Delhi District Court
M/S Shri Ram Solvent Extractions Pvt Ltd vs Govt Of Nct Of Delhi on 30 May, 2025
IN THE COURT OF Sh. RAJESH KUMAR GOEL
District Judge (Commercial Court) -02,
Central, Tis Hazari
OMP (COMM.) No. 33/2024
CNR No. DLCT 01-008276-2020
M/s Shri Ram Solvent Extractions Pvt. Ltd.
Through Mr. Sumit Singh Chauhan,
its Authorised Signatory
Having registered office at :
Kashipur Road, Jaspur,
(U.S. Nagar) Uttarakhand- 244712. ......Petitioner
Versus
Government of NCT of Delhi
Through the
Secretary-cum Commissioner
(Development),
Development Department,
5/9, Underhill Road, Delhi -110054. ...Respondent
Date of filing of petition : 02.05.2024
Date of Arguments : 07.05.2025
Date of Order : 30.05.2025
Order :
1. Vide this order, I shall dispose of the present
petition/objections under section 34 of Arbitration
& Conciliation Act, 1996 ( hereinafter referred to as
'Act') filled by M/s Shri Ram Solvent Extractions
Pvt. Ltd. ( hereinafter referred to as 'petitioner')
Digitally signed by
RAJESH RAJESH KUMAR
KUMAR GOEL
Date: 2025.05.30
GOEL 13:04:24 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 1 of 36 )
against Govt. of NCT of Delhi through Secretary-
cum Commissioner (Development) ( hereinafter
referred to as " respondent") assailing the final award
dated 28.11.2023 (hereinafter referred to as "impugned
award").
Facts of the case:
2. The brief facts of the case as gleaned from the
award, pleadings of the parties and the other
material available on record, which are necessary
for the disposal of the present petition are as under:-
a) In the year 2015, Ministry of Agriculture and
Farmers welfare, Govt. of India launched a
beneficiary scheme called as Pramparagat
Krishi Vikash Yojna ( hereinafter referred to
as "PKVY") intended to develop sustainable
models of organic farming by benefiting the
farmers in various ways; The said Scheme was
to be implemented by the State Government
through participation of the Regional
Councils/ NGOs.
b) Petitioner is stated to be a Regional Council
(RC) registered under the National Centre for
Organic Farming, Ministry of Agriculture &
Farmers Welfare, and successfully
implementing the same PKVY Scheme in a
few states for the last six years.
c) Respondent is the Secretary-cum-
Commissioner (Development) of the
Development Department, of the Development
Department, Government of NCT of Delhi
who had shown interest for adoption and PGS-
India Certification under PKVY Scheme to be
implemented in the NCT of Delhi under
RAJESH Digitally signed
by RAJESH
KUMAR Date: 2025.05.30
KUMAR GOEL
M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL 13:04:30 +0530
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 2 of 36 )
National Mission for Sustainable Agriculture.
d) On 24.09.2018, respondent is said to have
offered 100 clusters within the geographical
limit of NCT of Delhi to the petitioner for
implementation of Organic farming under the
PKVY Scheme which was accepted by the
petitioner vide letter of acceptance dated
26.09.2018 and Memorandum of
Understanding (MoU) dated 24.12.2018 was
signed and executed between the parties; as
per the clause 1 of the General Terms and
Conditions of MoU, petitioner was supposed
to carry out activities as per guidelines of
PKVY scheme on behalf of the respondent.
e) Clause 19 of the General Terms and
Conditions of the MoU, provided that the
petitioner shall produce satisfactory
performance report obtained from the
concerned District Magistrate (DM) being the
Chairman of the District Level Executive
Committee of PKVY Scheme and that the
District Level Executive Committee would be
responsible for carrying forward the objective
of the scheme ; as per the MoU the respondent
reserved the right of cancellation of contract if
performance of petitioner was not found
satisfactory including forfeiture of bank
guarantee.
f) In January, 2019, project activities were
initiated in terms of Clause 5 of the MoU, the
petitioner submitted the plans for the projects
and activities; in terms of clause 16 of MoU,
the Bank Guarantee dated 25.1.2019 for first
year of 5 % amount of total project cost
totalling to Rs 35,33,700/- was also submitted
to the respondent.
g) On 08.02.2019, respondent is said to have
issued the work order for 3 years to the
petitioner and was allotted 100 clusters in 8
villages in south west district Delhi ; due to
RAJESH Digitally
by RAJESH
signed
KUMAR KUMAR GOEL
Date: 2025.05.30
GOEL 13:04:37 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 3 of 36 )
some land issues, certain allotted Villages
falling under R-zone, the petitioner was able to
form only 80 clusters in south West District.
Therefore, the petitioner requested the
respondent to allot 20 clusters in North District
as there was no land available in South West
District. Accordingly, respondent vide its letter
dated 08.05.2019 allotted 7 additional villages
for conversion of cluster to the petitioner.
h) The petitioner after completing the first year
work as per the submitted action plan and
deliverables under the MoU, for the
implementation of PKVY Scheme, raised the
invoices totaling to Rs 1,02,61,600/- ( Rs One
Crore Two Lakhs Sixty One Thousand and
Six Hundred only) i.e invoice dated 26.8.2019
for a sum of Rs 51,73,600/-, (ii) dated
10.3.2020 for a sum of Rs 10,88,000/- and (iii)
dated 20.10.2020 for a sum of Rs 40,00,000/-,
as per the the MoU, however no payment was
made by the respondent.
