M/S C & C CONSTRUCTIONS LTD.versusIRCON INTERNATIONAL LTD.

                [2025] 1 S.C.R. 1413 : 2025 INSC 138

                     M/s C & C Constructions Ltd.
                                 v.
                       IRCON International Ltd.
                      (Civil Appeal No. 6657 of 2023)
                               31 January 2025
               [Abhay S. Oka* and Ujjal Bhuyan, JJ.]


                           Issue for Consideration
       Matter pertains to the order passed by the Division Bench of the
       High Court, dismissing an appeal u/s.37 of the Arbitration and
       Conciliation Act, 1996, holding that the requirement of clause 49.5
       was never waived by the respondent, that clause 49.5 was a valid
       clause, upheld the arbitral award.

                                  Headnotes†
       Arbitration and Conciliation Act, 1996 – s.37 – Arbitration
       award – Scope of interference in an appeal u/s.37 – Dispute
       between the appellant and the respondent over construction
       of Road Over Bridges – Case of the appellant that delay
       in construction work for the reasons attributable to the
       respondent, resulted in additional financial burdens – Appellant
       sought extension of time, and the same was extended by the
       respondent – Appellant then sought damages on account
       of delay on part of the respondent, however, the claims
       rejected – Thereafter, undertakings by the appellant that it
       would not claim anything extra other than escalation for
       the work executed – Two years later, the appellant invoked
       arbitration clause on basis of the claims raised – Arbitral
       tribunal rejected the claims based on clause 49.5 of GCC
       which disentitles the appellant from raising any claim for
       damages or compensation for failure or delay caused by the
       respondent in fulfilling its obligations under the contract –
       Petition u/s.34 by the appellant – Dismissed by the Single
       Judge of the High Court holding that the clause 49.5 would
       bar the appellant’s claim – Appeal before the Division Bench
       u/s.37 also dismissed – Correctness:


* Author
1414                                                          [2025] 1 S.C.R.

                         Supreme Court Reports


    Held: Scope of interference in an appeal u/s.37, in examining an
    order, setting aside or refusing to set aside an award, is limited
    and restricted – On facts, the appellant acted upon clause 49.5
    and sought an extension of time on three occasions – Solemn
    undertaking by the appellant not to make any claim other than
    escalation in respect of delays in the completion of work, however,
    claim made contrary to the undertakings – By the undertakings, the
    appellant agreed not to make a claim contrary to what is provided
    in clause 49.5, thus, by conduct, the appellant was estopped from
    challenging the validity of clause 49.5 – Furthermore, Clause 49.4
    would apply when the delay is not due to the respondent – In the said
    matter, the delay was on the part of the respondent, hence, clause
    49.5 would apply and not clause 49.4 – Also it cannot be inferred
    that clause 49.5 was waived by the respondent – Respondent
    stated that the claim for financial burden would have to be dealt with
    together with the proposal for an extension of time, and the said
    claim cannot be processed separately – Thus, on two occasions,
    on specific requests made by the appellant under clause 49 of
    the GCC, the extension of time was granted by the respondent –
    Except sub-clause 5 of clause 49, no other sub-clause which
    provides for grant of extension when the delay was attributable
    to the respondent – Thus, the order passed by the Division
    Bench upheld – General Conditions of Contract – Clause 49.5.
    [Paras 19, 23, 26-29]

                             Case Law Cited
    Larsen Air Conditioning and Refrigeration Company v. Union of
    India and Ors. [2023] 11 SCR 86 : (2023) 15 SCC 472; Konkan
    Railway Corporation Limited v. Chenab Bridge Project Undertaking
    [2023] 11 SCR 215 : (2023) 9 SCC 85 – relied on.
    Pam Developments Pvt. Ltd. v. State of West Bengal [2019] 9
    SCR 252 : (2019) 8 SCC 112; ONGC v. Wig Brothers Builders
    and Engineers Private Limited (2010) 13 SCC 377 – referred to.

                                List of Acts
    Arbitration and Conciliation Act, 1996.

