Rs 8.99 crore forensic lab award stands as Allahabad High Court rejects dead-partner and cartel pleas
Chief Justice Arun Bhansali and Justice Jaspreet Singh, sitting at Lucknow, dismissed the U.P. Electronics Corporation appeal under Section 37, holding that a claim signed by a partner who died before it was filed did not abate and that an unproven fraud plea cannot unsettle an award.
On 22 June 2018 the Additional Director General of the Uttar Pradesh Police Technical Services wrote to U.P. Electronics Corporation Ltd. that all the DNA instruments a Delhi firm had supplied for the new forensic laboratory at Varanasi were working properly and the supplier should be paid. The same day, the Corporation terminated the firm's work order and confiscated its bank guarantee. Eight years on, the Lucknow bench of the Allahabad High Court has refused to disturb the arbitral award of Rs 8,99,38,275, with interest at 8 per cent a year, that followed.
Chief Justice Arun Bhansali and Justice Jaspreet Singh, in a judgment written by Justice Singh and reserved on 21 September 2026, dismissed the Corporation's appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against the order of Commercial Court No. 2, Lucknow, which had on 15 December 2025 rejected its Section 34 petition. Four separate attacks on the award failed.
A tender, a corrigendum and a termination on the day payment was cleared
The Corporation floated a tender on 2 February 2018 to select an agency to supply and install instruments for the DNA unit of the Forensic Science Laboratory being set up at Varanasi. A corrigendum followed on 8 February. P.S. Global, a partnership firm from Karol Bagh in New Delhi, bid on 24 February. Two other bidders, both private limited companies, also put in bids. The Corporation's tender evaluation committee screened them, found the firm's bid favourable, negotiated a price reduction and issued a work order on 30 March 2018.
The firm furnished a performance bank guarantee of Rs 93,79,535, valid for 66 months, and supplied all 31 items within the time fixed. They were installed at Varanasi and demonstrated. The Deputy Director of the Forensic Science Laboratory certified installation, demonstration and satisfactory working. On 26 May 2018 the Corporation made a stock entry and forwarded the paperwork to the Police Technical Services headquarters for confirmation, which came in the ADG's letter of 22 June.
What happened in the preceding week is set out in the judgment. A public interest litigation raising allegations about the contract had been filed in the High Court on 15 May 2018 and dismissed as withdrawn on 28 May, within 13 days. On 16 June 2018, a gazetted holiday for Eid-ul-Fitr, the Corporation constituted a five-member inquiry committee. A lawyer, whose credentials the record does not disclose, complained to the State Government on 18 June. The government asked the Corporation for a report on 19 June, to be furnished by 20 June. The committee met for the first time on 20 June, reported on 21 June, and the report went to the government the same day. On 22 June the termination letter issued. At no point was the firm given notice or asked to respond. Condition 6.17 of the contract required 30 days' prior notice before termination.
The parties had agreed to arbitrate. On 12 January 2021 the High Court appointed a sole arbitrator in Arbitration Application No. 7 of 2021. After pleadings and evidence, the arbitrator made an award on 4 February 2022 allowing the firm's claims of Rs 8,99,38,275 with 8 per cent interest from the date the amount fell due until payment. The Corporation's challenge, Arbitration Case No. 43 of 2023, was dismissed by the Commercial Court on 15 December 2025.
The claim signed by a partner who died before it was filed
Senior Advocate S.C. Mishra, with Rajesh Chadha and Akhilesh Kumar Srivastava for the Corporation, led with the argument that the entire arbitration was a nullity because the statement of claim had been filed on behalf of a dead person. No life, he said, could be infused into it afterwards.
The bench set out the dates. The arbitrator's first sitting was on 20 March 2021. Shiv Kumar Verma, a partner of the firm, appeared in person with counsel and filed the vakalatnama; the firm was given two weeks to file its claim and the next date was 1 May. The statement of claim was prepared and signed by Verma on 1 April 2021 and a copy sent to the Corporation by speed post that day. Then the COVID-19 lockdown intervened: 1 May was adjourned to 29 May, and 29 May to 26 June. Verma died on 26 April 2021. On 26 June the firm's counsel, who the firm says was unaware of the death, filed the claim dated 1 April.
