Delhi High Court
Rattan India Power Ltd. vs Bharat Heavy Electricals Ltd. on 6 March, 2025
Author: Prateek Jalan
Bench: Prateek Jalan
$~P-1 and 2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Decided on: 06.03.2025
+ O.M.P. (COMM) 372/2017 & I.A. 12098/2017
RATTAN INDIA POWER LTD. .....Petitioner
versus
BHARAT HEAVY ELECTRICALS LTD. .....Respondent
+ OMP (ENF.) (COMM.) 149/2017, EX.APPL.(OS) 99/2022,
EX.APPL.(OS) 1683/2023, EX.APPL.(OS) 1046/2024, I.A.
13749/2017 & I.A. 13750/2017
BHARAT HEAVY ELECTRICALS LTD. .....Decree Holder
versus
RATTAN INDIA POWER LTD. .....Judgement Debtor
Appearance:
Mr. Tanmaya Mehta, Mr. Divyansh Rathi, Ms. Sumedha Rathi, Mr. Yash
Gaur, Advocates for petitioner in item No. 1.
Mr. Jayant Mehta, Sr. Advocate with Mr. Rameezuddin Raja, Mr. Namit
Suri, Ms. Tanya Sharma, Advocates for BHEL.
Mr. Rajat Navet and Mr. Kushagra Pandit, Advocates for judgment
debtor in item No. 2.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
JUDGMENT
O.M.P. (COMM) 372/2017
1. By way of this petition under Section 34 of the Arbitration and
Conciliation Act, 1996 [“the Act”], the petitioner assails an interim award
dated 27.07.2017, by which a three-member Arbitral Tribunal has
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awarded Rs. 115 crores in favour of the respondent, on an application
filed by the respondent under Section 31(6) of the Act. The interim award
was passed on the ground that the petitioner had admitted the
respondent’s claim to this extent.
A. Factual Background
2. The arbitral proceedings arose from a Letter of Award [“LoA”]
dated 11.10.2010, by which the respondent was entrusted with the task of
design, engineering, manufacturing, inspection, testing, etc. of a Boiler
Turbine Generator [“BTG”] for the petitioner’s 5×270 MW Thermal
Power Plant at Amravati, Maharashtra.1
3. Pursuant to the LoA, a supply contract and a services contract were
signed by the parties on 26.05.2011, which provided for the supply of
material and scope of services respectively. In terms of the said contracts,
the petitioner paid an advance amount of Rs. 142.5 crores to the
respondent, secured by an advance bank guarantee of the respondent. The
amount paid by way of advance was to be adjusted against supplies.
4. Disputes arose between the parties because the respondent claimed
that the petitioner had failed to discharge its payment obligations for
plant, machinery, equipment and services supplied by the respondent, and
became apprehensive of the petitioner’s financial position. By a
communication dated 14.02.2013, the petitioner unilaterally suspended
supplies, which was not accepted by the respondent. Ultimately, the
1
It may be noted that, at the time of the contract, the petitioner was known as “Indiabulls Power Ltd.”.
In the documents referred to in this judgment, the petitioner has thus been referred to as “Indiabulls” or
“IPL”.
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contract was terminated by a communication of the respondent dated
27.11.2015.
5. The petitioner’s principal defence on merits, as recorded by the
Tribunal and urged before this Court, was that the respondent had
breached the terms of the contract by failing to make supply of plant and
equipment sequentially. The petitioner characterises such non-sequential
supply as “dumping”, and therefore contended that the respondent was
not entitled to payment.
6. The matter went to arbitration, in which the respondent filed a
claim under the following heads:
S.NO. CLAIM AMOUNT
Claim I Outstanding payments due INR 390,73,76,841 + USD
for the supplies and services 26,90,102 + Euro
under the contracts 78,75,927/-
Claim II Inventory Blockage and Rs. 3,47,86,67,524
Inventory carrying costs.
Claim III Taxes and Duties Rs. 26,00,96,171
Claim IV Claims of sub-contractors INR 12,28,61,620/- and
and sub-vendors Euro 6,88,880/-
Claim V Loss of profit suffered by the INR 171,72,93,137 + USD
claimant due to non- 84,24,569 + EURO
performance and 1,15,81,360 [Total Claim for
abandonment of the loss of profit after
contracts by the respondent adjustment of advance]
Claim VI Bank guarantees charges Rs. 3,45,71,922/-
Claim VII Insurance charges Rs. 4,66,34,883/-
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Claim VIII Site establishment and Rs. 18,72,62,641
maintenance charges
Claim IX Engineering charges INR 21,82,71,333/- and
Euro 1,53,480/-
Claim X Headquarters expenses and INR 62,94,19,958/- + USO
management costs 18,05,265/- + EURO
24,81,720/-
7. The petitioner also made a counterclaim, for a declaration that the
contracts had been unlawfully terminated.
8. The impugned interim award arises out of applications filed by
both parties for interim awards, on the basis of alleged admissions made
by the other.
9. The respondent relied on minutes of meetings between the parties
on 21.11.2012, 09.04.2013, 06.09.2013 and 15.01.2014, to submit that its
dues of Rs.115 crores in respect of the Amravati project, and Rs.63 crores
in respect of another project at Nashik, were admitted by the petitioner
herein2.
10. In the impugned award, as far as the respondent’s application is
concerned, the Tribunal has referred to the aforesaid minutes of meetings
between the parties, and come to the conclusion that they record
admissions by the petitioner, of having received goods and invoices from
the respondent to the tune of Rs. 115 crores and Rs. 63 crores for the
2
In the impugned award, the Tribunal has noted that the petitioner was in the process of developing
two thermal power plants, Phase-II of its plant at Amravati (5x270MW) and a plant at Nashik
(5x270MW). The present proceedings concern Amravati Phase-II, but separate proceedings are in
progress in respect of the Nashik plant also. Both were being heard analogously before the same
Tribunal.
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Amravati and Nashik projects respectively. The Tribunal rejected the
petitioner’s submission that the minutes do not constitute unequivocal
admission of liability. The Tribunal also relied upon the issuance of C-
forms by the petitioner, to fortify its conclusion that the goods had, in
fact, been received and accepted by the petitioner. The Tribunal therefore
allowed the respondent’s application for award upon admission. The
impugned award is for a sum of Rs. 115 crores, as the present
proceedings only concerns Phase-II of the Amravati project.
