Shyam Sunder v. Surender Singh Verma - Arbitration Appeal

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Shyam Sunder vs Surender Singh Verma & Anr on 23 March, 2026

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 16.03.2026
Judgment pronounced on: 23.03.2026
Judgment uploaded on: 23.03.2026
+ FAO (COMM) 75/2026, CM APPL. 16133/2026 and CM
APPL. 16134/2026
SHYAM SUNDER .....Appellant
Through: Mr. K.S. Sharma, Adv.

                                        versus

                      SURENDER SINGH VERMA & ANR.         .....Respondents
                                   Through: Mr. Akhil Mittal, Ms. Riddhi
                                            Jain and Ms. Shayna Das
                                            Pattayanayak, Advs.

                      CORAM:
                      HON'BLE MR. JUSTICE ANIL KSHETARPAL
                      HON'BLE MR. JUSTICE AMIT MAHAJAN
                                        JUDGMENT ANIL KSHETARPAL, J.:

1. Through the present Appeal under Section 37 of the Arbitration and Conciliation Act, 19961 [hereinafter referred to as „A&C Act‟], the Appellant assails the correctness of the Judgment dated 23.12.2025 [hereinafter referred to as the „Impugned Judgment‟] passed by the learned District Judge in a petition instituted under Section 34 [hereinafter referred to as the „Section 34 Petition‟] of the A&C Act2. By way of the Impugned Judgment, the learned District Judge has declined interference with the Arbitral Award dated 03.06.2025 [hereinafter referred to as the „Award‟] and has upheld the

Section 37

Section 34

same.
2. The challenge laid by the Appellant in the Section 34 Petition
was directed against the findings returned by the learned Sole
Arbitrator [hereinafter referred to as the „Tribunal‟] in respect of its
claims arising out of a Collaboration Agreement executed between the
parties. The Appellant contended that the Award suffered from patent
illegality, inasmuch as material evidence had been ignored, findings
had been returned in the absence of proof, and reliance had been
placed upon documents which were neither duly proved nor
admissible in evidence. The learned District Judge, however, found no
ground to interfere and dismissed the Section 34 Petition.

1. Since the present Appeal arises under Section 37 against an order refusing to set aside the Award, the scope of interference is necessarily circumscribed. The question that arises for consideration is whether the learned District Judge committed any error warranting appellate interference while declining to set aside the Award.

FACTUAL MATRIX:

1.  Before examining the rival submissions advanced on behalf of
             the parties, it would be appropriate to briefly notice the factual
             background giving rise to the present Appeal.
   

2.  The Appellant is engaged in the business of construction,
             whereas Respondent No.1 is the owner of property bearing
             No.1302/13, Khasra No.93, Govindpuri, Kalkaji, New Delhi,
             admeasuring 185 sq. yds [hereinafter referred to as „subject property‟].
             Respondent No.2 is the son of Respondent No.1. The disputes
   
              between the parties arise out of a Collaboration Agreement dated
             25.05.2013 [hereinafter referred to as „Collaboration Agreement‟]
             executed between the Appellant and the Respondent No.1 in respect of
             the subject property.
   

3. In terms of the Collaboration Agreement, the Appellant was
             entrusted with the obligation of undertaking construction from the first
             floor up to the terrace, comprising multiple residential units, while the
             ground floor remained with the Respondent No.1. As per the
             Collaboration Agreement, upon completion of construction, six flats
             would be allocated to the Appellant.
   

4. During the continuance of the said arrangement, Respondent
             No.1 executed a registered Gift Deed transferring an undivided 50%
             share in the property in favour of Respondent No.2. It is the case of
             the Appellant that the said transfer, coupled with the subsequent
             conduct of Respondent No.2, impeded the progress of construction.
             The Respondents, however, dispute the said allegation.
   

5. According to the Appellant, as urged in the Section 34 Petition,
             substantial investments were made towards construction, and the work
             stood completed up to the agreed stage by the year 2016. It is alleged
             that notwithstanding such completion, the Respondents failed to
             convey title and possession of the six flats agreed to be allotted to the
             Appellant and, instead, dealt with certain portions of the property in
             favour of third parties.
   

6. The Respondents, on the other hand, contend that the Appellant
             was in breach of the Collaboration Agreement, having undertaken
             unauthorized construction, which led to the property being sealed by
   
              the Municipal Corporation of Delhi [hereinafter referred to as
             „MCD‟], besides initiation of criminal proceedings. It is further their
             case that the Appellant repeatedly sought extensions, failed to adhere
             to the contractual stipulations, and eventually withdrew from the
             project.
   

