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IN THE HIGH COURT OF DELHI
Najmi Waziri, Vikas Mahajan, JJ.
Tejpal Singh - Appellant
Versus
Surinder Kumar Dewan - Respondent
FAO(OS) (COMM) 8 of 2019, CM Appl. 28557 of 2019, CM Appl. 6877 of 2020, CM Appls. 7219-20 of 2020, CM Appl. 29298 of 2021 & CM Appl. 32194 of 2022
Decided On : 13-12-2022




Parties to a collaboration agreement are accountable for adherence to agreed terms; unauthorized deviations may invoke liability for damages arising from resultant legal complications and emotional distress.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 37 - Appeal against partial modification of an arbitral award concerning a collaboration agreement for property redevelopment - Issues of document authenticity and unauthorized construction addressed - The court affirmed the arbitrator's view rejecting fabrications claims against the collaboration agreements. The appellant failed to prove validity of his version of the agreements while he was held accountable for unauthorized construction leading to legal complications for the respondent. (Paras 2, 6, 16, 23)

(B) The principle of accountability in collaborative transactions - Parties are bound to adhere to agreements, and unauthorized actions by one party that affect the rights of the other can lead to damages. This was underscored through the court's rejection of the appellant's arguments about document fabrication, emphasizing agreements' integrity. (Paras 3, 14, 19)

Facts of the case:
The dispute arose from a collaboration agreement for property redevelopment between the parties wherein the appellant failed to adhere to the sanctioned construction plan, leading to unauthorized construction that resulted in sealing the property and criminal implications for the respondent. The respondent invoked arbitration due to the appellant's breaches relating to construction timelines and unauthorized alterations. (Paras 5, 7, 8)

Findings of Court:
The conviction of the arbitrator's decision was maintained as the appellant's unauthorized construction caused significant delays and legal issues for the respondent, warranting damages for mental anguish and property deprivation. Conclusion that the learned Single Judge's modifications to the awarded sums were based on substantiated evidence. (Paras 13, 16, 23)

Issues: The court addressed whether the collaboration agreements presented by the respondent were indeed forged, the liability of the appellant concerning unauthorized construction, and the validity of claims for emotional distress stemming from contractual breaches. (Paras 6, 10, 12)

Ratio Decidendi: The court elucidated that unauthorized construction contradicts collaboration agreement stipulations, thus rendering the appellant liable for damages. It reinforced that invocation of arbitration must be based on legitimate claims supported by evidence. The integrity of the agreements was paramount, demonstrated by the authenticity affirmed by the arbitrator and reiterated by the High Court. (Paras 19, 23, 28)

Result: Appeal dismissed; the arbitration award was affirmed with modifications on certain claims. (Para 29)

Table of Content
1. overview of arbitration appeal background (Para 1 , 2)
2. challenge of authenticity of collaboration agreements (Para 3 , 9 , 12)
3. details of collaboration agreements (Para 4 , 5 , 11)
4. unauthorized construction issue (Para 6 , 7)
5. claims made by respondent in arbitration (Para 8 , 10)
6. findings and modifications by the learned single judge (Para 13 , 14)
7. arguments against claim b regarding deprivation (Para 18 , 19 , 22)
8. damages awarded for mental agony (Para 23 , 26 , 27)
9. final ruling on appeal (Para 28 , 29)

JUDGMENT

Vikas Mahajan, J. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (in short `the Act') is directed against the impugned judgment and order dated 09.08.2018 passed by the learned Single Judge in OMP (COMM.) 178/2018, whereby the learned single judge has partially modified the award to the extent that amount awarded in favor of the respondent under Claim (A) was set aside and the amount awarded under Claim (B) was restricted to Rs.35,000/- per month for the period from May 2006 to 11.05.2007 along with interest as awarded by the learned Arbitrator. The remaining directions in the impugned award were upheld.

2. While entering into the facts and circumstances related to the controversy involved in the present appeal, it would be profitable to recapitulate the background and set up in which the dispute arose between the parties. The respondent (claimant before the learned arbitrator) being the absolute owner of the property bearing no. A-2/5 admeasuring 450 sq. yards, situated at Model Town, Delhi, entered into the Collaboration Agreement with the appellant on 03.05.2005, where under it was agreed that the existing structure of the aforesaid property would be demolished and a new building would be raised in conformity with the sanctioned plan and as per the specification which were mutually discussed, agreed upon and reduced into writing.

3. Since one of the argument raised by the appellant before us is that the two collaboration agreements filed by the respondent-claimant before the learned arbitrator are forged and fabricated whereas the one filed by the appellant is genuine, it is apt to deal with this argument at the outset to dispel the doubt created as regard the authenticity of collaboration agreements. It is noticed from the record that three different collaboration agreements were filed and exhibited before the learned arbitrator. Two collaborations agreements i.e. Ex.CW1/2 and Ex. CW1/C were filed by the respondent-claimant; whereas Ex. RW6/A was filed by the appellant. The learned arbitrator has recorded that the appellant had in his cross examination admitted that he had signed every page of Ex. CW-1/C and further admitted his signatures on the cuttings/corrections made thereon except the cutting/correction made at point `A'. The appellant had also stated that the signatures at point `B' appeared to be his but he had not signed the same. Thereafter, the learned arbitrator compared the admitted signatures of the appellant with those appearing at the cuttings/corrections and the same were found to tally with one another. The learned arbitrator has thus, concluded that once the appellant had admitted his signatures on Ex. CW-1/C, it did not lie in the mouth of the appellant to say that Ex.CW-1/C as filed by the respondent-claimant was a forged and fabricated document. The said findings of the learned arbitrator do not call for any interference as the view taken by the learned arbitrator is a possible view of the evidence on record. The relevant findings of the learned arbitrator in this regard reads as under:

"11. It is undisputed case of the parties that claimant being owner of the subject property entered into a collaboration agreement with the respondent for redevelopment and reconstruction of the property. However, there are three collaboration agreements available on record - two agreement Ex. CW1/2 and Ex, CW 1/C filed by the claimant and Ex. R

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