Delhi High Court – Orders
Kanchan Lal vs Delhi Technological University & Anr on 5 August, 2025
Author: Jasmeet Singh
Bench: Jasmeet Singh
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 395/2025
KANCHAN LAL .....Petitioner
Through: Mr. Rajeev Kumar, Ms. Alka
Srivastava, Advs.
versus
DELHI TECHNOLOGICAL UNIVERSITY & ANR. .....Respondent
Through: Ms. Anju Bhushan Gupta, Mr.
Sanyam Gupta, Mr Aditya Goel,
Advs.
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
ORDER
% 05.08.2025
1. This is a petition filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996, seeking appointment of an Arbitrator to
adjudicate the disputes between the parties.
2. The brief facts of the case are that the respondent No. 1 invited tender
under the name and style of “Remodeling and Renovation of Health
Centre (FOT) at DTU Campus”. The petitioner, being the successful
bidder, was awarded the work vide letter dated 22.06.2016. Pursuant
to the award of work to the petitioner, the parties executed an
Agreement dated 09.07.2016.
3. The Arbitration clause is Clause No. 25 of GCC.
4. Since there were disputes between the parties, the petitioner invoked
arbitration, vide Legal Notices dated 14.09.2020, 14.12.2020 and
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25.01.2022, and thereafter filed a petition under Section 11 of the
Arbitration and Conciliation Act, 1996.
5. When the matter came up for hearing before this Court on 18.01.2023,
the petition was dismissed as withdrawn, as not pressed, since the
petitioner sought the constitution of a Dispute Redressal Committee
(DRC). In terms of Clause 25, the petitioner approached the DRC,
which closed its proceedings on 22.09.2023. After discussing the
broad contours of the disputes between the parties, the DRC, instead
of finally settling the disputes in terms of the amount payable to the
petitioner by the respondents, left it to the parties to mutually settle the
same through the exchange of documents. Thus, upon closure of the
DRC proceedings, the petitioner’s grievances remained unresolved.
6. Due to this, the petitioner wrote to the respondents seeking settlement
of disputes relating to labour escalation and measurement issues. This
was followed by another letter dated 03.11.2023, wherein the
petitioner even offered to settle his claim on labour escalation for a
lower amount.
7. On 29.11.2023, the petitioner gave his undertaking to accept the
DRC’s decision and received the amounts awarded by the DRC.
8. However, as disputes remain unresolved, the petitioner seeks the
appointment of an arbitrator under Section 11(6) of the Arbitration and
Conciliation Act, 1996.
9. Mr. Gupta, learned counsel for the respondents, has filed a reply.
However, the same is not on record.
10. A copy of his reply is handed over in Court today, which is taken on
record.
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11. Mr. Kumar, learned counsel for the petitioner, submits that despite the
DRC’s attempt to resolve the disputes between the parties, the issues
remained unresolved as the DRC did not finally determine the
amounts payable to the petitioner and left them to be settled through
mutual consent. It is further submitted that, since the petitioner was in
dire need of funds owing to his worsened financial condition post-
COVID and with substantial amounts due from the respondents, he
was left with no option but to accept the amount offered by the
respondents at that time, and such acceptance was given under
economic duress.
12. It is also pointed out that before the DRC, the respondents alleged that
the petitioner had settled his claims vide letter dated 03.04.2020,
which, according to the petitioner, was forged and fabricated by
officials of the respondents, for which he lodged a police complaint.
13. In view of the respondents’ refusal, vide letter dated 29.01.2025, to
appoint an arbitrator, the petitioner, being aggrieved by the non-
resolution of his disputes, has been constrained to approach this
Hon’ble Court under Section 11(6) of the Arbitration and Conciliation
Act, 1996.
14. Mr. Gupta, learned counsel appears on behalf of the respondents and
states that the petition is not maintainable. He submits that the
petitioner, along with final claims, had also submitted his
consent/acceptance on the final claim of around 12.96 lakhs as per the
decision of the DRC and the same was accepted without any
reservation as per the letter dated 21.05.2024. The said letter is
reproduced below:
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15. Mr. Gupta, learned counsel, further submits that, as per Clause 25 of
the GCC, Arbitration can be invoked only when a party is dissatisfied
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with the decision of the DRC. In the present case, the petitioner had
given his consent to the DRC’s decision vide letter dated 21.05.2024,
pursuant to which payments were made on 16.08.2024 and were
accepted by the petitioner voluntarily and without any reservations, in
full and final settlement of his claims. Therefore, it is contended that
the petitioner is now estopped from invoking the arbitration clause.
