Delhi District Court
North Delhi Municipal Corporation vs Narinder Kumar on 31 August, 2022
IN THE COURT OF SH GURVINDER PAL SINGH,
DISTRICT JUDGE (COMMERCIAL COURT)-02,
PATIALA HOUSE COURT, NEW DELHI
OMP (Comm.) No. 41/2021
North Delhi Municipal Corporation
4th Floor, Civic Centre, Minto Road,
New Delhi-110 002
(Through its Commissioner) ..Petitioner
versus
Narinder Kumar
Sole Proprietor
Manoj Computer World,
N-1020, Shastri Nagar,
Delhi-110 052 ..Respondent
Date of Institution : 20/03/2021
Arguments concluded on : 05/08/2022
Decided on : 31/08/2022
Appearances : Ms. Nazia Parveen, Ld. Counsel for petitioner.
Sh. Amandeep Singh, Ld. Counsel for respondent.
JUDGMENT
1. Petitioner has filed the present petition/objections under Section 34 of The Arbitration and Conciliation Act, 1996 (herein after referred as The Act) impugning the arbitral award dated 27/11/2020 passed by Arbitral Tribunal of Sh. Amar Nath, Ld. District & Sessions Judge (Retired), Ld. Sole Arbitrator in arbitration case reference no. DAC/688/01-15 titled 'Narender Kumar vs North Delhi Municipal Corporation'. Ld. Sole Arbitrator awarded Rs. 47,08,815/- with interest @ 7% per OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 1 of 43 annum from 15/01/2015 till the date of award within 60 days of date of award, failing which further simple interest @ 9% per annum on aforesaid amount till realization; as well as Rs. 2,00,000/- as cost of arbitration proceedings; payable by petitioner to respondent/claimant.
2. I have heard Ms. Nazia Parveen, Ld. Counsel for petitioner; Sh. Amandeep Singh, Ld. Counsel for respondent and perused the record of the case, reply of respondent, the arbitral proceedings record, filed brief written arguments, relied upon precedents on behalf of parties and given my thoughtful consideration to the rival contentions put forth.
3. Shorn of unnecessary details following are the relevant material brief facts of the case of the petitioner/objector. Respondent was awarded car/scooter parking site at Jawalaheri Market, Paschim Vihar, New Delhi on a licensee fee of Rs.88,631/- per month for a period of five years on 22/09/2006. Respondent furnished security amount of Rs. 2,90,004/- towards three months license fee, advance one month license fee and 11 post-dated cheques. It was term of the contract and provisional offer letter dated 22/09/2006 that the parking site was being made available on "as is where is basis". It was also term of the contract that license fee shall be increased by 5% every year. The parking site was handed over to the respondent on 06/12/2006 by the petitioner and it is thereafter he started running the same. As per the respondent the shop owners of the area did not cooperate with him, hence he had to approach petitioner in the year 2007. Subsequently, it is the case of the respondent that on 28/04/2008, OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 2 of 43 06/04/2008, 19/08/2008 and 13/03/2009 he reported to the petitioner that he was unable to run the parking smoothly and incurring financial losses because officials of DDA were not letting him operate the parking fully and as per him 60% of the parking area was non-functional. On 16/09/2009 the respondent issued a letter requesting the petitioner to renew the yearly parking contract, he also enclosed 12 cheques towards license fee and assured to fulfill other terms and conditions of the contract. The petitioner on 05/10/2009 informed that in a joint inspection with the Traffic Police, it has been decided that since the parking site is not fit for public interest therefore the allotment stands cancelled. Referring to earlier show cause notice, it was also informed that at the parking site no proper board was found fixed, staff of respondent was not found in uniform and violation of agreement was noted. Accordingly, in terms of the show cause notice issued earlier for violations penalty of Rs. 1,69,000/- was imposed on the petitioner. Subsequently, vide letter dated 19/11/2009, the respondent was called upon to pay the balance amount of Rs.73,000/- in favour of the petitioner and this amount was in respect of arrears of parking, in terms of contract. On 24/12/2009 based on understanding arrived between the parties, petitioner on the request of the respondent extended and renewed the contract w.e.f. 19/09/2009 to 18/09/2010 for license fee of Rs.97,716/- per month. Respondent was accordingly directed to deposit Rs.1,08,382/- in favour of the petitioner and 11 monthly post dated cheques of Rs.97,716/- each in favour of MCD for the contract period. This letter contained terms of contract and specifically stated that as the Traffic Police has allowed only OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 3 of 43 single lane parking, therefore, the terms and directions of Traffic Police have to be strictly adhered to. The respondent by depositing the charges in terms of renewal dated 24/12/2009 and revised map of parking accepted to run the parking. Based on the complaint of respondent a letter dated 18/10/2010 was returned to the Traffic Police by petitioner requesting to give full cooperation to the contractor/respondent in respect of running of parking site. The respondent defaulted in payment of license fee; accordingly a demand notice dated 09/06/2011 was issued by petitioner. In the demand notice respondent was directed to clear the outstanding amount of Rs. 4,42,329/- failing which recovery proceedings under Section 455 of DMC Act shall be initiated against the respondent including termination of contract. The respondent in response to the demand notice on 09/08/2011 deposited the amount of Rs.4,42,329/- with the petitioner. The contract period was not extended by the petitioner. The respondent vide letter dated 08/12/2011 requested for renewal of contract. The respondent on 20/01/2012 requested to resolve all issues in respect of period of parking. Inspite of expiry of contract in September, 2011 the respondent was illegally holding the parking site without making payment of monthly license fee. The petitioner states that based on his request on 09/03/2012 a letter was issued to the respondent intimating that issue of period of allotment of parking has been referred to the Remission Committee subject to clearance of amount of Rs.10,95,848/-. On 27/03/2012 respondent/contractor/claimant wrote a letter claiming that he is not in unauthorized possession of parking site but is holding the site in terms of contract of year 2006 which OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 4 of 43 was for a period of 5 years. Respondent/contractor/claimant also stated that since he was not able to use entire parking site and has suffered financial losses, therefore, no payment is required to be made at his end. On 24/06/2013 the respondent again wrote a letter to the petitioner claiming that he is authorized to operate the parking site and thus deposited a cheque of Rs.97,116/- towards one month license fee, with request to permit him to remain in parking site till the expiry of contract for 5 years. This communication was followed by many other communications, but, the contract was not extended after 2011 nor he paid any amount towards license fee except making one payment as referred. Needless, to say this amount was adjusted towards the earlier arrears. On 24/09/2013 a demand was raised by the petitioner whereby an amount of Rs. 29,99,902/- w.e.f. October 2010 till September 2013 was demanded including penalty and other charges. Respondent was directed to make payment immediately to avoid further action. On 07/10/2013 the petitioner issued a show cause notice demanding an amount of Rs.29,99,902/-, failing which action including blacklisting and debarring shall be taken for violation of terms of allotment and breach of contract. Respondent vide reply dated 08/10/2013 responded claiming that the petitioner was at their fault and no action was liable to be taken. On 11/08/2014 the competent authority cancelled the allotment and directed the area to be free parking site. In continuation with this on 25/08/2014 another show cause notice was issued whereby a demand of Rs.44,00,536/- up to 11/08/2014 including penalty was demanded. The respondent vide letters dated 15/09/2014 and OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 5 of 43 17/11/2014 responded and declined to deposit any amount.
4. Since the petitioner did not appoint an Arbitrator on arising of dispute; respondent/claimant approached Delhi High Court for appointment of an Arbitrator. Delhi High Court appointed Sh. Narinder Pal Kaushik, Additional District Judge (Retired) with the direction to act as Sole Arbitrator to adjudicate the disputes having arisen amongst the parties. After holding some of the arbitral proceedings, aforesaid, Sh. N.P. Kaushik, Ld. Additional District Judge (Retired) had recused himself from the arbitration proceedings. Vide order dated 18/04/2018 in Arbitration Petition No. 31/2018 Delhi High Court appointed Sh. Amar Nath, Ld. District & Sessions Judge (Retired) as Ld. Sole Arbitrator with the direction to commence the proceedings from the date at which it had reached when the matter was being heard by previous Ld. Sole Arbitrator.
