Delhi District Court
Shri Dhiraj Gupta vs Delhi Urban Shelter Improvement Board on 5 April, 2019
IN THE COURT OF SHRI SANJAY SHARMAI
ADDL. DISTRICT JUDGE - 04 (WEST DISTRICT)
TIS HAZARI COURTS : DELHI
Arbitration No. 60968/2016
Shri Dhiraj Gupta
S/o late Shri Rishi Ram Gupta
Prop. Of M/s Dhiraj Gupta
18, Samaspur Jagir, Patparganj,
Delhi110 091 .........Petitioner
Versus
1. Delhi urban Shelter Improvement Board
Purnarws Bhawan , IP Estate,
New Delhi - 110 002
2. Shri Prem Kumar
Retired ADJ
Sole Arbitrator
at Delhi International Arbitration Centre,
Delhi High Court Campus, Sher Shah Road,
New Delhi .......Defendant
Date of institution : 22.10.2016
Date of reserving judgment : 20.3.2019
Date of pronouncement : 05.4.2019
ORDER:
The petitioner has filed the present petition under Section 34 of The Arbitration and Conciliation Act, 1996 for setting aside the arbitral award dt. 19.7.2016 passed between the parties. A reply to the petition Arbitration No. 60968/2016 Page 1 of 9 has been filed by the respondent.
2. The facts in brief giving rise to the present petition are that the petitioner was a successful bidder of a parking site opposite Cremation Ground, Tilak Nagar, New Delhi, in the bid called by the respondent in June 2014. A letter of acceptance of tender was issued on 01.8.2014 vide which the petitioner was required to pay the balance of advance license fee. The parking site was alloted at a monthly license fee of Rs.2,43,000/ and the petitioner deposited earnest money equivalent to three months license fee with the tender documents. After completion of tender formalities, a written agreement dt. 01.9.2014(hereinafter referred to as the Agreement) regarding allotment of the parking site was executed between the parties. The actual physical possession of the site was handed over to the petitioner on 19.8.2014.
3. It is the case of the petitioner that he visited the site before taking possession and noticed various problems on the site, such as no light facilities, no separate exit gate and undeveloped land with uneven spaces and thus, he took the possession under written protest. Similarly, he also mentioned 'under protest' on the site plan while taking the possession . He further claimed that the official of the respondent while delivering the possession also noted under his signatures that there was a dumped silt (malba) lying on the site and belonging to SDMC for which a letter was also written to SDMC. According to the petitioner, though the entire parking site was in an area of 10,110 sq. meters but actually, only an area of 5811.6 sq. meter was available with the petitioner and the Arbitration No. 60968/2016 Page 2 of 9 remaining of 4298.4 sq. meter was unusable because of the dumped silt (malba). The petitioner states that he had to take over the possession of the site as he apprehended forfeiture of his earnest money. It is further his case that he made various representations through letters to the respondent to rectify the problems highlighted by him and as aforesaid but without any success and hence he reverted to Clause 27 of the Agreement which provided for arbitration in case of dispute between the parties. Accordingly, he filed an application for referring the matter to arbitration before the Hon'ble High Court of Delhi which was allowed and the dispute between the parties was referred to arbitration .
4. The petitioner filed his statement of claim before the Ld. Arbitrator submitting the above facts and claimed that his liability to pay license fee was on prorata basis for the use of the actual land, i.e. for an area of 5811.6 sq. meters which would come to Rs.1,39,685/ per month instead of the agreed license fee of Rs.2,43,000/. He also claimed that the allotment was for a period of one year, i.e. from 01.8.2014 to 31.7.2015 but the actual physical possession of the site was delivered to him on 19.8.2014 and therefore, he was liable to pay proportionate license fee of Rs.55,874/ for the first month . He further claimed that he was liable to pay the license fee for the remaining 11 months @ Rs.1,39,685/ (on prorata usage of land) but had paid the license fee at the fixed rate of Rs.2,43,000/. In all, till June 2015, he paid a sum of Rs.24,32,000/ to the respondent.
