Kiran Raj

The Delhi High Court has dismissed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, filed by Rattan India Power Ltd. challenging an interim award passed by an arbitral tribunal. The tribunal had awarded Bharat Heavy Electricals Ltd. (BHEL) a sum of Rs. 115 crores on the ground that the petitioner had admitted its liability to that extent. The court held that the findings of the tribunal were based on documentary evidence, including minutes of meetings and C-forms, and declined to interfere.

The matter was adjudicated by Justice Prateek Jalan. The petition arose from an arbitral dispute between the parties regarding contractual payments under a project for a 5x270 MW Thermal Power Plant at Amravati, Maharashtra.

The arbitral proceedings arose out of a Letter of Award dated 11.10.2010, under which BHEL was entrusted with the design, engineering, manufacturing, inspection, and testing of a Boiler Turbine Generator (BTG) for the petitioner’s project. A supply contract and a services contract were signed on 26.05.2011, under which the petitioner paid an advance of Rs. 142.5 crores to BHEL. Disputes arose when BHEL claimed that the petitioner failed to discharge its payment obligations, leading to the termination of the contract by BHEL on 27.11.2015.

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The tribunal passed an interim award on 27.07.2017, stating:

"For the foregoing reasons, we are of the opinion that the Claimant is entitled to an interim award for an amount of Rs. 115 crores for Amravati Phase-II and Rs. 63 crores for Nashik Phase-II. There shall be an interim award for the above said amount in favour of the Claimant against the Respondent in the two matters. On this amount, the Claimant shall be entitled to interest calculated @18% per annum w.e.f. 30 days from the date of this Award within which time the Respondent may pay the awarded amount to the Claimant."

The petitioner challenged the award, arguing that the minutes of meetings relied upon by the tribunal did not constitute unequivocal admissions of liability.

The court examined the tribunal’s reliance on minutes of meetings dated 21.11.2012, 09.04.2013, 06.09.2013, and 15.01.2014. The tribunal had recorded:

"Not only do the minutes of meetings clearly and explicitly record an admission of liability, the subsequent correspondence entered into between the parties reinforces the claim of the Claimant. We do not find any ambiguity or qualification in the admission made by the Respondent."

The tribunal also relied on the issuance of C-forms by the petitioner, stating:

"The Respondent has admitted the supplies made by the Claimant and issued the necessary C-forms, which also go to show that the parties have treated the goods supplied by the Claimant as goods sold. The Respondent has admitted issuing the C-form. The only explanation given by the Respondent is that it was so done only with a view to help the Claimant in tax matters. Such an explanation is merely a moon-shine or an eye-wash explanation."

The court rejected the petitioner’s argument that the tribunal had misinterpreted the documents, stating:

"There is overwhelming evidence of unimpeachable credence available on record which goes to show that the Claimant has made supplies to the Respondent; that the goods supplied have been retained and certainly not returned by the Respondent to the Claimant; that there was some dispute about verification of the details and quantum of the goods supplied for which reconciliation process was undertaken by the parties; that during this reconciliation, the Respondent has in writing by way of Minutes of Meetings unequivocally admitted the dues of the Claimant to the extent of Rs. 115 crores for Amravati Phase-II (as against Rs. 187 crores claimed by the Claimant) and Rs. 63 crores for Nashik Phase-II (as against Rs. 106 crores claimed by the Claimant). The Respondent has issued 'C' forms to the Claimant whereby the sale of goods is admitted by the Respondent to the Claimant as also represented so to the tax authorities of the State. The Respondent cannot disown the liability so committed."

The petitioner argued that the tribunal had failed to consider its objections regarding sequential supply and had overlooked correspondence demonstrating that supplies were made unilaterally by BHEL. It relied on letters dated 04.07.2011, 26.08.2011, 15.09.2011, 25.11.2011, 07.02.2012, 17.07.2012, 19.11.2012, 10.12.2012, 23.03.2012, and 26.07.2011, contending that these documents demonstrated that the petitioner had never admitted liability.

The court recorded the petitioner’s submission as follows:

"The petitioner’s principal defence on merits, as recorded by the Tribunal and urged before this Court, was that the respondent had breached the terms of the contract by failing to make supply of plant and equipment sequentially. The petitioner characterises such non-sequential supply as ‘dumping’, and therefore contended that the respondent was not entitled to payment."

The petitioner also argued that the tribunal’s reliance on C-forms was misplaced. It cited its letter dated 18.01.2014, which stated that the issuance of C-forms should not be taken as an admission of liability.

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The court rejected the petitioner’s contentions, stating:

"The manner in which the decision has been structured does raise some ambiguity as suggested by [the petitioner], but the ambiguity is resolved when one reads the decision as a whole. The first part of the award deals with the respondent’s application, and categorically makes an ‘interim award’ in its favour. Interest has also been awarded upon the said amount and, in the very last paragraph (in the ‘Incidental’ section), provision has been made for stamping. These aspects admit of little doubt as to the finality of the award, to the extent the Tribunal found the respondent’s claims to be admitted."

The court further observed:

"The Tribunal has considered the minutes of the meetings, and found that they record express admissions of liability, fortified by subsequent correspondence between the parties. It has negated the petitioner’s contentions with regard to ambiguity or qualification in the admissions, and thus come to the conclusion that the admissions are of unimpeachable credence."

The petition was accordingly dismissed.

With the dismissal of O.M.P. (COMM) 372/2017, the enforcement proceedings for the arbitral award were directed to be listed before the roster bench on 25.03.2025.

Advocates Representing the Parties

For Rattan India Power Ltd.: Mr. Tanmaya Mehta, Mr. Divyansh Rathi, Ms. Sumedha Rathi, and Mr. Yash Gaur, Advocates

For Bharat Heavy Electricals Ltd.: Mr. Jayant Mehta (Senior Advocate) with Mr. Rameezuddin Raja, Mr. Namit Suri, and Ms. Tanya Sharma, Advocates

For the Judgment Debtor: Mr. Rajat Navet and Mr. Kushagra Pandit,  Advocates

Case Title: Rattan India Power Ltd. v. Bharat Heavy Electricals Ltd.
Neutral Citation: 2025: DHC:1464
Case Number: O.M.P. (COMM) 372/2017
Bench: Justice Prateek Jalan

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