Steel Authority vs Larsen And Toubro - Arbitration Award Challenge

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Steel Authority Of India Lmited vs Larsen And Toubro Ltd on 23 March, 2026

$~26
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : 23.03.2026

                      +         O.M.P. (COMM) 471/2024

                                STEEL AUTHORITY OF INDIA LMITED                  .....Petitioner
                                                  Through:    Mr. Shaiwal Srivastava & Ms.
                                                              Ghanishtha Mishra, Advs.

                                                  versus

                                LARSEN AND TOUBRO LTD.                .....Respondent
                                            Through: Mr. ER Kumar, Mr. Sameer
                                                     Parekh, Ms. Swati Bhardwaj &
                                                     Ms. Aditi, Advs.
                                CORAM:
                                HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
                                SHANKAR

                      %                           JUDGEMENT (ORAL)

                      HARISH VAIDYANATHAN SHANKAR, J. 1.        The present Petition has been filed under Section 34 of the
                      Arbitration and Conciliation Act, 19961, laying a limited challenge
                      to the Arbitral Award dated 30.06.20232, insofar as it pertains to the
                      issue of CENVAT/input tax credit.

1.    Learned counsel appearing on behalf of the Petitioner submits
                     that the impugned Award is liable to be set aside as the learned
                     Majority Arbitral Tribunal has returned erroneous findings of fact. It is
                     contended that the documents furnished by the Respondent were 1 Act 2 Impugned Award Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024                                     Page 1 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 insufficient and did not enable the Petitioner to avail the input tax
                     credit.
   

2.    Per contra, learned counsel appearing for the Respondent
                     submits that the central issue before the learned Arbitral Tribunal, as
                     also before this Court, is whether the Petitioner had taken any steps
                     whatsoever to avail the input tax credit. It is submitted that all
                     requisite documents were duly furnished to the Petitioner and that
                     there was no deficiency on the part of the Respondent.
   

3.    It is further submitted that the Petitioner, on the basis of the
                     documents so furnished, had reimbursed the Respondent towards the
                     amounts paid on account of CENVAT and VAT, which itself
                     demonstrates that the Petitioner had accepted the sufficiency of the
                     documents. He also places reliance upon paragraph nos. 104 and 105
                     of the Impugned Award to contend that the issue stands concluded in
                     terms of the reasoning adopted therein. The said paragraphs are
                     reproduced hereinbelow:
   

"104. The Claimant's contention is valid in asserting that the Respondent's
inability or failure to utilize the credit does not imply any default on the
part of the Claimant. The Claimant argues that their obligations do not
extend to ensuring the actual payment of taxes so that the credit for
CENVAT, VAT, and VAT on Works Contract is passed on to the
Respondent. This argument finds support in a judgment rendered by the
Hon'ble Delhi High Court in a case involving the same parties, Steel
Authority of India Ltd. (Respondent) vs. Larsen & Toubro Ltd.
(Claimant), reported in 2021 SCC Online Del 4065. The relevant part of
the judgment reads as under:

"28. It is SAIL's grievance that although it had availed of CENVAT
credit in the sum of Rs. 8.36,32, 168/, it could not avail the balance.
Accordingly, SAIL clarified that L&T was liable to pay a sum of Rs.
7,60,97,027/- as a shortfall of the minimum guarantee credit on
account of CENVAT and MiT on WCT. The Arbitral Tribunal found
that in fact, L&T had paid actual taxes amounting to Rs.
16,46,35,688/-and therefore, CENVAT and VAT on WTC was
available to SAIL to the aforesaid extent. The fact that SAIL. did not
or could not avail of the credit does not in any manner. lead to the Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 2 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 conclusion that La-2 had defaulted in its obligations. L&T's
obligations extended to paying actual taxes so that the credit on
account of CENAT, VAT and VAT on Works Contract Credit was
passed on to SAIL. Since it was found that L& T had in fact paid
taxes amounting to Rs. 16,46,35,688/- and a credit to the aforesaid
extent was available to SAIL, L&T had performed its obligations. In
view of the above, the Arbitral Tribunal rejected SAIL's
counterclaim and rightly so. The contention that the impugned award
is perverse or patently erroneous on this ground, is without any
merit."
105. Subsequently, in appeal, the aforementioned judgment was upheld by
the Hon'ble Division Bench of the Delhi High Court in 2023 SCC Online
Del 4457. The relevant paragraph of the judgment passed by the Division
Bench is as follows:

