Govt Of Nct Of Delhi vs M/S. Ram Krishan Yudhister Prakash
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 27.10.2026
Pronounced on: 31.10.2026
Uploaded on: 31.10.2026
# CNR No. DLHC010321452026
+ FAO (COMM) 198/2026, CM APPL. 46848/2026
GOVT OF NCT OF DELHI .....Appellant
Through: Mr. JM Kalia, Mr. Siddhartha
Shukla, Mr. Satender Kumar,
Mr. Dhruv Kalia, Mr. Sanjay
Prabhakar, Advs.
versus
M/S. RAM KRISHAN YUDHISTER PRAKASH
.....Respondent
Through: Mr. Kunwar Chandresh, Ms.
Poonam Prasad, Mr. Divyansh
Singh, Mr. Daleep Kumar Sah,
Mr. Raj Tiwari, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE BHARAT PARASHAR
JUDGMENT
BHARAT PARASHAR, J.
1. The present Appeal under Section 13(1A) of the Commercial
Courts Act, 2015 read with Section 37 of the Arbitration and
Conciliation Act, 1996 [hereinafter referred to as the “A&C Act”], has
been preferred by the Appellant, Government of NCT of Delhi
[hereinafter referred to as “ GNCTD ”], assailing the judgment dated
08.05.2026 [hereinafter referred to as the “ Impugned Order ”] passed
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by the learned District Judge (Commercial), North-East District,
Karkardooma Courts, Delhi, in OMP (COMM.) No. 4/2025. By the
Impugned Order, the Petition preferred by GNCTD under Section 34 of
the A&C Act was dismissed, leaving the arbitral award dated
20.01.2025 [hereinafter referred to as the “ Award ”] undisturbed.
2. Besides challenging the award and the impugned order dated
08.05.2026 dismissing the Petition under Section 34 of the Arbitration
and Conciliation Act, 1996 on various grounds, the primary
controversy pertains to appointment of Sole Arbitrator by the Public
Works Department (PWD) of GNCTD of his retired employee and
thereby attracting the bar under Section 12(5) r/w Seventh Schedule of
the A&C Act.
Factual Matrix :
3. The facts insofar as relevant for adjudication of the present
Appeal may briefly be noticed:
4. Appellant GNCTD through its department PWD awarded work
of construction of Aam Aadmi Mohalla Clinics (Primary Health
Centres) at various places under the North-East Circle, PWD, Delhi to
the Respondent M/s Ram Krishan Yudhister Prakash [hereinafter
referred to as the Contractor]. The letter of acceptance was issued on
17.12.2018 and the amount agreed to be payable was Rs. 2,96,84,753/-.
The stipulated date of commencement of work was 27.12.2018 and the
stipulated date of completion of work was 26.04.2019. The work was,
however, completed on 16.03.2020 i.e. beyond the stipulated date of
completion.
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5. The dispute, however, arose between the parties when the
contractor claimed charges also on account of escalation, expenditures
towards watch and ward, claims against additional work, extra payment
for working in foul position, claims against expenses incurred in the
extended period of the project besides other off site expenses in the
extended period of contract and claim on account of loss of business,
claim of interest etc. Accordingly, in terms of arbitration clause-25 of
the General Condition of Contract for Central PWD Works, 2014 as
was applicable to the contract in question, the Chief Engineer (E) PWD
of GNCTD vide reference letter dated 18.10.2023 nominated Sh.
Avendra Kumar Garg, Principal Chief Engineer, PWD (Retd.) as the
Sole Arbitrator to adjudicate the disputes between the parties. The
learned Arbitrator accepted the reference and issued notice to both the
parties. The contractor (Respondent herein) filed its claim under
various heads vide statement of claim. The Appellant alongwith its
statement of defence also filed its counter claim against the
Respondent.
6. Learned Arbitrator finally passed the award on 20.01.2025 in
favour of the Contractor and against the Department, while disallowing
a number of claims of the Contractor but at the same time also allowed
the same under various heads.
7. Aggrieved by the Award dated 20.01.2025, the Appellant herein
challenged the same by filing a Petition under Section 34 of the A&C
Act on various grounds. It was submitted that learned Arbitrator did not
adjudicate upon the counter claim filed by the Appellant and even
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failed to mention anything about it in the award and the same itself
raised sufficient doubts as to the impartibility of the learned Arbitrator
besides reflecting apparent bias on his part.
