Delhi District Court
Delhi Development Authority vs S.S. Infrastracture on 30 September, 2024
IN THE COURT OF SH. AJAY KUMAR JAIN:
DISTRICT JUDGE COMMERCIAL COURT 03 - SOUTH EAST
DISTRICT SAKET COURTS, NEW DELHI.
OMP (COMM) 95/2023
DELHI DEVELOPMENT AUTHORITY
Through its Vice Chairman
Vikas Sadan, INA,
New Delhi-110023 ..... Petitioner
VERSUS
M/s S.S. INFRASTRUCTURE
Through its Partner Sh. Sanjay Aggarwal
A-5, Swasthya Vihar, Vikas Marg,
Delhi-110092 .....Respondent/ Claimant
Date of Institution : 26.10.2023
Date when final arguments heard : 21.09.2024
Date of Judgment : 30.09.2024
JUDGMENT
1. Vide this judgment, I shall decide the petition U/s 34 of Arbitration and Conciliation Act filed by the petitioner/DDA challenging the impugned award dt. 17.07.2023.
2. Brief facts of the case as per petition that DDA invited bids for sale of eleven plots on free hold basis located at various OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 1 of 74 districts/community centers with the view that the hotels could be constructed and made operational to provide accommodation for guests and tourists expected to arrive in Delhi during the Commonwealth Games 2010. As per Cause 3.14 of the Tender Terms and Conditions, the Project had to be completed within a period of 24 months from the date issue of Demand-cum-Allotment Letter, pursuant to the invitation, the respondent herein gave a bid of Rs. 1,27,100,000/- for commercial plot, in question was accepted. The intended date of completion of the project was 03.01.2010. On 04.01.2008, a Demand-cum-Allotment Letter was issued by Petitioner, was required to complete the construction of the hotel and operationalize the same within 24 months of the issuance of Demand-cum-Allotment Letter. Accordingly, the hotel was to be completed on or before 03.01.2010.
3. To incentivize expeditious construction of the hotel before the Commonwealth Games, the certain relaxations were granted to the Respondent by the Petitioner viz. permission for construction of building up to plinth level, pending clearances from statutory bodies like CFO and DUAC, Conditional waiver of sanction charges prior to for construction of building beyond plinth level subject to that the hotel is operationalized before Commonwealth, approval by Technical Committee to forward the revised building plans with additional FAR to CFO and DUAC, pending Show Cause Notices issued for deviations in building during construction, permission granted by Petitioner for OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 2 of 74 excavation, for construction below plinth level and for construction above plinth level even without the formal approval of the building plan. In addition to the above relaxations, there is mechanism of fortnightly meetings with concerned Chief Engineers and all the hoteliers were repeatedly informed during the meetings taken by the senior officers of the Petitioner that the required basic amenities would be available to them as and when required but the same will not be linked with the pace of the construction and the hoteliers were required to complete the construction within the time frame.
4. On 14.01.2008, the Respondent wrote to the Petitioner for issuance of No Objection Certificate (NOC) for permitting the Respondent to submit the building plans which was granted by petitioner on 20.02.2008 for submission of the building plans and grant of excavation permission. On 29.02.2008, the Petitioner issued Conveyance Deed, thereafter on 24.03.2008, submitted building plans for scrutiny and approval, despite the fact that NOC had been granted over a month back. The building plans were accompanied by the relevant documents. The Petitioner, vide its letter dated 28.03.2008 to the Respondent pointed out certain deficiencies in the documents submitted by the latter. On 31.03.2008, the Respondent, after removing the deficiencies, resubmitted the building drawings and other documents. On 02.04.2008, the Respondent deposited balance 75% of the balance bid amount. On 04.04.2008, the Petitioner forwarded to Chief Fire Officer (CFO) and Delhi Urban Arts Commission (DUAC), OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 3 of 74 building plans for approval. On 08.04.2008, the Respondent handed over to the Petitioner herein, the Conveyance Deed duly stamped by the Collector of Stamps. On 11.04.2008, the Petitioner granted provisional permission to the Respondent to raise construction up to the plinth level. On 15.04.2008, CFO communicated to the Petitioner certain shortcomings in the building plans. DUAC, vide its letter dated 29.04.2008, to the Petitioner pointed out that submission of documents/material was not as per DUAC guidelines. The Petitioner, by its letter dated 15.05.2008, informed the Respondent that the possession of the plot will be handed over to it on or before 22.05.2008 at 11 am. The CFO by its letter dated 09.06.2008 approved the building plans. The Secretary to DUAC vide its letter dated 09.07.2008, informed the Petitioner that on scrutiny of the proposal, documents were not submitted as per requirement of DUAC. On 16.07.2008, Respondent furnished Performance Bank Guarantee for a sum of Rs. 63,55,000/- to the Petitioner. On 17.07.2008, the Petitioner executed the Conveyance Deed of the said plot in favour of the Respondent. On 06.08.2008, DUAC held a meeting to consider the proposal for approval of building plans of the hotel. The Respondent's architect by its letter dated 07.08.2008 informed the Petitioner that there was discrepancy between the width of the subject plot mentioned in the plans available with the DUAC and the actual width of the plot. In the meantime, the Government of India vide notification dated 12.08.2008 notified increase in FAR from 150 to 225 for hotels. On OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 4 of 74 27.08.2008, the Director (Bldg.) DDA with reference to the letter of the Respondent's architect dated 07.08.2008 wrote to the Chief Architect DDA stating that since there is a discrepancy in the width of the plot mentioned in the plans forwarded to DUAC, there is need to send the correct plans with plot area 30mts to DUAC. Pursuant to the Notification dated 12.08.2008, the Respondent on 25.09.2008 requested the Petitioner to permit use of increased FAR. In the additional FAR would entail delay in the completion of the project. Thus, having taken a conscious decision to enjoy the extra FAR, which was not bound under the Contract, the respondent should have been willing to bear the consequences of the delay arising due to its decision. The Petitioner, vide its letter dated 24.11.2008, rejected the request for additional FAR, thereafter, the Respondent made a representation to the Lieutenant Governor Delhi and Vice Chairman, DDA to resolve the issue of additional FAR.
5. The Secretary, DUAC by its letter dated 19.11.2008 informed the Petitioner that the Commission, in its meeting held on 15.10.2008, approved the proposal with observations. The Petitioner, vide its letter dated 05.01.2009, required the Respondent to submit fresh drawings after incorporating the suggestions of DUAC and CFO for approval of the Petitioner. The Respondent by its letter dated January 9/12, 2009 in compliance with the directions of the DUAC submitted with the request that sanction be accorded to the building plans at the earliest so that time bound expeditious OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 5 of 74 action could be initiated. On 29.01.2009, the Petitioner required the Respondent to submit the documents and drawings The Petitioner, on 24.02.2009, approved the proposal subject to the drawings being corrected. On 17.02.2009, the Respondent submitted corrected plans/drawings. On 24.03.2009, the Petitioner released approval to the plans subject to production of NOC from BSES. On 06.03.2009, the Petitioner asked the Respondent to submit the revised Building Plans. On 09.07.2009, the Respondent submitted revised plans with FAR 225, therefore, the entire process of sanction of Building Plans was restarted by the Respondent. It is to be noted that it was optional for the Respondent to avail the revised / enhanced FAR. The Respondent, having complete knowledge that the Project had to be completed within the stipulated time period, again started the procedure for sanction of building plans as per revised FAR. The Petitioner vide its letter dated 03.08.2009 required the Respondent herein, to deposit the following documents.
6. On 02.09.2009, the Petitioner reminded the Respondent herein that the time for completion of the hotel will be expiring on 03.01.2010. The letter also invited the attention of the Respondent to Clause 3.14 of the tender document, which provides that performance security to the tune of 5 per cent of the bid amount will be encashed as per following schedule in the event of delay in completion and making the hotel functional within the stipulated period. The letter also required the Respondent to submit OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 6 of 74 copy of the completion certificate and proof of making the hotel functional prior to the aforesaid date.
