Delhi District Court
Delhi Development Authority vs Subhash Chander on 17 January, 2026
IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 04 (Digital) -
SOUTH DISTRICT, SAKET COURTS, NEW DELHI.
OMP (COMM) 33/24
DELHI DEVELOPMENT AUTHORITY
Through its Vice Chairman
Vikas Sadan, INA, New Delhi-110023
..... Petitioner
VERSUS
SUBHASH CHANDER
M-532, First Floor,
Guru Harkishan Nagar,
New Delhi- 110087
....Respondent/ Claimant
Date of Institution : 22.10.2024
Date when final arguments heard : 14.01.2026
Date of Judgment : 17.01.2026
JUDGMENT
1. Vide this judgment, I shall decide the petition U/s 34 of Arbitration and Conciliation Act filed by the petitioner/DDA challenging the impugned award dt. 27.01.2024 passed by Sole Arbitrator.
OMP (COMM) 33/24 Dt. 17.01.2026 1 of 26 Delhi Development Authority Vs. Subhash Chander Digitally signed by AJAY AJAY KUMAR KUMAR JAIN Date:
JAIN 2026.01.17
16:36:57
+0530
2. Brief facts of the case as per petition that petitioner/DDA invited tendered for the works on or before 21.08.2017 through e-tendering system under NIT No. 12/EE/WD-3/DDA/2017-18 for D/o Main Land Including 60M & 45M Master Plan Roads in Dwarka Project, Phase-II, providing and laying peripheral sewer line in Sector-25, Dwarka Phase-II. In furtherance of the works, the parties entered into an agreement dated 14.11.2017. Since the rates quoted by respondent were found to be the lowest, the bid of respondent was declared successful. In terms of award letter dated 09.11.2017 and the agreement, the stipulated date for completion of the work was 17.05.2018 and the site was handed over to respondent on 18.11.2017. The respondent on request of petitioner granted extension of time without levy of any compensation. Finally, the work was completed after delay of 111 days and the petitioner issued a completion certificate to the respondent. The respondent sent a notice dated 27.05.2019 under Clause 25 of the Agreement, requesting that the Superintending Engineer decide various alleged issues that arose in execution of the works by the respondent. Another such letter was written to the Chief Engineer on 28.06.2019 for appointment of Arbitrator, post which the Engineer-in-charge asked the respondent to visit him on 20.12.2019. The respondent willingly and with complete knowledge of the consequences withdraw the request for appointment of Arbitrator vide letter dated 21.12.2019 and also stated that all disputes have been amicably resolved. The final bill OMP (COMM) 33/24 Dt. 17.01.2026 2 of 26 Delhi Development Authority Vs. Subhash Chander was prepared and the amount was released by the petitioner, pursuant to which respondent continued to issue various letters raising certain unwarranted issues/claims and vide letter dated 10.04.2021 again invoked arbitration clause, thereafter approached Hon'ble High Court of Delhi under section 11 (6) of the Arbitration and Conciliation Act seeking appointment of an independent impartial and sole Arbitrator, and therefore Sh. Amar Nath, District and Sessions Judge (Retd.) was appointed as Sole Arbitrator. On 05.02.2022, the respondent filed statement of claims before Ld. Arbitral Tribunal, thereafter the petitioner filed statement of defense. Pursuant to which, rejoinder was filed by respondent/claimant. Consequently, Ld. Arbitrator passed an award on 27.01.2024 in favour of respondent, holding the respondent entitled to recover and the petitioner liable to pay a total sum of Rs. 51,82,931/-.
3. In reply, it is stated that respondent/claimant was awarded work on 09.11.2017 which was completed after delay of 111 days, however extension of time also been granted without levy of compensation. The claimant/respondent have has been reminding for payment of their final bill even after submission of the bill on 15.05.2019. The respondent assured the claimants that they will settle their claim and need not go for arbitration and finalized the bill. Thereafter, the claimant withdraw the invocation of Arbitration. It was informed on 21.12.2019, the bill has been finalized, however on scrutiny of the bill, the claimant found that OMP (COMM) 33/24 Dt. 17.01.2026 3 of 26 Delhi Development Authority Vs. Subhash Chander an amount of Rs. 66,964/- was only payable to the claimants and no claims were settled as assured by the respondent. It has come to the knowledge of payment that the bill for Rs. 66,964/- was already finalized on 31.10.2019 and was lying with the Engineer In Charge. Engineer itself concealed the facts fraudulently and made claimant to withdraw the invocation of Arbitration. Therefore, the claimant/respondent again invoked Arbitration and also filed application before Hon'ble High Court of Delhi for appointment of Arbitrator, pursuant to which, arbitration proceedings initiated. SUBMISSIONS OF COUNSELS :
4. Ld. Counsel for petitioner/DDA submitted that the onus of proving that the undertaking dated 20.12.2019 was obtained by way of fraud and deception on the part of respondent, and only then could the issue of the belated handing over of the cheque by the petitioner be taken up. The inaction of the petitioner, does not in any way prove that the undertaking given by the respondent was taken fraudulently. Despite recording of oral evidence, the Ld. Arbitrator clearly overlooks the deposition and cross-examination of CW. Ld. Counsel submitted that the award perverse, in violation of public policy of India, the fundamental policy of Indian Law, hence liable to be set-aside.