16. It is further submitted that the present petition is barred under Clause
25 of the GCC, as the petitioner issued notice on 24.01.2025, well
beyond the stipulated period of 30 days from the receipt of the DRC’s
decision and the payment made on 16.08.2024. It is also contended
that the petitioner had earlier filed a petition under Section 11 of the
Arbitration and Conciliation Act, 1996, which was not unconditionally
withdrawn, and therefore, in view of the judgment of the Hon’ble
Supreme Court in HPCL Bio-Fuels Ltd. v. Shahaji Bhanudas Bhad,
2024 SCC OnLine SC 3190, a fresh petition is not maintainable. Mr.
Gupta relies on the conclusion part of the above cited judgement which reads as
under:
“131. In view of the aforesaid discussion, we have reached
to the following conclusion:
(i) In the absence of any liberty being granted at the time of
withdrawal of the first application under Section 11(6) of
the Act, 1996, the fresh application filed by the respondent
under the same provision was not maintainable;
(ii) The fresh application filed by the respondent under
Section 11(6) of the Act, 1996 was time-barred;
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(iii) The respondent is not entitled to the benefit of Section
14(2) of the Limitation Act; and
(iv) The respondent is also not entitled to the benefit of
condonation of delay under Section 5 of the Limitation Act.
132. As a result, the appeal filed by the appellant is allowed
and the impugned order passed by the High Court of
Bombay is hereby set aside.
133. Pending application(s), if any, shall stand disposed of.
134. The parties shall bear their own costs.”
17. I have heard learned counsel for the parties.
18. Clause No. 25 of the GCC reads as under:
“Clause 25 – Settlement of Disputes & Arbitration
Except where otherwise provided in the contract, all
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 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,
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 progress of the work or after the cancellation,
termination, completion or abandonment thereof shall 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 decision given in
writing by the Engineer In-Charge on any matter in
connection with or arising out of the contract orThis is a digitally signed order.
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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 the 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 contractor’s appeal.
If the contractor is dissatisfied with the decision of the
Chief Engineer, the contractor may within 30 days from
the receipt of the Chief Engineer Decision, appeal
before the Dispute Redressal Committee (DRC) along
with a list of disputes with amounts claimed in respect of
each such dispute and giving reference to the rejection
of his disputes by the Chief Engineer. The Dispute
Redressal Committee (DRC) shall give his decision
within a period of 90 days from the receipt of
Contractor’s Appeal. The constitution of Dispute
Redressal Committee (DRC) shall be as indicated in
Schedule ‘F’. lf the Dispute Redressal Committee (DRC)
fails to give his decision within the aforesaid period or
any party is dissatisfied with the decision of Dispute
Redressal Committee (DRC), then either party may
within a period of 30 days from the receipt of the
decision of Dispute Redressal Committee (DRC), give
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notice to the Chief Engineer for appointment of
arbitrator on prescribed proforma as per Appendix XV,
failing which the said decision shall be final binding and
conclusive and not referable to adjudication by the
arbitrator.
It is a term of contract that each party invoking
arbitration must exhaust the aforesaid mechanism of
settlement of claims/disputes prior to invoking
arbitration.
(ii) Except where the decision has become final, binding
and conclusive in terms of Sub Para (i) above, disputes
or difference shall be referred for adjudication through
arbitration by a sole arbitrator appointed by the Chief
Engineer, CPWD, in charge of the work or if there be no
Chief Engineer, the Additional Director General of the
concerned region of CPWD or if there be no Additional
Director General, the Director General, CPWD. If the
arbitrator 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.
(iii) It is a term of this contract that the party invoking
arbitration shall give a list of disputes with amounts
claimed in respect 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.
(iv) It is also a term of this contract that no person,
other than a person appointed by such Chief Engineer
CPWD or Additional Director General or Director
General, CPWD, as aforesaid, should act as arbitrator
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and if for any reason that is not possible, the matter
shall not be referred to arbitration at all.
(v) 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 payment, the
claim of the contractor shall be deemed to have been
waived and absolutely barred and the Government shall
be’ discharged and released of all liabilities under the
contract in respect of these claims.
(vi) The arbitration shall be conducted in accordance
with the provisions of the Arbitration And Conciliation
Act, 1996 (26 of 1996) or any statutory modifications or
re-enactment thereof and the rules made thereunder and
for the time being in force shall apply to the arbitration
proceeding under this clause.
(vii)It is also a term of this contract that the arbitrator
shall adjudicate on only such disputes 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.
(viii) 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.”
19. In the present case, while it is true that the petitioner accepted the
decision of the DRC, it cannot be overlooked that such acceptance
may have been influenced by the petitioner’s pressing financial needs.
It is plausible that, in order to secure immediate payment, the
petitioner made a statement indicating that the decision of the DRC
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was acceptable, notwithstanding the possibility that the acceptance
was not entirely voluntary but rather compelled by economic
circumstances.
20. This aspect has been examined by the Hon’ble Supreme Court in
National Insurance Co. Ltd. v. M/s Boghara Polyfab Pvt. Ltd.,
(2009) 1 SCC 267, where it was held that mere acceptance of payment
or signing of a settlement under financial distress does not necessarily
preclude a party from invoking arbitration, especially where such
acceptance may have been made under compulsion or economic
duress.
