O.M.P. (COMM) 414/2023 Page 1 of 16

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 12.05.2026

Judgment pronounced on: 20.05.2026

+ O.M.P. (COMM) 414/2023

PANDROL RAHEE TECHNOLOGIES PVT LTD THROUGH

AUTHORIZED REPRESENTATIV VARUN

BHOJAK .....Petitioner

Through: Mr. Naveen R. Nath, Sr. Adv

with Mr. Nishant Das, Mr. Atul

Kumar, Ms. Disha Gupta, Ms.

Aatrayi Das, Ms. Sakshi Nand,

Ms. Jyoti Jha and Mr. Aditya

Rana, Advs.

versus

IRCON INTERNATIONAL LTD THROUGH ITS

CHAIRMAN MR SUNIL KUMAR

CHAUDHURY .....Respondent

Through: Mr. Suman K. Doval, Mr.

Ramesh Wangnoo & Mr.

Lakshay Chaudhary, Advs.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN

J U D G M E N T

1. The present petition is filed under Section 34 of the Arbitration

and Conciliation Act, 1996 (for short „the Act‟) against the arbitral

award dated 15.05.2023 (for brevity „the award‟).

2. The facts shorn of unnecessary detail are that the respondent on

21.04.2015, issued Notice Inviting Tender (for short „NIT‟) for

design, manufacture, supply, transportation and delivery of Ballastless

O.M.P. (COMM) 414/2023 Page 2 of 16

Track Fastening for standard gauge railway track (1435 mm) with 60

kg 1080 grade rail for installation of ballastless track in elevated and

underground sections of Mukundpur–Lajpat Nagar (excluding Line-7)

of Delhi MRTS Project Phase-III.

2.1 The petitioner was the successful bidder and the Letter of

Acceptance (LOA) dated 21.05.2015 was issued. On 09.10.2015, the

parties executed Contract CT-1A (for brevity „the contract‟). The

respondent by communication dated 04.08.2016 (hereinafter referred

to as „variation order‟) varied the quantity of the ballastless track

fastening sets (for short „sets‟) to be supplied under each of the

categories and the total quantity increased from 1,86,500 sets to

1,98,715 sets. The details of the change in quantities of sets pursuant

to the variation order are tabulated below:

Item

No

Description

of Item

Unit

BOQ

Qty.

Variation

Qty.

Total

Qty. after

variation

Percentage

Change %

1 Supply of

BLT fittings

1.1 Supply track

& curve

track up to

1750m

Sets

1,60,000

(-) 56,751

1,03,249 (-) 35.46%

1.2 For curved

track

a Radius

1750-1000m

Sets 1,500 (+) 13,522 15,022 (+) 901.46%

b Radius

1000m-

500m

Sets

4,500

(+) 20,558

25,058

(+) 456.84%

c Radius 500-

300m

Sets

19,000

(+) 28,804

47,804

(+) 151.60%

O.M.P. (COMM) 414/2023 Page 3 of 16

d Radius

<300m

Sets 1500 (+) 6,082 7,582 (+) 405.46%

Total 1,86,500 1,98,715

2.2 The dispute arose as according to the petitioner, the revised

quantities required supply of a 4-bolt fastening system in place of the

2-bolt fastening system for curved tracks above 500 metres. The

petitioner had to procure and supply additional components including

anchor, nut bolts, eccentric bush, collared washer and compression

springs for varied order and thereby the cost of execution increased.

2.3 The petitioner completed the supplies and completion certificate

dated 11.05.2017 was issued. The payment for the sets supplied was

released by the respondent. The claim of the petitioner for payment

over and above agreed price towards the additional components

supplied was denied by the respondent.

2.4 The petitioner on 23.08.2019, invoked arbitration by issuing

notice under Section 21 of the Act. Vide court order dated 25.10.2021,

the sole arbitrator was appointed and the proceedings culminated in

the impugned award dated 15.05.2023. The claims of the petitioner

were rejected and hence, the present petition.

3. Learned senior counsel for the petitioner submits that the sets

were accepted by the respondent and the contract was fully executed.

The petitioner had to supply 4-bolt system instead of the 2-bolt system

for the curved tracks above 500 metres. The contention is that the

arbitrator failed to appreciate that the cost of supplies increased due to

the variation order.