5. Impugned arbitral award reveals that pursuant to receipt of notice of the claim petition of respondent/claimant from Delhi International Arbitration Centre (in short DIAC), New Delhi; petitioner failed to file the Statement of Defence (in short SOD) within the prescribed time and such right of the petitioner to file reply/counter claim stood waived; which was recorded in the proceedings dated 10/03/2016.
6. Petitioner has impugned the arbitral award mainly on the following grounds seeking setting aside of the impugned arbitral award. The award is contrary to facts on record, public policy of India, based on no evidence, perverse and contrary to provisions OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 6 of 43 of contract. Respondent having utilized the parking space and site cannot claim any refund from the petitioner. The claim of respondent was also barred by time because the correspondence on record and communications exchanged between the parties did not suggest that any refund was sought by the respondent from 2006 onwards. Ld. Sole Arbitrator has not appreciated nor examined the communications exchanged between the parties. Ld. Sole Arbitrator has not examined the terms of the contract, more specifically clauses 1,3 and 26. Had he examined them properly the result would have been different. Respondent miserably failed to lead any evidence in respect of his claims and explain to the petitioner as well as the Tribunal as to how financial loss was caused to him. Respondent did not file on record any income tax return, other tax returns, labour returns and payment vouchers to prove that he had suffered losses on account of making payment to staff, etc. Ld. Sole Arbitrator failed to take notice that the respondent/contractor was making payment of monthly license fees. There was no restriction on respondent by the petitioner as to how many cars, scooters and other vehicles were parked at the site. Respondent/contractor did not lead any evidence by way of parking slips to establish that he utilized the parking only for limited number of vehicles. Mere assertion and averment was of no use in such a case where lump sum license fees was being charged. Needless to say the contract was for a period of five years from 2006 till 2011; however, respondent/contractor continued in illegal possession till 2014 and that too without making any payment of license fee. The conduct of respondent/contractor itself proves that the parking OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 7 of 43 site was actually gold mine for him which he was not ready to part with irrespective of his frivolous complaints on utilization. Communications also prove that every time the respondent raised an issue a complaint was made to the Traffic Police including police to resolve the hindrances. No communication has been put on record by respondent/contractor that he suffered monthly losses, in fact there is no evidence of any loss to the respondent. Cross examination of the respondent establishes that respondent/ contractor failed to prove his case because in meters and feet he was not able to explain to the Arbitral Tribunal as to what area was not usable. Similarly, respondent/contractor was unable to explain as to why he accepted the renewal terms based on recommendation on Traffic Police in the year 2010, if in his opinion the parking site was not usable. It was on the respondent/contractor to prove his case as per Section 101 and 106 of The Evidence Act, 1872 and discharge the onus, but respondent/claimant miserably failed. None of the joint inspection held on the subject was disputed by the respondent/ contractor; in fact the correspondence between the parties was examined; respondent/claimant/contractor always desired to continue with the parking site. This establishes that no loss was being caused and license fees was rightly recovered by the petitioner. Petitioner is entitled to claim balance amount of license fee as well as penalty for retaining the parking site illegally from 2011 to 2014. No evidence was led by the respondent to seek waiver of this period during which he was in illegal possession of parking site. The pleadings of the case establish that the version of respondent was unreliable.
OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 8 of 43Correspondence proves that respondent had complained that parking site was functional 40% sometimes he claims that parking site was 25% functional or 20% functional or 10% functional. Most of the correspondences regarding the complaint are after expiry of the contract in the year 2011 i.e., complaints are more specifically dated 2012 onwards. While the respondent was in illegal occupation of parking site, these complaints cannot be entertained, particularly when he had not paid any license fee except making payment of one license fee on 07/07/2013. If the parking site was not feasible then why respondent/contractor retained the same; he could have exercise option to cancel the parking site allotment and return the same to the petitioner. No reasoning has been given for allowing claims in the present case. Ld. Arbitral Tribunal had acted mechanically and in an unknown manner. Clauses of the agreement have been ignored and way has been paved for sympathy on an illegal award. Arbitral Tribunal has acted in an autocratic manner by not examining the details of the claims in the light of agreement and precedents. The claims of the respondent/claimant are illegal, untenable and unmerited; which itself proves the malafide intention of the respondent/ claimant/contractor. Impugned arbitral award is in total violation of express provisions of agreement and scope of tendering work. Ld. Arbitral Tribunal which was constituted to deal with the demand of the respondent did not examine nor appreciated this aspect of the matter. The allotment letter and agreement are complete mechanism in itself and can neither be challenged before Arbitral Tribunal nor can the same be interpreted otherwise. Arbitral Tribunal cannot go beyond the written terms OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 9 of 43 of the agreement nor can rewrite the agreement. Respondent having once admitted to terms of agreement and utilized the parking site cannot complain subsequently, the same cannot be challenged now and respondent is estopped from doing so. The clauses of agreement are to be read and interpreted in the manner they are stated in the words and principle of contra-proferentum is not at all applicable in the present case. Claims raised by respondent are in total violation of the aforesaid express provisions contained in the agreement which the respondent well understood and accepted unequivocally while tendering for the work. Petitioner was not responsible for hindrances at parking site. In respect of parking, it is known fact that open land is given to the contractor, it is upon him how he utilizes the same. Parking issues, traffic police problems, shopkeepers objections are common day to day problems which the petitioner never guaranteed to resolve. Licensee contractor is to take care of all these issues and make arrangement for parking of the public at large. Except letter of respondent/contractor there is no evidence of any third party proving that the parking was not utilized by respondent/contractor in terms of the contract and it was not fruitful for him nor any survey of area was filed by him to support his version. The communications referred were self serving, baseless, malafide and bogus which had no bearing on the matter. Ld. Sole Arbitrator while deciding the claim no. 1 had ignored all the aspect of matter and did not give any finding as to why hypothetical figure had been taken into account to award the claims when nothing was admissible to the respondent. Ld. Sole Arbitrator has not explained as to how he has arrived at a OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 10 of 43 figure for award of the claimed amount. Impugned award is a case of complete lack of mind and non appreciation of facts and evidence. No reasoning has been given as to how the claimed amount has been arrived at. No computation or justification of claimed amount has been given in the award and only general discussion has been referred which does not serve the purpose of reasoning required for the adjudication of the case. The award of interest @ 7% per annum is illegal per se. Present was a case where no claim was admissible to the respondent/claimant/ contractor, therefore, there was no question of award of interest. Also the rate of interest awarded was on higher side particularly when escalations were granted as well as compensation. Vide the correspondences proved during the execution of the contract, respondent raised frivolous issues only in a self serving manner without any proof or intent to prove the same. No evidence was led by any of the parties; hence there was no question of passing award based on unacknowledged facts. By filing the claim petition, respondent/claimant/contractor took advantage of the situation, knowingly well the complete terms of the contract. Respondent was aware that he failed to establish his case viz a viz contractual terms. No issues were framed in arbitration proceedings and without framing any issues for determination in a manner unknown to law, the proceedings have been concluded and an illegal award has been passed. Petitioner through Ld. Counsel prayed for setting aside of the impugned arbitral award accordingly.
