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2025 Supreme(Online)(DEL) 781
HIGH COURT OF DELHI
Prateek Jalan, J
RATTAN INDIA POWER LTD. – Appellant
Versus
BHARAT HEAVY ELECTRICALS LTD. – Respondent
O.M.P. (COMM)-372/2017
The court upheld the interim award based on clear admissions made by the petitioner, affirming that evidentiary admissions can justify an award under the Arbitration and Conciliation Act.
Headnote:
(A) Arbitration and Conciliation Act, 1996 - Section 34 and Section 31(6) - Interim award challenged - Tribunal awarded Rs. 115 crores based on admissions by petitioner regarding outstanding payments - Petitioner claimed breach of contract by respondent for non-sequential supply - Tribunal found admissions in minutes of meetings and C-forms issued by petitioner - Court upheld the award, stating that the admissions were clear and unequivocal. (Paras 1, 10, 20, 39, 47)
(B) Admissions - Nature of admissions in arbitration - Tribunal can pass interim awards based on admissions made in meetings and correspondence - Evidentiary admissions can form the basis for an award if they are clear and unequivocal. (Paras 32, 39, 46)
Facts of the case:
The petitioner challenged an interim award of Rs. 115 crores in favor of the respondent, arising from a contract for a thermal power plant. Disputes arose over payment obligations and the respondent's claims for outstanding amounts. The petitioner suspended supplies, leading to the termination of the contract. (Paras 1-4)
Findings of Court:
The Tribunal found that the petitioner had admitted liability through minutes of meetings and C-forms, justifying the interim award. The court upheld the Tribunal's findings, stating that the admissions were clear and unequivocal. (Paras 10, 20, 39)
Issues: The main issues were whether the interim award constituted an award under the Act and whether the admissions made by the petitioner were unequivocal. (Paras 11, 12)
Ratio Decidendi: The court ruled that the Tribunal's interpretation of the admissions was reasonable and that the interim award was valid under the Act, emphasizing the limited scope of review under Section 34. (Paras 39, 47)
Result: Petition dismissed.
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 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 5x270 MW Thermal Power Plant at Amravati, Maharashtra.[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”]
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 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 for the supplies and services under the contracts | INR 390,73,76,841 + USD 26,90,102 + Euro 78,75,927/- |
| Claim II | Inventory Blockage and Inventory carrying costs. | Rs. 3,47,86,67,524 |
| Claim III | Taxes and Duties | Rs. 26,00,96,171 |
| Claim IV | Claims of sub-contractors and sub-vendors | INR 12,28,61,620/- and Euro 6,88,880/- |
| Claim V | Loss of profit suffered by the claimant due to non- performance and abandonment of the contracts by the respondent | INR 171,72,93,137 + USD 84,24,569 + EURO 1,15,81,360 [Total Claim for loss of profit after adjustment of advance] |
| Claim VI | Bank guarantees charges | Rs. 3,45,71,922/- |
| Claim VII | Insurance charges | Rs. 4,66,34,883/- |
| Claim VIII | Site establishment and maintenance charges | Rs. 18,72,62,641 |
| Claim IX | Engineering charges | INR 21,82,71,333/- and Euro 1,53,480/- |
| Claim X | Headquarters expenses and management costs | INR 62,94,19,958/- + USO 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 herein. [In the impugned award, the Tribunal has noted that the petitioner was in the process of developing two th