i) In the meeting held on 6.12.2019 in the office
of Joint Director (Agriculture), the concerned
Agriculture Extension Officer was ordered to
release the payment of the petitioner after
verifying, scrutinizing the work progress
report and bills submitted by the petitioner;
however, on 1.1.2020, the Block Development
Officer in its letter asked the petitioner to get
the verification itself from the land records
from the patwari through SDM office.
j) A review meeting was held in the office of the
Joint Director (Agriculture) wherein it was
decided that BDO would provide the list of
Kisan Samman Yojana to the RC and it was to
be confirmed accordingly whether it matched
with the registered farmers of PKVY, its area
and the clusters formed; in furtherance of the
meeting, the petitioner matched the verified
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
2025.05.30
GOEL 13:04:42
+0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 4 of 36 )
list and on 13.7.2020 submitted it along with
the full details of Farmers to the BDO office
but no reply was given by the BDO.
k) Petitioner received a letter dated 5.8.2020
from the office of Joint Director (Agriculture)
to submit second year bank guarantee of 5% of
amount involved in the work of first year; on
20.10.2020, petitioner performing his part of
the MoU, submitted the renewed Bank
Guarantee of Rs 35,33,700/- dated 01.09.2020
for the second year; on 24.9.2020, petitioner
submitted the verified list from Patwari
alongwith with full details of the farmers but
again no reply was received from the BDO
office.
l) In furtherance of a review meeting dated
15.12.2020, the petitioner submitted the
requisite documents to the JD Office, BDO
Office and DM Office; in the meeting held on
02.01.2021 with the Development
Commissioner, petitioner was again asked to
provide the copy of the invoices and clusters
verified list; thereafter in the meeting dated
12.2.2021, held in the office of Joint Director
(Agriculture), the petitioner was again asked to
submit the list of farmers cluster wise along
with the revenue records to which petitioner
pointed out the letter dated 25.09.2020
whereby the said list was already provided to
the BDO office and DM Office.
m) Petitioner sent a letter dated 06.05.2022 to the
respondent making a request to release the
payment for the work done for the first year;
said letter was replied by the Joint Director
(Agriculture) vide letter dated 23.05.2022
stating that through the funds have already
been received from the Govt. of India, no
expenditure has been incurred till date due to
non-verification of activities, work progress
report, list of beneficiaries farmers, their area
RAJESH Digitally signed by
RAJESH KUMAR GOEL
KUMAR Date: 2025.05.30
GOEL 13:04:48 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 5 of 36 )
under organic farming clusters through
concerned Tehsildar office, and properly
verified bills have not been submitted so far as
MoU and the DM was directed to process the
respective bills as per MoU and Guidelines of
GoI under PKVY scheme and prioritise the
matter.
n) Despite several meetings, communications and
reminders sent from time to time, respondent
failed to perform its obligation under the MoU
which led to the substantial loss to the
petitioner; a notice under section 21 of the
Arbitration and Conciliation Act,1996 was
sent to the respondent; despite the service of
the same, respondent failed to make the
payment.
o) There being arbitration clause in the
MoU ,Petitioner approached the Delhi High
Court for appointment of Arbitrator; Hon'ble
High Court vide Order dated 3.3.2023, was
pleased to appoint Sh. Subhash Goyal as Sole
Arbitrator to adjudicate the dispute which had
arisen between the parties and this is how the
dispute between the parties came to be placed
before the Ld. Arbitrator.
Proceedings before the Ld. Sole Arbitrator.
3. Pursuant to the appointment of the Ld.
Arbitrator by the Hon'ble High Court of Delhi, the
petitioner filed its claim before the Ld. Arbitrator
against the respondent praying for a recovery of Rs
1,02,61,600/- towards unpaid invoices + Rs
38,56,248/- towards interest @ 12% till 15.4.2023
and return of renewed Bank Guarantee of Rs
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2025.05.30
13:04:53 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 6 of 36 )
35,33,700/- dated 1.9.2020 along with pendente lite
and future interest @12% p.a from the date of filing
of statement of claim till its actual realization.
4. The respondent filed the statement of defence
to the claim of the petitioner before the Ld.
Arbitrator taking various objections and made
counter claim also in the sum of Rs 15,00,000/-
praying that the claim of the petitioner may kindly
be dismissed with costs.
5. Petitioner filed the rejoinder to the statement
of defense filed by the respondent and Ld. Ld.
Arbitrator framed the issues and the case was put to
trial/evidence.
6. In support of its case petitioner led evidence
and filed an affidavit of its AR Sh. Sumit Singh
Chauhan. The respondent also led the evidence and
filed an affidavit of Pawan Chopra, Deputy
Director (Agriculture) Development Dept , GNCT
Delhi.
7. After hearing both the parties, the Ld.
Arbitrator came to the conclusion that the
petitioner/claimant is NOT entitled to recover a sum
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
2025.05.30
GOEL 13:04:59
+0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 7 of 36 )
of Rs 1,02,61,600/- alongwith interest, however,
petitioner/claimant is entitled to get its Bank
Guarantee returned. Accordingly, impugned award
came to be passed. Here it is pertinent to note that
the counter claim of the respondent was also
rejected.
8. In the background of the aforesaid facts , the
impugned award came to be challenged by way of
present petition.
Proceedings before this Court:
9. On receipt of the present petition, vide order
dated 20.5.2024, the notice was directed to be given
to the respondent. The order dated 20.05.2024
would reveal that the question of limitation was left
open with direction that same would be decided
later on at an appropriate stage.
10. The respondent put the appearance through
Ld. Counsel and reply/written statement to the
present petition was filed taking various objections.