The Corporation then took seven months and several adjournments to file its defence, after an unsuccessful Section 16 application that the arbitrator dismissed on 7 November 2021. The statement of defence dated 7 January 2022 objected that the claim was not signed by an authorised person and was not properly verified; it did not plead that the signatory was dead. The firm disclosed Verma's death in its replication of 11 February 2022, and the Corporation then applied on 26 May 2022 to have the proceedings dismissed as abated. The arbitrator framed issue No. 4 on whether the claim had been filed by a duly authorised partner, and decided it against the Corporation.
Senior Advocate Arohi Bhalla, with Sunil Kumar Singh, Kartikeya Yadav and Prateek Agarwal for the firm, answered that the claimant was a partnership, its other partners were alive throughout, the point was raised at the first opportunity by the firm itself, and the objection before the arbitrator had been framed as abatement under Order XXII of the Code of Civil Procedure, not as a nullity.
The bench agreed. Verma was alive when he signed the claim, and he had already appeared before the arbitrator. The claim was the firm's, and “the firm is a collective name of its partners”. Though Section 19 of the 1996 Act frees arbitral tribunals from the CPC, the judges tested the objection against what would happen in a civil court. Order XXX Rule 4 provides that where persons sue in the name of a firm and one of them dies, whether before institution or during the suit, it is not necessary to join the legal representative. Section 99 bars reversal of a decree for any error, defect or irregularity not affecting the merits or jurisdiction. If a firm's suit would not abate in a civil court, a firm's arbitration claim could hardly be void for the same reason.
The court drew on the Supreme Court's rulings in Upper India Cable Co. v. Bal Kishan, where the death of partners who were formal parties did not abate an appeal, and Sumer Singh Galundia v. Jeevan Singh, which held that the death of one partner does not foreclose proceedings begun by the firm. It also applied its own recent decision in U.P. State Highways Authority v. Abhijeet Meerut Karnal Toll Road Ltd., where it held that not every procedural irregularity vitiates an award; a party must show the irregularity affected the tribunal's jurisdiction or the merits, or caused a failure of justice. The Corporation could show no prejudice beyond the bare fact of the date of death. The decisions it cited, from S. Ranganayaki Setlur to Amar Kaur v. Sadhu Singh, all concerned individual parties rather than firms, and none arose from arbitration. The plea was turned down as a technical objection.
Was the State of U.P. the real contracting party?
The Corporation's second ground was that it was only a facilitator, that the real contract was with the State through the Police Technical Services, and that the claim was defective for non-joinder of a necessary party. It cited Cox and Kings Ltd. v. SAP India (P) Ltd. and Ajay Madhusudan Patel v. Jyotrindra S. Patel.
The bench went to the undisputed chronology. The Corporation floated the tender, screened the bids, shortlisted and negotiated with the bidder, issued the work order, conducted the correspondence and signed the termination letter. From start to finish the cause of action ran between the Corporation and the firm. The Corporation may have been acting for the Police Technical Services, which wanted the Varanasi laboratory, but the exercise was outsourced to it, and it is a separate legal entity. Privity of contract lay between the Corporation and the firm; none existed between the firm and the Police Technical Services. The State's deep and pervasive control over a government corporation does not by itself create privity between the State and the corporation's counterparty.
Cox and Kings, the court said, concerned the group of companies doctrine, which the Supreme Court approved but hedged with tests that the party invoking it must satisfy on evidence, consistent with the factors in ONGC v. Discovery Enterprises. The Corporation had led no evidence to bring the doctrine into play. Both the arbitrator and the Section 34 court had rejected the non-joinder plea, and the bench found no patent illegality in that view.
