FAO (COM ) 14/2023 Page 1 of 23 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 02.09 .2025 Judgment pronounced on: 17.09 .2025 + FAO (COM ) 14/2023 LATE SH PRAM OD KUM AR JAIN PROPRIETOR OF M S JAIN ENTERPRISE S THROUGH HIS LEGAL HEIRS ORS & ORS. ..Appellants Through: Dr. Amit George, M r. Rajev Kumar, M r. Kartikay Punesh, M r. Adhishwar Suri, M r. Dushyant Kishan Kaul, M s. Rupam Jha, M s. Ibansara and M s. M edhavi Bhatia, Advocates. versus M UNICIPAL CORPORATION OF DELHI & ANR. ...Respondents Through: M r. Siddhant Nath (Standing Counsel), M r. Bhavishya M akhija and M r. Aman Khan, Advocates. CORAM : HON'BLE M R. JUSTICE ANIL KSHETARPAL HON'BLE M R. JUSTICE HARIS H VAIDYANATHAN SHANKAR J U D G E M E N T HARISH VAIDYANATHAN SHANKAR, J. 1. The present Appeal , under Section 37(1)(c) of the Arbitration and Conciliation Act, 1996 1, has ben filed to assail the Judgem ent 1 A&C Act FAO (COM ) 14/2023 Page 2 of 23 dated 15.10.2022 2 passed in Arbitration No. 84197/ 2015 titled ³/DWH Sh. Pramod Kumar Jain & Ors. (through legal heirs) v. North Delhi 0XQLFLSDO &RUSRUDWLRQ $QU´ by the learned Aditional District Judge ±8, Tis Hazari Courts (Central), Delhi 3. 2. The Arbitral Award dated 30.03.2012 4, passed by the learned Sole Arbitrator, was challenged by the Appellants by filing a petition under Section 34 of the A&C Act. However, the learned Commercial Court, vide the Impugned Judgment, dismissed the said petition and upheld the Arbitral Award . 3. The dispute arises out of a contract between the Appellants and the Respondents concerning thre work orders for road -raising and allied works , two dated 17.11.2000 and one dated 02.01.2001 5. The General Terms and Conditions applicable to the work orders envisage resolution of the disputes by arbitration . The relevant Arbitration Clause in the General Terms and Conditions is reproduced as under :- ³Clause 25 Setlem ent of Disputes & Arbitration Except where otherwise provided in the contract al questions and disputes relating to the meaning of the specifications, design, drawings and instructions here -in -before mentioned and as to the quality of workmanship or materials as used -on the work or as to any other question, claim, right, mater or thing whatsoever in any way arising ou t of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progres of the work or af ter the cancelation, termination, completion or abandonment thereof shal be dealt with as mentioned hereinafter : (i) If the contractor considers any work demanded of him to be outside the requirements of the contract, or disputes any drawings, record or deci sion given in writing by the Engineer -in -Charge on any mater in conection with or 2 Impugned Judgement 3 Commercial Court 4 Arbitral Award 5 W ork Orders FAO (COM ) 14/2023 Page 3 of 23 arising out of the contract of carying out of the work, to be unacceptable, he shal promptly within 15 days request the Superintending Engineer in writing , for written in struction or decision. Thereupon, the Superintending Engineer shal give his written instructions or decision within a period of one month from the rec eipt of the contractor's leter. If the Superintending Engin eer fails to give his instructions or decis ion in writing within the aforesaid period or if the contractor is disatisfied with the instructions or decision of the Superintending Engin eer, the contractor may, within 15 days of the rec eipt of Superintending Enginer's decision, apeal to the Chief Engin ee r who shal aford an oportunity to the contractor to be heard, if the later so desires, and to offer evidence in suport of his apeal. The Chief Engineer shal give his decision within 30 days of rec eip t of contracto U¶ s apeal. If the contractor is disatisfied with this decision, the contractor shal within a period of 30 days. from rec eipt of the decision, give notice to the Comisioner M .C.D. for apointment of arbitrator failing which the said decision shal be final binding and conclusive an d not referable 10 adjudication by the arbitrator. (i) Excep t where the decision has become final, binding and conclusive in terms of Sub Para (i) above disputes or diference shal be refered for adjudication through arbitration a sole arbitrator apointed b y the Comisioner M .C.D. If the arbitrator so apointed is unable or unwiling to act or resigns his apointment or vacates his office due to any reason whatsoever another sole arbitrator shal be apointed in the maner aforesaid. Such person shal be en titled