7. It is further the stand of the Respondents that the parties brought
   the Collaboration Agreement to an end by executing a Cancellation
   Agreement dated 08.03.2017 [hereinafter referred to as „Cancellation
   Agreement‟], along with certain receipts and undertakings, under
   which the Appellant is stated to have accepted full and final settlement
   of all claims arising out of the arrangement.

8. In view of the disputes that arose between the parties in the
   course of execution of the Collaboration Agreement, inter alia, in
   relation to alleged breaches, financial claims, and the rights and
   obligations flowing from the said arrangement, the Appellant
   instituted a civil suit seeking injunctive relief. During the proceedings,
   the parties agreed to refer the dispute to arbitration in terms of the
   arbitration clause contained in the Collaboration Agreement.

9. A learned Sole Arbitrator [hereinafter referred to as the
   „Tribunal‟] was appointed to adjudicate the disputes between the
   parties. Upon consideration of the material on record and the
   submissions advanced, the Tribunal rendered the Award dated
   03.06.2025, whereby the claims of the Appellant came to be rejected.

10. Aggrieved by the Award, the Appellant instituted the Section 34
    Petition, assailing the Award, inter alia, on the ground that the same
    suffered from patent illegality, perversity and non-consideration of

               material evidence.
    

11.     The learned District Judge, vide the Impugned Judgment dated
              23.12.2025, declined to interfere with the Award and dismissed the
              Section 34 Petition, primarily holding that the findings returned by the
              Tribunal were based on appreciation of evidence and did not warrant
              interference within the limited scope of Section 34. It was further
              observed that the objections raised by the Appellant essentially sought
              re-appreciation of evidence, which is impermissible in proceedings
              under Section 34.
    

12.     Aggrieved by the dismissal of the Section 34 Petition, the
              Appellant has preferred the present Appeal under Section 37.
    

13.     In the aforesaid backdrop, we proceed to notice the submissions
              advanced on behalf of the parties.
    

CONTENTIONS OF THE PARTIES:

1.     Heard learned counsel for the parties and, with their able
             assistance, perused the material on record.
   

2.     Learned Counsel representing the Appellant submits as under:
   

i. The learned District Judge has rejected the challenge
without examining whether the findings of the Tribunal were
supported by legally admissible evidence or suffered from patent
illegality, and has merely affirmed the Award.

ii. The Award is founded upon the alleged Cancellation
Agreement dated 08.03.2017, which was specifically disputed

and not proved in accordance with law. Despite this, the Tribunal

17:33:49
relied upon the same, and the learned District Judge erroneously
treated the issue as one of mere appreciation of evidence.

iii. The findings regarding alleged payments, including cash
transactions, are based on no evidence, in the absence of any
documentary material, financial trail, or corroboration, rendering
the Award perverse. This aspect has been overlooked in the
Impugned Judgment.

iv. Material evidence on record, including documents
reflecting inconsistencies in the Respondents‟ case and lack of
proof of expenditure, has been ignored by the Tribunal, which the
learned District Judge has failed to consider.

v. The findings of the Tribunal are contrary to the terms of
the Collaboration Agreement and the contractual obligations of
the parties, thereby attracting the ground of patent illegality.
19. Per contra, learned Counsel representing the Respondents
submits as under:

i. The scope of interference under Section 37 of the A&C
Act does not permit re-appreciation of evidence or substitution of
the Court‟s view for that of the Tribunal.

ii. It is submitted that the Tribunal has rendered a detailed
and reasoned Award upon due consideration of the pleadings,
evidence, and material on record, and the findings returned
therein are plausible and within its jurisdiction.

iii. The learned District Judge has correctly held that the

objections raised by the Appellant essentially seek a re-
evaluation of evidence and reassessment of factual findings,
which is impermissible under Section 34.

iv. It is further submitted that the findings relating to the
Cancellation Agreement, as well as the transactions between the
parties, are pure findings of fact based on appreciation of
evidence, including documents and oral testimony, and are not
open to interference in proceedings under Sections 34 or 37.
20. No other submissions have been advanced by learned counsel
for the parties.