                             List of Keywords
    Arbitration award; Arbitral award; Arbitration clause; Scope of
    interference in appeal u/s.37; Construction of Road Over Bridges;
    Delay in construction work; Additional financial burdens; Extension
[2025] 1 S.C.R.                                                             1415

        M/s C & C Constructions Ltd. v. IRCON International Ltd.


     of time; Damages; Escalation for the work executed; Claim for
     damages or compensation; Solemn undertaking; Estopped from
     challenging validity of clause 49.5; Delay; Financial burden; General
     Conditions of Contract Clause 49.5.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 6657 of 2023
     From the Judgment and Order dated 01.03.2021 of the High Court
     of Delhi at New Delhi in FAO (OS) (COMM) No. 36 of 2021

                         Appearances for Parties
     Vikas Goel, Tarun Dua, Ritesh Sharma, Pragun Dua, Ms. Anisha
     Dahiya, Deepal Hooda, Rahul Shyam Bhandari, Advs. for the
     Appellant.
     Gaurav Pachnanda, Sr. Adv., Sidhant Goel, Mohit Goel, Shubham S
     Saxena, Karmanya D Sharma, Ms. Nikita Jaitly, Ms. Avni Sharma,
     Sahil Tagotra, Advs. for the Respondent.

                Judgment / Order of the Supreme Court

                                 Judgment

     Abhay S. Oka, J.

     FACTUAL ASPECTS
1.   This appeal arises out of the impugned judgment and order of the
     Division Bench of the High Court of Delhi dated 1st March, 2021,
     which is passed in an appeal under Section 37 of the Arbitration and
     Conciliation Act, 1996 (for short, ‘the Arbitration Act’).
2.   We refer to a few factual aspects of the case. An agreement dated
     28th June, 2012 was entered into between the appellant and the
     respondent for constructing five Road Over Bridges (for short, ‘ROBs’)
     and their approaches at different locations in the State of Rajasthan.
     The schedule of completion in respect of each ROB was different. The
     locations where ROBs were to be constructed have been described
     as LC-200, LC-89, LC-228, LC-233 and LC-108. According to the
     appellant’s case, the work at the sites was delayed for the reasons
     attributable to the respondent. According to the appellant’s case,
1416                                                       [2025] 1 S.C.R.

                        Supreme Court Reports


     the respondent withdrew the work relating to the construction of two
     ROBs (LC-200 and LC-233) from the scope of work and certified
     the completion of the remaining work. There is no dispute that we
     are not concerned with LC-200 and LC-233 in this appeal. In the
     case of LC-89 and LC-228, the scheduled completion date was 15th
     September, 2013. For LC-108, it was 16th July, 2013. As per the
     completion certificate dated 22nd March 2016, the work of LC-89
     was completed on 8th October 2014, and the work of LC-228 was
     completed on 21st March 2015. According to the appellant’s case,
     work at LC-108 was completed on 31st March 2017.
3.   On 19th June 2013, the appellant addressed a letter to the respondent’s
     General Manager stating that the construction delay of ROBs at LC-
     108 was due to various hindrances at the site. By the said letter,
     the appellant requested the respondent to grant an extension of
     264 days. The appellant contended that the delay in construction
     work has resulted in an additional financial burden on account of the
     establishment and overheads, etc., for a longer period than planned,
     for which the appellant would be claiming separately. By the reply
     dated 14th October 2013, the respondent informed the appellant that
     the statement of the appellant that it would be claiming separately
     for financial burden was not acceptable. The respondent stated
     that the claim would have to be considered along with the prayer
     for extension. Therefore, the respondent requested the appellant
     to submit a detailed claim immediately so that the prayer for an
     extension of time could be considered. Separate letters dated 30th
     August, 2013 were addressed by the appellant to the respondent
     regarding LC-89 and LC-228 for grant of extension by 430 and
     437 days, respectively. By a letter dated 29th November, 2013, the
     respondent granted an extension of time as follows:

        LC No.        Extension Upto                 Penalty
        228           20th March, 2014               With Penalty
        89            28th February, 2014            With Penalty
        108           31st March, 2014               Without Penalty

4.   On 28th February, 2014, 09th April, 2014 and 19th April, 2014, the
     appellant again applied for a grant extension of time regarding LC
     Nos. 89, 228 and 108, respectively. By a letter dated 24th May, 2014,
     the respondent granted an extension of time as follows:
[2025] 1 S.C.R.                                                        1417

        M/s C & C Constructions Ltd. v. IRCON International Ltd.