to proceed with the reference from the stage at which it was left by his predecesor. It is a term of this contract that the party invoking arbitration shal give a list of disputes with amounts claimed in respect of each such dispute along with the notice for apointment of arbitrator and giving reference to the rejection by the Chief Enginer of the apeal. It is also a term of this contract that no person other than a person apointed by such Comisioner M .C.D. as aforesaid should act as arbitrat or and if for any reason that is not posible, the mater shal not be refered to arbitration at al. It is also a term of this contract that if the contractor does not make any demand for apointment of arbitrator in respect of any claims in writing as a foresaid within 120 days of rec eiving the intimation from the Engin eer -in -Charge that the final bill is ready FAO (COM ) 14/2023 Page 4 of 23 for payment, the claim of the contractor sh al be deemed to have been waived and absolutely barred and the M .C.D. shal be discharged and released of al liabilities under the contract in respect of these claims. The arbitration shal be conducted in accordance with the provisions of the Arbitration and Conciliation Act, 196 (26 of 196) or any statutory modifications or re -enactment thereof and th e rules made thereunder and for the ti me being in force shal aply to the arbitration proceeding under this clause. It is also a term of this contract that the arbitrator shal adjudicate on only such disputes as are refered to him by the apointing auth ority and give separate award against each dispute and claim refered 10 him and in al cases where the total amount of the claims by any party exce eds Rs. 1,0,0/ - the arbitrator shal give reasons for the award. It is also a term of the contract that i f any fees are payable to the arbitrator these shal be paid equaly by both the parties. It is also a term of the contract that the arbitrator shal be deemed to have entered on the reference on the date he isues notice to both the parties caling them t o submit their statement of claims and counter statement of claims. The venue of the arbitration shal be such place as may be fixed by the arbitrator in his sole discretion. The fees, if any, of the arbitrator shal, if required to be paid before the awar d 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 fe es, if any, of the arbitrator) shal be in the discretion of the arbitrator who may direct to any by whom and in what maner, such costs or any part thereof shal be paid and fix or setle the amou nt of costs to be so paid. ´ BRIEF FACTS : 4. At the outset, it is necessary to set out a brief factual history of this matter. The Appellants are the legal representatives of Late Shri Pra m od Kum ar Jain 6, a government -approved Contractor and Builder, who was awarded the aforesaid Work Orders , by the Respondents. Admittedly, the contractually stipulated period for completion of the work was 4 months. Shri Pramod Kumar Jain unfortunately pass ed away on 08.05.2001. Thereafter, the Appellants, being his legal representatives, sought to execute the awarded works . 6 Co ntractor FAO (COM ) 14/2023 Page 5 of 23 5. Work in respect of only two of the three work orders dated 17.11.2000 and 02.01. 2001 were executed till October 2001 . T he third work or der remained unexecuted due to the non -availability of the site. 6. Post October 2001, there appears to have ben no corespondence and it is the assertion of the Appellant that he met with the oficials of the Respondent. There appears to be nothing on recor d to substantiate this claim. 7. After a period of almost a year and 7 months, the Appellant appears to have corresponded vide letter dated 20.06.2003, which reads as follows: - ³6XE - W ork done in W AZIRPUR, W ORK ORDER NO. E.E XVI/TC/20 -201/536, 426, 427. Till not get PAYM ENT . Sir, M y Father was Runing the firm JAIN ENTERPRISE aproved as a clas I Contractor. He take a tender in your division. W ork order no above. M y father expired on 8 th M ay 201 in the between of wo rk. I son of M r. Late Shri Pramod Kumar Jain, com pleted this work . At The time of work my site JE was M r. Garg. After completed work M r. Garg was transfer, This I go to new JE M r. P.K. Jindle. He said to me that he don't know any thing. I go to office many time and asistant M r. Jintender said me to go out met with Gurmet for your M .B. I come and meet with Gurmet and he found m y nam e in M .B . Today I meet with M r. Garg and he told me that he hand over 24 M B to M r. P.K. Jindal and in that M B your Bill is t here but P.K. Jindal did not sum m it this M B in the ofice . So kindly see to this case as a very im portant and Solve m y problem . Thanking you Your faithfuly, SACHIN JAIN 6G´ (emphasis Suplied) FAO (COM ) 14/2023 Page 6 of 23 8. By th e letter dated 20.06.2003, the Appellants r aised a formal grievance regarding non -receipt of payment for the work done . 