7. Vide letter dated 07.09.2009, the Respondent responded to the communication dated 02.09.2009, that there had been lack of following infrastructural facilities which were affecting the construction of the hotel. The letter asserted that the hotel can be completed within six months from the date the said infrastructural facilities are made available, however it is to be noted that as per the period of the Contract, the Respondent had been aware that time was the essence of the Contract, especially considering the objective of the Project which was to provide accommodation to the guests arriving during the Commonwealth Games 2010, therefore, there was an express and implied urgency in completion of the hotel. The reasons given by the Respondent in its letter were untenable as the Respondent had been unable to even obtain approval of its revised building plans, thus whether infrastructural facilities were available at site or not was inconsequential as the Respondent had delayed in the most basic requirement for construction of the hotel.
8. On 11.09.2009 the Respondent wrote to the Delhi Jal Board (DJB) for providing water and sewerage connection. The Delhi Jal Board by its letter dated 06.10.2009, informed the Respondent that it should apply and submit the requisite documents through the developing agency of the area. On 05.11.2009, the Respondent wrote to the Petitioner stating that sanction for OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 7 of 74 utilization of FAR 225 was yet to be granted and absence of sanction would delay the completion of the hotel. On 22.10.2009, petitioner issued show cause notice, stating that construction/completion of following unauthorized development in contravention of the Master Plan. The Respondent vide letter dated 16.11.2009 submitted fresh drawings and also submitted NOC received from Airports Authority of India in respect of the height of the building. On 17.12.2009, the Commonwealth Budget Hotel Association of which the Respondent was a member, requested the Vice Chairman DDA to extend the dates for contemplated encashment of the bank guarantees. On 17.12.2009, the Respondent also wrote to the Petitioner herein requesting it to extend the period for invoking the performance security, however, petitioner vide letter dated 29.12.2009, stated that disposal conditions cannot be relaxed and performance security will be forfeited/encashed in accordance with the terms and conditions of allotment in case of failure of the Respondent to complete the hotel within the stipulated time.
9. The Respondent vide its letter dated 02.02.2010 to the Petitioner herein mentioned alleged delays attributable to the Petitioner and other governmental authorities. The Petitioner vide its letter dated 02.02.2010 forwarded the building plans with enhanced FAR to the CFO and DUAC for approval. The Petitioner vide its letter dated 11.03.2010 rejected the representation of the Respondent against proposed encashment of the performance OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 8 of 74 security. Vide this letter, all hoteliers were repeatedly informed at the time of submissions of bids and if he was having any reservations then he should not have submitted of his bid. The FAR was optional if the hotelier was having difficulty in completion of hotel project in time then he should not have availed the same instead of passing the blame on DDA. Thereafter, on 01.07.2010, CFO approved the revised building plans. The Petitioner, vide letter dated 08.07.2010, invoked the performance bank guarantee and requested the concerned bank to issue a banker's cheque in its favour for an amount of Rs. 63,55,000/-, however the said encashment was stayed by the Hon'ble High Court of Delhi vide Order dated 16.07.2010. While disposing of the said writ petition, the Hon'ble High Court directed that the said interim order would continue till the Ld. Arbitrator passes an order in the Application under Section 17 of the Act.
10. The Petitioner vide letter dated 15.07.2010 requested the Respondent to vacate the area surrounding plot number 6(b). DUAC vide its letter dated 15.03.2011 informed the Petitioner that the proposal was considered by the Commission at its meeting held on 19.01.2011 in which the proposal was approved with certain observations. On 13.06.2011, the Petitioner required the Respondent to submit the drawings as per observations of DUAC and CFO and to deposit the charges. On 20.06.2011, the Respondent herein submitted the requisite drawings. On 01.08.2011, the Respondent was reminded to deposit fee and OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 9 of 74 charges. On 31.10.2011, the Respondent deposited the fee and the charges.
11. Ld. Sole Arbitrator was appointed by the Hon'ble High Court of Delhi. During proceedings, respondent withdrew its main claim being Claim no. 1 for an amount of Rs. 7 crores. The Respondent herein sent Notice of Completion dated 22.05.2012 to the Regulatory Authority. After verification and completion of all formalities, the Regulatory Authority issued occupancy certificate on 07.01.2013, therefore, the Project was completed only on 07.01.2013 after a considerable delay.
12. Vide order dated 22.10.2013, the Ld. Arbitrator disposed of the Application under Section 17 of the Act vacating the interim order dated 16.07.2010 and directing that the amount realized shall be kept in a fixed deposit till the final outcome of the arbitration. The said order was challenged by the Respondent before the Hon'ble High Court of Delhi which was dismissed vide Order dated 19.11.2013 with a cost of Rs. 50,000/-.
13. During arbitral proceedings, respondent examined RW-1 Rajesh Jaiswal. The arbitration proceedings continued and eventually the Impugned Award dated 17.07.2023 was passed by the Ld. Arbitrator.
GROUNDS
14. It is stated that Ld. Sole Arbitrator erroneously and wrongfully decided the Arbitral Award dated 12.03.2023 in favor of OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 10 of 74 the Respondent without appreciating the contractual provisions by which the parties are bound. Respondent delayed the construction of the project and was thus in breach of terms of the Contract which automatically brings Clause 3.14 of the Contract into operation. Ld. Arbitrator failed to appreciate that the objective of construction and operationalization of the hotel. It was imperative that the construction be completed by the stipulated date as it was a matter of national importance. Ld. Arbitrator has erred in not considering the several relaxations. The petitioner handed over possession of the plot much prior to completion of formalities, i.e. on 15.05.2008, therefore granted NOC for submission of building plans and permission to excavate on 20.02.2008, i.e. much prior to deposit of balance 75% of the bid amount. Furthermore, permission for 3rd basement was granted on 23.06.2008.
15. Ld. Arbitrator has failed to take into account that the Respondent had every opportunity to inspect the plot on which construction had to be carried out. Furthermore, the Respondent was bound by Clause 3.2.1 of the Contract which expressly stated that The Plot is being tendered on 'as is where is basis', therefore, findings with respect to lack of infrastructural facilities are erroneous and contrary to the contractual stipulations.
16. Ld. Arbitrator despite concluding that the delay is attributable to the Respondent in Para 121 of the Impugned Award, goes on to hold that the Petitioner was not entitled to encash the Bank Guarantee which is in contravention of Clause 3.14 of the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 11 of 74 Agreement. The Respondent was aware that availing the additional FAR would entail delay in the completion of the project, thus having taken a conscious decision to enjoy the extra FAR, which it was not bound under the Contract, the respondent should have been willing to bear the consequences of the delay arising due to its decision. The impugned Award does not consider that while availing the enhanced FAR was not mandated under the Contract and the Respondent was not bound by the same, the completion of the Project by 03.01.2010 was mandatory and the Respondent is bound by Clause 3.14 of the Contract. Clause 3.14 of the Tender Document made time the essence of the Contract and required the Respondent to deposit the performance security to the tune of 5% of the bid amount. This amount was in the nature of a genuine pre- estimate of the losses suffered by the Petitioner in the event of delay in construction of the project.
17. Ld. Arbitrator has completely failed in noting that as per Clause 3.9 of the Contract, it was the sole responsibility of the Respondent to obtain necessary approvals for construction of the hotel. Ld. Arbitrator categorically holds that substantial delay can be attributed to authorities, i.e. authorities other than the Petitioner, however the said authorities, viz., DUAC, CFO etc. were neither made a party nor any consequences were fixed on the said authorities. The Ld. Arbitrator wrongly burdened the Petitioner herein with the liability for the alleged defaults committed by the said authorities. Respondent was majorly responsible for delay and OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 12 of 74 there had been several shortcomings in the plans submitted by the Respondent. It was repeatedly informed during the meetings taken by the senior officers of the Petitioner that the required basic amenities would be available to them as and when required but the same will not be linked with the pace of the construction. The Hoteliers were required to complete the construction within the time frame.