8. The various claims which learned Arbitrator had allowed were
also challenged on the ground that the same were not in accordance
with the terms and conditions of the agreement between the parties and
that learned Arbitrator gave his findings on the basis of presumptions
without any evidence in support thereof. It was also stated that learned
Arbitrator travelled beyond the purview of the relevant clauses of the
said agreement between the parties while allowing certain claims.
9. However, in the written arguments / written submissions filed by
the Appellant herein before the Court of Ld. District Judge (Comm.)
a specific objection was raised that as the learned Arbitrator who was a
retired employee of PWD, GNCTD, was unilaterally appointed by one
of the parties so such unilateral appointment was clearly hit by Section
12(5) r/w Seventh Schedule of the A&C Act. It was thus stated that as
the very appointment of learned Arbitrator was bad in law so any
subsequent proceedings before such an Arbitrator or any award passed
thereto was also non-est.
10. Learned District Judge (Comm.), however, dismissed the
Petition under Section 34 of the A&C Act primarily on the ground that
scope of interference with an award under Section 34 of the A&C Act is
very limited and if the view taken by the learned Arbitrator is plausible
so the Court cannot substitute its view in its place.
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11. As regard the specific objection with respect to the unilateral
appointment of learned Arbitrator, the Court in para-9 merely
mentioned that the said contention was devoid of any merits as the
Arbitrator was appointed with the concurrence of the Petitioner. In
para-10, it was also mentioned that the arbitral proceedings reflects that
the Petitioner participated in the proceedings and contested the matter.
12. Being aggrieved with the said order dated 08.05.2026 the present
Appeal under Section 37 of the A&C Act has been filed. Besides
challenging the award dated 20.01.2025 and the impugned judgment
dated 08.05.2026 on the ground that the learned Arbitrator as well as
Ld. District Judge (Comm.) while deciding the Petition under Section
34 of the A&C Act failed to consider that the learned Arbitrator
travelled beyond the express terms of the agreement between the parties
and had also failed to adjudicate upon the counter claim of the
Appellant it has also been stated that the appointment of Arbitrator by
Department of PWD, GNCTD, from a panel of retired government
servants was clearly hit Section 12(5) of A&C Act, being unilateral
appointment and consequently, the award passed by such an Arbitral
Tribunal was a nullity.
13. Per contra, learned counsel for the Respondent submitted that the
Arbitrator was appointed in accordance with the agreement of the
parties and by the department itself. It was also submitted that
Appellant herein duly participated in the proceedings before learned
Arbitrator and in fact in the Petition under Section 34 of the A&C Act
no such ground was even raised. It was thus submitted that after the
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award was passed in favour of the Respondent herein and against the
Appellant herein and that too after duly considering all the
documentary evidence as well as oral submissions made by the parties
that the appointment of the Arbitrator is being now challenged.
14. We have heard the arguments and carefully perused the record.
15. The foremost contention raised by learned counsel for the
Appellant which arises for consideration is whether after the coming
into force of The Arbitration and Conciliation (Amendment) Act, 2015,
the appointment of the Arbitral Tribunal by one of the parties in the
absence of an express agreement in writing subsequent to the dispute
having arisen would amount to waiving off the applicability of Section
12(5) of the A&C Act even though such an appointment is in
accordance with the earlier agreement of the parties. In this regard it
will be pertinent to mention that the aforesaid issue stands squarely
covered by the decision of this Court in FAO(OS)(Comm) No.
246/2026, titled “M/s Ahluwalia Contracts (India) Limited (ACIL) Vs.
Airports Authority of India (AAI)”, pronounced on 25.09.2026.
16. It will be worthwhile to quote the following observations from
the said judgment as the same clearly answers the issue involved herein
in paragraphs-22 to 39 as under :
“22. The answer to the aforesaid question is no longer res integra.