ANALYSIS AND FINDINGS

1.  This Court has considered the submissions advanced by learned
           Counsel for the parties.
   

2.  At the outset, it would be apposite to delineate the scope of
           interference in an Appeal under Section 37. It is well-settled that the
           jurisdiction of the appellate court under Section 37 is circumscribed
           and does not extend beyond the parameters laid down under Section
   

3.  The Hon‟ble Supreme Court in [MMTC Ltd. v. Vedanta Ltd.3](https://indiankanoon.org/doc/48366848/) has held that while exercising jurisdiction under Section 37, the Court
           cannot undertake an independent assessment of the merits of the
           arbitral award and is only required to examine whether the court
           exercising jurisdiction under Section 34 has acted within the confines
   
               (2019) 4 SCC 163
   
           of the provision.
   

4.  Similarly, in [Punjab State Civil Supplies Corpn. Ltd. v.
          Sanman Rice Mills4](https://indiankanoon.org/doc/197947604/), it has been held that the appellate court, while
          exercising powers under Section 37, does not sit in Appeal over the
          arbitral award and cannot re-appreciate the evidence. The scope of
          interference is confined to examining whether the court under Section
          34 has either exceeded its jurisdiction or failed to exercise jurisdiction
          vested in it.
   

5.  Further, a three-judge Bench of the Hon‟ble Supreme Court in [UHL Power Co. Limited v. State of Himachal Pradesh5](https://indiankanoon.org/doc/146677273/) has reiterated
          that the jurisdiction under Section 37 is even more circumscribed than
          that under Section 34, and the appellate court must exercise restraint
          and cannot substitute its own view for that of the Tribunal.
   

6.  The principle that the Court does not sit in Appeal over the
          findings of the Tribunal has also been emphasized in [McDermott
          International Inc. v. Burn Standard Co. Ltd. & Ors.6](https://indiankanoon.org/doc/996348/), wherein it has
          been observed that the role of the Court is supervisory in nature and
          intervention is warranted only in limited circumstances such as patent
          illegality, violation of natural justice, or jurisdictional error.
   

7.  The Courts have adopted the same consistent view in a catena
          of decisions, a few of which may be adverted to, namely, [Vedanta
          Ltd. v. Shenzhen Shandong Nuclear Power Construction Co. Ltd.7](https://indiankanoon.org/doc/57887874/);
   

2024 SCC OnLine SC 2632

                (2022) 4 SCC 116

                (2006) 11 SCC 181

                (2019) 11 SCC 465

             ONGC Ltd. Western Geco International Ltd.8; [Numaligarh Refinery
            Ltd. v. Daelim Industrial Co. Ltd.9](https://indiankanoon.org/doc/908591/); [Tata Hydro-Electric Power
            Supply Co. Ltd. v. Union of India10](https://indiankanoon.org/doc/1453986/); [Ssangyong Engg. &
            Construction Co. Ltd. v. NHAI11](https://indiankanoon.org/doc/95111828/); and, NHAI v. M. Hakeem12.

1.  Thus, it is well-settled that an Appeal under Section 37 is not an
           avenue for re-appreciation of evidence or re-evaluation of factual
           findings. The enquiry is limited to examining whether the learned
           Court under Section 34 has applied the correct legal principles and
           whether the Award suffers from any infirmity falling within the
           limited grounds of interference recognized under the A&C Act.
   

2.  Tested on the aforesaid principles, the contentions advanced on
           behalf of the Appellant are required to be examined.
   

3.  The principal challenge raised by the Appellant centres around
           the reliance placed by the Tribunal on the Cancellation Agreement
           dated 08.03.2017, which, according to the Appellant, was neither
           proved in accordance with law nor admissible in evidence. It is urged
           that the findings founded thereon stand vitiated, and that the learned
           District Judge has failed to properly examine this aspect.
   

4.  A perusal of the Award, however, indicates that the Tribunal
           has not treated the said document in isolation, but has assessed it in
           conjunction with the attendant circumstances, including the conduct of
           the parties, contemporaneous material, and oral evidence led during
   
               (2014) 9 SCC 263
   
               (2007) 8 SCC 466
   
                (2003) 4 SCC 172
   
                (2019) 15 SCC 131
   
                (2021) 9 SCC 1
   
              the arbitral proceedings. The Tribunal has, upon such evaluation,
             returned a categorical finding as to the existence and effect of the
             Cancellation Agreement.
   

5. In particular, the Tribunal has extracted and relied upon the
   contents of Ex. CW1/R-8, which records receipt of a sum of Rs.
   60,00,000/-, comprising consideration towards two flats as well as
   cash payment, expressly acknowledged as a "full and final settlement"

against Cancellation Agreement. The Tribunal has treated this
document as a contemporaneous acknowledgment of settlement,
bearing directly on the Appellant‟s rights and obligations.
33. The Tribunal has further disbelieved the Appellant‟s attempt to
dilute the evidentiary value of the said document by alleging that
signatures were obtained on blank papers, noting that no foundational
pleading or cogent evidence was led in support of such a plea. The
absence of any such averment, coupled with lack of substantiating
material, has been held to be fatal to the Appellant‟s case.