          LC No.             Extension Upto                  Penalty
            228             31st January, 2015           Without Penalty
             89            30th November, 2014           Without Penalty
            108            15th December, 2014           Without Penalty

5.   By letters dated 03rd September, 2014, the appellant submitted
     separate claims concerning the three ROBs for damages on account
     of the delay on the part of the respondent. By letters dated 14th
     October, 2014, the respondent rejected the claims. The appellant
     applied for further extension of time by letters dated 08th January,
     2015. In response, the respondent addressed a letter dated 09th
     January, 2015 by which the appellant was called upon to give
     undertakings to the effect that the appellant will not claim anything
     extra other than escalation for the work executed. The appellant
     submitted undertakings on 14th January, 2015 accordingly.
6.   The appellant invoked the arbitration clause on 25th January 2017.
     The appellant filed a statement making a claim for Rs. 44.11 crores
     under 15 substantive heads besides the claim of interest and costs.
     The respondent filed its statement of defence on 25th August, 2017.
7.   The respondent filed an application under Section 16(2) of the
     Arbitration Act. It was contended in the said application that clause
     49.5 of the General Conditions of Contract (for short, ‘GCC’) disentitles
     the appellant from raising any claim for damages or compensation for
     failure or delay caused by the respondent in fulfilling its obligations
     under the contract. The Arbitral Tribunal passed the order in the
     respondent’s application under Section 16 of the Arbitration Act in
     nature of an award dated 21st December, 2019 by which all claims
     were rejected based on clause 49.5 of GCC.
8.   Aggrieved by the impugned award dated 21st December 2019, the
     appellant preferred a petition under Section 34 of the Arbitration
     Act. The learned Single Judge of the High Court of Delhi dismissed
     the petition, holding that a term like clause 49.5 of the GCC would
     bar the appellant’s claim. Moreover, the appellant had accepted the
     communication dated 14th October 2014, issued by the respondent
     dismissing the claim. It was also held that clause 49.5 was valid
     and, after the appellant accepted the same, it could not contend to
     the contrary.
1418                                                         [2025] 1 S.C.R.

                         Supreme Court Reports


9.    Being aggrieved by the judgment of the learned Single Judge, the
      appellant preferred an appeal before the Division Bench of the High
      Court of Delhi by invoking Section 37 of the Arbitration Act. While
      dismissing the appeal, the Division Bench held that the requirement
      of clause 49.5 was never waived by the respondent. The Division
      Bench held that clause 49.5 was a valid clause. After holding that
      the powers of the Court while dealing with an appeal under Section
      37 of the Arbitration Act are limited by Section 34, the Division Bench
      dismissed the appeal.

      SUBMISSIONS
10. The learned counsel appearing for the appellant has made detailed
    submissions. His first submission is that the award of the Arbitral
    Tribunal was contrary to public policy and suffered from patent
    illegality. The learned counsel also pointed out that the main issue
    was whether a clause prohibiting the payment of damages, like clause
    49.5, could be enforced. He submitted that the Arbitral Tribunal and the
    learned Single Judge failed to appreciate the crucial aspects striking
    at the root of the award. The learned counsel pointed out various
    decisions of the Delhi High Court and this Court. After relying upon
    several decisions of this Court, he urged that the parties to the contract
    cannot contract against the Indian Contract Act, 1872 (for short, ‘the
    Contract Act’). He submitted that the finding recorded by the Arbitral
    Tribunal that clause 49.5 aims to protect the interests of PSUs and
    the Government is illegal. He relied upon the decision of this Court in
    the case of Pam Developments Pvt. Ltd. v. State of West Bengal1.
    The learned counsel submitted that the additional documents filed by
    the appellant ought to be considered. Therefore, the learned counsel
    appearing for the appellant submitted that the impugned judgments
    deserve to be set aside.
11. Learned counsel for the respondent submitted that clause 49.5 of
    GCC read with clause 12 of the Special Conditions of Contract (for
    short ‘SCC’) are limitation of liability clauses. These clauses are
    not in conflict with either Section 23 or Section 28 of the Contract
    Act. He submitted that if clause 49.5 of GCC and clause 12 of SCC
    are read together, it is apparent that in case of delay or fault on the