The statutory scheme contained in Section 12(5) of the A&C Act, as
also the interpretation placed thereon by the Supreme Court and
this Court, makes it clear that the waiver contemplated by the
proviso to Section 12(5) is of a particular and specific nature. It
cannot be inferred merely from the conduct of the parties, from the
fact that a party itself appointed the Arbitrator, or from the
participation of the parties in the arbitral proceedings.Waiver, in a
general sense, may in an appropriate case be inferred from conduct
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or from other circumstances. However, where the statute itself
prescribes the manner in which a party may waive the applicability
of a statutory provision, the Court cannot substitute the statutorily
prescribed mode with an implied waiver. The proviso to Section
12(5) expressly requires an agreement in writing, subsequent to the
disputes having arisen between the parties.
23. Section 12(5) of the A&C Act, as introduced by the Arbitration
and Conciliation (Amendment) Act, 2015, reads as under:
“ 12. Grounds for challenge
…
(5) Notwithstanding any prior agreement to the contrary, any
person whose relationship, with the parties or counsel or the
subject-matter of the dispute, falls under any of the categories
specified in the Seventh Schedule shall be ineligible to be
appointed as an Arbitrator:
Provided that parties may, subsequent to disputes having
arisen between them, waive the applicability of this
sub-section by an express agreement in writing.”
24. On a plain reading of the aforesaid provision, it becomes
evident that the legislature has consciously prescribed three
essential requirements for waiver: (i) the waiver must be subsequent
to the disputes having arisen between the parties; (ii) it must be by
agreement between the parties; and (iii) such agreement must be
express and in writing. Thus, the statutory provision does not
contemplate a waiver by implication or by conduct.
25. The aforesaid interpretation has been authoritatively settled by
the Supreme Court in Bhadra International. The Supreme Court,
after examining the scope and effect of the proviso to Section 12(5)
of the A&C Act, has explained the requirements of such waiver in the
following terms:
“75. The essentials of the proviso to Section 12(5) are:-
i. The parties can waive their right to object under sub-section
(5)
of Section 12;
ii. The right to object under the sub-section can be waived only
subsequent to a dispute having arisen between the parties;
iii. The waiver must be in the form of an express agreement in
writing.
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78. What flows from the aforesaid is when a right exists, i.e.,
the right to object to the appointment of an ineligible
Arbitrator in terms of Section 12(5), such a right cannot be
taken away by mere implication. For a party to be deprived of
this right by way of waiver, there must be a conscious and
unequivocal expression of intent to relinquish it. Needless to
say, for a waiver to be valid, it is necessary that the actor
demonstrates the intention to act, and for an act to be
intentional, the actor must understand the act and its
consequences.
*
84. Undoubtedly, the statute does not prescribe a format for
the agreement. However, the absence of a prescribed format
cannot be construed to mean that the waiver may be inferred
impliedly or through conduct. We say so because the
legislature has consciously prefaced the term “agreement”
with the word “express” and followed it with the phrase “in
writing”. This semantics denote the intention of the legislature
that the waiver under the proviso to Section 12(5) must be
made only through an express and written manifestation of
intention. ”
26. The significance of the aforesaid decision becomes apparent
from the facts of Bhadra International itself. In that case, the
Arbitrator had, in Procedural Order No.1, specifically recorded that
none of the parties had any objection to his appointment as the Sole
Arbitrator. Despite such factual position, the correctness of which
was not disputed, the Supreme Court held that such an observation
recorded in the procedural order could not amount to waiver,
particularly when the statute envisages waiver only by an express
terms of the agreement in writing subsequent to the disputes having
arisen between the parties.
27. Thus, the mere fact that a party may have proceeded with the
arbitration with knowledge of the constitution of the Arbitral
Tribunal cannot be elevated to an express agreement in writing as
contemplated by the proviso to Section 12(5) of the A&C Act. The
statutory requirement is not satisfied by acquiescence, participation
or conduct. The requirement is of an agreement, expressed in
writing, between the parties after the disputes have arisen.