O.M.P. (COMM) 414/2023 Page 4 of 16

3.1 Reliance is on the decisions of the Supreme Court in Patel

Engineering Ltd. v. North Eastern Electric Power Corporation Ltd.,

(2020) 7 SCC 167, Associate Builders v. Delhi Development

Authority, (2015) 3 SCC 49, Dyna Technologies Pvt. Ltd. v.

Crompton Greaves Ltd., (2019) 20 SCC 1 and Ssangyong

Engineering & Construction Co. Ltd. v. National Highways

Authority of India, (2019) 15 SCC 131 to contend that interpretation

of a contract in a manner which no reasonable person would have

arrived at, constitutes patent illegality. An arbitrator must consider the

evidence on record and take a plausible view.

3.2 The submission is that the findings of the arbitrator are perverse

and are beyond the terms of the contract. It is contended that the

award is contrary to the evidence on record and is liable to be set

aside.

3.3 The argument is that the contract is not a fixed value contract

and under Clause 27 of the General Conditions of Contract (for short

„GCC‟) the quantities under the Bill of Quantities (for short „BOQ‟)

were subject to variation and in the event the variation of individual

items exceeding twenty-five percent, fresh rates were to be negotiated.

3.4 It is emphasised that Clause 2.8 of the LOA does not deal with

payment for supply of additional components. The interpretation of

Clause 2.8 of the LOA by the arbitrator is not plausible and warrants

interference under Section 34 of the Act.

4. Per contra, the terms of the contract obligated that before

commencement of supplies the petitioner had to obtain approval of the

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design of sets from Delhi Metro Rail Corporation (for short „DMRC‟)

but the petitioner made supplies before getting the approval. Reliance

is on Clause 27 of GCC, Clauses 2.5 and 2.8 of the LOA and

Stipulation No. 6 of the Technical Specifications (for short „TS‟) to

argue that only agreed price is to be paid for additional supplies.

4.1 The argument is that on 07.04.2017 the final bill was paid as per

the rates agreed between the parties. The petitioner accepted the

payment without any protest and now cannot raise further bills on

account of additional costs incurred.

4.2 It is submitted that Clause 27 of the GCC permits negotiation of

fresh rates for increased quantities only when variation in individual

items exceeds (+) or (-) 25% and in the present case the variation of

sets is (+) 6.55% and only the agreed price is to be paid. Further,

Clause 2.8 of the LOA stipulates that Clause 27 of the GCC is not

applicable to the variation of individual items. Submission is that as

per Clause 1 of the Special Conditions of Contract (for short „SCC‟)

the LOA is at priority over the GCC.

4.3 Lastly, it is argued that the scope of interference under Section

34 of the Act is limited. There cannot be interference with a plausible

view of the arbitrator and the evidence cannot be re-appreciated. The

interpretation of the clauses of the contract falls within the domain of

the arbitrator and unless the interpretation is perverse no interference

is to be made on the ground that another view is possible.

5. Heard learned counsel for the parties at length. No other

arguments apart from those noted above were pressed.

O.M.P. (COMM) 414/2023 Page 6 of 16

6. Before proceeding further, it would be apposite to quote Clause

27 of the GCC, Clauses 2.5 and 2.8 of the LOA, Clause 1 of the SCC

and Stipulation No. 6 of the TS.

6.1 Clause 27 of the GCC:

“27.0 VARIATION IN QUANTITY OF ITEMS

COVERED BY THE BILL OF QUANTITIES

27.1 The quantities of items shown in the Bill of

Quantities are approximate, and liable to vary during the

actual execution of the supplies. The Supplier shall be

bound to carry out and complete the stipulated work,

irrespective of the variations in individual items, specified

in the Bill of Quantities

(ii) Such variations in quantities shall be paid for in the

manner laid down below:

(a) The accepted rates for various individual shall remain

firm for variation upto (+) or (-) 25%

(b) In case the variations in individual items is more than

(+) or (-) 25% the rate for the increased quantities beyond

(+) or (-) 25% shall be negotiated between the Engineer

and the Supplier.”

6.2 Clauses 2.5 and 2.8 of the LOA:

“2.5 Approval of the Design of system/various

component from the client

The supplier is required to submit detailed design

calculations of the fastening system for various types of

fastenings (straight track and for track on curves of

various radia) as provided in the Bill of Quantities. The

supplier shall be primarily responsible for obtaining the

approval for the above designs from the Client and

various components shall be supplied only as per the

designs/drawing approved by the Client.

