeking clarification and modification of the said order. Vide order dated 02.11.2018, the Hon'ble High Court permitted the petitioner to raise all objections before the Ld. Arbitrator, including objections relating to forgery of signatures. The petitioner further stated that her Special Leave Petition before the Hon'ble Supreme Court against the said order was dismissed OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 8 of 55 in limine.
16. The Petitioner submits that it filed a complaint with PS Kalkaji (FIR 08/2013) against the respondent and also filed a miscellaneous application under section 340 read with Section 195 CrPC. The petitioner had also filed a civil suit [CS(OS) 3019/2014] against the Respondent as defendant no. 1 and M/s Sachin Travels Ltd. as defendant no. 2 for recovery, which was disposed of as dismissed by the Hon'ble High Court of Delhi along with adjudication of the Arbitration petition under Section 11 filed by the Respondent, as already stated above.
17. It is the case of the petitioner that the arbitral proceedings in the present case are founded upon an alleged agreement dated 19.01.2011, which, according to her, is a forged, fabricated, and non-existent document. It is asserted that no such agreement was ever executed between the parties and that the respondent has relied upon a mere photocopy of an unsigned draft document, upon which fabricated ink signatures were subsequently placed with an intent to falsely create contractual obligations. The petitioner asserts that the alleged agreement was never acted upon, never produced in original, and never proved in accordance with law. The petitioner stated that she challenged the jurisdiction of the tribunal by filing an application under Section 16 of the Act, specifically raising the issue of forgery and non-existence of the agreement. It is further submitted that the learned Arbitrator failed OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 9 of 55 to frame an issue concerning the alleged forgery of the Petitioner's signatures, despite her vehement request made by way of an application under Section 16, and instead confined the Tribunal's examination of the said application only to the alleged tampering of clauses of the agreement.
18. It is further the case of the petitioner that the Ld. Arbitrator failed to render a categorical finding on the issue of forgery and fabrication, despite the same being a jurisdictional issue and despite specific pleadings, evidence, and applications moved by the petitioner seeking adjudication of the said issue. The petitioner submitted that the failure to decide the foundational issue of the existence and validity of the alleged agreement has resulted in a grave miscarriage of justice and renders the impugned portion of the award patently illegal.
19. The petitioner also challenges the finding of the Ld. Arbitrator with regard to the issue of tampering of the agreement dated 19.01.2011. The petitioner submits that the finding of the learned Arbitrator that no questions were put to the Respondent during cross-examination regarding the alleged tampering of clauses is perverse and contrary to the arbitral record. It is contended that the learned Arbitrator failed to take note of and appreciate the Respondent's own admissions, which constitute clinching evidence. In his rejoinder and affidavit of evidence, the Respondent admitted that the alleged agreement dated 19.01.2011 OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 10 of 55 was a replication of the draft sent vide email dated 30.11.2010, and simultaneously asserted that there was no tampering of the said agreement. However, on a comparison of the two documents, it is alleged that four clauses, including the arbitration clause, were added in the agreement dated 19.01.2011, which were conspicuously absent in the email dated 30.11.2010.
20. It is further submitted by the petitioner that the Hon'ble Apex court has clearly laid down that the original or duly certified copy of the alleged arbitration agreement is a sine-qua-non for invoking section 11 of the Arbitration and Conciliation Act,1996. However, in the present case neither the original nor duly certified copy of the alleged arbitration agreement was brought on record.
21. It is further stated that the petitioner filed a detailed counter- claim seeking recovery of Rs. 10,59,231/- being the outstanding resort dues wrongfully retained by the respondent, along with interest. The petitioner also claimed damages initially quantified at Rs. 18 crores on account of loss of business, collapse of the resort, and distress sale. However, due to severe financial constraints and inability to pay the requisite arbitral fees, the petitioner restricted her claim for damages to Rs. 1 crore.
22. The petitioner submitted that vide the impugned award, the Ld. Arbitrator allowed the petitioner's counter-claim for recovery OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 11 of 55 of Rs. 10,59,231/- with interest, thereby acknowledging that the respondent had wrongfully retained resort revenues. However, the Ld. Arbitrator rejected the petitioner's claim for damages on the ground that loss was not proved, despite extensive documentary and oral evidence being placed on record.
23. It is further stated that despite recording the findings that the respondent failed to provide a dedicated team, generate the agreed amount of business, act exclusively for the Petitioner's Resort, and that the Respondent collected payments directly from guests in complete disregard to the agreement between the parties that all the payments from guests were to come to the resort directly, the Ld. Arbitrator proceeded to award a sum of Rs. 8.75 lakhs to the respondent on equitable considerations for the period between 15.03.2011 and 28.06.2011. The petitioner submitted that the award of Rs. 8.75 lakhs is internally inconsistent, contrary to the findings recorded in the award itself, and based on conjectures rather than evidence. It is her grievance that crucial issues relating to forgery of the agreement, fraud, breach of fiduciary duty, and the causal nexus between the respondent's conduct and the collapse of the resort were either ignored or inadequately considered.
24. It is stated that the Petitioner repeatedly sought framing of issues on the aspect of forgery, permission to lead expert evidence, summoning of bank records, and examination of material OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 12 of 55 witnesses, however, such requests were declined, thereby causing serious prejudice and denying her a fair opportunity to present her case.
25. Accordingly, the Petitioner has challenged the validity of the arbitral award to the extent that it awards a sum of Rs. 8.75 lakhs in favour of the Respondent along with interest and rejects the Petitioner's claim for damages, on the ground that, for the reasons stated hereinabove, the award to the aforesaid extent is based on an invalid arbitration agreement, inasmuch as the learned Arbitrator is alleged to have proceeded on the basis of a forged photocopy of the agreement. It is further contended that even as per the alleged agreement, the learned Arbitrator failed to grant the reliefs to which the Petitioner was entitled in law. The award is thus alleged to be opposed to public policy, bad in law and on facts and circumstances of the case, radically erroneous, patently illegal on the face of the record, irrational, perverse, and in absolute disregard of the fundamental rules of evidence.
Case of the respondent
26. Reply to the present petition has been filed on behalf of respondent by submitting that the present objections filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996, are wholly misconceived and devoid of merit. The OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 13 of 55 respondent submits that the petition is liable to be dismissed at the threshold as the grounds urged do not fall within the scope of Section 34 of the Act. The Respondent submits that the grounds taken by the Petitioner are concocted, self-suited, contradictory, and outside the scope of Section 34 of the Arbitration & Conciliation Act,1996.
27. The Respondent submits that the Learned Arbitrator has duly framed all the relevant issues and adjudicated upon them. It is further submitted on behalf of the Respondent that the arbitral award is a matter of record and the contents of the same are admitted and shall prevail over the narration of the petitioner whenever any contradiction or misconception occurs in narration of the petitioner with the actual contents of the award.