5. Ld. counsel for the respondent/claimant submitted that the claimant has not made the payment despite submission of bill on 15.05.2019 for Rs. 1.25 crores, therefore claimant invoked arbitration on 27.05.2019. The respondent assured the claimant on OMP (COMM) 33/24 Dt. 17.01.2026 4 of 26 Delhi Development Authority Vs. Subhash Chander 20.12.2019 that they will settle their claim and need not to go arbitration and finalize the bill. Therefore, the claimant withdraw the invocation of arbitration, and the letter which was dictated and typed in the office of Engineer-in-charge on 20.12.2019. The claimant was informed on 21.12.2019 that its bill was finalized and an amount of Rs. 66,994/- was only payable to the claimant.
Therefore, the claimant has no other option except invoking the arbitration again. It is also revealed from the final bill that the bill was already passed on 31.10.2019 for Rs. 66,964/- and was lying with the Engineer-in-charge and without any change, the said bill has been finalized on 21.12.2019. There was no notice or intimation about the finalization of bill on 31.10.2019 and the claimant could see the bill only on 21.10.2019, therefore the withdrawal is because of concealment and fraudulent action on the part of petition and cannot be set to voluntary action.
6. The Ld. Arbitrator after considering all the documents and evaluating the documents passed the award, and found that the letter dated 20.12.2019 was not valid in the eyes of law. Ld. Counsel for respondent submitted that there is no merit in the present petitioner, therefore liable to be dismissed.
7. Arguments heard. Record perused.
8. Before adverting to the analysis, the relevant portion of impugned award dt. 27.01.2024 is re-produced as under :
"...
21. I have heard the arguments advanced on behalf of both the sides and carefully perused the record.
OMP (COMM) 33/24 Dt. 17.01.2026 5 of 26 Delhi Development Authority Vs. Subhash Chander
22. Core question involves for consideration:-
Whether a letter dated 20.12.2019 was obtained by Engineer- in-Charge from the claimant fraudulently by way of deception and misrepresentation?
23. Learned counsel for the claimant had urged that the Engineer-In-
Charge of the respondent had called the claimant for a meeting in its office in the 3rd week of December 2019 and he went there accordingly. Engineer-In-Charge advised the claimant that he will settle his claims after finalizing the bills and need not to go for arbitration. The Engineer-In-Charge promised to finalize his final bill shortly, if the application for appointment of arbitrator is with drawn by the claimant. On his assurance, the claimant gave the letter dated 20.12 .201 9 (Ex.CA-16) stating therein that "In continuation of our letter dated 22.08.2019 on the above subject I hereby withdraw my request fo r appointment of Arbitrator as all the disputes with department have been resolved" which was dictated and typed in the office of the Engineer-In-Charge and the same was handed over to the respondent who in turn assured the claimant that his final bill will be finalized very shortly after settling his claims. The claimant was intimated on 21.12.2019 that his bill has been finalized . After seeing the bill, it was revealed upon the claimant that an amount of Rs . 66,964/- was only payable to the claimant and his claims were not settled as so assured by the Engineer-In-Charge of the respondent. On inquiry, it was found by the claimant that the said bill had already been passed on 31.10.2019 and the same was kept by the Engineer-In- Charge in its office without any justifiable reason . The said bill was finalized on 31.10 .2019 without any change. There was no notice or intimation given about the finalization of bill on or before 31.10.2019 to enable the claimant to ascertain the correctness of the bill as per the work done by him. The assurance of the Engineer-In-Charge was nothing but concealment of facts and fraudulent action to achieve the ulterior motive and thus , the withdrawal of invocation of arbitration by the claimant cannot be said as voluntary action rath er the same was under duress and coercion on the part of the Engineer-In-Charge.
24. He invited the attention of this Tribunal by referring Clause 25 of the agreement which provides for invoking arbitration at any stage either during the progress of the work or on completion of the work or on termination of work an d or on finalization of the bill . The claim ant can seek any number of arbitrations during these stages. The claimant was made aware on 21.12.2019 for the first time by the Engineer-In -Charge about the finalization of the bill. Hence, the claim ant invoked arbitration clause thereafter on 10.04.2021 (Ex.C-22) within the statutory period of limitation after completing the procedure OMP (COMM) 33/24 Dt. 17.01.2026 6 of 26 Delhi Development Authority Vs. Subhash Chander as per Clause 25 through letters dated 21.07.2021 (Ex.C-23) and 16.08 .2021 (Ex.C-23). He urged that there is no consequence of the withdrawal of the invocation application when the Ld. Arbitrator was appointed by the Hon'ble High Court of Delhi to adjudicate the disputes and hence, the withdrawal of invocation arbitration dated 20 .12.2019 be declared as null and void as the same was under duress and coercion.
25. To support his contention, he placed reliance upon the following judgments:-
(i)Chairman & M.D, N. T.P.C. Ltd. Vs. Reshmi Constructions, Builders & Contractors, 2004 (1) R.A.J. 232 (SC);
(ii)Sethi Engineering Corporation Vs. Delhi Development Authority & Anr., 2009 (5) R.A.J. 329 (Del);
(iii)McDermott International Inc. Vs. Burn Standard Co. Ltd. and Ors., 2005 (1 OJ SCC 353;
(iv)National Insurance Company Vs. Boghara Polyfab Pvt. Ltd., 2009 (1) sec 267.