11. Written synopsis of arguments on behalf of
both the parties were filed. Both the Ld. Counsel for
the parties have argued the matter orally as well.
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
2025.05.30
GOEL 13:05:07
+0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 8 of 36 )
12. The petitioner has assailed the impugned
award, mainly on the following grounds -
(a) The Ld. Arbitrator while passing the impugned
award has committed patent illegality by
overlooking and failing to appreciate the
submissions made by the petitioner and ignoring
the most crucial documents i.e letter dated
2.2.2022, receivings of the respondent on the
progress report submitted by the petitioner on
26.2.2019, 06.5.2019, 15.7.2019, 31.8.2019,
5.11.2019 and 5.12.2019, report dated
05.12.2019, consolidated progress report, bills for
procuring seeds and organic manure etc.
(b) Ld. Arbitrator has committed patent illegality by
not going into the root of the matter and has given
contradictory findings and even in toto ignored as
well as wrongly interpreted the clause 10.1 of the
PKVY Scheme .
(c) Ld. Arbitrator has held that the petitioner failed to
form the clusters in terms of MOU and PKVY
Scheme which is contradictory to its own finding .
(d) Ld. Arbitrator has erred in passing the impugned
award having failed to consider that the unpaid
Invoices 26,8,2019, 10.3.2020 and 20.10.2020 in
question were raised by the petitioner only for the
80 clusters and not for 100 clusters.
(e) Ld. Arbitrator in its findings has considered the
averments in Statement of Defence of the
respondent as sacrosanct without any supporting
evidence while ignoring the evidence brought on
record by the petitioner.
(f) Learned Arbitrator has committed patent illegality
by ignoring the compliance of the MOU by the
Petitioner ; in terms of Clause 2, 3, and 7 and the
clauses under Terms and Conditions for Release
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2025.05.30
13:05:13 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 9 of 36 )
of Assistance of the MOU, the petitioner timely
submitted the progress reports with proper
receiving from the Respondent for the Clusters
categorically informing the Respondent along
with pictures the progress of work being carried
out.
(g) Learned Arbitrator has committed patent illegality
in concluding that there is nothing on the file as to
whether the land records of farmers who were
registered under PKVY Scheme or any Progress
Report was ever verified by the Respondent. It is
submitted that Learned Arbitrator failed to
appreciate the documents on record.
(h) Ld. Arbitrator has misinterpreted the MOU on a
misleading statement of the respondent that
petitioner failed to form the clusters within the
prescribed time.
(i) The impugned award is perverse as there was no
inspection or satisfactory report by the officials of
the respondents under clause 18 and 19; there was
no adverse report from the side of respondents
against the petitioner, which clearly highlights
that the officials of respondents did not verify the
documents submitted by the petitioner.
(j) Learned Arbitrator has overlooked one of the
most crucial fact which goes to the root of the
matter that under the cancellation clause of the
MOU, the Respondent had the right of
cancellation of contract if the performance of the
Petitioner was not found satisfactory as per terms
and conditions of MOU and PKVY Guidelines
which could also result in forfeiture of the
performance security, i.e., the Bank Guarantee.
However, there was no such communication by
the Respondent or in any of the meetings
terminating the contract. Moreover, the
Respondent vide its Letter dated 05.08.2020 to the
Petitioner demanded the Bank Guarantee for the
Digitally signed
RAJESH by RAJESH
KUMAR KUMAR GOEL
Date: 2025.05.30
M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL 13:05:19 +0530
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 10 of 36 )
second year, which was never forfeited by the
Respondent.
(k) Ld. Arbitrator failed to appreciate that the
meetings pertaining to villages impacted by the
sewage water from Najafgarh drain post the year
2021 were for the second year work and had no
influence on the work already carried out by the
petitioner for which the invoices were raised.
13. Ld. Counsel for the petitioner has argued on
the lines of the grounds, as noted herein above,
therefore, for the sake of brevity, I am not
reproducing the same again. On the point of
limitation, Ld. Counsel for the petitioner submitted
that initially the present petition had been filed
through e-mode on 24.02.2024; certain objections
were raised by the filing section which were
removed later on by the petitioner. He further
submitted that the impugned award is dated
28.11.2023. The date of filing the present petition is
dated 24.02.2024, therefore, the present petition has
been filed within the period of limitation.
14. In support of his arguments, he has placed
reliance on the following judicial authorities:-.
(a) State of Karnataka v. Siddaiah (2001) 10 SCC
28
(b) Associate Builders V. Delhi Development
Authority, (2015) 3 SCC 49
RAJESH Digitally
by RAJESH
signed
KUMAR KUMAR GOEL
Date: 2025.05.30
M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL 13:05:24 +0530
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 11 of 36 )
(c) Delhi Airport Metro Express Pvt. Ltd vs
DMRC (2022) 1 SCC 131
(d) State of Chattisgarh V. Sal Udyog (P) Ltd,
(2022) 2 SCC 275
(e) Patel Engineering Limited V. North Eastern
Electric Power Corporation Limited , (2020)
7 SCC 167.
15. Per contra, Ld. Counsel for the respondent
submitted that Ld. Arbitrator has rightly held that
the obligation of formation of clusters was on the
petitioner and not on the respondent. He further
submitted that there is no illegality or irregularity in
the impugned award passed by the Ld. Arbitrator
and the present petition is liable to be dismissed.
No other argument including on the point of
limitation was made on behalf of the respondent.
16. I have perused the record and heard the Ld.
Counsel for the petitioner and the respondent. I have
also gone through judicial pronouncements, as
relied upon by the Ld. Counsel for the petitioner.