"10. As regards, the second contention raised on behalf of appellant
regarding its entitlement to deduct sum of Rs. 7,60,97,027/- payable
by respondent on account of CENVAT and VAT on works contract,
this Court finds no merit in the same. On the said aspect, Arbitral
Tribunal has held as follows:

„20. The Claimant in his written submissions argued that input
credit related rules in respect to the two indirect taxes were
changed on a few occasions and input credit on VAT on WCT
was not available. A combined reading of invitation for bid, the
contract agreement including the technical specifications, the
GCC and the SC shows that amounts guaranteed towards
CENPAT etc. were the commitment of the claimant. Further,
Respondent was entitled to claim a credit against these payments
made by the claimant on their behalf. Guaranteed CENVAT etc.
were irrespective of final value of the contract on account of any
variations due to items or their rates and that the shortfall in credit
could be deducted. However, it is clear from the documents made
available which have not been contested by the Respondent that
payment of Rs. 16.46 crores has been made towards this
particular item as against the minimum guarantee of Rs. 15,97,29,
195/- on the revised contract. / is also notable that claiming of
input credit is the responsibility of the employer in accordance
with the extant regulations. It is further notable that input credit
on VAT paid on Works contract was not available under the
relevant regulations. This argument on behalf of the Claimant was
not challenged by the Respondent. Even from the language of
clause 19. 1.h of the invitation for Bid is can be seen that
availability of input credit on VAT on ICT was uncertain as is
indicated by the use of phrase if any in the second line of the
clause as reproduced in para 14 above, therefore the Respondent
could not have held unavailability of Input credit against the
claimant. We are, therefore, inclined to accept the arguments
rendered by the claimant and do not accept the argument of the Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 3 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 Respondent that an amount of Rs. 7.60.97.0274 was due from the
claimant because neither the Respondent has proved as to which
documents had not been made available by the claimant because
of which Respondent was prevented from claiming the input
credit for remaining amount nor the Respondent has been able to
deny the fact that an amount of Rs. 16.46 crores had been paid by
the claimant towards this item. According to the statement made
available by the claimant to the tribunal their payments towards
these indirect taxes have been as follows-
Sl. Particulars Revised amount of Actual Amount
No. Taxes per final value of Taxes Paid
of executed contract
1. Minimum 10,28,95,508/- 10,28,95,508/-
Guaranteed
CENVAT
2. Minimum 5,68,33,687/- 5,68,33,687/-
Guaranteed
VAT on WCT
15,97,29,195/- 15,97,29,195/-
These facts have not been contested by the Respondent. It is
therefore clear that claimant has discharged its aggregate
responsibility in this respect though it deposited Rs. 64,86.477/-
less against the CEVAT head. However, since the commitment is
towards filling up the shortfall, the commitment has been more
than fulfilled by paying excess against VAT on WCT.‟