7. Following are the relevant averments of respondent in brief in the filed reply through Ld. Counsel. The objection petition is OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 11 of 43 baseless, vexatious and deserves to be dismissed. There is inordinate delay in filing the petition without sufficient cause. Court is not to sit in an appeal over an award nor can reassess nor can re-appreciate the evidence. The award can be challenged only on the grounds mentioned in Section 34 of the Act. Facts cannot be re-examined to find whether a different decision can be arrived at. Ld. Sole Arbitrator had passed the award after due consideration of facts, evidences and law applicable. Petitioner's right to defence was struck off by order dated 10/03/2016 as petitioner failed to file the statement of defence within prescribed time and said order was not challenged and attained finality. Petitioner is trying to bring his defence through this petition whereas petitioner/objector cannot bring new facts and evidences on record, which is not permissible in law. The parking site allotted to respondent/claimant/contractor initially remained un- operational whereas possession so offered on 06/12/2006 was symbolic possession while the respondent/claimant/contractor was unable to operate parking area due to restrictions by the market association; due to which parking area could not be operated from the date of possession i.e., 06/12/2006 to August, 2007. After September, 2009 parking area came under category of "Not Recommended for parking", which was thereafter canceled by the petitioner and so the parking area remained closed from September, 2009 to December, 2009. Sometime around in June, 2012 parking area again remained un-operational due to objection by the Delhi Police, Traffic Police for which the respondent wrote detailed letters Ex CW1/54 and Ex CW1/56 which were neither questioned during cross examination nor any OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 12 of 43 dispute was raised in written submissions filed by petitioner. Initially respondent/contractor was allotted the area as shown in site plan having area around 1399 meters and on 24/12/2009 petitioner revised the site plan, which are exhibited as Ex CW1/62 and Ex CW1/63, revising the area available for parking and by deleting 1254 meters of area out of total 1399 meters of area. Parking site remained un-operational for some period and also when it was operational even then respondent was unable to operate to its full extent. It is admitted that area was reduced by petitioner to great extent. On one side respondent was deprived of operating the total area allotted at the time of possession and on the other side petitioner was charging same amount even after reduction in parking area and that too with yearly enhancement. Only about 10% of parking area was available for parking but petitioner charged for 100% parking area. Respondent/contractor was shown total area of 1399 meters at the time of NIT, based upon which respondent did prior assessment of parking site and made the offer for Monthly License Fees (in short MLF) based upon the total area. That parking site was allotted to the respondent upon said proposal made. When petitioner itself withdrew the big portion of allotted area, petitioner itself violated the terms of contract by not granting remission. The allegation raised that respondent applied for the parking site after prior assessment and further parking site was allotted on "as is where is" basis as stated in provisional offer letter and respondent is not entitled to make excuse of hindrances and restrictions in operating the parking site, are vague assertions as the intent behind the prior assessment of parking site is to assess the area to OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 13 of 43 calculate the monthly fee and "as is where is" means that department is responsible to provide the area as it is available at time of NIT and in the present case hindrances and restrictions faced by the respondent were of nature that cannot be assessed at time of prior inspection. Respondent/contractor was not asking remission due to decline of potential customers or other ambiguous reason. Here the respondent/contractor was asking for the remission due to reduction in the total parking area which was shown/mentioned in NIT. It is admitted fact that due to traffic police restrictions, petitioner withdrew the big chunk out of the total area. There was no way that this can be assessed by the respondent prior to the allotment of site. Respondent was entitled to the remission which petitioner failed to grant. Clause 17 of the agreement clearly entitles the respondent for remission of MLF in case there is reduction in the parking area by the petitioner department. It is admitted fact that by letter dated 24/12/2009 petitioner itself reduced the parking area by revising the site plan after joint survey by traffic police and same is borne out from the revised site plan Ex CW1/62. Petitioner department itself recommended the case of respondent as fit for remission. The contention of petitioner that there is no such provision in agreement regarding remission is baseless. Respondent was authorized to operate the parking site commencing from the period August, 2007 to August, 2012 i.e., period of five years, which is borne out from letter Ex CW1/12 dated 04/12/2007. After repeated requests made to the petitioner by respondent, petitioner had extended the contract whereby the respondent was authorized to operate the parking site till next NIT, which is OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 14 of 43 borne out from letter Ex CW1/40 dated 05/12/2011. There is no mention of "unauthorized occupant" in any letter issued by petitioner to respondent even after alleged expiry period. Respondent never waived his objection of reduction in area. Instead respondent/contractor time and again requested petitioner through letters to grant him remission in MLF. No questions nor suggestion during cross examination of witness of respondent/ contractor were put by petitioner/Ld. Counsel and the documents of respondent/contractor to which petitioner had not disputed, stood admitted. Respondent through Ld. Counsel denied the averments of the petitioner/objector in toto and in particular. It was prayed for dismissal of the petition/objection of the petitioner.
8. Ld. Counsel for petitioner argued in terms of the grounds, above said and prayed for setting aside the impugned arbitral award. It was argued that respondent/claimant/contractor cannot claim refund on the ground of non usage of parking area since the contract of parking was allotted on "as is where is basis", therefore, no case can be made out for decline in potential of customers or for any unforeseen reasons whatsoever. Reliance was placed upon the case of Manpreet Singh & Co. vs North Delhi Municipal Corporation, 2014 SCC OnLine Del 4729. It was also argued by Ld. Counsel for petitioner that petitioner had duly complied with the complaints of the respondent and took all the necessary actions which were within the reach and bounds of the petitioner and co-operated with the respondent from time to time in order to ensure smooth functioning of the parking site. It was also argued by Ld. Counsel for petitioner that default in OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 15 of 43 making payment on the part of respondent was not taken note of by the Arbitral Tribunal and such default would have resulted in blacklisting of the respondent as the same would account for a clear violation of the terms of allotment and breach of contract. Respondent refused to make such payment falsely claiming that petitioner was actually at fault whereas respondent was obligated to make payment of Rs. 29,99,902/- (inclusive of the penalty and other charges) for the period starting from October, 2010 till September, 2013. It was also argued by Ld. Counsel for petitioner that respondent/claimant/contractor cannot claim entire refund after utilizing and earning from parking site. Ld. Counsel for petitioner also relied upon the case of S.K. Pandey vs MCD & Ors., 2012 SCC OnLine Del 254 and prayed for setting aside of the impugned arbitral award.