28. The principal ground raised by the petitioner relates to the alleged non-existence and forgery of the arbitration agreement dated 19.01.2011. The respondent submits that this issue has already been adjudicated and has attained finality. It is contended that in proceedings under Section 11 of the Act (Arb. P. No. 34/2013), the petitioner disputed her signatures on the agreement. The photocopy of the agreement was sent to CFSL, and by order dated 25.09.2018, the Hon'ble High Court of Delhi upheld the validity and genuineness of the petitioner's signatures on the arbitration agreement. The High Court observed that at least insofar as the arbitration clause was concerned, the signatures of OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 14 of 55 Smt. Megha Singh were genuine. The said order was challenged before the Hon'ble Supreme Court, but the SLP was withdrawn by the Petitioner. Thus, the issue of existence of the arbitration agreement has attained finality and cannot be re-agitated in the present proceedings.
29. The respondent further submits that the learned Arbitrator specifically framed Issue No. 4 in this regard:
"Whether the claimant has tempered with the terms of the agreement dated 19.01.2011 and if so, its impact? OPR."
30. The respondent relied upon the findings of the Tribunal in respect of the said issue, wherein, after considering the record, the Tribunal held that no material evidence was produced to substantiate the allegation of tampering. It was observed that no suggestions regarding forgery or fabrication were put in cross- examination, and no cogent evidence was led by the petitioner to establish tampering. The respondent submits that the petitioner did not include any witness in her list to prove forgery, and a private handwriting expert was sought to be introduced at a belated stage without permission. The learned Arbitrator disallowed such evidence, and no specific challenge has been made in the present petition to that order.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 15 of 5531. The respondent submits that once the CFSL report has established the authenticity of the petitioner's signatures and the same has been upheld by the Hon'ble High Court, the allegation that the Arbitrator acted on a forged photocopy is untenable. It is contended that the petitioner is misusing the process of law by repeatedly raising the same issue which has already been adjudicated. It is also submitted that the petitioner herself admitted in Criminal Revision No. 68/2017 (order dated 21.12.2017) that a draft agreement had been prepared, thereby admitting the existence of an agreement between the parties.
32. With regard to the petitioner's challenge concerning damages, the respondent submits that the learned Arbitrator has adjudicated Issue No. 9 in detail and rejected the petitioner's counter-claim for Rs. 1 crore. The respondent further places reliance upon the findings of the Tribunal in respect of the said issue wherein the Tribunal recorded that the alleged damages were remote, imaginary and unsupported by cogent evidence. It was observed that no nexus was established between the alleged losses and any act of the claimant-Respondent, and that no documentary proof of loss was produced. The Tribunal further held that compensation under Section 73 of the Contract Act requires proof of actual loss, which was not established. It was also noted that criminal proceedings initiated by the petitioner, including FIR No. 08/2013 and subsequent revisions and petitions up to the Hon'ble High Court and Hon'ble Supreme Court, did not result in findings OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 16 of 55 in her favour. It is submitted by the respondent that the petitioner had filed criminal proceedings on these grounds against the respondent, however, she has drastically failed to obtain any relief or findings against the respondent.
33. The respondent submits that the petitioner had earlier instituted separate proceedings before the Hon'ble High Court, being CS (OS) No. 3019/2014, wherein she initially claimed damages to the tune of Rs. 20 crores and subsequently sought amendment of the plaint, reducing the claim to Rs. 20 lakhs. It is contended that such drastic and unexplained variation in the quantum of damages reflects a speculative and unsubstantiated approach. The respondent further submits that the present prayer seeking damages of Rs. 1 crore is equally untenable and amounts to an abuse of the process of law.It is further asserted that the petitioner has failed to place on record any cogent documentary evidence to substantiate the damages claimed. Rather, the petitioner has consistently altered and fluctuated the amount of damages at different stages, first before the Hon'ble High Court and thereafter before the learned Arbitrator,thereby undermining the credibility of the claim.
34. The respondent has placed on record a detailed chronology of litigations initiated by the petitioner, including criminal proceedings, revision petitions, petitions before the Hon'ble High Court, SLP before the Hon'ble Supreme Court (withdrawn), and OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 17 of 55 complaint under Section 200 Cr.P.C. It is contended that the petitioner has left no stone unturned against the respondent and is attempting to re-agitate issues which have already attained finality. The present petition is described as another attempt to reopen concluded findings under the guise of Section 34.
35. With respect to the amount awarded by the Learned Arbitrator, the respondent submits that the Ld. Arbitrator awarded a sum of Rs. 8.75 Lakhs in favor of the respondent along with 8% interest only for the period from 15.03.2011 to 28.06.2011, during which services were rendered by the Respondent to the Petitioner's Resort. However, the respondent submits that he is entitled to get remuneration for the entire period until the resort was sold. The Respondent has filed a separate Section 34 petition challenging the award passed by the Ld. Arbitrator in this regard.
36. Regarding the claim of Rs. 10,59,231/-, it is contended that the recoverable amount related to M/s Sachin Travels Pvt. Ltd., and not the respondent personally. The petitioner herself had taken a similar stand in earlier proceedings. It is submitted that efforts under the Negotiable Instruments Act also failed due to jurisdictional issues and the demise of the concerned person. Hence, the prayer for recovery in the present petition is stated to be unsustainable.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 18 of 5537. It is further submitted that the arbitration agreement was entered into only between the Petitioner and the Respondent, and no third party had privity of contract. The allegation that the Respondent concealed any agreement from a third party is, therefore, specifically denied. It is further submitted that the learned Arbitrator disallowed the impleadment application on the ground that the transactions between the proposed party and the Respondent were outside the scope of the arbitration agreement, which was confined to the agreement executed solely between the Petitioner and the Respondent.The narration concerning M/s Sachin Travel is stated to be unwarranted and irrelevant. It is also submitted that Mr. Sachin Jagatdar, who was running M/s Sachin Travel, has expired, and this fact was brought on record before the Hon'ble High Court by the Respondent. The contents of the said paragraphs are, therefore, denied.
38. The respondent denies that the award is opposed to public policy. It is submitted that the allegations are merely an attempt to bring the petition within the scope of Section 34(2)(b)(ii) of the Act without any substantive basis. The respondent asserts that the Arbitrator framed all relevant issues, considered the evidence, and rendered findings based on record.
39. It is denied that the award given in favor of the Respondent and against the Petitioner is invalid, illegal, without jurisdiction, or suffers from patent illegality. The respondent reiterates that the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 19 of 55 issue of forgery was duly framed and adjudicated. The opinion of the CFSL has been upheld, and the private expert's opinion cannot override it. The respondent further submits that interlocutory orders passed by the learned Arbitrator, including disallowing additional witnesses and discovery applications, have not been specifically challenged and have thus attained finality.
40. The respondent also specifically denies allegations of misconduct, fraud, breach of fiduciary duty, secret profiteering, or concealment of documents. It is submitted that the petitioner has failed in criminal proceedings on similar allegations, and the agreement between the parties cannot be termed void ab initio.