11. By the same interim award, the Tribunal also dismissed an
application filed by the petitioner herein under Section 31(6) of the Act,
for an award upon admission against the respondent. Although this aspect
of the impugned decision has also been challenged in the petition, Mr.
Tanmaya Mehta, learned counsel for the petitioner, was ultimately
instructed not to press the challenge on this ground, as the arbitral
proceedings were by then at a final stage. This is recorded in the order of
this Court dated 06.12.2024. This judgment, therefore, deals only with the
challenge to the interim award against the petitioner.
B. Is the impugned decision an award?
12. Before adverting to the detailed facts of the case, a preliminary
issue may be dealt with, which concerns the characterisation of the
impugned decision as an “award”. As noted above, the decision deals
with applications filed by both parties. After enumerating the factual
background and the nature of the dispute, the Tribunal first dealt with the
application of the respondent herein. The application was disposed of in
in the following terms:
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“47. For the foregoing reasons we are of the opinion that the Claimant
is entitled to an interim award for an amount of Rs. 115 crores for
Amravati Phase-II and Rs. 63 crores for Nashik Phase-II. There shall
be an interim award for the above said amount in favour of the
Claimant against the Respondent in the two matters. On this amount
the Claimant shall be entitled to interest calculated @18% per annum
w.e.f. 30 days from the date of this Award within which time the
Respondent may pay the awarded amount to the Claimant.
48. Interest for the period up to the date of this award and with effect
from which date shall it be payable, are the issues which are left to be
adjudicated upon while passing the final award.
49. The costs of these proceedings shall be costs in the main cause.”3
13. The next part of the decision is under the heading: “On
respondent’s application dated 05.12.2016 u/s 31(6) of the A&C Act,
1996″4, with numbered paragraphs, again commencing with paragraph 1.
The petitioner’s application was ultimately dismissed.
14. The impugned decision closes with three paragraphs under the
heading “Incidental”, which read as follows:
“Incidental
34. Before parting we would like to clarify by way of abundant caution
that whatever has been stated hereinabove in this order, has been so
stated only for the purpose of passing the interim award and that too
on perusal of pleadings and undisputed documents. Any observation
made herein above, wittingly or unwittingly, shall not bind the
tribunal at the stage of final hearing after the evidence has been
recorded.
35. Costs incurred in these proceedings shall form costs in the main
cause.
36. The Claimant shall supply and attach with this award the
requisite amount of stamp duty and having done so, inform the
Respondent and members of the Tribunal.”53
Emphasis supplied.
4
It may be mentioned therein that the petitioner and the respondent herein were respectively referred to
as the “respondent” and the “claimant” before the Tribunal.
5
Emphasis supplied.
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15. It was submitted at the outset by Mr. Tanmaya Mehta, that
paragraph 34 of the impugned decision itself leads ambiguity to the
finality of the decision, and therefore, to its effect as an “award”. He
submitted that, in paragraphs 47 and 48 of the first section (quoted
above), the Tribunal had made an interim award on admission, but
reopened the same in paragraph 34, under the heading “Incidental”.
16. Mr. Jayant Mehta, learned Senior Counsel for the respondent, on
the other hand, disputed such a reading. The impugned decision,
according to him, is in two parts, one allowing the respondent’s
application for award on admissions, and the other dismissing the
petitioner’s application. To the extent that the petitioner’s application for
an interim award had been dismissed, paragraph 34 was clarificatory to
the extent, that the petitioner’s right to agitate the same claims at final
hearing was reserved. This was not intended to apply to the decision on
the respondent’s application, which was “final”, in the sense that the
Tribunal had passed an interim award, which decided that part of the
respondent’s claim finally. To support this point, Mr. Jayant Mehta
referred to paragraph 36 of the decision, which required the award to be
stamped by the respondent herein. Such a requirement would not have
arisen if the part of the decision in the respondent’s favour, was tentative
or prima facie, or in any other way indefinite.
17. On this preliminary point, upon a holistic reading of the decision, I
am of the view that the respondent’s contention must prevail. The manner
in which the decision has been structured does raise some ambiguity as
suggested by Mr. Tanmaya Mehta, but the ambiguity is resolved when
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one reads the decision as a whole. The first part of the award deals with
the respondent’s application, and categorically makes an “interim award”
in its favour. Interest has also been awarded upon the said amount and, in
the very last paragraph (in the “Incidental” section), provision has been
made for stamping. These aspects admit of little doubt as to the finality of
the award, to the extent the Tribunal found the respondent’s claims to be
admitted. The rest of the decision concerns the petitioner’s claim for an
award on admissions, which was declined. Having declined the interim
award, the Tribunal clarified that those observations would not be binding
at final hearing. On a proper interpretation, therefore, I am of the view
that the interim award does constitute an award, within the meaning of
the Act.
18. It may be mentioned that at the time of hearing of this petition,
final arguments were in progress before the Arbitral Tribunal, which had
since been reconstituted due to the unfortunate demise of two of the
arbitrators who had passed the impugned interim award. Unfortunately,
learned counsel for the parties were not unanimous as to whether the
claims awarded in favour of the respondent had been reopened for
arguments at the final hearing. I have therefore proceeded on a reading of
the documents and decisions, as placed on record.
C. The alleged admissions
19. Minutes of four meetings held between the parties have been
referred to in the impugned award. Relevant portions of the minutes are
reproduced hereinbelow:
i. Minutes of meeting dated 21.11.2012:
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“Futher to BHEL letter dated 17th November 2012 & Indiabulls
letter dated 19th November 2012, the outstanding payment of
Amravati Ph-I, Nashik Ph-I, Amravati Ph-II & Nashik Ph-II and
LC available as on 21st November 2012 were discussed. The
reconciled statement is as follows:
Project LC Available BoEs with BoEs with Bills with Total Payable
Bank Indiabulls BHEL pending (**)
Submission (*)
BHEL India BHEL India BHEL India BHEL India BHEL India
bulls bulls bulls bulls bulls
Amravati 27 27 19 19 123 105 35 – 177 124
Ph-I
Nashik Ph- 43 45 5 3 24 11 14 – 43 14
I Unit 1, 2
and 3 (upto
HT & ESP
Insulation
Nashik Ph- 0 0 0 0 71 57 79 – 150 57
I Unit 3
(excl. HT
& ESP
Insulation),
4&5
Amravati 0 0 0 0 – – 187 115 187 115
Ph-II (***)
Nashik Ph- 0 0 0 0 – – 106 63 106 63
II (***)
Total 73 72 24 22 218 173 421 178 663 373(*) – The invoices lying with BHEL pending for opening of LCs
and hence BoEs are not generated. The same was not discussed
by Indiabulls.
