O.M.P. (COMM) 221/2017 Page 1 of 29

$~J

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment reserved on:01.11.2025

Judgment pronounced on: 22 .01.2026

+ O.M.P. (COMM) 221/2017 & I.A. 26479/2025

GOVT.OF NCT OF DELHI & ANR. ………Petitioners

Through: Mr. Tushar Sannu, Ms. Ankita

Bhadoriya and Mr. Vishal Ji, Advs.

versus

GAURAV ENTERPRISES ………Respondent

Through: Mr. Sudhir Nandrajog Sr. Adv.

with Mr. Tarkeshwar Nath, Mr. Harshit

Singh, Advs.

CORAM:

HON'BLE MR. JUSTICE JASMEET SINGH

J U D G M E N T

1. This is a petition filed under Section 34 of the Arbitration and

Conciliation Act, 1996 (“1996 Act”) seeking to set aside the Arbitral

Award dated 20.12.2016 (“impugned Award”), wherein the claims of

the respondent were allowed and was awarded a sum of

Rs.6,87,09,157/- towards pending bills and Rs. 32,82,807/- as refund

of security along with interest @ 9% p.a from the date of invocation of

the arbitration clause upto the date of the award and future interest @

12% p.a. from the date of the award till its realization.

O.M.P. (COMM) 221/2017 Page 2 of 29

2. The petitioners before this Court were the respondents in the

arbitration proceedings and the respondent herein was the claimant.

FACTUAL BACKGROUND

3. The petitioner No. 1 i.e., Dr. Baba Saheb Ambedkar Hospital, a

government aided hospital, situated at Rohini, provides super specialty

facilities including Neurosurgery, Nephrology, Pulmonology and

Urology. The petitioner No. 2 i.e., Health & Family Welfare

Department, is a Department of Government of NCT of Delhi and is

committed to providing healthcare facilities to the people of Delhi.

4. The respondent i.e., M/s. Gaurav Enterprises, is engaged in the

business of providing security services.

5. The petitioner No. 1 invited e-tenders for providing security services

with trained manpower at Dr. Baba Saheb Ambedkar Hospital for a

period of two years on contract basis. The respondent participated in

the same and was awarded the contract to provide 130 security guards

and 3 security supervisors for a period of 2 years starting from

29.04.2011 @ Rs. 338.12/- per day per security guard.

6. Subsequently, an Offer Letter dated 27.04.2011 (“Offer Letter”) was

issued by petitioner No. 1 to the respondent. Later, on 28.04.2011, a

notice was issued by petitioner No. 1 to the respondent directing the

respondent to take over the charge of security services and to submit a

list of manpower deployed with their addresses and medical fitness

and police verification within 7 days. Consequently, an Agreement

dated 28.04.2011 (“Agreement”) was executed between the petitioner

No. 1 and the respondent for a period of two years from 29.04.2011 to

28.04.2013.

O.M.P. (COMM) 221/2017 Page 3 of 29

7. The said Agreement contains an arbitration being Clause No. 58 of the

Terms and Conditions of the Contract (“TCC”), which reads as

under:-

“58.⁠ ⁠Dispute Resolution

(a) Any dispute and or difference arising out of or relating

to this contract will be resolved through joint discussion of

the authorities' representatives of the concerned parties.

However, if the disputes are not resolved by joint

discussions, then the matter will be referred for adjudication

to a sole Arbitrator appointed by the Principal

Secretary/Secretary (of the Administrative Department),

Government of NCT of Delhi

(b) The award of the sole Arbitrator shall be final and

binding on all the parties. The arbitration proceeding's shall

be governed by Indian Arbitration and Conciliation Act

1996 as amended from time to time.

(c) The cost of Arbitration shall be borne by the respective

parties in equal proportions. During the pendency of the

arbitration proceeding and currency of contract, neither

party shall be entitled to suspend the work/service to which

the dispute relates on account of the arbitration and

payment to the contractor shall continue to be made in

terms of the contract.

Arbitration proceedings will be held at Delhi/New Delhi

only.”

8. The respondent took over the charge of security services with effect

O.M.P. (COMM) 221/2017 Page 4 of 29

from 29.04.2011 and deployed its manpower. However, the

Agreement period was extended till 24.12.2014 (terminated on

24.12.2014) as the security services are essential services required in

Hospital.

9. As per the terms of the Agreement, the respondent was to provide the

requisite documents such as proof of disbursement of wages, proof of

deposition of ESI/EPF etc. However, the respondent failed to do so

and consequently, payment could not be released.

