2022 Supreme(Del) 994

IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Shailendra Paul - Appellant
Versus
Mukesh Aggarwal - Respondent
O.M.P. 3/2020
Decided On : 18-05-2022

The court held that the Arbitral Tribunal erred in its finding that the version of the ATS (Agreement to Sell dated 14.11.2011) as relied upon by the petitioner was fabricated, and also erred in its conclusion that the petitioner was in possession of the Property prior to July 2012.

Headnote:

ARBITRATION - AWARD - CHALLENGE - GROUNDS - FABRICATION OF DOCUMENT - CONSIDERATION FOR SALE OF PROPERTY - VERSION OF ATS RELIED UPON BY RESPONDENT - ADMISSION BY RESPONDENT IN REPLY TO PETITION FILED BY PETITIONER - NO EXPLANATION OFFERED - INFERENCE DRAWN BY ARBITRAL TRIBUNAL THAT ATS RELIED UPON BY PETITIONER WAS FABRICATED - MANIFESTLY ERRONEOUS - NO GROUNDS TO CONCLUDE THAT AGREED CONSIDERATION OF RS. 2.85 CRORES, AS MENTIONED IN THE ATS RELIED UPON BY RESPONDENT, WAS GENUINE - POSSESSION OF PROPERTY - CONTROVERSY - ARBITRAL TRIBUNAL'S CONCLUSION THAT PETITIONER MUST HAVE BEEN IN POSSESSION OF PROPERTY PRIOR TO JULY 2012 - BASED ON PREMISES THAT PETITIONER, BEING A LAWYER, WOULD NOT HAVE PERMITTED OR TOLERATED RESPONDENT HANDING OVER POSSESSION OF SECOND FLOOR TO THIRD PARTY WITHOUT RECEIVING POSSESSION OF REMAINING PROPERTY - RESPONDENT'S CASE IN PROCEEDINGS BEFORE COURT THAT PETITIONER WAS NEVER IN POSSESSION AND RESPONDENT HAD CONTINUED TO BE IN POSSESSION FROM 31.03.2012 TILL 16.12.2015 - CONCLUSION OF ARBITRAL TRIBUNAL MANIFESTLY ERRONEOUS - CLAIM FOR BALANCE CONSIDERATION OF RS. 1,90,00,000/- AND INTEREST THEREON - REJECTED BY ARBITRAL TRIBUNAL ON GROUND THAT CLAIMS WERE BARRED BY LIMITATION - CONCLUSION MANIFESTLY ERRONEOUS - TRANSACTION FOR SALE OF SECOND FLOOR IN FAVOUR OF SHARAD BHANSLI NOT CLOSED - PETITIONER'S RIGHT TO CLAIM ENTIRE CONSIDERATION IN TERMS OF COLLABORATION AGREEMENT - CANNOT BE STATED TO BE BARRED BY LIMITATION - DAMAGES FOR INCOMPLETE WORK - REJECTED BY ARBITRAL TRIBUNAL ON GROUND THAT POSSESSION OF PROPERTY WAS HANDED OVER TO PETITIONER PRIOR TO 25.07.2012 - CONCLUSION MANIFESTLY ERRONEOUS - LIQUIDATED DAMAGES - QUANTIFIED BY ARBITRAL TRIBUNAL AT RS. 6,00,000 - CONCLUSION PATENTLY ERRONEOUS AS IT RESTS ON ASSUMPTION THAT PETITIONER WAS HANDED POSSESSION OF PROPERTY PRIOR TO 25.07.2012 - CLAIM FOR ELECTRICITY BILLS AND OTHER CHARGES SUCH AS HOUSE TAX, WATER CHARGES, GROUND RENT ETC. - REJECTED BY ARBITRAL TRIBUNAL ON GROUND THAT PETITIONER WAS HANDED OVER POSSESSION OF PROPERTY ON 25.07.2012 - CONCLUSION REQUIRED TO BE SET ASIDE - ARBITRAL TRIBUNAL'S DECISION REGARDING PETITIONER'S CLAIM FOR ELECTRICITY (CLAIM NO.5A), IS ALSO LIABLE TO BE SET ASIDE - CLAIM FOR HOUSE TAX AND OTHER LIABILITIES - ARBITRAL TRIBUNAL FOUND THAT INSUFFICIENT DETAILS WERE PROVIDED AND HELD THAT A BLANKET ORDER, AS SOUGHT BY THE PETITIONER, COULD NOT BE GRANTED - NO INFIRMITY WITH THE SAID CONCLUSION - COST OF LITIGATION - REJECTED BY ARBITRAL TRIBUNAL AND FOUND THAT BOTH THE PARTIES HAD TAKEN INCONSISTENT STANDS AND MADE INCORRECT STATEMENTS BEFORE THE ARBITRAL TRIBUNAL AND THEREFORE, WERE NOT ENTITLED TO ANY COSTS - NO INFIRMITY WITH THE SAID CONCLUSION AS WELL - IMPUGNED AWARD SET ASIDE TO THE EXTENT IT REJECTS THE PETITIONER'S CLAIM FOR BALANCE CONSIDERATION AND INTEREST (CLAIM NOS. 1 AND 2) AS WELL CLAIM FOR INCOMPLETE WORK (CLAIM NO.3), AND IN RESPECT OF THE PETITIONER'S CLAIM FOR LIQUIDATED DAMAGES (CLAIM NO.4) AND ELECTRICITY CHARGES (CLAIM NO. 5-A), IS SET ASIDE IN ENTIRETY.

Fact of the Case:

Petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (A&C Act) impugning an arbitral award dated 31.12.2019 (impugned award) rendered by an Arbitral Tribunal comprising of a Sole Arbitrator. The impugned award was rendered in the context of disputes that have arisen between the parties in relation with the Collaboration Agreement dated 24.10.2010 (Collaboration Agreement).

Finding of the Court:

The impugned award to the extent it rejects the petitioner's claim for balance consideration and interest (Claim Nos. 1 and 2) as well claim for incomplete work (Claim no.3), is set aside. The impugned award in respect of the petitioner's claim for liquidated damages (Claim no.4) and electricity charges (Claim no. 5-A), is set aside in entirety.

Issues: Whether the Arbitral Tribunal erred in its finding that the version of the ATS (Agreement to Sell dated 14.11.2011) as relied upon by the petitioner was fabricated, and whether the Arbitral Tribunal erred in its conclusion that the petitioner was in possession of the Property prior to July 2012.

Ratio Decidendi: The Arbitral Tribunal's conclusion that the ATS relied upon by the petitioner was fabricated and the other version relied upon by the respondent that reflected the lower consideration was genuine, is clearly not a plausible view. The respondent had admitted in its reply that the consideration for the sale of Second Floor was in excess of Rs. 4.5 - Rs. 4.6 crores. In this view, the conclusion that the ATS relied upon by the petitioner was fabricated and the other version relied upon by the respondent that reflected the lower consideration was genuine, is clearly not a plausible view.

Final Decision: The impugned award is set aside to the aforesaid extent. The petition is, accordingly, disposed of in the aforesaid terms.