17. Before proceeding further it is necessary to
decide the issue of limitation.
18. The amended Section 34 of the act reads as
under:
Digitally signed
RAJESH by RAJESH
KUMAR GOEL
KUMAR Date:
GOEL 2025.05.30
13:05:30 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 12 of 36 )
"34. Application for setting aside arbitral award .--(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 furnishes proof 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
(ii) the arbitral award is in conflict with the public
policy of India.
RAJESH by
Digitally signed
RAJESH
KUMAR KUMAR GOEL
Date: 2025.05.30
GOEL 13:05:36 +0530
M/s Shri Ram Solvent Extractions Pvt. Ltd
v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 13 of 36 )
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.
(2-A) 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 Digitally signed by RAJESH RAJESH KUMAR KUMAR GOEL M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL Date: 2025.05.30 13:05:42 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 14 of 36 ) 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 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. "
19. In terms of section 34 (3) of the Act, an application for setting aside the award can be made within three months from the date on which the party making that application had received the arbitral award. Vide order dated 2.5.2024, this court had called a report from the filing section just to know as to when the present petition was initially filed. The report from the filing section has already been received which indicates that originally the present petition was filed on 24.02.2024. Certain objections were raised which appears to have been removed by the petitioner subsequently. Further, an affidavit on behalf of the petitioner is also there wherein it has been stated that the present petition was filed on 24.02.2024. There is nothing on record to disbelieve the said report and the affidavit filed Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL 2025.05.30 13:05:48 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 15 of 36 ) by the petitioner. Thus, for the purpose of limitation the date of filing of the present petitioner shall be considered as 24.02.2024. The impugned award is dated 28.11.2023, therefore, the present petition is well within the period of limitation in terms of section 34 (3) of the Act.
20. Coming to the merits of the case, it is no more res integra that, the legislative intent with which the 1996 Act is made, Section 5 and Section 34 of the 1996 Act would make it clear that judicial interference with the arbitral awards is limited to the grounds in Section 34. While deciding the application filed under Section 34 of the Act, Courts are mandated to strictly act in accordance with and within the confines of Section 34, refraining from appreciation or re-appreciation of matters of fact as well as law.
21. Having regard to the contentions urged and the issues raised, it shall also be apposite to take note of the principles enunciated by the Hon'ble Supreme Court in some of the relevant decisions on the scope of challenge to an arbitral award under Section 34 of the Act.
Digitally signedRAJESH by RAJESH KUMAR GOEL KUMAR Date:
GOEL 2025.05.30 13:05:54 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 16 of 36 )
22. In so far as the state of the law prior to 2015 Amendment is concerned, the situation stands encapsulated by the Hon'ble Supreme Court , in DDA v. R.S. Sharma and Co., (2008) 13 SCC 80, where the grounds whereby courts may intervene against arbitral award, were listed, which are as under:-
"21. From the above decisions, the following principles emerge:
(a ) An award, which is (i ) contrary to substantive provisions of law; or (ii ) the provisions of the Arbitration and Conciliation Act, 1996; or (iii ) against the terms of the respective contract; or (iv ) patently illegal; or (v ) prejudicial to the rights of the parties; is open to interference by the court under Section 34(2) of the Act.
(b ) The award could be set aside if it is contrary to:
(a ) fundamental policy of Indian law; or (b ) the interest of India; or (c ) justice or morality.
(c ) The award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court.
(d ) It is open to the court to consider whether the award is against the specific terms of contract and if so, interfere with it on the ground that it is patently illegal and opposed to the public policy of India."
23. One of the grounds on which the award could have been assailed was it to have been in conflict Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
GOEL 2025.05.30 M/s Shri Ram Solvent Extractions Pvt. Ltd 13:05:59 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 17 of 36 ) with the public policy of India. This concept has been elaborately considered by Hon'ble Supreme Court in Associate Builders v. DDA, (2015) 3 SCC 49 , wherein it was held:-
"19. When it came to construing the expression "the public policy of India" contained in Section 34(2)(b ) (ii ) of the Arbitration Act, 1996, this Court in ONGC Ltd. v. Saw Pipes Ltd. [(2003) 5 SCC 705 held: (SCC pp. 727-28 & 744-45, paras 31 & 74) "31 . Therefore, in our view, the phrase 'public policy of India' used in Section 34 in context is required to be given a wider meaning. It can be stated that the concept of public policy connotes some matter which concerns public good and the public interest. What is for public good or in public interest or what would be injurious or harmful to the public good or public interest has varied from time to time. However, the award which is, on the face of it, patently in violation of statutory provisions cannot be said to be in public interest. Such award/judgment/decision is likely to adversely affect the administration of justice. Hence, in our view in addition to narrower meaning given to the term 'public policy' in Renusagar case [Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644] it is required to be held that the award could be set aside if it is patently illegal. The result would be--award could be set aside if it is contrary to:
(a ) fundamental policy of Indian law; or (b ) the interest of India; or Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:06:05 M/s Shri Ram Solvent Extractions Pvt. Ltd +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 18 of 36 ) (c ) justice or morality, or (d ) in addition, if it is patently illegal.
Illegality must go to the root of the matter and if the illegality is of trivial nature it cannot be held that award is against the public policy. Award could also be set aside if it is so unfair and unreasonable that it shocks the conscience of the court. Such award is opposed to public policy and is required to be adjudged void."
