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2026 Supreme(Del) 398
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. KAMESWAR RAO, VINOD KUMAR, JJ.
Chander Mohan Lall - Appellant
Versus
DLF Home Developers Limited – Respondent
FAO(OS) (COMM) 100 of 2019 & CM APPLN. 2389 of 2020
Decided On : 18-06-2026
For the Appellant :Appellant in person with Ms. Nancy Roy, Ms. Ananya Chug, and Ms Annanya Mehan Advocates.
For the Respondent:Mr. B B Gupta, Sr. Advocate with Mr Vishnu Kant and Mr. Karan Jain, Advocates.
A court’s judicial review of an arbitral award is strictly limited to identifying perversity or legal illegality. If an arbitrator’s interpretation of a contract is reasonable, courts cannot substitute that view, and failure to prove evidence of loss precludes claims for damages exceeding contractually stipulated amounts.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Commercial Courts Act, 2015 - Section 13 - Indian Evidence Act, 1872 - Sections 65A and 65B - Indian Contract Act, 1872 - Section 73 - Arbitration - Scope and ambit of judicial review - Tribunals exercise primary authority in interpreting contractual terms; courts may not interfere unless the interpretation is perverse or unreasonable - An award is not to be substituted merely because another plausible interpretation exists. (Paras 36, 37, 42)
(B) Evidence - Proof of damages - Claims for loss of potential income must be substantiated by admissible and proven documentation - Where parties fail to establish evidence in accordance with procedural law, assertions for higher damages are insufficient to displace contractually stipulated compensation clauses. (Paras 38, 43)
Facts of the case:
The appellant entered into an agreement for possession of commercial property. Delays in handing over possession led to arbitration. The arbitrator awarded limited compensation as per a specific clause in the agreement, rejecting the appellant's claims for higher loss-of-rent damages due to unproved evidence. The tribunal found that neither party was entitled to further claims beyond the agreed terms for the specified period. The lower court upheld this interpretation, prompting the present appeal against the rejection of higher damages.
Findings of Court:
The court affirmed that the arbitrator's interpretation of the compensation clause was reasonable and plausible. It held that the challenge regarding the quantum of damages was a question of fact and evidentiary proof, which cannot be re-opened in an appeal under the limited jurisdiction granted by the statute. The court rejected the plea to increase compensation, noting that the appellant failed to discharge the burden of proof for higher losses.
Issues: Whether the interpretation of the contractual compensation clause was perverse and whether the refusal to accept unproved evidence for higher damages warranted interference under the limited scope of judicial review.
Ratio Decidendi: An arbitral award's construction of contractual terms is final if arrived at by a reasonable mind; procedural failure to prove documents renders an allegation of higher damages unsubstantiated. Appellate bodies are barred from re-evaluating evidence or substituting an arbitrator's plausible construction of contract clauses with their own.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. overview of arbitration dispute and findings of the arbitral tribunal. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7) |
| 2. appellant's challenge regarding the applicability and adequacy of compensation clauses in the property agreement. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 3. respondent's defense asserting concurrent findings of fact and limited scope for judicial review under section 37. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37) |
| 4. judicial reaffirmation that arbitrator's interpretation of contractual terms is binding absent perversity. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48) |
| 5. formal dismissal of the appeal and disposal of pending procedural applications. (Para 49 , 50 , 51) |
JUDGMENT :
V. KAMESWAR RAO, J.
1. This appeal has been filed under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter, ‘the Act’) read with Section 13 of the Commercial Courts Act, 2015 challenging the order dated 28.03.2019 passed by the learned Single Judge in O.M.P. (COMM) 271/2018, with the following prayers:-
“ii) to set aside the impugned order dated 28.03.2019 only to the extent of the amount of damages to the Appellant @ Rs. 25/- per sq.ft;
iii) Award damages to the Appellant at the rate of Rs. 200/- per sq.ft. from 10.06.2009 till actual handing over of possession of the properties in issue to the Appellant in November 2014 or such other rate as this Hon'ble Court deems fit;
iv) Pass an order directing the Registry to place on record the entire file of the proceedings before the Learned Single Judge in O.M.P. (COMM) 271/2018 before this Hon'ble Court;”
2. As noted from the impugned order, the disputes between the parties arise from the Retail/Commercial Office Space Buyer's Agreements (‘the Agreement’) dated 31.05.2006 regarding the delay in handing over of the possession of the office spaces to the appellant by the respondent.
3. The case of the appellant was that the last installment was payable only on the receipt of notice from the respondent that it has received the Occupancy Certificate from the Delhi Development Authority and such an intimation was received only in the year 2011. According to the appellant, he was ready and willing to pay the last installment, whereas, the respondent refused to hand over the possession of the office space until and unless the appellant pays other charges.
4. The case of the respondent was that the possession of the office space could not be handed over to the appellant as the appellant had defaulted in his last installment (12th installment), in accordance with Annexure-III (Schedule of Payments) of the Agreement and other charges like maintenance and holding charges.
5. Hence, disputes arose between the parties, which were referred to arbitration. The possession of the office space was handed over by the respondent to the appellant in November 2014 pursuant to orders passed by this Court in Arbitration Appeal No.8/2013 under Section 37 of the Act filed by the appellant against the order of the Arbitrator dated 20.02.2013.
6. In the Arbitral Award dated 31.03.2018, the Arbitrator held that the respondent was under an obligation to send an intimation of receipt of Occupancy Certificate to the appellant. As the respondent failed to furnish proof of such intimation having been delivered to the appellant, the appellant was not liable to pay the final instalment till 12.01.2011, when for the first time the respondent sent an e-mail to the appellant giving details of payment due from the appellant including the paper work and other formalities to be completed. The learned Arbitrator awarded damages to the appellant for delay in grant of possession till 12.01.2011 at the rate of Rs.25/- Per Square Feet Per Month (PSFPM). For the period beyond 12.01.2011, the learned Arbitrator held that, as both the parties contributed to the delay in handing over of the possession of the office space, the appellant is not en