9. Post this corespondence, there was a prolonged silence for almost four years , broken by a series of letters dated 16.05.207, 12.07.2007, and 11.12.2007 . This was followed by re presentations addressed to the Superin tendant Enginer on 28.12.2007 and to the Chief Enginer on 14.01.2008 . 10. The Appellants invoked the arbitration clause vide letter dated 18. 02.2008 and thereafter , fil ed a petition under Section 11 of the A&C Act before this Court. By order dated 02.04.2009, a learned Single Judge appointed the learned Sole Arbitrator to adjudicate the disputes , inter se the parties. 11. The learned Sole Arbitrator, vide Arbitral Award dated 30.03.2012, rejected the monetary claims of the Ap pellants, holding them to be barred by limitation. Aggrieved, the Appellants filed a petition under Section 34 of the A&C Act before the learned Commercial Court, seking to set aside the Arbitral Award. The learned Court, however, dismissed the petition vide the Impugned Judgment , upholding the learned 6ROH$UELWUDWRU¶VUHD 12. The Appellants , being dissatisfied with the dismissal of their Section 34 petition, have prefered the present appeal under Section 37 of the A&C Act. CONTENTIONS OF THE APPELLA NTS : 13. Learned Counsel for the Appellants would contend that both the learned Sole Arbitrator and the learned Commercial Court ered in holding that the claims were bared by limitation . FAO (COM ) 14/2023 Page 7 of 23 14. It would be submitted that the Judgment in M ajor (Retd.) Inder Singh Re khi v. Delhi Development Authority 7 has ben wrongly applied in the facts and circumstances of the present case. 15. It would also be submitted that limitation begins only when a dispute actually arises , that is, upon assertion and denial of a claim , and not merely on completion of the work and since no final bill was ever prepared or intimated and only entries were made in the M easurement Book, which cannot be treated as final bills, limitation had not commenced. 16. In support, reliance would further be placed o n Ram Ditta M al v. Food Corporation of India 8 and Oriental Building and Furnishing Co. Ltd. v. Union of India 9, where this Court held that limitation commences only on preparation or intimation of the final bill and that a dispute arises only when a claim is expressly refuted, and that these principles squarely aply to the present case. 17. Learned Counsel would submit that the letter dated 20.06.2003 was merely an enquiry about the M easurement Book and not a claim for payment, and that the first assertion of claim was made only on 16.05.2007, followed by a detailed representation on 11.12.2007 and further letters to the Superintendent Engineer on 28.12.2007 and to the Chief Engineer on 14.01.2008, and since arbitration was invoked thereafter on 18.02.2008, it was in strict compliance with the pre - reference procedure under Clause 25 of the General Terms and Conditions . Learned Counsel for the Appellant would also place reliance on the judgement of this Court in W elspun Enterprises Ltd. 7 (1988) 2 SCC 338 8 1985 SCC OnLine Del 589 9 1981 SCC OnLine Del 140 FAO (COM ) 14/2023 Page 8 of 23 v. NC Ltd. 10 to contend th at the limitation cannot commence until the contractual procedure ha d ben completed. 18. It would further be urged that the Respondents themselves acknowledged their liability in their reply letter dated 30.07.2008 to the query of the Appellant under the Righ t to Inform ation 11 Act , by admitting that sums of Rs. 2,84,214/ - and Rs. 2,66,565/ - were payable, and such acknowledgment extended limitation under Section 18 of the Lim itation Act, 1963 12 . 19. It would be submitted that moreover, the Appellants disputed the qua ntified amounts by their reply dated 24.07.2009, which further demonstrated that disputes were alive and resultantly not barred by limitation . 