1. Additionally, the Tribunal has placed reliance upon the
   admissions of CW1 in cross-examination, particularly with respect to
   his signatures on the sale deeds executed in favour of third parties.
   From this, the Tribunal has drawn an adverse inference that the
   transactions were undertaken with the knowledge, consent, and for the
   ultimate benefit of the Appellant, thereby reinforcing the
   Respondent‟s case regarding settlement and adjustment of rights.

2. The Tribunal has also taken into account the admitted execution
   of documents evidencing extension of the Collaboration Agreement,
   as well as its eventual cancellation. The inconsistency in the

              Appellant‟s stand, admitting signatures at some places while denying
             at others, has been held insufficient to dislodge the documentary
             evidence proved against him.
   

3. On a cumulative assessment of the documentary record and oral
   evidence, including the admissions elicited in cross-examination, the
   Tribunal has concluded that the Claimant failed to discharge the
   burden of proof and, in fact, corroborated the defence set up by the
   Respondent. The finding as to the validity and effect of the
   Cancellation Agreement is thus rooted in appreciation of evidence and
   cannot be characterised as perverse or based on no evidence.

4. The learned District Judge, while dealing with this contention,
   has specifically noted that the objection raised by the Appellant
   pertains to the manner of appreciation of evidence and the weight to
   be assigned thereto. It has been held that once the Tribunal has
   considered the material on record and taken a plausible view, the
   Court, in exercise of jurisdiction under Section 34, cannot reassess the
   sufficiency of such material or substitute its own conclusions.

5. This Court finds no infirmity in the aforesaid approach. The
   question whether a document stands proved, as well as the evidentiary
   value to be attached to it, falls within the domain of appreciation of
   evidence led by the parties. The distinction between a finding based
   on "no evidence" and one based on appreciation of available material
   must be borne in mind. In the present case, the findings of the
   Tribunal cannot be said to be unsupported by evidence so as to
   warrant interference within the limited scope of Section 34 or, a
   fortiori, under Section 37.

6. Insofar as the contention relating to alleged payments, including
   cash transactions, is concerned, the Tribunal has returned findings
   based on bills, including lack of proof, absence of linkage to the
   subject property and inconsistencies in invoices and admission made
   by the Appellant. The learned District Judge has rightly observed that
   such findings are rooted in appreciation of evidence, which lies
   exclusively within the domain of the Tribunal, and do not disclose
   perversity or patent illegality.

7. The submission that the findings are based on "no evidence" is,
   in effect, an invitation to reassess the adequacy or reliability of the
   evidence relied upon by the Tribunal. Such an exercise falls outside
   the permissible contours of jurisdiction under Sections 34 and 37. A
   mere possibility of an alternative view would not justify interference
   where the view taken by the Tribunal is a plausible one.

8. Further, the contention that material evidence has been ignored
   also does not merit acceptance. The Award reflects due consideration
   of the documentary and oral evidence on record. The learned District
   Judge has concurred with this position, holding that the objections
   raised by the Appellant seek a re-appreciation of the evidentiary
   record, which is impermissible.

9. The further submission that the findings of the Tribunal are
   contrary to the terms of the Collaboration Agreement is equally
   unavailing. The interpretation of contractual provisions and
   determination of the rights and obligations of the parties fall squarely
   within the jurisdiction of the Arbitral Tribunal. Unless such
   interpretation is shown to be patently illegal or wholly implausible, no

              interference is warranted. No such case is made out in the present
             matter.
   

10. Viewed thus, the learned District Judge has correctly applied
    the settled principles governing interference under Section 34 and has
    neither exceeded nor failed to exercise the jurisdiction vested in it.
    The impugned judgment reflects a conscious application of the limited
    scope of interference and does not suffer from any patent illegality,
    perversity, or jurisdictional error.

CONCLUSION:

1. For the reasons aforesaid, the present Appeal, being devoid of
   merit, is dismissed. The Impugned Judgment dated 23.12.2025 passed
   by the learned District Judge, affirming the Arbitral Award dated
   03.06.2025, calls for no interference.

2. All pending applications, if any, stand disposed of.

ANIL KSHETARPAL, J.

AMIT MAHAJAN, J.

MARCH 23, 2026
s.godara/shah