26. Per contra, learned counsel for the respondent refuted the aforesaid line of arguments whilst contending that the parties had finally settled the amounts due for closing the agreement. He further submitted that after discussion, the respondent had submitted a letter dated 20.12.2019 in continuation of the letter dated 22.08.2019 . The claimant had not produced any evidence to substantiate his plea that the letter was coerced and under duress. His further line of arguments was that the claimant had uploaded the measurement of the alleged work done on 30.10.2019 which was passed by the Engineer-In- Charge on the same day. The claimant did not make any complaint either to the Higher-Ups of the respondent or to the police or to any other authorities that the letter dated 20.12.2019 and the undertaking had been extracted from him by fraud or unfair means and thus,his plea is an afterthought. The claimant has failed to prove that the letter dated 20.12.2019 was obtained fraudulently by way of deception and misrepresentation and thus , the prayer of the claim No.1 is liable to be rejected as the same having no merits.
27 . To substantiate its plea, he placed reliance upon the following judgments:-
(i)Delhi Integrated Multi Modal Transit System Ltd. Vs. Mis R.S.Sharma Contractors Pvt. Ltd. (2018) sec Online Del.9386, wherein it was observed that the claimant's bald plea of duress and coercion is not sustainable as no material had been placed on record to substantiate its claim that the letter dated 21.12.2012 was submitted under coercion.
(ii)ODA Vs. Sukumar Chand Jain, 2012 sec OnLine Del 3445;
OMP (COMM) 33/24 Dt. 17.01.2026 7 of 26 Delhi Development Authority Vs. Subhash Chander
(iii)State of Rajasthan and Another Vs. Ferro Concrete Construction Private Limited, (2009) 12 sec 1;
(iv)Up State Bridge Corporation Vs. DOA and Anr., 2019 SCC OnLine Del.7168;
(v)Edifice Developers and Project Engineer Ltd. Vs. MisEssar Projects (India) Ltd., 2013 sec OnLine Born. 5
(vi)Essar Procurement Servic es Ltd. Vs. Paramount Constructions, 2016 sec OnLine Born. 9697.
28. Before proceeding further, let me examine some of the documents and the relevant clauses of the agreement which are being reproduced as under:-
".....Ex.RW-1/11 22.08.2019 To, The Executive Engineer W.0.-3 DOA75 Sub: Providing & laying peripheral sewer line in Sector-25, DWK Phase-II Agreement No. : 24/EEIWE-3/DDA/2017-18 Dear Sir, The Agreement Item No. 2, "Extra for every additional lift of 1.5 m or part thereof in excavation - we have claimed of Rs. 90.40 per cum. Now after the decision the department agreed to pay Rs. 73.55 per cum. If the department paid Rs. 73.55 per cum in item No.2. We have to state that we will withdraw revocation of arbitration clause.
Thanking you, Yours faithfully For Subhash Chander Sd/-
Auth. Signatory A C D A Nil Sd.-
22/8I2019 SE/WO Ex.CA-16 Dated: 20/12119 To, The Executive Engineer WORKS, DOA OMP (COMM) 33/24 Dt. 17.01.2026 8 of 26 Delhi Development Authority Vs. Subhash Chander Central Nursery, Sec-5 Dwarka, New Delhi Sub: Withdrawal of request for appointment of Arbitrator for the work "D/o main land including 60 & 45 Master Plan Road in Dwarka, Project, Phase-II (O/o Sector 23B, 24, 25 &
26) Ref.: Providing and laying peripheral sewer line in Sector-25, Dwarka Agmt. No.: 24/EEIWO-3/DDA/2017-18 In continuation or our letter dated 22.08.20 19 on the above subject I hereby withdraw my requ est for appointment of Arbitrator as all the disputes with department have been resolved.
Thanking you Yours faithfully Sd/-
M/s Subhash Chander Ex.CA-17 10/04/2021 Dear Sir(s)
1. xxxxxx
2. That I am Government contractor duly registered with various Government department including DDA and carrying my business under the name and style of Sh. Subhash Chander at M-532, Guru Hari Kishan Nagar, Paschim Vihar, New Delhi-110087.
Xxxxx xxxx Clause 12 Deviation I Variations Extent and Pricing The Engineer-in-Charge shall have power (1) to make alteration in, omissions from, additions to, or substitutions for the original specifications, drawings, designs and instructions that may appear to him to be necessary or advisable during the progress of the work, and (ii) to omit a part of the works in case of non-availability of a portion of the site or for any other reasons and the contractor shall be bound to carry out the works in accordance with any instructions given to him in writing signed by the Engineer- in-Charge and such alterations, omissions, additions or substitutions shall form part of the contract as if originally provided therein and any altered, additional or substituted work which the contractor may be directed to do in the OMP (COMM) 33/24 Dt. 17.01.2026 9 of 26 Delhi Development Authority Vs. Subhash Chander manner specified above as part of the works, shall be carried out by the contractor on the same conditions in all respects including price on which he agreed to do the main work as hereafter provided.
The completion cost of any agreement for Maintenance works including works of up gradation, aesthetic, special repair, addition/ alteration shall not exceed 1.25 times of Tendered amount
12. 1 The time for completion of the works shall, in the event of any deviations resulting in additional cost over the tendered value sum being ordered, be extended, if requested by the contractor, as follows:
(i) In the proportion which the additional cost of the altered, additional or substituted work, bears to the original tendered value plus (ii) 25% of the time calculated in (i) above or such further additional time as may be considered reason able by the Engineer-in-Charge.
