Cause title — parties, addresses and appearances
FAO (COMM) 106/2025
Page 1 of 8
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IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 02.05.2025
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FAO (COMM) 106/2025
GMTD BSNL HISAR HARYANA
.....Appellant
Through:
Ms. Sangeeta Sondhi, Mr.
Daksh Jain and Mr. Amit Patra,
Advs.
versus
SURESH KUMAR SECURITY AGENCY .....Respondent
Through:
Mr. Dhaval Mehrotra and Ms.
Aditi Desai, Advocates.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
HON’BLE MS. JUSTICE RENU BHATNAGAR
NAVIN CHAWLA, J. (Oral)
1.
Allowed, subject to all just exceptions.
CM APPL. 26658/2025(Exemption)
2.
For the reasons stated in the application, the delay of 63 days in
filing the appeal is condoned.
CM APPL. 26656/2025 (Delay of 63 days)
3.
The application stands disposed of.
4.
This appeal has been filed under Section 37(1) of the
Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the
Act’), challenging the Order dated 19.11.2024 (hereinafter referred to
as ‘Impugned Order’) passed by the learned District Judge
Commercial Court-01, South District, Saket Courts in OMP (COMM)
FAO (COMM) 106/2025 & CM APPL. 26657/2025
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
Page 2 of 8
No. 52/2023 titled as GMTD BSNL, Hisar Haryana Vs. Suresh
Kumar Security Agency, dismissing the said OMP, that is, the petition
under Section 34 of the Act filed by the appellant herein.
5.
To give a brief background of the facts of the present appeal,
the respondent, by way of two separate agreements dated 21.05.2018,
was appointed to provide security services to the appellant in its
telecom installations, stores, and cash counters of Hisar, Sirsa, and
Fatehabad. The said contracts were terminated by the appellant vide
letter dated 05.11.2018. The respondent invoked the arbitration
proceedings, alleging therein that the dues of monthly payments were
not cleared in time by the appellant and were finally paid in
instalments running up till 2022. The respondent, therefore, claimed
inter alia interest for the delayed payments.
6.
The learned Arbitral Tribunal, vide its Award dated 30.05.2023,
allowed the claim of the respondent, inter alia observing as under:-
“11. From the statement of RW1 and RW2 it
is admitted fact that the DGR. Guidelines are
the part of the binding agreement between the
parties. The Clause 16 (c) of DGR Guidelines
is reproduced as under: -
"16. Wages
....
(c) Principal-employer will pay wages to
the security agency by 1st of every month.
Payment to security guards/supervisors will
be done by ECS/Cheque by the security
agency by 7th of each month. In case the
salary is not paid by ECS/Cheque due to
compelling reasons, DGR will be intimated
accordingly."
The para 13 of the agreements reads as under:
"13. Guidelines of DGR as amended from
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
Page 3 of 8
time to time will be applicable."
According to the above guidelines which were
the part of binding agreements of the parties,
the principal employer was bound to pay the
wages due to the security agency by the 1st
date of every month. Thereafter, the security
agency was duty bound to pay the wages to the
security guards/supervisors by ECS/Cheque by
7th date of every month. In case due to
compelling reasons salary is not paid to
security guards/supervisor then DGR was to
be informed It is not the case of the respondent
that DGR was informed. Even, the security
agency does not claim that it has informed the
DGR. It shows that the issue of non-payment
of salary to the security guards was not taken
as a serious issue in-fact by the respondent.
But it was made a good excuse for non-
payment of wages to the security agency. It is
crystal clear that the respondent has not
complied with the DGR guidelines particularly
according clause 16 (c) and para 13 of the
agreements Ex. C-1 and C-2. Evidently the
respondent had been impressing upon the
claimant to make the payment to the security
guards at first by claimant by 7th of each
month and thereafter, after verifying the bills it
will make the payment on the 1st day of
subsequent month i.e. from beginning of the 3rd
month from the date of deployment of security
guards. Once the respondent had not made the
payment of bills, how could respondent ask the
claimant to pay first to the guards without
making payment even after taking services? It
makes clear that according to arguments
advanced on behalf of the respondent, after
serving of security guards for one month, on
the 1st day of the next month the security
agency had to make the payment to the
security guards from its own funds then raise
the bill complying the guidelines of BSNL.
Then, the BSNL shall check and verify the
details of bills and if satisfied it will approve
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
Page 4 of 8
for its payment which will be paid by BSNL
after the end of 2nd month, on the 1st of third
month of deployment of the security guards. It
could not be the sprit and intention of the
guidelines that respondent will start paying for
security agency only after taking service of
two months from security guards/agency in the
biggening. It is clear contravention of the
agreed
terms
and
conditions
of
the
agreements. There is neither such terms or
conditions in agreements between the parties
nor this fact has been proved by any cogent
evident on behalf of the respondent. However,
the respondent by its own interpretation has
taken it that the security agency shall first pay
the guards for the first month by the 7th of the
month then raised the bill then the respondent
shall pay in the next month by first of the
month if bills found in order otherwise the
payment could be delayed for the reason that
security agency has not raised the bills
properly. It is not acceptable in view of the
express DGR guidelines.