5. It was claimed by the petitioner that he spent Rs.One lac on Arbitration No. 60968/2016 Page 3 of 9 partial development of the site plan and suffered losses @ Rs.25,000/ per month and also paid monthly salary to the attendants @ Rs.54,000/ per month which was also a loss. Thus, he claimed a sum of Rs.8,39,591/ which were paid in excess to the respondent.
6. The respondent not only filed reply to the claim of the petitioner before the Ld. Arbitrator but also made a counterclaim wherein it claimed that the petitioner failed to make the payment of the license fee from November 2014 to July 2015 in time and the license fee for December 2014 and January 2015 was received belatedly whereas the said fee for February 2015 to May 2015 was not received and thus, relied upon Clause 23 of the Agreement which provided penalty of Rs.1000/ per day for the period of delay and thus, laid a claim of Rs.16,11,000/ against the petitioner.
7. The Ld. Arbitrator upon entering reference and on hearing both the sides, passed the impugned Award wherein the claim laid before him by the petitioner was dismissed whereas the counterclaim of the respondent was partly allowed, directing the petitioner to pay a sum of Rs.2,43,000/ towards the balance license fee and Rs.1,02,664/ towards costs, totalling Rs.3,45,664/, alongwith interest @ 12% per annum w.e.f. August 2015. The cost of the stamp paper of Rs.350/ was also directed to be paid by the claimant.
8. Aggrieved by the impugned Award, the petitioner has filed the present petition .
9. I have heard Shri RK Alagh - Ld. Counsel for the petitioner, Arbitration No. 60968/2016 Page 4 of 9 Shri Amit Kumar Mittal - Ld. Counsel for respondent No. 1/DUSIB and have also perused the Trial Court Record.
10. The main objection of the claimant as raised in the present petition is that the Ld. Arbitrator failed to consider that the petitioner had taken the possession of the parking site under written protest and had invariably pointed out the problems/anomalies in the site through written letters which were acknowledged by the officials of the respondent. He has also taken an objection that the Ld. Arbitrator failed to consider that the official of the respondent had acknowledged the fact of the dumped silt at the site at the time of handing over the possession of the site. It was also pointed out that the Ld. Arbitrator unnecessarily gave importance to his letter dt. 28.6.2014 written to the respondent and further that he relied upon the Clause of the Agreement that the site was being alloted on 'As is where is basis', without appreciating that in case the petitioner had not taken its possession, his earnest money could have been forfeited.
11. In reply, the respondent has denied each and every contention and has stated that the Award passed by the Ld. Arbitrator is totally legal and binding on the parties.
12. The main objection of the petitioner is that almost half of the parking site which was alloted to him was covered with debris/malba at the time when the possession was taken over by him and for which he is not liable to pay the license fee on proportionate basis. This aspect of the matter has been dealt in detail by the Ld. Arbitrator in para 43 of the impugned Award. It has been rightly observed by the Ld. Arbitrator that Arbitration No. 60968/2016 Page 5 of 9 no date has been mentioned by the petitioner when he inspected the site or whether he inspected it before filing the tender. It is also observed that even at the time of inviting tenders in June 2014, the malba of SDMC was lying at the site which is evident from the letter dt. 28.6.2014 written by the respondent to the SDMC for removing it and which was put by SDMC about two months prior to the said date. Thus, if the petitioner had visited the site before filing the tender, it should have been in his knowledge that the debris was lying there and he was well within his rights to withdraw from the tender or not to file the same. Thus, it is apparent that he made the bid despite knowing the fact of the malba lying at the site or in the alternative, never visited the site.
13. The argument and objection of the petitioner that the Ld. Arbitrator erred in relying upon the letter dt. 28.6.2014 because the malba could have been removed at the time of inspecting the site by the petitioner and could have been again kept or dumped there before giving the possession. This is a purely hypothetical and presumptive argument/objection with no legs to stand. Even if it is presumed for the sake of arguments to be so, the area and position of dumping the malba could not have been exactly the same on both occasions. There is no reason why the SDMC would have first cleaned the debris and then again put it there. Hence, this objection is rejected outrightly.