1    (2019) 8 SCC 112
[2025] 1 S.C.R.                                                            1419

        M/s C & C Constructions Ltd. v. IRCON International Ltd.


     part of the employer (respondent), a reasonable extension of time
     can be granted and payment of price variation as per the formula
     agreed between the parties in the contract itself can be made.
     Learned counsel submitted that this Court has consistently upheld
     the enforceability of limitation of liability clauses. He relied upon what
     is held in paragraph 10 of the decision of this Court in the case of
     ONGC v. Wig Brothers Builders and Engineers Private Limited2.
     He submitted that the appellant made an irreversible election to
     accept the extension of time in terms of the agreed scheme of the
     contract between the parties without payment of liquidated damages.
     Therefore, the appellant is not entitled to make any additional claim
     for compensation and/or damages beyond the stipulations in the
     contract and contrary to the express prohibition in clause 49.5
     of GCC. He pointed out the letters addressed by the respondent
     by which initially liquidated damages/penalty were imposed on
     the appellant for the delay. However, on the request made by the
     appellant, the respondent granted an extension of time by waiving
     liquidated damages. Therefore, the appellant made an irreversible
     election to accept an extension of time under clause 49.5 of GCC.
     He relied upon three letters addressed by the appellant in which the
     appellant agreed not to make any claim other than escalation against
     the respondent because of the delay on the part of the respondent
     for which an extension of time has been sought. He pointed out
     that the claim for damages was raised two years after the date of
     the last extension. Learned counsel would, thus, submit that the
     appellant has lost its right to challenge clause 49.5 and therefore,
     no interference is called for with the impugned judgment.

     OUR VIEW
12. We are concerned with three ROBs bearing numbers LC-89, LC-228
    and LC-108. Clause 49.5 of GCC reads thus:
            “49.5 Delays due to Employer/Engineer
            In the event of any failure or delay by the Employer/
            Engineer in fulfilling his obligations under the contract,
            then such failure or delay, shall in no way affect or vitiate
            the contract or alter the character thereof; or entitle
            the Contractor to damages or compensation thereof


2   (2010) 13 SCC 377
1420                                                        [2025] 1 S.C.R.

                         Supreme Court Reports


          but in any such case, the Engineer shall grant such
          extension or extensions of time to complete the work, as
          in his opinion is/are reasonable.”
                                                (emphasis added)

13. Initially, by a letter dated 11th February, 2013, the respondent had
    imposed a penalty on the appellant for slippage of milestones and
    non-deployment of engineers. On 19th June, 2013, a letter was
    addressed by the appellant to the respondent in respect of LC-108
    seeking an extension of time of 264 days as there were delays on the
    part of the respondent. The said letter mentioned that as the delay
    resulted in an additional financial burden on the appellant, they would
    claim it separately. Similar separate letters in respect of LC-228 and
    LC-89 were addressed by the appellant on 30th August, 2013. In the
    said three letters, the appellant invoked clause 49 of GCC for grant
    of extension of time. Sub-clause No.5 of clause 49 is the only sub-
    clause in clause 49 which provides for extension of time on account
    of delay due to the respondent. By a letter dated 29th November,
    2013, the respondent communicated to the appellant the decision
    regarding the grant of extension of time regarding LC-228, LC-89
    and LC-108 till 09th April, 2014, 28th February, 2014 and 19th April,
    2014 respectively. As stated in the letter, in the case of LC-89 and
    LC-228, the extension was granted subject to penalty. In the case of
    LC-89, the appellant addressed a letter dated 28th February, 2014 to
    the respondent requesting that an extension of time be granted till
    30th May, 2014, without penalty. Similar letters were addressed on
    9th April, 2014 regarding LC-228 and on 19th April, 2014 regarding
    LC-108, wherein a request was made to grant an extension of time
    till 31st January, 2015 and 15th December, 2014 respectively, without
    penalty. It is pertinent to note that in these letters, the appellant did
    not state that it would be making any claim on account of the delay
    on the part of the respondent. On 28th February, 2014, 9th April, 2014
    and On 19th April, 2014, by separate letters, the appellant applied
    for grant of extension of time for all three ROBs without penalty.
14. By letter dated 24th May, 2014, the respondent approved the extension
    of time for LC-228, LC-89 and LC-108 up to 31st January, 2015, 30th
    November, 2014 and 15th December, 2014 respectively. The extension
    was granted without penalty. Thus, based on the requests made
    by the appellant, while granting further extension, the respondent
    waived the penalty.
[2025] 1 S.C.R.                                                          1421