1. Upholding the award on the aforesaid aspect, learned Single
   Judge has held as follows--

2. It is SAIL's grievance that although it had availed of
   CENIAT credit in the sum of Rs. 8,36,32,1684, it could not
   avail the balance. Accordingly, SAIL claimed that L&T was
   liable to pay a sum of Rs. 7,60,97,027/- as a shortfall of the
   minimum guarantee credit on account of CENVAT and VAT on
   WCT. The Arbitral Tribunal found that in fact, L&T had paid
   actual taxes amounting to Rs. 16.46,35,688/- and therefore,
   CENVAT and WAT on WTC was available to SAIL to the
   aforesaid extent. The fact that SAIL did not or could not avail of
   the credit, does not in any manner, lead to the conclusion thar
   L&T had defaulted in its obligations. L&T obligations extended
   to paying actual taxes so that the credit on account of CENAT,
   VAT and VAT on Works Contract Credit was passed on to
   SAIL. Since it was found that L& T had in fact paid taxes
   amounting to Rs. 16,46.35,688/- and a credit to the aforesaid
   extent was available to SAIL, L&T had performed its
   obligations. In view of the above, the Arbitral Tribunal rejected
   SAIL's counter claim and rightly so. The contention that the Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 4 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 impugned award is perverse or patently erroneous on this
   ground, is without any merit."

3.    This Court has heard learned counsel for the parties and perused
                     the impugned award as well as the material on record.
   

1. At the outset, it is apposite to note that this Court remains conscious of the limited scope of its jurisdiction while examining an objection petition under Section 34 of the Act. There is a consistent and evolving line of precedents whereby the Hon‟ble Supreme Court has authoritatively delineated and settled the contours of judicial intervention in such proceedings. In this regard, a three-Judge Bench of the Hon‟ble Supreme Court, after an exhaustive consideration of a catena of earlier judgments, in OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions (India) (P) Ltd.3, while dealing with the grounds of conflict with the public policy of India and patent illegality, grounds which have also been urged in the present case, made certain pertinent observations, which are reproduced hereunder:

"Relevant legal principles governing a challenge to an arbitral
award

1. Before we delve into the issue/sub-issues culled out above, it would be useful to have a look at the relevant legal principles governing a challenge to an arbitral award. Recourse to a court against an arbitral award may be made through an application for setting aside such award in accordance with sub-sections (2), (2-A) and (3) of Section 34 of the 1996 Act. Sub-section (2) of Section 34 has two clauses, (a) and (b). Clause (a) has five sub-clauses which are not relevant to the issues raised before us. Insofar as clause (b) is concerned, it has two sub-clauses, namely, (i) and (ii). Sub- clause (i) of clause (b) is not relevant to the controversy in hand. Sub-clause (ii) of clause (b) provides that if the Court finds that the arbitral award is in conflict with the public policy of India, it may set aside the award.

Public policy

1. "Public policy" is a concept not statutorily defined, though it has been used in statutes, rules, notification, etc. since long, and is 3 (2025) 2 SCC 417 Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 5 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 also a part of common law. Section 23 of the Contract Act, 1872 uses the expression by stating that the consideration or object of an agreement is lawful, unless, inter alia, opposed to public policy. That is, a contract which is opposed to public policy is void.

---

1. What is clear from above is that for an award to be against public policy of India a mere infraction of the municipal laws of India is not enough. There must be, inter alia, infraction of fundamental policy of Indian law including a law meant to serve public interest or public good.

---

                             The 2015 Amendment in [Sections 34](https://indiankanoon.org/doc/1219022/) and [48](https://indiankanoon.org/doc/369807/)

1. The aforementioned judicial pronouncements were all prior to the 2015 Amendment. Notably, prior to the 2015 Amendment the expression "in contravention with the fundamental policy of Indian law" was not used by the legislature in either Section 34(2)(b)(ii) or Section 48(2)(b). The pre-amended Section 34(2)(b)(ii) and its Explanation read:

---

1. By the 2015 Amendment, in place of the old Explanation to Section 34(2)(b)(ii), Explanations 1 and 2 were added to remove
   any doubt as to when an arbitral award is in conflict with the public
   policy of India.

2. At this stage, it would be pertinent to note that we are dealing
   with a case where the application under Section 34 of the 1996 Act
   was filed after the 2015 Amendment, therefore the newly
   substituted/added Explanations would apply [Ssangyong Engg. &
   Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131].