(**) – the difference is on account of BoEs not received by
Indiabulls.
(***) – Value of invoices received at Indiabulls.
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It is also agreed that the difference in the values in the above
table will be further reconciled by 3rd December 2012.”6ii. Minutes of meeting dated 09.04.2013:
“The following were discussed in the meeting:
1. Indiabulls informed that the financial closure of Amravati Ph-II
& Nashik Ph-II projects have been completed. However, they are
waiting for FSA & PPA for Amravati Ph-II & Nashik Ph-II and
detailed status of both projects would be presented in the next
meeting.
2. The outstanding for Amravati Ph-II & Nashik Ph-II, as per
BHEL is Rs. 304 Crs and as per Indiabulls is Rs. 178 Crs. Both
the parties have agreed for reconciliation of outstanding and
material lying at sites.
3. BHEL requested Indiabulls for the following:
• Issuance for Form “C’ for material dispatched for
Amravati Ph-II Project & issuance of Form “I” for
material dispatched for Nashik Ph-II Project.
• Return of bank guarantees submitted towards advance &
performance for Amravati Ph-II & Nashik Ph-II projects.
• Insurance Policy taken by BHEL for Amravati Ph-II &
Nashik Ph-II projects is for total contract period. However,
as the projects are under hold, Indiabulls is requested to
review this issue.
• Preservation of the material lying at Amravati Ph-II &
Nashik Ph-II sites.
• Indiabulls agreed to review & revert on above issues.
4. BHEL intimated that consequent to issue of Hold on the projects,
BHEL is having a huge inventory at their works. It was agreed that
the inventory as on 31st March 2013 will be worked out by BHEL.
5. For Amravati Phase – II, Indiabulls requested BHEL to provide
copies of tax invoices & a certificate from BHEL Trichy unit on its
vendors on duty drawback issue. Indiabulls shall furnish draft of the
certificate.”7
iii. Minutes of meeting dated 06.09.2013:
“1. BHEL furnished copy of invoices amounting to Rs. 116.17
Cr. (Nashik Ph-II) & RS.207.28 Cr. (Amravati Ph-II) and
requested Indiabulls to verify the same at their end it was6
Emphasis supplied.
7
Emphasis supplied.
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agreed that any discrepancy in the material at Amravati/Nashik
(Ph-II) shall be reconciled jointly by Indiabulls & BHEL at
mutually, convenient dates.
2. Indiabulls requested BHEL to furnish the procedure of
preservation of material lying at Amravati Ph-II & Nashik Ph-II
sites. BHEL informed that they will depute their quality experts
shortly. However, necessary manpower, T&P and other
arrangements shall be made by Indiabulls at their own cost.
3. In line with point no.4 of record Notes of Meeting dated 9th
April 2013, BHEL has furnished the details of inventory as on
31st March 2013 amounting to Rs.367.46 Cr for Nashik Ph-II &
Rs.340.89 Cr for Amravati Ph-II. As item details had not been
furnished, BHEL clarified that it was practically not feasible to
list the items. Indiabulls, however, requested BHEL to furnish
atleast some details to identify the items.
4. BHEL requested Indiabulls to Issue Form “C” for material
dispatched to Amravati Ph-II project. Indiabulls assured to do
the needful on priority.
5. BHEL requested Indiabulls to return THE BANK
GUARANTEES SUBMITTED TOWARDS-CONTRACT
PERFORMANCE FOR Amravati Ph-II & Nashik Ph-II projects
as the projects are presently under hold and assured that the
same will be re-submitted on revival of the projects. Indiabulls
shall revert.”8iv. Minutes of meeting dated 15.01.2014:
“5. The issue of reconciliation of outstanding was deliberated.
According to BHEL, the total outstanding work out to the tune
of Rs. 322.00 Crores IPL informed that reconciliation exercise
is in advanced stage but there are certain discrepancies which
need to be resolved. BHEL was accordingly requested to depute
the representatives from their respective Units to both sites,
BHEL agreed to the same and requested IPL to release
payment of Rs.178 Crs (agreed outstanding as per MoM
DATED 21.11.12) as first step of payment to reduce its debt
burden and balance may be paid once reconciliation is
complete. IPL informed that they are seized of BHEL’s concern
and will revert on the matter shortly.
6. IPL reminded BHEL to depute their quality expert for advising
action required for preservation of material lying at Amravati &8
Emphasis supplied.
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Nashik site. BHEL agreed to arrange their quality engineer from
Trichy Unit shortly.”9D. Decision of the Tribunal
20. The analysis of the alleged admissions in the impugned award is as
follows10:
“40. During the course of hearing, the submission on behalf of the
Respondent has been that the Minutes of Meeting relied on by the
Claimant do not record an unequivocal admission of liability on the
part of the Respondent. We cannot agree. We have extracted and
reproduced the relevant excerpts from the MoMs. Not only the MoMs
clearly and explicitly record admission of the liability, the subsequent
correspondence entered into between the parties re-enforces the
claim of the Claimant. We do not find any ambiguity or qualification
in the admission made by the Respondent.
41. Ld. Counsel for the Claimant has submitted that not only there are
clear unequivocal admissions of the Respondent, but these admissions
cannot now be disowned by the Respondent as the Claimant has acted
upon the said admissions, and therefore, the admissions would operate
estoppels on the Respondent preventing it from resiling therefrom.
42. Another weighty factor in favour of the Claimant is that the
Respondent has admitted the supplies made by the Claimant and issued
the necessary C-forms, which also go to show that the parties have
treated the goods supplied by the Claimant as goods sold. The
Respondent has admitted issuing the C-form. The only explanation
given by the Respondent is that it was so done only with a view to
help the Claimant in tax matters. Such an explanation is merely a
moon-shine or an eye-wash explanation.