        M/s C & C Constructions Ltd. v. IRCON International Ltd.


15. Thereafter, on 03rd September, 2014, the appellant addressed three
    separate letters to the respondent raising monetary claims on account
    of the delay on the part of the respondent. The respondent replied
    on 14th October, 2014 by separate letters. The letters are identical.
    For the sake of convenience, we are referring to the letter of the
    respondent in respect of LC-108, which reads thus:
           “The claim of Rs. 65696068/- is not at all admissible and
           acceptable. The time extension which has been granted to
           you without penalty is not at all basis of any claims as per
           clause 49 of General Conditions of Contract. As per clause
           No. 4.1 of Special Conditions of Contract your claims is not
           tenable. The same was already discussed with you earlier
           and in response to that you had removed your lines of
           “It is also to mention here that delay in work is resulting
           in additional financial burden on us on account of
           establishment and over heads and cost overrun etc.,
           for a lengthier period than planned, for which we will
           be claiming separately” from your request letter for
           extension of time. That time you were also agreed
           with it and re submitted your request letter without
           such lines.
           Once again you are requested to complete the work
           within the extended period and do not waste your time
           as well as our time in writing such type of false claims.”
                                                   (emphasis added)

16. Thereafter, concerning the three LCs, separate letters were addressed
    by the appellant on 8th January, 2015, requesting the respondent
    to grant further extension. The respondent sent separate replies
    to these three letters on 9th January, 2015. In the said letters, the
    respondent informed the appellant as under:
           “Vide above mentioned letters you have requested for
           Extension of Time in respect of ROB in lieu of LC No. 89
           (Dadi ka Phatak) up to 30.06.2015. In this connection
           you are requested to kindly submit an undertaking that
           you will not claim anything extra other than escalation
           for work executed in the extended.”
                                                   (emphasis added)
1422                                                        [2025] 1 S.C.R.

                         Supreme Court Reports


17. Pursuant to the said letters, by three separate letters dated 14th
    January, 2015, in respect of the said three LCs, the appellant
    submitted undertakings in the following terms:
          “We, therefore, undertake that we will not make any claim
          other than Escalation against the IRCON because of
          the delay in completion of which extension of time
          has been sought by us.”
                                                    (emphasis added)

18. After giving the said undertakings, two years thereafter, on 25th
    January, 2017, the appellant made claims on account of delay on
    the part of the respondent, for which an extension was granted. The
    appellant invoked the arbitration clause on the basis of the said claims.
19. Considering the conduct of the appellant, the following conclusions
    can be drawn:
     a)   The appellant acted upon clause 49.5 and sought an extension
          of time on three occasions;
     b)   The claim in the letter dated 25th January, 2017 was made by
          the appellant after giving solemn undertaking on 14th January,
          2015 not to make any claim other than escalation in respect of
          delays in the completion of work. The claim made was contrary
          to the undertakings;
     c)   By the undertakings, the appellant agreed not to make a claim
          contrary to what is provided in clause 49.5; and
     d)   Therefore, by conduct, the appellant was estopped from
          challenging the validity of clause 49.5.
20. At this stage, we must refer to the decision of the learned Single
    Judge in the petition under Section 34 filed by the appellant. The
    contentions raised by the appellant have been reproduced by the
    learned Single Judge of Delhi High Court in paragraphs 12 and 13
    of the Judgment. Paragraphs 12 and 13 read thus:
          “12. Mr. Naveen Kumar, learned counsel for the petitioner
          has primarily submitted that the Tribunal has clearly erred in
          accepting the application of the respondent under Section
          16 of the Act of 1996. The Tribunal should have allowed
          the petitioner to produce evidence that the delay in
[2025] 1 S.C.R.                                                            1423