18. Ld. Arbitrator has not considered the fact on record that the infrastructural facilities could not be made available prior to the completion of the hotel projects because the same are interconnected works which may have been damaged in the intervening period during construction.
19. Ld. Arbitrator erroneously and wrongfully decided the Arbitral Award dated 17.07.2023 in favor of the Respondent without appreciating Clause 3.9 of the Agreement and duly appreciating that the plot was being tendered on 'as is where is' basis as per Clause 3.2.1 of the Agreement. Ld. Arbitrator has erroneously rendered the finding in paragraph 94 of the Impugned Award that rejection of enhanced FAR by the Petitioner was contrary to Notification of the Government of India dated 12.08.2008.
REPLY :
20. In reply, it is stated that on 04.01.2008 allotment cum demand letter was issued. On 14.01.2008 considering the urgency OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 13 of 74 of the project respondent requested DDA to issue NOC for Building Plans, however after delay of one-month, DDA issued NOC/sanction to start digging/excavation. The said plot was lacking basic infrastructural facility including water, electricity, sewage, road drain and internal development etc. The Respondent with an intention of expeditious completion of the work at site made representations to DDA and other authorities to arrange to above facilities, however no action was taken to redress the grievances. DDA after wasting 2 precious months DDA provided the form of Conveyance Deed to the Respondent for stamping purposes simultaneously with the issuance of the allotment-cum-
demand letter dated 04.01.2008. Respondent deposited the balance amount and also submitted duly stamped conveyance deed with DDA.
21. On 11.04.2008, in view of urgency and time bound project Respondent was granted provisional permission to raise construction upto the plinth level without formal handing over of physical possession of the plot was granted. On 15.05.2008, physical possession of the plot was given to Respondent vide Possession Letter after one month of approval of provisional permission. On 16.07.2008 petitioner furnished performance bank guarantee to a sum of Rs. 63,55,000/-. On 17.07.2008 after an inadvertent delay of more than 3 months, execution/registration of the Conveyance Deed was carried out by DDA in favour of Respondent. On 12.08.2008, considering the shortage of rooms for OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 14 of 74 Common Wealth Games, Government of India vide Notification No. SO2034(E) dated 12.08.2008 notified that the current FAR of 150 shall be increased to 225 at all hotel plots considering the prospective deficiency of rooms, however, DDA/petitioner never conveyed the requisite permission to increase the FAR despite notification by Government of India. On 25.09.2008, Respondent intimated DDA that since the construction has reached the plinth level, the status FAR shall be known for further construction of the hotel, since DDA remained silent. On 07.10.2008, a reminder of this date was sent by the Respondent intimating that time bound completion of the project is critical, however DDA rejected the increase in FAR despite notification by Government of India. On 26.02.2009, modification in notification dated 12.08.2008 allowing the FAR 225 and 40% ground coverage will apply to all hotel plots in commercial centers (IV and V) and Metropolitan City. On 04.03.2009, after being aggrieved by the conduct of DDA, Respondent made representation to Lt. Governor of Delhi, Ministry of Urban Development and Vice Chairman, DDA requesting kind intervention to resolve the issue of additional FAR considering the fast progress of the construction. On 11.09.2009, respondent made an application to Delhi Jal Board to provide the basic facilities of water and sewage at the construction site.
22. On 06.10.2009 DJB informed the Respondent that the DDA being the developing agency, is responsible for providing these facilities, and DDA who was responsible to submit the water OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 15 of 74 supply scheme of the area has not submitted the scheme. Therefore, the completion of the project ran into roadblocks. DDA was reminded that sanction for utilization of FAR 225 has not been granted yet, and such absence will delay the completion of the hotel. The Submission of fresh drawings by Respondent was done on 16.11.2009, and on 17.12.2009 Commonwealth Budget Hotel Association of which Respondent is a member made a request to the Vice Chairman of DDA to extent the time for encashment of performance guarantee by 6 months, however the petitioner vide letter dated 08.07.2010 invoked the performance bank guarantee.
23. It is stated that the petitioner maliciously and deliberately created hurdles in timely completion of the hotel project, by delaying the handing over possession and deliberately delaying the sanctioning the building plans without which Respondent neither constructed the hotel nor could have made it operational. It is stated that the subject matter of the dispute arose from the clause 3.14 of the tender document itself, therefore in order to invoke clause 3.14 position of delay is required to be addressed for adjudication of the delay and it shall be determined by whom such delay has been caused and it was due to continuous in actions of the Petitioner due to which project could not be completed on time. There is no patent illegality in the impugned award passed by the Ld. Arbitrator on this aspect.
24. It is also stated that the Ld. Arbitrator observed that the factum of not providing basic infrastructural has been admitted OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 16 of 74 by the Petitioner and throughout the pendency of the project multiple intimations/requests have been made to the Petitioner regarding providing basic infrastructural facilities. It is stated that the bonafide conduct of the Respondent cannot be looked upon, right from the beginning expeditious steps has been taken by the Respondent for timely completion of the project. On 22.02.2008, Respondent showed his keenness and made representation to the authorities to provide basic infrastructural facilities along with multiple agencies like Delhi Jal Board, Common Wealth Budget Hotel Association.
25. The plea of Respondent always fell into deaf ears and even till 2010 no infrastructural facilities were provided, despite the fact that time again made innumerable reminders on 05.01.2009, 18.05.2009, 27.05.2009, 03.08.2009, 17.08.2009, 04.11.2019, 17.11.2009 and 23.11.2009, since it as becoming impossible to complete the project. Ld. Arbitrator it is concluded that requirement of 'basic infrastructural facilities' is inseparable from the construction of hotel on an empty plot of land or any construction perse.
IN PARAWISE REPLY
26. It is denied that the relaxations granted by the Petitioner to the Respondent were to incentivise expeditious construction of the hotel, however the Petitioner took more than four months to grant the permission to construct up to the plinth OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 17 of 74 level. The whole idea behind the policy was to save time but taking time to give permissions was counter-productive and not in aid of the policy. The NOC was issued by the Petitioner on 20.02.2008 after a delay of more than a month. The excavation permission was also granted on 20.02.2008 after a delay of a month with an onerous condition that the permission is being granted on the special request of auction purchaser at its own cost and risk and DDA will not be responsible in case of any losses as a result of any changes/subsequent developments that may occur during the process of sanctioning of the building plans.
27. It is also stated that the deficiencies and the issue relating to mismatch of lay out plans (drawings) of Community Centre Mandawali could have been communicated to claimant's architect or respondent in one go without loss of time. The time spent in resolving the issue of mismatch was to the account of Petitioner and DUAC. The Notification dated 26.02.2009 of Government of India which provided that the norm FAR 225 and 40% ground coverage will apply to all hotels including hotel plots in question. The reason for rejection of the increased FAR is contrary to the Notification of the Government of India dated 12.08.2008 by which the floor area ratio was enhanced from 150 to
225. Vide letter dated 02.02.2010, Respondent referred to the delay of the Petitioner and other authorities in granting requisite sanctions to the plans, hence, it is a matter of record that the delay is attributable to the Petitioner and other governmental agencies.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 18 of 74 REPLY TO GROUNDS
28. It is stated that the Agreement has been interpreted by the Ld. Arbitrator based on the clauses and evidence produced by both the parties. Respondent cannot solely be made liable for the delayed completion of the project since it is a matter of record that there were unreasonable delays in granting NOC, Conveyance Deed and various other permissions that are attributable to the Petitioner. Respondent requested the Petitioner to issue No Objection Certificate (NOC) on 14.01.2008 for building plans, however petitioner took more than a month in issuing the sanction of the plan, which was actually issued on 20.02.2008. The respondent was however cautioned not to raise any structure/construction till the building plans were sanctioned. The whole idea behind the policy was to save time but taking time to give permissions was counter-productive and not in aid of the policy. Ld. Arbitrator has rightfully decided the Award on the basis of terms of the Contract.
