[Cites 4, Cited by 0]
Delhi High Court
Proto Developers And Technologies Ltd vs M/S Antriksh Realtech Pvt Ltd & Anr on 18 March, 2026
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 17.02.2026
Judgment pronounced on: 18.03.2026
Judgment uploaded on: 18.03.2026
+ FAO(OS) (COMM) 189/2024 & CM APPL. 48495/2024
PROTO DEVELOPERS AND TECHNOLOGIES LTD
.....Appellant
Through: Mr. Ashwani Kumar Singh,
Adv.
versus
M/S ANTRIKSH REALTECH PVT LTD & ANR
.....Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE AMIT MAHAJAN
JUDGMENT
ANIL KSHETARPAL, J.
1. The present Appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 [hereinafter referred to as the „Act‟] is directed
against the judgment dated 10.05.2024 passed by the learned Single
Judge in O.M.P. (COMM) 98/2024 captioned Proto Developers &
Technologies Ltd. Vs. Antriksh Realtech Pvt. Ltd & Anr. [hereinafter
referred to as the „Impugned Judgment‟], whereby the Petition
instituted by the Appellant herein under Section 34 of the Act
[hereinafter referred to as „Section 34 Petition‟] assailing the Arbitral
Award dated 01.07.2023 [hereinafter referred to as „the Award‟] came
to be dismissed.
2. The factual matrix, to the extent required for the purposes of the
present Appeal, is noticed hereafter.
FACTUAL MATRIX
3. The dispute arises out of a group housing development project
proposed on land admeasuring approximately 61,500 sq. yards
situated at Village Chhajarsi, Ghaziabad, owned by M/s Raksha
Vigyan Karamchari Sahakari Awas Samiti Ltd., Ghaziabad
[hereinafter referred to as „the Society‟]. In the year 2006, the Society
entered into a development arrangement for the construction,
management and allotment of flats with M/s Rose Enterprises (a unit
of Proto Infosys Limited), the predecessor-in-interest of the present
Appellant, under which development rights in respect of the said land
were conferred and possession was delivered for purposes of
construction and the aforesaid allied activities. Certain steps towards
development, including land filling, boundary demarcation and
procurement of initial sanctions, were undertaken in pursuance
thereof.
4. Thereafter, owing to financial constraints and the inability of
the original developer, the Appellant herein, to mobilise adequate
funds for execution of the project, the Society and the Appellant
decided to induct a third-party developer.
5. On 09.02.2010, a Collaboration Agreement [hereinafter referred
to as „the Collaboration Agreement‟] came to be executed between the
Society, M/s. Proto Developers & Technologies Ltd. & Associates,
the Appellant as the confirming party, and Respondent No. 1,
Antriksh Realtech Pvt. Ltd.[hereinafter referred to as „the subsequent
developer‟], whereby Respondent No. 1 was inducted as the developer
for the construction of the multi-storied group housing complex
proposed to be known as "Antriksh Sanskriti". The Collaboration
Agreement recorded the subsisting rights created under the earlier
agreement of 2006 and envisaged a composite development structure.
Under the Collaboration Agreement, the Society and the Appellant
together were entitled to 37.5% of the constructed and unconstructed
area, while the subsequent developer was to retain 62.5% of the same,
and these were called their Allocable Shares.
6. The Collaboration Agreement delineated the respective
responsibilities of the parties in relation to construction, procurement
and continuation of statutory sanctions, and the discharge of statutory
dues payable to the Ghaziabad Development Authority [hereinafter
referred to as „GDA‟]. The subsequent developer was to undertake
construction at its own cost. The Collaboration Agreement further
contained stipulations governing the liability for payment of statutory
charges and the consequences thereof. The said clauses in the
Collaboration Agreement provided for the subsequent developer to
make certain payments towards statutory dues, subject to a financial
cap of Rs. 11 Crores. The interpretation and application of the
provisions of the Collaboration Agreement subsequently became the
principal area of controversy between the parties when disputes arose.
7. Pursuant to the Collaboration Agreement, construction activities
were commenced by the subsequent developer in April 2011. The
project, however, encountered impediments on account of demands
raised by the GDA towards development charges, city development
fee, additional FAR payments, labour cess and allied statutory levies.
The non-payment of these dues led to revocation of permissions, and
repeated sealing of the project site at different points of time.