24. The observations made in the case of Associate Builders v. DDA(supra), were followed by Hon'ble Supreme Court in the case of Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 and has spelt out the contours of the limited scope of judicial interference in reviewing the arbitral awards under the Act and observed thus :
(SCC pp. 169-71, paras 34-41) "34 . 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 paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49] i.e. the fundamental policy of Indian law would be relegated to "Renusagar" understanding of this expression. This would necessarily mean that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 expansion has been done away with. In short, Western Geco , as explained in paras 28 and 29 of Associate Builders , would no longer obtain, as under the Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL 2025.05.30 13:06:11 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 19 of 36 ) 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 para 30 of Associate Builders .
35 . 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 paras 36 to 39 of Associate Builders , as it is only such arbitral awards that shock the conscience of the court that can be set aside on this ground.
36 . 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 paras 18 and 27 of Associate Builders , or secondly, that such award is against basic notions of justice or morality as understood in paras 36 to 39 of Associate Builders . 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 , as understood in Associate Builders , and paras 28 and 29 in particular, is now done away with.
RAJESH Digitally by RAJESH signed KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:06:17 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 20 of 36 ) 37 . Insofar as domestic awards made in India are concerned, an additional ground is now available under sub-section (2-A), added by the Amendment Act, 2015, to Section 34. Here, there must be patent 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. 38 . Secondly, it is also made clear that reappreciation 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.
39 . To elucidate, para 42.1 of Associate Builders , namely, a mere contravention of the substantive law of India, by itself, is no longer a ground available to set aside an arbitral award. Para 42.2 of Associate Builders , 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.
40 . The change made in Section 28(3) by the Amendment Act really follows what is stated in paras 42.3 to 45 inAssociate Builders , 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 Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:06:22 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 21 of 36 ) 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(2-A).
41 . What is important to note is that a decision which is perverse, as understood in paras 31 and 32 of Associate Builders , 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."
25. The position in Associate Builders (supra) was recently summarised by Hon'ble Supreme Court in the case of Indian Oil Corpn. Ltd. v. Shree Ganesh Petroleum, (2022) 4 SCC 463 and held as under:-
"42. In Associate Builders , this Court held that an award could be said to be against the public policy of India in, inter alia, the following circumstances:
42.1. When an award is, on its face, in patent violation of a statutory provision.Digitally signed
RAJESH by RAJESH KUMAR GOEL KUMAR Date:
GOEL 2025.05.30 13:06:28 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 22 of 36 ) 42.2. When the arbitrator/Arbitral Tribunal has failed to adopt a judicial approach in deciding the dispute.
42.3. When an award is in violation of the principles of natural justice.
42.4. When an award is unreasonable or perverse. 42.5. When an award is patently illegal, which would include an award in patent contravention of any substantive law of India or in patent breach of the 1996 Act.
42.6. When an award is contrary to the interest of India, or against justice or morality, in the sense that it shocks the conscience of the Court."
26. Here I may note the observation of Hon'ble Supreme Court made in another recent case of Batliboi Environmental Engineers Ltd. v. Hindustan Petroleum Corpn. Ltd., (2024) 2 SCC 375 at page 401:-
"32. Post award interference and the extent of the second look by the courts under Section 34 of the A&C Act has been a subject- matter of perennial parley. The foundation of arbitration is party autonomy. Parties have the freedom to enter into an agreement to settle their disputes/claims by an Arbitral Tribunal, whose decision is binding on the parties. [ See Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1 : which examines arbitrability and non-arbitrability of subject-matters and claims, which aspect will not be examined in this case.] It is argued that the purpose of arbitration is fast and quick one- stop adjudication as an alternative to court adjudication, and therefore, post award interference by the courts is un- warranted, and an anathema that undermines the fundamental edifice of arbitration, which is consensual and voluntary departure from the right of a party to have its claim or dispute adjudicated by the judiciary. The process is informal, and need not be legalistic [ The expression "judicially", does not equate arbitration with formal/court proceedings, and would include a Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
GOEL 2025.05.30 M/s Shri Ram Solvent Extractions Pvt. Ltd 13:06:36 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 23 of 36 ) just and fair decision.] . Per contra, it is argued that party autonomy should not be treated as an absolute defence, as a party despite agreeing to refer the disputes/claims to a private tribunal consensually, does not barter away the constitutional and basic human right to have a fair and just resolution of the disputes. The court must exercise its powers when the award is unfair, arbitrary, perverse, or otherwise infirm in law. While arbitration is a private form of dispute resolution, the conduct of arbitral proceedings must meet the juristic requirements of due process and procedural fairness and reasonableness, to achieve a "judicially" sound and objective outcome. If these requirements, which are equally fundamental to all forms of adjudication including arbitration, are not sufficiently accommodated in the arbitral proceedings and the outcome is marred, then the award should invite intervention by the court."