20. Learned Counsel would further argue that both the learned Sole Arbitrator and the learned Commercial Court misapp lied M ajor (Retd.) Inder Singh Rekhi (supra) by treating silence after assertion as denial, whereas the law, as clarified in State of Orissa v. Damodar Das 13 , requires unequivocal denial or repudiation for limitation to commence, and since no such denial o cured and, on the contrary, there was acknowledgment of liability, the period of limitation could not have ben said to commence . Learned Counsel would place reliance on Sham Sunder v. M CD & Ors 14 to contend that the cause of action arose only upon invoca tion of Clause 25 and that limitation does not run where the final bill was not prepared. 10 2022 SCC OnLine Del 3296 1 RTI 12 Limitation Act 13 (1996) 2 SCC 216 14 133 (2006) DLT 540 FAO (COM ) 14/2023 Page 9 of 23 21. Further reliance would be placed on Avinash Sharma v. M CD 15 , where this Court held that under Clause 25, a communication that the final bill is ready for payment is a sine qua non for limitation to begin or for waiver to apply, and since in the present case no such communication was ever issued and even later , the department admitted that bills were pending with the acounts section, limitation had not commenced; and th erefore, the claims cannot be treated as time -bared. 22. It would also be submitted that the delay in execution was entirely attributable to the Respondents, since sites were not made available and materials were delayed, and one site was never handed over at all; yet, despite acepting several claims on merits, the learned Sole Arbitrator denied relief solely on the ground of limitation, which, it would be urged, was manifestly unjust. 23. Learned Counsel would further urge that Section 28(3) of the A&C Act requi red the learned Sole Arbitrator to decide disputes in acordance with the terms of the contract and trade usage, and Clause 25 made it incumbent upon Respondent No. 2 to notify preparation of the final bill, which was admittedly not done, and this fact was FRQILUPHG E\ WKH 5HVSRQGHQWV¶ RZQ -examination; therefore, the finding of limitation was erroneous. 24. Lastly, it would be contended that the learned Commercial Court contradicted itself, for while it treated the letters of 2003, 2007, and 20 08 as assertions of claim for limitation purposes, it simultaneously held, when dealing with interest, that there was no record of any approach by the Appellants for verification of the 15 2007 SCC OnLine Del 797 FAO (COM ) 14/2023 Page 10 of 23 M easurement Book, and such inconsistency undermines the conclusion on limitation. CONTENTIONS OF THE RESPONDENTS : 25. Per contra , learned Counsel for the Respondents would support the concurent findings of the learned Sole Arbitrator and the learned Commercial Court and would submit that the claims were hopelessly bared by li mitation, as running bills had ben prepared in November 2001 for two work orders sanctioning sums of Rs. 2,84,214/ - and Rs. 2,66,565/ -, but arbitration was invoked only in February 2008 , more than six years later , well beyond the three -year period under A rticle 137 of the Limitation Act. 26. It would further be DUJXHG WKDW WKH $SSHOOD 20.06.2003 constituted assertion of a claim, and silence thereafter amounted to denial; therefore, the limitation commenced in 2003 and expired long before arbit ration was invoked in 2008. 27. Learned Counsel for the Respondents would deny the allegation of non -availability of sites and submit that site changes were reflected in the work orders themselves, and that the plea of non -availability was a fabricated excuse to justify non -performance; since the work orders were required to be completed within four months and the Appellants failed to adhere to contractual timelines, their attempt to reopen concurent findings of fact amounts to an abuse of process of law and a n efort to revive stale claims. 28. It would finally be urged that the scope of interference under Section 37 of the A&C Act is very limited, for unless an award is contrary to the fundamental policy of Indian law, in conflict with basic notions of justice an d morality, or sufers from patent illegality on the FAO (COM ) 14/2023 Page 11 of 23 face of the record, the appellate court cannot reappreciate evidence or disturb concurent findings; reliance was placed on M M TC Ltd. v. Vedanta Ltd .16 to buttress this submission. ANALYSIS : 29. Having heard the submissions advanced by learned Counsel for both parties, and upon a careful consideration of the pleadings, documents, and the impugned findings, this Court now proceeds to address the questions arising for determination. 30. The foremost issue that aris