41. The Respondent further submits that no document has been placed on record by the Petitioner to establish that the sale of the resort was a distress sale and not one undertaken for huge profits. It is contended that, had it been a distress sale, the Petitioner would have placed the relevant sale documents on record without hesitation. The Respondent submits that the Petitioner has deliberately withheld the sale consideration details, as the resort was sold to earn substantial profit. It is further asserted that, since the resort was sold for huge profits, the alleged non-payment of salaries of staff, if any, was a deliberately created situation adopted as a tactic by the Petitioner to project that she was facing losses and was therefore unable to pay staff salaries. The Respondent also submits that the balance sheet of the Petitioner's OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 20 of 55 resort depicting an operational loss of Rs. 59,86,389 may have been created in the books of accounts to serve the Petitioner's own interests and that the same has no concern with the Respondent.
42. It is contended that since the resort was sold within a few months of its opening, even while construction was ongoing, the allegation that adequate business was not provided by the Respondent as agreed does not arise. According to the Respondent, the Petitioner herself defaulted on the terms of the agreement by selling the resort within a short span of its commencement for her own financial gain.
43. It is further submitted by the Respondent that the Petitioner deliberately concealed the vital fact that the resort was not completely constructed; that all committed rooms were not ready; that the swimming pool was not functional; and that there were various other incomplete aspects of the resort, all attributable to the Petitioner herself. It is contended that, despite these shortcomings, the Respondent managed to send guests to the resort, which is stated to be established through the testimony of witnesses on the arbitral record. Therefore, the calculation made by the Petitioner regarding assumed business of Rs. 25-30 lakhs per month is stated to be based on presumptions, whims and fancies, and has no basis in view of the deficiencies in the resort and the fact that it was sold within a few months of opening for huge profit.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 21 of 55Replication
44. The plaintiff has filed a replication to the reply on the section 34 petition submitted by the Respondent. In the said replication, the petitioner has categorically denied all the allegations and contentions raised by the Respondent. The Petitioner has reiterated, reaffirmed and relied upon the averments of the Section 34 Petition and maintains that the present petition has been filed on a valid grounds. It is reiterated by the petitioner that the alleged agreement dated 19.01.2011 is merely a replication of the draft sent vide email dated 30.11.2010, however, four clauses, including the arbitration clause, were subsequently added in the alleged agreement dated 19.01.2011, which were conspicuously absent in the email dated 30.11.2010. It is specifically pleaded that the arbitral proceedings are founded upon a forged, fabricated, and non-existent document, and that the respondent relied upon a mere photocopy of an unsigned draft, upon which fabricated ink signatures were subsequently placed to falsely create contractual obligations. It is further stated that the alleged agreement was never acted upon, never produced in original, and never proved in accordance with law. It is averred that the petitioner was initially restrained from raising the issue of forgery before the learned Arbitrator, however, in Review Application No. 408/2018 in ARB.P. 34/2013, the said restriction was lifted by order dated 02.11.2018, thereby permitting the petitioner to raise all objections, including forgery. It is further OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 22 of 55 pleaded that neither the original nor a duly certified copy of the alleged arbitration agreement was brought on record while invoking Section 11 of the Arbitration and Conciliation Act, 1996.It is stated that the petitioner had filed a complaint with PS Kalkaji (FIR No. 08/2013) and had also moved an application under Section 340 read with Section 195 CrPC in relation to the alleged forgery.It is further asserted that despite specific applications under Section 16 of the Act, the learned Arbitrator failed to frame an issue on forgery of signatures and confined consideration only to alleged tampering of clauses. It is pleaded that the learned Arbitrator failed to render a categorical finding on the issue of forgery and fabrication, despite the same being a jurisdictional issue. It is further averred that the petitioner had initially quantified damages at Rs. 18 crores but later restricted the claim to Rs. 1 crore due to financial constraints and inability to pay arbitral fees. It is contended that the award of Rs. 8.75 lakhs to the respondent is internally inconsistent with the findings recorded in the award itself and is based on conjectures rather than evidence.
45. I have heard arguments advanced on behalf of both the parties and have perused the case file as well as original arbitral record. I have also considered the oral and written submissions advanced on behalf of both sides.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 23 of 55Points of Consideration before the Court
46. The scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996, is limited. Section 34 of the Arbitration and Conciliation Act, 1996 is reproduced as under:
"Section 34. Application for setting aside arbitral awards.
(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if--
(a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]--
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the Court finds that--
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 24 of 55
(ii) the arbitral award is in conflict with the public policy of India.
1[Explanation 1.--For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,--
(i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or
(ii) it is in contravention with the fundamental policy of Indian law; or
(iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.--For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.] [(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.] (3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter. (4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.
[(5) An application under this section shall be filed by a party only after issuing a prior notice to the other party and such OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 25 of 55 application shall be accompanied by an affidavit by the applicant endorsing compliance with the said requirement. (6) An application under this section shall be disposed of expeditiously, and in any event, within a period of one year from the date on which the notice referred to in sub-section (5) is served upon the other party.]"
47. Before examining the objections raised by the petitioner, it is necessary to briefly note the statutory framework governing interference with an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996. Section 5 of the Arbitration and Conciliation Act, 1996 restricts judicial intervention in arbitral proceedings and provides that no judicial authority shall intervene except where so provided in Part I of the Act. Section 34 constitutes the statutory mechanism through which a party may seek recourse against an arbitral award. Section 34(1) stipulates that recourse to a court against an arbitral award may be made only by an application for setting aside the award in accordance with Section 34(2) and Section 34(3) of the Act. Section 34(2)(a) enumerates limited grounds on which an arbitral award may be set aside. These include circumstances where a party was under incapacity, the arbitration agreement was not valid under the applicable law, the party was not given proper notice of appointment of the arbitrator or of the arbitral proceedings, the party was otherwise unable to present its case, the award deals with disputes beyond the scope of submission to arbitration, or the composition of the arbitral tribunal or arbitral OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 26 of 55 procedure was not in accordance with the agreement between the parties.
48. Section 34(2)(b) further provides that an award may be set aside if the subject matter of the dispute is not capable of settlement by arbitration under the law or if the award is in conflict with the public policy of India. Explanation I to the provision clarifies that an award would be in conflict with public policy only if the making of the award was induced by fraud or corruption, or it contravenes the fundamental policy of Indian law, or is in conflict with the most basic notions of morality or justice. Explanation II makes it clear that no review on the merits of the dispute shall be undertaken while examining whether the award contravenes the fundamental policy of Indian law. Further, Section 34(2-A) provides that in the case of domestic arbitrations, an award may be set aside if it is vitiated by patent illegality appearing on the face of the award. However, the proviso makes it explicit that an award shall not be set aside merely on the ground of an erroneous application of law or by reappreciation of evidence. Thus, the legislative scheme makes it clear that the jurisdiction of the Court under Section 34 is narrow and supervisory in nature. The Court does not sit in appeal over the arbitral award. It is well settled that the Court cannot re-evaluate the evidence or substitute its own view for that of the arbitrator merely because another view may be possible.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 27 of 5549. In the present case, the arbitral award under challenge is a detailed and well-reasoned award, in which the learned Arbitrator has examined the pleadings, documentary material and oral evidence of the parties before returning findings on each issue framed for adjudication. The objections raised by the petitioner in the present proceedings substantially seek a re-appreciation of the evidence and reconsideration of findings of fact, which is impermissible within the limited scope of Section 34 of the Act.