12.2 Deviation, Extra item and pricing A. For Project and original works :
In the case of extra item(s) (items that are completely new, and are in addition to the items contained in the contract), the contractor may within fifteen days of receipt of order or occurrence of the item(s) claim rates, supported by proper analysis, for the work and the engineer-in-charge shall within prescribed time limit of the receipt of the claims supported by analysis, after giving consideration to the analysis of the rates submitted by the contractor, determine the basis of the market rates and the contractor shall be paid in accordance with the rates so determined.
B. For Maintenance works including works of up gradation, aesthetic, special repair, addition/ alteration:
In the case of Extra Item(s) being the schedule items (Delhi Schedule of Rates items), these shall be paid as per the schedule rate plus cost index (at the time of tender) plus/minus percentage above/ below quoted contract amount. Payment of Extra items in case of non- schedule items (Non- DSR items) shall be made as per the prevailing market rate. Deviation, Substituted Items, Pricing.
A. For Project and original works:
In the case of substituted items (items that are taken up with partial substitution or in lieu of items of work in the contract), the rate for the agreement Item (to be substituted) OMP (COMM) 33/24 Dt. 17.01.2026 10 of 26 Delhi Development Authority Vs. Subhash Chander and substituted item shall also be determined in the manner as mentioned in the following para.
(a) If the market rate for the substituted item so determined is more than the market rate of the agreement item (to be substituted), the rate payable to the contractor for the substituted item shall be the rate for the agreement item (to be substituted) so increased to the extent of the difference between the market rates of substituted item and the agreement item (to be substituted).
(b) If the market rate for the substituted item so determined is less than the market rate of the agreement item (to be substituted), the rate payable to the contractor for the substituted item shall be the rate for the agreement item (to be substituted) so decreased to the extent of the difference between the market rates of substituted item and the agreement item (to be substituted) .
B. For Maintenance works including works of up gradation, aesthetic, special repair, addition/ alteration:
In the case of Substitute Item(s) being the schedule items (Delhi Schedule of Rates items), these shall be paid as per the schedule rate plus cost index (at the time of tender) plus/minus percentage above below quoted contract amount Payment of Substitute in case of nom schedule items (Non
-DSR items) shall be made as per the prevailing market rate. Deviation, Deviated Quantities, Pricing A. For Project and original works:
In the case of contract items, substituted items, contract cum substituted items, which exceed the limits laid down in schedule F, the contractor may within fifteen days of receipt of order or occurrence of the excess, claim revision of the rates, supported by proper analysis for the work in excess of the above mentioned limits, provided that if the rates so claimed are in excess of the rates specified in the schedule of quantities, the Engineer-in-Charge shall within prescribed time limit of receipt of the claims supported by analysis, after giving consideration to the analysis of the rates submitted by the contractor, determine the rates on the basis of the market rates and the contractor shall be paid in accordance with the rates so determined.
B. For Maintenance works including works of up alteration: gradation, aesthetic, special repair, addition /alteration:
OMP (COMM) 33/24 Dt. 17.01.2026 11 of 26 Delhi Development Authority Vs. Subhash Chander In the case of contract items, which exceed the limits laid down in schedule F, the contractor shall be paid rates specified in the schedule of quantities.
The prescribed time limits for finalizing rates for Extra Item(s), Substitute Item(s) and Deviated Quantities of contract items are as under:
(i) If the Tendered value of work is up to Rs. 45 lac: 30 days.
(ii) If the Tendered value of work is more than Rs. 45 lac and up to Rs. 2.5 Crore: 45 days
(iii) If the Tendered value of work exceeds Rs. 2.5 Crore: 60 days.
12.3 A. For Project and original works:
The provisions of the preceding paragraph shall also apply to the decrease in the rates of items for the work in excess of the limits laid down in Schedule F, and the Engineer-in- Charge shall after giving notice to the contractor within one month of occurrence of the excess and after taking into consideration any reply received from him within fifteen days of the receipt of the notice, revise the rates for the work in question within one month of the expiry of the said period of fifteen days having regard to the market rates. B. For Maintenance works including works of up gradation, aesthetic, special repair, addition I alteration:
In case of decrease in the rates prevailing in the market of items for the work in excess of the limits laid down in Schedule F, the Engineer-in-Charge shall after giving notice to the contractor within one month of occurrence of the excess and after taking into consideration any reply received from him within fifteen days of the receipt of the notice, revise the rates for the work in question within one month of the expiry of the said period of fifteen days having regard to the market rates.
12.4 The contractor shall send to the Engineer-in-Charge once every three months, an up to date account giving complete details of all claims for additional payments to which the contractor may consider himself entitled and of all additional work ordered by the Engineer-in-Charge which he has executed during the preceding quarter falling which the contractor shall be deemed to have waived his right.
However, the Superintending Engineer may authorize consideration of such claims on merits.
OMP (COMM) 33/24 Dt. 17.01.2026 12 of 26 Delhi Development Authority Vs. Subhash Chander 12.5 For the purpose of operation of Schedule "F", the following works shall be treated as works relating to foundation unless & otherwise defined in the contract:
(i)For Buildings: All works up to 1.2 metres above ground level or up to floor 1 level whichever is lower.
(ii)For abutments, piers and well staining: All works up to 1.2 m above the bed level.
(iii)For retaining walls, wing walls, compound walls, chimneys, over head reservoirs/ tanks and other elevated structures: All works up to 1.2 metres above the ground level.