        M/s C & C Constructions Ltd. v. IRCON International Ltd.


           discharging the obligations under the contract was
           clearly on the respondent and as such, the petitioner
           was entitled to the claims, which were in the nature
           of damages.
           13. That apart, he has drawn my attention to various
           documents to contend that the respondent had by its
           own conduct, not adhered to Clause 49.5 of the GCC.
           In support of his submission, he has drawn my attention
           to page 670 of the documents, wherein the respondent
           in its communication to the petitioner has stated for grant
           of extension of time, the petitioner’s claims for additional
           financial burden has to be dealt together. In other words, the
           respondent has agreed with the claim of the petitioner for
           additional financial burden. Mr. Kumar has relied upon the
           judgment reported in MANU/SC/1620/2009, Asian Techs
           Ltd. v. Union of India, in support of his submission that
           de-hors a stipulation which bars a claim, still the Arbitrator
           can consider the aspect of delay and award the claim, if
           justified.”
                                                     (emphasis added)

21. No other submission made by the appellant has been noted in the
    judgment. The learned Single Judge firstly held that on the plain
    reading of clause 49.5 of the GCC, the claims made by the appellant
    before the Arbitrator were barred. Learned Single Judge held that
    having accepted the stipulation in clause 49.5, the appellant could
    not have contended otherwise.
22. Now, we turn to the impugned judgment of the Division Bench. The
    first contention raised by the appellant was that all 15 monetary
    claims could not have been summarily rejected by the Arbitral
    Tribunal exercising jurisdiction under Section 16 of the Arbitration Act,
    without giving an opportunity to the appellant to lead evidence and
    to prove that the claims were not barred by clause 49.5. Secondly,
    the appellant sought to rely upon clause 49.4. Another contention
    raised on behalf of the appellant was that clause 49.5 was waived
    by the respondent.
23. As the claims were hit by Clause 49.5 on its plain reading, there was
    no question of allowing the appellant to lead evidence. Clause 49.4
1424                                                      [2025] 1 S.C.R.

                        Supreme Court Reports


     will apply when the delay is not due to the respondent. Admittedly,
     in this case, the delay was on the part of the respondent. Hence,
     clause 49.5 will apply and not clause 49.4.
24. Now, in this appeal, a contention has been raised that the validity
    of clause 49.5 ought to have been examined in the light of Sections
    23 and 28 of the Contract Act, but the High Court has not examined
    the said issue. Careful perusal of the judgment of the learned Single
    Judge shows that the contention that the validity of clause 49.5 ought
    to be decided in the light of Sections 23 and 28 of the Contract
    Act was not raised before the learned Single Judge in a petition
    under Section 34. The said contention was not raised even before
    the Division Bench in appeal under Section 37. Therefore, it is not
    open to the appellant to raise the said contention in this appeal for
    the first time.
25. A contention was raised for the first time in appeal under Section 37
    that clause 49.5 was waived by the respondent. Apart from the fact
    that said contention could not have been raised for the first time in
    appeal under Section 37 of the Arbitration Act, on the applications
    made by the appellant specifically invoking clause 49, the respondent
    granted an extension of time on more than one occasion. On this
    behalf, much capital was sought to be made about what is stated
    by the respondent in its letter dated 14th October, 2013. Though
    the said contention could not have been raised in an appeal under
    Section 37 still, we are examining the same. In the letter dated 14th
    October, 2013, the respondent stated:
          “Vide above mentioned letter, you have requested for
          extension of time for a total of 264 days. However, in,
          your letter you have mentioned as under:
          “it is also mentioned here that delay in work in resulting
          in additional financial burden on us on account of
          establishment and over heads etc., for a longer period
          than planned, for which we will be claiming separately”
          For grant of extension of time, your claim for additional
          financial burden has to be dealt together with the proposal
          of extension of time. Hence, your statement that you will
          be claiming separately for additional financial burden is
          not acceptable.
[2025] 1 S.C.R.                                                             1425

        M/s C & C Constructions Ltd. v. IRCON International Ltd.