28. The aforesaid principle has also been applied by the Division
Bench of this Court in Titagarh Rail Systems (supra). The Division
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Bench has specifically rejected the contention that following the
contractual procedure for appointment of an Arbitrator, by itself,
could result in waiver of the applicability of Section 12(5) of the
A&C Act. The relevan t observations read as under:
“27. While it may be true that the procedure followed by the
parties was that which was envisaged, in the contract between
them, as applying where there was waiver of Section 12(5),
following of the procedure cannot by itself result in such
waiver. The argument effectively puts the cart before the
horse. There must, in the first instance, be waiver of the
applicability of Section 12(5) by written agreement in writing
as required by the proviso to the said clause read with the
decision in Bhadra International, and, only thereafter, if there
exists such express waiver in writing, would the arbitral
procedure envisaged in that situation as contained in Clause
2905(a)(ii) apply. The situation cannot be read in reverse. We
cannot accept the argument that by invoking the procedure
applicable in a case of waiver of Section 12(5), Section 12(5)
stands waived, despite the absence of any written agreement in
writing to that effect.
28. In fact, the situation which exists in the present case is that
the very invocation of the procedure, envisaged in the contract
between the parties as being applicable in a case in which
Section 12(5) stood waived, was itself illegal. That procedure
applies only where there is waiver of the applicability of
Section 12(5). Inasmuch as there was no such waiver in the
present case, the procedure itself would not apply. By
erroneously invoking the procedure which applies where
Section 12(5) has been waived, waiver of Section 12(5) cannot
be implied.”
29. The principle emerging from the aforesaid decisions is,
therefore, clear. The fact that a party has acted in accordance with
the contractual mechanism for appointment cannot, in the absence
of an express agreement in writing subsequent to the disputes,
constitute waiver of the applicability of Section 12(5) of the A&C
Act. The contractual mechanism cannot be permitted to operate in a
manner contrary to the mandatory statutory requirement.
30. In the present case, it is not in dispute that AAI appointed the
Sole Arbitrator in exercise of the power conferred upon it under
Clause 57(c) of the Contract Agreement. It is also not in dispute that
the appointment was made after the disputes had arisen between the
parties. However, there is admittedly no express agreement in
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writing between the parties, subsequent to the disputes having
arisen, whereby the applicability of Section 12(5) of the A&C Act
was waived.
31. The Appellant seeks to overcome this statutory requirement
by placing reliance upon the fact that AAI itself appointed the Sole
Arbitrator, participated in the arbitral proceedings for several years
and did not raise any objection to the constitution of the Arbitral
Tribunal until after the Award was rendered. However, these
circumstances, even taken cumulatively, cannot constitute the
express agreement in writing mandated by the proviso to Section
12(5) of the A&C Act.
32. In this regard, reliance placed by the Appellant upon the fact
that it was AAI itself which appointed the Sole Arbitrator is of no
avail. The precise question whether a party which has itself made
the unilateral appointment can subsequently object to the
appointment has also been considered by the Division Bench of this
Court in Mahavir Prasad Gupta and Sons v. Govt. of NCT of
1
Delhi . The Division Bench considered the question whether the act
of unilateral appointment itself could constitute an express
agreement to waive the statutory ineligibility and held as under:
“79. Hence, exercise of power to unilaterally appoint the
Arbitrator by a party cannot be termed as express agreement
to waive the invalidity
of the arbitration agreement providing for unilateral
appointment. For waiver under Section 12(5) of the Act after
the dispute have arisen, the parties are required to consciously
agree in writing to waive the ineligibility of the Arbitrator.
Grounds of ineligibility of the Arbitrator under Seventh
Schedule are derived from Red List of IBA Rules on Conflict of
Interest in International Commercial Arbitration. The Act was
as amended in 2015 to provide a detailed framework to
address Arbitrator bias. This framework includes the Fifth and
Seventh Schedules, which draw from the Orange and Red Lists
of the IBA Guidelines, respectively. The Fifth Schedule
requires Arbitrators to disclose any circumstances that might
reasonably affect their impartiality, including relationships
with the parties, counsel, or subject matter of the dispute. The
Seventh Schedule reflecting the Red List, outlines scenarios of
relationship conflict that would result in de jure ineligibility of
an Arbitrator.”
1
2025 SCC OnLine Del 4241
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33. The aforesaid decision is of particular relevance to the
submission advanced by learned senior counsel representing the
Appellant. The mere fact that the appointment was made by AAI
does not amount to an express agreement in writing by both parties
to waive the applicability of Section 12(5) of the A&C Act. The act of
appointment and the statutory waiver contemplated by the proviso
operate in distinct fields and cannot be equated with each other.