27. In the case of Konkan Railway Corpn. Ltd. v.
Chenab Bridge Project, (2023) 9 SCC 85, it was held that :
"19. Therefore, the scope of jurisdiction under Section 34 and Section 37 of the Act is not akin to normal appellate jurisdiction. [UHL Power Co. Ltd. v. State of H.P., (2022) 4 SCC 116, para 15 :. See also : Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1, paras 24, 25.] It is well-settled that courts ought not to interfere with the arbitral award in a casual and cavalier manner. The mere possibility of an alternative view on facts or interpretation of the contract does not entitle courts to reverse the findings of the Arbitral Tribunal. [Ibid; Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131; Parsa Kente Collieries Ltd. v. Rajasthan Rajya Vidyut Utpadan Nigam Ltd. , (2019) 7 SCC 236, para 11.1 : In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd. [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] , this Court held : ( Dyna Technologies case [Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd., (2019) 20 SCC 1] , SCC p. 12, paras 24-25) "24 . There is no dispute that Section 34 of the Arbitration Act limits a challenge to an award only on Digitally signed by RAJESH RAJESH KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:06:41 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 24 of 36 ) the grounds provided therein or as interpreted by various courts. We need to be cognizant of the fact that arbitral awards should not be interfered with in a casual and cavalier manner, unless the court comes to a conclusion that the perversity of the award goes to the root of the matter without there being a possibility of alternative interpretation which may sustain the arbitral award. Section 34 is different in its approach and cannot be equated with a normal appellate jurisdiction. The mandate under Section 34 is to respect the finality of the arbitral award and the party autonomy to get their dispute adjudicated by an alternative forum as provided under the law. If the courts were to interfere with the arbitral award in the usual course on factual aspects, then the commercial wisdom behind opting for alternate dispute resolution would stand frustrated.
25 . Moreover, umpteen number of judgments of this Court have categorically held that the courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act."
28. In the case of Patel Engg. Ltd. v. North Eastern Electric Power Corpn. Ltd., (2020) 7 SCC 167 , it was held that:-
"22. The present case arises out of a domestic award between two Indian entities. The ground of patent illegality is a ground available under the statute for setting aside a domestic award, if the decision of the arbitrator is found to be perverse, or, so irrational that no reasonable person would have arrived at the same; or, the construction of the contract is such that no fair or reasonable person would take; or, that the view of the arbitrator is not even a possible view."
RAJESH Digitally by RAJESH signed KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:06:47 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 25 of 36 )
29. In the case of K. Sugumar v. Hindustan Petroleum Corpn. Ltd., (2020) 12 SCC 539 , it was held that:-
"2. The contours of the power of the Court under Section 34 of the Act are too well established to require any reiteration. Even a bare reading of Section 34 of the Act indicates the highly constricted power of the civil court to interfere with an arbitral award. The reason for this is obvious. When parties have chosen to avail an alternate mechanism for dispute resolution, they must be left to reconcile themselves to the wisdom of the decision of the arbitrator and the role of the court should be restricted to the bare minimum. Interference will be justified only in cases of commission of misconduct by the arbitrator which can find manifestation in different forms including exercise of legal perversity by the arbitrator."
30. In the case of Delhi Airport Metro Express (P) Ltd. v. DMRC, (2022) 1 SCC 131, it was held:-
"28. This Court has in several other judgments interpreted Section 34 of the 1996 Act to stress on the restraint to be shown by Courts while examining the validity of the arbitral awards. The limited grounds available to Courts for annulment of arbitral awards are well known to legally trained minds. However, the difficulty arises in applying the well-established principles for interference to the facts of each case that come up before the Courts. There is a disturbing tendency of Courts setting aside arbitral awards, after dissecting and reassessing factual aspects of the cases to come to a conclusion that the award needs intervention and thereafter, dubbing the award to be vitiated by either perversity or patent RAJESH Digitally by RAJESH signed KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:06:52 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 26 of 36 ) illegality, apart from the other grounds available for annulment of the award. This approach would lead to corrosion of the object of the 1996 Act and the endeavours made to preserve this object, which is minimal judicial interference with arbitral awards. That apart, several judicial pronouncements of this Court would become a dead letter if arbitral awards are set aside by categorising them as perverse or patently illegal without appreciating the contours of the said expressions.
29. Patent illegality should be illegality which goes to the root of the matter. In other words, every error of law committed by the Arbitral Tribunal would not fall within the expression "patent illegality". Likewise, erroneous application of law cannot be categorised as patent illegality. In addition, contravention of law not linked to public policy or public interest is beyond the scope of the expression "patent illegality". What is prohibited is for Courts to reappreciate evidence to conclude that the award suffers from patent illegality appearing on the face of the award, as Courts do not sit in appeal against the arbitral award. The permissible grounds for interference with a domestic award under Section 34(2-A) on the ground of patent illegality is when the arbitrator takes a view which is not even a possible one, or interprets a clause in the contract in such a manner which no fair-minded or reasonable person would, or if the arbitrator commits an error of jurisdiction by wandering outside the contract and dealing with matters not allotted to them. An arbitral award stating no reasons for its findings would make itself susceptible to challenge on this account. The conclusions of the arbitrator which are based on no evidence or have been arrived at by ignoring vital evidence are perverse and can be set aside on the ground Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:06:58 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 27 of 36 ) of patent illegality. Also, consideration of documents which are not supplied to the other party is a facet of perversity falling within the expression "patent illegality".
31. Adverting to the present case, the number of objections have been raised in the present petition which may be briefly pen down as a) overlooking and failing to appreciate the submissions made by the petitioner and ignoring the most crucial documents b) by not going into the root of the matter and has given contradictory findings and even in toto ignored as well as wrongly interpreted the clause 10.1 of the PKVY Scheme c) has given contradictory finding d) erred in passing the impugned award having failed to consider the unpaid Invoices e) ignored the evidence brought on record by the petitioner f) ignored the compliance of the MOU by the Petitioner g) patent illegality in concluding that there is nothing on the file as to whether the land records of farmers who were registered under PKVY Scheme or any Progress Report was ever verified by the Respondent h) failed to appreciate the documents on record i) misinterpreted the MOU on a misleading statement of the respondent that petitioner failed to form the Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:07:17 M/s Shri Ram Solvent Extractions Pvt. Ltd +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 28 of 36 ) clusters within the prescribed time j) the impugned award is perverse k) overlooked one of the most crucial fact which goes to the root of the matter regarding cancellation clause of the MOU etc.
