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* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment pronounced on: 12.07.2023
+ O.M.P. COMM) 303/2020
THDC INDIA LTD ..... Petitioners
Through: Mr. Parag P. Tripathi, Sr. Adv. along
with Mr. Puneet Taneja, Ms. Lalit
Mohini Bhat, Ms. Hetu Arora Sethi,
Mr. Srinivasan Ramaswamy, Mr.
Abhimanyu Verma, Mr. Amit Yadav,
Mr. Manmohan Singh Narula and Ms.
Laxmi Kumari, Advs.

Versus

M/S PCL-INTERTECH LENHYDRO

CONSORTIUM JV ..... Respondents
Through: Mr. Neeraj Kishan Kaul, Sr. Adv. and
Ms. Kiran Suri, Sr. Adv. along with
Mr. Purvesh Buttan, Ms. Aishwarya
Kumar, Mr. Prateek Narwar, Ms.
Vidhushi Garg, Ms. Meghna Mishra,
Mr. Jatin Mongia, Mr. Dheeraj P.
Deo, Ms. Palak Sharma, Mr. Tarun
Mehta, Mr. Deepak Joshi and Mr.
Raghav Agarwal, Advs.

CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA

JUDGMENT
1. The present petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 assails an award dated 17.12.2010 passed by an
Arbitral Tribunal, pursuant to an arbitration agreement incorporated in the

O.M.P. COMM) 303/2020 Page 1 of 85

 was unwarranted for the Arbitral Tribunal to award any amount on the
premise that interest was wrongly levied on the risk and cost account
maintained by the petitioner.
e) The maintainability of all the claims has been questioned on the basis
that the Respondent furnished NCC-1 and NCC-2 and also on the basis
that the respondent is an unincorporated entity.
38. Finally, it is contended that the award of 18% for the post-award
period is excessive. In the circumstances, the petitioner submits that the
majority award suffers from patent illegality and is contrary to the
fundamental policy of Indian Law, and therefore liable to be set aside.
Submissions on behalf of the respondent:-
39. Learned senior counsel for the respondent has strongly refuted the
contentions made on behalf of the petitioner. As regards the issue of no
claim certificate, it has been emphasized that the same was not voluntarily
given. It is submitted that under clause 58 of the contract between the
parties, extension could only be given for delays on the part of the petitioner.
Further, there is no provision in the contract for furnishing a no claim
certificate as a pre-condition for grant of time extension or as a pre-
condition for regularization of any sub-contracting. Attention is drawn to the
letter dated 04.12.2006 addressed by the petitioner, wherein, it is stated that
―time extension has been given as per the provision of the contract in view
of the delay in handing over of the excavation area‖.
40. It is submitted that the Arbitral Tribunal has submitted cogent findings
of fact with regard to the issue of furnishing of no claim certificate.
Attention has been drawn to the sequence of events leading upto the
issuance of the no claim certificate to contend that the plea of the so-called

O.M.P. COMM) 303/2020 Page 23 of 85

Whether Claims are precluded/ barred on account of the No Claim
Certificate/s [NCC-1 and NCC-2]
81. The relevant findings in the impugned award on this issue are as
under:-
(i) There is no provision in the contract for furnishing of a no
claim certificate for the purpose of grant of time extension, yet
the Petitioner insisted on such no claim certificate and withheld
the grant of EOT till the same was furnished;
(ii) From the correspondence, particularly, letter dated 4.12.2006 of
the Respondent, it is evident that the first EOT was given in lieu
of delay in handing over of the requisite excavation area and the
no claim certificate sought was not as per the contract, and was
not given voluntarily;
(iii) EOT-1 was sought by the Respondent/Claimant on 28.11.2005,
no claim certificate was sought by the Petitioner on 21.3.2006
as a pre-condition for grant of EOT-1, and the same was
granted only on 16.6.2007 i.e. after nearly 18 months of delay;
(iv) EOT-1 had been withheld on account of non-furnishing of
NCC-1; and on the very date on which EOT-1 was granted after
furnishing of NCC-1, arbitration was invoked by the
Respondent/ Claimant; such invocation of Arbitration was itself
the instantaneous protest to NCC-1 being sought;
(v) By the time EOT-1 was granted, application for EOT-2 was
already pending which subsumed the period covered by EOT-1;
EOT- 2 was sought on 14.2.2007 even before EOT-1 was
approved. NCC-2 was requested by the Petitioner on 4.10.2007

