Delhi High Court
Surajmal Yadav vs Delhi State Industrial Infrastructure ... on 24 May, 2018
Author: Navin Chawla
Bench: Navin Chawla
$~9
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 24th May, 2018
+ O.M.P. 19/2017 & IA No. 13216/2017
SURAJMAL YADAV ..... Petitioner
Through: Mr.M.K. Singh & Mr.Surjeet Singh,
Advs.
versus
DELHI STATE INDUSTRIAL INFRASTRUCTURE
DEVELOPMENT CORPORATION LTD. ..... Respondent
Through: Ms.Renuka Arora, & Ms.Nikita
Salwan, Advs. with Mr.Raja
Chaudhary, Legal Asstt. DSIIDC.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
IA No. 13216/2017 In view of the order passed in the main petition, the application is disposed of having become infructuous, leaving it open to the petitioner to seek relief through appropriate proceedings.
O.M.P. 19/20171. This petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been filed by the petitioner on a limited ground that the Arbitrator while passing the Impugned Award dated 11th July, 2017 has not considered the entire prayer made by the petitioner in Clause B of the prayer clause in the Statement of Claim filed before the Arbitrator. Clause B of the prayer made in the Statement of Claim is reproduced herein under:-
"B) to direct the respondent / DSIIDC to facilitate for the refund of O.M.P. 19/2017 Page 1 the paid stamp duty Rs. 33,012,040/- and the payment of interest on EMD, Bid amount, stamp duty paid @ 15% from the date of respective payments to 31.01.2016 and further from 01.02.2016 to date of actual payment. The amount of interest works out to Rs.7,72,01,437/- to be paid by the respondent / DSIIDC to the claimant."
(emphasis supplied)
2. It is the case of the petitioner that the petitioner had successfully bid for commercial plot in Sector-2, Cluster H, measuring 1000 square meter in the Bawana Industrial Complex, Delhi in an auction-sale conducted by the respondent on 30.10.2006 and had paid the entire consideration amount of ₹5.52 crores as demanded by the respondent pursuant to which the possession of the plot was handed over to the petitioner on 12.06.2007. It is further the case of the petitioner that the petitioner had purchased Stamp Duty for an amount of ₹33,12,040/- for the purpose of execution of the Lease Deed by the respondent. In spite of receiving the above consideration and the purchase of the Stamp Duty by the petitioner, the respondent failed to execute the Lease Deed due to which the petitioner could not carry out the construction on the plot and could not therefore, bear the fruits of the amount invested by him. It is on this basis that the petitioner had demanded from the respondent interest at the rate of 15% per annum on the Earnest Money Deposit, bid amount and Stamp Duty.
3. The Arbitrator in his Impugned Award has considered the submissions made by the parties with respect to the claims of the petitioner and has held that the construction on the plot could not take place due to non-execution of the Lease Deed by the respondent and has held this issue in favour of the petitioner. The learned Arbitrator has also held that it is for the O.M.P. 19/2017 Page 2 default of the respondent that the Stamp Duty purchased by the petitioner remained unutilized and has further directed that incase the same cannot be utilized for the purpose of execution of the Lease Deed, the respondent shall refund the same alongwith interest at the rate of 9% per annum from the date of the Award till the date of the payment.
4. The learned counsel for the petitioner submits that the learned Arbitrator has not considered the effect of the failure of the respondent to execute the Lease Deed and consequential inability of the petitioner to construct a building on the land allotted in its favour, as far as the EMD and the bid amount deposited by the petitioner is concerned.
5. The learned counsel for the respondent, on the other hand, submits that as the Arbitrator has passed a direction with respect to the Stamp Duty, the Arbitrator should be presumed to have rejected the prayer being made by the petitioner with respect to the grant of interest on EMD and the bid amount.