50. The scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996, is circumscribed by specific and limited grounds. It is well-established that the court does not sit in appeal over the arbitral award and cannot re- appreciate the evidence or re-examine the merits of a dispute as would ordinarily be done in a regular appeal, unless there are compelling reasons such as a breach of the fundamental policy of Indian law, is in conflict with the most basic notions of morality or justice, or a patent illegality appearing on the face of the award. The Apex Court has time and again held that the jurisdiction conferred on a Court under Section 34 is narrowly tailored.
51. The learned Arbitrator has passed a reasoned award, analyzing each issue framed before him. The findings are based on evidence, supported by reasoning, and consistent with law. Merely because the Petitioner disagrees with the conclusions reached by the Arbitrator cannot be a ground for interference under Section34.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 28 of 55It is well established that the Court exercising jurisdiction under Section 34 cannot act as a second arbitral forum. The legislative intent under the 1996 Act is to minimize judicial interference and promote finality of arbitral awards.
52. Section 34 of the Arbitration and Conciliation Act, 1996 allows a party to challenge an arbitral award on limited grounds, such as if the award is in conflict with public policy, or if the tribunal acted in a manner that violated the principles of natural justice or if the award is otherwise in violation of the law. However, in the present case, the petitioner has failed to establish that the award is contrary to public policy or that the Sole Arbitrator's conduct in passing the award was flawed in any way.
53. It is well-settled that arbitral tribunals enjoy a wide degree of autonomy and discretion in determining the facts, applying the law, and rendering awards. The role of the Courts in reviewing arbitral awards is extremely limited, and this Court can only interfere if the award is found to be patently illegal or against the public policy of India or if the award explicitly falls within the purview of the other grounds enumerated in Section 34 and as already discussed above. In this case, the petitioner has failed to demonstrate any such illegality or irregularity in the award passed by the Sole Arbitrator. The petitioner's objections are seek a re- appreciation of the evidence and reconsideration of findings of fact, which do not meet the threshold required for setting aside the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 29 of 55 award under Section 34.
54. The Hon'ble Supreme Court in MMTC Limited v. Vedanta Limited, [Civil Appeal No. 1862 of 2014], held that the Court must not act as an appellate forum to re-appreciate evidence or interfere with the findings of the arbitral tribunal unless there is a patent illegality or a violation of the public policy of India. The relevant paragraphs of the judgment are reproduced as under:
"11. As far as Section 34 is concerned, the position is well−settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii), i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a 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.
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 OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 30 of 55 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. (See Associate Builders v. DDA, (2015) 3 SCC 49). Also see ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705; Hindustan Zinc Ltd. v.
Friends Coal Carbonisation, (2006) 4 SCC 445; and McDermott International v. Burn Standard Co. Ltd., (2006) 11 SCC 181).
It is relevant to note that after the 2015 amendments 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 (2A) 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.
12. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section 34. In other words, the Court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the Court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the Court under Section 34 and by the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 31 of 55 Court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings.
13. Having noted the above grounds for interference with an arbitral award, it must now be noted that the instant question pertains to determining whether the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. However, this question has been addressed by the Courts in terms of the construction of the contract between the parties, and as such it can be safely said that a review of such a construction cannot be made in terms of re-assessment of the material on record, but only in terms of the principles governing interference with an award as discussed above."
55. The principle laid down in Associate Builders v. Delhi Development Authority, [(2015) 3 SCC 49], also emphasizes that interference is warranted only in cases when the arbitral award is in conflict with the public policy of India, i.e. is against fundamental policy of Indian Law, interest of India, justice or morality or suffers from patent illegality. It was also held that construction of the terms of a contract is primarily for an arbitrator to decide unless the arbitrator construes the contract in such a way that it could be said to be something that no fair-minded or reasonable person could do.
56. The grounds for setting aside an arbitral award under Section 34 are limited and specific. The petitioner has failed to OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 32 of 55 establish any of these grounds. It is a settled position of law that the jurisdiction of this Court under Section 34 is supervisory and not appellate. The Court is not to sit in appeal over the findings of the Arbitrator. Re-appreciation of evidence or substitution of the Court's own view in place of that of the Arbitrator is impermissible. Interference is warranted only when the award is shown to be patently illegal, perverse, contrary to the fundamental policy of Indian law, or opposed to public policy.
57. The Hon'ble Supreme Court in Ssangyong Engineering & Construction Co. Ltd. v. National Highway Authority of India, [Civil Appeal No. 4779 of 2019], clarified that an award can be set aside on public policy grounds only if it shocks the conscience of the Court. The arbitral award in this case does not meet this threshold. The Tribunal's findings are based on a careful consideration of the evidence and the contractual terms agreed upon by the parties. Below are the reproduced relevant paragraphs of the judgment:
"23. What is clear, therefore, is that the expression "public policy of India", whether contained in Section 34 or in Section 48, would now mean the "fundamental policy of Indian law" as explained in paragraphs 18 and 27 of Associate Builders (supra), i.e., the fundamental policy of Indian law would be relegated to the "Renusagar" understanding of this expression. This would necessarily mean that the Western Geco (supra) expansion has been done away with. In short, Western Geco (supra), as explained in paragraphs 28 and 29 of Associate Builders (supra), OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 33 of 55 would no longer obtain, as under the guise of interfering with an award on the ground that the arbitrator has not adopted a judicial approach, the Court's intervention would be on the merits of the award, which cannot be permitted post amendment. However, insofar as principles of natural justice are concerned, as contained in Sections 18 and 34(2)(a)
(iii) of the 1996 Act, these continue to be grounds of challenge of an award, as is contained in paragraph 30 of Associate Builders (supra).
24. It is important to notice that the ground for interference insofar as it concerns "interest of India"
has since been deleted, and therefore, no longer obtains. Equally, the ground for interference on the basis that the award is in conflict with justice or morality is now to be understood as a conflict with the "most basic notions of morality or justice". This again would be in line with paragraphs 36 to 39 of Associate Builders (supra), as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
25. Thus, it is clear that public policy of India is now constricted to mean firstly, that a domestic award is contrary to the fundamental policy of Indian law, as understood in paragraphs 18 and 27 of Associate Builders (supra), or secondly, that such award is against basic notions of justice or morality as understood in paragraphs 36 to 39 of Associate Builders (supra). Explanation 2 to Section 34(2)(b)
(ii) and Explanation 2 to Section 48(2)(b)(ii) was added by the Amendment Act only so that Western Geco (supra), as understood in Associate Builders (supra), and paragraphs 28 and 29 in particular, is now done away with.
26. Insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 34 of 55 illegality appearing on the face of the award, which refers to such illegality as goes to the root of the matter but which does not amount to mere erroneous application of the law. In short, what is not subsumed within "the fundamental policy of Indian law", namely, the contravention of a statute not linked to public policy or public interest, cannot be brought in by the backdoor when it comes to setting aside an award on the ground of patent illegality.
27. Secondly, it is also made clear that re-
appreciation of evidence, which is what an appellate court is permitted to do, cannot be permitted under the ground of patent illegality appearing on the face of the award.
28. To elucidate, paragraph 42.1 of Associate Builders (supra), namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Paragraph 42.2 of Associate Builders (supra), however, would remain, for if an arbitrator gives no reasons for an award and contravenes Section 31(3) of the 1996 Act, that would certainly amount to a patent illegality on the face of the award.
29. The change made in Section 28(3) by the Amendment Act really follows what is stated in paragraphs 42.3 to 45 in Associate Builders (supra), namely, that the construction of the terms of a contract is primarily for an arbitrator to decide, unless the arbitrator construes the contract in a manner that no fair-minded or reasonable person would; in short, that the arbitrator's view is not even a possible view to take.
Also, if the arbitrator wanders outside the contract and deals with matters not allotted to him, he commits an error of jurisdiction. This ground of challenge will now fall within the new ground added under Section 34(2A).
30. What is important to note is that a decision which OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 35 of 55 is perverse, as understood in paragraphs 31 and 32 of Associate Builders (supra), 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. Thus, 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.
Additionally, a finding based on 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 characterised as perverse."
58. The petitioner has not demonstrated any patent illegality in the arbitral award. The Tribunal's decision is based on a correct interpretation of the contract terms and conditions and a fair assessment of the evidence. There is no manifest error or gross irregularity that warrants setting aside the award. The Tribunal's decision aligns with the contractual terms agreed upon by the parties.
59. The petitioner's claim that the arbitral Tribunal's decision was arbitrary is not supported by the record. The Tribunal provided a detailed and reasoned award, explaining its findings and the basis for its conclusions. The Tribunal's reasoning was logical, coherent, and based on the evidence presented. This Court reiterates the principle that the Arbitral Tribunal's commercial OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 36 of 55 wisdom should not be questioned by the courts. The Tribunal is best placed to understand the nuances of the dispute and the commercial realities. As held in MMTC Limited v. Vedanta Limited, [Civil Appeal No. 1862 of 2014], the Tribunal's decision should be respected unless it is manifestly arbitrary or unreasonable.
60. One of the principal objections raised by the petitioner is that the arbitral tribunal lacked jurisdiction as the agreement dated 19.01.2011 is allegedly forged and tampered with, and therefore there was no valid arbitration agreement between the parties.The issue concerning the existence of the arbitration agreement already stood adjudicated in the Section 11 proceedings before the Hon'ble High Court of Delhi in ARB.P. 34/2013. The Hon'ble High Court specifically examined the allegations of forgery raised by the petitioner and referred the matter to the Central Forensic Science Laboratory (CFSL) for examination of the signatures. After considering the CFSL report and the material placed on record, the Hon'ble High Court categorically held that the signatures of the petitioner on the arbitration agreement were genuine and that a valid arbitration agreement existed between the parties. The Court observed that the CFSL report did not reveal any fundamental difference between the questioned signatures and the admitted signatures of the petitioner.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 37 of 5561. The Hon'ble High Court further held that although the petitioner may have disputes regarding the contents of the agreement, the question regarding the existence of the arbitration agreement stood established. The Court accordingly referred the disputes between the parties to arbitration and observed that the petitioner was at liberty to raise all other objections before the learned Arbitrator. The Hon'ble High Court observed inter alia:
"10. All the above facts, combined with the CFSL report show that there exists an arbitration agreement between the parties......The factual narration above is sufficient for this Court to hold that there exists an arbitration agreement between the parties and the signature is not forged. Even apart from the CFSL report, there are other facts that support the existence of the arbitration agreement. *****************************
1. For the reasons stated above i.e. the pleadings in the suit, the order passed in the revision petition as also the CFSL report, this Court finds that the signatures of Smt. Megha Singh in so far as the arbitration agreement is concerned, are valid and genuine. The challenge to the same is untenable.
2. The disputes between the parties are referred to the sole arbitration of Justice S.P. Garg (Retired) Judge. The Learned Arbitrator shall consider all the objections of the Respondent in respect of the terms of the agreement between the Petitioner and Respondent. Smt Megha Singh is permitted to raise all her objections and claims before the Ld. Arbitrator. This Court has not expressed an opinion on the various clauses of the agreement or the merits of the disputes between the parties.
18. The suit is liable to be rejected with liberty to the Plaintiff to raise all her claims and seek reliefs before the Ld. Arbitrator, except insofar as it relates to her signatures in respect of the arbitration agreement. All allegations, objections and claims of the Respondent are left open. "
62. Thus, the issue regarding the existence and validity of the arbitration agreement already stood concluded in the Section 11 OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 38 of 55 proceedings.
63. The petitioner thereafter filed Review Application No. 408/2018 in ARB.P. 34/2013, wherein the Hon'ble High Court reiterated that the examination undertaken in the earlier judgment was limited to determining the existence of the arbitration agreement and clarified that the remaining disputes could be raised before the learned Arbitrator.
64. The said objection raised by the Petitioner has also been duly considered and dealt with by the learned Arbitrator in the impugned award. The relevant findings recorded in the award are reproduced hereunder:
"28. On perusal of the record, it reveals that the respondent has disputed the execution of the agreement dated 19.01.2011 with the claimant. This plea was taken by the respondent at the time of contesting the proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 before the Hon'ble Delhi HighCourt in Arb. P. No.34/2013. The respondent had placed on record the 'photocopy of the agreement dated 19.01.2011 claiming that the original agreement was in the possession of the respondent. The respondent had denied her signatures on the agreement. The photocopy of the agreement was sent to CFSL and finally, vide order dated 25.09.2018 (Ex.CW1/8), the petition filed by the petitioner was allowed. The Hon'ble High Court observed:
"The facts in the present case reveal that there are disputes between the parties. While Smt. Megha Singh alleges that the signatures on the agreement are fabricated, she does not dispute the existence of an agreement. While it is her stand that the agreement is an oral agreement, it Is Mr. Mishra's stand that the agreement is in writing and he has placed a copy on record which contain her original signatures as per the CFSL report, Thus, at least in so far as the arbitration clause is concerned, the signatures of Smt. Megha Singh are to be taken as authentic and OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 39 of 55 genuine. Once this is held so, the question as to whether there is any tempering with the other clauses, difference in the terms agreed etc., are questions to be determined by the Ld. Arbitrator..."