29. The hotel site is located in Community Centre and it was clearly understood that necessary development would be by the Petitioner and the concerned governmental authorities. Since no such steps were taken, the Respondent faced hurdles in completing the project due to non-availability of infrastructural facilities. The Petitioner is covering his incompetence and mistakes behind the veil of "as is where is basis" portion. Ld. Arbitrator was right in holding that the Petitioner herein was not entitled to encash the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 19 of 74 bank guarantee since it is matter of record that the Petitioner and other authorities were responsible for granting approval NOC/sanction and hence causing delays in the completion of the construction. The Respondent by availing the additional FAR acted in accordance with the two notifications, however the Petitioner failed to take note of the delays caused in granting various permissions like NOC, Conveyance Deed, Possession Letter and the physical possession of the plot. The fact that plot was sold on 'as is where is basis' does not imply that infrastructural facilities will be created by the owner of the hotel. The owner of the hotel cannot be expected to provide street lights on the road leading to the hotel and cannot be expected to install a grid station for the electricity needs of the hotel as well as cannot be expected to lay water pipes from the civic source to the hotel. It is also stated that the petitioner is responsible for providing the basic infrastructural facilities since the plot was situated in a Community Centre. Ld. Arbitrator was correct to hold that the rejection of the increased FAR by the Petitioner was contrary to the Notifications of the Government of India dated 12.08.2008 and 26.02.2009. Furthermore, the Petitioner has mentioned no reason as to why the finding of the Ld. Arbitrator with respect to the Notification of Government of India is erroneous. Ld. Arbitrator was correct in judgement to hold that it is paradoxical to expect a hotel to be completed and operationalised without the infrastructural facilities.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 20 of 74 REJOINDER
30. It is stated that the respondent is solely responsible for the delays in completion and operationalisation of the hotel due to its own actions and disregard for contractual terms and conditions. It is stated that Petitioner had put in place mechanism of fortnightly meetings with concerned Chief Engineers for required basic amenities would be available to them as and when required but the same will not be linked with the pace of the construction and the construction would be completed within the time frame. Ld. Arbitrator ignored essential facts and evidences and Ld. Arbitrator ignored Several relaxations were given to the Respondent in order to incentivize and ensure that the construction of the Hotel would be completed within the stipulated time. Petitioner handed over possession of the plot much prior to completion of formalities. The Respondent was granted NOC for submission of building plans and permission to excavate on 20.02.2008, i.e. much prior to deposit of balance 75% of the bid amount. Furthermore, permission for 3rd basement was granted on 23.06.2008. Availing the enhanced FAR was not mandated under the Contract and the Respondent was not bound by the same, the completion of the Project by 03.01.2010 was mandatory and Respondent was bound by Clause 3.2.1 of the Contract which expressly stated that the Plot is being tendered on 'as is where is basis'. As per Clause 3.9 of the Contract, it was the sole responsibility of the Respondent to obtain necessary approvals for construction of the hotel.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 21 of 74
31. It is denied that the factum of not providing basic infrastructural facilities has been admitted by the Petitioner. Respondent had been provided with requisite facilities which were need at the time of construction of the hotel. It is also clarified that the basic amenities would be available to them as and when required but the same will not be linked with the pace of the construction.
32. The objective of the Project which was to provide accommodation to the guests arriving during the Commonwealth Games 2010, however the letter of 05.11.2009 by the Respondent makes it obvious that the Respondent was holding up construction of the hotel in order to get sanction for utilization of FAR 225. The respondent had duly made aware that the place of certain work of infrastructure facilities depend upon construction stage of allotted plots. The services cannot be made available prior to completion of hotel projects and this fact is also communicated during various meetings.
IN PARAWISE REPLY IN REJOINDER
33. It is denied that petitioner took more than four months to grant the permission to construct up to the plinth level and also denied the petitioner delayed in granting NOC and excavation permission. It is also denied that the deficiencies and the issue relating to mismatch of lay out plans (drawings) of Community Centre Mandawali could have been communicated to claimant's OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 22 of 74 architect or respondent in one go without loss of time. The availing the enhancement in FAR was optional and not mandatory. It is stated that respondent has insisted on proceedings with the construction with only increased FAR despite knowing that the same will cause delay. It is also stated that availability of infrastructural facilities were a pre-requisite for carrying out the work as contemplated in the contract.
SUBMISSIONS OF COUNSELS :
34. Ld. Counsel for petitioner/DDA submitted that the Ld. Arbitrator ignored the express terms of agreement and went behind the agreement and re-writing the same by substituting its own understanding. Ld. Arbitrator is ignored Clause 3.9 which place responsibility of obtaining the approvals on to the respondent and the respondent failed to plans approved in time to ensure the completion of the work as per clause 3.14. As per clause 3.14, the time is essence of contract and as per clause 3.2.1, the plot is being tendered on "As is where is basis", thus, it is presumed that the intended purchaser had inspected the site and familiarize himself with prevalent conditions in all respects before giving the bid. The construction of hotel was in no manner contingent upon the availability of the infrastructural facilities and could not be ground for the respondent to justify breach of its contractual obligations. The infrastructural facilities could not be made reliable prior to the completion of the project because the same are inter-connected OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 23 of 74 works which may have been damaged in the intervening period during construction. All the hoteliers were informed during meeting by the senior officers of DDA that they required basic amenities would be made available to them as and when they required but the same could not be link with the pace of construction. Ld. Arbitrator failed to appreciate the contractual provisions.
35. The availing of enhanced FAR was optional and the respondent was aware that the availing of additional FAR would entail delay in completion of project, therefore, the respondent is liable to bear the consequences of delay due to the said decision. (Relied upon Delhi Metro Rail Corporation Ltd. VS. Delhi Airport Metro Express Pvt. Ltd., Curative petition (C) Nos. 108-109 of 2022 dt. 10.04.2024; Indian Oil Corporation Ltd. Vs. Shree Ganesh Petroleum Rajgurunagar, C.A. No. 837-838/2022 dt. 01.02.2022 and PSA SICAL Terminals Private Limited Vs. Board of Trustees of V.O. Chidambranar Port Trust Tuticotin and Others, 2021 SCC Online SC 508)
36. Ld. Counsel submitted that in impugned award suffers from internal contradiction. The Ld. Arbitrator himself observed that the delay is because of the claimant as well as the DDA, DUAC and CFO, however, failed to remedy the petitioner because of the violation of clause 3.14 of the agreement by the claimant. [Relied upon Morgan Securities & Credits Pvt. Ltd. Vs. Samtel Display Systems Ltd., 2024(1) R.A.J. 101(Del)] OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 24 of 74
37. Ld. Arbitrator ignored the fact that the approvals were denied because of defective proposal and not as per requirement. The respondent held up the work towards completion of hotel even till November, 2009 in order to pressurize the petitioner to grant the enhanced FAR. Ld. Arbitrator also ignored the fact that the petitioner was handed over the plot much prior to completion of formalities. The respondent was granted NOC much prior to the deposit of balance 75% of the bid amount and the permission of third basement was granted on 23.06.2008. Ld. Arbitrator also ignored the fact that the petitioner raised the issue of alleged lack of infrastructural facilities for the first time in September, 2009 when the project was at its final lack. The respondent also failed to obtain any extension of time. The respondent insisted on enhanced FAR despite knowing that the entire process will be sanctioned for restarted and eventually the project will be delayed. Vide letter dt. 24.11.2008, the petitioner clearly informed the respondent that the request for enhancement of FAR cannot be exceeded as the FAR of community centre had already been improvized and the letter also reminded the respondent to take up the matter for approval of plans with DUAC and CFO.