3. The 2015 Amendment adds two Explanations to each of the
   two sections, namely, Section 34(2)(b)(ii) and Section 48(2)(b), in
   place of the earlier Explanation. The significance of the newly
   inserted Explanation 1 in both the sections is two-fold. First, it does
   away with the use of words : (a) "without prejudice to the
   generality of sub-clause (ii)" in the opening part of the pre-
   amended Explanation to Section 34(2)(b)(ii); and (b) "without
   prejudice to the generality of clause (b) of this section" in the
   opening part of the pre-amended Explanation to Section 48(2)(b);
   secondly, it limits the expanse of public policy of India to the three
   specified categories by using the words "only if".
   Whereas, Explanation 2 lays down the standard for adjudging
   whether there is a contravention with the fundamental policy of
   Indian law by providing that a review on merits of the dispute shall
   not be done. This limits the scope of the enquiry on an application
   under either Section 34(2)(b)(ii) or Section 48(2)(b) of the 1996
   Act.

1. The 2015 Amendment by inserting sub-section (2-A) in Section
   34, carves out an additional ground for annulment of an arbitral Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 6 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 award arising out of arbitrations other than international
   commercial arbitrations. Sub-section (2-A) provides that the Court
   may also set aside an award if that is vitiated by patent illegality
   appearing on the face of the award. This power of the Court is,
   however, circumscribed by the proviso, which states that an award
   shall not be set aside merely on the ground of an erroneous
   application of the law or by reappreciation of evidence.

2. Explanation 1 to Section 34(2)(b)(ii), specifies that an arbitral
   award is in conflict with the public policy of India, only if:

(i) the making of the award was induced or affected by fraud or
corruption or was in violation of Section 75 or Section 81; or

(ii) it is in contravention with the fundamental policy of Indian law;

or

(iii) it is in conflict with the most basic notions of morality or
justice.
49. In the instant case, there is no allegation that the making of the
award was induced or affected by fraud or corruption, or was in
violation of Section 75 or Section 81. Therefore, we shall confine
our exercise in assessing as to whether the arbitral award is in
contravention with the fundamental policy of Indian law, and/or
whether it conflicts with the most basic notions of morality or
justice. Additionally, in the light of the provisions of sub-section
(2-A) of Section 34, we shall examine whether there is any patent
illegality on the face of the award.

is any patent illegality on the face of the award.

1. Before undertaking the aforesaid exercise, it would be apposite to consider as to how the expressions:

(a) "in contravention with the fundamental policy of Indian law";

(b) "in conflict with the most basic notions of morality or justice";

and

(c) "patent illegality" have been construed.
In contravention with the fundamental policy of Indian law

1. As discussed above, till the 2015 Amendment the expression "in contravention with the fundamental policy of Indian law" was not found in the 1996 Act. Yet, in Renusagar Power Co. Ltd. v. General Electric Co., 1994 Supp (1) SCC 644, in the context of enforcement of a foreign award, while construing the phrase "contrary to the public policy", this Court held that for a foreign award to be contrary to public policy mere contravention of law would not be enough rather it should be contrary to:

(a) the fundamental policy of Indian law; and/or

(b) the interest of India; and/or

(c) justice or morality.

---

1. The legal position which emerges from the aforesaid discussion
   is that after "the 2015 Amendments" in Section 34(2)(b)(ii) and Section 48(2)(b) of the 1996 Act, the phrase "in conflict with the Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 7 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 public policy of India" must be accorded a restricted meaning in
   terms of Explanation 1. The expression "in contravention with the
   fundamental policy of Indian law" by use of the word
   "fundamental" before the phrase "policy of Indian law" makes the
   expression narrower in its application than the phrase "in
   contravention with the policy of Indian law", which means mere
   contravention of law is not enough to make an award vulnerable.
   To bring the contravention within the fold of fundamental policy of
   Indian law, the award must contravene all or any of such
   fundamental principles that provide a basis for administration of
   justice and enforcement of law in this country.
   asis for administration of justice and enforcement of law in this
   country.

