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2026 Supreme(Online)(Del) 6003

IN THE HIGH COURT OF DELHI AT NEW DELHI
Harish Vaidyanathan Shankar, J
INSTITUTE OF HUMAN BEHAVIOUR AND ALLIED SCIENCES – Appellant
Versus
MI 2 C SECURITIES AND FACILITIES – Respondent
O.M.P. (COMM)-286/2024



Advocates:
For the Appellants/Petitioners: Tushar Sannu, Ankita Bhadouriya, Umesh Kumar
For the Respondents: Rajesh Gogna, Shivam Tiwari, Rebina Rai, Punita Jha

Legal Category Hierarchy

  • practice and procedure
    • arbitration
      • setting aside of award
        • grounds of challenge
        • scope of interference (Para 57, 58, 65, 69, 71, 88)
      • arbitral award
        • interest
  • commercial law
    • micro small and medium enterprises
      • msmed act
        • interest on delayed payments (Para 76, 77, 78, 79, 80)
        • dispute resolution mechanism (Para 77, 78, 79)

Table of Contents

1. Challenge to arbitral award under Section 34, A&C Act — Non-payment for additional deployment of security personnel — Dispute under service agreement. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 )

2. Petitioner: award patently illegal, exceeded contract terms, ignored evidence, wrongly awarded MSMED interest. Respondent: award based on plausible contract interpretation; limited Section 34 scope. (Para 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 )

4. Under Section 34, A&C Act, a plausible contract interpretation by the arbitrator is not interfered with unless perverse or patently illegal. (Para 58 , 65 , 68 , 69 , 88 )

5. Objection petition dismissed; enforcement petition to proceed; judgment debtor directed to deposit awarded sum within four weeks. (Para 89 , 90 , 91 , 92 )

6. When can an arbitral award be set aside for patent illegality under Section 34(2A) of the A&C Act?

Patent illegality, going to the root of the matter, includes an award based on no evidence, ignoring vital evidence, or being so irrational that no reasonable person would reach it. Mere erroneous application of law is not sufficient. (Para 68 , 69 , 70 , 71 , 72 , 73 )

7. Is recourse to the Micro and Small Enterprise Facilitation Council under Section 18 of the MSMED Act a mandatory precondition for an arbitral tribunal to award statutory interest under Sections 15 and 16 of the MSMED Act?

No. The obligation to pay interest on delayed payments under Sections 15 and 16 is an absolute statutory consequence, independent of invoking the Section 18 mechanism. (Para 75 , 76 , 77 , 78 , 79 , 80 )

8. Can a court under Section 34 of the A&C Act substitute its own interpretation of a contract for that of the arbitral tribunal?

No. The interpretation of contractual terms lies within the arbitrator's domain. The court cannot substitute its view if the arbitrator's interpretation is plausible, even if another view is possible. (Para 63 , 64 , 65 )

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 03.02.2026 Judgment pronounced on: 06.04.2026 + O.M.P. (COMM) 286/2024, I.A. 33341/2024 (Stay), I.A.

33342/2024 (Ex. from filing certified copies of the arbitral record), I.A. 33343/2024 (Ex. from filing entire original/certified copies of the arbitral tribunal record), I.A. 33344/2024 (Delay of 5 days in re-filing the petition) & I.A.

36363/2024 (Delay of 4 days in filing the short note)

INSTITUTE OF HUMAN BEHAVIOUR AND ALLIED SCIENCES .....Petitioner Through: Mr. Tushar Sannu, Standing Counsel with Ms. Ankita Bhadouriya and Mr. Umesh Kumar, Advocates.

versus MI 2 C SECURITIES AND FACILITIES .....Respondent Through: Mr. Rajesh Gogna, Mr. Shivam Tiwari, Ms. Rebina Rai and Ms.

Punita Jha, Advocates.

+ OMP (ENF.) (COMM.) 272/2024, EX.APPL.(OS) 2/2025 (Filed on behalf of the decree holder to place on record the new certificate of incorporation dt. 29.04.2024) & EX.APPL.(OS) 59/2025 (Filed on behalf of the decree holder for amendment of memo of parties)

MI2C SECURITY AND FACILITIES PVT LTD .....Decree Holder Through: Mr. Rajesh Gogna, Mr. Shivam Tiwari, Ms. Rebina Rai and Ms.

Punita Jha, Advocates.

versus INSTITUTE OF HUMAN BEHAVIOUR AND ALLIED SCIENCES .....Judgement Debtor Through: Mr. Tushar Sannu, Standing Counsel with Ms. Ankita Bhadouriya and Mr. Umesh Kumar, Advocates.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR

J U D G M E N T

HARISH VAIDYANATHAN SHANKAR, J.

1. The Objection Petition, being O.M.P. (COMM) 286/2024, Objection Petition, has been instituted under Section 34 of the Arbitration and Conciliation Act, 1996, A&C Act, by Institute of Human Behaviour & Allied Sciences, Petitioner assailing the Arbitral Award dated 26.02.2024, Impugned Award rendered by the learned Sole Arbitrator in the arbitral proceedings initiated at the instance of MI2C Securities and Facilities, Respondent

2. The Claimant, in the above-stated arbitral proceedings vide the Impugned Award, was awarded a principal sum of Rs. 1,37,05,429/- towards the invoices raised along with Pre-reference Interest and pendente lite interest at the rate of 18% and further, future interest at the rate of 20% from the date of award until actual realisation.

3. For the sake of convenience, clarity and consistency, the parties shall hereinafter be referred to in the same rank and nomenclature as adopted in the above-stated Objection Petition.

4. Parallelly, an Enforcement Petition, being O.M.P. (COMM) 272/2024, Enforcement Petition has been filed by the Respondent/ Award Holder under Section 36 of the A&C Act, read with Order XXI Rules 1, 11(2), 30, 43, 64 & 66, read with Section 151 of the Code of Civil Procedure, 1908, seeking enforcement and execution of the Impugned Award.

5. It is because the enforceability of the Impugned Award is directly contingent upon the fate of the challenge laid by way of the Objection Petition, and since both the proceedings are intrinsically interlinked with the Impugned Award, the Objection Petition and the Enforcement Petition were heard together contemporaneously, in order to obviate the possibility of conflicting determinations.

6. It is accordingly clarified that the Enforcement Petition shall necessarily abide by the outcome of the Objection Petition, and in the event the challenge to the Impugned Award succeeds, the Enforcement Petition would consequently not survive for consideration.

BRIEF FACTS:

7. The Petitioner is stated to be an autonomous Government Institution and Hospital under the aegis of the Government of N.C.T. of Delhi and the Respondent, a private limited company registered as Micro, Small and Medium Enterprises, MSME, is stated to be an integrated security and facility management service provider engaged in providing manpower for security services.

8. The Petitioner issued a Notice inviting Tender dated 06.11.2015, NIT seeking bids to provide security manpower to be deployed at its premises. The Respondent participated in the said bidding process and stood

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