32. Here it would be relevant to reproduce the observations made by the Ld. Arbitrator touching the controversy in question, while passing the impugned award, which are as under:-
After referring to the conditions of PKVY Scheme, Ld. Arbitrator observed as under:-
"....It has come in evidence that the respondent was required to allocate the villages for formation of GROUPS AND CLUSTERS as per MOU and guidelines of PKVVY Scheme and the respondent allotted the Districts and Villages along with the required numbers of Clusters to the claimant Initially 18 villages were allocated in South West Delhi forming 100 Clusters but due to land issues as most of the villages were in R- ZONE the Claimant was able to form 30 Clusters in South West Delhi and requested the Respondent to allocate 20 Clusters in North District as no land was available in South West Delhi There after the respondent vide letter dated 08/05/2019, (Annx CB ) allotted additional villages for conversion of Clusters to the Claimant with the direction to start the work immediately in accordance with the MOU as well as PKVY Scheme However, again, the problem arose as out of 8 villages allotted to the Claimant 4 villages were in R ZONE and RAJESH Digitally signed by RAJESH as such the Cluster could KUMAR not be formed and thus the KUMAR GOEL Date:
2025.05.30
GOEL 13:07:43
+0530
M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 29 of 36 ) Claimant wrote letter dated 26/09/2019 Annx CC after conducting ground level work requesting the Respondent to allot the villages as per the list annexed and the villagers of the said villages vere also interested in joining the PKVY Scheme and they had also discussed with the revenue officials and thereafter the Claimant formed 19 Clusters in North District of Delhi but the said list was not approved by the Competent authority and thus in the absence of approval of inclusion of additional villages the Clusters can not be said to have been formed as required in the PKVY Scheme Moreover the land included in the Clusters was required to be in Contiguous Patch and not scattered Or segregated may be in one village or nearby village But it has come in evidence that the land was NOT contiguous as the land of villages Mitraon Kalan shown at serial no, 12 in the cluster no.4 and another village Galibpur shown serial no. 20 Cluster no.4 is situated at a distance. 15 Km from each otter and the same is in violation of terms and conditions of MOU and Guidelines of PKVY Scheme ( Ex Rw 1/1 and Rw1/2) Therefore, the Claimant has failed to consolidate the land as required for the formation of Groups and Clusters and thus the Claimant itself has violated the terms and condition of MOU as well as PKVY Scheme and revised guidelines of Government of India..."
The contention of the Claimant ( petitioner herein) that formation of groups and cluster was the obligation of the State Government (respondent herein) as per the PKVY Guidelines was also attended to and answered by the Ld. Arbitrator as under:-
"However this argument is not tenable as the State Govt was required to identify the Groups/villages where PKVY Scheme was to be implemented for the formation of Clusters.
M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 30 of 36 ) Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:07:50 +0530 It is pertinent to mention here that vide letter dated 24/9/18 annex C2. the Respondent offered the implementation of PKVY Scheme in 100 Clusters keeping in view the profile and presentation given by the Claimant before the State level, Executive Committee and in pursuance of letter of offer, the Claimant vide letter dated 26-09-2018 ( annexor C3 ) accepted the said offer of implementation of PKVY scheme in 100 Clusters and in pursuance there of MOU dated 24-12-2018 was executed between the parties There is nothing in the letter of offer or in the letter of acceptance about the allotment of identified parcels/ patches of land for promoting organic agriculture as per PKVY Scheme. So much so there is nothing in the MOU regarding the obligation on the part of Respondent State to allot the contiguous patch of agricultural land for the purpose of development of organic farming The Respondent state was to allot the villages for promoting organic farming and the ground level work for formation of Clusters was to be done by Claimant RC in accrdance with PKVY Scheme".
Finally, Ld. Arbitrator reached at a conclusion and observed as under :-
"Therefore, from the above evidence, and circumstances of the case, it is evident that Several deliberations and directions took place to get the PKVY scheme implemented in terms of the revised guidelines of Government of india as well as in terms of MOU but there is nothing on the file in order to infer, as to whether the said directions were complied with and to what extent. So much so there is nothing on the file as to whether the land records of farmers who were registered under PKVY Scheme was ever got verified and that any work progress report was ever got verified from the competent revenue authority as directed by the Joint Director Agriculture.
No doubt the Claimant has submitted the PROJECT REPORT / PROGRESS REPORT (2018-2019) for 100 Digitally signed by RAJESH RAJESH KUMAR GOEL KUMAR Date:
GOEL 2025.05.30 13:07:56 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 31 of 36 ) Clusters till 30 November to the Joint Director (Agri) THE REPORT seems to have been prepared after collecting inputs/ Data from the experts and that is why the same is voluminous and well compiled but there is nothing on the file that the said progress report was ever got verified by the competent authority .