10. The petitioner No. 1 vide letter dated 03.12.2011, requested the

respondent to furnish the requisite documents including the list of

personnel deployed, ESI, EPF, police verification and medical

examination reports etc. Another letter dated 28.04.2012 was

addressed to the respondent requesting submission of month-wise

proof of disbursement of wages through ECS or cheque to each of the

personnel deployed along with a list of the Ex-servicemen deployed

by the respondent at the hospital. On respondent’s failure to provide

the required documents, reminders were sent by petitioner No. 1.

11. The petitioner No. 1 vide letter dated 02.02.2013 again requested the

respondent to provide an undertaking to the effect that wages to

security personnel deployed had been paid along with some other

documents. However, the respondent failed to deposit the requisite

documents. On respondent’s failure to so the same, another letter

dated 15.03.2013 was issued by petitioner No.1 to the respondent.

12. Since there were disputes between the parties, the respondent filed an

arbitration petition under Section 11 of the 1996 Act being Arbitration

Petition No. 78/2015 seeking appointment of an Arbitrator to

O.M.P. (COMM) 221/2017 Page 5 of 29

adjudicate the disputes, which was disposed of vide order dated

21.12.2015 and the Sole Arbitrator was appointed.

13. The learned Sole Arbitrator entered reference and commenced the

arbitration proceedings. The respondent filed its statement of claim,

claiming a sum of Rs. 6,87,09,157/- towards pending payments and

refund of security deposit of Rs. 32,82,807/- along with interest

@18% p.a. from the date the amount became due and payable till its

realization.

14. The petitioners filed the reply to the statement of claim. The Sole

Arbitrator framed the following issues:-

“i. Whether in pursuance of the Agreement dated

28.04.2011 the petitioner has complied and submitted the

bills of security personal accordingly, if so, its effect?

ii. Whether the petitioner has not followed the guidelines

entered into the agreement and submitted the bills

arbitrarily and whether they actually paid to the guard

towards for salaries, ESI, EPF and other payments to the

security personnel/employees, if so, its effect?

iii. Whether the petitioner did not submit EPF and ESI

Number and other details of the employees, if so, its ⁠effects?

iv. Whether respondent deliberately withheld the salaries

payment of bills amount submitted on behalf of petitioner,

for the service, if so, its effects?

v. To what relief the petitioner is entitled?”

15. After hearing both parties and considering the documents and

evidence placed on record, the Sole Arbitrator passed the impugned

O.M.P. (COMM) 221/2017 Page 6 of 29

Award dated 20.12.2016, wherein while allowing the claims of the

respondent, he awarded a sum of Rs. 6,87,09,157/- towards pending

bills and Rs. 32,82,807/- towards refund of security along with

interest.

SUBMISSIONS ON BEHALF OF THE PETITIONER S

16. Mr. Sannu, learned counsel for the petitioners, submits that the

impugned Award is completely irrational and contrary to the clauses

of the Agreement. The findings of the Sole Arbitrator are perverse,

opposed to public policy of India and is patently illegal. Hence, the

impugned Award is violative of Sections 28(1)(a) and 34 of the 1996

Act as it is not in accordance with the substantive law in force in India

and hence, liable to be set aside.

17. It is submitted that Clauses No. 4 and 5 of TCC of the Agreement

provide that the antecedents of the staff employed were to be verified

by the respondent from local police and an undertaking in this regard

was to be submitted to the petitioner No. 1. Furthermore, the

respondent was to maintain a register on which day to day deployment

of personnel was to be entered and the same was to be countersigned

by the authorized official of the petitioner department. The shift-wise

deployment particulars of the personnel engaged during each month,

was supposed to be shown while raising the bill. However, no such list

or verification report was provided by the respondent.

18. It is submitted that the respondent failed to abide by the aforesaid

clauses of the Agreement and therefore, was not entitled to payments,

which were towards the cost incurred by the respondent for salaries,

EPF and ESI amounts etc. Further, the Sole Arbitrator failed to take

O.M.P. (COMM) 221/2017 Page 7 of 29

note of the said clauses of the Agreement and also wrongly placed the

burden of proving that the said clauses upon the petitioners.

19. It is submitted that at the time of arguments, the petitioners denied that

the documents produced before the Sole Arbitrator constituted full set

of documents as contemplated by the Agreement. The observation of

the Sole Arbitrator that he has gone through all the rejoinder

documents and supporting documents allegedly submitted by the

respondent and found everything in order, is incorrect. To

substantiate, the petitioners relied upon the bill of April 2011 wherein

the respondent has only given total of amount and no details of

attendance or names of security guards. In the accompanying EPFO

and ESI also, it is only some cumulative figure of payments, without

any division explaining whether the security personnels employed at

petitioner Hospital were paid or not. The said documents clearly show

that the conditions of the Agreement were not complied with and

further fails to elaborate the number of security personal employed,

and payments made to them. The case of the petitioners is that the

respondent at one given point of time could have had numerous

security personal employed at different locations and could have very

easily employed less people at the petitioner hospital and show

challans for security personal employed elsewhere. The challans do

not show that the security personal were employed at the petitioner

hospital. Additionally, despite continuous reminders the respondent

did not disclose the details of personnels deployed as per the

Agreement.