9. Ld. Counsel for respondent argued in terms of above elicited filed reply. It was argued by Ld. Counsel for respondent that Court does not sit in an appeal over the award nor can reassess nor can re-appreciate the evidence while adjudicating the petition under Section 34 of the Act, whereas the award can only be challenged under the grounds mentioned in Section 34 of the Act. Ld. Sole Arbitrator had passed the award after due consideration of facts, evidence and law applicable. Right to defence of petitioner was struck off by order dated 10/03/2016 as petitioner had failed to file the statement of defence within prescribed time. Said order dated 10/03/2016 was not challenged and attained finality. A party cannot take a new ground which was never raised before the Arbitrator, while challenging the arbitral award as both the parties were given opportunities to file the substance OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 16 of 43 on record and based on that substance, Ld. Sole Arbitrator based his award. The grounds mentioned in the petition, not raised before Arbitral Tribunal cannot be entertained accordingly. The facts regarding obstructions in operating the parking site smoothly without any problem was also acknowledged by the petitioner, when the petitioner had sent letter to SHO Police Station Paschim Vihar and held a joint meeting within department. These acts of petitioner show that the petitioner was aware of the fact of hindrances associated with the allotted parking site. The ground raised that the contract expired in year 2011 and respondent/claimant/contractor was unauthorized occupant is vague and baseless ground as respondent/contractor was authorized to operate the parking site commencing from the period August, 2007 to August, 2012 i.e., period of five years and said fact can be adduced from letter Ex CW1/12 dated 04/12/2007. Further, petitioner had extended the contract whereby respondent was authorized to operate the parking site till next NIT which can be adduced from the letter Ex CW1/40 dated 05/12/2011. Even otherwise there was no such mention of words "unauthorized occupant" in any letter issued by the petitioner to the respondent after alleged expiry period. It is also admitted fact that initially respondent was allotted the area around 1399 meters as shown in site plan Ex CW1/61 and later on 24/12/2009 petitioner revised the site plan which are exhibited as Ex CW1/62 and Ex CW1/63 revising the area available for parking and by deleting the 1254 meters of area out of total 1399 meters of area. Respondent was shown total area of 1399 meters at the time of NIT, based upon which respondent did prior OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 17 of 43 assessment of parking site, thereby respondent made the offer of MLF based upon the total area. That parking site was allotted to the respondent upon said proposal made. Thus, when the petitioner itself withdrew the big portion of area, petitioner violated the terms of contract by not granting remission. In the present case hindrances and restrictions faced by respondent/ claimant/respondent were of nature that could not be assessed at the time of prior inspection. Respondent/claimant/contractor was not asking remission due to decline of potential customers or other ambiguous reason but respondent/claimant/contractor was asking for the remission due to reduction in the total parking area which was shown/mentioned in NIT. It is admitted fact that due to Traffic Police restrictions, petitioner withdrew the big chunk out of the total area. However, "as is where is basis" also cast duty upon the petitioner department to provide the parking site as it was there at time of NIT which petitioner failed to provide. There was no way that this can be assessed by the respondent, prior to the allotment of the parking site. Clause 17 of the agreement clearly entitles the respondent for remission of MLF in case there is reduction in the parking area by the petitioner department. By letter dated 24/12/2009 petitioner reduced the parking area by revising the site plan after joint survey by traffic police and same is borne out from the revised site plan Ex CW1/62. In Ex CW1/60, petitioner department had admitted and recommended the case of respondent/claimant/contractor as fit for remission. The contention of petitioner that there is no such provision in agreement regarding remission was baseless. Thus, respondent was entitled to the remission as awarded in impugned OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 18 of 43 arbitral award. It was also argued by Ld. Counsel for respondent that it was clear from the letters/representations written by respondent after said re-opening about the hindrances/restrictions and reduction of parking area. It is accordingly clear that respondent/contractor/claimant never waived his objection of reduction in area and instead time and again respondent/ contractor requested the petitioner through letters to grant him remission in MLF. It was also argued by Ld. Counsel for respondent that if opposite party has not disputed any fact/ document in the affidavit of said witness nor asked any question nor gave any suggestion for it during cross examination, then it shall be deemed to be admitted. The documents to which petitioner had not disputed; accordingly stand admitted. Petitioner has not disputed about any letter/representation, except letter dated 23/01/2007. Therefore, all those letters were admitted and by no way it was permissible to petitioner to dispute those documents in the present petition. The ground raised regarding the calculations filed along with statement of claim have not been put to the witness; so as above said, these calculations were deemed to be admitted by the petitioner. Moreover, no document contrary to calculations filed with statement of claim and letters/ representations filed with the statement of claim were either shown, produced nor were proved by petitioner on record in arbitral proceedings. Petitioner had filed the present petition claiming violation of principles of natural justice. Petitioner was given sufficient opportunities to present its case; however, petitioner chose not to file its reply and subsequently right of petitioner was waived. It was argued by Ld. Counsel for OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 19 of 43 respondent/claimant/contractor that petitioner/objector had failed to raise any valid or tenable grounds under Section 34 of the Act whereas the grounds raised therein are merely an attempt to delay the machinery of law and the raised grounds in the present petition were briefly considered by Ld. Sole Arbitrator whereas there is no point left to be adjudicated. Ld. Counsel for respondent/contractor/claimant relied upon the following precedents and prayed for dismissal of the present petition:-
1. Muddasani Venkata Narsaiah (D) Th. Lrs. Vs Muddasani Sarojana, MANU/SC/0524/2016;
2. Union of India vs Susaka Private Limited & Ors., (2018) 2 SCC 182;
3. Summit Apartments Pvt. Ltd. vs Satya Priya Saxena & Ors., MANU/DE/0790/2021 and
4. PSA SICAL Terminals Pvt. Ltd. vs The Board of Trustees of V.O. Chidambranar Port Trust Tuticorin & Ors., decided by Supreme Court in Civil Appeal Nos. 3699-3700 of 2018 on 28/07/2021.
10. An arbitral award can be set aside on the grounds set out in Section 34 (2) (a), Section 34 (2) (b) and Section 34 (2A) of the Act in view of Section 5 of the Act and if an application for setting aside such award is made by party not later than 3 months from the date from which the party making such application had received the signed copy of the arbitral award or if a request had been made under Section 33 of the Act, from the date on which that request had been disposed of by the Arbitral Tribunal. If the Court is satisfied that the applicant was prevented by sufficient cause from the making the application within the said period of three months it may entertain the application within further period of 30 days, but not thereafter.
11. Section 34 (1) (2), (2A) and (3) of The Arbitration and OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 20 of 43 Conciliation Act, 1996 read as under:-
"34. Application for setting aside arbitral award- (1) Recourse to a court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub- section (3).
(2) An arbitral award may be set aside by the court only if-
(a) the party making the application furnishes proof that-
(i) a party was under some incapacity, or
(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or
(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration;
Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or
(b) the court finds that-
(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or
(ii) the arbitral award is in conflict with the public policy of India.
Explanation 1 - For the avoidance of OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 21 of 43 any doubt, it is clarified that an award is in conflict with the public policy of India, only if,-- (i) the making of the award was induced or affected by fraud or corruption or was in violation of Section 75 or Section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice.
Explanation 2.-- For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of the dispute.
(2A) An arbitral award arising out of arbitrations other than international commercial arbitrations, may also be set aside by the Court, if the Court finds that the award is vitiated by patent illegality appearing on the face of the award:
Provided that an award shall not be set aside merely on the ground of an erroneous application of the law or by reappreciation of evidence.
(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:
Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter."
12. Supreme Court in case of Dakshin Haryana Bijli Vitran Nigam Ltd. vs M/s Navigant Technologies Pvt. Ltd, 2021 SCC OnLine SC 157 has held that the date on which the signed award is provided to the parties is a crucial date in arbitration proceedings under the Act. It is from this date that: "(a) the period of '30 days' commences for filing an application under Section 33 for correction and interpretation of the award, or for additional award; (b) the arbitral proceedings would terminate as OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 22 of 43 provided by Section 32(1) of the Act; (c) the period of limitation for filing objections to the award under Section 34 commences."
13. Supreme Court in Suo Moto Writ Petition (Civil) no. 3 of 2020, In Re: Cognizance For Extension Of Limitation vide order dated 10/01/2022 has excluded the period from 15/03/2020 till 28/02/2022 for computing the period of limitation for any suit, appeal, application or proceedings and the petition under Section 34 of The Act is also eligible for the same. Accordingly, the present petition filed on 20/03/2021 is within the period of limitation.
14. Following are the part of para no. 15, para no. 16 and part of para no. 17 of impugned arbitral award :-
"15. .................................................................................................
Pursuant to the receipt of the notice of the present claim petition from the Delhi International Arbitration Centre, New Delhi, the respondent had failed to file the Statement of Defense (in short "SOD") within the prescribed time and as such "right of the respondent to file reply/counter claim stood waived" which was recorded in the proceedings dated 10.03.2016.
16. Admission/Denial of documents of the claimant was not carried out. Even the issues were not framed. However, the claimant was directed to file the affidavit towards the evidence with an advance copy to the other/opposite side.
17. To prove its claim, the claimant had examined Shri Narender Kumar (CW1) through affidavit/additional affidavit, Ex CW- 1/A and CW-1/1A who deposed on the lines of SOC. He was cross examined at length on various dates by the counsel for the respondent."
15. 63 documents as Ex CW-1/1 to Ex CW-1/63 were exhibited and proved by respondent/contractor/claimant in evidence led before Ld. Sole Arbitrator in arbitral proceedings, as is borne out OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 23 of 43 from the impugned arbitral award. 48 pages impugned arbitral award finds appreciation of oral and documentary evidence led by respondent/contractor/claimant including Ex CW-1/1 to Ex CW-1/63 and yet petitioner/Counsel cry hoarse alleging the award is based on no evidence. Above mentioned makes it abundant clear that fault lies with the petitioner itself for failure to file the Statement of Defence and counter claim within the prescribed time and it resulted in proceedings dated 10/03/2016 elicited above wherein right of present petitioner to file reply/ counter claim stood waived. Accordingly, for want of defence/counter claim, no evidence was led by petitioner in the Arbitral Tribunal.
