Back
2018 Supreme(Del) 2017
IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
Adwel Advertising Service & Anr. - Petitioners
Versus
South Delhi Municipal Corporation - Respondent
O.M.P. (COMM.) 383 of 2017 & IA No. 12481-12483 of 2017
Decided On : 19-07-2018
For the Petitioner: Mr. Sachin Datta, Mr. Sandeep Grover, Ms. Pankhuri Bhardwaj, Mr. Yatender
For the Respondents: Mr. Sanjay Poddar, Mr. Gaurang Kanth, Ms. Biji Rajesh
Headnote:
ARBITRATION - PUBLIC NOTICE - EXCLUSION OF PWD MAINTAINED ROADS - REDUCTION OF LICENSE FEE - PUBLIC NOTICE DATED 05.03.2006 - APPLICABILITY - DELAY IN FILING - ARBITRAL TRIBUNAL'S ORDER - JUDICIAL REVIEW - SCOPE - PATENT ILLEGALITY - REBATE FOR NON-ILLUMINATION OF KIOSKS - QUANTIFICATION - AD HOC BASIS - ARBITRAL TRIBUNAL'S DISCRETION - JUDICIAL INTERFERENCE - REMOVAL OF POLES BY GOVERNMENT AGENCIES/DEPARTMENTS - REBATE IN LICENSE FEE - QUANTUM OF CLAIM - ONUS OF PROOF - TERMS AND CONDITIONS OF NIT - MONTHLY STATEMENTS - MAINTENANCE OF RECORDS - BREACH - LIABILITY TO PAY MONTHLY LICENSE FEE - PERIOD OF CONTRACT/LICENSE - EXPIRY - FRESH AUCTION - SUCCESSFUL BIDDER - POSSESSION OF SITE - INTERIM ORDER - WITHDRAWAL OF SUIT - NEW AGREEMENT - AWARD OF ARBITRAL TRIBUNAL - PARTIAL SETTING ASIDE.
Fact of the Case:
Petitioner challenged the Arbitral Award dated 22.05.2017 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the offers of allotment of contract for display of illuminated kiosks on street light poles on MCD roads (excluding all PWD maintained roads) for the period 01.04.2006 to 31.03.2008 in respect of City Zone, South Zone, West Zone and Central Zone of the MCD, all dated 10.04.2006. The primary dispute between the parties is in relation to the exclusion of all PWD maintained roads from the offer of allotment made by the respondent in favour of the petitioners and the claim of the petitioners for a consequential reduction in the license fee on this ground.
Finding of the Court:
The Arbitral Tribunal has passed its Award in favour of the petitioners and against the respondent by relying upon the Committee Report as an admission of the respondent to the claim of the petitioners. As a Claimant, the onus of proof of the claim was on the petitioners. It was for the petitioners to have led evidence in support of its claim and petitioners cannot succeed merely because the report of the Committee appointed by the respondent was incorrect.
Issues: 1. Applicability of Public Notice dated 05.03.2006. 2. Delay in filing of Public Notice dated 05.03.2006. 3. Scope of judicial review of Arbitral Tribunal's order. 4. Patent illegality. 5. Quantification of rebate for non-illumination of kiosks. 6. Rebate in license fee for removal of poles by Government agencies/departments. 7. Liability to pay monthly license fee beyond the period of contract/license.
Ratio Decidendi: 1. The Arbitral Tribunal has erred in law and on fact by not appreciating that the petitioners had submitted its bid in response to the NIT dated 27.01.2006. 2. The Public Notice dated 05.03.2006 was not applicable to the present dispute and in fact, only a copy thereof had been filed by the respondent before the Arbitrator and that too at a very belated stage. 3. The judgment of Supreme Court in Bagai Construction vs. Gupta Building Material Store, (2013) 14 SCC 1, would not be of any assistance to the petitioners as in the present case, the parties have gone to trial on basis of the averment of the respondent that the Letters of Offer issued to the petitioners were on the basis of the Public Notice dated 05.03.2006. 4. The Arbitral Tribunal in its Impugned Award has taken note of the fact that the respondent had consistently pleaded that due to trifurcation of the MCD into three separate Corporations, including the respondent herein, some of the records pertaining to the case had been misplaced/lost and the respondent, despite its best effort to trace the same, had failed. 5. The claim granted in favour of the petitioners was akin to damages and it was for the Arbitral Tribunal to have assessed the same on the basis of the evidence led before it. 6. The Arbitral Tribunal has considered the evidence led before it on this claim and has also observed that as it cannot be held that the MCD was solely responsible for arranging the electricity connection and the parties have not even counted the total number of electricity poles on which the advertisement had to be displayed, therefore, it was difficult to make an assessment as to how non illumination of kiosks would have affected the revenue earning capacity of the petitioners. 7. The Arbitral Tribunal has held that the petitioners have been unable to prove the quantum of claim under this head in form of the number of poles that were there at the time of the grant of license and that had been removed by various authorities from time to time.