20. It is submitted that the respondent failed to disburse the wages to the

O.M.P. (COMM) 221/2017 Page 8 of 29

personnel by ECS or by cheque and the same is in violation of Clause

No. 55 of TCC of the Agreement. Although the respondent has

claimed it had been paying full wages in cash, however the documents

clearly demonstrate contrary. Furthermore, the respondent in its

communication with the petitioners has admitted that it was not

making payment to security personnel. Additionally, the petitioner

vide its letter dated 07.05.2014 had informed the respondent about the

complaints received from security personnel regarding salaries paid to

them below the minimum wages.

21. It is submitted that the respondent has failed to provide any proof of

employer’s contribution towards PF/ESI for the period upto March

2012. The respondent has failed to provide proof of registration with

the Labour Department, required as per Clause No. 41 of TCC of the

Agreement and has also failed to verify the age of the personnel

deployed, required as per Clause No. 42 of TCC of the Agreement and

the personnel who were purportedly from the ex-servicemen

background, as was required by Clause No. 43 of TCC of the

Agreement. Further, the respondent failed to provide proof of medical

examinations, education qualifications, police verifications and CVs

of the personnel purportedly deployed at the petitioner’s premises, as

required by Clauses No. 5, 23, 43 and 30 of TCC of the Agreement,

despite repeated reminders. While passing the impugned Award, the

Sole Arbitrator has ignored the express terms and conditions of the

Agreement and having failed to examine the documents that were on

record, the Sole Arbitrator erred in its findings and conclusions.

22. It is submitted that there are discrepancies in EPF and ESI challans

O.M.P. (COMM) 221/2017 Page 9 of 29

submitted by the respondent. The documents such as bills raised,

EPF/ESI challans etc. relied upon by the respondent in the arbitration

proceedings clearly demonstrates that between March 2011 to

February 2012, the respondent deliberately submitted consolidated

EPF and ESI challan and falsely claimed as having deposited the

statutory EPF and ESI dues. Consolidated challans could not be

verified for whether the statutory dues were deposited against each

security guard purportedly deployed by the respondent. Additionally,

despite requests from the petitioners to provide the detailed challans,

the respondent continued to deposit only the consolidated challans. By

not providing the same till date, the respondent has not only breached

the Agreement but has also illegally profited by denying the security

personnel their rightful dues.

23. It is further submitted that the respondent started providing detailed

EPF and ESI, from March 2012. However, a perusal of same shows

that the respondent has been raising inflated bills, underpaying the

personnel, and has been submitting false challans. For instance in the

security bill of March 2012, the respondent has raised bill for 130

security guards and 3 security supervisors @ Rs. 369.46/- per day for

31 days. However, as per list of deployed personnel submitted by the

respondent for March 2012, it deployed 160 personnel for said month.

24. Further, for the said month, the respondent has claimed to have

deposited EPF of Rs. 2,35,654/- and therefore submitted the

consolidated EPF challan to the petitioners for reimbursement.

However, the detailed EPF challan, for the same month, shows that

the respondent paid EPF of Rs. 2,35,654/- for employees numbering to

O.M.P. (COMM) 221/2017 Page 10 of 29

over 508; and not 133 or 160, as were stated to have been deployed by

the respondent in petitioner’s premises. Thus, after depositing EPF for

518 employees, the respondent tried to illegally claim reimbursement

from the petitioners and the Sole Arbitrator has failed to take note of

the said discrepancy.

25. The said bill of March 2012, further shows discrepancies even

regarding the wages as claimed to have been paid to the personnel by

the respondent. The respondent claim to have been paying wages @

Rs. 369.49/- per day for 31 days to each personnel. However, in case

of person named Sushila, the detailed EPF Challan shows that she was

paid Rs. 3006/- and had worked for 14 days; which computes her

wages to only Rs. 214/- per working day, which is far below Rs.

338.12/- as sanctioned vide the Agreement.

26. It is submitted that just like in the case of EPF, even for ESI the

respondent has tried has make a claim of having deposited

Rs.1,10,839/- towards ESI contribution for the month of March 2012,

whereas, the detailed ESI contribution challan, shows that the said

challan was issued to the respondent, having deposited the said

amount against 608 employees.

27. The above said example from the bills submitted by the respondent

more than amply demonstrates that the bills raised by the respondent

were false and inflated and the EPF and ESI challans were false and

bogus. Additionally, the Agreement provided that each payment to

respondent would only be made on basis of jointly signed

documentary proof attached to the bills raised, however, the

respondent has failed to provide any such proof and also failed to get

O.M.P. (COMM) 221/2017 Page 11 of 29

the said documents attested from the representatives of the petitioners.