*** *** ***

O.M.P. (COMM) 414/2023 Page 7 of 16

2.8 Quantity Variation

Clause 27.0 of General Conditions of Contract shall be

applicable for the total quantity of fastening sets of

various types contained in Bill of Quantity i.e. sum total

of item no (i) to (vi) i.e. for total quantity of 1,86,500 sets

and will not be applicable for the variation of individual

items of each type.”

6.3 Clause 1 of the SCC:

“ORDER OF PRIORITY OF CONTRACT

DOCUMENTS:

Where there is any conflict between the various

documents in the contract, the following order of priority

shall be followed i.e. a document appearing earlier shall

override the document appearing subsequently:

1) Agreement

2) Letter of Acceptance of Tender

3) Notice Inviting Tender

4) Instructions to the Tenderers

5) Appendix to Tender

6) Form of Bid

7) Special Conditions of the Contract

8) General Conditions of Contract

9) Technical Specifications

10) Relevant codes and Standards

11) Bill of Quantities”

6.4 Stipulation No. 6 of the TS:

“6. The Bill of Quantities provides for the supply of set of

fastening system (imported and Indian components) for

straight track and for curve track for various range of

radius. The supplier shall be responsible for obtaining

O.M.P. (COMM) 414/2023 Page 8 of 16

approval of the Client for the design of fastenings sets for

various types as regards the nos. of anchor bolts with

associated components per set (Bolt calculations). The

accepted rates shall remain unchanged irrespective of the

design of fastening system approved by the Client as

regards nos. of anchor bolts for various range of radius.

No claim on this account shall be accepted.”

7. The petitioner was the successful bidder and was issued LOA

for supply of 1,86,500 sets. The quantity of the sets to be supplied

increased to 1,98,715. For the additional sets supplied, the petitioner

was paid at the agreed rate.

8. The surviving dispute is that due to the variation in quantity the

petitioner had to supply additional components for which payment is

claimed over and above the agreed price of the sets.

9. The NIT invited bids for supply of a total of 1,86,500 sets,

comprising of both Indian and imported components. The bid was for

a price per set as is evident from the contract documents including the

NIT, LOA and BOQ and held by the arbitrator. The LOA dated

21.05.2015, was for the total cost of work to be undertaken and

bifurcated the amount into Indian Rupees (hereinafter referred to as

„INR‟) and US Dollars, the price was inclusive of taxes, levy, cess,

etc.

10. The arbitrator after considering the terms and clauses of the

tender and the LOA concluded that the supply of sets was at a fixed

cost and the agreement dated 09.10.2015, executed between the

parties was to that effect. The challenge to the finding of a fixed value

O.M.P. (COMM) 414/2023 Page 9 of 16

contract by learned counsel for the petitioner by relying upon Clause

27 of the GCC and the BOQ, lacks merit. Clause 27 of the GCC

specifies that the quantities mentioned in the BOQ may vary and the

supplier would be bound to complete the work despite variation. The

price for additional supplies consequent to variation are dealt with in

two categories: first, where the variation is upto (+) or (-) 25% , the

supplies are to be made at the accepted rates and second, where the

variation exceeds (+) or (-) 25%, the rates for the increased quantities

had to be negotiated. The clause does not deal with the rate fixed for

the supply of 2-bolt and 4-bolt sets or with additional components

supplied. The rates specified in clause 27 of GCC in case there is

variation in quantities does not alter the position that sets were to be

supplied on fixed price. The BOQ gives the split of price for imported

components, Indian components, transportation costs, taxes, amount

payable in USD and the amount payable in INR but does not support

the case of the petitioner that the contract was for the supply of

individual components and not complete sets. The conclusion of the

arbitrator is a plausible one.

11. The component wise price break-up in annexure to the LOA

was specified to be for taxes and transportation only and was

considered accordingly by the arbitrator. The price break-up would

not affect the tender awarded for total cost of the work i.e., the cost for

supply of the sets of various categories.

12. It is an admitted fact that consequent to variation order the

petitioner was paid the agreed price for the supply of additional sets

O.M.P. (COMM) 414/2023 Page 10 of 16

but the grievance is that consequent to variation the petitioner ended

up supplying additional components. Stipulation No. 6 of the TS

forms part of the contract and obligated the petitioner to get approval

from DMRC of the designs for various types of sets and the number of

anchor bolts with associated components per set. It provides that the

accepted rates shall remain the same irrespective of design of the

fastening system approved by DMRC and no claim shall be accepted

on this account. The claim of the petitioner for payment of additional

components over and above the agreed price of the sets is barred by

stipulation no. 6 of the TS.