43. In Uttamsingh Duggal’s Case, which we have referred to in, para
25 above the judgment was sought to be given on admissions contained
in (i) Balance Sheet of the defendant, (ii) Minutes of the Meeting, and
(iii) a Letter communicating the resolution of the minutes of the
meeting. The submissions made on behalf of the Respondent were that
Order XII Rule 6 comes under the heading “Admissions” and a
judgment on admission could be given only after due opportunity to the
other side to explain the admission, if any, is given; that such
admission should have been made only in the course of the pleadings
or else the other side will not have an opportunity to explain such9
Emphasis supplied.
10
As noted above, the petitioner and the respondent herein are referred to in the impugned award as
“respondent” and “claimant” respectively.
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admission; that even though the provision reads that the court may at
any stage of the suit make such order as it thinks fit, the effect of
admission, if any, can be considered only at the time of trial; that the
admission even in pleadings will have to be read along with Order VIII
Rule 5(1) CPC and the court need not necessarily proceed to pass an
order or judgment on the basis of such admission but call upon the
party relying upon such admission to prove its case independently; that
during pendency of other suits and the nature of contentions raised in
the case, it would not be permissible at all to grant the relief before
trial as has been done in the present case; that the expression
“admissions” made in the course of the pleadings or otherwise will
have to be read together and the expression “otherwise” will have to be
interpreted ejusdem generis.
43.1 None of the contentions prevailed.
43.2 Their Lordships further held that the statement made in the
proceedings of the Board of Directors’ meeting and the letter sent as
well as the pleadings when read together, leads to unambiguous and
clear admission with only the extent to which the admission is made in
dispute, and the court had a duty to decide the same and grant a
decree, we think this approach is unexceptionable.
44. Here we may refer to a decision in Chemical Systems Technologies
(India) Pvt. Ltd. v. Simbhanaoli Sugar Mills Ltd.[CS (OS) 1480/2009
and CC No. 27/2006, decided on February 1, 2013] cited by Ld.
Counsel for the Claimant. The High Court of Delhi was dealing with
the case of a Defendant who admitted delivery of goods, successful
erection, issuance of C-forms of the price of goods and did not reject
the goods but still denied the liability. On an application for judgment
on admissions, the High Court observed that such defendant incurs the
risk of deemed admission of liability. If such defendant had not
considered itself liable to pay the balance price of the goods, it would
not have issued the C-forms with respect thereto. The issuance of the
‘C’ forms is an acknowledgement of the defendant having informed its
taxation authorities of having purchased goods of the value thereof, on
payment of concessional rate of tax. The defendant cannot be
permitted to have conflicting stands before its taxation authorities and
vis-a-vis plaintiff.
45. The Supreme Court in Phool Chand Gupta v. State of A.P. (1997)2
SCC 591 and Shree Digvijay Cement Co. Ltd. v. State of Rajasthan
(2000) 1 SCC 688 has held that issuance of ‘C’ Form is a proof of the
sale of the goods having been effected and the goods having been
accepted without any demur.
46. There is overwhelming evidence of unimpeachable credence
available on record which goes to show that the Claimant has made
supplies to the Respondent; that the goods supplied have been
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retained and certainly not returned by the Respondent to the
Claimant; that there was some dispute about verification of the
details and quantum of the goods supplied for which reconciliation
process was undertaken by the parties; that during this
reconciliation, the Respondent has in writing by way of Minutes of
Meetings unequivocally admitted the dues of the Claimant to the
extent of Rs. 115 crores for Amravati Phase-II (as against Rs. 187
crores claimed by the Claimant) and Rs. 63 crores for Nashik Phase-
11 (as against Rs. 106 crores claimed by the Claimant). The
Respondent has issued ‘C’ forms to the Claimant whereby the sale of
goods is admitted by the Respondent to the Claimant as also
represented so to the tax authorities of the State. The Respondent
cannot disown the liability so committed.”11
E. Submissions of learned counsel for the petitioner
21. Mr. Tanmaya Mehta, learned counsel for the petitioner, assailed the
award, both on factual and legal grounds. He submitted that the minutes
of the meeting had been wrongly read to constitute unequivocal
admissions. According to him, in the meetings, at best, the petitioner
accepted that the goods had been delivered and that invoices had been
received, but this could not be construed as admissions of liability on the
part of the petitioner. The petitioner’s contention, that the supplies had
been made non-sequentially, in a manner which rendered the goods
unusable at the time they were supplied, was raised in contemporaneous
correspondence, which had been placed before the Tribunal in some
detail, but overlooked.12 He argued that the dispute as to the respondent’s
entitlement for payment is also evident from these letters. He also drew
11
Emphasis supplied.
12
Mr. Tanmaya Mehta referred to the petitioner’s letters dated 04.07.2011, 26.08.2011, 15.09.2011,
25.11.2011, 07.02.2012, 17.07.2012, 19.11.2012, 10.12.2012, 23.03.2012 and 26.07.2011stating that
petitioner permitted dispatch only of limited material for Amravati Phase-II.
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my attention to a letter dated 10.12.2012, in which the petitioner denied a
communication of the respondent dated 06.12.2012, which in turn,
referred to a meeting between the Chairmen of the companies, and
contended that the parties had agreed to revise price and commissioning
schedule, including liquidation of outstanding payments.
22. Referring to the minutes dated 21.12.2012, Mr. Tanmaya Mehta
pointed that the minutes referred inter alia to the petitioner’s letter dated
19.11.2012, wherein it had specifically referred to the fact that supply
was being made by respondent on its own, the value of supply being Rs.
178.22 crores. It was in the context of this correspondence that the table
in the minutes must be read. While endorsing that Rs. 115 crores of bills
were pending submission, even according to the petitioner, it has
specifically been clarified by a footnote that this is the value of invoices
received by the petitioner. Mr. Tanmaya Mehta submitted that admission
of receipt of invoices, has been confused with admission of liability for
payment.
23. Turning to the minutes dated 09.04.2013, Mr. Tanmaya Mehta
submitted that no admission ought to have been inferred, when
reconciliation of outstandings and materials was still pending.
24. Mr. Tanmaya Mehta assailed the Tribunal’s emphasis on issuance
of C-forms, with particular reference to the petitioner’s letter dated
18.01.2014, which expressly stated that the issuance of C-forms was not
to be taken as an admission of liability.