2. Without intending to exhaustively enumerate instances of such
   contravention, by way of illustration, it could be said that:

(a) violation of the principles of natural justice;

(b) disregarding orders of superior courts in India or the binding
effect of the judgment of a superior court; and

(c) violating law of India linked to public good or public interest,
are considered contravention of the fundamental policy of
Indian law.
However, while assessing whether there has been a contravention
of the fundamental policy of Indian law, the extent of judicial
scrutiny must not exceed the limit as set out in Explanation 2 to Section 34(2)(b)(ii).

---

                             Patent illegality

1. Sub-section (2-A) of Section 34 of the 1996 Act, which was
   inserted by the 2015 Amendment, provides that an arbitral award
   not arising out of international commercial arbitrations, may also
   be set aside by the Court, if the Court finds that the award is visited
   by patent illegality appearing on the face of the award. The proviso
   to sub-section (2-A) states that an award shall not be set aside
   merely on the ground of an erroneous application of the law or by
   reappreciation of evidence.

2. In ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705, while
   dealing with the phrase "public policy of India" as used in Section
   34, this Court took the view that the concept of public policy
   connotes some matter which concerns public good and public
   interest. If the award, on the face of it, patently violates statutory
   provisions, it cannot be said to be in public interest. Thus, an award
   could also be set aside if it is patently illegal. It was, however,
   clarified that illegality must go to the root of the matter and if the
   illegality is of trivial nature, it cannot be held that award is against
   public policy.

it cannot be held that award is against public policy.

1. In Associate Builders v. DDA, (2015) 3 SCC 49, this Court Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 8 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 held that an award would be patently illegal, if it is contrary to:

(a) substantive provisions of law of India;

(b) provisions of the 1996 Act; and

(c) terms of the contract [See also three-Judge Bench decision of
this Court in State of Chhattisgarh v. SAL Udyog (P) Ltd.,
(2022) 2 SCC 275].
The Court clarified that if an award is contrary to the substantive
provisions of law of India, in effect, it is in contravention of Section 28(1)(a) of the 1996 Act. Similarly, violating terms of the
contract, in effect, is in contravention of Section 28(3) of the 1996
Act.

1. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019)
   15 SCC 131 this Court specifically dealt with the 2015
   Amendment which inserted sub-section (2-A) in Section 34 of the
   1996 Act. It was held that "patent illegality appearing on the face of
   the award" refers to such illegality as goes to the root of matter, but
   which does not amount to mere erroneous application of law. It was
   also clarified that what is not subsumed within "the fundamental
   policy of Indian law", namely, the contravention of a statute not
   linked to "public policy" or "public interest", cannot be brought in
   by the backdoor when it comes to setting aside an award on the
   ground of patent illegality [ See Ssangyong Engg. & Construction
   Co. Ltd. v. NHAI, (2019) 15 SCC 131]. Further, it was observed,
   reappreciation of evidence is not permissible under this category of
   challenge to an arbitral award [See Ssangyong Engg. &
   Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131].
   Perversity as a ground of challenge

2. Perversity as a ground for setting aside an arbitral award was
   recognised in ONGC Ltd. v. Western Geco International Ltd.,
   (2014) 9 SCC 263. Therein it was observed that an arbitral decision
   must not be perverse or so irrational that no reasonable person
   would have arrived at the same. It was observed that if an award is
   perverse, it would be against the public policy of India.

3. In Associate Builders v. DDA, (2015) 3 SCC 49 certain tests
   were laid down to determine whether a decision of an Arbitral
   Tribunal could be considered perverse. In this context, it was
   observed that where:

(i) a finding is based on no evidence; or

(ii) an Arbitral Tribunal takes into account something irrelevant to
the decision which it arrives at; or

(iii) ignores vital evidence in arriving at its decision, such decision
would necessarily be perverse.
However, by way of a note of caution, it was observed that when a
court applies these tests it does not act as a court of appeal and,
consequently, errors of fact cannot be corrected. Though, a possible
view by the arbitrator on facts has necessarily to pass muster as the
arbitrator is the ultimate master of the quantity and quality of Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 9 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 evidence to be relied upon. It was also observed that an award
based on little evidence or on evidence which does not measure up
in quality to a trained legal mind would not be held to be invalid on
that score.

be held to be invalid on that score.