O.M.P. COMM) 303/2020 Page 49 of 85

 and furnished by the Respondent on the same day. Only
thereafter EOT-2 was given on 15.11.2007. This shows that the
furnishing of NCC was in the nature of a pre-condition imposed
by the Petitioner for grant of EOT. This was not contemplated
under the contract, in terms of which grant of EOT was to be
governed by GCC Clause 58.
(vi) NCC-2 which was furnished as a pre-condition for EOT-2, in
fact, subsumed the period covered by EOT-1, and specifically
states that the same is without prejudice to the rights of the
Respondent under the Contract.
(vii) The Tribunal finally held that the scenario under which the No
Claim Certificate was sought for ―persuades us to come to a
conclusion that the said certificate was given not voluntarily
but under compulsion faced with the huge investment already
made by the Claimant and the various hindrances attributed to
the respondent…‖

82. The impugned award also relied upon, and applied the law laid down
in the following judgements to reach the aforesaid conclusion:-
(1) NTPC Ltd. Vs. Reshmi Constructions42
(2) Ambica Constructions Vs. Union of India.,43
(3) K.N. Sathyapalan (dead) By LRs Vs. State of Kerala44,
(4) Pure Helium India Pvt. Ltd. Vs. ONGC45,
(5) National Insurance Company Limited Vs. Boghara Polyfab Pvt. Ltd46.

42
(2004) 2 SCC 663
43
(2006) 13 SCC 475
44
(2007) 13 SCC 43
45
(2003) 8 SCC 593
46
(2009) 1 SCC 267

O.M.P. COMM) 303/2020 Page 50 of 85

jurisdiction under Section 34 of the Arbitration and Conciliation Act, 1996,
would be loathe to substitute its views for that of the Arbitrator.
88. It is also notable that the no claim certificate/s were sought in the
backdrop of the inordinate delays that had been occasioned in execution of
the works. Elaborate findings of fact have been rendered in the award in
terms of which the Petitioner was found responsible for the said delays. It
was on account of these delays that EOT was required and for which NCC
was sought by the Petitioner from the Respondent. The findings on facts
rendered in the impugned award on the issues of delay, EOT, NCC are all
inter-related and it would be difficult to re-appraise the same in these
proceedings.
Omission to conduct cross examination
89. It is also notable that in the Rejoinder filed on behalf of the
Respondent before the Arbitral Tribunal, in response to the Petitioner/s
reliance on the non-claim certificate/s, it was categorically pleaded as
under:-
―The respondent suggested claimant to apply for provisional
extension of time and insisted to sign a no claim certificate and this
fortifies the fact that it was not voluntary on the part of claimant.
Inspite of compelling circumstances, claimant managed to express his
opposition and resistance in the form of protest/by reserving rights.
Therefore, it is not correct to say that ‗no claims certificate‘ extracted
from claimant would, clear the liability of respondent to pay damages
for delays. It is submitted that the conduct of claimant in no way be
considered as voluntary and there is no free consent in giving the so
called no claims certificate and it is not tenable in the eye of law.
Even so, as per the legal position just obtaining a ‗no claim
certificate‘ does not bar the claimant from his entitlement of
legitimate claims.

