Point of Law: Arbitration - Arbitral Award - Form and contents of arbitral award - DDA issued a public notice for Auction of prime plots on freehold basis for construction of Hotels in Delhi - The mandate under Section 31(3) of the Arbitration Act is to have reasoning which is intelligible and adequate and, which can in appropriate cases be even implied by the courts from a fair reading of the award and documents referred to thereunder, if the need be.

JUDGMENT :

VIBHU BAKHRU, J.

1. The Delhi Development Authority (hereafter the ‘DDA’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’) impugning a common Arbitral Award dated 02.06.2019 (hereafter ‘the impugned award’) delivered by the Arbitral Tribunal comprising of a Sole Arbitrator, in respect of disputes arising in connection with contracts for sale of two plots of land respectively.

2. The impugned award has been rendered in the context of disputes that have arisen between the parties in relation to Plot Nos. 13A and 13B situated at Mayur Vihar District Centre, New Delhi, which were auctioned for the purpose of constructing a hotel. Allotment cum Demand letters dated 30.06.2006 with respect to the aforesaid plots had been issued pursuant to an Auction Notice dated 05.06.2006.

3. By the impugned common award, the Arbitral Tribunal has partly accepted the claims preferred by the respondent (hereafter ‘Eros’). The Arbitral Tribunal directed the petitioner to release the Performance Bank Guarantees of Rs. 5.90 crores and has awarded a sum of Rs. 12 lacs each against Eros’s claim for bank charges for keeping the said Bank Guarantees alive. The Tribunal further allowed simple interest at the rate of 12% per annum on the awarded amount from the date of the award till its realisation.

4. DDA assails the impugned award to the extent as noted hereafter, as being patently illegal and contrary to the fundamental policy of Indian Law.

5. Briefly stated, the relevant facts that are necessary to address the controversy are as under.

6. DDA issued a public notice for “Auction of prime plots on freehold basis for construction of Hotels in Delhi” on 05.06.2006. As per Clause 2.1 of the Auction Notice, the same clarified that “it will be presumed that the bidder has visited the site and satisfied himself/herself with the prevalent site conditions in all respects including status and infrastructural facilities available etc. before participating in the Auction and offering the bid.”

7. Thereafter, on 05.06.2006, the respondent (hereinafter ‘Eros’) participated in the said auction and gave its bid of Rs. 118 crore for each of the hotel plots (Plot Nos. 13A and 13B) located at Mayur Vihar District Centre, New Delhi. Further, as per the terms of Clause 2.6 of the Auction Notice, Eros deposited 25% of the bid amounts as Earnest Money Deposit (EMD), equivalent to Rs. 29.60 crores for each plot.

8. DDA vide letters dated 30.06.2006 informed Eros that its bid of Rs. 118 crore for each of the aforementioned plots was accepted by the Vice Chairman, DDA. Accordingly, as per Clause 2(vii) of the Auction Notice read with Clause 3.4(i) of the General Terms and Conditions of the Auction, Allotment-cum-Demand letters (in respect of Plots bearing nos. 13A and 13B) were issued to Eros directing them to remit the balance 75% amount, that is, Rs. 88,40,00,050 for each of the aforementioned plots within a period of 90 days from the date of issue of the said letters. Eros vide letters dated 26.09.2007 informed DDA that it had deposited the said amount in respect of Plot Nos. 13A and 13B.

9. Thereafter, on 09.11.2006, No Objection Certificates were issued by DDA to Eros. The Deputy Director (CL) of DDA, vide letters dated 09.11.2006, requested the Deputy Director (Bldg.) of DDA to entertain and examine the building plans submitted by Eros in respect of Plot bearing nos. 13A and 13B and release the same on production of No Objection Certificates issued by its office for obtaining the physical possession and execution of lease deeds for the said plots.

10. On 17.11.2006, in accordance with Clause 3.14 of the General Terms & Conditions of the Auction, Punjab National Bank (PNB) furnished Performance Bank Guarantees at the instance of Eros. The said Guarantees secured DDA against the obligation of Eros to complete the hotel and make it functional within a period of 42 months from the date of delivery of pos