38. Ld. Counsel for the petitioner submitted that Ld. Arbitrator invoked the express language of the letters placed on record by the petitioner which clearly states that the petitioner will facilitate the infrastructural facilities as and when the requisite stage for the same shall arise which is clear from the letter dt.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 25 of 74 11.03.2010. Ld. Arbitrator failed to notice that infrastructural facilities were not required for the comforts and ease of the respondent instead the said facility linked with the pace of the construction so that the same are available of the customers post operationalization. The respondent himself delayed the construction. The reliance on clause 3.11 (1) of the agreement is incorrect which clearly envisages the responsibility to provide water to the premises post construction of the hotel. Ld. Arbitrator exceeded the jurisdiction, therefore, the impugned award is perverse and patently illegal.
39. Ld. Arbitrator also attributed delay to third parties such as DUAC, CFO, DFS without hearing them, thus, the impugned award is violating the principal of natural justice. Ld. Arbitrator found the third party responsible for the delay yet petitioner is made liable for punishment for the same which is grossly against the public policy of India. The respondent is responsible for the delay which in itself brings clause 3.14 into operational thus, empower the petitioner to encash the bank guarantee. Ld. Arbitrator cannot re-write the terms of contract hence, the impugned award is liable to be set aside being perverse and patently illegal.
40. Ld. Counsel for the respondent submitted that raw patch of the land was given for construction and operationalization without any lacking basic of infrastructural. The respondent since beginning taken steps for timely completion of project on OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 26 of 74 22.02.2008 made representation to the authorities to provide basic infrastructural facilities alongwith multiple agencies like Delhi Jal Board, Common Wealth Budget Association. However, despite number of reminders, respondent not responded even till 2010 and no infrastructure facilities were provided. Ld. Arbitrator concluded that the requirement of basic infrastructural facilities is inseparable from the construction of hotel on an empty plot of land or any construction perse. Ld. Counsel submitted that the DDA also taken substantial time in granting sanction to the building plans as well as for increase FAR. The said delays are attributable to DDA rightly by the Ld. Arbitrator. Ld. Arbitrator also interpreted the relevant clauses i.e. 3.14, 3.2.1, 3.9 (3) of the contract in proper prospective. The respondent cannot complete the project without basic infrastructural facilities. There is nothing on record that there is deliberate delay on the part of the respondent. The respondent even not challenged the claim no. 1 i.e. for damages of Rs. 7 Crores on account of delay due to DDA but only pressed claim no. 2 restraining the DDA to encash the performance bank guarantee. Ld. Arbitrator had also rejected the counter claims of the DDA and the DDA has not challenged the said portion. Ld. Counsel submitted that there is no illegality in the impugned award passed by Ld. Arbitrator leave aside any patent illegality. The impugned award is passed after appreciation of the material on record and this court in present jurisdiction cannot re-appreciate the merits of the case. Ld. Counsel submitted that there is nothing pointed out OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 27 of 74 regarding breach of fundamental policy. The present petition is liable to be dismissed. [Relied upon Dyna Technologies Pvt. Ltd. Vs. Crompton Greaves Limited, (2019)20 SCC 1; Associate Builders Vs. DDA 2014(6)693 SC; National Highways Authority of India Vs. JMC Constructions Pvt. Ltd., 2021 DHC 3519; UHL Power Company Ltd. Vs. State of Himachal Pradesh, Civil Appeal No. 10341 of 2011; Atlanta Limited Thr. Its Managing Director Vs. Union of India represented by Chief Engineer Military Engineering Service, Civil Appeal No. 1533 of 2017; Punjab State Civil Supplies Corporation Limited (PUNSUP) Vs. Ganpati Rice Mills, 2021(6) R.A.J. 475 (SC); Oriental Insurance Company Limited Vs. Diamond Product Limited (2021) 284 DLT 35 (DB)]
41. Both the counsel s also filed written submissions.
42. Arguments heard. Record perused.
43. Before advertising to the analysis, the relevant portion of impugned award dt. 17.07.2023 is re-produced as under :
The following claims and counter claims are based upon the pleadings of the respective parties :
Fundamental Dispute Between the Parties "........66. According to respondent as per clause 3.14 of the tender document, hotel was to be completed and operationalized by claimant within 24 months of the issuance of the demand cum-allotment letter dated Januay4, 2008. Therefore, the hotel was to be completed and operationalized on or before January 3, 2010. According to clause 3.14 date of completion is to be treated as the date on which completion certificate is obtained by the auction purchaser. There is no dispute that the hotel was not completed and operationalized OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 28 of 74 by the January 3, 2010. The basic question to be determined is which party is responsible for the delay in completion of the hotel and its operationalization. Learned counsel for claimant submitted that it was respondent and the other government authorities concerned with approval of the building plans and issue of no objection certificates, who were responsible for the delay in completion of the hotel and its operationalization. On the other hand, learned counsel for respondent vehemently denied the assertion of learned counsel for claimant and argued that the entire delay is to be laid at the door of claimant.
Analysis of delay
67. It will be convenient to divide the analyses in two parts, phase 1 and phase 2.
68. Discussion under phase-1 will cover the stage up to sanction of building plans of the hotel with FAR 150 and discussion under phase 2 will cover the period commencing with the notifications of Government of India dealing with FAR 225 and ending with letter of respondent dated May 3, 2013.
Phase 1
69. According to the tender notice various approvals and clearances were required to be obtained by claimant from the concerned authorities. Any delay on the part of claimant in taking appropriate steps which were required to be taken need to be taken note of. Similarly, any delay on the part of authority/authorities who were to accord approvals etc., are also required to be taken into account. It was argued by the learned counsel for respondent that under the terms of the tender document it was the responsibility of claimant to seek and obtain approvals from the concerned authority/authorities and any delay in securing the approvals must be laid at the door of claimant. Tribunal agrees with the argument of learned counsel for respondent to the extent of delay on the part of claimant but where delay in granting approvals / NOCs was on the part of respondent and other concerned authorities, blame for the delay, if any, cannot be loaded on claimant.
70. It is well-settled that no one should suffer for the mistake of someone else. In case the delay in taking the steps for OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 29 of 74 acquiring the various approvals/sanction is of claimant, they cannot be ignored. Similarly, the same applies to the delays of the authority/authorities. The terms of the tender must be read in a just, fair and reasonable manner, otherwise justice is bound to suffer and it will not be in keeping with well entrenched principles of law.
71. The hotel was required to accommodate guests who were to visit Delhi for the Commonwealth Games 2010. This important aspect has to be kept in view to consider while considering the question of delay, if any, attributable to the claimant, respondent and other authorities. Re. Grant of Permission for submission of building plans.
72. On January 14, 2008 Page 11 claimant applied to respondent for seeking issue of No Objection Certificate (NOC) required for submitting the building plans. On February 20, 2008 respondent issued the NOC. As is evident respondent in issuing the NOC took more than one month.
Re- Permission to excavate the Land for Basement of the Hotel
73. On January 21, 2008 claimant requested respondent to grant permission to excavate the land for basement to the extent of area permitted as per Development Control Norms prescribed for the plot. Permission was granted by respondent on February 20, 2008 after a delay of about a month with the following onerous condition:
"It is further added that the permission is being granted on the special request of auction purchaser, at its own cost and risk and DDA will not be responsible in case of any losses as a result of any changes/subsequent developments that may occur during the process of sanctioning of the building plans."
Re-provisional permission for construction up to plinth level
74. On April 11, 2008 respondent granted provisional permission to claimant for taking up construction of hotel building up to plinth level pending the clearance of the building plans by the DUAC, CFO and MOEF. The letter reads as under:
DELHI DEVELOPMENT AUTHORITY OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 30 of 74 BUILDING SECTION Dated: 11/4/08 M/s SS Infrastructure Sub: Provisional permission for construction upto plinth level Dear Sir, I am to refer to Building plans submitted for approval of DDA vide reference no. F-13 (sic) dated 24/03/08 in view of the forthcoming Commonwealth Games, 2010 in Delhi, the construction of hotel building is to be expedited so that the same is operationalised and before the start of the Commonwealth Games, 2010. In this context, I am directed to convey the provisional permission for taking up the construction of the hotel building up to the plinth level pending the statutory clearances of the building plans by the DUAC, CFO & MOEF. A set of building plans have been/are being forwarded to DUAC and CFO for their clearances. However, in case any charges are (sic) by them it will have to be rectified by you at your own cost as per the affidavit submitted ... concerned that the construction above plinth level shall be taken up without the statutory clearances and (sic) sanction of the building plans by DDA.
