Shivalik House Keeping Services vs The Office In Charge General Admin
- Court
- Delhi High Court
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Judgment pronounced on: 31.08.2026
# CNR No.DLHC010727802025
ARB.P. 1576/2025
+
SHIVALIK HOUSE KEEPING SERVICES .....Petitioner
Through: Ms. Vibha Sharma, Mr. Mukund
Thakur, Mr. Gokulesh Gautam,
Advocates.
versus
THE OFFICE IN CHARGE GENERAL ADMIN .....Respondent
Through: Ms. Anju Bhushan Gupta (ASC)
along with Mr. Sanyam Gupta,
Advocate.
CORAM
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The present petition under Section 11(6) of the Arbitration and
Conciliation Act, 1996 (hereinafter “ A&C Act ”) seeks constitution of an
Arbitral Tribunal to adjudicate the disputes between the parties.
2. The disputes between the parties have arisen in the context of a
contract awarded by the respondent/ Delhi Technological University (DTU)
to the petitioner for provision of Sanitation and Housekeeping Services.
3. The dispute sought to be raised is as regards the petitioner’s claim for
reimbursement of incremental wages stated to have been paid consequent
upon revision in the statutory minimum wages during the subsistence of the
contract.
4. The respondent opposes the petition principally on three grounds:
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(i) It is contended that the disputes sought to be raised are
hopelessly barred by limitation;
(ii) It is urged that the agreement between the parties does not
contain an arbitration clause inasmuch as the arbitration clause
was contained in the Notice Inviting Tender (NIT) which
cannot be considered to have been specifically incorporated as
part of the contract.
(iii) That the petition has been instituted by a person, not duly
authorized on behalf of the petitioner partnership firm.
FACTUAL BACKGROUND
5. In October, 2010, the respondent issued a Notice Inviting Tender
(NIT) for outsourcing of Sanitation and Housekeeping Services at DTU for a
period of two years. The petitioner, a partnership firm submitted its bid on
19.10.2010.
6. It is noticed that with the NIT is enclosed “Terms and Conditions of
Contract”. Clause 59 and 60 thereof provides as under:
“ 59. 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 Vice
Chancellor Delhi Technological University, 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. The cost of Arbitration shall be borne by the respective
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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.
60. JURISDICTION OF COURT:-
The courts at Delhi/New Delhi shall have the exclusive jurisdiction to
try all disputes, if any, arising out of this agreement between the
”
parties.
7. By a letter dated 27.01.2011, the respondent conveyed acceptance of
the petitioner’s bid. The said letter reads as under:
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8. The petitioner conveyed its acceptance on 28.01.2011. Thereafter, the
respondent addressed a letter dated 02.02.2011 to the petitioner, containing
the subject “Award of contract for sanitation services at DTU”. The said
letter is as under:
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9. Pursuant to the aforesaid, a formal Contract Agreement dated
06.05.2011 was executed between the parties. The same reads as under:
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10. As can be seen, Clause-4 of the agreement records the monthly
contract price and stipulates that “if the minimum wages is revised by the
Government of NCT of Delhi / Government of India, the incremental wages
applicable, will be provided by the DTU as per terms and conditions of
Contract / NIT”.
11. According to the petitioner, the Govt. of NCT of Delhi, by a
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notification dated 18.03.2011, revised the applicable minimum wages with
effect from 01.04.2011 and from time to time thereafter. It is asserted that the
petitioner disbursed wages at revised rates but the respondent continued to
release payments computed at pre-revised rates.
12. It is stated that the petitioner raised successive claims for differential/
incremental wages. In this regard, the petitioner makes a reference to a
communication dated 13.01.2014, which enclosed the complete details of
the basis on which the petitioner sought to claim payments.
13. It is further asserted that reminder letters dated 08.03.2014 and
19.03.2014 were thereafter sent. The respondent is stated to have responded
by a letter dated 12.07.2014 asking the petitioner to submit monthly dues
and drawn statement for the period w.e.f. 07.02.2011 for necessary action
regarding payment of dues.
14. Subsequent protracted correspondence is stated to have ensued
between the parties. The petition avers as under:
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15. It is submitted that thereafter, on 30.05.2018, the respondent
terminated the contract with the petitioner. The communication dated
30.05.2018 reads as under:
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16. It is submitted that the correspondence between the parties continued
till 2024. In this regard attention is drawn to letter dated 02.09.2024, sent by
the petitioner to the respondent. It is further pointed out that vide letter dated
07.10.2024, the respondent wrote to the petitioner as under:
17. In response, a letter dated 28.10.2024 is stated to have been sent by
the petitioner, purportedly to provide the necessary particulars as sought by
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the respondent.
18. The petitioner issued a notice invoking arbitration on 12.08.2025. It is
not in dispute that the respondent neither replied to the said notice nor took
any steps to appoint an arbitrator.
19. The present petition was filed on 20.09.2025.
OBJECTIONS ON BEHALF OF THE RESPONDENT
20. Learned counsel for the respondent has made elaborate submissions.
It is submitted that the claims are ex facie barred by limitation inasmuch as
the claims pertain to the period 2011-2015.
21. It is submitted that the contract terminated in 2018 and the notice
under Section 21 of the A&C Act was issued only on 12.08.2025 i.e. more
than seven years after termination.
22. It is thus submitted that the claims are hopelessly time-barred and in
the nature of ‘ dead-wood ’ and as such, this Court should decline to refer the
parties to arbitration. In support of the said contentions, the respondent relies
upon the following judgments:
i. BSNL v. Nortel Networks (India) (P) Ltd. , (2021) 5 SCC 738;
ii. M/S. N.C. Construction vs. Union of India and Ors, passed by the
Calcutta High Court (AP-COM/144/2025);
iii. Sri Swapan Paul vs. M/S. Paul Construction , passed by the Calcutta
High Court (Arbitration Petition No. AP/28/2025);
iv. Sri Ramendra Narayan Bhattacharya v. The State of Tripura and
Another, passed by the Tripura High Court (ARB.P No. 03 of 2025).
