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2019 Supreme(Del) 2109
IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJEEV NARULA, J.
India Tourism Development Corporation — Appellant
Versus
M/S. CP & Associate Pvt. Ltd. And others — Respondent
Original Miscellaneous Petition (Comm) No. 252, 257 of 2019; Interlocutory Application No. 8852, 8853, 9054, 9053 of 2019
Decided on : 03-09-2019
Advocate Appeared:
Sangram Patnaik, Adv., Sayant Lodha, Adv., Sanjana Saddy, Adv., Pawan Mathur, Adv., Swyamsidha, Adv., Rajiv Gupta, Adv., Jayant Goyal, Adv., Manjit Singh, Adv., Anil, Adv.
The court emphasized that it does not sit in appeal over the findings given by the arbitrator in an arbitral award, and interference is limited to the grounds mentioned in Section 34(2) of the Arbitration and Conciliation Act, 1996.
Headnote:
Arbitration - Petitioner - Arbitration and Conciliation Act, 1996 - Section 34
Fact of the Case:
The petitioner challenged two arbitral awards dated 6th February 2019 and 5th February 2019, which were nearly identical. The petitioner, a Government of India undertaking, was assigned the work of furnishing flats at Vasant Kunj during the Commonwealth Games 2010 by the Delhi Development Authority (DDA). The respondent, M/s C.P. & Associates Pvt. Ltd., failed to supply the furniture within the stipulated contract period, leading to disputes and arbitration proceedings.
Finding of the Court:
The court found that the petitioner was responsible for the delay due to failure in handing over the flats on time to the respondents. The court also held that the petitioner's official signed the MoU as a witness, making the petitioner liable for the obligations arising from the MoU. The court rejected the petitioner's objection regarding the non-joinder of parties and impleading of DDA, imposing a cost on the petitioner.
Issues: The issues included the recovery of liquidated damages due to delay in supply of furniture and the obligation of the petitioner under the MoU executed between the respondents.
Ratio Decidendi: The court's decision was based on the interpretation of relevant clauses in the contract, the conduct of the parties during the arbitral proceedings, and the provisions of the Arbitration and Conciliation Act, 1996.
Final Decision: The court dismissed the petitions and imposed a cost on the petitioner.
JUDGMENT :
Sanjeev Narula, J.
These petitions have been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act") challenging the Arbitral Award dated 6th February 2019 in OMP (Comm) 257/2019 and the Arbitral Award dated 5th February 2019 in OMP (Comm) No. 252/2019.
2. The facts and questions of law raised in both the petitions are nearly identical, with few material differences as shown in the following table:
| Basis | OMP (Comm) 257/2019 | OMP (Comm) 252/2019 |
| 1. Details of Letter of Intent. | LOI No. GM (Engg.)/ CWG/VK-MIG/10, dated, 12th February 2010, for an amount of Rs. 2,46,92,500/- | LOI No. GM (Engg.)/ CWG/VK-HIG/10, dated, 12th February 2010, for an amount of Rs. 3,14,52,445/- |
| 2. Details of Work Order. | Work Order No. GM (Engg.)/ CWG/VK-MIG/10, dated, 19th February 2010, for an amount of Rs. 2,46,92,500/- | Work Order No. GM (Engg.)/ CWG/VK-HIG/10, dated, 19th February 2010, for an amount of Rs. 3,14,52,445/- |
| Date of the Award. | 6th February 2019 | 5th February 2019. |
Looking into the commonality in facts and grounds of challenge a common order is being passed.
Brief Facts [Common]:
3. Petitioner-ITDC, is a Government of India undertaking inter alia involved in the progressive development, promotion and expansion of tourism in India. Respondent No.1- M/s C.P. & Associates Pvt. Ltd. is a company carrying on the business of Real Estate development and manufacturing furniture. Respondent No. 2- M/s India Export Today (IET), is also engaged in the business of manufacturing and supply of furniture and Respondent No. 3 is the Delhi Development Authority (DDA).
4. During the Commonwealth Games 2010, DDA assigned the work of furnishing flats at Vasant Kunj, to the Petitioner vide Memorandum of Understanding (MoU) dated 14th July 2010. The Petitioner, in turn, issued a Notice Inviting Tender (NIT) for "Supplying Furniture for DDA Mega Housing Project, Behind Pocket D6 and Pocket-D6 Vasant Kunj, Akshardham, New Delhi (For Commonwealth Games 2010). Respondent No.1 bid for the tender and on being declared the successful bidder was awarded the abovementioned Work Order dated 19th February 2010. Before issuance of the Work Order, a Letter of Intent dated 12th February 2010 was also issued to Respondent No.1. The formal agreement dated 6th July 2010, was executed between the parties with a stipulation that the NIT, Letter of Intent and the Work Order along with certain other documents shall be read and construed as part of this agreement. As per the terms and conditions of Work Order, the work was to be completed on 18th July 2010.
5. Due to certain issues between the parties, Respondent No.1 could not supply the furniture within the period stipulated in the contract in order to facilitate the Respondent to complete the contract, Petitioner granted an extension and permitted Respondent No. 1 to sub-contract the work in favour of Respondent No. 2. MoUs dated 31st July 2010 and 7 th August 2010 to this effect were executed between Respondent No. 1 and 2 which were witnessed by one of the officer of Petitioner. Petitioner, vide letter dated 10th August 2010, granted an extension of time, to Respondent Nos. 1 and 2 for completion of contract up to 31st August 2010. In terms of the aforesaid understanding between the parties, they continued to supply goods to the Petitioner. However, vide letter dated 3 rd September 2010, Petitioner informed the Respondent Nos. 1 and 2 that it would not accept the goods beyond 15th September 2010. Respondent No. 1 tried to conciliate and convince the Petitioner to accept further supply of the furniture, but the Petitioner did not agree. As a result, Respondent No. 1 sent a legal notice dated 27th August 2012, invoking the arbitration clause. In compliance thereof,