Thanking you, Yours Faithfully Dy. Director Bldg.
75. It may be noticed that according to tender documents, the auction purchasers without payment of the entire bid amount, the execution of the conveyance deed, delivery of possession of the plot to them and sanction of building plans were not entitled to excavate the land and to construct upon it even up to plinth level, but in view of the Commonwealth Games, 2010, as the urgency was involved in execution of the hotel projects, permissions with regard thereto as a matter of policy were granted. Though, the claimant was also granted the said concessions, it took time for permissions to come. In the case OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 31 of 74 of permission to construct up to plinth level respondent took more than four months 12 to grant the permission to claimant. The whole idea behind the policy was to save time but taking time to give permission was counter-productive and not in aid of the policy.
76. It was clarified in the aforesaid letter of respondent dated April 11, 2008, that in case any changes are affected by the authorities in the building plans, the construction will have to be rectified at the risk and cost of claimant. Obviously, permission to raise the construction up to plinth level was at the risk and cost of claimant. Such permission is associated with the fear that construction could be demolished. It was argued by learned counsel for respondent that by granting the aforesaid permission, respondent gave a head start of several months to claimant. But it has not been explained why it took four months to grant the permission to construct the building up to plinth level.
Re-Sanction of Building plans with FAR 150
77. Claimant after receiving the permission to submit building plans vide letter of respondent dated February 20, 2008, it (claimant) submitted the building plans along with site plan, service plan, general specifications, title to the land, attested copy of receipt of payment of application fee and other requisite documents on March 24,2008. Clearly claimant took 32 days in submitting the building plans and the other documents.
78. On March 28, 2008, respondent pointed out deficiencies in the documents submitted by claimant. Pursuant thereto claimant submitted documents on March 29, 200813.
79. On April 04, 2008 respondent forwarded to CFO and DUAC building plans for approval. Thus, respondent without delay forwarded the plans to CFO and DUAC for approval within four days of the submission of documents after removal of deficiencies by claimant.
Re. Approval of plans by CFO
80. On April 15, 2008, CFO communicated to respondent certain shortcomings in the building plans.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 32 of 74 "a) Travel distance is not meeting LB/UV as per BBL 1983;
b) firefighting arrangements have not been marked on building plans as per NBC part IV;
c) compartmentation/segregation of lift/staircase is required as per NBC part IV;
d) ventilation scheme with calculation is required as per NBC part IV;
e) sprinkler scheme with design calculation is required as per IS 15.05. 2002 IV.
81. On June 09, 2008 CFO granted approval to the building plans with observations. As is apparent CFO took about two months to accord approval to the building plans. Re. Approval of plans by DUAC
82. DUAC by its letter dated April 29, 2008 to claimant's architect requested him to ensure submission of documents/materials to the commission as per DUAC guidelines. It seems that these guidelines were part of the aforesaid letter as it is stated "guidelines given over leaf"2.
83. Secretary to the DUAC by its letter dated July 09, 2008 addressed to respondent stated that during preliminary scrutiny of the proposal it was found that documents as per DUAC's requirements have not been submitted. It was emphasized therein to submit the following documents at the earliest so that proposal could be placed before the commission for scrutiny and evaluation:
1. Survey site plans;
2. CFO clearance; and
3. landscape plan;
84. On August 6, 2008 DUAC held a meeting to consider the proposal for approval of building plans of the hotel. It appears that claimant's architect was orally informed by DUAC regarding the outcome of the deliberations. Claimant's architect by its letter14 dated August 7, 2008 informed respondent that the plans of the subject plot available with the DUAC show the width of the plot as 28 mtrs, while its actual width is 30 mtrs. Consequently, the letter requested respondent to provide to DUAC the correct outlay plan duly OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 33 of 74 signed by it. The said letter of the Claimant's Architect reads as under:
R-22 GERA & ASSOCIATES ARCHITECTS & INTERIOR DESIGNERS To Director Building Dept. DDA, Vikas Sadan New Delhi Sub : Building plans of 6B Community Centre, Mandawali Fazalpur, Delhi belonging to M/s SS Infrastructure Dear Sir, It is bring to your kind notice that the above mentioned Hotel Plans were put in front of committee meeting of DUAC on th 6 August, 2008 for approvals but were postponed in this meeting for want of correct layout key plans duly signed from DDA as they have the plans from DDA which show that the plot size of above mentioned plot is 28m wide while the plot is 30m wide kindly sent the correct plans duly signed urgently enabling us to get the sanction at the earliest.
85. The deliberations of the meeting of DUAC held on August 6, 2008 were formally conveyed to claimant's Architect by the following letter of Secretary to DUAC dated August 27, 2008.
Sub: Building plans in respect or Hotel at plot no. 6B, Community Centre, Mandawali-Fazalpur.
Ref. DUAC's letter of even number dated 09.07.2008 & DDA's letter no. F13(112)/08/Bldg./25 dated 04.04.2008 & Architect's letter no. nil dated 10.07.2008.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 34 of 74 Sir, The above said proposal was considered by the Commission at its meeting held on August 6, 2008. The decisions and observations of the Commission are reproduced below for further necessary compliance at your end:-
"Decisions:
Deferred with observations.
Observations It was noted that the drawings of community Centre Mandawali Fazalpur as shown by the Chief Architect, DDA were different from the one approved by the Commission. It appears that the DDA had subsequently revised the layout which has not been submitted to DUAC."
(Sanjeev Sengupta) Secretary Copy to: 1. The Chief Architect, DDA, Vikas Minar, I.P Estate, New Delhi. He is requested to submit the revised drawings at an early date so that the proposals of hotels could be considered by the Commission.
Joint Director(C&I) Bldg., DDA, Vikas Sadan, INA, New Delhi. 3.M/s S S Infrastructure, F-109, Aditya Arcade, Community Centre, Preet Vihar, Delhi Sd/-
(Sanjeev Sengupta) Secretary"
86. The Director Building DDA by its letter dated August 27, 2008, apprised the Chief Architect DDA regarding the letter of the claimant's architect dated August 7, 2008 and the meeting held by DUAC on August 6, 2008. In view of the discrepancy between the width of the plot mentioned in the plans forwarded to the DUAC and the plans available with it, the letter requested him to send the correct plans with plot width of 30 mts to DUAC. The letter to the extent relevant is set out as under:
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 35 of 74 Sub: Plot width in respect of plot no. 6 B Community Centre, Mandawali Fazalpur Ref. Letter dated 07.08.2008 of M/s Gera and Associates Architects Sir, Please find enclosed photocopy of above mentioned letter dated 7.8.2008 from M/s Gera and Associate, Architects regarding width of the plot. This matter was considered by DUAC in its meeting held on 06.08.2008. Since, there is a discrepancy in plot width in the plans and forwarded by us available with DUAC there is a need to send the correct plan with plot width of 30 mts to DUAC. This plot is a hotel plot and sanction of building plans/construction is being monitored for Commonwealth Games Project. You are requested to send the correct plan to DUAC on priority with intimation along with plan to this office also.
87. Thereupon, the Senior Architect of respondent under the cover of the following letter dated September 24, 2008 forwarded revised drawings of Community Centre, Mandawali, Fazalpur to the DUAC:
Sub: Building Plans in respect of Hotels at plot no. 6B & 6C, Community Centre, Mandowali, Fazalpur near Utsav Ground Ref 1: no. 22(20) 2008 DUAC dt. 27-08-09
2. no. 22(17) 2008 DUAC dt. 27-8-08 Sir, Please find enclosed the revised drawings of Fazalpur near Utsav Ground as desired vide above noted subject under references for your information and record. It is pertinent to mention that the scheme was approved by DUAC vide their letter no. 29(30) 2005- DUAC dated 18-5-07 and was OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 36 of 74 subsequently revised due to change in FAR as per MPD-2021 and Hotel plots disposed in public auction.