The Sole Arbitrator failed to take note of the said discrepancies.

28. It is submitted that the burden of proving that payments were made

and covenants of the Agreement were complied with was wrongly

placed on the petitioners. The Sole Arbitrator while framing the Issue

No. 2 (as reproduced above), has erroneously put the burden of

proving that the respondent had not followed guidelines mentioned in

the Agreement upon the petitioners, which is in violation of Section

101 of the Indian Evidence Act, 1872. Similarly, in framing the Issue

No. 3 (as reproduced above) the Sole Arbitrator erroneously put the

burden upon the petitioners.

29. It is further submitted that after framing such issues, the Sole

Arbitrator recorded his finding “that there is no dispute regarding the

salaries paid to the security personnel....”, which is without any

evidence and in teeth of the petitioner’s case that the respondent failed

to make payment as per cheque or ECS, and had further failed to

provide any documentary proof of having paid the wages jointly

signed by the petitioner department and that of the respondent, or

proof of ESI or EPF or Service Tax etc., having been deposited. In

addition to this, the Sole Arbitrator, without any stage of admission

and denial of documents, proceeded and held that all the documents

filed by the respondent stood admitted. The Sole Arbitrator arrived at

an erroneous conclusion that since the respondent “has submitted

these documents in four volumes along with Rejoinder. All these

papers were on record and since the Respondent (GNCTD) did not file

any contradiction, the burden lies on the Respondent (GNCTD) to

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rebut these allegations.”. It is submitted that on these incorrect

application of principles of evidence law alone the impugned Award is

liable to be set aside.

30. It is submitted that the Sole Arbitrator made an incorrect finding that

the petitioners did not point out deficiencies in the documents

submitted by the respondent pursuant to this Court’s Order dated

03.03.2015. After this Court had directed the respondent to bring to

the petitioners a fresh set of documents evidencing payment of ESI/

EPF, so that the petitioners could point out deficiencies, the petitioners

did pointed out the deficiencies in the said documents and the same is

an undisputed fact. However, the Sole Arbitrator has still recorded that

the petitioners did not object to the documents that were supplied.

31. In view of the aforesaid grounds, the learned counsel for the

petitioners submits that that by ignoring the clauses of the Agreement,

the Sole Arbitrator has travelled beyond his jurisdiction as his

existence depends upon the agreement and his function is to act within

the limits of the agreement. The impugned Award suffers from non

application of mind and it is contrary to the law and facts forming part

of record. It is therefore submitted that the impugned Award suffers

from several legal and factual infirmities, and is therefore,

unsustainable in law and liable to be set aside.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

32. Mr. Nandrajog, learned senior counsel for the respondent, submits that

the impugned Award is well within the parameters of the contractual

provisions and is in accordance of law and hence, the impugned

Award needs no interference.

O.M.P. (COMM) 221/2017 Page 13 of 29

33. It is submitted that the respondent has complied with all the TCC of

the Agreement, statutory provisions and Labour Laws. The same is

evident from letters dated 12.12.2011, 09.02.2012, 25.05.2012,

03.01.2013 etc. It is further submitted that the Sole Arbitrator has

dealt with all the objections raised by the petitioners in the impugned

Award, particularly in paragraphs No. 82 to 88.

ANALYSIS AND FINDINGS

34. I have heard learned counsel for the parties.

35. The Court under Section 34 of the 1996 Act has very limited and

narrow scope of interference in a challenge to an Arbitral Award. The

Hon’ble Supreme Court in Ramesh Kumar Jain v. Bharat

Aluminium Co. Ltd.

1

, while laying down the scope of interference

under Section 34 and 37 of the 1996 Act observed as under:-

“28. The bare perusal of section 34 mandates a narrow lens

of supervisory jurisdiction to set aside the arbitral award

strictly on the grounds and parameters enumerated in sub-

section (2) & (3) thereof. The interference is permitted

where the award is found to be in contravention to public

policy of India; is contrary to the fundamental policy of

Indian Law; or offends the most basic notions of morality or

justice. Hence, a plain and purposive reading of the section

34 makes it abundantly clear that the scope of interference

by a judicial body is extremely narrow. It is a settled

proposition of law as has been constantly observed by this

1

2025 SCC OnLine SC 2857.

O.M.P. (COMM) 221/2017 Page 14 of 29

court and we reiterate, the courts exercising jurisdiction

under section 34 do not sit in appeal over the arbitral

award hence they are not expected to examine the legality,

reasonableness or correctness of findings on facts or law

unless they come under any of grounds mandated in the said

provision. In ONGC Limited. v. Saw Pipes Limited, this

court held that an award can be set aside under Section 34

on the following grounds:“(a) contravention of fundamental

policy of Indian law; or (b) the interest of India; or (c)

justice or morality, or (d) in addition, if it is patently

illegal.”

