Kanohar rail award remains challenged in Delhi High Court

Kanohar Electricals, referred to as Kanohar, holds a Rs 8.589 crore arbitral award from a Northern Railway electrification contract, excluding applicable interest, but the Union of India’s challenge remains pending before the Delhi High Court. A separate Uttar Pradesh power-transmission arbitration also remains unresolved, with a Rs 4.069 crore claim and a Rs 4.219 crore counterclaim.

What is the status of Kanohar’s rail award?

Kanohar’s Rs 8.589 crore rail award remains subject to Delhi High Court adjudication because the Union of India filed its challenge on May 9, 2019. A three-member arbitral tribunal issued the award on February 8, 2019 in favour of the Kanohar Electricals-BCPAL joint venture, holding the contract termination arbitrary, wrongful and unlawful. The stated award amount excludes applicable interest.

The Union of India alleges that the February 2019 award is contrary to the contract terms, while Kanohar has filed an application objecting to the maintainability of the government’s petition. The disclosure records no Delhi High Court ruling, hearing date or payment against the award. The award is therefore a tribunal determination in Kanohar’s favour, rather than a recovery confirmed through the pending court proceeding.

What led to Kanohar’s Northern Railway dispute?

Kanohar’s rail award arose from a contract for supply, erection, testing and commissioning of 25 kilovolt, 50 hertz single-phase electrification work on the Noli-Tapri section in Ambala under Northern Railway’s Delhi Division. The Union of India awarded the tender to the Kanohar Electricals-BCPAL joint venture, and the parties entered into the contract on April 24, 2017.

The Union of India terminated the contract through a letter dated November 13, 2017, alleging slow progress of the work by Kanohar. The joint venture subsequently initiated arbitration after filing an application before the Punjab and Haryana High Court in 2018, which resulted in a reference to the tribunal. The tribunal’s February 2019 finding on termination is being contested through the Delhi High Court challenge, leaving the recovery dependent on the court process.

Why does the Delhi High Court challenge matter to Kanohar?

Kanohar’s ability to realise the Rs 8.589 crore principal award depends on the outcome of the Delhi High Court proceeding and on any applicable interest, which was not included in the disclosed award amount. The disclosure does not state whether the court has decided the company’s maintainability objection. It also does not disclose a final timetable for the court matter.

The award exceeds Kanohar’s Rs 1.661 crore materiality threshold for civil and arbitration proceedings. Kanohar’s board adopted the materiality policy on January 23, 2026, selecting Rs 1.661 crore because it was the lowest of three stated measures: 2% of preceding fiscal-year turnover of Rs 9.012 crore, 2% of net worth of Rs 4.863 crore, and 5% of average absolute profit or loss after tax for the preceding three fiscal years.

The materiality comparison shows the rail award is about five times the Rs 1.661 crore disclosure threshold. That comparison identifies why the matter appears in the litigation section, but it does not establish that the full award will be received. The court challenge must be resolved for the award’s status to move beyond the disclosed pending adjudication.

What are the claims in Kanohar’s power-transmission arbitration?

Kanohar and Chung-Hsin Electric and Machinery Manufacturing Corporation claim Rs 4.069 crore from Uttar Pradesh Power Transmission Corporation Limited in an arbitration concerning a gas-insulated sub-station at Neebu Park, Lucknow. Their statement of claim, dated November 25, 2023, seeks refund of allegedly deducted liquidated damages, incentive amounts and cess charges, alongside alleged loss from delayed payment and interest.

Liquidated damages are contractually specified sums claimed for an alleged delay or other breach. Kanohar and its co-claimant allege that the customer made frequent changes to the work scope and delayed site handover and payments because of inadequate coordination among its internal units. They state that, after project completion, the customer deducted Rs 69 lakh as liquidated damages and Rs 43.5 lakh as labour cess.

The Allahabad High Court appointed retired Justice Devi Prasad Singh as sole arbitrator through its November 30, 2023 order after the claimants challenged two unilateral arbitrator appointments. The claimants had applied to the High Court on October 30, 2023 under Section 11(6) of the Arbitration and Conciliation Act, 1996, which concerns court appointment of an arbitrator where the appointment mechanism fails.

Uttar Pradesh Power Transmission Corporation Limited filed a Rs 4.219 crore counterclaim on February 22, 2025, alleging that this was the balance of liquidated damages payable by Kanohar and its co-claimant. The counterclaim is Rs 15 lakh higher than the Rs 4.069 crore claim. Neither figure is a net liability determination because both sides’ monetary claims remain pending before the sole arbitrator.

How do these proceedings compare with Kanohar’s other disclosed matters?

The rail proceeding differs from the Uttar Pradesh arbitration because the rail dispute has already produced a Rs 8.589 crore tribunal award, while the power matter remains at the stage of competing claims. Each disclosed amount exceeds Kanohar’s Rs 1.661 crore materiality threshold: the rail award by Rs 6.928 crore, the power claim by Rs 2.408 crore, and the counterclaim by Rs 2.558 crore.

Kanohar also disclosed a pending writ petition before the High Court of Uttarakhand, filed on September 14, 2022, relating to a 220/33 kilovolt Jafarpur sub-station contract. The Variegate-Kanohar joint venture contract contemplated Rs 26.168 crore in payment from Power Transmission Corporation of Uttarakhand Limited. Kanohar alleges that an income-tax recovery notice should apply only to Variegate Projects Private Limited’s contractual share and says Rs 3.069 crore remains payable to the joint-venture parties.

The company separately reported five indirect-tax cases involving Rs 1.877 crore, to the extent quantifiable and without adjustment for duties paid against those demands. It disclosed no direct-tax cases, no criminal proceedings involving the company and no actions by statutory or regulatory authorities against it. Those classifications do not change the status of the rail award or the power arbitration, both of which remain pending.

Conclusion

Kanohar’s disclosed public-project disputes show two different stages of recovery uncertainty. The Northern Railway matter has a tribunal award in Kanohar’s favour but remains under Union of India challenge, while the Uttar Pradesh power matter has unresolved claims from both the company side and the customer side. The larger amount is the Rs 8.589 crore rail award, excluding applicable interest.

The next developments to watch are a Delhi High Court decision on the Union of India petition and the sole arbitrator’s determination of the Uttar Pradesh claim and counterclaim. Kanohar has not disclosed a date for either outcome. The pending Uttarakhand writ petition also remains relevant because it concerns the stated Rs 3.069 crore balance under the Variegate-Kanohar joint-venture arrangement.