1. In Ssangyong Engg. & Construction Co. Ltd. v. NHAI, (2019)
   15 SCC 131, which dealt with the legal position post the 2015
   Amendment in Section 34 of the 1996 Act, it was observed that a
   decision which is perverse, while no longer being a ground for
   challenge under "public policy of India", would certainly amount to
   a patent illegality appearing on the face of the award. It was pointed
   out that an award based on no evidence, or which ignores vital
   evidence, would be perverse and thus patently illegal. It was also
   observed that a finding based on documents taken behind the back
   of the parties by the arbitrator would also qualify as a decision
   based on no evidence inasmuch as such decision is not based on
   evidence led by the parties, and therefore, would also have to be
   characterised as perverse [ See Ssangyong Engg. & Construction
   Co. Ltd. v. NHAI, (2019) 15 SCC 131].

2. The tests laid down in Associate Builders v. DDA, (2015) 3
   SCC 49 to determine perversity were followed in Ssangyong
   Engg. & Construction Co. Ltd. v. NHAI, (2019) 15 SCC 131 and
   later approved by a three-Judge Bench of this Court in Patel Engg.
   Ltd. v. North Eastern Electric Power Corpn. Ltd., (2020) 7 SCC 167.

3. In a recent three-Judge Bench decision of this Court in DMRC
   Ltd. v. Delhi Airport Metro Express (P) Ltd., (2024) 6 SCC 357,
   the ground of patent illegality/perversity was delineated in the
   following terms: (SCC p. 376, para 39)
   "39. In essence, the ground of patent illegality is available
   for setting aside a domestic award, if the decision of the
   arbitrator is found to be perverse, or so irrational that no
   reasonable person would have arrived at it; or the
   construction of the contract is such that no fair or
   reasonable person would take; or, that the view of the
   arbitrator is not even a possible view. A finding based on
   no evidence at all or an award which ignores vital
   evidence in arriving at its decision would be perverse and
   liable to be set aside under the head of "patent illegality".
   An award without reasons would suffer from patent
   illegality. The arbitrator commits a patent illegality by
   deciding a matter not within its jurisdiction or violating a
   fundamental principle of natural justice."

e to be set aside under the head of "patent illegality". An
award without reasons would suffer from patent illegality.
The arbitrator commits a patent illegality by deciding a
matter not within its jurisdiction or violating a Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 10 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 fundamental principle of natural justice."

Scope of interference with an arbitral award

1. The aforesaid judicial precedents make it clear that while
   exercising power under Section 34 of the 1996 Act the Court does
   not sit in appeal over the arbitral award. Interference with an
   arbitral award is only on limited grounds as set out in Section 34 of
   the 1996 Act. A possible view by the arbitrator on facts is to be
   respected as the arbitrator is the ultimate master of the quantity and
   quality of evidence to be relied upon. It is only when an arbitral
   award could be categorised as perverse, that on an error of fact an
   arbitral award may be set aside. Further, a mere erroneous
   application of the law or wrong appreciation of evidence by itself is
   not a ground to set aside an award as is clear from the provisions of
   sub-section (2-A) of Section 34 of the 1996 Act.
   n error of fact an arbitral award may be set aside. Further, a mere
   erroneous application of the law or wrong appreciation of evidence
   by itself is not a ground to set aside an award as is clear from the
   provisions of sub-section (2-A) of Section 34 of the 1996 Act.

2. In Dyna Technologies (P) Ltd. v. Crompton Greaves Ltd.,
   (2019) 20 SCC 1, paras 27-43, a three-Judge Bench of this Court
   held that courts need to be cognizant of the fact that arbitral awards
   are not to be interfered with in a casual and cavalier manner, unless
   the court concludes that the perversity of the award goes to the root
   of the matter and there is no possibility of an alternative
   interpretation that may sustain the arbitral award. It was observed
   that jurisdiction under Section 34 cannot be equated with the
   normal appellate jurisdiction. Rather, the approach ought to be to
   respect the finality of the arbitral award as well as party's autonomy
   to get their dispute adjudicated by an alternative forum as provided
   under the law.