16. Following are the relevant clauses in agreement Ex CW- 1/10 inter se parties to the lis filed before Arbitral Tribunal:-
"1) Duration of contract The contract will be for a duration of five years with effect from the date of handing over the site to the licensee but the contract shall be renewed after the expiry of every one year with the enhancement of monthly licence fee by five percent every year subject to the satisfactory completion of period of every year of contract. The contract can be extended for further period of one year by the Commissioner, MCD, at his discretion, whose decision shall be final and binding upon the tenderer. However, if the allottee continues to operate the site after expiry of the period of contract, even under any judicial order/stay order from the competent court, he shall be treated as unauthorized occupant for such period and shall be liable to pay to the Corporation the misuse/damages charges @ double the monthly licence fee for such period of unauthorized occupation.
...........................................................................................................
3) Responsibility of licensee before offering bid:
(a) The licensee has inspected the parking site which is being given on 'as is where is' basis and has satisfied himself full before offering bid for the same.
The licensee has bid the amount by considering its entire potential OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 24 of 43 to attract customers. The licensor shall not be responsible for any decline in the potential of the customers at the parking site for any extraneous/unforeseen reason (s) whatsoever. Any claim for remission on the basis of harm to business interest on extraneous/unforeseen conditions/reasons whatsoever shall be summarily rejected by the MCD without any kind of response to the licensee and the licensee shall not be entitled to make any claim/remission on the account.
..........................................................................................................
6) Parking details
(a) "MCD will supply a map of the space allowed for the parking of cars/scooters/motor cycles and the licensee shall use the parking space strictly according to the map. This map shall be signed by the supdt./inspector of the RP Cell and by the licensee himself also at the time of handing/taking over the site. Use of parking site will be strictly as per terms of NIT and no vehicle other than permissible shall be allowed to be parked in the licensed parking site. The space allotted, as per map, will be allowed on roadside parking sites from the road berm.
...........................................................................................................
17) Licensee to hand over possession, if so required by the Licensor
(a) In case the site is required by the Commissioner for a municipal/public purpose, the licensee shall have to hand over the vacant possession of the site at once. However, proportionate amount of license fee for the period of such disuse would be refundable to him. In case the site is required for any particular period for the above purpose or the parking site remains closed on account of reasons beyond his control during the period of contract, a proportionate amount of license fee for the vacant period may be refundable to him, as per rules if due
(b) MCD reserves the right to revise the area and change the site of parking stand in the vicinity during the currency of the contract. In case of revision of size of parking area during the currency of the contract the licensee fee will stand revised in the same proportion for the remaining period of the contract.
(c) The licensee shall not interfere with the work of construction by the licensor if any drain, pipe or cable etc. shall repair at his own cost damage which may be caused to such works to the entire satisfaction of the licensor.
(d) On the expiry of the period of contract, the licensee shall peacefully hand over possession of the parking site to the MCD. ...........................................................................................................
OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 25 of 4326) Surrender
(a) In the event of surrender of parking contract by the licensee, the right of acceptance or rejection solely rests with the Licensor.
(b) In the case of surrender of the contract, the Licensee shall have to give at least 90 days notice, but not before the lapse of one year of start of contract, so as to enable the Licensor to examine the notice to take decision and to make alternative arrangement for the running of parking site for the safeguard of municipal revenue.
(c) In case of surrender/cancellation of any tender for any reason, it shall also be open to Commissioner/Officer authorized by him to negotiate with the highest bidder and if he is not available, 2 nd highest bidder/other bidder in order of their bid amounts/any other parties in the interest of revenue of the MCD.
(d) In the case of surrender, the security deposit amount shall not be adjusted against the licence fee of remaining months and shall be refunded after the determination of the contract.
(e) The Licensee/Contractor, who has surrendered the site, shall not be eligible to participate in the retender process of the same site.
.........................................................................................................."
17. Following is the part appreciation of Ld. Sole Arbitrator:-
"29. According to the Ld. Counsel for the respondent that the correct site map of the allotted parking area was Ex.C1 and not other site map(s). If the site map Ex CW-1/7 and Ex CW- 1/55 and Ex CW-1/62 are examined together, it does not reveal that these site map(s) were tempered with by adding the figure of area as 1254 meters and after deleting the same (1399 Mtrs. - 1254 Mtrs.) the figure of the area came to 145 meters which is apparent from the Ex.CW-1/63. Moreover, it was not the case of respondent that the site map(s) other than Ex.C1 have been tempered with. I find substance in the version of the claimant that the site map Ex.C1 was initially supplied to it at the time of possession of the parking site and thereafter revised map Ex.CW-1/7 containing the figure of the area of the parking site was supplied. However, photocopies of the revised map Ex CW-1/7 was made exhibits subsequently by giving fresh exhibits numbers such as Ex CW-1/55 and Ex CW-1/62 during the course of examination of the witness inadvertently. Keeping in view of the aforesaid scenario, the contention of the respondent does not appeal that Ex.C1 was the only correct site map.
30. It was officially noted that there was revised map which makes out strong prima facie case that some space is used by the shopkeepers/market association, the area allowed in revised site map is much less than the area allotted in NIT.OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 26 of 43
31. The plea of the respondent that alleged figure of 1399 meters is imaginary stands falsified as apparent from Ex CW-1/60, wherein it has been specifically mentioned that "......approx. measurement of the major portion is mentioned on the copy of the map placed opposite. Some of the space where parking is shown, the building has been erected here now. On the other spaces as on today vehicles are parked but nobody was seen of collecting the parking fee." Hence, the plea of the respondent being contrary to the record is rejected.
32. Now let me examine the File Noting at Page No.85/N & 86/N, (Delhi Nagar Nigam) North MCD Parking site at Jwala Heri Market, Paschim Vihar (Rohini Zone) which indicates that there was approval from the Additional Commissioner (Rev.) on 24.10.2014 which is at the highest level of the department, which reads as under:-
"........
Kindly peruse the noting on prepage wherein A.O. (R.P.Cell) directed to put up a self contained note. In this regard, it is submitted that show cause notice dated 25.08.2014 was issued to the parking contractor and the contractor submitted his reply to the same on 15.09.2014 and the detailed facts are as under:
The parking site was initially allotted w.e.f. 06.12.2006 for the period of five years. But the parking site couldn't be made functional due to various problems created by police authorities and market association as informed by the contractor. He informed that he started to operate the parking site after the issuance of the letter dated 04.12.2007 by the corporation and five-year period stated from this date. Later on the parking site came under the category "Not recommended" in the survey carried out by the Traffic Police and to make the parking site operational certain area was deleted from the parking map handed over to the contractor at the time of allotment i.e. 06.12.2006. In the meantime while the new site map was provided to the contractor he was not allowed to operate the parking site. He further stated that almost 75% area was reduced in the new site map. He further submitted that in May 2012 the parking area was closed by the market association and concerned police authorities and he made it operational in June 2013 and deposited on account license fee. He further requested to give him relief for the area reduced in the site and not to charge license fee for the period when parking site was not operational.
The details facts of the case area already mentioned at page no. 64/N to 67/N. The outstanding payment has not OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 27 of 43 been received from the contractor. According to the show cause notice dated 18.06.2014 failing which the respective parking contract was to be cancelled and the process for blacklisting the contract started.
Further, as per orders of the competent authority an inspection was carried on 14.03.2014 and during the course of inspection it was found that as per the initial map available on record these are two phases of the space in the map the first is roads side and adjacent spaces of the Jawala Heri Mkt. and the second is the area of the DDA Complex on the opposite side. The status of the DDA Complex as on date is quite different of the map having signatures of the staff in the year 2003, 2005 and 2006. The approx. measurement of the major portion is mentioned on the copy of the map placed opposite. Some of the space where parking is shown, the building has been erected here now. On the other spaces as on today vehicles are parked but nobody was seen of collecting the parking fee. Thus, except the proceedings with regard to this portion available on record it is not possible to ascertain the past status after passing a span of approximately eight years.