34. Significantly, the Division Bench in Mahavir Prasad Gupta
(supra)ultimately upheld the setting aside of the award on the
ground of unilateral appointment. The Supreme Court thereafter
declined to interfere with the judgment of the Division Bench in the
Special Leave Petition. The aforesaid position thus lends further
consistency to the interpretation adopted by this Court regarding the
mandatory nature of the proviso to Section 12(5) of the A&C Act.
35. The question posed before this Court is also directly answered by
the judgment of the Supreme Court in Bharat Broadband Network
2
Ltd. v. United Telecoms Ltd. . In the said case, the Supreme Court
considered the precise question as to whether the appointment of an
ineligible Arbitrator by the party having the power of appointment
could itself amount to an express waiver under the proviso to Section
12(5) of the A&C Act. The Supreme Court held that it could not.
36. The Supreme Court, in Paragraph No.20 of Bharat
Broadband (supra), interpreted the expression “express agreement
in writing” occurring in the proviso to Section 12(5) of the A&C Act
in the following terms:
“20. This then brings us to the applicability of the proviso to
Section 12(5) on the facts of this case. Unlike Section 4 of the
Act which deals with deemed waiver of the right to object by
conduct, the proviso to Section 12(5) will only apply if
subsequent to disputes having arisen between the parties, the
parties waive the applicability of sub-section (5) of Section 12
by an express agreement in writing. For this reason, the
argument based on the analogy of Section 7 of the Act must
also be rejected. Section 7 deals with arbitration agreements
that must be in writing, and then explains that such
agreements may be contained in documents which provide a
record of such agreements. On the other hand, Section 12(5)
refers to an “express agreement in writing”. The expression
“express agreement in writing” refers to an agreement made
2
(2019) 5 SCC 755
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in words as opposed to an agreement which is to be inferred by
conduct. Here, Section 9 of the Contract Act, 1872 becomes
important. It states:
“ 9. Promises, express and implied .—Insofar as the
proposal or acceptance of any promise is made in
words, the promise is said to be express. Insofar as
such proposal or acceptance is made otherwise than
in words, the promise is said to be implied.”
It is thus necessary that there be an “express” agreement in
writing. This agreement must be an agreement by which both
parties, with full knowledge of the fact that Shri Khan is
ineligible to be appointed as an Arbitrator, still go ahead and
say that they have full faith and confidence in him to continue
as such. The facts of the present case disclose no such express
agreement. The appointment letter which is relied upon by the
High Court as indicating an express agreement on the facts of
the case is dated 17-1-2017. On this date, the Managing
Director of the appellant was certainly not aware that Shri
Khan could not be appointed by him as Section 12(5) read
with the Seventh Schedule only went to the invalidity of the
appointment of the Managing Director himself as an
Arbitrator. Shri Khan's invalid appointment only became
clear after the declaration of the law by the Supreme Court in
TRF Ltd. [TRF Ltd. v. EnergoEngg. Projects Ltd., (2017) 8
SCC 377 : (2017) 4 SCC (Civ) 72] which, as we have seen
hereinabove, was only on 3-7-2017. After this date, far from
there being an express agreement between the parties as to the
validity of Shri Khan's appointment, the appellant filed an
application on 7-10-2017 before the Sole Arbitrator, bringing
the Arbitrator's attention to the judgment in TRF Ltd. [TRF
Ltd. v. EnergoEngg. Projects Ltd., (2017) 8 SCC 377 : (2017)
4 SCC (Civ) 72] and asking him to declare that he has become
de jure incapable of acting as an Arbitrator. Equally, the fact
that a statement of claim may have been filed before the
Arbitrator, would not mean that there is an express agreement
in words which would make it clear that both parties wish Shri
Khan to continue as Arbitrator despite being ineligible to act
as such. This being the case, the impugned judgment is not
correct when it applies Section 4, Section 7, Section 12(4),
Section 13(2) and Section 16(2) of the Act to the facts of the
present case, and goes on to state that the appellant cannot be
allowed to raise the issue of eligibility of an Arbitrator, having
itself appointed the Arbitrator. The judgment under appeal is
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also incorrect in stating that there is an express waiver in
writing from the fact that an appointment letter has been
issued by the appellant, and a statement of claim has been filed
by the respondent before the Arbitrator. The moment the
appellant came to know that Shri Khan's appointment itself
would be invalid, it filed an application before the Sole
Arbitrator for termination of his mandate.”