3. In the present case, the learned Majority Arbitral Tribunal has,
                     upon appreciation of the material on record, returned a categorical
                     finding, as noted in paragraph nos. 110 and 111 of the impugned
                     Award, that the Petitioner had not taken any steps to avail the input
                     tax credit, including by making an application before the concerned
                     authorities. The relevant paragraphs of the Impugned Award are
                     reproduced hereinbelow:
   

"110. Moreover, the absence of any submitted documents by the
Respondent is conspicuous. These documents were relevant to
show that the guaranteed amount of credit could not be availed
for any reason attributable to the Claimant. The Respondent's Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 11 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 acknowledgment of the higher taxes paid and documents
provided by the Claimant, underscores the validity of the
Claimant's position.

1. In view of the above discussion, the Tribunal finds merit in Claimant's contentions and does not accept the argument of the Respondent that an amount of Rs. 8.85 crore was due towards the alleged shortfall in the Minimum Guaranteed Amount. Neither the Respondent has been able to prove which documents were not made available by the Claimant because of which Respondent was prevented from claiming the input credit for remaining amount nor the Respondent has been able to deny the fact that an amount of Rs. 69.74 crores had been paid by the Claimant towards taxes."
2. Once such a finding is returned, the substratum of the Petitioner‟s challenge stands eroded. In the absence of any attempt on the part of the Petitioner to avail the input tax credit, the contention that the documents furnished by the Respondent were insufficient becomes inconsequential.

1.  The learned Majority Arbitral Tribunal has also taken note of
                     the fact that the Petitioner had reimbursed the Respondent towards the
                     amounts paid on account of CENVAT and VAT, which lends further
                     support to the conclusion that the documents furnished were acted
                     upon.
   

2. In the present petition, the contentions sought to be urged
                     clearly fall beyond the limited scope of scrutiny permissible under [Section 34](https://indiankanoon.org/doc/1219022/) of the Act. It is well-settled, as reiterated in [OPG Power](https://indiankanoon.org/doc/8285957/) (supra) and the consistent line of precedents of the Hon‟ble Supreme
                     Court, that interference in such jurisdiction is confined to grounds of
                     patent illegality, perversity, or conflict with the public policy of India.
                     Upon consideration of the contentions noted hereinabove, this Court is
                     of the view that none of them meets the threshold warranting
                     interference with the impugned award rendered in favour of the Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024                                            Page 12 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37 Respondent.
   

3. The view taken by the learned Majority Arbitral Tribunal is a
   plausible and reasonable view based on the material placed before it.
   This Court finds no perversity or patent illegality in the said findings
   so as to warrant interference under Section 34 of the Act.

4. In view of the foregoing, the present Petition stands dismissed.

5. At this stage, this Court notes that the Petitioner had deposited
   the awarded amount, which, vide Order dated 20.01.2025, was
   permitted to be withdrawn by the Respondent/Decree Holder, subject
   to furnishing a Bank Guarantee.

6. In view of the findings returned hereinabove, and there being no
   ground to interfere with the impugned Award, the said Bank
   Guarantee is directed to be released in favour of the Respondent.

7. List before the learned Joint Registrar on 02.04.2026 for the
   limited purpose, i.e. releasing of the Bank Guarantee.

8. Accordingly, the present Petition, along with pending
   Application(s), if any, stands disposed of in the aforesaid terms.

HARISH VAIDYANATHAN SHANKAR, J.

MARCH 23, 2026/ v/va/jk Signature Not Verified Digitally Signed O.M.P. (COMM) 471/2024 Page 13 of 13 By:HARVINDER KAUR BHATIA Signing Date:25.03.2026 19:01:37