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2021 Supreme(Del) 123
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Ashima Infrastructure Pvt. Ltd. - Petitioner
Versus
Parsvnath Developers Ltd. - Respondent
O.M.P. (COMM) 473 of 2018
Decided On : 07-04-2021
For the Petitioner:Mr. Vatsal Kumar and Ms. Amita Saraswat, Advocates.
For the Respondent:Mr. Vineet Sinha and Mr. Manmeet Singh Nagpal, Advocates.
Point of Law: Arbitration and Conciliation - Pray for setting aside arbitral award - Concession Agreement - Court must observe that petition was adjourned to enable the learned counsel for AIPL to verify the same - He had after examining the same conceded that AIPL’s claim for interest on security deposit would not survive - Court finds no ground to interfere with the impugned award.
Headnote:
Arbitration and Conciliation Act, 1996 - Sections 34 and 11(5) - Delhi Municipal Corporation Act, 1957 - Sections 423 and 491 - Indian Contract Act – Section 73 – Arbitration proceeding – Award - Respondent entered into a Concession Agreement 2 with Metro Railway Corporation - In terms of said Concession Agreement - DMRC had allotted area of Seelampur Plaza comprising of the built-up area at ground floor and in subways, under the station box Metro Rail Station, on license for a period of twelve years expiring - Whether Arbitral Tribunal had erred in not awarding any interest on security deposit furnished by AIPL contended that security deposit was required to be refunded by PDL at time of handing over the possession of premises in question - Whether impugned award is liable to be set aside on the ground that PDL had not compensated AIPL for equipment and other materials left at site.
Finding of the Court: Parties had reconciled calculation and learned counsel for AIPL had confirmed that interest computed by Arbitral Tribunal on sums due to PDL on account of Sub-License Fee and service tax is in accordance with terms of Agreement from date when amounts became due till 30.04.2016, that is, till handing over of possession of premises. Similarly, the interest due on electricity charges computed was being computed only till date of handing over of possession - Thus, amount had been found to be amount due by AIPL to PDL on the date of handing over of possession - Arbitral Tribunal had adjusted the amount being security deposit refundable to AIPL from said amount - Thus, it is not disputed that AIPL had got full credit of security deposit on the date of handing over of possession of premises - Arbitral Tribunal has awarded pre-arbitration, pendente lite and future interest on remaining amount, that is, ^2,25,66,369/- after deducting security deposit and therefore, question of awarding interest on security deposit does not arise.
Result : Petition is dismissed
JUDGMENT :
VIBHU BAKHRU, J.
1. The petitioner (hereinafter ‘AIPL’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter the ‘A&C Act’), inter alia, impugning the Arbitral Award dated 06.07.2018 (hereinafter the ‘impugned award’) passed by the Arbitral Tribunal comprising of a learned Sole Arbitrator.
2. The impugned award has been rendered in the context of disputes that have arisen between the parties in relation to a Sub-License Agreement dated 01.10.2009.
3. By the impugned award, the Arbitral Tribunal has partly accepted the claims preferred by the respondent. The Arbitral Tribunal has accepted that the total amount payable to the respondent in respect of its claim is Rs.2,25,66,369/-. The Tribunal further allowed interest at the rate of 18% per annum on the said amount as pendente lite and future interest. The Tribunal also awarded costs quantified at Rs.2 lacs to the respondent.
4. AIPL 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. On 26.02.2005, the respondent (hereinafter ‘PDL’) entered into a Concession Agreement dated 26.02.2005 with the Delhi Metro Railway Corporation (hereinafter ‘DMRC’). In terms of the said Concession Agreement, DMRC had allotted the area of Seelampur Plaza comprising of the built-up area at the ground floor and in the subways, under the station box at Seelampur Metro Rail Station, on license for a period of twelve years expiring on 14.03.2017 for developing the said Shopping Station Box/Complex.
7. In terms of the said Concession Agreement, PDL completed the construction of the Shopping Complex and was named as ‘Parsvnath Metro Mall’. Further, PDL was entitled to sub-license the areas within the said Station Box for the uses/purposes and timeline, as specified in the Concession Agreement.
8. Thereafter, on 1.10.2009, PDL entered into a Sub-License Agreement with AIPL in respect of “Station Box (Right Wing) admeasuring in aggregate measuring 16,394 Sq. Ft. Super Area (13,115 Sq. Ft. covered area comprising of Ground Floor 8, 740 Sq. Ft. and Mezzanine Floor 4,375 Sq. Ft.) on the Ground and Mezzanine Floor of the Complex, from the Concessionaire for a period/term of 9 years (3 + 3 + 3) (the Term) commencing from the date 2nd Day of Offer of Possession of the Demised Premises or the date of taking over the possession by the Sub Licencee whichever is earlier (the Sub Licencee Commencement Date), which shall not be extended beyond the Concession Period terminating on 14th March, 2017.” The use of the aforesaid premises was stipulated to be in accordance with the Concession Agreement dated 26.02.2005 signed between PDL and DMRC.
9. AIPL had sub-licensed the said area for running, setting up and operating a celebration/party hall under the name of “Metro Shehnai”. PDL sub-licensed the aforementioned space to AIPL for a monthly Sub-License Fee of Rs.4,00,000/- for the first three years of the term from the date of commencement of the Sub-License Agreement. The said Fee would be increased by 15% after the expiry of every three years of the term. In addition to the said Fee, AIPL was also obligated to pay electricity, water and other charges on actual basis directly to PDL or the maintenance agency as appointed by PDL.
10. In order to run the premises as a celebration/party/banquet hall, certain licenses were required to be procured from the Fire Department as well as the Municipal Corporation of Delhi (MCD).
11. On 01.09.2010, MCD informed AIPL of its decision of rejecting AIPL’s application and closing its file as the “Sub License Agreement between M/s Parasvnath Developers Ltd. and M/s Ashima, Securities on 1.10.10 is for running retail outlets not for Banquet H
