Court Finds Physical Verification More Reliable Than Later Inquiry Reports

The Delhi High Court has dismissed an appeal filed by the Chief Electoral Officer (CEO), upholding an arbitral award of over ₹1 crore in favour of a contractor who supplied tents, furniture and electrical equipment during the 1999 Lok Sabha elections.

A Division Bench of Justice Avneesh Jhingan and Justice Shail Jain ruled on October 28 that the arbitrator’s decision was reasonable and did not suffer from any factual or legal error warranting judicial interference.

The court observed that election officials had physically verified the supplied materials and signed the contractor’s bills before the temporary structures were dismantled. The verification was considered more reliable than inquiry reports prepared later, after scrutiny began in July 2000.

The Returning Officers of the Outer Delhi and Karol Bagh constituencies had also testified in support of the contractor, stating that the bills were signed after physical verification. The court noted that there was no material on record establishing that the required challans had not been submitted daily.

Contractual Dispute and Rejection of CEO’s Appeal

The dispute arose after the CEO invited tenders for hiring election-related infrastructure during the 1999 Lok Sabha elections. The contractor was awarded work for the Outer Delhi and Karol Bagh parliamentary constituencies under an agreement containing an arbitration clause.

The contractor submitted bills worth ₹80.30 lakh for Outer Delhi and ₹19.98 lakh for Karol Bagh, totalling approximately ₹1.003 crore. The CEO alleged that the bills were inflated and argued that payment was subject to daily submission of challans, physical verification and approval by the competent authority under Clause 19 of the agreement.

A show-cause notice was issued in 2000 over the alleged failure to submit daily verified challans. While the CEO admitted that ₹15.22 lakh was payable, the arbitrator allowed the contractor’s full claim and awarded an additional ₹2 lakh in costs.

After a single-judge bench rejected the CEO’s objections in 2017, the matter reached the Division Bench. The High Court ultimately dismissed the appeal, reinforcing the principle that courts should not interfere with an arbitral award merely because another interpretation of the evidence is possible, provided the award does not suffer from a legally recognised defect.