29. In Para No. 12 of the order, the Hon'ble High Court further observed:
"For the reasons stated above i.e. the pleadings in the suit, the order passed in the revision petition as also the CFSL report, this court finds that the signatures of Smt. Megha Singh, in so far as the arbitration agreement is concerned, are valid and genuine. The challenge to the same is untenable."
30. The order dated 25.09.18 was challenged before the Hon'ble Supreme Court. However, the respondent opted to withdraw the SLP. The issue of 'existence of the arbitration agreement, by virtue of agreement dated 19.01.2011 has, thus, attained finality and the respondent can't be permitted to challenge its 'existence' in the present proceedings."
65. In view of the aforesaid findings, it is evident that the issue regarding the existence and validity of the arbitration agreement had already been conclusively determined by the Hon'ble Delhi High Court in proceedings under Section 11 of the Arbitration and Conciliation Act, 1996. The learned Arbitrator has also duly considered the said aspect in the impugned award and has returned a finding after examining the material placed on record. The said order having attained finality, the Petitioner cannot be permitted to reopen or re-agitate the same issue in the present proceedings under Section 34 of the Act.
66. As already reiterated above it is settled law that the scope of interference under Section 34 of the Act is limited, and this Court does not sit in appeal over the findings of the learned Arbitrator. Re-appreciation of evidence or re-examination of factual findings OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 40 of 55 is impermissible unless the award is shown to be patently illegal or contrary to the fundamental policy of Indian law. No such ground has been made out in the present case.
67. Accordingly, this Court finds no merit in the said objection raised by the Petitioner, and the same is liable to be rejected.
68. The petitioner has further contended that the agreement dated 19.01.2011 was tampered with and that the learned Arbitrator failed to properly adjudicate this issue. The record of the arbitral proceedings, however, show otherwise. The Ld. Arbitrator specifically framed a separate issue, Issue No. 4, to deal with the said objection of the Petitioner-
"Whether the claimant has tampered with the terms of the agreement dated 19.01.2011 and if so, its impact? OPR"
69. The framing of the above issue itself demonstrates that the learned Arbitrator duly considered the objection raised by the petitioner and afforded the parties an opportunity to lead evidence on the said issue. Dealing with the said objection of the Petitioner, the Arbitral Tribunal has duly recorded the following findings-
"31. Regarding the allegations that the 'agreement' was tempered with, this Tribunal is of the view that no material evidence has emerged to substantiate it. Nothing has been disclosed by the respondent as to which term and condition of the 'agreement' has been tempered with. In his evidence by way of affidavit Ex. PX). CW1 Satish Kumar Mishra proved the execution of the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 41 of 55 'agreement" dated 19.01.2011 between the parties. In the cross- examination, the claimant was not at all questioned if there was any tempering with the terms and conditions of the 'agreement'. No suggestions were put to the claimant if the 'agreement' dated 19.01.2011 was forged and fabricated or its terms were tempered with by the claimant."
70. Upon appreciation of the pleadings, documents and oral testimony on record, the Ld. Arbitrator has returned a cogent and reasoned finding on the said issue. The petitioner, in the present petition, has merely reiterated the allegation of tampering without identifying the specific clauses alleged to have been altered or placing any cogent documentary evidence to substantiate the allegation. The present challenge therefore essentially invites this Court to reassess the evidentiary record and substitute its own conclusions for those of the arbitrator, which is impermissible within the limited scope of Section 34 unless the grounds stipulated under the statutory mandate of section 34 are made out, which is not the case in the present case.
71. The petitioner has also contended that the arbitration proceedings were vitiated as the original or certified copy of the arbitration agreement was not filed. This contention of the Petitioner is also devoid of any merit. The very same objection was raised before the Hon'ble High Court during the Section 11 proceedings.The Hon'ble Delhi High Court specifically observed that the copy of the agreement containing the original signatures of the parties would suffice for the purposes of the proceedings. In OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 42 of 55 its order dated 25.09.2018 in ARB.P. 34/2013, the Hon'ble High Court duly observed as under:
"....It was also alleged that the original agreement having not been filed before the Court, the matter is not liable to be referred to arbitration...
3. In rejoinder, the Petitioner has placed on record the copy of the agreement containing the original signatures of the Respondent. Vide order dated 24th March, 2014, this Court passed the following directions: "The petitioner has filed, along with the rejoinder as Annexure-2, photocopy of the agreement dated 19.01.2011 stated to have been arrived at with the respondent, which allegedly contains original signatures of the parties. According to the petitioner, the original of the agreement is in the possession of the respondent. Since the petitioner has placed on record a copy of the agreement which allegedly contains the signatures of the parties in original, the same would suffice. Accordingly, the said document filed as Annexure-2 at pages 186 to 190 of the Part-I file be sealed and be sent to the CFSL for obtaining fresh report in terms of the order dated 26.07.2013. Adjourned to 21.05.2014."
72. Once the Hon'ble High Court exercising jurisdiction under Section 11 was satisfied regarding the existence of the arbitration agreement and referred the disputes to arbitration, the petitioner cannot be permitted to reopen the same issue in the guise of a challenge under Section 34.
73. It is also noteworthy that the Petitioner has adopted mutually inconsistent stands in the present proceedings. On the one hand, the Petitioner has sought to completely deny the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 43 of 55 existence of any written agreement between the parties. On the other hand, the Petitioner has relied upon the very same alleged draft agreement to contend that the Respondent failed to fulfill his obligations thereunder, particularly the assurance of generating business to the tune of approximately Rs. 3 crores per annum for the Petitioner's resort and of dealing exclusively with the Petitioner. On this basis, the Petitioner has further contended that despite recording these findings in the award with regard to the Respondent's failure to adhere to his part of obligations, the learned Arbitrator erroneously awarded a sum of Rs. 8,75,000/- in favour of the Respondent.
74. Such a course is legally impermissible. A party cannot be permitted to approbate and reprobate, or to accept and reject the same instrument depending upon its convenience. Once the Petitioner seeks to rely upon the terms of the agreement for the purpose of alleging breach and claiming reliefs, the Petitioner cannot simultaneously deny the very existence of the said agreement.
75. The petitioner has further assailed the impugned arbitral award on the ground that the learned Sole Arbitrator rejected the petitioner's claim for damages despite extensive documentary and oral evidence having been placed on record.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 44 of 5576. A perusal of the arbitral award reveals that the learned Arbitrator had framed a specific issue in this regard, namely Issue No. 9 - "Whether the respondent is entitled to recover damages restricted to Rs. 1 crore from the claimant? OPR." The said issue has been duly considered and adjudicated in detail by the learned Arbitrator after examining the pleadings, evidence, and submissions of the parties.