23. Secondly, it is submitted that the agreement dated 06.05.2011
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contains no arbitration clause. It is submitted that the arbitration clause is to
be found only in the NIT. Reliance is placed on the judgment rendered by
the Supreme Court in NBCC (India) Ltd. v. Zillion Infraprojects (P) Ltd.,
(2024) 7 SCC 174, to contend that given the facts and circumstances of the
present case, the arbitration clause contained in the NIT has not been
incorporated into the contract inasmuch as the latter contains no specific
reference thereto.
24. Lastly, it is submitted that the petition has been filed by the person
who is not been duly authorized and as such the petition deserves to be
dismissed on this ground as well. Reliance in this regard is placed on the
judgment passed by the Kerala High Court in M/S P.K. Chandrasekharan
Nair & Co. vs. Hindustan Petroleum Limited (2025:KER:90639).
SUBMISSIONS ON BEHALF OF THE PETITIONER
25. Learned counsel for the petitioner has vehemently opposed the
aforesaid submissions. It has been contended that the scope of inquiry under
Section 11 of the A&C Act is extremely limited and circumscribed and does
not extend to undertaking a detailed adjudication of disputed questions of
facts. Reliance is placed on the following judgments:
i. Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1;
ii. Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman, (2019) 8 SCC
714;
iii. Duro Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729.
26. As regards the petitioner’s contention regarding the claim being
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barred by limitation, it is submitted that the petitioner’s claim was never
unequivocally rejected and the correspondence shows that the dispute is live
and subsisting inasmuch as there has been no final rejection of the claim.
Refence is made to the protracted correspondence between the parties in this
regard. As such, it is submitted that the present case does not fall within the
narrow category of being in the nature of ‘ deadwood’ .
27. It is submitted that the notice under Section 21 of the A&C Act, 1996
was given only on 12.08.2025 and the present petition was filed within the
period of limitation.
28. As regards existence of the arbitration agreement, it is submitted that
the agreement dated 06.05.2011 was the culmination of the respondent’s
own tender process and that Clause-2 of agreement deems the NIT and the
terms and conditions appended therewith, to form part of the said agreement.
29. It is submitted that the agreement must be construed as part of a
composite contractual arrangement. It is further submitted that the
respondent itself has acted throughout on the basis of the contractual
framework arising out of the tender process and cannot be permitted to
selectively rely on the agreement while seeking to disown the terms of the
NIT, which is an integral part of the contract.
30. On authorization, it is submitted that the said objection is purely
technical inasmuch as the present petition has been instituted by a partner of
the petitioner firm who is fully competent and authorized in law to represent
and act on behalf of the firm.
31. It is further submitted that even assuming there was any technical
defect in the authorization, the same stands cured by virtue of Authorization
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Letter dated 17.09.2025, filed vide Diary No.229962/2026. The said letter
reads as under:
32. As such, it is submitted that the objection relating to authorization is
wholly untenable.
ANALYSIS AND FINDINGS
The Scope of inquiry under Section 11 of A&C Act.
33. Before dealing with the individual objections, it is necessary to notice
the extant legal position governing jurisdiction and scope of examination by
a referral court under Section 11 of the A&C Act.
34. Section 11(6-A) of A&C Act mandates that the Court, while
considering an application for appointment of an arbitrator shall confine
itself to forming a prima facie opinion as regards existence of any arbitration
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agreement. The width of the inquiry at the referral stage has been subject
matter of successive decisions of the Supreme Court. The legal position has
been succinctly set out by a seven-judge bench of the Supreme Court in
Interplay Between Arbitration Agreements under Arbitration Act, 1996 &
Stamp Act, 1899, In re, (2024) 6 SCC 1, wherein it has been authoritatively
laid down that the referral court is concerned only with the prima facie
existence of an arbitration agreement, leaving other issues to the arbitral
tribunal. The relevant observations therein are as under:
“164. The 2015 Amendment Act has laid down different parameters
for judicial review under Section 8 and Section 11. Where Section 8
requires the Referral Court to look into the prima facie existence of
a valid arbitration agreement, Section 11 confines the Court's
jurisdiction to the examination of the existence of an arbitration
agreement. Although the object and purpose behind both Sections 8
and 11 is to compel parties to abide by their contractual
understanding, the scope of power of the Referral Courts under the
said provisions is intended to be different. The same is also evident
from the fact that Section 37 of the Arbitration Act allows an appeal
from the order of an Arbitral Tribunal refusing to refer the parties to
arbitration under Section 8, but not from Section 11. Thus, the 2015
Amendment Act has legislatively overruled the dictum of Patel Engg.
[SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] where it was
held that Section 8 and Section 11 are complementary in nature.
Accordingly, the two provisions cannot be read as laying down a
similar standard.
165. The legislature confined the scope of reference under Section
11(6-A) to the examination of the existence of an arbitration
agreement. The use of the term “examination” in itself connotes that
the scope of the power is limited to a prima facie determination.
Since the Arbitration Act is a self-contained code, the requirement of
“existence” of an arbitration agreement draws effect from Section 7
of the Arbitration Act. In Duro Felguera [Duro Felguera, S.A. v.
Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764]
, this Court held that the Referral Courts only need to consider one
aspect to determine the existence of an arbitration agreement —
whether the underlying contract contains an arbitration agreement
which provides for arbitration pertaining to the disputes which have
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arisen between the parties to the agreement. Therefore, the scope of
examination under Section 11(6-A) should be confined to the
existence of an arbitration agreement on the basis of Section 7.