12. The dispute between the parties' rests on
the two points. First, the claimant alleged at
the payments have been delayed without any
reason and fault on the part of security
agency. Second, the respondent alleged that
the bills of security agency were not paid by
the respondent as security agency did not pay
salary to the security guards by the 7th of each
month and also did not submit bills on time
after making statutory payments of ESI, EPF
and GST. In this deal by agreements, the
security agency was to perform its part by
deploying
the
required
security
guards/supervisors which was performed by
the security agency at first by deploying tis
security guards/supervisors by the 01.06.2018
onwards. Thereafter, it was the respondent to
perform its part by paying for security services
on 01.07.2018 when the salary of security
guards became due to be paid. When
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
Page 5 of 8
respondent had failed to make the payment for
the service rendered for the month of June,
2018 to the security agency where from the
finance for the payment of guards to the
security agency would flow for the payment of
wages on 07.07.2018. This is logical and in
accordance with the para16 (c) of DGR
guidelines that for the first month i.e. of June,
2018, the security agency was to raise its bill
by 30.06.2018 after statutory payments and the
payment of wages must have been made by the
respondent
to
the
security
agency
by
01.07.2018 subject to verification of payment
of salary to the security guards by 07.07.2018
without any delay. The bills of next month i.e.
of July, 2018 could be cleared after
verification of the payments of salary to the
guards for the month of June, 2018 i.e.
previous month and statutory payments for the
month of July, 2018 so that the payment to the
guards could be made by 07.08.2018 without
any delay, and so on. But it was BSNL
instrumental of delay of payments to the
security guards and subsequently started
taking advantage of its own inaction and non-
compliance of the terms and conditions of the
agreements, that too without intimating any
defect to the claimant to take step immediately
to remove the defect, if any required. Over and
above when it came to the knowledge of the
respondent that claimant had not paid salary
to the security guards/supervisors for any
particular month, as per the guidelines and
terms of agreements, it was the duty of
Respondent being Principal Employer, to
make payments of wages to the security guards
and intimate this fact to Security Agency and
DGR. But this is not the case of respondent
that it made any payment of salary directly to
the security guards or took any other step so
that security guards could be paid with their
salary. But surprising no payment was made
by respondent up to October, 2018 except a
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
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payment of Rs.12,13,167/- only on 18.10.2018
against huge outstanding of Rs.48,22,194/- as
on 05.09.2018. The RW1 in response to Q.
No.16 admitted in his cross-examination that
BSNL did not make payments due to non-
availability of funds after referring the para
no.14 of SOD. It has also come in his
statement that BSNL system did not accept the
bills older than 60 days. Thus, there was the
trouble with respondent only in not making
payments as there was non- availability of
funds and their system was another hurdle in
delaying the payments of bills. The Respondent
never bothered to intimate the claimant about
any issue with bills, at once. It has come in
evidence that the bills were duly raised in time
after making statutory deposits, formalities
and payments of salary of the security guards.
It has come in evidence of the claimant that he
made the payment to the security guards by
borrowing money and from personal funds of
proprietor.
13. The above discussion of the facts, evidence
oral and documentary and circumstances of
the case goes to indicate that the fault was on
the part of the respondent in delay of payment
to the security guards as respondent failed to
make any payment on time of outstanding
amount and no fault on the part of the
claimant.”
7.
The learned Arbitral Tribunal directed the appellant to pay to
the respondent a sum of Rs. 18,04,621/- on account of interest on
delayed payments, calculated at the rate of 12% per annum. The
learned Arbitral Tribunal also awarded the cost of the proceedings
amounting to Rs. 82,500/- in favour of the respondent.
8.
Aggrieved by the Award, the appellant challenged the same by
way of an application under Section 34 of the Act, which has been
Signed By:VIJAYA
LAKSHMI DOBHAL
Signing Date:09.05.2025
16:59:32
Signature Not Verified
FAO (COMM) 106/2025
Page 7 of 8
dismissed by the learned District Judge by way of the Impugned
Order.
9.The learned counsel for the appellant submits that the learned Tribunal and the learned District Judge have failed to appreciate that in terms of the agreement between the parties, as also the DGR guidelines that were admittedly applicable to the contract, the respondent was to raise monthly bill along with proof of payments of statutory dues to the workers, that too in a prescribed proforma along with name of location, number of security personnel and duty period duly verified by the Officer in charge of the sector, etc. He submits that in the present case, the invoices that were raised by the respondent, did not adhere to the prescribed format and were not accompanied by the relevant documents, and therefore, there was a delay in processing the same and making payments to the respondent. He submits that, therefore, the respondent was not entitled to any claim of interest for the alleged delay payments. The learned counsel for the appellant further submits that the learned Arbitral Tribunal has attempted to re-write the agreement between the parties.
10.We are unable to accept the above submissions of the learned counsel for the appellant.
11.It needs no reiteration that the power of the Court under Section 34 of the Act is confined to the circumstances that have been mentioned in the said provision. The Court does not act as an Appellate Court against the arbitral award and, therefore, cannot enter into the questions of merit, evidence, or disputed questions of facts to FAO (COMM) 106/2025 arrive at its findings. The Arbitral Tribunal is also the final judge on the interpretation to be placed on the agreement. A similar restriction on power, if not more, is placed on the Appellate Court exercising juri iction under Section 37 of the Act. Reference in this regard is placed on Larsen Air Conditioning and Refrigeration Company v. Union of India & Ors., (2023) 15 SCC 472. 12. The dispute raised by the appellant has been duly considered by the learned Arbitral Tribunal, as would be evident from the extracts of the Award quoted herein above.
13.The learned counsel for the appellant, even otherwise, has not been unable to show to us that, at the relevant time, the respondent was ever informed of any deficiency in the invoices raised by the respondent.
14.Apart from contending that the learned Arbitral Tribunal has re- written the agreements between the parties, no basis for the submission has been shown to us.
15.We, therefore, do not find any merit in the present appeal. The same is, accordingly, dismissed. The pending application(s) are also disposed of.
NAVIN CHAWLA, J
RENU BHATNAGAR, J MAY 2, 2025/ab/my/VS
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