ARB.A/6/2012 on 16 October 2026

1 2026:HHC:45844 IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA Arb. Appeal No. 6 of 2012 Reserved on : 18.9.2026 Decided on: 16.10.2026 Uploaded on: 16.10.2026 Union of India & ors.

… Appellants Versus Madhu Sood

…Respondent _____________________________ ______________

Coram

Hon’ble Mr. Justice Virender Singh, Judge Whether approved for reporting? ___________________________________________________ For the Appellants: Mr. K.B. Khajuria, Advocate. For the Respondents : Mr. Vikrant Thakur, Senior Advocate, assisted by Mr. Shubham Guleria, Advocate. Virender Singh, Judge The appellants have filed the present appeal under Section 37(1)(b) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as ‘the Act’), against the order dated 1.9.2011, passed in Arbitration Case No. 2-S/2 of 2007, by the learned District Judge, Shimla, whereby, the objections preferred, by the appellants under Section 34 of the Act, against the award dated

2 2026:HHC:45844 21.7.2006, passed by the Sole Arbitrator, were dismissed.

2. Brief facts, leading to filing of the present appeal, under Section 37 of the Act, as borne out from the record, may be summed up, as under: This court, vide order dated 1.8.2003, passed in OMP (M) No. 67 of 2003, has appointed Shri V.K. Khurana, as sole Arbitrator. An agreement for execution of the work for laying down the optical fiber cable was entered into between M/s Pramod Kumar Sood, Paras Dass Garden, Shimla, and the Government of India. When, the dispute had arisen, then, the matter was referred to the Arbitrator. The Arbitrator has given his award, on 21.7.2006. 2.1 By virtue of said award, the present appellants were directed to pay a sum of rupees 1,39,305/- along with interest, @ 14% per annum, with effect from 1.3.1996, till the date of payment, in favour of the contractor. 2.2 The present appellants were dissatisfied, with the award, so passed, by the learned Arbitrator, as such,

3 2026:HHC:45844 they have filed the objections, under Section 34 of the Act, before the learned District Judge, Shimla, which were dismissed by the learned District Judge, Shimla, vide order dated 1.09.2011.

3. Thereafter, the present appeal has been preferred before this Court, under Section 37 of the Act, mainly on the ground that the learned District Judge has not considered the fact that the award has been passed, in favour of a person, who was not a party to the contract. No legal right whatsoever could flow to the respondents, from the agreement in question. As such, her claim was not maintainable, before the Arbitrator. 3.1 The findings of the learned District Judge, Shimla have further been assailed on the ground that the learned District Judge has also not considered the fact that the record of the case has been seized by the CBI, in the year 1997, and prior to that, a vigilance inquiry was being conducted with regard to work, qua which, the award has been passed by the learned Arbitrator.

4 2026:HHC:45844 3.2 According to the appellants, in case, the authorities are compelled to make payment, during pendency of the inquiry or investigation, then, the very purpose of looking into the irregularities, will stand defeated. 3.3 The award is also stated to be against the public policy, so far as the same grants interest @ 14% per annum, from the year 1996 onwards.

4. On the basis of above facts, Mr. K.B. Khajuria, Advocate, appearing for the appellants, has prayed that the present appeal, may kindly be allowed, by setting aside the order, dated 1.9.2011, passed by the learned District Judge, Shimla, by virtue of which, the objections, under Section 34 of the Act, were dismissed.

5. The appellants, are before this Court, under Section 37 of the Act.

6. It is no longer res-integra that the scope of interference, by this Court, under Section 37 of the Act is narrower than the scope of interference, under Section 34 of the Act.

5 2026:HHC:45844

7. The perusal of the record shows that the objections with regard to the locus of respondent Madhu Sood has also been taken before the learned District Judge, and the learned District Judge has dealt with this point by holding that the execution of the work was done by the respondent, being the sole proprietor of M/s GS Builders. She is the person, who has instituted the application, under Section 11 of the Act, through Shri Pramod Sood. As such, she has rightly been impleaded, in the present lis.

8. Even otherwise, the Arbitrator has dealt with this this point, by holding that the matter was referred to him, by this Court and the objections as to the locus of Mrs. Madhu Sood, if any, should have been taken before this Court.

9. This Court cannot interfere with the well- reasoned order, passed by the learned Arbitrator, which has been upheld by the learned District Judge.

10. So far as the other ground, upon which, the award is being assailed, before this Court, about the fact that the record has been seized by the CBI, is concerned,

6 2026:HHC:45844 on that ground, the award cannot be interfered with by this court.

11. The learned counsel appearing for the appellant could not point out as to how the act of Arbitrator to award 14% interest, per annum, with effect from 1.3.1996 does fall within the definition of ‘against the public policy in India’.

12. Considering the above facts, there is no occasion for this Court to interfere with the well-reasoned order, passed by the learned District Judge, Shimla, while dismissing the objections, under Section 34 of the Act.

13. In view of above, the present appeal is dismissed, so also the pending application(s), if any.

14. Record be sent back. (Virender Singh) 16.10.2026 Judge Kalpana

7 2026:HHC:45844