37. The aforesaid decision is directly relevant to the facts of the
present case. The Supreme Court has expressly rejected the
proposition that the party which itself appoints the Arbitrator is
thereby precluded from questioning the validity of such
appointment. More importantly, the Supreme Court has made it
clear that the appointment letter itself cannot be treated as an
express agreement in writing under the proviso to Section 12(5) of
the A&C Act.
38. The submission of learned senior counsel representing the
Appellant that the decision in Bhadra International ought to be
confined to a case where the objection is raised by the party which
did not make the appointment, therefore, cannot be accepted. The
subsequent decision of the Division Bench in Mahavir Prasad
Gupta (supra) has expressly examined this very issue, and the
principle has thereafter received further support from the Supreme
Court. The statutory requirement of an express agreement in writing
does not depend upon which of the parties made the appointment.
39. Equally, the participation of AAI in the arbitral proceedings
cannot result in a different conclusion. The Supreme Court in
Bhadra International has specifically recognised that even conduct
which may otherwise appear to demonstrate acceptance of the
Arbitral Tribunal cannot substitute the express written agreement
contemplated by the proviso. The reason is apparent from the
statutory language itself. Section 12(5) of the A&C Act constitutes a
specific statutory departure from the general principle of waiver by
conduct.
17. In the present case also the record discloses that the learned
Arbitrator who was a retired Principal Chief Engineer of PWD itself
was appointed by one of the parties i.e. PWD of GNCTD and the
department did participate in the proceedings before the learned
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Arbitrator and besides filing its statement of defence, it also filed its
counter claim before the learned Arbitrator. However, there is nothing
on record to show that subsequent to the disputes having arisen, the
parties entered into any express agreement in writing whereby they
consciously waived off the applicability of Section 12(5) of the A&C
Act. Thus, participation in the arbitration proceedings or filing of
statement of defence or counter claim or failure to raise an objection
before learned Arbitrator in this regard cannot be treated as a substitute
for such statutory waiver.
18. It is true that in the Petition under Section 34 of the A&C Act
filed by the Appellant herein no such ground was taken but in the
written arguments / written submissions filed a specific ground was
mentioned along with the relevant case law but learned Trial Court
failed to address the said issue and discarded the said submission
merely on the ground that Petitioner therein had participated in the
proceedings. Thus, it is even not a case where before adjudication of the
Petition under Section 34 of the A&C Act, the objection as regard the
unilateral appointment of the learned Arbitrator was not raised.
However, as discussed above, merely because the Appellant had
participated in the arbitral proceedings or had failed to raise such an
objection at any earlier stage of the proceedings cannot make such an
appointment to be valid.
19. Hon’ble Supreme Court in “ Bhadra International (India) Pvt.
Ltd. & Ors. Vs. Airports Authority of India ” has specifically
recognised that an objection going to the inherent jurisdiction of the
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Arbitral Tribunal may be raised at any stage of challenge to the award.
20. Thus, in the overall facts and circumstances of the case as
discussed above, since the very appointment of Arbitrator being
unilateral and without there being any express agreement in writing
subsequent to arising of disputes and thereby waiving the applicability
of Section 12(5) of the A&C Act cannot be held to be valid in the eyes
of law and accordingly, any subsequent proceedings before such an
Arbitral Tribunal or any award emanating thereto can also be not
sustained.
21. In these circumstances, there is no requirement to deal with other
contentions raised by learned counsel for the Appellant challenging the
award or the impugned order. Accordingly, the impugned order dated
08.05.2026 and the award dated 20.01.2025 are hereby set aside. The
present Appeal is allowed.
22. In the facts and circumstances of the case, there shall be no order
as to costs.
BHARAT PARASHAR, J.
ANIL KSHETARPAL, J.
st
OCTOBER 31 , 2026/ DH
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