Delhi Transco Ltd v. M/S Hythro Power Corporation Ltd

JASMEET SINGH, J AUGUST 21, 2025/sp

(Corrected and released on 03.09.2025)

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 21.08.2025 + O.M.P. (COMM) 169/2020 DELHI TRANSCO LTD. .....Petitioner Through: Mr. Ajay Bansal, Ms. Veena Bansal, Mr. Gaurav Yadava, Mr. Sourav Jindal, Advs. versus SUPREME ADVERTISING PRIVATE LIMITED (FORMERLY HYTHRO ENGINEERS PVT. LTD.) .....Respondent Through: Mr. Prateek Gupta, Mr. Raghav Tiwari, Ms. Vishaka Kaushik, Advs. CORAM: HON'BLE MR. JUSTICE JASMEET SINGH : JASMEET SINGH.J (ORAL) 1. This is a petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act") seeking to challenge the Award dated 01.12.2008 and additional/ corrected Award dated 13.12.2008 passed by the Sole Arbitrator in "M/s. Hythro Power Corporation Ltd. and Delhi Vidyut Board (Delhi Transco Ltd.)." 2. The dispute arises out of a Contract dated 05.02.1997 (Order No. XEN (220KVL) 1-73/591), whereby the petitioner, Delhi Transco Ltd. ("DTL") (then Delhi Vidyut Board), awarded to the respondent, M/s Hythro Power Corporation Ltd., the work of erection, testing and commissioning of loop-in and loop-out of 220 KV double circuit tower line from Mandola to Patparganj at the 220 KV sub-station, south of Wazirabad, under Contract T-73. The value of the Contract was Rs. 27,44,695.30 (+/- 25%), and the work was to be completed within six months, i.e., by 04.08.1997, time being the essence of the Contract. 3. Since there were disputes between the parties by letter dated 03.08.2000, Mr. Ramesh Chander, Retired Chief Engineer (Civil), was appointed as the Sole Arbitrator. 4. Before the Sole Arbitrator, the respondent raised thirteen claims, to which the petitioner filed a reply along with ten counterclaims. After the balance work was completed through other agencies, the petitioner revised its counterclaims. During the course of proceedings, certain claims and counterclaims (Claim Nos. 6, 8, 11 and Counterclaim Nos. III, VI, VII and VIII) were, with mutual consent, withdrawn and referred to the arbitration of Justice S.S. Chadha (Retd.), as they pertained to highly technical issues concerning material reconciliation. 5. On 01.12.2008, the Sole Arbitrator passed the impugned Award whereby he allowed Claim Nos. 1, 2, 3, 4, 5, 7, 9, 10, 12 and 13 of the respondent, dismissed most of the petitioner's counterclaims, and referred some issues to Justice S.S. Chadha (Retd.). Thereafter, an additional Award dated 13.12.2008 was issued for the correction of typographical errors. 6. Aggrieved by the said Awards, the petitioner has filed the present petition under Section 34 read with Sections 28(3) and 16(6) of the Act seeking to set aside the impugned Awards. 7. Mr. Dev, learned counsel for the petitioner, submits that the impugned Award dated 01.12.2008 and the additional Award dated 13.12.2008 are unsustainable in law. It is urged that the Sole Arbitrator failed to appreciate the petitioner's case in its entirety and recorded findings based on conjectures rather than evidence. The corrected Award, running into only two pages, is stated to be perfunctory and contrary to the requirement of a reasoned decision under the law. 8. It is contended that the Sole Arbitrator misconstrued several material provisions of the Notice Inviting Tender ("NIT"), including Clauses 10B, 3.7.1, 3.7.3, 1.10.3 and 1.10.3a, and overlooked breaches attributable to the respondent. 9. It is further argued that the Sole Arbitrator wrongly assumed that excavation at Location No. 2 commenced in June 1997, although contemporaneous records and measurement books reflected otherwise, and overlooked the fact that monsoon conditions made such execution improbable. While bottlenecks like right-of-way, foundation design and route profile were noticed, the Sole Arbitrator failed to recognise that adherence to NIT provisions by the respondent could have obviated such impediments. 10. The petitioner submits that despite the respondent's defaults, several claims were wrongly allowed. Refund of earnest money and security (Claim No.