29. …. Hence, it is very well settled that arbitral awards are

not liable to be set aside merely on the ground of erroneous

in law or alleged misappreciation of evidence and there is a

threshold that the party seeking for the award to be set

aside has to satisfy, before the judicial body could enter into

the realm of exercising its power under section(s) 34 & 37.It

is also apt and appropriate to note that re-assessment or re-

appreciation of evidence lies outside the contours of judicial

review under section(s) 34 and 37. This court in Punjab

State Civil Supplies Corporation Limited v. Sanman Rice

Mills, at Paragraph 12 observed that even when the arbitral

awards may appear to be unreasonable and non-speaking

that by itself would not warrant the courts to interfere with

the award unless that unreasonableness has harmed the

public policy or fundamental policy of Indian law. It might

O.M.P. (COMM) 221/2017 Page 15 of 29

be a possibility that on re-appreciation of evidence, the

courts may take another view which may be even more

plausible but that also does not leave scope for the courts to

reappraise the evidence and arrive at a different view. This

court in Batliboi Environmental Engineers

Limited v. Hindustan Petroleum Corporation Limited held

that the arbitrator is generally considered as ultimate

master of quality and quantity of evidence. Even an award

which is based on little or no evidence would not be held to

be invalid on this score. At times, the decisions are taken by

the arbitrator acting on equity and such decisions can be

just and fair therefore award should not be overridden

under section 34 and 37 of the A&C Act on the ground that

the approach of the arbitrator was arbitrary or capricious.”

(Emphasis added)

36. A bare perusal of the paragraphs reproduced above show that the

Court under Section 34 of the 1996 Act cannot act as appellate

authority or re-appreciate the evidence. The Court should refrain itself

from interfering with the findings of the Arbitral Tribunal and/or

substituting its own views with those arrived at by the Arbitral

Tribunal. The Court can set aside an Arbitral Award only under the

limited grounds expressly provided in Section 34 of the 1996 Act or

when the Arbitral Award is contrary to the law or terms of the

agreement.

37. With said principles in mind, I shall now proceed to consider the rival

contentions raised by both the parties.

O.M.P. (COMM) 221/2017 Page 16 of 29

38. Before proceeding further, it is pertinent to refer to the relevant

clauses from the TCC of the Agreement. The same are extracted

below:-

“TERMS AND CONDITIONS OF THE CONTRACT

xxxxxxxx

4. The antecedents of security staff deployed shall be got

verified by the contractor from local police authority and an

undertaking in this regard to be submitted to the department

and department shall ensure that the contractor complies

with the provisions.

5.⁠ The Contractor will maintain a register on which day to

day deployment of personnel will be entered. This will be

countersigned by the authorized official of the Department.

While raising the bill, the deployment particulars of the

personnel engaged during each month, shift wise, should be

shown. The Contractor has to given an undertaking (on the

format), duly countersigned by the concerned official of the

Department, regarding payment of wages as per rules and

laws in force, before receiving the 2nd payment onwards.

xxxxxxxx

23. The contractor shall abide by and comply with all the

relevant laws and statutory requirements covered under

various laws such as Labour Act, Minimum Wages Act,

Contract Labour (Regulation and abolition) Act, EPF, ESI

and various other Acts as applicable from time to time with

O.M.P. (COMM) 221/2017 Page 17 of 29

regard to the personnel engaged by the contractor for the

Department

24.The payment would be made at the end of every month

based on the actual shift manned/operated by the personnel

supplied by the contractor and based on the documentary

proof jointly signed by the representative of the

Departmentand the contractor/his representative/personnel

authorized by him. No other claim on whatever account

shall be entertained by the Department.

xxxxxxxx

27. …

a. In case the contractor fails to commence/execute the work

as stipulated in the agreement or unsatisfactory

performance or does not meet the statutory requirements of

the contract, Department reserves the right to impose the

penalty as detailed below:-

i) 20% of cost of order/agreement per week, up to four

weeks delays.

xxxxxxxx

53. The contractor shall provide the copies of relevant

records during the period of contract or otherwise even

after the contract is over whenever required by the

Department etc.

54. The contractor will have to deposit the proof of

depositing employee’s contribution towards PF/ESI etc. of

each employee in every 3 months.

O.M.P. (COMM) 221/2017 Page 18 of 29

55.⁠ ⁠The contractor shall disburse the wages to its staff

deployed in the Department every month through ECS or by

Cheque in the presence of representative of the

Department.”