“42. We thus find that the cases referred to fall under two
categories. The cases relied on by the appellant are of one
category where the Court after considering the facts, found that
there was a full and final settlement resulting in accord and
satisfaction, and there was no substance in the allegations of
coercion/undue influence. Consequently, this Court held that
there could be no reference of any dispute to arbitration. The
decisions in Nav Bharat [1994 Supp (3) SCC 83] and Nathani
Steels [1995 Supp (3) SCC 324] are cases falling under this
category where there were bilateral negotiated settlements of
pending disputes, such settlements having been reduced to
writing either in the presence of witnesses or otherwise. P.K.
Ramaiah [1994 Supp (3) SCC 126] is a case where the contract
was performed and there was a full and final settlement and
satisfaction resulting in discharge of the contract. It also falls
under this category.
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43. The cases relied on by the respondent fall under a different
category where the Court found some substance in the
contention of the claimants that “no-dues/claim certificates”,
or “full and final settlement discharge vouchers” were insisted
and taken (either in a printed format or otherwise) as a
condition precedent for release of the admitted dues.
Alternatively, they were cases where full and final discharge
was alleged, but there were no documents confirming such
discharge. Consequently, this Court held that the disputes were
arbitrable.”
21. The petitioner has also clearly stated in paragraph no. 19 of the
petition that: –
“19. ………………………….
That since the Petitioner was in dire need of monies as his
financial conditions had worsened post COVID and his huge
amount was stuck with the Respondent, he had no choice but to
accept whatever monies was being offered by the Respondent at
that point of time and thus the acceptance was given by the
Petitioner under economic duress. It is pertinent to mention
that before the DRC the Respondent had claimed that the
Petitioner has settled his claims vide his letter, dated
03/04/2020 which according to the Petitioner was forged and
fabricated by the officials of the Respondent for which the
Petitioner also filed a Police Complaint. A copy of the
Summary of Claims prepared by the Respondent is attached as
Document No. 13 and the letter of acceptance submitted by theThis is a digitally signed order.
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Petitioner on 21/05/2024 is attached as Document No. 14.”
22. In view of the above, the petitioner’s acceptance of the DRC’s
decision cannot be treated as a conclusive or binding settlement, as the
same was allegedly made under economic duress and in circumstances
indicating compulsion, thereby rendering such acceptance of no legal
consequence for the purposes of estopping the petitioner from
invoking arbitration.
23. Furthermore, the reliance placed by the respondents on the judgment
of the Hon’ble Supreme Court in M/s HPCL Bio-Fuels Ltd. (supra) is
misplaced. In the present case, the earlier petition, being ARB. P.
1246/2022 was withdrawn by the petitioner solely on the ground that it
had been filed without first approaching the DRC, and not as an
unconditional withdrawal on merits. Thereafter the petitioner
approached the DRC and is still having pending disputes. Hence, the
said judgment has no application to the facts of the present case.
24. Additionally, the contention of the respondents that the present
petition is time barred because the petitioner issued the notice beyond
the stipulated period of 30 days as mentioned under Clause 25 of GCC
cannot be accepted. There are numerous judicial precedents wherein
this Court has held that any pre condition in an Arbitration Agreement,
obliging the parties to exhaust pre Arbitral Mechanism, is directory in
nature and not mandatory.
25. This Court in Jhajharia Nirman Ltd. v. South Western Railways,
2024 SCC OnLine Del 7133 held as under:
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“18. In numerous judicial precedents, this Court has taken the
view that any pre-condition in an arbitration agreement
obliging one of the contracting parties to either exhaust the pre-
arbitral amicable resolution avenues or to take recourse to
Conciliation are directory and not mandatory.”
26. In view of this, non adherence to the stipulated period of 30 days by
the petitioner is not fatal.
27. For the reasons stated above, the petition is allowed and the following
directions are issued: –
i) Mr. Sumit Chaudhary (Adv) (Mob. No. 966716035) is
appointed as a Sole Arbitrator to adjudicate the disputes
between the parties.
ii) The arbitration will be held under the aegis and rules of the
Delhi International Arbitration Centre, Delhi High Court,
Sher Shah Road, New Delhi (hereinafter, referred to as the
‘DIAC’).
iii) The remuneration of the learned Arbitrator shall be in terms
of DIAC (Administrative Cost and Arbitrators’ Fees) Rules,
2018.
iv) The learned Arbitrator is requested to furnish a declaration
in terms of Section 12 of the Act prior to entering into the
reference.
v) It is made clear that all the rights and contentions of the
parties, including as to the arbitrability of any of the claim,
any other preliminary objection, as well as claims/counter-
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claims and merits of the dispute of either of the parties, are
left open for adjudication by the learned arbitrator.
vi) The parties shall approach the learned Arbitrator within two
weeks from today.
28. The present petition is disposed of in the aforesaid terms.
JASMEET SINGH, J
AUGUST 5, 2025/sp
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