Ashok S. Ghodeshwar Sr. Architect (East Zone) Encl: 1. Site plan-Dig no. A 02/scheme no. E-6006/P-252
2. Plot Division Plan-Drg. No. A-03/scheme no. E-6006/P-
25288. In the first instance DUAC in April 29, 2008 had requested claimant to ensure submission of documents/materials as per DUAC guidelines. Between April 30 to July 08, 2008, DUAC was able to make only preliminary scrutiny of the proposal and required the aforesaid documents namely survey site plan, clearance of plans by CFO and landscape plan. Thereafter, between July 9,2008 and August 27 2008 it only discovered mismatch between the layout plan earlier approved by it and the one submitted by respondent. It is difficult to understand piece meal scrutiny of the documents by DUAC or its staff over a period of four months. The said deficiencies and the issue relating to mismatch of lay out plans(drawings) of Community Centre Mandawali could have been communicated to claimant's architect or respondent in one go without loss of time. The time spent in resolving the issue of mismatch was to the account of respondent and DUAC. Furthermore, the concerned Architect of respondent took almost a month to forward the revised drawings of the Community Centre, Mandawali, Fazalpur It is also to be noted that the meeting of the DUAC took place on August 06, 2008 but its observations were conveyed in writing on August 27, 2008.
89. The Secretary DUAC by its letter dated November 19, 2008 informed respondent that the commission in its meeting held on October 15, 2008 approved the proposal with the following observations:
"1. Proposed continuation of Ashoka Trees all along the plot boundary of both the plots [(i.e., plot (6B) and adjacent plot 6(sic)] will create a high wall effect which is not acceptable.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 37 of 74
2. The strong architectural elements proposed at the roof level of two buildings [Plot (6B) and adjacent plot 6 (sic)) should be placed in such a fashion, so that both become the mirror image of each other."
It can be seen from above that after the issue relating to lay out plan of Community Centre Mandawali was clarified by letter of respondent's Architect dated September 24,2008, DUAC held the meeting on October 15,2008 but its outcome was communicated to respondent and claimant by its letter dated November 19, 2008 after delay of 34 days.
90. On submission of corrected drawings by claimant, DUAC under the cover of its letter dated December 29, 2008, forwarded the drawings to respondent with the following remarks:
Accordingly, 1 set of approved drawings as far as DUAC is concerned is enclosed herewith for further necessary action at your end (sic) at the same is otherwise as per master plan, zonal plan, building bye-laws, fire fighting regulations, the policy instructions of the Govt. of India, any other controls at Community Centre level. Further with the conditions that 1% of the project cost need to be spent on 'Work of Arts' in the building. The necessary compliance of 'Bureau of Indian Standards' norms against earthquake hazards the provisions for the rain water harvesting and the barrier free movement of the physically challenged should be ensured by the concerned local body before releasing the approval.
91. The observations that were made in the letter of DUAC dated November 19, 2008 regarding proposed placement of Ashoka Trees and architectural elements at the roof level of the two buildings at Plot 6(b) and 6(c) could have been intimated earlier. The building plans were forwarded by respondent on April 4, 2008 but the aforesaid two observations were communicated on November 19, 2008 after a period of 7 months. It took another month and ten days for corrected drawings to be submitted and approved. Claimant must also share the blame for shortcomings in the plans indicated in the aforesaid letters of DUAC. Respondent also OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 38 of 74 contributed to the delay in the process of approval by the DUAC in as much as after the scheme of Community Centre Fazalpur was approved by DUAC on May18, 2007, respondent effected change in the FAR due to sale of hotel plots but did not inform DUAC about it. In case this information had been shared by respondent with DUAC, much time would have been saved.
92. Respondent by its letter dated January 05, 2009 required claimant to submit fresh drawings after incorporating the suggestions of DUAC and CFO for its approval. Pursuant thereto, claimant submitted the drawings on January 9, 2009. Thereafter, respondent by its letter dated January 29, 2009 required claimant to furnish such of the documents regarding which information was not found to be complete. On February 16, 2009 claimant furnished the documents whereupon respondent on March 24, 2009, sanctioned the building plans with FAR 150 subject to submission of NOC from BSES.
Phase 2 The Government of India vide notification 15 dated August 12, 2008 notified increase in FAR from 150 to 225.
The relevant part of the notification reads as under:
3.........decided to modify the Master Plan for Delhi 2021.
4. Now, therefore, in exercise of the powers conferred by sub-section (2) of Section 11-A of the said Act, the Central Government hereby makes the modifications in the said Master Plan for Delhi, 2021 as per Annexure A & B with effect from the date of publication of this Notification in the Gazette of India.
S.No. Page No. Para/ Clause No. Modifications of MPD-2021
1. 35-36 Table 5.4-4(c) The Development Hotels Control Norms of (c) Hotels shall be substituted as per Annexure B. OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 39 of 74 Annexure B
2. Table 5.4. Development Control- Commercial Centers of (c) Hotels shall be modified to read as under:
Use/ Maximu FA Heigh Parking Other Controls
Use premises m R t (mts) Standards
Coverage ECS/100
% sqm of floor
area
(c) 40 22 NR* 3 (i) Maximum 10%
Hotels 5# ground coverage
shall be allowed
for providing
atrium. In case,
the permissible
additional ground
coverage for
atrium is utilized,
25% of the
utilized ground
coverage shall be
counted towards
FAR:
Maximum 20% of
the FAR can be
used for the
Commercial
Offices, Retail &
Service Shops.
The enhanced
FAR will be
allowed subject to
payment of harges
to be prescribed
/notified by
the Government.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 40 of 74 NR*- No Restriction, subject to clearance from AAI, Delhi Fire Service and other statutory bodies. FAR# In respect of all hotels except those located in LBZ area, Civil lines Bungalow Area and Hotels existing on heritage structures.
@ In respect of hotels where the building plans stand sanctioned prior to 27.1.2006, parking standard of 3 ECS for 100 sqm of floor area shall be applicable only for the additional FAR which will be availed consequent upon amendment to MPD 2021. In respect of hotels where the building plans have been sanctioned on or after 27.1.2006, the parking standard of 3 ECS for 100 sqm of floor area shall be applicable to the entire plot.
94. Pursuant to the notification, claimant by its letter dated September 25, 200816 requested respondent to intimate the status of enhanced FAR qua plot no. 6B, Mandwali Community Centre and the payment to be made for enhanced FAR. It was emphasized in the letter that construction was shortly reaching the plinth level and necessary infrastructure needs to be created according to the revised FAR. It was submitted therein that if FAR status is not intimated without loss of further time, it may become difficult to comply with a stipulated time schedule. Respondent took two months to reject the aforesaid request of claimant by its letter dated November 24, 200817 on the ground mentioned in the following part of the letter:
"This is in reference to your letter dated 25.9.08 regarding increase in FAR from 150 to FAR225 for the above-mentioned hotel plot. In this regard, it is intimated that request for additional FAR cannot be acceded to. The FAR of above-
mentioned community centre has already been utilized and there is no FAR left".
The reason for rejection is contrary to the notification of the Government of India dated August 12, 2008 by which floor area ratio was enhanced from 150 to 225. Therefore, OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 41 of 74 the floor area ratio for hotels was not dependent upon the floor area ratio of respective community centres. In the circumstances the rejection of claimant's request seeking permission to use enhanced FAR not only suffered from delay but was also in contravention of notification of the Government of India. Thereafter claimant made representation to the Lieutenant Governor of Delhi, Ministry of Urban Development and Vice Chairman of respondent. The Government of India on February 26.2009 issued another notification18, which clearly provided norm of 225 FAR and 40% ground coverage for hotels. The notification categorically stated that the said norm shall be applicable to all hotel plots in commercial centres. In view of aforesaid notification, on March 06, 2009, DDA asked claimant to submit the requisite proposal. In response, on July 7, 2009, claimant submitted revised plans with FAR 225 after an inordinate delay of four months.