            Hence, you are requested to submit your detailed
            claim immediately so that your request for extension
            of time can be processed early.”
26. By no stretch of imagination, after reading the said letter it can be
    inferred that clause 49.5 was waived by the respondent. In fact, the
    respondent stated that the claim for financial burden would have to
    be dealt with together with the proposal for an extension of time, and
    the said claim cannot be processed separately. Thereafter, on two
    occasions, on specific requests made by the appellant under clause
    49 of the GCC, the extension of time was granted by the respondent.
    Except sub-clause 5 of clause 49, there is no other sub-clause which
    provides for grant of extension when the delay was attributable to
    the respondent. The extensions were granted at the instance of the
    appellant by invoking clause 49. Hence, the argument of waiver of
    Clause 49.5 by the respondent deserves to be rejected. Moreover,
    detailed claim, as stated in the letter dated 14th October, 2013 was
    not submitted by the appellant. Therefore, the Division Bench rightly
    found no merit in the said contention.
27. As far as scope of interference in an appeal under Section 37 of
    Arbitration Act is concerned, the law is well settled. In the case of
    Larsen Air Conditioning and Refrigeration Company v. Union
    of India and Ors.3 in paragraph 15, this court held thus:
            “15. The limited and extremely circumscribed jurisdiction
            of the court under Section 34 of the Act, permits the
            court to interfere with an award, sans the grounds of
            patent illegality i.e. that “illegality must go to the root of
            the matter and cannot be of a trivial nature”; and that the
            Tribunal “must decide in accordance with the terms of
            the contract, but if an arbitrator construes a term of the
            contract in a reasonable manner, it will not mean that the
            award can be set aside on this ground” [ref : Associate
            Builders [Associate Builders v. DDA, (2015) 3 SCC 49 :
            (2015) 2 SCC (Civ) 204] , SCC p. 81, para 42]. The other
            ground would be denial of natural justice. In appeal,
            Section 37 of the Act grants narrower scope to the


3   (2023) 15 SCC 472
1426                                                           [2025] 1 S.C.R.

                             Supreme Court Reports


             appellate court to review the findings in an award,
             if it has been upheld, or substantially upheld under
             Section 34.”
                                                       (emphasis added)

28. In the case of Konkan Railway Corporation Limited v. Chenab
    Bridge Project Undertaking4 in paragraph 18, this court held thus:
             “18. At the outset, we may state that the jurisdiction of the
             court under Section 37 of the Act, as clarified by this Court
             in MMTC Ltd. v. Vedanta Ltd. [MMTC Ltd. v. Vedanta Ltd.,
             (2019) 4 SCC 163 : (2019) 2 SCC (Civ) 293] , is akin to
             the jurisdiction of the court under Section 34 of the Act.
             [Id, SCC p. 167, para 14:“14. As far as interference with
             an order made under Section 34, as per Section 37, is
             concerned, it cannot be disputed that such interference
             under Section 37 cannot travel beyond the restrictions laid
             down under Section 34. In other words, the court cannot
             undertake an independent assessment of the merits of the
             award, and must only ascertain that the exercise of power
             by the court under Section 34 has not exceeded the scope
             of the provision.”] Scope of interference by a court in an
             appeal under Section 37 of the Act, in examining an order,
             setting aside or refusing to set aside an award, is restricted
             and subject to the same grounds as the challenge under
             Section 34 of the Act.”
29. Considering the limited scope of interference, as laid down by this
    Court, we find absolutely no merit in the appeal and the same is
    accordingly dismissed.

     Result of the case: Appeal dismissed.



     †
         Headnotes prepared by: Nidhi Jain




4   (2023) 9 SCC 85