6. I have considered the submissions made by the counsel for the parties. As far as the default of the respondent and the consequential effect of the same on the petitioner is concerned, the Arbitrator has held as under:-
"Admittedly the Lease Deed has not been executed till date. It has clearly emerged that abeyance and delay in execution of the Lease Deed has forced the Claimant to run from pillar to post for obtaining sanction of its Building Plans but without any success. The Respondent cannot rely upon its NOC dated 11-06-2007 given that there were specific demands raised by the MCD for a fresh NOC and EOT in view of the two year prohibition for completion of construction from the date of handing over physical possession. The Circular dated 09.08.2011 is not of relevance for the reason that nothing stopped the Respondent/DSIIDC from issuing a corrigendum to the terms of auction, lifting the double embargo put forth in Clause O.M.P. 19/2017 Page 3 11 (iii) as spelt out above or issuing fresh NOC/EOT, which also stands proved in view of the Cross-examination of Mr. Puneet Kulshetra. Rather, levying additional composition charges burdens allottees such as Claimant who have already paid the entire sale price and yet have not received any return on their investment till date. The fact that some other allottees have completed construction in absence of Lease Deed cannot come to the rescue of the Respondent. The Claimant cannot be forced to act contrary to the terms of auction because some other allottees have chosen to do so. It is also of significance to note that the Stamp Duty was paid by the Claimant on the Lease Deed as per terms finalized by the Claimant. Thus, it shall be an obvious corollary that it is the responsibility of the Respondent to ensure that the Stamp Duty paid by the Claimant is either utilized or refunded to the Claimant along with interest, since no fault is attributable to the Claimant for non-execution of the Lease Deed and the consequent refusal by the MCD to sanction the Building Plans."
7. As far as the final relief is concerned, the learned Arbitrator has held as under:-
"In view of the facts pleaded, evidence led and arguments advanced, the Petition partly succeeds. The Respondent is directed to execute the Lease Deed in favour of the Claimant within 6 months from the date of this Award. In case the Respondent is unable to get the Lease Deed executed within the stipulated time frame, with every day of delay, the Respondent shall be liable to pay - interest at the rate of 9 percent per annum to be calculated on the auction consideration of Rs. 5.52 crore. The Respondent shall ensure that the Stamp Duty of Rs. 33,12,040/- as paid by the Claimant shall be re-utilized. In case of failure of re-utilization of paid Stamp Duty, the Respondent shall refund the paid stamp duty of Rs. 33,12,040/- to the Claimant along with interest at the rate of 9 percent per annum from date of the Award till date of payment. The Respondent is further directed to provide within 3 months a fresh NOC/EOT, as demanded by the MCD, to the Claimant. The Respondent is also directed to issue a fresh EOT of 2 years from the date of sanction of the Building Plan to the Claimant for completion of construction at the Plot. The Claimant is directed to pay the arrears of Ground Rent to the Respondent; however, in the circumstances of this case, the Respondent shall not O.M.P. 19/2017 Page 4 be entitled to any interest from the Claimant on account of delayed payment of Ground Rent. The Respondent is free to demand Ground Rent in accordance to the terms of auction from the date of execution of Lease Deed. The Claimant will also be entitled to recover the cost of these proceedings quantified at Rs. 2 Lakhs for Counsel fees together with payment made to the Arbitral Tribunal."
8. In the entire Award there is no discussion with respect to the claim made by the petitioner for the grant of interest on the EMD and the bid amount deposited by him for the allotment of the land in question. I cannot agree with the submission of the learned counsel for the respondent that as such prayer has not been granted in the final Award, it should be deemed to have been rejected by the Arbitral Tribunal. In terms of Section 31(3) of the Act, the Arbitrator has to state the reasons upon which the Award is passed. If the claim made by the petitioner was to be rejected, the Arbitrator has to give reasons for the same. One cannot assume rejection of the prayer made by the petitioner and further assume reasons for rejection of such prayer. In my opinion, clearly the Arbitrator has not considered this part of the claim made by the petitioner. However, as there is no challenge made by either party to the Award as passed, the present petition is disposed of by granting leave to the petitioner to reagitate its claim with respect to the interest on the Earnest Money Deposit as also the bid amount paid by him to the respondent in any other appropriate proceedings. It is made clear that the petitioner shall be entitled to claim the benefit of Limitation in terms of Section 43(4) of the Act in such proceedings.
9. The petition is disposed of with the above directions and with no order as to cost.
NAVIN CHAWLA, J
MAY 24, 2018/rv
O.M.P. 19/2017 Page 5