(iv)For reservoirs/tanks (other than overhead resf3rvoirsltanks) : All works up to 1.2 metres stove the ground level.
(v)For basement: All works up to 1.2 m above ground level or up to floor 1 level whichever is lower.
(vi)For Roads, all items of excavation and filling including treatment of sub base.
12.6 Any operation incidental to or necessarily has to be in contemplation of bidder while filing tender, or necessary for proper execution of the item included in the Schedule of quantities or in the schedule of rates mentioned above, whether or not, specifically indicated in the description of the item and the relevant specifications, shall be deemed to be included in the rates quoted by the bidder or the rate given in the said schedule of rates, as the case may be. Nothing extra shall be admissible for such operation.
Clause 25 Settlement of Disputes & Arbitration:
(A)Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions herein before mentioned and as to the quality of workman ship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specification s, estimates, instructions, orders or these condition s or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter.
OMP (COMM) 33/24 Dt. 17.01.2026 13 of 26 Delhi Development Authority Vs. Subhash Chander
ii)If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or decision given in writing by the Engineer-in- Charge on any matter in connection with or arising out of the contract or carrying out of the work, to be unacceptable, he shall promptly within 15 days request the Superintending Engineer in writing for written instruction or decision. Thereupon the Superintending engineer shall give his written Instructions or decision within a period of one month from the receipt of the contractor's letter.
If the Superintending Engineer fails to give his instructions or decision in writing within the aforesaid period or if the contractor is dissatisfied with the instructions or decision of the Superintending Engineer, the contractor may, within 15 days of the receipt of Superintending Engineer's decision appeal to the Chief Engineer who shall afford an opportunity to contractor to be heard, if the latter so desires, and to offer evidence in support of his appeal The chief Engineer shall give his decision within 30 days of receipt of the Contractor's Appeal. If the contractor is dissatisfied with this decision, the contractor shall within a period of 30 days from receipt of the decision, give notice to the Engineer Member for appointment of Arbitrator, failing which, the said decision shall be final, binding and conclusive and not) referable to adjudication by the Arbitrator.
iii) Except where the decision has become final, binding and conclusive in terms of Sub Para (1) above disputes or difference shall be referred for adjudication through arbitration by a Sole Arbitrator who shall be a technical person having the knowledge and experience of the trade, appointed by the Engineer Member, DDA, and who shall not be in relationship with the parties or counsel of the subject- matter of the dispute falling under any of the categories specified in the Seventh - Schedule of the Arbitration and Conciliation Act, 1996 duly amended by Act No.3 of 2016 dated 31.12.15. If the arbitrator so appointed is unable or unwilling to act or resigns his appointment or vacates his office due to any reason whatsoever, another sole arbitrator shall be appointed in the manner aforesaid. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor.
It is a term of this contract that the party invoking arbitration shall give a list of disputes with amounts claimed in respect OMP (COMM) 33/24 Dt. 17.01.2026 14 of 26 Delhi Development Authority Vs. Subhash Chander of each such dispute along with the notice for appointment of arbitrator and giving reference to the rejection by the Chief Engineer of the appeal.
It is also a term of this contract that no person other than a person appointed by the Engineer Member, DDA, as aforesaid, should act as arbitrator and, if, for any reason that is not possible; the matter sh all not be referred to arbitration at all. It is also a term of this contract that if the contractor does not make any demand for appointment of arbitrator in respect of any claims in writing as aforesaid within 120 days of receiving the Intimation from the Engineer-in-Charge that the final bill is ready for the payment, the claim of the contractor shall be deemed to have been waived and absolutely barred and the DDA shall be discharged and released of all liabilities under the contract in respect of these claims.
The arbitration shall be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (Act 26 of 1996), and as amended by the Arbitration and Conciliation (Amendment) Act 12015 (No.3 of 2016) dated 31 .12.15 or any statutory modifications or re- enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceeding under this clause.
It is also a term of this contract that the arbitrator shall adjudicate on only such disputes as are referred to him by the appointing authority and give separate award against each dispute and claim referred to him and, in all cases, where the total amount of the claims by any party exceeds Rs. 1, 00, 000/-, the arbitrator shall give reasons for the award. It is also a term of the contract that if any fees are payable to the arbitrator, these shall be paid equally by both the parties. It is also a term of the contract that the arbitrator shall be deemed to have entered on the reference on the date he issues the notice to both the parties calling them to submit their statement of claims and counter statement of claims. The venue of the arbitration shall be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator, shall, if required, to be paid before the award is made and published, be paid half and half by each of the parties. The cost of the reference and of the award (including the fees, if any, of the arbitrator) shall be in the OMP (COMM) 33/24 Dt. 17.01.2026 15 of 26 Delhi Development Authority Vs. Subhash Chander discretion of the arbitrator who may direct to any by whom and in what manner, such costs or any part thereof shall be paid and fix or settle the amount of costs to be so paid. (B) The Decision of the Superintending Engineer regarding the quantum of reduction as well as justification thereof in respect of rates for substandard work which may be decided to be accepted will be final and could not be open to Arbitration.
..."
Appreciation
29. The existence of an agreement is/was not denied. There had been an assertions of cl ai ms and denial thereof. It is trite to say that on completion of work, right to get payment normally arises. It is also true that on settlement of the final bill , the right to raise further payment get weakened but the claims subsist and if it subsists, then the same is a matter of arbitration.