Similarly, the validity of an arbitration agreement, in view of Section
7, should be restricted to the requirement of formal validity such as
the requirement that the agreement be in writing. This interpretation
also gives true effect to the doctrine of competence-competence by
leaving the issue of substantive existence and validity of an
arbitration agreement to be decided by Arbitral Tribunal under
Section 16. We accordingly clarify the position of law laid down in
Vidya Drolia [Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC
1 : (2021) 1 SCC (Civ) 549] in the context of Section 8 and Section
11 of the Arbitration Act.
166. The burden of proving the existence of arbitration agreement
generally lies on the party seeking to rely on such agreement. In
jurisdictions such as India, which accept the doctrine of
competence-competence, only prima facie proof of the existence of
an arbitration agreement must be adduced before the Referral
Court. The Referral Court is not the appropriate forum to conduct a
mini-trial by allowing the parties to adduce the evidence in regard
to the existence or validity of an arbitration agreement. The
determination of the existence and validity of an arbitration
agreement on the basis of evidence ought to be left to the Arbitral
Tribunal. This position of law can also be gauged from the plain
language of the statute.
167. Section 11(6-A) uses the expression “examination of the
existence of an arbitration agreement”. The purport of using the
word “examination” connotes that the legislature intends that the
Referral Court has to inspect or scrutinise the dealings between the
parties for the existence of an arbitration agreement. Moreover, the
expression “examination” does not connote or imply a laborious or
contested inquiry. [ P. Ramanatha Aiyar, The Law Lexicon (2nd
Edn., 1997) 666.] On the other hand, Section 16 provides that the
Arbitral Tribunal can “rule” on its jurisdiction, including the
existence and validity of an arbitration agreement. A “ruling”
connotes adjudication of disputes after admitting evidence from the
parties. Therefore, it is evident that the Referral Court is only
required to examine the existence of arbitration agreements,
whereas the Arbitral Tribunal ought to rule on its jurisdiction,
including the issues pertaining to the existence and validity of an
arbitration agreement. A similar view was adopted by this Court in
Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Ltd. [Shin-Etsu
Chemical Co. Ltd. v. Aksh Optifibre Ltd., (2005) 7 SCC 234]”
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35. The position was further expounded in SBI General Insurance Co.
Ltd. v. Krish Spg. , (2024) 12 SCC 1. The Supreme Court held that the
inquiry under Section 11 of the A&C Act is confined to ascertaining the
prima facie existence of the arbitration agreement and “nothing else”. The
relevant extracts are as under:
“117. In view of the observations made by this Court in Interplay
Between Arbitration Agreements under the Arbitration Act, 1996 &
the Stamp Act, 1899, In re [Interplay Between Arbitration
Agreements under the Arbitration Act, 1996 & the Stamp Act,
1899, In re, (2024) 6 SCC 1 : 2023 INSC 1066] , it is clear that the
scope of enquiry at the stage of appointment of arbitrator is limited
to the scrutiny of prima facie existence of the arbitration
agreement, and nothing else.
For this reason, we find it difficult to
hold that the observations made in Vidya Drolia [Vidya Drolia v.
Durga Trading Corpn., (2021) 2 SCC 1 : (2021) 1 SCC (Civ) 549]
and adopted in NTPC Ltd. v. SPML Infra Ltd. [NTPC Ltd. v. SPML
Infra Ltd., (2023) 9 SCC 385 : (2023) 4 SCC (Civ) 342] that the
jurisdiction of the Referral Court when dealing with the issue of
“accord and satisfaction” under Section 11 extends to weeding out
ex facie non-arbitrable and frivolous disputes would continue to
apply despite the subsequent decision in Interplay Between
Arbitration Agreements under the Arbitration Act, 1996 & the Stamp
Act, 1899, In re[Interplay Between Arbitration Agreements under
the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6
SCC 1 : 2023 INSC 1066] .”
36. In SBI General Insurance (supra), the Supreme Court clarified its
earlier decision in Arif Azim Co. Ltd. v. Aptech Ltd. , (2024) 5 SCC 313 and
held that that referral court must not embark upon an intricate inquiry as to
whether the substantive claims are time barred. The relevant observations
therein are as under:
“131. On the first issue, it was observed by us that the Limitation Act,
1963 is applicable to the applications filed under Section 11(6) of the
1996 Act. Further, we also held that it is the duty of the Referral Court
to examine that the application under Section 11(6) of the 1996 Act is
not barred by period of limitation as prescribed under Article 137 of
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the Limitation Act, 1963 i.e. 3 years from the date when the right to
apply accrues in favour of the applicant. To determine as to when the
right to apply would accrue, we had observed in para 57 of the said
decision that: (Arif Azim case [Arif Azim Co. Ltd. v. Aptech Ltd., (2024)
5 SCC 313 : (2024) 3 SCC (Civ) 358 : 2024 INSC 155] , SCC p. 340)
“57. … the limitation period for filing a petition under Section
11(6) of the 1996 Act can only commence once a valid notice
invoking arbitration has been sent by the applicant to the other
party, and there has been a failure or refusal on the part of that
other party in complying with the requirements mentioned in
such notice.”
132. Insofar as the first issue is concerned, we are of the opinion
that the observations made by us in Arif Azim [Arif Azim Co. Ltd. v.
Aptech Ltd., (2024) 5 SCC 313 : (2024) 3 SCC (Civ) 358 : 2024
INSC 155] do not require any clarification and should be construed
as explained therein.
133. On the second issue it was observed by us in para 68 of Arif
Azim case [Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313 :
(2024) 3 SCC (Civ) 358 : 2024 INSC 155] that the Referral Courts,
while exercising their powers under Section 11 of the 1996 Act, are
under a duty to “prima facie examine and reject non-arbitrable or
dead claims, so as to protect the other party from being drawn into a
time-consuming and costly arbitration process”.
