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IN THE HIGH COURT OF DELHI
Vibhu Bakhru, J.
Delhi Development Authority - Appellant
Versus
Samar Singh - Respondent
O.M.P. (COMM) 22 of 2015
Decided On : 20-04-2022
A party must receive the full extent of what was agreed in an arbitration; failure to deliver as promised justifies a proportional reduction in fees, without the need to further prove loss.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 34 - Dispute regarding license fee for parking site - DDA contended that it was entitled to the entire license fee, while respondent claimed partial possession - Arbitral Tribunal awarded a reduced fee and interest on overpayment - DDA challenged the award citing patent illegality - Tribunal's finding that 37% of the site was not handed over was upheld as evidence showed DDA's default. (Paras 22 and 23)
Facts of the case:
The DDA issued a tender for parking site allotment, with the respondent claiming partial possession of the site leading to disputes regarding the license fee. DDA contended that they were entitled to the full fee, while the respondent claimed a reduction due to only receiving 63% of the site.
Findings of Court:
The Court upheld the Arbitral Tribunal's findings that the possession slip established DDA's failure to provide the entire area and supported a proportionate reduction of the license fee.
Issues: Whether the respondent was entitled to a reduction in license fee due to partial possession of the parking site and whether the arbitration award was vitiated by patent illegality.
Ratio Decidendi: The Court found that DDA had a clear obligation to hand over the entire site and that the Tribunal's conclusions were justified based on the evidence presented, warranting no interference under the Act.
Result: Petition dismissed.
| Table of Content |
|---|
| 1. claim for proportionate license fee reduction (Para 4 , 10 , 12 , 14) |
| 2. obligations on dda regarding possession claims (Para 17 , 18 , 21 , 22) |
| 3. acceptance of claim by arbitral tribunal (Para 19 , 20 , 23) |
| 4. dismissal of the petition (Para 24) |
JUDGMENT
Vibhu Bakhru, J.(Oral)--The Delhi Development Authority (hereafter `DDA') impugns an Arbitral Award dated 23.07.2015 (hereafter `the impugned award') rendered by an Arbitral Tribunal constituted by the Sole Arbitrator (hereafter `the Arbitral Tribunal').
2. The arbitration was conducted under the aegis of the Delhi International Arbitration Centre (DIAC) and in accordance with its Rules. The dispute between the parties arises in respect of a parking site licensed to the respondent, being parking site at Group-IInd in front of Plot nos. 2-5, 8-22, 22-33, 42-44 at Nehru Place, New Delhi (hereafter `the Parking Site'). Whilst, DDA claims that it is entitled to receive the entire agreed license fee for the Parking Site, the respondent disputes the same. According to the respondent, he was handed over possession of only a part of the Parking Site and therefore, the license fee payable for the entire Parking Site was required to be reduced accordingly. The Arbitral Tribunal had accepted the respondent's contention and awarded a sum of Rs.1,97,21,012/-, in favour of the respondent along with interest at the rate of 9% per annum from the date of filing the claim (that is, 01.05.2011) till realization of the entire amount.
3. DDA contends that the impugned award is vitiated by patent illegality on the face of the award. This is, essentially, the controversy that is required to be addressed in this petition.
Factual Background
4. On 30.03.2006, DDA had issued a Notice Inviting Tenders for allotment of various parking sites within its jurisdiction. The respondent furnished its bid for allotment of the Parking Site and offered a license fee of Rs.10,56,000/- per month. The respondent claimed that its bid was the highest, however, DDA did not hand over the Parking Site at the material time. On further inquiries, by a letter dated 25.07.2006, DDA informed the respondent that a suit had been filed before a Civil Judge, Delhi and orders had been passed directing DDA to maintain status quo in respect of the Parking Site. DDA stated that it was contesting the stay order and once the stay order was vacated, it would hand over the Parking Site to the respondent. Thereafter, by a letter dated 01.12.2006, DDA informed the respondent that it was declared as the successful tenderer, in respect of the Parking Site. The license was for a term of three years. The license fee was fixed at Rs.10,56,000/- per month with an increase of 10% per annum. DDA also called upon the respondent to furnish the requisite documents within a period of fifteen days, failing which, the allotment would be cancelled.
5. Thereafter, on 14.12.2006, the respondent requested DDA to inform him as to when the possession of the Parking Site would be handed over. The respondent further stated that he was ready and willing to hand over the balance amount of Rs.31,68,000/-, in addition to the sum of Rs.21,12,000/-, which was already deposited by him.
6. DDA sent another letter dated 13.04.2007 directing the respondent to deposit three months' advance license fee along with the requisite documents within a period of seven days from the date of issuance of the said letter, failing which, the allotment of the Parking Site in favour of the respondent would be cancelled and the earnest money forfeited.
7. Thereafter, under the cover of a letter dated 20.04.2007, the respondent sent a demand draft for a sum of Rs.22,68,000/-.
8. DDA issued a letter of allotment dated 23.04.2007, granting a license to the respondent in respect of the Parking Site. The respondent was permitted to collect parking charges from the public at the stipulated rate and on the terms and conditions as set out in the Tender Documents. Th