30. The conduct of the parties as evident from the record that a cheque of amount of Rs. 66,964/- had already been prepared on 31.10.2019 prior to the said letter dated 20.12.2019. Question, therefore, arises as to what was the necessity to submit the. Letter dated 20.12.2019 by the claimant mentioning therein that "In continuation of our letter dated 22.08.2019 on the above subject I hereby withdraw my request for appointment of Arbitrator as all the disputes with department have been resolved". Although, it may not be strictly in place but ground reality cannot be overlooked. Each case has to be considered on its own facts.
31. There is no explanation from the respondent's side as to what was the reason for keeping the cheque amounting to Rs.66,964/- with it for a period of 1 month and 20 days after preparing the same on 31.10.2019. There is no justifiable reason that the cheque amounting to Rs.66,964/- towards the full and final settlement was prepared on 31.10.2019 and the same could not be handed over to the claimant till the date of submitting the letter dated 20.12.2019, meaning thereby that the claimant was not aware about the full and final settlement amounting to Rs.66,964/- till the date of handing over the letter dated 20.12.2019 to the Engineer-In-Charge. Not only this, it is not evident from the record that the claimant was ever intimated with regard to the full and final settlement of the amount of Rs . 66,964/- against the amount due. The claimant was never intimated by the respondent that the final bill was ready for payment. Had the claimant been made aware about the full and final settlement of the amount of Rs. 66,964/- on 20.12 .2019 then the said amount ought to have been mentioned in the said letter against the amount of Rs. 1,18,15,077/-. I failed to OMP (COMM) 33/24 Dt. 17.01.2026 16 of 26 Delhi Development Authority Vs. Subhash Chander understand as to why this material fact has not been mentioned there. The claimant disputed the plea of the respondent that the contract in question was discharged by accord and satisfaction. The claimant's claim was that the letter dated 20.12.2019 was invalid as the same had been obtained under duress and coercion. I think, letter dated 20.12.2019 cannot be considered to constitute a waiver on the part of the claimant for the reason that the respondent had not complied with the payment as per the assurance given by the Executive Engineer while taking the letter dated 20 .12.2019 being No Claim Certificate (in short "NCC") from the claimant. It cannot be said that the letter dated 20.12.2019 was given by the claimant voluntarily without any duress or coercion of any kind.
32. In so far NCC wherein it is mentioned that "/ will not claim anything extra for the extended period" is concerned , the same is on the body of performa of EoT which was neither required in the said format, as having no such column nor Under the law. Significant to note that the EoT was granted upto 06.09 .2018 without levying any compensation and completion certificate was also issued on 06 .09.2018. It is hard to believe that NCC as referred to above was given on the format of EoT by the claimant was on his free will and volition .
33. As per letter dated 15.05.2019 (Ex .CA-13) , the claimant had raised a cl aim for an amount of Rs. 1, 18, 15,077/-, none of which had been resolved . It is highly improbable that the claimant have got ready to write such letter 20.12.2 019 by mentioning that all the disputes with the department have been resolved. No prudent man would believe that the contractor may give away his claims of Rs.1,18,15,077/- as detailed in the letter dated 15.05.2019 for such a meager amount of Rs.66,964/- by his own in normal circumstances unless he is deceived. Moreover, the amount released by the respondent fell short against the amount involving crores of rupees vide letter dated 15.05.2019 (Ex.CA-13). Though , it is true that bald assertion of coercion and duress would be insufficient to sustain such an assertion but it cannot be ignored that the claimant asserted that it had not accepted a reduced payment as full and final settlement of his claims and as such, the duress and coercion is established by sufficient material and evidence. Since the final amount raised by the claimant was not paid in full, therefore, NCC could not constitute a waiver on the part of the claimant. It needs to be noticed that the respondent transferred the amount of Rs.66,964/- through RTGS in the account of the claimant. It is relevant to mention here that the letter dated 20.12.2019 does not find mention the amount of settlement and the claimant had accepted the amount of Rs .66,964/- against the claim of OMP (COMM) 33/24 Dt. 17.01.2026 17 of 26 Delhi Development Authority Vs. Subhash Chander Rs .1, 18, 15,077/- which goes to establish that the letter dated 20.12.2019 was invalid and had been obtained by exercising undue influence and coercion, as such, the same does not discharge the contract by accord and satisfaction. It is not out of place to mention here that the said letter does not show any stamp with signature/initial of the concerned official of the respondent who had received the said letter and as such, the said document is not free from any suspicion. Here I may quote the judgment passed by Hon'ble Mr.Justice Vibhu Bakhru of our own Hon'ble High Court in case titled GAIL (India) Limited Vs. Bansal lnfratech Synergies Limited, 2021 (6) R.A.J 270 (Del.) wherein his Lordship was pleased to observe as under:-
"...
24. The Arbitral Tribunal had also accepted the aforesaid contention and had referred to the decisions of the Supreme Court in Union of India v. Master Construction Co.: (2011) 12 sec 349; National Insurance Company v. Boghara Polyfab Private Limited: (2009) 1 sec 267; and Oriental Insurance Co. Ltd. v. Oicitex Furnishing Limited: 2019 sec OnLine 1458 and had observed as under:
"26. From the said decisions it is clear that the issuance of a "No Claim Certificate" does not, by itself, extinguish the rights and claims of the party issuing such a certificate. If the party is able to establish duress or coercion, then the,, No Claim Certificate" issued by it would be void and its claims would have to judged on merits. At the same time, a bald assertion of coercion or duress without any material to back such a plea would not entitle the party who gave the ,,No Claim Certificate" to renege from it."