8. The parties were at variance as to the contractual allocation of
liability for the aforesaid statutory payments for sanctions and
permissions. The Appellant asserted that the subsequent developer
was responsible for all payments necessary for continuation of the
project and for keeping the sanctions alive during the development.
The subsequent developer, on the other hand, contended that in terms
of the contractual stipulations governing statutory dues, its liability
was limited to the capped amount of Rs. 11 crores in terms of the
Collaboration Agreement and that payments made by it to the GDA
beyond that limit were on behalf of the Society and the Appellant, and
were liable to be reimbursed. These payments were characterised by
the subsequent developer as financial assistance/help extended to the
Appellant to preserve the project and secure de-sealing of the project
site.
9. Disputes thus arose between the parties not only in relation to
the responsibility for statutory payments and the consequences of the
sealing of the project site, but also with regard to delays in
construction, alleged diversion of project funds, and reciprocal claims
for damages.
10. In terms of the arbitration clause contained in the Collaboration
Agreement, the disputes were referred to Arbitration, and a learned
Sole Arbitrator was appointed by the Delhi International Arbitration
Centre (DIAC). The Appellant, in arbitral proceedings, raised
monetary claims alleging breach of contractual obligations by the
subsequent developer and sought damages running into Rs. 710
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crores. The subsequent developer, in turn, preferred counterclaims of
about Rs. 100 crores, principally seeking reimbursement of amounts
stated to have been expended towards statutory dues payable to the
GDA on behalf of the Appellant and the Society and towards
maintenance and preservation of the project during the period when
the site remained sealed.
11. By the Arbitral Award dated 01.07.2023, the learned Sole
Arbitrator rejected the claims of the Appellant in their entirety and
partly allowed certain counterclaims of the subsequent developer,
awarding a sum of Rs.12,01,01,524/- inclusive of interest up to the
date of the Award together with future interest at the rate of 9% per
annum.
12. Aggrieved thereby, the Appellant instituted the Section 34
Petition bearing O.M.P. (COMM) 98/2024. By the judgment dated
10.05.2024, the learned Single Judge, upon a consideration of the
contractual framework and the reasoning adopted by the learned
Arbitrator, held that the interpretation placed upon the relevant clauses
of the Collaboration Agreement constitutes a plausible and justifiable
view, and that no ground for interference within the parameters
available under Section 34 of the Act was made out. The petition was,
accordingly, dismissed.
13. The present Appeal under Section 37 of the Act has been
preferred against the aforesaid judgment dismissing the petition for
setting aside the Arbitral Award.
14. It may be noticed that although the Respondents have not
entered appearance in the present Appeal despite service, the Court is
nonetheless required to examine the matter within the requirements of
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Section 37 of the Act. The absence of the Respondents does not
enlarge the scope of appellate scrutiny nor dilute the discipline
imposed by the Act on interference with the Arbitral Award.
15. In this factual backdrop, the submissions fall for consideration.
SUBMISSIONS ON BEHALF OF THE APPELLANT
16. Learned counsel for the Appellant submits that the learned
Single Judge failed to exercise jurisdiction vested under Section 34 of
the Act and dismissed the Section 34 Petition on an erroneous
understanding that the Court could not examine the findings of the
learned Arbitrator. It is urged that the objections raised disclosed
grounds of patent illegality, perversity and conflict with the
fundamental policy of Indian law, which required judicial scrutiny.
17. It is contended that the judgment under Section 34 is non-
speaking and does not deal with the substantial grounds urged by the
Appellant, including the plea that the award is contrary to the
contractual scheme, based on material not forming part of the
evidence, and rendered in violation of principles of natural justice.
18. Learned counsel further submits that the counterclaims allowed
by the learned Arbitrator were ex facie barred by limitation and that
the learned Single Judge failed to examine this jurisdictional
objection.
19. In particular, the challenge is laid by the Appellant to the partial
allowance of Counterclaim No. 1 to the extent of Rs. 9 crores. It is
contended that the learned Arbitrator treated the absence of a specific
denial in the Appellant‟s reply to the counterclaim as sufficient to
infer that the said amount had been paid by Respondent No. 1 on
behalf of the Appellant and the Society. According to the Appellant,
such an inference could not have been drawn in the absence of
evidence demonstrating that the payment of ₹9 crores had in fact been
made.
