Contract Lawyer in Delhi | Breach of Contract, Recovery Suits & Arbitration

Last reviewed: November 1, 2026

A contract dispute in India is not the same as a contract dispute in the US. The Indian Contract Act, 1872 is the governing statute; it has been in force for over 150 years and has been the foundation of commercial law in India since independence. Bijlani & Co. represents businesses, individuals, and institutions in contract disputes across Delhi NCR, from a construction contract dispute of ₵5 crore to a personal services agreement of ₵50,000.

The Three Categories of Contract Disputes

1. Breach of Contract — One party has failed to perform its obligation under the contract. The remedy is a civil suit for damages (actual loss + expected profit) or specific performance (a court order to perform the contract). The Indian Contract Act’s Section 73 provides for “compensating the party” for loss or damage caused by the breach; Section 56 (formerly Section 79) addresses the “frustration” doctrine, where an event outside the parties’ control makes performance impossible. The key limitation: the loss must have been “reasonably foreseeable” at the time of contracting, not at the time of breach.

2. Fraudulent Contract — The contract was procured by misrepresentation, concealment of a material fact, or a false statement of fact. Fraud vitiates a contract ab initio — it is void, not voidable. The remedy is a rescission suit and a claim for damages under Section 73. For a criminal fraud, the relevant sections are BNS 318 (cheating) and 340 (dishonest misappropriation of property). The civil and criminal remedies can run in parallel.

3. Unfair Contract Terms — A contract that contains a “manifestly unfair” term (e.g., a penalty clause that is not a genuine pre-estimate of loss) is void under Section 27 of the Indian Contract Act. The “penalty” doctrine is a critical protection: a penalty clause (a sum stipulated for a breach that is not a genuine pre-estimate) is void as to the excess over the actual loss. A liquidated damages clause (a genuine pre-estimate) is enforceable. The distinction is a matter of substance, not form.

The Arbitration Route: Why Most Contract Disputes Go to Arbitration

Since the 2015 and 2019 amendments to the Arbitration and Conciliation Act, 1996, most commercial contract disputes in Delhi NCR are resolved by arbitration, not by the civil court. The reasons are: (1) arbitration is faster (12-24 months vs. 3-5 years); (2) the arbitrator is a domain expert (a construction lawyer for a construction contract); (3) the award is final and enforceable under the New York Convention (for international contracts); and (4) the civil court’s role is limited to enforcing the award under Section 34, not re-hearing the merits. The “faster track” under Part IB (2015 amendment) applies to domestic arbitrations under ₵2 crore and mandates a 12-month award. The arbitrator is appointed by the parties by mutual agreement; if they cannot agree, the court appoints under Section 11.

Specific Performance: The Equitable Remedy

Specific performance is a court order compelling a party to perform its contractual obligation, rather than paying damages. It is available under Section 10 of the Specific Relief Act, 1963, where: (1) the contract is valid and enforceable; (2) the parties have performed their part; (3) the subject matter is not fungible (e.g., a specific piece of land or a unique asset); and (4) damages are inadequate. For a standard sale-of-goods contract, damages are the appropriate remedy; specific performance is reserved for contracts where the subject is unique and cannot be replaced. A specific performance suit is a civil suit; it is not available in arbitration unless the contract expressly provides for it.

The Debt Recovery Tribunal (DRT) Route for Secured Claims

For a secured financial claim (a loan, a guarantee, a lease), the Debt Recovery Tribunal (DRT) is the fastest forum in India. The DRT has original jurisdiction over a secured claim of ₵20 lakh or more (Section 13 of the DRT Act, 1993). The DRT is a single-member judicial tribunal; it can order attachment of the secured asset and force a sale within 12 months of the claim. The DRT award is final and not appealable except to the DRT Appellate Tribunal on a point of law. Bijlani & Co. represents lenders and borrowers in DRT proceedings across Delhi NCR. For a borrower, the DRT is a significant threat: the asset is attached and sold without a civil trial. For a lender, the DRT is the fastest recovery mechanism in India.

The Five Most Common Contract Disputes in Delhi NCR

1. Real estate developer delays — A buyer has paid for a flat; the developer has not delivered by the promised date. The remedy is a RERA complaint (faster, 2-3 months) or a civil suit for specific performance. RERA is the first forum; a civil suit is the fallback. 2. Partnership dispute — A partner has breached the partnership deed. The remedy is a civil suit for dissolution of the partnership and a partition of the assets. 3. Employment contract breach — An employee has breached a non-compete clause. The remedy is an injunction under Section 15 of the Specific Relief Act, if the non-compete is enforceable (it is only enforceable for a “trade secret” or a “customer connection” that the employee acquired during employment). 4. Construction contract delay — The contractor has failed to complete by the deadline. The remedy is a liquidated damages claim (if the contract has a genuine pre-estimate) or a damages claim under Section 73. 5. Franchise agreement breach — The franchisee has breached the operating standards. The remedy is a specific performance suit and a liquidated damages claim. The franchise agreement is governed by the Indian Contract Act; there is no “franchise statute” in India.

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