39. Mr. Nandrajog, learned senior counsel for the respondent, states that

the Sole Arbitrator has duly considered all the TCC of the Agreement,

statutory provisions and dealt with all the objections raised by the

petitioners in the impugned Award, and the same is evident from

paragraphs No.82 to 88 of the impugned Award, which read as under:-

“82. On perusal the records, claimant vide its letter dated

12.12.2011 pointed out that bills for the period 29.04.2011

to 30.11.2011 with EPF and ESIC challans and attendance

sheet has been placed before the Respondent. Bio Data form

along with medical fitness certificate and bills verification

report in respect of 136 security guards and three

supervisors were deployed in the hospital were also

submitted and these formalities have been submitted by the

claimant vide its letter dated 16.01.2012. Counsel for the

claimant clearly pointed out that the claimant has

performed his part of the contract and also submitted

documents which includes .....

83. I have perused the records. Claimant submitted the

duplicate copies of the bills, consolidated challan of PPF

and ESIC and EPF, PCR, list of deployed personnel

showing EPF and ESIC Number against each of them. In

addition to that claimant has also submitted the details

O.M.P. (COMM) 221/2017 Page 19 of 29

regarding monthwise and shiftwise duties roaster, bills

verification along with list of security personnel,

acquaintance roll, the claimant met for 50% of the total

payable amount because they were suffering from financial

crunch. Ld. Counsel argued that despite every detail,

respondent did not pay even a single pie except the part

payment which has already mentioned. During joint

discussion between the parties, the claimant submitted

duplicate copies of the bills consolidated challan of EPF

and ESIC and EPSI and contributory sheet of ESIC along

with list of deployed security personnel showing EPF and

ESIC details. Claimant has submitted these documents, in

four volumes along with Rejoinder. All these papers were on

record and since the respondent did not file any

contradiction therefore, the burden lies on the respondent to

rebut these allegations. The claimant has also submitted

they have informed respondent monthwise and shiftwise

duty roaster, bills verification along with list of security

personnel and acquaintance roll and each of these are on

record. As per version of the claimant, the respondent

despite receipt of these documents and in compliance of

High Court order dated 03.03.2015 did not make any

payment. Claimant further wrote several letters but of no

avail. In view of the High Court direction dated 03.03.2015

it was obligatory on the respondent to make the payment in

case no deficiency is pointed out and since the respondent

O.M.P. (COMM) 221/2017 Page 20 of 29

did not point out any deficiency, the respondent was bound

to pay within a period of 8 weeks from 09.03.2015. Since

payment was not made, the arbitration petition was revived

and High Court has directed the Arbitrator to adjudicate

the claim. It is, therefore, very clear that right from invoking

jurisdiction of the Hon'ble High Court till the Arbitrator has

been appointed no payment has ever been made despite the

direction that in no case discrepancy is found the amount

has to be paid.

84. The claimant has pointed out that in volumeness

documents all the correspondences and papers have been

submitted before the Tribunal and neither any deficiency

and nor any other fault has been pointed out by the

respondent. Respondent has no right to withhold the claim

of the claimant. ....

85. Ld. Counsel for the respondent during arguments

vehemently refuted the arguments raised by the defendants

counsel and placed reliance on Clauses 2, 4, 10, 45, 47, 48,

54 and 55 of the Agreement on the ground that claimant has

violated the same. Ld. Counsel for the respondent argued

that the claimant had failed to fulfill terms and conditions of

the agreement which was major part of the contract.

Claimant had himself mentioned about the agreement in

para 4 of this petition but none of those conditions in

clauses of the said Agreement are fulfilled. The documents

given by the claimant are denied and they are not pertaining

O.M.P. (COMM) 221/2017 Page 21 of 29

to the present case. Counsel further argued that as per

Clause 1, contractor shall pay all statutory dues like ESI,

EPF but no details in regarding to payment EPF, ESI,

individual person employed were made available to the

hospital at any time. Counsel argued that even the list of

man power was not provided. No verification report were

submitted while raising bills deployment particular of

security personnel engaged were not submitted despite

demand by the hospital. Counsel pointed out that the

annexures of the same are annexed. Counsel further argued

that theft took place and that was reported to the police.

Copy of the police report is annexed. Counsel argued as per

clause 10 of the security staff shall not accept any

remuneration or award in any shape whereas guard was

terminated and whereas Departmental enquiry was set up.