25. As the matter of law, Mr. Tanmaya Mehta submitted that an award
passed on the basis of such alleged admissions, which were evidentiary at
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best and not admissions in pleadings, was unsafe and inappropriate. It
was his contention that evidentiary admissions cannot form the basis of a
final award, unless they have been put to the concerned party in cross-
examination. This is because such admissions can always be clarified and
explained, or even demonstrated to have been made in error. He pointed
out that the issues framed in the arbitral proceedings included these very
aspects, which have been prematurely decided in the impugned award. He
argued that the Tribunal had thus committed a manifest error in ignoring
evidence on record which sought to explain the alleged admissions.
F. Submissions of learned Senior Counsel for the respondent
26. Mr. Jayant Mehta, learned Senior Counsel for the respondent, on
the other hand, opened his argument by reminding the Court of the
limited jurisdiction available under Section 34 of the Act. He submitted
that the impugned decision was based on an interpretation of the
pleadings and evidence placed by the parties. The material had been fully
considered by the Tribunal, and exercise of jurisdiction at this stage
would be tantamount to invoking an appellate jurisdiction, which the
setting aside Court does not possess.
27. Without prejudice to this submission, Mr. Jayant Mehta submitted
that the goods were admittedly supplied by the respondent, delivered and
accepted. Invoices were therefore raised in terms of the supplies made,
which ought to have been honoured. He argued that the petitioner’s
insistence upon “sequential supply” is not a bonafide defence, but a
moonshine, which ought not to absolve it of its liability to pay for the
goods supplied, received and accepted.
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28. On a reading of the minutes in question, Mr. Jayant Mehta
supported the Tribunal’s conclusion that the documents contained
unequivocal and unambiguous admissions, and were sufficient to justify
an award. He pointed out that the alleged defence was not with regard to
receipt of the plant or equipment, nor was it contended that the sale
thereof was incomplete. Even in the minutes, no specific mention has
been made of the dispute regarding alleged non-sequential supply, so as
to justify an argument at this stage, that the supplies did not attract
liability on this ground. The petitioner has also not raised a claim or
counterclaim for damages.
29. Mr. Jayant Mehta submitted that the aforesaid minutes dated
21.11.2012 and 09.04.2013 referred to reconciliation of “outstandings”,
which is in turn referable to the difference in the outstanding figures
claimed by the respondent, as compared to the figures acknowledged by
the petitioner. The letter dated 19.11.2012, according to learned Senior
Counsel, also supports the respondent’s case that the petitioner was
unable to pay, which was the root cause for suspension of the contract by
the respondent. The minutes do record acknowledgment of debts, and
have not been categorically contested in later correspondence, such as
letters dated 10.12.2012 and 14.02.2013 addressed by the petitioner to the
respondent. At the very least, Mr. Jayant Mehta submitted that the
conclusions drawn by the Tribunal were not fanciful or arbitrary.
30. Mr. Jayant Mehta submitted that minutes of subsequent meetings
held on 06.09.2013 and 15.01.2014 also support the Tribunal’s
interpretation. The minutes dated 06.09.2013 contemplated reconciliation
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of invoices with materials, without reference to the alleged requirement
of sequential supply. In fact, as far as material which was not currently
useable was concerned, the petitioner requested the respondent to furnish
the procedure for preservation of material with the help of their quality
experts. Similarly in the meeting dated 15.01.2014, the amount of Rs. 178
crores were referred to as “agreed outstanding as per minutes of meeting
dated 21.11.2012”. The petitioner promised to revert on the issue, but did
not contest to the fact that the amount was admitted.
31. Learned counsel on both sides also referred to several judgments to
which I shall refer at the appropriate stage.
G. Analysis
a. Principles governing Section 34 of the Act
32. Before addressing the specifics of this particular case, the
following well settled principles, with regard to the scope of interference
under Section 34 of the Act, must be borne in mind13:
(a) Appreciation of pleadings and assessment of evidence, including
interpretation of documents, lie within the domain of the arbitral
tribunal. It is for the tribunal to assess the weight to be given to any
piece of evidence, and to adjudicate upon the sufficiency of
evidence.
(b) The Court exercising this jurisdiction, does not sit as an appellate
Court, but only reviews an award on limited parameters provided13
Reference, in this connection, may be made to the recent decisions of the Supreme Court in OPG
Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd. [(2025) 2 SCC 417] –
paragraph 74 and 75, Reliance Infrastructure Ltd. v. State of Goa [(2024) 1 SCC 479] – paragraph 76
and 77, Batliboi Environmental Engineers Ltd. v. Hindustan Petroleum Corpn. Ltd. [(2024) 2 SCC
375] – paragraphs 43 to 45 and Konkan Railway Corpn. Ltd v. Chenab Bridge Project [(2023) 9 SCC
85] – paragraphs 19 to 21.
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under the Act, such as grounds of procedural fairness, statutory
compliance, bona fides. Interference with the factual findings of an
arbitral tribunal is justified only if it is based on no evidence at all,
or if material evidence has not been adverted to, or the conclusions
arrived at are manifestly unreasonable and arbitrary, in the sense
that no reasonable tribunal could have reached the same
conclusion.
(c) As the Court does not exercise appellate jurisdiction, it will not set
aside an award, even if it perceives that a different view was
possible, on a reading of the pleadings, appreciation of the
evidence, or even in understanding of the relevant legal position.
b. Principles governing judgments/awards on admission
33. Learned counsel for the parties cited several decisions on the
power to grant judgments or awards on admissions. In civil suits, such
power is exercised under Order XII Rule 6 of the Code of Civil Procedure
1908, which reads as follows:
“6. Judgment on admissions.–(1) Where admissions of fact have
been made either in the pleading or otherwise; whether orally or in
writing, the Court may at any stage of the suit, either on the
application of any party or of its own motion and without waiting for
the determination of any other question-between the parties, make
such order or give such judgment as it may think fit, having regard to
such admissions.
(2) Whenever a judgment is pronounced under sub-rule (1) a decree
shall be drawn up in accordance with the judgment and the decree
shall bear the date on which the judgment was pronounced.”
34. In this context, learned counsel on both sides referred to the
judgment of the Supreme Court in Uttam Singh Duggal & Co. Ltd. v.