77. While dealing with the said issue, the learned Arbitrator first examined the circumstances in which the Petitioner started the resort business and subsequently sold the same. The Tribunal noted that the decision of the Petitioner to seek voluntary retirement and start the resort was an independent decision taken by her in consultation with her husband. It was further observed that when the Petitioner first met the claimant-Respondent in October 2010, the structure of the resort was already complete and finishing work was in progress. The learned Arbitrator therefore held that the claimant-Respondent could not be blamed for the Petitioner's independent decision to leave her government job and enter into a new business venture.
78. Furthermore, the Tribunal also considered the circumstances surrounding the sale of the resort and recorded that the Petitioner had herself started searching for buyers in July/August 2011 and there was no material on record to suggest that the claimant- Respondent had instigated or compelled the Petitioner to sell the OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 45 of 55 resort. It was further noted that the claimant-Respondent had not even been informed about the decision of the Petitioner to sell the resort and that there was no evidence to show that any consultation had taken place between the parties prior to such sale.
79. The learned Arbitrator further observed that the apparent reason for the sale of the resort was that the business expectations of the Petitioner were not fulfilled during the short period the resort remained operational. However, in the absence of any evidence demonstrating that the claimant-Respondent was responsible for the sale of the resort or for the alleged financial losses suffered by the Petitioner herein, the claimant-Respondent could not be held liable for the same. The Tribunal also relied upon the admissions made by the Petitioner during cross- examination. It was noted that the Petitioner admitted that she had not made any written complaint to the claimant-Respondent regarding non-fulfilment of business procurement, nor had she objected to the rates being charged from guests. The Petitioner further admitted that she had not issued any written communication expressing grievance against the claimant- Respondent's conduct of business and had not taken any steps to terminate the arrangement with the claimant-Respondent during the period the resort remained operational.The Tribunal further referred to Section 55 of the Indian Contract Act and noted that the Petitioner had the option to terminate the arrangement if the claimant-Respondent failed to perform his obligations. However, OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 46 of 55 admittedly no such termination or avoidance of the contract took place during the period the resort remained operational. The findings of the Tribunal in this regard are reproduced as under:
"62. The sole purpose to engage the claimant was to procure business for the resort. The claimant had assured to generate business to the tune of Rs.3 crore in the first year itself. However, it did not happen for various reasons for which both the parties have blamed each other. The fact remains if the claimant was in breach of the terms and conditions of the agreement/understanding or he was allegedly sending the guests on 'commission basis' unilaterally, there was no compulsion for the respondent not to dispense with or terminate the services of the claimant. Under Section 55 of the Contract Act, the promisee is given the option to avoid the contract when the promisor fails to perform the contract. However, at no stage, during the period the resort remained in operation, the respondent terminated the services of the claimant or avoided the contract. The respondent was at liberty to engage any other independent person for marketing the resort. In the cross-examination, the respondent admitted that she had not approached any independent person for marketing the resort when the claimant did not provide any business throughout the month of February, 2011. It has come in the cross-examination of the respondent that she had introduced the claimant to Mandeep Gandhi and had informed him that the claimant used to market for her resort. She did not complain to Mandeep Gandhi if the claimant had not provided business to her in terms of the agreement/understanding. It has further come on record that Mandeep Gandhi had paid Rs.2 lacs to the claimant but the said amount was returned by the claimant to Mandeep Gandhi. The respondent did not examine Mandeep Gandhi to ascertain as to how and under what circumstances cheque of Rs. 2 lacs was given to the claimant and why it was returned by him. Apparently, till that time i.e. sale of resort, the respondent had no grievance against the claimant.Ld. Counsel for the respondent has failed to impress as to how the claimant whose only job was to procure business for the resort of the réspondent on payment of 'fee' was liable for all the losses allegedly suffered by the respondent for running the resort or in its alleged distress sale. Admittedly, from 19.01.2011 till the sale of resort, no payments whatsoever were made to the claimant for the services provided by him."OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 47 of 55
80. The learned Arbitrator analyzed the evidence on record and returned a categorical finding that the petitioner had failed to establish any actual loss attributable to the claimant-Respondent. The Tribunal noted that the petitioner had not produced cogent evidence to substantiate the alleged losses or to establish any nexus between the claimant-Respondent's conduct and the alleged damages. The learned Arbitrator specifically observed that the alleged losses were not supported by reliable evidence and that the claim for damages was speculative in nature. The award records as under:
"64.The respondent has not proved by adducing any cogent and clinching evidence that the alleged losses suffered by her have any nexus with the claimant or that he was responsible for it. Apparently, the damages sought by the respondent are remote and unreasonable."
81. The Tribunal further elaborated the settled legal position governing claims for damages under section 73 of the Indian Contract Act, 1872 and held that compensation under the law can only be granted where actual loss is proved. Section 73 explicity highlights legislative intent by stating that such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach. In this regard, the learned Arbitrator observed:
"64. ..........................It is clear that if loss in terms of money can be determined, the party claiming the compensation must prove the loss suffered by him. Existence of loss is sine qua non under Section 73 of the Contract Act. In the instant case, no loss is proved to have been suffered by the respondent on account of OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 48 of 55 the alleged breach of contract by the claimant. Compensation can be given only for the damages or loss suffered. If damages/loss is not suffered, the law does not provide for a windfall."
81. Applying the said principle to the facts of the case, the learned Arbitrator concluded that no material had been produced to demonstrate that any loss had been suffered on account of the claimant-Respondent's alleged breach. The Tribunal further held:
"The damages sought by the respondent are imaginary and have no nexus with the activities of the claimant.No worthwhile evidence has come to show if the claimant was responsible in any manner for any loss allegedly suffered by the respondent. No independent public witness was examined by the respondent to substantiate and corroborate her case."
82. The learned Arbitrator also noted that no independent witness or documentary evidence had been led by the petitioner to substantiate the alleged losses, thereby rendering the claim for damages unsustainable. The learned Arbitrator also took note of the fact that litigation between the parties commenced only after the claimant-Respondent served a legal notice dated 13.08.2012 seeking consultancy charges, whereafter the Petitioner initiated criminal proceedings against the claimant-Respondent. The Tribunal recorded that the claimant-Respondent had been discharged in the said criminal case and that the subsequent remedies pursued by the Petitioner did not yield any favourable outcome.
OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 49 of 5583. Furthermore, a bare perusal of the record, however, reveals that the Petitioner had initially raised a claim for damages amounting to Rs. 21.5 crores. Subsequently, the Petitioner restricted the said claim to Rs. 2 crores and thereafter further reduced the claim to Rs. 1 crore before the Arbitral Tribunal. The said successive and substantial reductions in the quantum of damages claimed itself casts doubt on the credibility and substantiation of the Petitioner's claim. The same prima facie indicates that the claim for damages was speculative and unsupported by cogent material.