20. The Appellant further submits that the finding is based solely on
oral testimony of RW- 2 (the Accountant of the Respondent No. 1)
without production of books of accounts or documentary proof, and
the learned Arbitrator had drawn an adverse inference in the absence
of a specific denial to the counter-claim. It is submitted that such a
finding is contrary to the "no evidence" principle and could not have
been sustained.
21. It is also urged that the Award proceeds on an erroneous
interpretation of the Collaboration Agreement, especially with regard
to the allocation of liability for statutory payments and approvals.
According to the Appellant, the contractual scheme placed the
responsibility for development and associated costs upon the
Respondent No. 1, and the learned Arbitrator has wrongly fastened
liability upon the Appellant and the learned Single Judge has erred in
treating the same as a plausible view.
22. Learned counsel submits that the learned Arbitrator travelled
beyond the terms of the contract, selectively applied certain clauses
while disregarding others, and thereby acted in excess of jurisdiction.
The Award is further assailed as being arbitrary, unreasonable and
contrary to public policy, including on the ground of the rate of
interest awarded on the counterclaims.
23. It is lastly submitted that the award suffers from breach of due
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process inasmuch as findings have been returned on the basis of vague
and extraneous material, depriving the Appellant of a fair opportunity
to contest the same.
24. In view of the submissions advanced, the following questions
arise for consideration in this appeal:
i. Whether the learned Single Judge has failed to exercise
jurisdiction under Section 34 of the Act;
ii. Whether the finding of the Arbitral Tribunal on limitation
is ex facie contrary to law;
iii. Whether the award suffers from absence of evidence in
respect of the counter-claims; and
iv. Whether any ground of patent illegality or perversity is
made out within the scope of Section 37 of the Act.
ANALYSIS AND FINDINGS
25. An Appeal under Section 37 of the Act does not entail a
rehearing of the objections under Section 34, nor does it undertake a
merits review of the arbitral determination. The jurisdiction of the
appellate court is confined to examining whether the court exercising
jurisdiction under Section 34 of the Act has remained within the well-
settled parameters governing interference with an arbitral award. The
appellate court does not sit in appeal over the Arbitral Award, nor
does it re-appreciate the contractual construction or the evidentiary
material, save to the limited extent necessary to ascertain whether the
Section 34 court has countenanced a patent illegality, perversity, or a
jurisdictional error.
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26. The primary question which, therefore, arises for consideration
is whether the learned Single Judge, in declining to set aside the
Arbitral Award, failed to exercise jurisdiction vested under Section 34
of the Act, or whether the view taken that the interpretation placed by
the learned Arbitrator on the Collaboration Agreement constituted a
plausible view not amenable to interference.
27. The challenge laid by the Appellant is, in substance, directed
against the construction placed by the learned Arbitrator on the
contractual allocation of liability for statutory payments and
approvals, the evidentiary basis for the partial allowance of certain
counterclaims, and the rejection of the Appellant‟s claims. The
enquiry, however, is not whether an alternative interpretation of the
contract is possible, but whether the interpretation adopted by the
learned Arbitrator is one that no reasonable person could have taken,
or whether the learned Single Judge, in testing the Award on the anvil
of Section 34, has either applied an incorrect standard or failed to
notice a patent illegality going to the root of the matter.
28. Insofar as the plea of limitation is concerned, the Appellant has
urged that the counterclaims allowed by the learned Arbitrator were ex
facie time-barred and that the learned Single Judge failed to examine
this objection. A plea of limitation, where it goes to the
maintainability of a claim, may in an appropriate case assume a
jurisdictional character. The question is not whether this Court would
independently reach a different conclusion on limitation, but whether
the view taken can be sustained within the contours of Section 34 of
the Act.
29. The controversy must, therefore, be tested on the touchstone of
whether the learned Single Judge merely deferred to a plausible view
taken by the learned Arbitrator on the construction of the contract and
the material before the Tribunal, or whether the Impugned Judgment
discloses a non-application of mind to grounds which, if established,
would have attracted interference.
30. The Arbitral Award, as noticed by the learned Single Judge,
turns primarily on the construction of the Collaboration Agreement,
particularly in regard to the allocation of liability for statutory dues,
permissions and approvals, and the financial consequences arising
from the sealing of the project site. The learned Arbitrator drew a
distinction between (i) governmental and statutory liabilities required
to be discharged to keep the sanctions alive, and (ii) construction
costs, and on that basis apportioned responsibility between the parties
in terms of the contractual scheme, including the stipulation placing a
financial cap of Rs. 11 crores on the contribution of Respondent No. 1
towards certain statutory payments for sanctions.