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United Bank of India14, in which the principles of Order XII Rule 6 of the
CPC have been explained thus:
“11. Learned counsel for the appellant contended that Order 12 Rule
6 comes under the heading “Admissions” and a judgment on
admission could be given only after due opportunity to the other side
to explain the admission, if any, is given; that such admission should
have been made only in the course of the pleadings or else the other
side will not have an opportunity to explain such admission, that even
though the provision reads that the court may at any stage of the suit
make such order as it thinks fit, the effect of admission, if any, can be
considered only at the time of trial; that the admission even in
pleadings will have to be read along with Order 8 Rule 5(1) CPC and
the court need not necessarily proceed to pass an order or a judgment
on the basis of such admission but call upon the party relying upon such
admission to prove its case independently; that during pendency of
other suits and the nature of contentions raised in the case, it would not
be permissible at all to grant the relief before trial as has been done in
the present case; that the expression “admissions” made in the course
of the pleadings or otherwise will have to be read together and the
expression “otherwise” will have to be interpreted ejusdem generis.
12. As to the object of Order 12 Rule 6, we need not say anything more
than what the legislature itself has said when the said provision came to
be amended. In the Objects and Reasons set out while amending the
said Rule, it is stated that “where a claim is admitted, the court has
jurisdiction to enter a judgment for the plaintiff and to pass a decree on
admitted claim. The object of the Rule is to enable the party to obtain
a speedy judgment at least to the extent of the relief to which
according to the admission of the defendant, the plaintiff is entitled”.
We should not unduly narrow down the meaning of this Rule as the
object is to enable a party to obtain speedy judgment. Where the other
party has made a plain admission entitling the former to succeed, it
should apply and also wherever there is a clear admission of facts in
the face of which it is impossible for the party making such admission to
succeed.
13. The next contention canvassed is that the resolutions or minutes of
the meeting of the Board of Directors, resolution passed thereon and the
letter sending the said resolution to the respondent Bank cannot amount
to a pleading or come within the scope of the Rule as such statements
are not made in the course of the pleadings or otherwise. When a
statement is made to a party and such statement is brought before the
court showing admission of liability by an application filed under
14
(2000) 7 SCC 120 [hereinafter, “Uttam Singh Duggal”].
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Order 12 Rule 6 and the other side has sufficient opportunity to
explain the said admission and if such explanation is not accepted by
the court, we do not think the trial court is helpless in refusing to pass
a decree. We have adverted to the basis of the claim and the manner
in which the trial court has dealt with the same. When the trial Judge
states that the statement made in the proceedings of the Board of
Directors’ meeting and the letter sent as well as the pleadings when
read together, leads to unambiguous and clear admission with only
the extent to which the admission is made in dispute, and the court
had a duty to decide the same and grant a decree, we think this
approach is unexceptionable.”15
35. In Karam Kapahi Vs. Lal Chand Public Charitable Trust16, the
Supreme Court, after considering Uttam Singh Duggal, reiterated that the
scope of Order 12 Rule 6 of CPC is not limited to admissions contained
in pleadings. The Supreme Court held as follows:
“40. If the provision of Order 12 Rule 1 is compared with Order 12
Rule 6, it becomes clear that the provision of Order 12 Rule 6 is wider
inasmuch as the provision of Order 12 Rule 1 is limited to admission
by “pleading or otherwise in writing” but in Order 12 Rule 6 the
expression “or otherwise” is much wider in view of the words used
therein, namely:”admission of fact … either in the pleading or
otherwise, whether orally or in writing”.
41. Keeping the width of this provision (i.e. Order 12 Rule 6) in mind
this Court held that under this Rule admissions can be inferred from the
facts and circumstances of the case (see Charanjit Lal Mehra v. Kamal
Saroj Mahajan [(2005) 11 SCC 279] , SCC at p. 285, para 8).
Admissions in answer to interrogatories are also covered under this
Rule (see Mullas’s Commentary on the Code, 16th Edn., Vol. II, p.
2177).
xxx xxx xxx
47. Therefore, in the instant case even though statement made by the
Club in its petition under Section 114 of the Transfer of Property Act
does not come within the definition of the word “pleading” under
Order 6 Rule 1 of the Code, but in Order 12 Rule 6 of the Code, the
word “pleading” has been suffixed by the expression “or otherwise”.
Therefore, a wider interpretation of the word “pleading” is warranted
in understanding the implication of this Rule. Thus the stand of the
15
Emphasis supplied.
16
(2010) 4 SCC 753 [hereinafter “Karam Kapahi”].
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Club in its petition under Section 114 of the Transfer of Property Act
can be considered by the Court in pronouncing the judgment on
admission under Order 12 Rule 6 in view of clear words “pleading or
otherwise” used therein especially when that petition was in the suit
filed by the Trust.”17
36. The following judgments, cited by Mr. Jayant Mehta, follow
similar principles in the context of arbitral awards. These decisions are
also clear in indicating that challenges to awards upon admission, must be
adjudicated on the same narrow principles which govern Section 34 of
the Act.
(a) In Nimbus Communications Ltd. v. Prasar B. Harati18, a Division
Bench of this Court considered an interim award on admission, the
admission arising out of a claim for set off and adjustment. The
Division Bench followed Uttam Singh Duggal, holding that the
scope of Order XII Rule 6 of the CPC should not be narrowed
down.19
(b) In NDMC v. N.S. Associates (P) Ltd.20, an interim award on
admissions was challenged on the ground that the admissions were
not clear or unequivocal. The Court, however, rejected the
challenge, citing the judgment of this Court in BHEL v. Zillion
Infraprojects (P) Ltd.21, which holds that an arbitral tribunal has the
power to pass such an interim award, under Section 31(6) of the
Act.
17
Emphasis supplied.
18
2016 SCC OnLine Del 6886 [hereinafter, “Nimbus Communications”].
19
It may be noted that by an order dated 07.10.2016 in SLP(C) No. 19499/2016, the Supreme Court
declined special leave to appeal against the judgment of this Court in Nimbus Communications.
20
2024 SCC OnLine Del 4289.
21
(2023) 1 HCC (Del) 635.
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(c) Shutham Electric Ltd. v. Vaibhav Raheja22 was also concerned with
a petition under Section 34 of the Act, against an award upon
admission. The admissions were not contained in pleadings, but in
correspondence between the parties. The Court upheld the award,
which found the denials of liability to be vague and bald, and the
award on admissions to be justified. The Court expressly adopted
the narrow principles of scrutiny that are available under Section
34.
