O.M.P. (COMM) 537/2020

IN THE HIGH COURT OF DELHI AT NEW DELHI

%

Judgment delivered on: 13.12.2021

+

O.M.P. (COMM) 537/2020

SMS WATER GRACE BMW PVT. LTD.

..... Petitioner

versus

GOVT. OF NCT OF DELHI DIRECTORATE OF

HEALTH SERVICES

..... Respondent

Advocates who appeared in this case:

For the Petitioner

: Mr Darpan Wadhwa, Senior Advocate with

: Mr Sandeep Das, Mr Sitesh Mukherjee an

: Ms Aarushi Mishra, Advocates

For the Respondent

: Mr Anuj Aggarwal, ASC, GNCTD with

: Ms Ayushi Bansal, Ms Aishwarya Sharma

: and Mr Sanyam Suri, Advocates.

CORAM

HON’BLE MR JUSTICE VIBHU BAKHRU

JUDGMENT

VIBHU BAKHRU, J

Introduction

1.

The petitioner has filed the present petition under Section 34 of

the Arbitration and Conciliation Act, 1996 (hereafter the ‘A&C Act’)

impugning

an

arbitral

award

dated

18.03.2020

(hereafter

the

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O.M.P. (COMM) 537/2020

‘impugned award’) rendered by the Arbitral Tribunal constituted of a

Sole Arbitrator (hereafter the ‘Arbitral Tribunal’).

2.

The controversy between the parties, essentially, relates to the

obligations of the petitioner to collect and treat bio-medical waste from

Healthcare establishments identified by the Government of NCT of

Delhi (the respondent), free of any charge, in terms of Clause 10 of an

agreement dated 21.07.2006 (hereafter the ‘Agreement’).

3.

The petitioner contends that in terms of the said clause, its

liability to collect, transport and treat bio-medical waste from the

Healthcare establishments was limited to approximately 1000 kgs. per

day. The respondent disputes the same. According to the respondent,

the petitioner was obliged to collect, transport, treat and dispose of all

the bio-medical waste from all Healthcare establishments identified by

it, free of charge, during the term of the Agreement.

4.

The Arbitral Tribunal accepted the respondent’s contention and

rejected the claims made by the petitioner. It also rejected the counter-

claims raised by the respondent.

Factual background

5.

The petitioner is engaged, inter alia, in the business of treating

waste material.

6.

The Directorate of Health Services, Government of NCT of Delhi

(the respondent) had acquired land measuring 1000 sq. meters at

Ghazipur, Delhi, for establishment of the Centralised Treatment Facility

(hereafter ‘CTF’) for treatment of bio-medical waste. It invited tenders

2021:DHC:4142

O.M.P. (COMM) 537/2020

for establishing a CTF for bio-medical waste generated from private

hospitals/public nursing homes, diagnostic centers, laboratories/blood

banks, medical/ISM colleges, as a joint venture, on BOT (Build Operate

Transfer) basis for a period of ten years.

7.

The joint venture was premised on the respondent providing the

site and infrastructural support to the selected party/agency for

establishing the CTF, in terms of transferring the site on such terms and

conditions

as

may

be

approved

by

the

Delhi

Development

Authority/Municipal Corporation of Delhi. The selected tenderer was

obliged to incur all capital expenditure for establishing the CTF as well

as for operation and maintenance.

8.

The tender documents also expressly provided that the selected

tenderer would transport and treat bio-medical waste generated in

hospitals and dispensaries under the Government of NCT of Delhi

(where treatment facilities were not available on site) free of cost.

9.

The petitioner tendered for the project and was successful. The

respondent issued a Letter of Intent dated 23.04.2006 (hereafter ‘LoI’)

and called upon the petitioner to furnish a Performance Bank Guarantee.

The petitioner submitted the Performance Bank Guarantee on

21.07.2006 and thereafter, the parties entered into the Agreement dated

21.07.2006.

10.

In terms of the Agreement, the respondent agreed to provide the

land at Ghazipur for setting up the CTF. And, in terms of Clause 12 of

the Agreement, the petitioner agreed to pay a sum of ₹4,32,000/- to the

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O.M.P. (COMM) 537/2020

respondent as monthly charges till