Counsel argued that staffwise duty deployment was not

submitted and no labour license was submitted after enquiry

of license on 28.04.2014. No medical Certificate in regard

to the deployment staff was provided and thus infringement

of Clause 45 of the Agreement is attracted. Security guards

were not provided to Walikie Talkie, Torches, Cells, Lathis

in violation of Clause 47 and 48 of the Agreement. As per

clause 54 Contractor will have to deposit proof of deposit

employee contribution towards EPF/ESI etc. It has never

been submitted. Counsel further argued that as per Clause

55 of the Agreement, the Contractor shall disburse the

O.M.P. (COMM) 221/2017 Page 22 of 29

wages of the staff deployment departmental every month

through cash or by cheque in pursuance of the

representation of the Department. But no such vouchers

were deposited and condition was infringed and contractor

was repeatedly informed by the Department vide number of

letters but in vain and therefore, the respondent has no

option but to withhold the payment. The claimant has failed

to perform his part of the contract and respondent has

successfully pointed out that the petitioner has not followed

guidelines in terms of the agreement as submitted bills are

arbitrary and without any basis. Both the issues No.1 & 2

be decided against the claimant and in favour of the

respondent. Accordingly since the EPF and ESI Numbers

were not submitted the claimant is not entitled for any

reimbursement and it is very obvious that the respondent

did not withhold the payment arbitrarily but with certain

reason because the infringement of the Agreement and

claimant committed gross illegalities and therefore, not

entitled for any payment thereof and even the security

money is liable for confiscation. Ld. Counsel for the

claimant in rebuttal replied that none of the provision in

Clauses 2, 4, 10, 45, 47, 48, 54 and 55 of the Agreement

entitle the respondent to withhold the legally due payment

and since the part payment has been made the respondent

has no right to withhold remaining payment. All the

contentions raised by the respondent are beyond the

O.M.P. (COMM) 221/2017 Page 23 of 29

contractual provisions and against the settled proposition of

law. The claimant has already submitted the desired

documents to the respondent. The claimant has discharged

its obligation under the agreement.....

86. Ld. Counsel clearly mentioned that since each and every

formality have been complied and the agreement has been

fulfilled and the Claimant has ever been sincere to his work,

respondent cannot withhold the payment.

87. I have heard the Ld. Counsel for the claimant as well as

respondent and gone through each and every documents

even the volumes No.1 to 4 filed by the claimant along with

Rejoinder showing everything. The case of the claimant is

very clear that an Agreement has been arrived at between

the parties on 28.04.2011 and vide agreement that

respondent agreed to deploy the security personnel

appointed by the claimant to watch the hospital security and

everything has been mentioned in the Agreement with

regarding duties etc. At no point of time respondent claim

that security personnel was not in sufficient strength and

deployment was less than required strength. The admitted

facts are that in pursuance of the agreement security

personnel were deployed and respondent initially paid a

part payment of Rs.74 lac and odd to the claimant for

providing security but subsequently the dispute arose

regarding the non-fulfillment of the conditions of the

agreement. Respondent pointed out that security personnel

O.M.P. (COMM) 221/2017 Page 24 of 29

were not paid in accordance with the agreement that EPF

and ESI and other formalities have not been complied and

payment can only be made when each and every condition

has been fulfilled. As per terms of the Contract the claimant

has to complete its part of agreement. Claimant initially

submitted the bills, provided the security personnel and the

deployment of the security personnel at various times even

when the guards were changed and claimant has also

showed sincerity whenever any complaint has been

preferred on behalf of the respondent, the claimant

immediately rushed and tried to fulfill the security lapses. In

fact no major lapses have been shown on record. On the

contrary, the claimant has cited certain instances in which

the prompt action was taken. Ld. Counsel for the respondent

has cited only one incident of theft and one incident in

which one security guard was taken to task for indulgence

in mal practices. But that will not disentitle the claimant to

get its payment due. Had there been any latches done the

respondent ought to have proved the instances and pointed

out the breach of the contractual agreement and relevant

clause had to be invoked but certain scrucplous incident did

not debar the claimant to claim the wages because service is

thing which obliges the person enjoyed services to pay

thereof in lieu of the services rendered. The respondent only

cited that certain irregularities have been committed and

that has not been complied whereas the claimant is specific

O.M.P. (COMM) 221/2017 Page 25 of 29

in his contention that whatever was the duty that has been

performed and service was rendered in accordance with the

Contract. .....