(d) Also under Section 34 of the Act, the judgment of the Bombay
High Court in Deccan Chronicle Holdings Ltd. v. Tata Capital
Financial Services Ltd.23, upheld an award upon admissions,
finding that the view of the arbitrator was not perverse and would,
therefore, not attract jurisdiction under Section 34 of the Act. As in
the present case, the award was based on admissions, founded upon
acknowledgements of liability in various documents. The award
debtor submitted that it ought to have been given an opportunity to
explain the alleged admission in oral evidence. The Bombay High
Court noticed that the said party had not disputed the content of the
documents, and rejected the contention that oral evidence was
required to be adduced.
37. Mr. Jayant Mehta cited three further judgments on the principles of
Order XII Rule 6 of the CPC, rendered in civil suits. In view of the
authorities already cited, it is not necessary to discuss them in detail.
22
2024 SCC OnLine Del 4226 [hereinafter, “Shutham Electrics”].
23
2016 SCC OnLine Bom 5319.
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Suffice it to note that, in Vijaya Myne v. Satya Bhushan Kaura24, this
Court emphasized the purpose of Order XII Rule 6 of CPC, to provide
expeditious judgment in admitted claims, rather than compel the parties
to undergo protracted trials. The judgment of the Supreme Court in Badat
and Co. v. East India Trading Co.25, holds that evasive denial in pleadings
is tantamount to an admission, which obviates the need for further
proof26. In A.N. Kaul v. Neerja Kaul27, the District Court had declined
judgment upon admission on the ground that there was no express
admission of liability. This Court however reversed the said view, holding
that raising a bogey of a defense would not avoid a decree.
38. Mr. Tanmaya Mehta placed several judgments in support of his
contention that a judgment upon admission cannot be passed on the basis
of admissions in evidence, as such alleged admissions have to be tested at
trial:
(a) The judgment of the Supreme Court in Nagindas Ramdas v.
Dalpatram Ichharam28, was directed against proceedings for
eviction under the Bombay Rent Control Act, 1947. The Court
drew a distinction between “judicial admissions” and “evidentiary
admissions” in the following terms:-
“27 …. Admissions, if true and clear, are by far the best proof
of the facts admitted. Admissions in pleadings or judicial
admissions, admissible under Section 58 of the Evidence Act,
made by the parties or their agents at or before the hearing of
the case, stand on a higher footing than evidentiary24
2007 SCC OnLine Del 828.
25
1963 SCC OnLine SC 9.
26
Ibid, paragraph 11.
27
2018 SCC OnLine Del 9597.
28
(1974) 1 SCC 242 [hereinafter, “Nagindas Ramdas”].
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admissions. The former class of admissions are fully binding
on the party that makes them and constitute a waiver of proof.
They by themselves can be made the foundation of the rights of
the parties. On the other hand, evidentiary admissions which
are receivable at the trial as evidence, are by themselves, not
conclusive. They can be shown to be wrong.”
(b) The judgment of the Supreme Court in Sita Ram Bhau Patil v.
Ramchandra Nago Patil29, was in the context of the Bombay
Tenancy and Agricultural Lands Act. The alleged admission was in
a deposition found to be irrelevant to the case in which the
deposition was recorded. In the context of Section 145 of the
Indian Evidence Act, the Court held that the statement ought to
have been put to the person in cross-examination.
(c) Raveen Kumar v. State of H.P.30, was a criminal appeal before the
Supreme Court, in which the Court mandated caution in reliance
upon evidence with which the witness has not been confronted,
despite opportunity.
(d) The judgment in Ram Niranjan Kajaria v. Sheo Prakash Kajaria31
arose out of an application for an amendment of a written statement
in a partition suit. The Court held, relying upon Nagindas Ramdas,
that a categorical admission in the pleadings cannot be withdrawn,
but can be clarified or explained by way of an amendment.
(e) In Avadh Kishore Das v. Ram Gopal32, the Court held that
evidentiary admissions are not conclusive proof of the facts
admitted, and may be explained or shown to be wrong, but shift the
29
(1977) 2 SCC 49 [hereinafter, “Sita Ram Bhau Patil”].
30
(2021) 12 SCC 557 [hereinafter, “Raveen Kumar”].
31
(2015) 10 SCC 203 [hereinafter, “Ram Niranjan Kajaria”].
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evidentiary burden upon the person making the admission, which
in that case, had not been discharged.
(f) In a case of admissions arising out of accounting entries, the
Division Bench of this Court, in Durga Builders (P) Ltd. v. Motor
and General Finance Ltd.33, framed the question thus: “the
question is not whether [the person] making the admission has an
unimpeachable case but whether there is some room to doubt that
liability is established”.
c. Application to the facts of this case
39. Taking Mr. Tanmaya Mehta’s legal submission first, he submitted
that an evidentiary admission – as opposed to an admission in the
pleadings – is incapable of forming the foundation of a judgement upon
admission. This contention is, in my view, repelled by reference to the
text of Order XII Rule 6 of CPC, the judgement in Uttam Singh Duggal
and several judgements, which follow the same line. In Order XII Rule 6
of CPC, reference is made to admissions in “pleadings or otherwise”,
including orally. Power is conferred upon the civil court to enter
judgement at any stage of the suit, if faced with satisfactory admissions.
Mr. Tanmaya Mehta’s submission amounts to narrowing the scope of the
provision, a course which the Supreme Court, in Uttam Singh Duggal and
Karam Kapahi, specifically rejects. Indeed, the arguments advanced on
behalf of the petitioner mirror many of the arguments, which were
considered and rejected in Uttam Singh Duggal – that opportunity has to
be given to explain the admission, that its effect must be considered at the
32
(1979) 4 SCC 790 [hereinafter, “Avadh Kishore Das”].
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time of trial, and that Order XII Rule 6 of CPC must be confined to
admissions in pleadings or other similar situations, reading the provision
ejusdem generis. The Supreme Court has made it clear that the width of
Order XII Rule 6 of CPC is wide, and intended to curb unnecessarily
protracted litigation.
40. As noted above, the same principles have been applied even while
adjudicating petitions for setting aside of arbitral awards. Indeed, it would
be incongruous to adopt a narrower view in the context of arbitral awards.