134. Our findings on both the aforesaid issues have been
summarised in para 92 of the said decision thus: (Arif Azim case
[Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313 : (2024) 3 SCC
(Civ) 358 : 2024 INSC 155] , SCC p. 357)
“92. Thus, from an exhaustive analysis of the position of law on
the issues, we are of the view that while considering the issue of
limitation in relation to a petition under Section 11(6) of the
1996 Act, the courts should satisfy themselves on two aspects by
employing a two-pronged test — first, whether the petition under
Section 11(6) of the 1996 Act is barred by limitation; and
secondly, whether the claims sought to be arbitrated are ex facie
dead claims and are thus barred by limitation on the date of
commencement of arbitration proceedings. If either of these
issues are answered against the party seeking referral of
disputes to arbitration, the court may refuse to appoint an
Arbitral Tribunal.”
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135. Insofar as our observations on the second issue are concerned,
we clarify that the same were made in light of the observations made
by this Court in many of its previous decisions, more particularly in
Vidya Drolia [Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC
1 : (2021) 1 SCC (Civ) 549] and NTPC Ltd. v. SPML Infra Ltd.
[NTPC Ltd. v. SPML Infra Ltd., (2023) 9 SCC 385 : (2023) 4 SCC
(Civ) 342] However, in the case at hand, as is evident from the
discussion in the preceding parts of this judgment, we have had the
benefit of reconsidering certain aspects of the two decisions referred
to above in the light of the pertinent observations made by a seven-
Judge Bench of this Court in Interplay Between Arbitration
Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899,
In re [Interplay Between Arbitration Agreements under the
Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6 SCC 1 :
2023 INSC 1066] .
136. Thus, we clarify that while determining the issue of limitation in
exercise of the powers under Section 11(6) of the 1996 Act, the
Referral Court should limit its enquiry to examining whether Section
11(6) application has been filed within the period of limitation of
three years or not. The date of commencement of limitation period
for this purpose shall have to be construed as per the decision in
Arif Azim [Arif Azim Co. Ltd.v. Aptech Ltd., (2024) 5 SCC 313 :
(2024) 3 SCC (Civ) 358 : 2024 INSC 155] . As a natural corollary, it
is further clarified that the Referral Courts, at the stage of deciding
an application for appointment of arbitrator, must not conduct an
intricate evidentiary enquiry into the question whether the claims
raised by the applicant are time-barred and should leave that
question for determination by the arbitrator. Such an approach gives
true meaning to the legislative intention underlying Section 11(6-A)
of the Act, and also to the view taken in Interplay Between
Arbitration Agreements under the Arbitration Act, 1996 & the Stamp
Act, 1899, In re [Interplay Between Arbitration Agreements under
the Arbitration Act, 1996 & the Stamp Act, 1899, In re, (2024) 6
SCC 1 : 2023 INSC 1066] .”
37. SBI General Insurance (supra), nevertheless preserves a distinct
inquiry as to limitation governing the Section 11 application itself. For that
purpose, what is to be ascertained is whether the petition under Section 11
was filed within the stipulated period, after issuance of a notice under
Section 21 of the A&C Act.
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38. The jurisdiction of the referral court again came to be considered by
the Supreme Court in Office for Alternative Architecture v. Ircon
Infrastructure & Services Ltd., 2025 SCC OnLine SC 1098, where the
Supreme Court took the view that it was impermissible for the referral to
segregate or exclude particular claims on appreciation of factual aspects
which fall for consideration of the arbitral tribunal.
“6. The short question that falls for our consideration is whether
while exercising power under Section 11 of the 1996 Act, the Court
has to confine its consideration as to the existence of an arbitration
agreement between the parties. If so, whether it would be
permissible, while exercising jurisdiction under Section 11, to hold
that some of the claims raised are non-arbitrable or fall within
excepted category.
7. Sub-section (6A) of Section 11, which was inserted by Act 3 of
2016, with effect from 23.10.2015, makes it clear that while
considering an application under sub-section (4) or sub-section (5)
or sub-section (6), the Supreme Court or the High Court, as the case
may be, shall, notwithstanding any judgment, decree or order of any
Court, confine to the examination of the existence of an arbitration
agreement.
8. Act 33 of 2019 omitted sub-section (6A) but the amending Act has
not been notified thus far. In consequence, sub-section (6A) of
Section 11 of the 1996 Act remains in the statute book.
9. The statement of objects and reasons of the 2015 amendment with
reference to insertion of sub-section (6A) in Section 11 of the 1996
Act, reads thus:
“(iii) an application for appointment of an Arbitrator shall be
disposed of by the High Court or the Supreme Court, as the
case may be, as expeditiously as possible and an endeavour
should be made to dispose of the matter within a period of 60
days.
(iv) to provide that while considering any application for
appointment of Arbitrator, the High Court or the Supreme
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Court shall examine the existence of a prima facie arbitration
agreement and not other issues.”
10. The significance of the use of the expression “not other issues”
in the statement of objects and reasons of the 2015 amendment was
noticed by a seven-Judge bench of this Court in In Re : Interplay
Between Arbitration Agreements under the Arbitration and
Conciliation Act, 1996 and the Indian Stamp Act, 18995 , and it was
observed:
“209. The above extract indicates that the Supreme Court or
High Court at the stage of the appointment of an Arbitrator
shall ‘examine the existence of prima facie arbitration
agreement and not other issues’. These other issues not only
pertain to the validity of the arbitration agreement, but also
include any other issues which are a consequence of
unnecessary judicial interference in the arbitration
proceedings.”
11. Relying on the above observations made by this Court in In Re :
Interplay (supra), a three-judge bench of this Court in “SBI General
Insurance Co. Ltd. v. Krish Spinning 6 ” observed:
“114. ….that the scope of enquiry at the stage of appointment
of Arbitrator is limited to the scrutiny of prima facie existence
of the arbitration agreement, and nothing else. For this
reason, we find it difficult to hold that the observations made
in ‘Vidya Drolia v. Durga Trading Corporation 7 (supra) and
adopted in ‘NTPC v. SPML Infra Limited 8 (supra) that the
jurisdiction of the referral court when dealing with the issue
of “accord and satisfaction” under section 11 extends to
weeding out ex-facie non-arbitrable and frivolous disputes
would continue to apply despite the subsequent decision in In
Re : Interplay (supra)”.