13. The issue as to the type of sets to be used for the curved track

above 500 metres was pending and the insistence of the petitioner on

use of 2-bolt system instead of a 4-bolt system was not accepted by

DMRC. The petitioner in violation of Stipulation No. 6 of the TS

made the supplies prior to obtaining approval from DMRC. The

petitioner raised a claim that due to the supply of additional

components, the procurement cost increased and petitioner is entitled

to additional payment over and above the agreed price. It is important

to note that Stipulation No. 6 of the TS provided that the accepted

rates shall not change upon approval of the design by DMRC. The

arbitrator rightly noted that the bolt calculation was dependent upon

approval of the design by DMRC and this was also evident from the

email communication of the petitioner dated 07.08.2015.

14. The arbitrator was right in holding that Clause 27 of the GCC

and Stipulation No. 6 of the TS deal with different situations and there

O.M.P. (COMM) 414/2023 Page 11 of 16

was no need to go into the priority ranking inter se the two clauses.

The case set up by the petitioner for getting out of the rigours of

Stipulation No. 6 of the TS by contending that acceptance of the

supplies by the respondent tantamounted to acceptance of the design

was contrary to Stipulation No. 6 of the TS. The design was to be

approved by DMRC and not by IRCON ltd., the executing agency.

15. It would be relevant to note that as per Clause 2.8 of the LOA,

Clause 27 of the GCC was applicable for variation of the sets of

various types contained in the BOQ i.e. for sum total of Item no. (i) to

(vi) mentioned in the BOQ and not for the variation of individual

items. The contention of learned counsel for the petitioner that Clause

2.8 of the LOA dealt with individual items and not additional

components is ill-founded. If the argument if taken to logical end

would mean that upon variation, the contract would change from a set-

based to a component-based contract, which the parties never

contemplated. The total quantity in the BOQ mentioned in Clause 2.8

relates to the quantity of sets to be supplied and the clause cannot be

read to mean that in case of variation of quantity of sets, the nature of

the tender would change and the varied quantity is to be supplied

item-wise and not on complete set basis as the original quantity was

being supplied.

16. The argument of learned counsel for the petitioner that the

arbitrator has re-written the terms and conditions agreed between the

parties is noted to be rejected. The arbitrator took into consideration

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the terms of the tender, TS and the clauses of the LOA and has given a

plausible interpretation.

17. The scope of interference under Section 34 of the Act is well

settled. The award cannot be interfered for another possible view. The

interpretation of the clauses of the contract falls within the exclusive

domain of the arbitrator. The award cannot be interfered with for

every legal or factual error unless it is vitiated by perversity.

Reference in this regard may be made to the following decisions of the

Supreme Court:

17.1 In Prakash Atlanta (JV) v. National Highways Authority of

India, 2026 INSC 76 it was held as under:-

“59. (vi) If an arbitral tribunal‟s view is found to be a

possible and plausible one, it cannot be substituted

merely because an alternate view is possible.

Construction and interpretation of a contract and its terms

is a matter for the arbitral tribunal to determine. Unless

the same is found to be one that no fair-minded or

reasonable person would arrive at, it cannot be interfered

with. If there are two plausible interpretations of the

terms of a contract, then no fault can be found if the

arbitrator accepts one such interpretation as against the

other. To be in conflict with the public policy of India,

the award must contravene the fundamental policy of

Indian law, which makes it narrower in its application.”

17.2 In Ramesh Kumar Jain v. Bharat Aluminium Company

Limited (BALCO), 2025 INSC 1457 it was held 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

O.M.P. (COMM) 414/2023 Page 13 of 16

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 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

14

, 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.”

17.3 In Consolidated Construction Consortium Limited v. Software

Technology Parks of India, (2025) 7 SCC 757 it was held as under:

“46. Scope of Section 34 of the 1996 Act is now well

crystallized by a plethora of judgments of this Court.