The objective of Order XII Rule 6 of CPC, to the extent that it shortens
unnecessary litigation, aligns with the objective of arbitral adjudication,
to provide expeditious and efficient resolution of disputes.
41. The judgements in Nagindas Ramdas, Sita Ram Bhau Patil, and
Raveen Kumar, cited by Mr Tanmaya Mehta are all in different contexts:
under the Bombay Rent Control Act, 1947, the Bombay Tenancy and
Agricultural Lands Act, and in a criminal appeal. The judgment in Uttam
Singh Duggal, Karam Kapahi, and the High Court judgments referred to
in paragraph 36 above, on the other hand, deal directly with judgements
and awards upon admission in civil cases. The present case falls in that
line of cases, and those are the judgements which, in my view, would
govern the decision in the present case. That being said, I do not read the
judgement in Nagindas Ramdas to hold that an evidentiary admission can
never be the basis of a decree or award, without leading evidence.
Admissions in pleadings are placed on a higher footing, to the extent that
they may require nothing more for a decree to follow, whereas admissions33
2013 SCC OnLine Del 5165.
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outside of pleadings, must be considered contextually. To hold that there
is a bar on granting an award of admissions in the case of evidentiary
admissions, would be inconsistent with the text of Order XII Rule 6 of the
CPC, and the judgements cited above. Similarly, the judgement in Ram
Niranjan Kajaria and Avadh Kishore Das also dealt with different stages
of proceedings – Ram Niranjan Kajaria, with an application for
amendment, and Avadh Kishore Das, with a post-trial decision on the
basis of admission. Neither judgement, in my view, goes as far as the
petitioner suggests.
42. Mr. Tanmaya Mehta sought to distinguish the judgement in Uttam
Singh Duggal, on the ground that the Court had recorded a specific
finding that there was no explanation for the admission in question. He
submitted that, in the present case, in contrast, the petitioner had offered a
plausible explanation. Learned counsel disputed the respondent’s
characterisation of the petitioner’s defence as a moonshine, and
contended that the defence had been founded in contemporaneous
correspondence, which ought not to have been overlooked.
43. Once the point of principle is settled against the petitioner, I am of
the view that these considerations stretch the jurisdiction available under
Section 34 of the Act beyond permissible limits. The Arbitral Tribunal has
considered the minutes of the meetings, and found that they record
express admissions of liability, fortified by subsequent correspondence
between the parties. It has negated the petitioner’s contentions with
regard to ambiguity or qualification in the admissions, and thus come to
the conclusion that the admissions are of unimpeachable credence. As
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noted above, the quantity and quality of evidence, and the weight to be
attached to any particular piece of evidence, are matters well within the
province of the arbitral tribunal. The arguments advanced by Mr.
Tanmaya Mehta, in my view, call for a reassessment of that evidence,
which is not open to the Court.
44. The only ground upon which interference would nevertheless have
been justified, is if the Court found the factual assessment to be entirely
bereft of evidentiary support or perverse, in the sense that no reasonable
tribunal could have reached the same conclusion. Having perused the
minutes and the correspondence in question, I am unable to return a
finding of such a nature. The minutes of the meetings referred to
“outstandings”/”outstanding payment” and reconciliation thereof. The
Tribunal’s view that the goods had admittedly been received by the
petitioner, and the invoices had also been received by the petitioner, is
based upon those minutes. While Mr. Tanmaya Mehta sought to suggest
that the admissions were with regard to receipt of invoices alone, that was
a matter upon which the petitioner was required to satisfy the arbitrators,
which it failed to do. There is no perversity in the understanding, that the
reconciliation required was with regard to the difference in the amounts
claimed by the respondent, as opposed to the amounts admitted by the
petitioner. None of the minutes contained any specific express reference
to the dispute regarding sequential supply, which forms the sheet anchor
of the petitioner’s defence. In such circumstances, the view of the
Tribunal cannot be interdicted in Section 34 proceedings.
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45. The only remaining question is with regard to whether the Tribunal
has erred in treating the C-forms issued by the petitioner as admissions.
Mr. Tanmaya Mehta relied upon the judgement in Taipack Ltd. v. Ram
Kishore Nagar Mal34, which was also rendered under Section 34 of the
Act. The question before the Court was whether C-forms constitute
acknowledgement of debt, so as to give rise to a fresh period of
limitation. The Court observed that the issuance of C-forms could not
serve to extend limitation as they do not constitute acknowledgement of a
present and subsisting liability, but of receipt of goods and the price to be
paid for them. The issuance of C-forms does not reveal whether the
payments have already been made or whether a jural relationship of
debtor and creditor arises. Thus, the essential require requirements, for
the purpose of extension of limitation, were held to be missing. Mr.
Jayant Mehta, however, relied upon a later judgement of this Court in
Chemical Systems Technologies (India) Pvt. Ltd. v. Simbhaoli Sugar Mills
Ltd35, also cited in the impugned decision of the Tribunal, which was
rendered on an application under Order XII Rule 6 of the CPC. This
Court held that issuance of C-forms is an acknowledgement to the
taxation authorities, that the person issuing them has purchased the goods
in question and the value thereof. Coupled with other circumstances, the
Court held that although the C-forms may not be an acknowledgement of
liability, along with other factors, they can be relied upon to take a view
of whether there is an implied admission.
34
2007 SCC OnLine Del 804.
35
2013 SCC OnLine Del 416 [hereinafter, “Chemical Systems”].
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46. In the present case, I am of the view that the Tribunal’s decision,
relying upon Chemical Systems, is not liable for interference. The
issuance of C-forms were only one of the factors which weighed with the
Tribunal, as in Chemical Systems.
47. For the reasons aforesaid, I am of the view that the petitioner has
failed to make out a case for interference, as provided under Section 34 of
the Act.
H. Conclusion
The petition is accordingly dismissed, but without any orders as to
costs.
OMP (ENF.) (COMM.) 149/2017
In view of the dismissal of O.M.P. (COMM) 372/2017, the
proceedings for enforcement of the impugned award dated 27.07.2017 be
listed before the Roster Bench on 25.03.2025, subject to orders of
Hon’ble the Judge In-Charge (Original Side).
PRATEEK JALAN, J
MARCH 06, 2025
Bhupi/PV/SS/Ainesh/SD/
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