Emphasis Supplied
12. As the above decision has been rendered by a three-Judge bench
of this Court after considering the seven-Judge bench decision of
this Court in In Re : Interplay (supra), we are of the view that the
respondent cannot profit from certain observations made by a two-
Judge bench of this Court in Emaar (supra). In our view, therefore,
the High Court fell in error in bisecting the claim of the appellant
into two parts, one arbitrable and the other not arbitrable, when it
found arbitration agreement to be there for settlement of disputes
between the parties. The correct course for the High Court was to
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leave it open to the party to raise the issue of non-arbitrability of
certain claims before the arbitral tribunal, which, if raised, could be
considered and decided by it.”
39. Thus, the governing principal is that the referral court must satisfy
itself that prima facie there exists an arbitration agreement and that the
petition under Section 11 has been filed within a period of three years
reckoned from the failure or refusal of the opposite party to act upon a valid
notice invoking arbitration. Beyond that, it is impermissible for a referral
court to embark upon an intricate factual inquiry for adjudicating limitation.
40. Even as per the respondent, the reference can be declined only where
the conclusion as regards the claim being hopelessly time barred is apparent
on the face of the record and requires no evidentiary inquiry at all.
41. It is in the aforesaid framework that this Court proceeds to examine
the objections raised by the respondent.
Whether an arbitration agreement exists?
42. The respondent’s contention is that the arbitration clause is contained
in the NIT alone and that the agreement dated 06.05.2011 only makes a
general reference to the tender documents which is not enough to
incorporate the arbitration clause into the contract. Reliance is primarily
placed on NBCC (India) Ltd. v. Zillion Infraprojects (P) Ltd., (2024) 7
SCC 174.
43. NBCC (India) Ltd. (supra) in turn follows and relies upon a judgment
of the Supreme Court in M.R. Engineers & Contractors (P) Ltd. v. Som
Datt Builders Ltd., (2009) 7 SCC 696.
44. Significantly, in M.R. Engineers (supra), the Supreme Court drew a
distinction between ‘reference’ and ‘incorporation’. Paras-16 and 17 of M.R.
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Engineers
(supra) clearly enunciate as under:
“16. There is a difference between reference to another document in
a contract and incorporation of another document in a contract, by
reference. In the first case, the parties intend to adopt only specific
portions or part of the referred document for the purposes of the
contract. In the second case, the parties intend to incorporate the
referred document in entirety, into the contract. Therefore when
there is a reference to a document in a contract, the court has to
consider whether the reference to the document is with the intention
of incorporating the contents of that document in entirety into the
contract, or with the intention of adopting or borrowing specific
portions of the said document for application to the contract.
17. We will give a few instances of incorporation and mere reference
to explain the position (illustrative and not exhaustive). If a contract
refers to a document and provides that the said document shall form
part and parcel of the contract, or that all terms and conditions of
the said document shall be read or treated as a part of the contract,
or that the contract will be governed by the provisions of the said
document, or that the terms and conditions of the said document
shall be incorporated into the contract, the terms and conditions of
the document in entirety will get bodily lifted and incorporated into
the contract. When there is such incorporation of the terms and
conditions of a document, every term of such document (except to
the extent it is inconsistent with any specific provision in the
contract) will apply to the contract. If the document so incorporated
contains a provision for settlement of disputes by arbitration, the
said arbitration clause also will apply to the contract.”
45. M.R. Engineers (supra) proceeds to lay down the principles
governing incorporation by reference. The relevant extract reads as under:
“24. The scope and intent of Section 7(5) of the Act may therefore be
summarised thus:
(i) An arbitration clause in another document, would get
incorporated into a contract by reference, if the following
conditions are fulfilled:
(1) the contract should contain a clear reference to the
documents containing arbitration clause,
(2) the reference to the other document should clearly
indicate an intention to incorporate the arbitration clause
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into the contract,
(3) the arbitration clause should be appropriate, that is
capable of application in respect of disputes under the
contract and should not be repugnant to any term of the
contract.
(ii) When the parties enter into a contract, making a general
reference to another contract, such general reference would not
have the effect of incorporating the arbitration clause from the
referred document into the contract between the parties. The
arbitration clause from another contract can be incorporated into
the contract (where such reference is made), only by a specific
reference to arbitration clause.
(iii) Where a contract between the parties provides that the
execution or performance of that contract shall be in terms of
another contract (which contains the terms and conditions
relating to performance and a provision for settlement of disputes
by arbitration), then, the terms of the referred contract in regard
to execution/performance alone will apply, and not the
arbitration agreement in the referred contract, unless there is
special reference to the arbitration clause also.
(iv) Where the contract provides that the standard form of terms
and conditions of an independent trade or professional institution
(as for example the standard terms and conditions of a trade
association or architects association) will bind them or apply to
the contract, such standard form of terms and conditions
including any provision for arbitration in such standard terms
and conditions, shall be deemed to be incorporated by reference.
Sometimes the contract may also say that the parties are familiar
with those terms and conditions or that the parties have read and
understood the said terms and conditions.
(v) Where the contract between the parties stipulates that the
conditions of contract of one of the parties to the contract shall
form a part of their contract (as for example the general
conditions of contract of the Government where the Government
is a party), the arbitration clause forming part of such general
conditions of contract will apply to the contract between the
parties.”
