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* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 13.02.2026 Judgment pronounced on: 01.04.2026 + O.M.P. (COMM) 73/2024 & I.A. 43484/2024 (Seeking withdrawal of amount deposited by petitioner)

UNION OF INDIA .....Petitioner Through: Mr. Vikas Kumar Sharma, Senior Central Government Counsel.

versus M/S VARINDERA CONSTRUCTIONS LTD. .....Respondent Through: Ms. Risha Mittal and Mr. Md.

Adil Alam, Advocates.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

J U D G M E N T

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition under Section 34 of the Arbitration and Conciliation Act, 1996, A&C Act has been filed impugning the Arbitral Award dated 27.08.2023 along with the corrigendum dated 20.10.2023, Arbitral Award, passed by the learned Sole Arbitrator in disputes arising out of Contract dated 03.11.2014 executed between the parties for the construction of dwelling units under the Married Accommodation Project at Jodhpur.

2. By way of the present proceeding, the Petitioner seeks to assail the Impugned Arbitral Award, principally on the ground that the mandate of the learned Arbitrator had expired under Section 29A of the A&C Act, prior to the pronouncement of the Award, and that the grant of interest by the learned Arbitral Tribunal is legally unsustainable.

BRIEF FACTS:

3. Shorn of unnecessary details, the facts germane to the institution of the present Appeal are as follows:

I. Briefly stated, the disputes between the parties arise out of a works contract awarded by Union of India, UOI to the Respondent for the construction of dwelling units for Officers, JCOs and ORs under the Married Accommodation Project at Jodhpur.

II. The contract was awarded pursuant to a Letter of Acceptance dated 03.11.2014 for a total contract value of ₹138,95,30,116/-. The date of commencement of the work was 27.11.2014 and the stipulated period for completion of the project was 25 months, with the original date of completion being 26.12.2016. The work was eventually completed on 10.03.2017.

III. Upon completion of the work, the Respondent submitted its final bill on 27.06.2017. The undisputed portion of the final bill was paid by UOI on 30.11.2019. Certain disputes thereafter arose between the parties, inter alia, concerning alleged delay in payment of the final bill, claims relating to prolonged bank guarantees, delayed or under payments of Running Account Receipts, RARs , and claims pertaining to deviation works and additional items.

IV. In view of the disputes having arisen between the parties, an Arbitral Tribunal comprising a learned Sole Arbitrator came to be constituted pursuant to an Order dated 15.09.2020 passed by this Court in ARB.P. 378/2020.

V. The learned Arbitrator entered upon reference and arbitral proceedings commenced under the provisions of the A&C Act.

VI. During the course of the arbitral proceedings, the Respondent filed its Statement of Claim raising several claims, including interest on delayed payment of the final bill, losses on account of prolonged bank guarantees, losses due to delayed and underpayments of RARs, and claims relating to deviation works and additional items. UOI filed its Statement of Defence opposing the claims and also raised a counterclaim.

VII. The Petitioner claims that the pleadings in the arbitral proceedings were completed on 24.05.2021.

VIII. During the pendency of the arbitral proceedings, UOI filed an Application dated 10.04.2023 before the learned Arbitrator, invoking Section 29A of the A&C Act, contending that the mandate of the learned Arbitrator had expired and seeking termination of the arbitral proceedings on that ground. The said Application was heard by the learned Arbitrator and was ultimately dealt with in the Impugned Award.

IX. The learned Sole Arbitrator thereafter rendered the Arbitral Award dated 27.08.2023, whereby several claims of the Respondent were partly allowed. Under the Award, amounts were granted under different heads, including claims relating to delayed payment of