Delhi High Court Upholds Award For HCL Technologies, Rejects Time Extension From Earlier Proceedings

The Delhi High Court on 23 April upheld an arbitral award in favour of HCL Technologies Ltd., holding that Sahaj Bharti Travels' claim of over Rs. 3.27 crore towards unpaid Minimum Running Guarantee dues under an employee transport agreement was time-barred.

Justice Subramonium Prasad upheld the Tribunal's refusal to exclude the nearly three-year period (August 2019 to May 2022) spent before the NCLT and NCLAT while computing limitation, as the proceedings were dismissed on merits and not for lack of jurisdiction, and therefore did not satisfy Section 14 of the Limitation Act, as clarified in HPCL Bio-Fuels Ltd. v. Shahaji Bhanudas Bhad. He held:

“It is apposite to state that an application under Section 9 of the IBC and an application under Section 11(6) of the Act are sought for parallel reliefs and hence fails to meet the parameters set out in the HPCL Bio-Fuels Ltd”, adding that “the Tribunal has rightly declined the benefit of the aforesaid section to the Petitioner on the ground that the NCLAT dismissed its claim on merits and not on the question of jurisdiction.”

The dispute arose from a service agreement dated 19 November 2015 between Sahaj Bharti Travels and HCL Technologies under which the petitioner provided employee transport services across Delhi-NCR. Clause 28, read with the Minimum Running Guarantee stipulation, fixed a minimum usage threshold for cab operations. The agreement remained in force till 31 December 2018.

Sahaj Bharti Travels claimed unpaid dues under this arrangement and sought Rs. 3.27 crore along with interest. After rejecting a one-time settlement offer on 29 November 2018, it issued a demand notice on 8 May 2019 and thereafter initiated insolvency proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016.

The NCLT, by order dated 17 January 2022, admitted the application and commenced the corporate insolvency resolution process against HCL Technologies. However, the NCLAT set aside this order on 26 May 2022.

Subsequently, Sahaj Bharti Travels invoked arbitration by issuing a notice under Section 21 of the Arbitration and Conciliation Act, 1996, following appointment of the arbitrator under Section 11.

By an award dated 4 September 2025, the Tribunal rejected the claims as time-barred, holding that the dues accrued monthly between September 2015 and December 2018, each giving rise to a separate cause of action with its own limitation period.

Aggrieved, Sahaj Bharti Travels challenged the award under Section 34 of the Arbitration Act before the High Court, arguing that the dispute constituted a continuing cause of action and that time spent before the NCLT and NCLAT ought to be excluded.

HCL Technologies opposed the plea, contending that each monthly unpaid amount constituted an independent claim.

The Court accepted HCL's position and rejected the argument of a continuing cause of action. It reiterated that limitation under the Limitation Act, 1963, applies separately to each monthly payment and cannot be extended by aggregating claims. It said:

“The approach of the Tribunal in criticising the Petitioner for clubbing the periods cannot be faulted with and this approach cannot be said to be in conflict with the Public Policy of India. Payment was to be made by the Respondent separately for each month and therefore the limitation for each month would start separately. Though the demand notice was sent on 08.05.2019 but the demand notice cannot give rise to a separate cause of action. The notice under Section 21 of the Act was sent on 27.08.2022.”

The Bench further held that even after applying the Supreme Court's COVID-related extension of limitation, arbitration ought to have been invoked by 30 May 2022. Since it was invoked only in late July/August 2022, the claims were barred by limitation.

Accordingly, the High Court dismissed the Section 34 petition and upheld the Tribunal's decision.

Appearances for petitioner (Sahaj Bharti Travels): Advocates Dushyant Yadav, Pankaj Kumar Yadav, Sudhir Yadav.