$~30 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 11.02.2026 + O.M.P. (COMM) 488/2023 NATIONAL RESEARCH DEVELOPMENT CORPORATION & ANR. .....Petitioners Through: Mr. Joydeep Sarma, Mr.

Kaushal Kapoor, Mr. Lalit Verma & Mr. A P Singh, Advs.

versus MAK CONTROLS AND SYSTEMS PRIVATE LIMITED .....Respondent Through: Mr. Satyam Thareja, Mr.

Rakesh Karela & Mr. Shaurya Katoch, Advs.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN AVNEESH JHINGAN, J. (ORAL)

1. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (in short „the Act‟) against the Award dated

07.08.2023.

2. The facts shorn of unnecessary details are that the petitioners/claimants on 06.03.2002 entered into a „Programme Aimed at Technological Self Reliance‟ agreement (for short „the agreement‟) with the respondent. The respondent was given financial assistance to develop a product „Mak World Traker‟. The agreement was for a period of twelve years. A royalty agreement of even date was also executed between the parties. The respondent at end of each financial year, for five years from start of commercial sale of product had to pay royalty of Rs.24 Lakhs per annum. The respondent completed the project in the year 2007 but failed to commercialize it. The nil annual royalty returns were filed due to non-commencement of commercial production. Notice under Section 21 of the Act dated 24.06.2019 was issued by the petitioners. The notice was responded to on 02.07.2019 stating that there is no liability to pay royalty. The Arbitrator was appointed by this court under Section 11 of the Act.

3. The claim of the petitioners for royalty totaling to Rs.1,20,00,000/- was rejected in view of clause 4.1(f) of the agreement.

3.1 The claim for damages for not transferring the technology on failure to commence commercial production by the respondent was rejected on the ground of limitation. Hence, the present petition.

4. The clause 4.1(f) stipulated that the respondent at the end of each financial year shall pay a lump-sum royalty of Rs.24 Lakhs per annum, for five years from the start of commercial sale of the product. Learned counsel for the petitioner fairly submits that in view of the admitted facts that there was no commercial production of the product, the issue of royalty is not being agitated.

4.1 It is argued that the arbitrator erred in rejecting the claim for damages on the ground of limitation. The submission is that albeit, the project was completed in the year 2007 but the agreement was for twelve years i.e. up to 05.03.2014 and thereafter before issuing notice under Section 21 of the Act in the year 2019 the petitioner waited for royalty for five years. It is canvassed that in violation of clause 11(e) of the agreement, the respondent while replying to the notice for first time in year 2019 offered to transfer the technology.

5. Per contra the view taken by the arbitrator is a plausible one. Considering the obligation casted upon the respondent by clause 11(e) the claim for damages is time barred. The argument is that the scope of interference under Section 34 of the Act is limited.

6. Heard learned counsel for the parties at length and perused the relevant record with their able assistance. Apart from the contentions noted above no other issue was pressed.

7. Before proceeding further, it would be relevant to quote clause

4(i)(f), clause 8, clause 11 and clause 16 of the agreement:-

“ 4(i)(f) To pay to NRDC. who will receive the same on behalf of DSIR, annual lumpsum\royalty of Rs 24 lakhs per year for a total period of 5 years from the “Start of Commercial Sale‟ of the Product(s)” at the end of each financial year.

8. COMPLETION OF PROJECT The Project shall be deemed to have been successfully completed when MAK have designed, developed, produced, tried and tested "Product(s)" as per specifications given in Annexure I to this Agreement; to the satisfaction of DSIR and users.

11. UTILIZATION OF TECHNOLOGY a. MAK will enter into an agreement with NRDC