It seems the claimant has failed to form the clusters as required under 3.3.1.2 and 3.3.1.3 and mandated in condition no. 10 of the PKVY SCHEME and non formation of Clusters is also evident from the above referred deliberations and discussions as well as directions issued by the competent authorities from time to time and also from the admitted fact by the Claimant that due to land issues the Claimant was able to form 80 Clusters in area/ villages allocated as against the 100 Clusters in South West District and the Claimant requested the Respondent to allot additional Villages in North District and thereafter vide letter dated 08-05- 2019 EXCW1/27 Respondent allotted 8 additional villages for forming Clusters It is also an admitted fact that out of 8 additional villages allotted to the Claimant. there was issue in 4 villages as the land was of R-Zone and not available for agriculture purposes. and the Claimant informed the Respondent vide letter dated 26- 09-2019 Cw1/28 The Ld. Counsel for the Claimant has argued that thereafter 19 Clusters were formed in the North District on 15-10-2019 but there is nothing on the file as to from where the additional land was allocated for the formation of Clusters as vide letter dated 26-09-2019 the Claimant had expressed their inability to form Clusters in the 8 additional villages in North District It is pertinent to mention here from the written submissions submitted by the Claimant, that after the receipt of list of Kisan Samman Yojana South west BDO the registered farmers with the area where matched and the list along with registration forms of 30 Clusters were submitted to the BDO office in July 2 020 and the remaining Clusters were got verified from the Digitally signed RAJESH by RAJESH KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:08:00 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 32 of 36 ) patwari and were submitted in the month of September 2020 Therefore evidently the Claimant failed to form Clusters with in the prescribed time as per MOU and thus the verification could not be done regarding the list of farmers their land records, suitability of agricultural land for organic farming, soil testing reports, monthly migress reports etc. It is again pertinent to mention here that had the testing report of the soil of the land adjoining to Najafgarh drain was obtained then the said land could not have been included in the Cluster formation because the said land contained sewage water and pollutants where organic farming was not possible.
Moreover there is NO inspection report not to talk of SATISFACTORY PROGRESS REPORT as required under cl. 18and ci 19 NO report from DLEC which was the responsible authority to inspect and supervise the implementation of PKVY Scheme there is nothing on the file to infer as to whether the list of farmers and their areas were ever matched so as to infer the formation of CLUSTERS as per MOU Therefore the Claimant has failed to form Clusters for organic farming in terms of MOU and revised guidelines of PKVY Scheme which was sine qua non for implementation of PKVY Scheme Therefore the voluminous Project/Progress was not verified by the competent authorities for want of Clusters formation as the said report was paper work and not on the ground level in terms of MOU and PKVY Scheme and that is why directions were given from time to time to form Clusters and thus the Claimant has violated the Terms and Conditions of MOU as well as PKVY Scheme guidelines Hence, when the competent authority has not verified the work progress report then it cannot be said to have been proved that the claimant incurred expenses as RAJESH Digitally by RAJESH signed KUMAR KUMAR GOEL M/s Shri Ram Solvent Extractions Pvt. Ltd GOEL Date: 2025.05.30 13:08:05 +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 33 of 36 ) mentioned in the Bills and Progress Report in developing the organic farming in the villages allotted to the Claimant and thus thus the Claimant has failed to comply with the terms and conditions of PKVY SCHEME as well as MOU and revised guidelines of Govt of India".
33. From the aforesaid observations and the findings of Ld. Arbitrator, as noted herein above, it is clear that the contentions of the petitioner, as raised before this Court while assailing the impugned award, were duly considered by the Ld. Arbitrator and dealt with by him. In the impugned award the Ld. Arbitrator has referred to the terms and conditions of Memorandum of Understanding (MoU) and the guidelines of PKVY Scheme in extenso. Not only that the outcome of various meetings which took place in respect of the work/job assigned to the petitioner, were also referred to. The invoices raised by the petitioner found mentioned in the impugned award. Therefore, the contention of the petitioner that invoices were not considered by the Ld. Arbitrator would not stand before this Court.
34. Now, the question arises whether the findings and observations of the Ld. Arbitrator are so perverse which would be suffice to hold that there Digitally signed RAJESH by RAJESH KUMAR GOEL KUMAR Date:
2025.05.30 GOEL 13:08:10 M/s Shri Ram Solvent Extractions Pvt. Ltd +0530 v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 34 of 36 ) is patent illegality in passing the impugned award or not? In my considered opinion the answer would be in negative.
35. At the outset I may mention that there is plethora of judgments of Hon'ble Supreme Court and various High Courts wherein it was categorically held that the court should not interfere with an award merely because an alternative view on the facts and interpretation of the contract between the parties exists. Further, mere erroneous application of the law does not mean that there is patent illegality. The patent illegality should be illegality which goes to the root of the matter which is missing in the present case. Further, one should not forget that the scope of jurisdiction under section 34 is not akin to normal appellate jurisdiction and therefore, the Arbitral award cannot be interfered in a routine manner unless there are grounds to believe that the impugned award is perverse and goes to the root of matter. Tested on these parameters, the present petition would fail.
36. Thus, a reading of the materials placed on record, including the impugned award, would RAJESH Digitally by RAJESH signed KUMAR KUMAR GOEL Date: 2025.05.30 GOEL 13:08:16 +0530 M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 35 of 36 ) disclose that the view taken by the Ld arbitrator, on a consideration of the documents and materials placed before him, is a possible and reasonable conclusion and it is difficult for this court to arrive at a conclusion that the impugned award is patently illegal, as claimed by the petitioner. If that is so, I do not see how this court could have re-appreciated the same to come to a contrary finding. Hence, the present petition being devoid of merits is hereby dismissed.
37. File be consigned to record room, as per rules.
RAJESH Digitally
by RAJESH
signed
KUMAR KUMAR GOEL
Date: 2025.05.30
GOEL 13:08:21 +0530
(Rajesh Kumar Goel)
District Judge (Commercial)-02
Central, Tis Hazari Courts
30.05.2025
Announced in the Open Court
today i.e: 30.05.2025
M/s Shri Ram Solvent Extractions Pvt. Ltd v/s Govt of NCT of Delhi Date of order 30.05.2025 (Page 36 of 36 )