Setback SolutionsGet help

← All articles

Government Grant for Tech Project Backfires Into Crore-Rupee Damages Award — Delhi HC

08 Nov 2026

Government Grant for Tech Project Backfires Into Crore-Rupee Damages Award — Delhi HC
Source (official court record): Som Shiva Impex Ltd vs National Research Development Corporation, Delhi High Court

Court: Delhi High Court

Appeal dismissed — ruling against Som Shiva Impex Ltd. (Petitioner)

In Short

A manufacturing company received government funds to develop a special plastic blend, but never sold the product because market conditions made it a failure. When the government demanded royalty payments anyway, an arbitrator refused the royalty but ordered the company to pay massive damages for failing to hand over the project design documents. The Delhi High Court reviewed this decision under a challenge petition.

The Parties

Party A: Som Shiva Impex Ltd.

Party B: National Research Development Corporation & Department of Scientific and Industrial Research

Advocates & Judges

For Party A: Learned Advocate Mr. Rajshekhar Rao, Learned Advocate Mr. Malak Bhatt, Learned Advocate Ms. Sukanya Joshi

For Party B: Learned Advocate Mr. JM Kalia, Learned Advocate Mr. Siddhartha Shukla, Learned Advocate Mr. Dhruv Kalia, Learned Advocate Mr. AP Singh

Judge(s): Hon'ble Justice Subramonium Prasad

What the Case Was About

Back in 2010, a government department launched a scheme to give partial financial support to industrial units for research and development. Som Shiva Impex applied for funding to develop a special rubber and plastic compound and received about 2.4 crore rupees. They signed agreements saying they would pay royalties if the product was sold commercially, and promised to hand over all technology designs to the government if they failed to sell the product within four years. The company finished the project on paper but never made any commercial sales because the raw material prices shot up and there was no market demand. When the government demanded royalties, the company refused to pay, saying no sales meant no royalties were due. This led to arbitration, where the arbitrator agreed no royalties were owed, but punished the company with damages for not handing over the technical design documents on time.

Judgment Date

13th OCTOBER, 2026

The Outcome

The court recorded the petition challenging the arbitral award, while the underlying dispute involved rejecting royalty claims but upholding damages for failing to hand over technology documents.

What the Court Looked At

What This Means For You

Getting government financial support for a research project sounds like free help, but it comes with strict legal strings attached. In this case, even though the company escaped paying royalties because their product failed in the market, they were slapped with huge financial penalties simply for failing to return project design papers on time. If you take government or institutional grants, you must meticulously follow every post-project administrative rule, such as handing over technical documents within deadlines, or you might face heavy court-ordered damages. Let Setback Solutions help you understand your options and coordinate your next steps if you are stuck in a complex commercial contract dispute.

You Still Have Options

If you are facing a massive arbitration penalty, lost your commercial dispute case, or wonder what your next legal move should be, it is not the end of the road. You can still explore options like getting a second opinion, evaluating your appeal choices, or seeking non-judicial guidance to map out a better path forward. Reach out to Setback Solutions to help you understand your options and coordinate the next step today. Please remember that Setback Solutions is not a law firm and does not provide legal advice or guarantee any specific legal outcome.

⚠️ This is an AI-generated article. AI can make mistakes. Please double-check the facts by reading the real order/source linked above rather than relying completely on this article.

Facing a legal problem yourself?

We explain it in plain language and coordinate a lawyer for you. Plans from ₹99, incl. GST.

Get help →