On the Jwala Heri Mkt. side vehicles two wheeler and cars were parked on road and the space between road between Jwala Heri Mkt. in front of Choudhary Balbir Singh Complex and Choudhary Kishan Chand Complex where the parking fees slips were being issued by the workers of the contractor. In the inner space parallel to the wall of the park where Tehbazari were allotted before 10-12 years was not being used by the contractor. The other inner space near the residential flats was found under personal use of the shopkeeper and area residents.
From the revised Map at 117/C, there is prima facie strong case that the area of parking allowed on the revised site is much less than the area which was part of NIT against which the MLF was quoted and the work was awarded to the licensee. The original parking site may be the one which is at 23/C, the said maps are also available at page 183/C & 187/C. In view of the aforesaid facts and maps available in the file, it is proposed that the monthly license fee may be calculated as per the revised map placed on page 117/C and after adjustment of paid MLF a demand notice may be issued to the parking contractor for the payment of outstanding dues, if any. ('X' portion) The file is submitted for further necessary direction in OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 28 of 43 the matter please.
Sd/-
DA(RP Cell)
29/9/14
Supdt. /RPC/NDMC(On Leave)
ADRPC In response to show cause notice dated
25.08.2014, the P/Contractor has filed his
submissions wide letter dt. 15.09.2014
Submitted for further direction/
appropriate order please.
Sd/-
29/9
DC(RP/cell) on leave
Addl. C(R) 'X' Approved
Sd/-
24/X/2014
DC(RP Cell)
Sd/-
M.S.A Khan
Addl. Comm. (Rev.)
........"
33. It is trite to say that the noting does not show the name of the addressee to whom it was issued but it cannot be ignored that its contents are not denied. For a moment, if it is assumed that the noting Ex CW-1/60 was unlawfully procured, then it was the subject of inquiry within its house. Had the noting been not issued by the department then question arises as to how the said noting came in the power and possession of the claimant. It would not be feasible to procure the copy of the noting without the involvement of the officials of the respondent because the record always remains in the official custody of the respondent. In the instance case, the copy of the noting file was obtained under the Right to Information Act, 2005 and filed by the claimant in the proceedings of the present case. The respondent did not dispute the contents, authenticity and genuineness of the document. On the contrary, there was approval from the highest level i.e. Additional Commissioner (Rev.) which is apparent from reading the noting Ex CW-1/60. The endorsement below the noting is having the signature of Mr. M.S.A. Khan the then Additional Commissioner (Rev.) appended the official of OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 29 of 43 stamp with date. Nothing contrary has either been shown or produced by the respondent with a view to controvert/contradict the contents of the noting in question. In the absence of any contrary document, the contents of the noting have to be acted upon. Moreover, Ex CW-1/60 came from the official record of the respondent supplied under the RTI Act is admissible in evidence being public document and the same is not required to be proved by calling the witness or the person who had issued the same while discharging the duties of a Public information Officer. I find support of my view from judgment titled "Vinod Vs. M/s Kaya Kalap Agencies", decided on 25.09.2019 by High Court of Madhya Pradesh Bench at Indore (Second Appeal No. 2208/2018).
34. It is settled law that strict rules of evidence do not apply to the arbitration matters. The Arbitral Tribunal shall not be bound by the Code of Civil Procedure or the Indian Evidence Act, 1872 and is free to determine the admissibility of evidence. The Arbitral Tribunal is ruled by the provisions of natural justice.
35. Furthermore, sub section (4) of Section 19 of the Arbitration and Conciliation Act, 1996 states that the Arbitral Tribunal has the power to determine the admissibility, relevance, materiality and weight of any evidence. In case of "Sathyanarayana Brothers (P) Ltd. Vs. Water Supply and Drainage Board", (2004) 5 SCC, 319, it was emphasized that the arbitrator while making his award cannot ignore any material and relevant documents to determine the controversy so as to render a just and fair decision.
36. It was officially noted that there was revised map at 117/C which makes out strong prima facie case that some space is used by the shopkeepers/market association, the area allowed in revised site map is much less than the area allotted in NIT. The noting dated 29.09.2014 also stated in conclusion that the monthly license fee may be calculated as per the revised map on page 117/C and after adjustment of the said MLF, the demand notice may be issued to the parking contractor or the payment of outstanding dues if any. The respondent had been charging MLF at the same rate which was fixed at the time of awarding the contract but it failed to provide hindrance free parking site.
37. Proposal note 'X' consists of two directions. Firstly, it is proposed on the basis of map(s) available in the file that the monthly license fee may be calculated as per the revised map placed on page 117/C. Secondly, after adjustment of said MLF, a demand notice be issued to the parking contractor for OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 30 of 43 the payment of outstanding dues. The endorsement below the noting was approved by Mr. M.S.A. Khan the then Additional Commissioner (Rev.) under its signature.
38. From the record, it stands established that the respondent ignored the first direction regarding the calculation of the MLF as per the revised map but chose to issue the demand notice, which is not expected from the government statutory bodies.
........................................................................................................."
18. Ld. Sole Arbitrator relied upon the law laid by Supreme Court in the cases (i) Urban Improvement Trust, Bikaner vs Mohan Lal, (2010) 1 SCC, 512 and (ii) Bhag Singh & Ors. Vs Union Territory of Chandigarh through LAC, Chandigarh, (1985) 3 SCC 737 and after appreciation of oral and documentary evidence before him opined that respondent/ contractor/claimant was asking for the remission due to reduction in the total parking area which was shown/mentioned in NIT but despite existence of Clause 17 in agreement Ex CW1/10 after there was reduction in parking area by petitioner vide letter Ex CW-1/21 dated 24/12/2009 and revised map Ex CW1/63 showing the area as 145 meters; also gave the finding inter alia that there was no reason but to accept the claim no. 1 of respondent/contractor/claimant in absence of any defence and details given in documents filed with Statement of Claim having not been put to witness of claimant, which were deemed to be admitted in view of law laid by Supreme Court in the case of Muddasani Venkata Narsaiah (D) Th. Lrs. Vs Muddasani Sarojana (supra). Oral and documentary evidence were appreciated at length by Ld. Sole Arbitrator for award of Rs.47,08,815/- for refund of excess amount of MLF deposited by OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 31 of 43 respondent/contractor/claimant with petitioner in its claim no. 1.
19. Ld. Sole Arbitrator appreciated various letters of respondent/claimant/contractor and proved in arbitral proceedings record, which were sent to petitioner informing that entire parking allotted site could not be made operational and respondent/contractor was unable to run/use the entire parking site due to various hindrances at the site and requested the petitioner for remission in MLF and to charge the license fees proportionately as per area available for parking out of the total parking area allotted. Impugned arbitral award also finds mention of the fact that when petitioner failed to resolve the matter, the arbitration clause was invoked and arbitral proceedings were conducted. No new grounds can be raised by petitioner herein which had not been raised before the Arbitral Tribunal wherein petitioner had every opportunity to file Statement of Defence and counter claim within the time frame and the Arbitral Tribunal had given equal treatment to parties to arbitration and full opportunity was given to them to present their case. Even witness of claimant/contractor/respondent was cross examined at length in arbitral proceedings by Ld. Counsel for petitioner. Ld. Sole Arbitrator also appreciated that respondent/contractor/claimant was allotted area around 1399 meters as shown in site plan Ex CW-1/61 and later on 24/12/2009 petitioner revised the site plan which are exhibited as Ex CW-1/62 and Ex CW-1/63 revising the area available for parking and by deleting the 1254 meters of area out of total 1399 meters of area. Total area 1399 meters at the time of NIT, was shown to respondent/contractor, based upon which the respondent/contractor/claimant made offer of MLF but OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 32 of 43 it was petitioner itself who withdrew the big portion of area but did not grant remission despite existence of Clause 17, above elicited, violating the terms of contract itself. The allotment of parking site being made available on "as is where is basis"
merely disentitles respondent/claimant/contractor to make excuses for payment of MLF based on hindrances and restrictions in normal operation of parking site but no where it relieves the duties of petitioner department to provide the entire area of 1399 meters of parking site in terms of NIT nor petitioner was entitled to withdrew the above elicited big chunk out of the total area and consequent thereupon not to provide remission in MLF proportionately to the withdrawn area under the garb of term "as is where is basis" despite existence of Clause 17 in agreement, above elicited
20. Sections 28(3) and 31 (7) of The Act read as follows:
"28. Rules applicable to substance of dispute.-- ........................................................................................................ (3) While deciding and making an award, the arbitral tribunal shall, in all cases, take into account the terms of the contract and trade usages applicable to the transaction.