88. Under aforementioned circumstances, I am at a loss to

understand that why the Respondent did not pay for the

services rendered by the claimant. Plea for non-payment

raised by the respondent is neither tenable nor taken for

granted and there is no evidence, no document on record to

justify the assertion on behalf of the respondent. Only by

saying that certain clauses of the Contract, 2, 4, 10, 45, 47,

48, 24 and 25 were not complied will not entitle the

respondent to withhold the claim of the claimant. The

claimant on the Contrary submitted the details which were

asked for by the respondent and submitted the entire data as

per Agreement. The burden lies on the respondent in

eventuality of the submissions of these documents by the

claimant to show that the in assertion made by the claimant

accordance with the Agreement and liable to be struck out

but the respondent has neither filed any documentary or

oral evidence to rebut these facts. Therefore, it is very clear

on the record that the claimant has complied and submitted

bills to security personnel in accordance with the agreement

dated 28.04.2011 and therefore, issue No.1 is decided in

favour of the claimant and issue No.2 in which burden on

the respondent to rebut and to prove that ESI/EPF etc and

other payment to the security personnel were not made,

O.M.P. (COMM) 221/2017 Page 26 of 29

respondent failed to discharge its burden whereas the

claimant has submitted all details in Volume No.1 to 4 filed

along with Rejoinder Affidavit. Accordingly issue No.2 is

decided against the respondent and in favour of the

claimant. Issue No.3 is also decided accordingly that the

claimant/petitioner submitted all details of employees and in

light of the above argument issue No.4 is decided in favour

of the claimant and against the respondent because

respondent could not establish that amount was withheld

because of legal norms on the contrary claimant has

established that the amount was withheld against legal

provision because he has submitted and complied with the

entire documents.”

40. A perusal of the paragraph No. 83 of the impugned Award

(reproduced above) shows the Sole Arbitrator duly recorded that the

respondent submitted copies of bills, consolidated challan of PPF and

ESI and EPF, PCR list of deployed personnel showing their EPF and

ESIC number against each of them. Additionally, the respondent also

submitted month-wise and shift-wise duties of roster, bill verification

along with list of security personnel, acquaintance roll etc. The

Arbitrator further notes that all the documents were on record and

hence, the petitioners had all the opportunity to contradict the same.

The burden lay upon the petitioners to dispute and contradict the

same.

41. Except for these procedural non-compliances as alleged by the

petitioners, there is no deficiency in the services provided by the

O.M.P. (COMM) 221/2017 Page 27 of 29

respondent. There is no contention of the petitioners or documentary

proof that the respondent did not provide 130 security personnel and 3

security supervisors for the entire contractual period and thereafter for

the extended period as per the Agreement or that there was any kind of

deficiency in the services provided by the security personnel of the

respondent.

42. The Sole Arbitrator in paragraph No. 87 of the impugned Award

(reproduced above) states that he perused each and every document

filed by the respondent and only thereafter he came to the conclusion

that each and every formality under the Agreement was complied with

by the respondent and there was no justifiable reason for the

petitioners to withhold the amounts due and payable to the respondent.

43. Further, the Sole Arbitrator in paragraph No. 88 of the impugned

Award (reproduced above) observed that the respondent had

submitted the details asked by the petitioners and as per the

Agreement, it was the petitioner’s burden to prove that the respondent

has not complied with the terms of the Agreement, which it failed to

do.

44. Under the Agreement, the respondent provided manpower services in

form of security personal. The petitioners took the benefits of the

security personal provided by the respondent and is now seeking to

not pay for the services availed. At no point in time the petitioners

terminated the Agreement, if they were not satisfied with the way and

manner in which the respondent was supplying the manpower.

45. The illustrations given by the petitioners are mere aberrations and

cannot absolve the petitioners of the liability to make payment for the

O.M.P. (COMM) 221/2017 Page 28 of 29

services received. Additionally, in the reply/response filed by the

petitioners before the Sole Arbitrator, or anywhere in the pleadings

before the Arbitrator, no such ground has been raised and hence, the

Sole Arbitrator did not have an opportunity to deal with the same.

46. The said findings of the Sole Arbitrator are both reasonable and

plausible views and show due application of mind to the facts,

documents on record, clauses of the Agreement, and pleadings of the

parties. The findings of the Sole Arbitrator are based on interpretation

of the clauses of the Agreements and documents on record. The

Arbitral Tribunal is the master of the quantity and quality of evidence

and it is only when interpretation of the Arbitral Tribunal is so bizarre

that is shocks the conscience of the Court or is beyond the scope of the

Agreement, that the Court could interfere under Section 34 of the

1996 Act, however, the same is not the case here.

47. In the present case, the Sole Arbitrator being satisfied with the

documents along with the rejoinder submitted by the respondent, came

to the conclusion that the respondent is entitled to amounts due. I find

no infirmity with findings of the Sole Arbitrator.

48. Instead, I am of the view that the petitioners by withholding bills due

and payable to the respondent, has in fact obstructed payments of

salaries to security personnel who are people with meagre recourses

and urgent need of salaries to meet there day-to day needs.

CONCLUSION

49. In view of the aforesaid discussion, the objections raised by the

petitioners are frivolous to say the least and I find no merit in the

submissions to set aside the impugned Award. The findings of the

O.M.P. (COMM) 221/2017 Page 29 of 29

Sole Arbitrator are plausible views and are not contrary to the terms

and conditions of the Agreement or so unreasonable that no prudent

man could have arrived at. The impugned Award cannot be said to be

in contravention with the public policy of India or patently illegal.

50. For the said reasons, the present petition is dismissed along with

pending application(s), if any.

JASMEET SINGH, J

JANUARY 22, 2026 / (HG)