Section 34 is not in the nature of an appellate provision. It

provides for setting aside an arbitral award that too only

on very limited grounds i.e. as those contained in Sub-

sections (2) and (2-A) of Section 34. It is the only remedy

for setting aside an arbitral award. An arbitral award is

not liable to be interfered with only on the ground that the

award is illegal or is erroneous in law which would

require re-appraisal of the evidence adduced before the

arbitral tribunal. If two views are possible, there is no

scope for the court to re-appraise the evidence and to take

the view other than the one taken by the arbitrator. The

view taken by the arbitral tribunal is ordinarily to be

accepted and allowed to prevail. Thus, the scope of

O.M.P. (COMM) 414/2023 Page 14 of 16

interference in arbitral matters is only confined to the

extent envisaged Under Section 34 of the Act. The court

exercising powers Under Section 34 has perforce to limit

its jurisdiction within the four corners of Section 34. It

cannot travel beyond Section 34. Thus, proceedings

Under Section 34 are summary in nature and not like a

full-fledged civil suit or a civil appeal. The award as such

cannot be touched unless it is contrary to the substantive

provisions of law or Section 34 of the 1996 Act or the

terms of the agreement.”

17.4 In Sepco Electric Power Construction Corporation v. GMR

Kamalanga Energy Ltd., 2025 INSC 1171 it was held as under:

“97……..Therefore, it appears that even if the arbitrator‟s

legal or factual reasoning is faulty, the courts ought to

ideally refrain from interfering with an award until an

error of law is evident from the award itself or in a

document that forms an integral component thereof.”

17.5 In Parsa Kente Collieries Limited. v. Rajasthan Rajya Vidyut

Utpadan Nigam Limited, (2019) 7 SCC 236 held as under:-

“9.1. In Associate Builders [Associate Builders v. DDA,

(2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] , this Court

had an occasion to consider in detail the jurisdiction of

the Court to interfere with the award passed by the

Arbitrator in exercise of powers under Section 34 of the

Arbitration Act. In the aforesaid decision, this Court has

considered the limits of power of the Court to interfere

with the arbitral award. It is observed and held that only

when the award is in conflict with the public policy in

India, the Court would be justified in interfering with the

arbitral award. In the aforesaid decision, this Court

considered different heads of “public policy in India”

which, inter alia, includes patent illegality. After referring

Section 28(3) of the Arbitration Act and after considering

the decisions of this Court in McDermott International

Inc. v. Burn Standard Co. Ltd. [McDermott International

O.M.P. (COMM) 414/2023 Page 15 of 16

Inc. v. Burn Standard Co. Ltd., (2006) 11 SCC 181] ,

SCC paras 112-113 and Rashtriya Ispat Nigam Ltd. v.

Dewan Chand Ram Saran [Rashtriya Ispat Nigam Ltd. v.

Dewan Chand Ram Saran, (2012) 5 SCC 306] , SCC

paras 43-45, it is observed and held that an Arbitral

Tribunal must decide in accordance with the terms of the

contract, but if an Arbitrator construes a term of the

contract in a reasonable manner, it will not mean that the

award can be set aside on this ground. It is further

observed and held that construction of the terms of a

contract is primarily for an Arbitrator to decide unless the

Arbitrator construes the contract in such a way that it

could be said to be something that no fair-minded or

reasonable person could do. It is further observed by this

Court in the aforesaid decision in para 33 that when a

court is applying the “public policy” test to an arbitration

award, it does not act as a court of appeal and

consequently errors of fact cannot be corrected. A

possible view by the Arbitrator on facts has necessarily to

pass muster as the Arbitrator is the ultimate master of the

quantity and quality of evidence to be relied upon when

he delivers his arbitral award. It is further observed that

thus an award based on little evidence or on evidence

which does not measure up in quality to a trained legal

mind would not be held to be invalid on this score.”

(Emphasis supplied)

18. The conclusions of the tribunal: (i) that the petitioner started the

supplies before the design was approved on 19.11.2015 and thereby

violated Stipulation No. 6 of the TS; (ii) there was no modification of

the contract and only the number of sets of various kinds to be

supplied were varied; (iii) the payment for additional sets supplied

was to be made at the agreed price; and (iv) rejecting the claim of the

petitioner seeking payment over and above the agreed price, for

O.M.P. (COMM) 414/2023 Page 16 of 16

additional components supplied consequent to variation order, suffers

from no legal or factual error much less perversity and the view is

plausible, neither against public policy and nor is patently illegal.

19. No case is made out for interference under Section 34 of the

Act. The impugned award is upheld.

AVNEESH JHINGAN, J

MAY 20, 2026

‘ha’

Reportable:- Yes