Fraud, cartel and the corrigendum
The third ground was that the firm and the two other bidders had concealed material facts and formed a cartel to manipulate the bidding, a corrupt practice that justified the inquiry and the termination and made the award contrary to the public policy of India.
The firm's explanation, recorded in the judgment, was that the tendered instruments were highly sophisticated and had a single original equipment manufacturer in the world. Every bidder's experience certificate therefore traced back to the same OEM, the Corporation knew this, and that was why it had issued the corrigendum. The three bidders were a partnership firm and two private limited companies, each with a separate legal identity.
The bench found no material on record showing any fault in the items supplied; the evidence was that they worked satisfactorily and were certified as such. There was nothing to show the firm had rigged the bid or influenced the screening committee, nothing to show the corrigendum was tailored for the firm, and the Corporation could not dispute that there was only one OEM. The arbitrator had framed issue No. 2 on this question, considered the evidence and Condition 6.17, and found that the Corporation had failed to establish any corrupt or fraudulent practice and had not even issued a notice before terminating. These, the court said, were pure findings of fact.
A plea of fraud, the judges observed, is “easier to plead than to establish the same”; until proved by cogent evidence it remains a plea. Counsel for the Corporation could point to no evidence that the arbitrator had ignored. The public policy argument fell with it: once the fraud plea failed on the evidence, the matter was a finding of fact that neither the Section 34 court nor the appellate court could re-appreciate. The court added that all the material had been before the Corporation's own tender scrutiny committee, which found no irregularity, and that the Corporation offered no explanation of how a cartel was formed or how the bidding was manipulated.
The bench anchored its approach in the narrow scope of Sections 34 and 37. It cited Ramesh Kumar Jain v. Bharat Aluminium Co. Ltd., which restates the Ssangyong definition of public policy as the fundamental policy of Indian law or the most basic notions of justice and morality, and Jan De Nul Dredging India (P) Ltd. v. Tuticorin Port Trust, where the Supreme Court said the appellate power under Section 37 is even more restricted than Section 34 and does not permit re-appraisal of evidence to record a contrary finding.
The partnership deed and the Section 69 bar
The Corporation's fourth point was that the firm was unregistered with two partners when it bid, and that the claim had been accompanied by a 2015 deed showing as much. When the Corporation raised the bar in Section 69(3) of the Indian Partnership Act, 1932, which prevents an unregistered firm from enforcing contractual rights in court, the firm produced a 2018 deed showing a registered firm with three partners. This, the Corporation said, was misrepresentation that vitiated the contract and a patent illegality the Commercial Court had ignored.
The bench recorded that the firm was indeed unregistered on the date of its bid but was registered on 17 June 2019. The arbitration began in 2021, and it was undisputed that the firm was registered by the time of its first appearance before the arbitrator. Section 69(3) was therefore not attracted. In any event, the court relied on Umesh Goel v. Himachal Pradesh Cooperative Group Housing Society Ltd., in which the Supreme Court held that the bar does not apply to arbitral proceedings at all.
No remand for a brief but reasoned order
Finally, the Corporation argued that the Commercial Court had merely reproduced the parties' submissions without giving reasons of its own, and asked for a remand. The bench disagreed. The Section 34 court had noticed and decided each plea. Its reasoning need not be elaborate, and where a plea has been considered and decided in brief with reasons that are not shown to be wrong, “an order of remand cannot be made in a routine manner”. The court cited the Supreme Court's recent ruling in Shivappa v. Shantavva, which collects earlier decisions in Ashwini Kumar, P. Purushottam Reddy and Zarif Ahmad against remand where the material is available to the appellate court, and held that no ground for remand was made out.
Order
The court held that the award of 4 February 2022 and the judgment of Commercial Court No. 2, Lucknow of 15 December 2025 suffered from no illegality warranting interference under Section 37. The appeal was dismissed and the sole arbitrator's award affirmed. There was no order as to costs. The judgment was delivered on 24 October 2026 from the Chief Justice's Court at Lucknow.