84. In view of the aforesaid findings, the learned Arbitrator concluded that the respondent had failed to establish entitlement to damages.
85. This Court finds that the above findings are based on appreciation of the evidence on record, including the admissions made during cross-examination of the Petitioner herein, and constitute a reasoned determination of the issue framed by the Tribunal. The petitioner has failed to demonstrate that the said findings suffer from perversity, patent illegality, or violation of the fundamental policy of Indian law so as to warrant interference under Section 34 of the Arbitration and Conciliation Act, 1996. It is settled law that in proceedings under Section 34, this Court does not sit in appeal over the findings of the arbitral tribunal and cannot undertake a re-appreciation of evidence merely because another view may be possible. Accordingly, the objection raised OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 50 of 55 by the petitioner assailing the rejection of the claim for damages is without merit and is hereby rejected.
86. Furthermore, it is the objection of the petitioner that despite recording findings that the respondent had failed to generate adequate business for the petitioner's resort and had not achieved the projected business of approximately Rs. 3 crore per annum, and further noting that the respondent was not working exclusively for the petitioner, the Ld. Arbitrator nevertheless awarded a sum of Rs. 8.75 lakhs in favour of the respondent towards consultancy charges. This Court has considered the said objection and finds no merit in the same.
87. A perusal of the arbitral award reveals that the Ld. Arbitrator has dealt with the issue of consultancy charges in detail while adjudicating Issue No. 1 and Issue No. 4, and has interpreted the terms of the agreement in a balanced and harmonious manner after appreciating the entire evidence on record. The Tribunal has noted that as per the agreement dated 19.01.2011, the respondent was entitled to consultancy charges of Rs. 2.5 lakhs per month, however, the respondent had failed to generate the anticipated volume of business and had effectively provided business only for a limited period. Taking into account the factual matrix, the Ld. Arbitrator consciously refrained from awarding the consultancy charges for the entire contractual period. Instead, the Tribunal limited the entitlement of the respondent only to the period during which he had actually rendered services OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 51 of 55 and brought guests to the resort, namely from 16.03.2011 to 28.06.2011, thereby ensuring that the respondent was compensated only for the work actually performed.
88. The Tribunal has specifically observed that the respondent had not provided any business prior to 15.03.2011 and had stopped bringing guests after 28.06.2011, and therefore he could not be permitted to claim consultancy charges for the entire contractual duration as that would amount to unjust enrichment. Accordingly, the consultancy fee was restricted to the said operative period only.
89. Thus, far from granting the claim mechanically, the Ld. Arbitrator moderated the contractual entitlement in order to do complete justice and equity between the parties, while ensuring that neither party derived an unfair advantage. It is further noteworthy that during the course of evidence, the petitioner's husband had admitted that no consultancy charges were paid to the respondent despite the business brought by him to the resort. The Tribunal has taken this admission into account while determining the respondent's limited entitlement to remuneration. Furthermore, with regard to the Petitioner's repeated objection concerning the alleged reliance upon a tampered and forged agreement dated 19.01.2011, the Ld. Arbitrator duly recorded that even the email dated 30.11.2010 sent by the Respondent to the Petitioner's husband-receipt of which has not been denied also incorporates that the respondent would be entitled to Rs. 2.5 lakhs per month as OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 52 of 55 consultancy fee for marketing the resort of the respondent. The same is reproduced as under-
"33. This Tribunal is of the view that the claimant shall be entitled to consultancy charges/remuneration @ Rs.2.5/- lacs per month as agreed to in the 'agreement' only for the period, he effectively worked for the resort to provide business under the 'agreement'. In the e-mail dated 30.11.2010 (Annexure 7) sent by the claimant to the respondent's husband J. K. Singh, the final terms and conditions were sent for approval after meeting. The receipt of this e-mail has not been denied. This email also incorporates that the claimant would be entitled to Rs.2.5/-lacs per month as consultancy fee for marketing of the resort of the respondent. It lends credence to the claimant's contention that he was entitled to receive Re 2.5/. lac per month as consultancy fee."
90. In light of the above reasoning, this Court finds that the Ld. Arbitrator has adopted a fair, balanced and reasoned approach while awarding the sum of Rs. 8.75 lakhs in favour of the respondent. The finding is based on appreciation of evidence, interpretation of contractual terms and equitable considerations, which fall squarely within the domain of the arbitral tribunal.Accordingly, the objection raised by the petitioner against the award of Rs. 8.75 lakhs towards consultancy charges is found to be devoid of merit and is hereby rejected.
91. The Arbitrator has not altered the contractual terms; rather, he interpreted the agreement dated 19.01.2011 in accordance with the statutory limitations imposed by the Contract Act and the settled jurisprudence of the Hon'ble Supreme Court. Interpretation of contract terms falls squarely within the domain of the arbitrator, OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 53 of 55 as held in McDermott International Inc. v. Burn Standard Co. Ltd. [(2006) 11 SCC 181].
92. The finality of arbitral decisions is a cornerstone of arbitration. The petitioner's challenge to the award lacks substantive merit and does not meet the high threshold for setting aside an arbitral award. The Tribunal provided both parties with adequate opportunity to present their cases. The Tribunal's adherence to due process and fair hearing principles ensures that the award is not vitiated by procedural irregularities.
93. In the circumstances, I find no ground to hold that the award suffers from patent illegality or perversity. The objections are founded on re-agitation of factual disputes already adjudicated upon by the Arbitrator. This Court cannot reappreciate such findings under the limited ambit of Section 34.
CONCLUSION
94. In view of the foregoing discussion, this Court finds that none of the objections raised by the petitioner disclose any ground warranting interference with the impugned arbitral award within the limited scope of judicial review under Section 34 of the Arbitration and Conciliation Act, 1996. The grounds urged by the petitioner are essentially directed at re-appreciation of evidence and reconsideration of findings of fact returned by the learned OMP(COMM) 38/2020 Megha Singh Vs. Satish Kumar Mishra Page 54 of 55 Arbitrator, which is impermissible in proceedings under Section
34. The arbitral award demonstrates that all the concerns and issues raised by the parties were duly considered and adjudicated by the learned Arbitrator through a reasoned analysis of the pleadings, evidence and contractual terms. No patent illegality, perversity or violation of the fundamental policy of Indian law has been shown by the petitioner.
95. Accordingly, the objections raised by the petitioner fall outside the scope of interference under Section 34 of the Act and the present petition is dismissed, leaving the parties to bear their own costs. File be consigned to record room after due compliance.
Announced & dictated Digitally signed
in the open Court on this
Neelam by Neelam singh
Date:
6th day of March, 2026 singh 2026.03.06
16:21:30 +0530
(NEELAM SINGH)
District Judge
(Commercial Court-05)
South-East District, Saket Courts,
New Delhi
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