Final Decision: Petition is partially allowed with no order as to cost.
1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) has been filed by the petitioners challenging the Arbitral Award dated 22.05.2017 passed by the Sole Arbitrator adjudicating the disputes that have arisen between the parties in relation to the offers of allotment of contract for display of illuminated kiosks on street light poles on MCD roads (excluding all PWD maintained roads) for the period 01.04.2006 to 31.03.2008 in respect of City Zone, South Zone, West Zone and Central Zone of the MCD, all dated 10.04.2006.
2. The primary dispute between the parties is in relation to the exclusion of all PWD maintained roads from the offer of allotment made by the respondent in favour of the petitioners and the claim of the petitioners for a consequential reduction in the license fee on this ground.
3. The respondent had issued a Notice Inviting Tender (NIT) on 27.01.2006 in relation to allotment of rights for display of advertisement through kiosks on street poles existing on all MCD roads “including” PWD maintained roads in respect of all the 12 municipal zones from the date of allotment or 01.04.2006 (whichever is earlier) to 31.03.2008 in respect of City, Central and South Zones and for the period 01.04.2006 to 31.03.2008 in respect of remaining nine Zones. The last date of submission of the tender was 16.02.2006 and the NIT prescribed the Minimum Reserve Price per month for the award of such rights.
4. There is no dispute between the parties on the fact that the last date of submission of tender was extended by the respondent till 01.03.2006 vide Corrigendum dated 14.02.2006.
5. It is the case of the respondent that thereafter the NIT was amended by the respondent vide its Public Notice dated 05.03.2006 and a revised NIT was published on that date which excluded PWD maintained roads; gave a uniform period of license for all 12 municipal Zones as 01.04.2006 to 31.03.2008; revised the Minimum Reserve Price per month for various Zones; as also extended the last date of submission of tenders to 10.03.2006. The petitioners dispute the issuance of this Public Notice and submit that it had submitted its tender with the respondent based on the NIT published on 27.01.2006.
6. The respondent vide its letters dated 10.04.2006 made an offer of allotment of the contract for display of illuminated advertisement through kiosks on street poles of MCD roads (excluding all PWD maintained roads) for the period 01.04.2006 to 31.03.2008 in respect of City Zone, South Zone, West Zone and Central Zone of MCD in favour of the petitioners on the monthly license fee offered by the petitioners. It is relevant to note here that such offer letters clearly made reference to the Public Notice published on 05.03.2006 alongwith NIT published on 27.01.2006. The said offer letters also called upon the petitioners to deposit the security deposit equivalent to three months’ license fee and one month’s advance license fee together with advance advertisement tax and also submit an Agreement duly executed and signed by the petitioners on or before 17.04.2006. The said letters further warned that incase of failure to comply with this condition it shall be presumed that the petitioners are not interested in the offer and the same shall be withdrawn and the earnest money deposited by the petitioners shall be forfeited.
7. The petitioners filed a civil suit being CS (OS) 621/2006 challenging the exclusion of PWD roads from the offer letters dated 10.04.2006. This Court vide its order dated 17.04.2006 was pleased to grant an ad interim ex-parte injunction in favour of the petitioners. The same was however, modified by the order dated 17.07.2007, which, on the issue of the applicability of Public Notice dated 05.03.2006 inter alia held as under:-
“13. I have heard learned counsel for the parties