46. It is pertinent to note that the present case pertains to “ incorporation
of another document in a contract, by reference” . In such a case, as clarified
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M.R. Engineers
in (supra), the parties intend to incorporate the referred
document in entirety into the contract. Para-17 of M.R. Engineers (supra)
proceeds to discuss the consequences of such incorporation. It specifically
holds that if a contract refers to a document (in this case, the NIT) and
provides that the said document shall form part and parcel of the contract,
the terms and conditions thereof (the NIT) “ in entirety will get bodily lifted
and incorporated into the contract” .
47. When there is such incorporation, every term of such document
(except to the extent it is inconsistent with any specific provision in the
contract) will apply to the contract.
48. In the present case, the contract does not purport to refer to the terms
and conditions of another contract; what has been made an integral part of
the contract is the very same NIT and the terms and conditions enclosed
therewith, which led to the formation of the contract. The NIT, the LOA and
the contract forms part of the same composite transaction.
49. The present case is a quintessential ‘single-contract case’ and not a
‘two-contract case’ with which the judgment in NBCC (India) Ltd. (supra)
was concerned.
50. In NBCC (India) Ltd. (supra) , the Supreme Court was concerned
with a situation where the terms and conditions as contained in a tender
issued by Damodar Valley Corporation (DVC) was sought to be
incorporated in the LOI issued by NBCC pursuant to its tender process. In
that case, Clause-7.0 of the LOI prescribed that redressal of dispute between
NBCC and the respondent therein shall only be through Civil Courts having
jurisdiction of Delhi alone. The question was whether the arbitration
agreement contained in the terms and conditions in the tender issued by the
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DVC could be ipso facto made applicable to the contract between the NBCC
and the respondent. In that case, the Supreme Court placed reliance on M.R.
Engineers (supra) and held as under:
“19. A perusal of sub-section (5) of Section 7 of the Arbitration Act
itself would reveal that it provides for a conscious acceptance of the
arbitration clause from another document, by the parties, as a part
of their contract, before such arbitration clause could be read as a
part of the contract between the parties.
20. It is thus clear that a reference to the document in the contract
should be such that shows the intention to incorporate the
arbitration clause contained in the document into the contract.
21. The law laid down in M.R. Engineers & Contractors [M.R.
Engineers & Contractors (P) Ltd. v. Som Datt Builders Ltd., (2009)
7 SCC 696 : (2009) 3 SCC (Civ) 271] has been followed by this
Court in Duro Felguera, S.A. v. Gangavaram Port Ltd. [Duro
Felguera, S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017)
4 SCC (Civ) 764] and Elite Engg. & Construction (Hyd.) (P) Ltd. v.
Techtrans Construction India (P) Ltd. [Elite Engg. & Construction
(Hyd.) (P) Ltd. v. Techtrans Construction India (P) Ltd., (2018) 4
SCC 281 : (2018) 3 SCC (Civ) 60]
22. No doubt that this Court in Inox Wind Ltd. v. Thermocables Ltd.
[Inox Wind Ltd. v. Thermocables Ltd., (2018) 2 SCC 519 : (2018) 2
SCC (Civ) 195] has distinguished the law laid down in M.R.
Engineers & Contractors[M.R. Engineers & Contractors (P) Ltd. v.
Som Datt Builders Ltd., (2009) 7 SCC 696 : (2009) 3 SCC (Civ)
271] . In the said case (i.e. Inox Wind [Inox Wind Ltd. v.
Thermocables Ltd., (2018) 2 SCC 519 : (2018) 2 SCC (Civ) 195] ),
this Court has held that though general reference to an earlier
contract is not sufficient for incorporation of an arbitration clause in
the later contract, a general reference to a standard form would be
enough for incorporation of the arbitration clause. Though this
Court in Inox Wind [Inox Wind Ltd. v. Thermocables Ltd., (2018) 2
SCC 519 : (2018) 2 SCC (Civ) 195] agrees with the judgment in
M.R. Engineers & Contractors [M.R. Engineers & Contractors (P)
Ltd. v. Som Datt Builders Ltd., (2009) 7 SCC 696 : (2009) 3 SCC
(Civ) 271] , it holds that general reference to a standard form of
contract of one party along with those of trade associations and
professional bodies will be sufficient to incorporate the arbitration
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clause. In the said case (i.e. Inox Wind [Inox Wind Ltd. v.
Thermocables Ltd., (2018) 2 SCC 519 : (2018) 2 SCC (Civ) 195] ),
this Court found that the purchase order was issued by the appellant
therein in which it was categorically mentioned that the supply
would be as per the terms mentioned therein and in the attached
standard terms and conditions. The respondent therein by his letter
had confirmed its acceptance. This Court found that the case before
it was a case of a single contract and not two-contract case and,
therefore, held that the arbitration clause as mentioned in the terms
and conditions would be applicable.
23. The present case is a “two-contract” case and not a “single-
contract” case.”
51. As such, the Supreme Court was concerned with a two-contract case
and not with a single-contract case. As mentioned, in the present case, the
enclosed therewith
NIT and the terms and conditions , are the respondent’s
own tender documents which constitute/form part of the contract. The same
has been specifically made part of the contract by way of a clear stipulation
in the contract agreement. Clause-2 of the Contract Agreement reads as
under:
“2. The following documents shall be deemed to form and be
read and constructed as per of this Agreement, viz.
Letter of acceptance of award of contract;
a.
b. Terms and Conditions;
c. Notice Inviting Tender;
d. Bill of Quantities;
e. Scope of work;
f. Addendums, if any
Any other documents forming part of the contract.
g.
52. It would be difficult to conceive of a language more clearly
evidencing an intention to incorporate the identified documents into the
contract agreement between the parties.
53. The NIT is not an extraneous document to which reference has been
made, rather it is a constituent part of a single composite contract between
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the parties.
54. Thus, it is unambiguously clear that the NIT and the terms and
conditions enclosed therewith have been incorporated into the contract.