31. The learned Single Judge, while considering the challenge
under Section 34, examined the relevant clauses relied upon by the
parties and came to the conclusion that the interpretation placed by the
learned Arbitrator was a possible and plausible view flowing from the
contractual framework. The court expressly held that no perversity or
patent illegality was made out in the said construction.
32. It is well settled that the interpretation of a contract falls
primarily within the domain of the Arbitral Tribunal. Where the
Tribunal adopts a view that is reasonably borne out from the terms of
the agreement, the court under Section 34 does not substitute its own
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interpretation merely because another view is possible. The appellate
court under Section 37 is further removed from such an exercise and is
concerned only with whether the court under Section 34 has applied
this principle correctly.
33. The Appellant has urged that the partial allowance of
Counterclaim No. 1 is based on no evidence and rests solely on oral
testimony without production of accounts. The learned Single Judge
has, however, recorded that the findings of the learned Arbitrator were
based on the material placed before the Tribunal, and evidence
analysed in light of that interpretation and that no perversity or
absence of evidence was demonstrated.
34. The question before this Court is not whether the evidentiary
appreciation by the learned Arbitrator is correct, but whether the
learned Single Judge failed to notice a finding which is so devoid of
evidentiary basis as to attract the ground of patent illegality. The
Impugned Judgment indicates that the learned Single Judge was alive
to this test and declined interference on the ground that the
conclusions of the learned Arbitrator were supported by the record and
could not be characterised as perverse.
35. The plea that the counterclaims were barred by limitation has
been urged as a jurisdictional objection. The Arbitral Award records
that the Statement of Claim was filed on 08.09.2019, while the
Statement of Defence and Counterclaims were filed on 30.07.2020
and 05.08.2020 respectively. The Tribunal further noted that disputes
had arisen regarding supply and legibility of documents
accompanying the Statement of Claim, which stood resolved only
after the Tribunal entered reference. By order dated 28.02.2020, the
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Tribunal directed the filing of the Statement of Defence and
Counterclaims within four weeks. The Counterclaims were already
taken on record as noted in the order dated 07.08.2021 whereby the
Tribunal had condoned the delay, relying upon the directions issued
by the Supreme Court in In Re: Cognizance for Extension of
Limitation1 extending limitation on account of the COVID-19
pandemic, and proceeds on that basis to hold the counterclaims to be
within time. It was for the Appellant to prove how the counterclaims
was filed beyond prescribed period of limitation and the Appellant
failed to substantiate the same. The learned Single Judge has accepted
this approach and found no patent illegality in the said determination.
The application of the binding directions of the Supreme Court to the
procedural timeline before the Tribunal constitutes, at the very least, a
plausible view. Once the Tribunal applied the said directions of the
Supreme Court while considering limitation, the counterclaims could
not be regarded as ex facie time-barred.
36. It is well settled that limitation assumes a jurisdictional
character only where a claim is ex facie barred by statute. Where the
issue involves the appreciation of facts, computation of periods, or
applicability of legally sustainable exclusions, the same falls within
the domain of the arbitral tribunal. In the present case, the view taken
by the Tribunal, as affirmed by the learned Single Judge, cannot be
said to be ex facie contrary to law.
37. The contention that the counter-claim has been allowed in the
absence of evidence is also without substance. The Arbitral Tribunal
considered the pleadings in the counterclaim, the testimony of the
Signed By:JAI Suo Motu Writ Petition (Civil) No.3 of 2020
NARAYAN
Signing Date:18.03.2026
12:11:18
witness of the Respondent No. 1, RW-2 and the material placed on
record regarding payments towards statutory dues and has treated the
counterclaim No. 1 to the extent of Rs. 9 crores as established. RW-2,
in his evidence, deposed that the counterclaimant had, at the request of
the Appellant and the Society, extended financial assistance
aggregating to approximately Rs. 9 crores in connection with the
project; and the amount remained outstanding and liable to be repaid.
The Tribunal has observed that while replying to the counterclaim, the
Appellant did not specifically deny receipt of Rs. 9 crores, which had
been pleaded as financial assistance to the Appellant and the Society
in the counterclaim by the Respondent No. 1, nor did the Appellant
cross-examine the witness of the Respondent No. 1 on that aspect
during evidence. Failing which, such averments remained
unchallenged, and the corresponding evidentiary inference was drawn
by the learned Arbitrator of the assertion being admitted.