28. In addition to the finding that the respondent had submitted the NCC and MRS under duress and coercion, the Arbitral Tribunal also found that GAIL could not rely on the NCC as the payments mentioned therein were not fully discharged by GAIL at the material time. The NCC contemplated a full and final settlement of all dues on payment of an amount of ~5,21, 14,469/-. However, the amounts paid to the respondent fell short of the said amount by ~62, 49, 3871-. GAIL having not paid the settled amount, could not therefore, rely on the NCC to claim that the respondent had settled all its claims and dues in terms of the NCC.
Xxxxxx
31. In view ,6f the above, the present petition is unmerited and is, accordingly dismissed. The pending applications are also disposed of OMP (COMM) 33/24 Dt. 17.01.2026 18 of 26 Delhi Development Authority Vs. Subhash Chander
34. There is no dispute about the proposition of law laid down by the Hon'ble High Court of Delhi in the judgment Delhi Integrated Multi Model Transit System Ltd. (Supra) but regard is to be given to the facts and circumstances of the case. In the judgment (supra), the parties had fin ally settled the amount due for closing the arbitration proceedings under the agreement. The contractor had submitted a letter dated 21.12.2012 accepting the terms of settlement which was subsequently implemented and thus, the agreement had been discharged by accord and satisfaction. To support its contention, the contractor had claimed on the ground that it was coerced into accepting a full and final settlement. There was a mutual agreement finalizing the claim of Rs.66,38,288/- and payment of Rs. 12,66,897/- against the final bill as full and final settlement. The respondent was also asked DIM/TS to adjust the mobilization advance and to release the bank guarantee submitted to securing the same. DIM/TS sent a letter dated 29.05.2013 confirming that subsequent to the respondent full and final settlement vide its letter dated 21 .12.2012, the project accounts had been finalized and an amount of Rs. 19, 324/- was to be paid by the respondent/DIM/TS to R. S. Sharma after deducting TDS, VAT and other statutory deductions towards the full and final settlement of the account. There were correspondence between the parties qua the full and final settlement accepting the terms of the settlement by exchanging various letters.
35. In the instant case, letter dated 20.12.2019 does not find mention of any amount of settlement by accepting the terms of full and final settlement which is apparent from a cheque amounting to Rs. 66,964/- which had already been prepared on 31.10.2019 i.e. one month and 20 days prior to the said letter dated 20.12 .2019 vide which full and final settlement of the dispute was claimed to be resolved by the respondent. It is not out of place to mention here that the letter dated 20.12.2019 does not reveal any mutual agreement because the same was signed by the claim ant only and not by the respondent. Hence, the judgments relied upon by the respondent have no application in the facts and circumstances of the case in hand.
Xxx xxx xxx
xxx xxx xxx
Xxx xxx xxx
Relief:
OMP (COMM) 33/24 Dt. 17.01.2026 19 of 26
Delhi Development Authority Vs. Subhash Chander
37. For these reasons, the respondent shall pay the awarded amount Rs. 51,82,931.00 alongwith interest thereon @ 9% per annum from the date of filing the Statement of claim till the date of award within 60 days plus cost of Rs. 2,50,000/-. If the respondent fails to pay the awarded amount i.e. Rs. 51,82,931.00 alongwith interest @ 9% per annum within 60 days to be counted from the date of award plus cost of the arbitration awarded then simple interest @ 12% per annum will be levied on the aforesaid amount including cost of the arbitration proceedings till the date of realization.
..."
9. The main contention of the Ld. Counsel for petitioner/DDA that the Ld. Arbitrator has wrongly decided the core issue i.e. 'Whether the letter dated 20.12.2019 was obtained by the Engineer In Charge from the claimant fraudulently by way of deception and misrepresentation.' The letter dated 20.12.2019 (Ex.CA-16) stating therein that 'in continuation of our letter dated 22.08.2019 on the above subject, I hereby withdraw my request for appointment of Arbitrator as all the disputes with department has been resolved '
10. While appreciating the contention of both the parties, Ld. Arbitrator observed that a cheque of Rs. 66,964/- was handed over after this undertaking, however it was already prepared on 31.10.2019, therefore the question arose what is the necessity of the said letter dated 20.12.2019. Ld. Arbitrator observed that there is no justifiable reason that the cheuqe amount of Rs. 66,964/- towards full and final settlement was prepared on 31.10.2019 and the same could not be handed over till the date of submitting the letter dated 20.12.2019. There is nothing in the said letter dated 20.12.2019 that the settlement amount of Rs. 66,964/- was against the amount of OMP (COMM) 33/24 Dt. 17.01.2026 20 of 26 Delhi Development Authority Vs. Subhash Chander Rs. 1,18,15,077/-. The claimant had invoked the arbitration for claiming Rs. 1,18,15,077/-, therefore it is imprudent to accept that he will agree for meagre amount of Rs. 66,964/-. The letter dated 20.12.2019 (Ex.CA-16) also do not mention any amount of settlement, therefore the Ld. Arbitrator do not found that the said letter dated 22.12.2019 executed out of mutual agreement and decided the claim on merits.