14. In the opinion of this Court, the Ld. Arbitrator rightly invoked Clause 3 of the Agreement providing for taking over the site on 'as is where is basis'. Thus, if the site was open for inspection and had Arbitration No. 60968/2016 Page 6 of 9 been inspected by the claimant before making the bid or before filing the tenders, there was no occasion for him to claim proportionate license fee which was against the terms of the Agreement. Similarly, the other claims that the land was not developed, was uneven , without fencing and light were all matters which were clearly noticeable by the petitioner but despite that he proceeded with the tenders and made the bid and therefore, he cannot now make any claim on that account in view of Clause 3 of the Agreement, as aforesaid. Apart from that, Clause 12(a) of the Agreement provides that sanitation, cleanliness, lightning etc. shall be the responsibility of the petitioner.
15. The Ld. Arbitrator rightly relied upon the judgment in SK Pandey Vs. MCD (OMP No. 310 of 2010 Delhi), wherein it was held:
"Parking site was a commercial site and petitioner accepted terms and conditions of the letter of offer. The terms and conditions of the contract agreement stipulate that the parking site has been given on 'as is where is basis'. Thus, no dispute can be raised by the petitioner with regard to any loss or damages as the contract was accepted by the petitioner with open eyes".
16. In view of the above, the argument that the officials of the respondent acknowledged that malba was lying at the spot at the time of possession is also of no help to the petitioner.
17. Another objection has been taken by the petitioner that he operated the parking only till 31.7.2015 as per the terms of the possession letter dt. 19.8.2014, but the ld. Arbitrator had observed that the petitioner Arbitration No. 60968/2016 Page 7 of 9 retained the possession till 18.8.2015. I have gone through the statement of claim filed by the petitioner before the Ld. Arbitrator and it is nowhere mentioned therein that the petitioner had handed over the possession of the site to the respondent on 31.7.2015. Though the petitioner filed a copy of letter dt. 27.7.2015 intimating the respondent his intention to surrender the site on 31.7.2015 and further stating that in case its officials do not take the possession he would discontinue to operate the parking site at the responsibility of the respondent but there is nothing on record to suggest that he had actually surrendered the site or quit operations on 31.7.2015. On the contrary, the respondent filed a show cause notice dt. 14.9.2015 where it is recorded that possession of the site was taken over by the petitioner on 19.8.2014 and as per Clause 1 of the Agreement, the period of contract expired on 18.8.2015.
18. Clause 1 of the said Agreement states that the contract will be for a period of one year with effect from the date of handing over the site to the licensee. It means that the contract was valid from 19.8.2014 to 18.8.2015. Thus, the claim of the petitioner that he was not liable to pay license fee from 01.8.2014 to 18.8.2014 or from 01.8.2015 to 18.8.2015 is neither tenable nor acceptable as he is bound by the terms and conditions of the Agreement and admittedly, he took possession of the site on 19.8.2014.
19. Clause 28 (a) of the Agreement provides that in the event of surrender of parking contract by the licensee, the right of acceptance or rejection solely rests with the licensor. There is again nothing on record Arbitration No. 60968/2016 Page 8 of 9 to show that the respondent had accepted the surrender of the site w.e.f. 31.7.2015 as claimed by the petitioner vide letter dt. 27.7.2015. Therefore, he is liable to pay the licence fee for the complete period of the contract, i.e. till18.8.2015.
20. These were the only objections raised in the present petition and in view of the aforesaid, they are not sustainable. I do not find any infirmity in the impugned Award passed by the Ld. Arbitrator. The same is accordingly upheld and the objections are dismissed.
File be consigned to Record Room.
Digitally signedANNOUNCED IN OPEN COURT SANJAY by SANJAY
SHARMA
SHARMA Date: 2019.04.05
ON the 5th day of April 2019 16:48:16 +0530
(SANJAY SHARMAI)
Addl. District Judge04 (West)
Tis Hazari Courts, Delhi.
Arbitration No. 60968/2016 Page 9 of 9