**** **** **** ****

O.M.P. COMM) 303/2020 Page 57 of 85

 Regarding that 'No Claim Certificate' furnished by claimant, it is a
submission made purely at the behest of the superior muscle powered
dictum of the respondent each time while causing grant of extension of
time, even when the delays are either due to the reasons/factors not
attributable to a contractor/claimant, or due to reasons/factors
beyond the control of contractor/claimant. Here it is to further clarify
that the compelling need to furnish "No' Claim Certificate" as per the
instructions of the Respondent, even though the same was at variance
from the contract as well as whether justified or not, arose purely due
to the often widely practiced threatening inflictions such as i. Levy of
liquidated damages, ii. Suspension of payments, iii. Even encashment
of Bank Guarantees etc., as these could have totally crippled the
finances leading to stoppage of activities at site under the contract,
creating further complications and further hurt the
business/reputation as the whole. As such under these circumstances,
the Claimant purely in the interest of keeping the sustenance of
activities even in the face of several types. of hindrances and
difficulties, he was left with the loan option of complying to the
dictum of Respondent even though it was an unjust and unfair act.‖

90. It is also notable that in the background of the divergence in the

respective position of the parties on the aforesaid aspects (relating to
NCC/sub-contracting), the Respondent/ Claimant filed affidavits of
evidence of two witnesses i.e. Mr. Kuljeet Singh Narula and Mr. Kadiyala
Harinath Babu.
91. In the affidavit of evidence filed on behalf of Shri Kuljeet Singh
Narula it was specifically stated as under:-
―42. I submit that the work was delayed beyond the schedule due to
reasons attributable to respondent. The respondent granted
provisional extension of time, but with a threat to levy liquidated
damages by reserving the rights thereto for a later stage in some of
the mile stone shifting / grant of extension of time letters. This
predicament was totally unforeseen and sudden and situation had
come to such a pass that if no payment is received at that juncture,
losses would multiply and entire set up would crumble under the
weight of mounting losses. As claimant continued the work in the face
of hindrances, respondent was trying to delay interim payments under
one reason or other. Therefore, in these circumstances, claimant was
forced to do whatever was insisted upon to get some relief for rotation

O.M.P. COMM) 303/2020 Page 58 of 85

 of cash. The respondent suggested claimant to apply for provisional
extension of time and insisted to sign and claim certificate and this
fortifies the fact that it was not voluntary on the part of claimant.
Inspite of compelling circumstances, claimant managed to express his
opposition and resistance in the form of protest/by reserving rights.
Therefore, it is not correct to say that 'no claims certificate' extracted
from claimant would clear the liability of respondent to pay damages
for delays. It is submitted that the conduct of claimant in no way be
considered as voluntary and there is no free consent in giving the so
called 'no claims certificate' and it is not tenable in the eye of law.
Even so, as per the legal position just obtaining a 'no claim certificate'
under coercion and duress does not bar the claimant from his
entitlement of legitimate claims. Here it is to further clarify that the
compelling need to furnish "No Claim Certificate" as per the
instructions of the Respondent, even though the same was at variance
from the contract as well as whether justified or not, arose purely due
to the often widely practiced threatening inflictions such as i. Levy of
liquidated damages, ii. Suspension of payments, iii. Even encashment
of Bank Guarantees etc., as these could have totally crippled the
finances leading to stoppage of activities at site under the contract,
creating further complications and further hurt the
business/reputation as the whole. As such under these circumstances,
the Claimant purely in the interest of keeping the sustenance of
activities even in the face of several types of hindrances and
difficulties, he was left with the loan option of complying to the dictum
of Respondent even though it was an unjust, unfair and illegal act.

92. On the issue of sub-contracting, it was averred in the said Affidavit

as under:-
45. The GCC 56 of Contract provides for subcontracting the works
and the respondent did not raise any objection ever before in this
regard. The allegation by respondent of deploying RSJV as
subcontractor is in itself as a breach, is motivated and an
afterthought, as evident from the following:

Respondent was very well aware of the fact that since 2002
RSJV was working as a subcontractor to claimant, but he did
not deliberately bother or worry about this, since the works
proceeded to the practically feasible extent even in the face of
sustained impediments.

Respondent recognized RSJV as subcontractor of claimant. In

this connection the minutes of the meeting held on 02.05.2006

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