........................................................................................................
31. Form and contents of arbitral award.--
......................................................................................................... (7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.
(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of two per cent. higher than the current rate of interest prevalent on the date of award, from the date of the award to the date of payment.
Explanation.- The expression "current rate of interest" shall OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 33 of 43 have the same meaning as assigned to it under clause (b) of section 2 of the Interest Act, 1978 (14 of 1978)."
21. In the case of Ashi Limited vs Union of India O.M.P. 200/2015 decided by Delhi High Court on 19/05/2020, Hon'ble Ms. Justice Jyoti Singh had also appreciated law laid by Supreme Court in the case of Sree Kamatchi Amman Constructions vs The Divisional Railway Manager (Works) Palghat & Ors. MANU/SC/0625/2010 and inter alia held as follows:
"54. In so far as the grant of interest by an Arbitrator is concerned, the law is no longer res integra, Section 31(7)(a) of the Act clearly stipulates that unless otherwise agreed by the parties, where the Award is for payment of money, the Tribunal may grant such rate as it deems reasonable, on the whole or any part of the money and for the whole or any part of the period between the date of cause of action and the date of the Award. In the case of Jaiprakash Associates Ltd. (Jal) v. Tehri Hydro Development Corporation India Ltd., MANU/SC/0157/2019, the Supreme Court after noticing the provisions of the 1996 Act and various judgments on the issue of interest, more particularly, the recent judgment in the case of Reliance Cellulose Products Ltd. v. ONGC Ltd., MANU/SC/0777/2018: (2018) 9 SCC 266, summed up the law on interest as under:
"13. Insofar as power of the arbitral tribunal in granting pre- preference and/or pendente lite interest is concerned, the principles which can be deducted from the various judgments are summed up below:
(a) A Constitution Bench judgment of this Court in the case of Secretary, Irrigation Department, Government of Orissa vs G.C. Roy exhaustively dealt with this very issue, namely, power of the arbitral tribunal to grant pre-
reference and pendente lite interest. The Constitution Bench, of course, construed the provision of the 1940 Act which Act was in vogue at that time. At the same time, the Constitution Bench also considered the principle for grant of interest applying the common law principles. It held that under the general law, the arbitrator is empowered to award interest for the pre- reference, pendente lite or post award period. This proposition was culled out with the following reasoning:
"43 The question still remains whether arbitrator OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 34 of 43 has the power to award interest pendente lite, and if so on what principle. We must reiterate that we are dealing with the situation where the agreement does not provide for grant of such interest nor does it prohibit such grant. In other words, we are dealing with a case where the agreement is silent as to award of interest. On a conspectus of aforementioned decisions, the following principles emerge:
(i) A person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This basic consideration is as valid for the period the dispute is pending before the arbitrator as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34, Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator.
(ii) An arbitrator is an alternative form (sic forum) for resolution of disputes arising between the parties. If so, he must have the power to decide all the disputes or differences arising between the parties. If the arbitrator has no power to award interest pendente lite, the party claiming it would have to approach the court for that purpose, even though he may have obtained satisfaction in respect of other claims from the arbitrator. This would lead to multiplicity of proceedings.
(iii) An arbitrator is the creature of an agreement. It is open to the parties to confer upon him such powers and prescribe such procedure for him to follow, as they think fit, so long as they are not opposed to law. (The proviso to Section 41 and Section 3 of Arbitration Act illustrate this point).
All the same, the agreement must be in conformity with law. The arbitrator must also act and make his award in accordance with the general law of the land and the agreement.
(iv) Over the years, the English and Indian courts have acted on the assumption that where the agreement does not prohibit and a party to the reference makes a claim for interest, the arbitrator must have the power to award interest pendente lite. Thawardas [Seth Thawardas Pherumal v.
OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 35 of 43Union of India, MANU/SC/0070/1955 : (1955) 2 SCR 48: AIR 1955 SC 468] has not been followed in the later decisions of this Court. It has been explained and distinguished on the basis that in that case there was no claim for interest but only a claim for unliquidated damages. It has been said repeatedly that observations in the said judgment were not intended to lay down any such absolute or universal rule as they appear to, on first impression. Until Jena case [MANU/SC/ 0004/ 1987: (1988) 1 SCC 418: (1988) 1 SCR 253] almost all the courts in the country had upheld the power of the arbitrator to award interest pendente lite. Continuity and certainty is a highly desirable feature of law.
(v) Interest pendente lite is not a matter of substantive law, like interest for the period anterior to reference (pre-reference period). For doing complete justice between the parties, such power has always been inferred."
It is clear from the above that the Court decided to fall back on general principle that a person who is deprived of the use of money to which he is legitimately entitled to, has a right to be compensated for the deprivation and, therefore, such compensation may be called interest compensation or damages.
(b) As a sequitur, the arbitrator would be within his jurisdiction to award pre-reference or pendente lite interest even if agreement between the parties was silent as to whether interest is to be awarded or not.
(c) Conversely, if the agreement between the parties specifically prohibits grant of interest, the arbitrator cannot award pendente lite interest in such cases. This proposition is predicated on the principles that an arbitrator is the creature of an agreement and he is supposed to act and make his award in accordance with the general law of the land and the agreement. This position was made amply clear in G.C Roy case in the discussion thereafter:
"44. Having regard to the above consideration, we think that the following is the correct principle which should be followed in this behalf:
Where the agreement between the parties does not prohibit grant of interest and where a OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 36 of 43 party claims interest and that dispute (along with the claim for principal amount or independently) is referred to the arbitrator, he shall have the power to award interest pendente lite. This is for the reason that in such a case it must be presumed that interest was an implied term of the agreement between the parties and therefore when the parties refer all their disputes or refer the dispute as to interest as such to the arbitrator, he shall have the power to award interest. This does not mean that in every case the arbitrator should necessarily award interest pendente lite. It is a matter within his discretion to be exercised in the light of all the facts and circumstances of the case, keeping the ends of justice in view."
(d) Insofar as 1940 Act is concerned, it was silent about the jurisdiction of the arbitrator in awarding pendente lite interest. However, there is a significant departure on this aspect insofar as 1996 Act is concerned. This distinction has been spelt out in Sayeed Ahmed case in the following manner:
"Re: Interest from the date of cause of action to date of award
7. The issue regarding interest as noticed above revolves around Clause G1.09 of the Technical Provisions forming part of the contract extracted below:
"G. 1.09. No claim for interest or damages will be entertained by the Government with respect to any money or balance which may be lying with the Government or any become due owing to any dispute, difference or misunderstanding between the Engineer-in- Charge on the one hand and the contractor on the other hand or with respect to any delay on the part of the Engineer-in-Charge in making periodical or final payment or any other respect whatsoever."
xxxxxxxx
14. The decisions of this Court with reference to the awards under the old Arbitration Act making a distinction between the pre-reference period and pendente lite period and the observation therein that the arbitrator has the discretion to award interest during pendente lite period in spite of any OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 37 of 43 bar against interest contained in the contract between the parties are not applicable to arbitrations governed by the Arbitration and Conciliation Act, 1996."
............................................................................
56. In the case of Union of India v. Bright Power Projects (India) (P) Ltd., MANU/SC/0712/2015 : (2015) 9 SCC 695, Supreme Court held that when agreement between the parties bars interest on the amounts from cause of action to the date of the Award, the Arbitrator is bound by it and cannot award interest as Section 31 (7)(a) clearly begins with the words 'unless otherwise agreed by parties'.