11. The present petition is not disputing the case on merit of claims, however only on the ground that the said letter dated 20.12.2019 (Ex.CA-16) could not be held to be obtained from the claimant fraudulently by way of deception and misrepresentation, however there is nothing perverse found in the observation of Ld. Arbitrator regarding the said letter dated 20.12.2019. The said letter in the background of the facts cannot be held to be executed only for the full and final amount of Rs. 66,964/- when the claim raised for a total sum of Rs. 1,18,15,077/-.
12. On overall appreciation of material on record, I do not found any illegality leave aside the patent illegality in the impugned award passed by Ld. Arbitrator. The present award is not against to the public policy. The Ld. Arbitrator passed the award after proper appreciation of material on record, and this court also cannot re- appreciate the case on merits. No ground made out to interfere in the impugned award.
13. Scope of interference under section 34 of Arbitration and Conciliation Act with Arbitrator's award is very limited. The Court OMP (COMM) 33/24 Dt. 17.01.2026 21 of 26 Delhi Development Authority Vs. Subhash Chander would not be justified in reappraising the material on record and substituting its own view in place of the view taken by Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail as held by Hon'ble Supreme Court in the case of Navodaya Mass Entertainments Ltd. v. J.M. Combines reported in (2015) 5 SCC 698.
14. Hon'ble Supreme Court in the case of 'Sutlej Construction Ltd. v. State (UT of Chandigarh) reported in (2018) 1 SCC 718' has held that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice. Paragraph nos. 10 to 13 of the said judgment are extracted below:-
"10. We are not in agreement with the approach adopted by the learned Single Judge. The dispute in question had resulted in a reasoned award. It is not as if the arbitrator has not appreciated the evidence. The arbitrator has taken a plausible view and, an in our view, as per us the correct view, that the very nature of job to be performed would imply that there has to be an area for unloading and that too in the vicinity of 5 km as that is all that the appellant was to be paid for. The route was also determined. In such a situation to say that the respondent owed no obligation to make available the site cannot be accepted by any stretch of imagination. The unpreparedness of the respondent is also apparent from the fact that even post-termination it took couple of years for the work to be carried out, which was meant to OMP (COMM) 33/24 Dt. 17.01.2026 22 of 26 Delhi Development Authority Vs. Subhash Chander be completed within 45 days. The ability of the appellant to comply with its obligations was interdependent on the respondent meeting its obligations in time to facilitate appropriate areas for unloading of the earth and for its compacting. At least it is certainly a plausible view.
11. It has been opined by this Court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice".
12. The approach adopted by the learned Additional District Judge, Chandigarh was, thus, correct in not getting into the act of re-appreciating the evidence as the first appellate court from a trial court decree. An arbitrator is a chosen Judge by the parties and it is on limited parameters can the award be interfered with. 13. The learned Single Judge ought to have restrained himself from getting into the meanderings of evidence appreciation and acting like a second appellate court. In fact, even in second appeals, only questions of law are to be determined while the first appellate court is the final court on facts. In the present case, the learned Single Judge has, thus, acted in the first appeal against objections dismissed as if it was the first appellate court against a decree passed by the trial court."
15. The scope of interference with an arbitral award under Section 34 of the Act has been considered and discussed by Hon'ble Supreme Court in a judgment rendered in the case of 'MMTC Ltd. v. Vedanta Ltd. reported in (2019) 4 SCC 163' . Paragraph nos. 11 to 14 of the said judgment are extracted below:
"11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on OMP (COMM) 33/24 Dt. 17.01.2026 23 of 26 Delhi Development Authority Vs. Subhash Chander 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.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts.
13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, sub-section (2-A) has been inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an OMP (COMM) 33/24 Dt. 17.01.2026 24 of 26 Delhi Development Authority Vs. Subhash Chander erroneous application of the law or by re-appreciation of evidence.
14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section
34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
16. In the case of 'Maharashtra State Electricity Distribution Company Ltd. v. Datar C.C.L. Ltd. reported in (2018) 3 SCC 133' it has been held by Hon'ble Supreme Court that "the proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto."
17. Ld. Arbitrator has passed the award upon consideration of material placed before him. There is nothing on record that the relevant material is not placed before the Ld. Arbitrator. There is nothing perverse or patent illegality in the findings of the Ld. Arbitrator.
18. The Ld. Sole Arbitrator has drawn inferences and conclusions after the factual appreciation in the light of the legal OMP (COMM) 33/24 Dt. 17.01.2026 25 of 26 Delhi Development Authority Vs. Subhash Chander principles. The views of the Ld. Sole Arbitrator can not be found fault with only for the reason that some other views can emerge by appreciating the same set of facts and evidence, until and unless it is shown that such a view is totally obnoxious and unsupported by the sound legal principles.
19. This Court cannot substitute its own views or the views of the parties with the view taken by the Ld. Arbitral Tribunal, if the view taken by the Ld. Arbitrator is not in conflict with the settled legal position. There is nothing to suggest that the findings and conclusions rendered by the Ld. Arbitrator are per-se perverse, illegal or non- sustainable or against public policy.
20. Accordingly, the present petition under Section 34 of the Arbitration and Conciliation Act as pressed into service by the petitioner is therefore not sustainable within the scope and ambit of the provision, therefore, liable to be dismissed and accordingly dismissed and disposed of.
21. File be consigned to record room after necessary compliance.
Announced in open court on 17th January 2026 (Ajay Kumar Jain) District Judge, Comm-04 (Digital) South District, Saket Courts, Delhi OMP (COMM) 33/24 Dt. 17.01.2026 26 of 26 Delhi Development Authority Vs. Subhash Chander