55. It is also relevant to note that para-24(v) of the judgment in M.R.
Engineers (supra) contemplates as under:
“24. The scope and intent of Section 7(5) of the Act may therefore be
summarised thus:
......
(v) Where the contract between the parties stipulates that the
conditions of contract of one of the parties to the contract shall form
a part of their contract (as for example the general conditions of
contract of the Government where the Government is a party), the
arbitration clause forming part of such general conditions of
contract will apply to the contract between the parties.”
56. Even assuming arguendo that the present case involves reference to
standard terms and conditions (forming part of the NIT), the arbitration
clause forming part thereof, shall be ipso facto applicable.
57. As such, the dispute resolution clause incorporated in Clause-59 of
the terms and conditions enclosed with the NIT is operative and binding
between the parties.
58. The Clause-59 prescribes the mode of dispute resolution whereas the
Clause-60 identifies the Court which will exercise supervisory jurisdiction
over it. The same is as under:
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Limitation.
59. This Court has already taken note of the protracted correspondence
relied upon by the petitioner.
60. The legal position is unmistakable in terms that where the issue of
limitation turns upon construction and effect of correspondence (which has
continued till end of 2024) the conduct of parties or the question as to
whether there has been any acknowledgement, or whether the dispute is live
and subsisting based on the conduct of the respondent are all factual issues
which require to be adjudicated based on the respective evidence adduced by
the parties.
61. The judgments relied upon by the respondents involve fact situations
where the concerned Court took the view that no evidentiary exercise was
required to come to the conclusion that the claim sought to be raised was in
the nature of a ‘ deadwood ’. The same is not the position here. As such, in
these proceedings, it is not apposite for this Court to take a final view and /
or to adjudicate the issue as to whether the claims sought to be raised are
barred by limitation or not. It follows that the question of limitation qua the
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claims must be left to be decided by the arbitral tribunal before which, the
respondent shall be at liberty to raise appropriate objections as regards
limitation, inter alia by moving an application under Section 16 of the A&C
Act and / or to press for its determination as a preliminary issue.
Authorization
62. The objection that the present petition has not been instituted by a
duly authorized person is also not a valid ground to reject the present
petition in the peculiar factual conspectus.
63. In the instant case, the petition has been instituted by a partner of the
petitioner firm. Even assuming there was an infirmity with the initial
authorization, an authorization letter dated 17.09.2025 (supra) has been
placed on record whereby all three partners of the firm have expressly
authorized Sh. Sunil Kaushik (through whom the present petition has been
filed) “ to sign the all documents pertaining to the Hon,ble High Court
Matter against the Office In-charge (General Admin) Delhi Technological
University, (Former Delhi College of Engineering) Govt. of NCT of Delhi
Shahbad, Daulatpur, Bawana Road, Delhi-110042 on behalf of the partners
of M/s Shivalik House Keeping Services .”
64. The legal position is also well-settled that a deficiency in
authorization is a curable procedural defect.
65. In Uday Shankar Triyar v. Ram Kalewar Prasad Singh, (2006) 1
SCC 75, it was held as under:
“15. It is, thus, now well settled that any defect in signing the
memorandum of appeal or any defect in the authority of the person
signing the memorandum of appeal, or the omission to file the
vakalatnama executed by the appellant, along with the appeal, will
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not invalidate the memorandum of appeal, if such omission or defect
is not deliberate and the signing of the memorandum of appeal or
the presentation thereof before the appellate court was with the
knowledge and authority of the appellant. Such omission or defect
being one relatable to procedure, can subsequently be corrected. It
is the duty of the office to verify whether the memorandum of appeal
was signed by the appellant or his authorised agent or pleader
holding appropriate vakalatnama. If the office does not point out
such defect and the appeal is accepted and proceeded with, it cannot
be rejected at the hearing of the appeal merely by reason of such
defect, without giving an opportunity to the appellant to rectify it.
The requirement that the appeal should be signed by the appellant
or his pleader (duly authorised by a vakalatnama executed by the
appellant) is, no doubt, mandatory. But it does not mean that non-
compliance should result in automatic rejection of the appeal
without giving an opportunity to the appellant to rectify the defect. If
and when the defect is noticed or pointed out, the court should,
either on an application by the appellant or suo motu, permit the
appellant to rectify the defect by either signing the memorandum of
appeal or by furnishing the vakalatnama. It should also be kept in
view that if the pleader signing the memorandum of appeal has
appeared for the party in the trial court, then he need not present a
fresh vakalatnama along with the memorandum of appeal, as the
vakalatnama in his favour filed in the trial court will be sufficient
authority to sign and present the memorandum of appeal having
regard to Rule 4(2) of Order 3 CPC, read with Explanation (c)
thereto. In such an event, a mere memo referring to the authority
given to him in the trial court may be sufficient. However, filing a
fresh vakalatnama with the memo of appeal will always be
convenient to facilitate the processing of the appeal by the office.
17. Non-compliance with any procedural requirement relating to a
pleading, memorandum of appeal or application or petition for relief
should not entail automatic dismissal or rejection, unless the
relevant statute or rule so mandates. Procedural defects and
irregularities which are curable should not be allowed to defeat
substantive rights or to cause injustice. Procedure, a handmaiden to
justice, should never be made a tool to deny justice or perpetuate
injustice, by any oppressive or punitive use. The well-recognised
exceptions to this principle are:
(i) where the statute prescribing the procedure, also prescribes
specifically the consequence of non-compliance;
(ii) where the procedural defect is not rectified, even after it is
pointed out and due opportunity is given for rectifying it;
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(iii) where the non-compliance or violation is proved to be
deliberate or mischievous;
(iv) where the rectification of defect would affect the case on merits
or will affect the jurisdiction of the court;
(v) in case of memorandum of appeal, there is complete absence of
authority and the appeal is presented without the knowledge,
consent and authority of the appellant.”