57. In State of Haryana v. S.L Arora & Co., MANU/SC/ 0131/2010 : (2010) 3 SCC 690, Supreme Court has held that it is not open to the courts to interfere in the discretion exercised by an Arbitrator in granting the rate of interest. This is purely the domain, power and prerogative of the Arbitrator. Relevant part of the judgment reads as under:-
"23. The difference between clauses (a) and (b) of Section 31(7) of the Act may conveniently be noted at this stage. They are:
(i) Clause (a) relates to pre-award period and clause
(b) relates to post-award period. The contract binds and prevails in regard to interest during the pre-award period. The contract has no application in regard to interest during the post-award period.
(ii) Clause (a) gives discretion to the Arbitral Tribunal in regard to the rate, the period, the quantum (principal which is to be subjected to interest) when awarding interest. But such discretion is always subject to the contract between the parties. Clause (b) also gives discretion to the Arbitral Tribunal to award interest for the post-award period but that discretion is not subject to any contract; and if that discretion is not exercised by the Arbitral Tribunal, then the statute steps in and mandates payment of interest, at the specified rate of 18% per annum for the post-award period.
(iii) While clause (a) gives the parties an option to contract out of interest, no such option is available in regard to the post-award period.
In a nutshell, in regard to pre-award period, interest has to be awarded as specified in the contract and in the absence of OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 38 of 43 contract, as per discretion of the Arbitral Tribunal. On the other hand, in regard to the post-award period, interest is payable as per the discretion of the Arbitral Tribunal and in the absence of exercise of such discretion, at a mandatory statutory rate of 18% per annum."
22. Ld. Counsel for the petitioner did not point out any provision in the agreement inter se parties for no interest payable for any sum payable in terms of the contract or any provision prohibiting Arbitral Tribunal for award of interest in adjudication of disputes in arbitral proceedings. There was no term in the contract prohibiting award of interest for sums payable adjudicated under the contract. Respondent/contractor/claimant was deprived of the use of the money to which he was legitimately entitled, having right to be compensated for the deprivation and for the withheld money accordingly was necessarily required to be compensated, also in terms of interest for the payment withheld. By no figment of imagination the findings of the Arbitral Tribunal can be said to be beyond the terms of contract. Awarded interest by the Arbitral Tribunal is in terms of the contract. Also by no figment of imagination awarded rate of interest can be said to be unreasonable or exorbitant to compensate the respondent/claimant/contractor for deprivation of the use of the money to which he was legitimately entitled to.
23. Clause akin to clause 17 in agreement Ex CW-1/10 inter se parties to the lis was not there in the agreement under consideration in case of Manpreet Singh & Co. vs North Delhi Municipal Corporation(supra). Precedents relied upon by Ld. Counsel for petitioner are not applicable in the present case as they embody facts and circumstances entirely different and OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 39 of 43 distinguishable to the facts and circumstances of case in hand.
24. The proceedings under Section 34 of the Act are summary in nature and the scope of enquiry in the proceedings under Section 34 of the Act is restricted to specified grounds for setting aside only, as was held in the case of Canara Nidhi Limited vs M. Shashikala & Ors., 2019 SCC Online SC 1244. The Court would not construe the nature of claim by adopting too technical an approach or by indulging into hair-splitting, otherwise the whole purpose behind holding the arbitration proceedings as an alternative to Civil Court's forum would stand defeated, as was held in the case of Sangamner Bhag Sahakari Karkhana Ltd. vs Krupp Industries Ltd., AIR 2002 SC 2221. An award is not open to challenge on the ground that the arbitrator had reached a wrong conclusion or had failed to appreciate some facts, but if there is an error apparent on the face of the award or if there is misconduct on the part of the arbitrator or legal misconduct in conducting the proceedings or in making the award, the court will interfere with the award; as was held by Supreme Court in the case of Oil & Natural Gas Corporation vs M/s Wig Brothers Builders & Engineers Pvt. Ltd., (2010)13 SCC 377. Reappraisal of evidence by the court is not permissible and as a matter of fact, exercise of power to reappraise the evidence is unknown to a proceeding under the Arbitration Act; as was held by Supreme Court in the case of Ispat Engineering & Foundry Works vs Steel Authority of India Ltd., (2001) 6 SCC 347. In order to provide a balance and to avoid excessive intervention, the award is not to be set aside merely on the ground of an erroneous application of the law or by re-appreciating evidence; as was held OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 40 of 43 by Supreme Court in the case of P.R Shah, Shares & Stock Brokers Pvt. Ltd vs B.H.H. Securities Pvt. Ltd. & Ors., (2012) 1 SCC 594. At global level the doctrine of 'Contra Proferentem' is generally applied by the Judges/Arbitrator in the cases where a contract appears ambiguous to them; the Judges/Arbitrator in India have appreciated and adopted similar line of reasoning in the cases involving ambiguous contract wherein it is believed that 'an ambiguity is needed to be resolved' in order to find the correct intention of the contract. If the conclusion of the arbitrator is based on a possible view of the matter, the court is not expected to interfere with the award and if the Arbitrator relies on a plausible interpretation out of the two possible views, then it would not render the award perverse; as was held by Supreme Court in the case of M/s Sumitomo Heavy Industries Ltd. vs Oil & Natural Gas Commission of India, 2010 (11) SCC
296. Award is not open to challenge on the ground that the Arbitral Tribunal had reached a wrong conclusion or had failed to appreciate the facts; the appreciation of evidence by the arbitrator is never a matter which the Court considers in the proceeding under Section 34 of the Act, as the Court is not sitting in appeal over the adjudication of the arbitrator.; as was held by Delhi High Court in the case of NTPC Ltd vs Marathon Electric Motors India Ltd., 2012 SCC OnLine Del 3995. Supreme Court in the case of Associate Builders vs Delhi Development Authority, (2015) 3 SCC 449 has restricted the scope of public policy, so the Court does not act as a Court of appeal and consequently errors of fact cannot be corrected. An error relatable to interpretation of the contract by an arbitrator is an error within OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 41 of 43 his jurisdiction and such error is not amenable to correction by Courts as such error is not an error on the face of the award; as was held by Supreme Court in the case of Steel Authority of India Ltd. vs Gupta Brother Steel Tubes Ltd., (2009) 10 SCC
63.
25. Relying upon the law laid in the precedents above said, it can be said that not only the reasonings of Ld. Sole Arbitrator are logical, but all the material and evidences were taken note of by Ld. Sole Arbitrator and this Court cannot substitute its own evaluation of conclusion of law or fact to come to the conclusion other than that of Ld. Sole Arbitrator. Cogent grounds, sufficient reasons have been assigned by Ld. Sole Arbitrator in reaching the just conclusion and no error of law or misconduct is apparent on the face of the record. This Court cannot re-appraise the evidence and it is not open to this Court to sit in the appeal over the conclusion/findings of facts arrived at by Learned Former District & Sessions Judge who was competent to make assessment, while taking into consideration the facet of the matter. Re-appraisal of the matter cannot be done by this Court. No error is apparent in respect of the impugned award. I do not find any contradiction in the observations and findings given by Ld. Sole Arbitrator. The impugned award does not suffer from vice of irrationality and perversity. The conclusion of the Ld. Sole Arbitrator is based on a possible view of the matter, so the Court is not expected to interfere with the award. Even impugned award passed by Ld. Sole Arbitrator cannot be set aside on the ground that it was erroneous. The award is not against any public policy nor against the terms of contract of the parties. No ground OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 42 of 43 for interference is made out. None of the grounds raised by the petitioner attract Section 34 of the Act. For the foregoing reasons, the petition is hereby dismissed.
26. The parties are left to bear their own costs.
27. File be consigned to record room.
Digitally signed by GURVINDER GURVINDER PAL SINGH
PAL SINGH Date: 2022.08.31
13:23:52 +0530
ANNOUNCED IN (GURVINDER PAL SINGH)
OPEN COURT District Judge (Commercial Court)-02
st
On 31 August, 2022. Patiala House Court, New Delhi.
DK) OMP (Comm.) No. 41/2021 North Delhi Municipal Corporation vs Narinder Kumar Page 43 of 43