38. The Supreme Court in Rajinder Pershad (Dead) by LRs. v.
Darshana Devi2, has observed that where a party intends to dispute
the correctness of a witness‟s statement on a crucial aspect, the
witness must be confronted with that part of the testimony in cross-
examination so as to afford the witness an opportunity of explanation;
failing such challenge, the witness‟s credit cannot be impeached.
39. A party that declines to cross-examine a witness on a crucial
aspect cannot subsequently contend that the said statement of the
witness ought not to be relied upon. In the present case, the absence of
a specific denial in the pleadings to the counterclaim and the failure to
cross-examine the witness of the Respondent No.1, RW-2, on the
Signed By:JAI AIR 2001 SC 3207
NARAYAN
Signing Date:18.03.2026
12:11:18
issue of financial assistance of Rs. 9 crores entitled the Tribunal to
treat that part of the evidence as unrebutted and to draw the
corresponding evidentiary inference. The learned Single Judge has
recorded that no finding entirely unsupported by evidence had been
demonstrated by the Appellant so as to justify the setting aside of the
Award.
40. The challenge of the Appellant is thus, in essence, directed to
the sufficiency and weight of the evidence, which is thus not a case of
no evidence. At best, it constitutes a challenge to the sufficiency of the
material considered by the Tribunal as evidence, which lies within the
exclusive domain of the Arbitral Tribunal and is not open to re-
appreciation under Sections 34 or 37 of the Act.
41. The Arbitral record indicates that the Tribunal considered the
pleadings in the counterclaim, the oral testimony of RW-2 in support
thereof, and the material placed on record regarding payments towards
certain statutory dues while arriving at its conclusion.
42. It is also relevant to note that by virtue of Section 19(4) of the
Act, the Arbitral Tribunal is empowered to determine the
admissibility, relevance, materiality and weight of the evidence placed
before it, without being strictly bound by the provisions of the Indian
Evidence Act, 1872. Once the Tribunal has evaluated the pleadings,
the testimonies and conduct of the parties in the course of evidence,
the sufficiency or weight assigned to such material falls within the
domain of the Arbitral Tribunal. The Appellant cannot, in proceedings
under Sections 34 or 37 of the Act, invite the Court to undertake a re-
appreciation of the evidence merely because the Tribunal drew an
inference adverse to it.
43. The allegations of breach of natural justice and reliance on
extraneous material have been urged by the Appellant in general
terms. The learned Single Judge has found no substance in these
objections. No specific instance of denial of opportunity or reliance on
material behind the back of the Appellant has been demonstrated.
44. On an overall consideration, the Impugned Judgment discloses
that the learned Single Judge applied the correct test under Section 34,
examined the challenge on the touchstone of patent illegality and
perversity, and declined to substitute the Arbitral view with an
alternative interpretation of the contract or the evidence. No
jurisdictional error or misapplication of the settled principles
governing interference with an Arbitral Award has been shown.
45. The contention that the Impugned Judgment is non-speaking is
also without merit. The Impugned Judgment notices the contractual
framework, the nature of the findings returned by the learned
Arbitrator, and records the conclusion that the view taken is a
plausible and justifiable one.
CONCLUSION
46. The settled position is that where the Arbitral Tribunal has
adopted a view which is reasonably borne out from the material on
record, and the Court exercising jurisdiction under Section 34 has
tested the award on the correct parameters governing interference with
Arbitral Awards, the appellate court under Section 37 would not
interfere merely because another view on the facts or contract is
possible. Interference would arise only where the award or the
judgment under Section 34 discloses a patent illegality, perversity, or
a jurisdictional error going to the root of the matter, which has not
been demonstrated in the present case.
47. In view of the foregoing discussion, this Court finds no
infirmity in the approach adopted by the learned Single Judge in
declining to set aside the Arbitral Award. The Impugned Judgment
does not suffer from any jurisdictional error, nor does it disclose a
failure to exercise jurisdiction vested under Section 34 of the Act.
48. Accordingly, the present Appeal, along with the pending
application, stands dismissed.
ANIL KSHETARPAL, J.
AMIT MAHAJAN, J.
MARCH 18, 2026
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