In any event, the aspect as regards deficiency of any authorisation,
can also be urged in the arbitral proceedings.
CONCLUSION
66. In the circumstances, the objections raised by the respondent are
found to be untenable for the purpose of resisting constitution of an arbitral
tribunal.
67. The arbitration clause in the present case contemplates that the Vice
Chancellor of the respondent shall appoint an arbitrator.
68. The legal position is well-settled that such a stipulation conferring
right of unilateral appointment to one of the contracting parties is
inoperable, void and non est . In this regard reference may be made to the
following judgments:
i. The Supreme Court in the case of Perkins Eastman Architects DPC
v. HSCC (India) Ltd ., (2020) 20 SCC 760 held as under:
“21. But, in our view that has to be the logical deduction from TRF
Ltd. [TRF Ltd. v. Energo Engg. Projects Ltd., (2017) 8 SCC 377 :
(2017) 4 SCC (Civ) 72] Para 50 of the decision shows that this
Court was Energo Enggith the issue, “whether the Managing
Director, after becoming ineligible by operation of law, is he still
eligible to nominate an arbitrator” The ineligibility referred to
therein, was as a result of operation of law, in that a person having
an interest in the dispute or in the outcome or decision thereof, must
not only be ineligible to act as an arbitrator but must also not be
eligible to appoint anyone else as an arbitrator and that such person
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cannot and should not have any role in charting out any course to
the dispute resolution by having the power to appoint an arbitrator.
The next sentences in the paragraph, further show that cases where
both the parties could nominate respective arbitrators of their
choice were found to be completely a different situation. The reason
is clear that whatever advantage a party may derive by nominating
an arbitrator of its choice would get counter-balanced by equal
power with the other party. But, in a case where only one party has
a right to appoint a sole arbitrator, its choice will always have an
element of exclusivity in determining or charting the course for
dispute resolution. Naturally, the person who has an interest in the
outcome or decision of the dispute must not have the power to
appoint a sole arbitrator. That has to be taken as the essence of the
amendments brought in by the Arbitration and Conciliation
(Amendment) Act, 2015 (3 of 2016) and recognised by the decision
of this Court in TRF Ltd.”
ii. In Bhadra International (India) Pvt. Ltd. v. Airports Authority of
India , 2026 SCC OnLine SC 7, the Court held as under:
“123. A conspectus of the aforesaid detailed discussion on the
position of law as regards Section 12 of the Act, 1996, is as
follows:—
i. The principle of equal treatment of parties provided in Section 18
of the Act, 1996, applies not only to the arbitral proceedings but also
to the procedure for appointment of arbitrators. Equal treatment of
the parties entails that the parties must have an equal say in the
constitution of the arbitral tribunal.
ii. Sub-section (5) of Section 12 provides that any person whose
relationship with the parties or counsel, or the dispute, whether
direct or indirect, falls within any of the categories specified in the
Seventh Schedule would be ineligible to be appointed as an
arbitrator. Since, the ineligibility stems from the operation of law,
not only is a person having an interest in the dispute or its outcome
ineligible to act as an arbitrator, but appointment by such a person
would be ex facie invalid.
iii. The words “an express agreement in writing” in the proviso to
Section 12(5) means that the right to object to the appointment of an
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ineligible arbitrator cannot be taken away by mere implication. The
agreement referred to in the proviso must be a clear, unequivocal
written agreement.
iv. When an arbitrator is found to be ineligible by virtue of Section
12(5) read with the Seventh Schedule, his mandate is automatically
terminated. In such circumstance, an aggrieved party may approach
the court under Section 14 read with Section 15 for appointment of a
substitute arbitrator. Whereas, when an award has been passed by
such an arbitrator, an aggrieved party may approach the court
under Section 34 for setting aside the award.
v. In arbitration, the parties vest jurisdiction in the tribunal by
exercising their consent in furtherance of a valid arbitration
agreement. An arbitrator who lacks jurisdiction cannot make an
award on the merits. Hence, an objection to the inherent lack of
jurisdiction can be taken at any stage of the proceedings.”
iii. This Court in Engineering Projects India Limited v. Allied
Construction , 2026 SCC OnLine Del 4000, held as under:
“6. The legal position is that under Section 12(5) read with Seventh
Schedule of the Act an employee of the party in dispute is ineligible
to be appointed as an arbitrator and cannot nominate or appoint
any other person as an arbitrator. The unilateral appointment in
absence of express agreement in writing between the parties to
waive the applicability of Section 12(5) of the Act is void ab initio.
The participation in the arbitration proceedings cannot be construed
to be waiver under the proviso to Section 12(5) of the Act.”
69. In the circumstances, it is incumbent upon this Court to appoint an
independent Sole Arbitrator to adjudicate the disputes between the parties.
70. Accordingly, Ms. Aastha Chawla, Advocate (Mob. No.: +91
9910646789) is appointed as the Sole Arbitrator to adjudicate the disputes
between the parties.
71. The learned Sole Arbitrator may proceed with the arbitration
proceedings subject to furnishing to the parties requisite disclosures as
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required under Section 12 of the A&C Act.
72. The learned Sole Arbitrator shall be entitled to fee in accordance with
th
IV
Schedule to the A&C Act; or as may otherwise be agreed to between the
parties and the learned Sole Arbitrator.
73. Needless to say, all jurisdictional objections raised by the respondent
inter alia, on grounds of limitation, existence of arbitration agreement and /
or any other objection/s that may be raised, are kept open for consideration
by the Arbitral Tribunal.
74. All rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned Arbitrator
on merits, in accordance with law.
75. The observations made hereinabove are only for the purpose of taking
a prima facie view as to whether an Arbitral Tribunal is required to be
constituted.
76. The present petition stands disposed of in the above terms.
SACHIN DATTA, J
AUGUST 31, 2026
cl,ss
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