95. Thereupon, respondent by its letter19 dated August 3, 2009 again asked claimant to furnish documents/information as it appears that the information/documents furnished by claimant on certain aspects were not sufficient.
96. Claimant by its letter dated November 16, 2009 submitted fresh drawings. It also submitted NOC received from Airports Authority of India in respect of the height of the building. Learned counsel for respondent rightly pointed out that claimant took more than three months from October 3, 2009 in submitting the drawings.
97. On November 05, 2009, claimant reminded respondent that sanction for FAR 225 was yet to be granted by it. Claimant voiced its concern by stating therein that absence of sanction would delay the completion of the hotel.
98. It seems no one was interested in expeditious completion of the process initiated for grant of sanction of the building plans as all the parties, the one seeking the sanction and the ones who were to grant approvals were taking months to discharge their obligations. Already this is OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 42 of 74 evident from the facts and circumstances referred to above and the mention of the facts and circumstances facts that will follow. This trend continued, which is perceptible from the fact that claimant submitted fresh drawings/building plans to respondent on November 16, 2009 but the latter forwarded them to CFO and DUAC under the cover of its letter dated February 2, 2010 i.e., after 77 days and after the stipulated date of completion of the hotel project.
99. On July 1, 2010, CFO approved the revised building plans. In doing so CFO took five months. In so far as DUAC is concerned, the approval of building plans was communicated to respondent by its letter dated March 15, 2011.The letter to the extent relevant is culled out as under:
[...] "1. The proposal forwarded by DDA was considered at Commission's meeting held on December 8, 2010. It was not approved and certain observations were given.
2. Clarifications received from DDA by letter dated January 3, 2011 was taken note of.
3. The proposal was found acceptable.
Accordingly, a set of approved revised drawings as far as DUAC is concerned is enclosed herewith for further necessary action at your end is the same as otherwise as per master plan, zonal plan, building bye laws, firefighting regulations, the policy instructions of the Government of India. Further with the condition that one per cent of the project cost need to be spent on work of arts in building, the necessary compliance of Bureau of Indian Standards norms against earthquake, hazards, the provision for rain water harvesting and the barrier free movement of the physically challenged should be ensured by concerned local body before releasing the approval."
Following are the important takeaways from the aforesaid letter of DUAC:
1. Building plans/drawings with FAR 225 were sent by respondent to DUAC on February 2, 2010. They were OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 43 of 74 considered by the Commission at its meeting held on December 8, 2010, when it did not approve the same;
2. DUAC took 11 months to disapprove the plans with observations during its meeting held on the aforesaid date;
3. Though clarification by DDA was received under the cover of letter dated January 3, 2011, DUAC approved the building plans with FAR 225 by taking another 70 days.
100. After a hiatus of five months, on June 13, 2011, respondent required claimant to submit drawings as per DUAC and CFO observations and deposit the requisite charges. On June 20, 2011, claimant submitted the requisite drawings but without depositing the charges demanded by respondent. It was on October 31, 2011 claimant deposited the fee/ charges after a long delay of more than four months.
101 The saga of approval ends on October 31, 2011 as pleadings of the parties have traveled thus far and no further. There is nothing on record to show whether respondent gave approval to the building plans, whether the hotel was completed and operationalized, whether completion certificate was given to the hotel, whether provisional occupancy certificate was given to operate the hotel during the common wealth games. But facts and circumstances clearly show that claimant, respondent, DUAC and CFO all contributed to the delay.
The above analysis shows that no one can singly be attributed with all the delay in the completion of the project by the stipulated date and beyond it. In this view of the matter respondent cannot be heard to say that since claimant was to secure the approvals and no objection certificates, any delay in securing them cannot justify claimant's failure to complete the hotel and operationalise the same by the prescribed date. In the light of the aforesaid finding, it is not necessary to dwell on the argument of learned counsel for respondent that Hotel being a public utility, failure on the part of claimant to complete the hotel caused loss to the public at large, for which it needs to compensate respondent in terms of clause 3.14. and the decisions cited by him. The determination in regard to question of delay is decisive in resolving the controversy.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 44 of 74
102. There is another relevant factor which needs to be considered. Learned counsel for claimant argued that essential infrastructural facilities were not in place even until April 2013. According to him without facilities such as water, electricity, drainage and road, it was not possible to complete and operationalize the hotel. Learned counsel submitted that in such a scenario, including the other delays attributable to respondent and the said authorities, respondent cannot accuse claimant for not obtaining the completing certificate within the stipulated period.
103. On the other hand, learned counsel for respondent argued that the plot was sold/allotted on as is where is basis. In this regard he referred to the following terms of the tender document and conveyance deed:
Clause 3.2.1 The bid shall be for the amount of the premium offered for the freehold rights in the plot. The plot is being tendered on 'as is where is basis'. It is presumed that the intending purchaser has inspected the site and familiarized himself with the prevalent conditions in all respects before giving the bid. The tenderer cannot put any condition with his bid.
Clause 4 of Conveyance Deed The said plot is allotted on the basis as is, and the purchaser cannot make alteration/ addition/ encroachment/ unauthorised construction in or around the same without written permission of vendor who may refuse or grant the same subject to such terms and conditions as deemed proper.
104. On the basis of these clauses, he also contended that it must be presumed that claimant had inspected the site before giving its bid and familiarized itself with the prevalent site conditions in all respects. Learned counsel argued that the words "in all respects" occurring in clause 3.2.1 includes infrastructural facilities as well. He canvassed that claimant must have satisfied itself with the status of the infrastructural facilities. Reference was also made to clause 4 of the conveyance deed executed by the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 45 of 74 parties which inter-alia provides that the plot is allotted on 'as is' basis. Learned counsel argued that in view of the aforesaid clauses, claimant cannot be heard to urge about the lack of infrastructural facilities. In support of his submission learned counsel cited the decision of the Supreme Court in Punjab Urban Planning and Development Authority and Ors. vs. Raghunath Gupta and Ors., (2012) 8 SCC 197 and decision of the Delhi High Court in Sunlight Project Pvt. Ltd. vs. DDA & Ors., w.P. (c) 685/2008 decided on January6, 2017.
105. Learned counsel for respondent also contended that respondent is a land-owning agency constituted under the Delhi Development Act, 1957 and is required to promote and secure the Development of Delhi. Furthermore, making provision for said facilities is not within its domain and sphere of activity. The said facilities were to be provided by the concerned civic authorities on completion of the hotel project.
106. The first question to be determined is whether claimant is right in its argument that the infrastructural facilities were not made available to it. In this regard it will be necessary to refer to relevant correspondence exchanged between the parties.
107. Respondent by its letter dated September 2, 2009 reminded claimant that the time for completion of the hotel shall be expiring on January 3, 2010. In this regard the letter invited the attention of claimant to clause 3.14 of the tender document and warned claimant that in the event it failed to provide the completion certificate and proof of making the hotel functional by the said date, performance security will be encashed in accordance with the terms and conditions of the document.
108 Claimant with a view to seeking more time to complete the project, in its response/representation20 dated September 7, 2009 pointed out lack of following infrastructural facilities which factor, according to it, was affecting the construction of the hotel:
"That there is no basic services like laying of sewer and water lines available in the Community Centre, OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 46 of 74 Mandawali Fazalpur and this has already been reported number of times to the competent authority; That the area has not been developed so far by providing roads in the Community Centre as well as surrounding areas which is also one of the obstacles in expediting the work.
That the area has not been electrified so far and which can only be done by BSES in case development charges to develop the site electrically is deposited by the DDA. [...]"
109 The letter also asserted that the hotel could be completed within six months from the date the said infrastructural facilities are made available. A slight digression from the topic of infrastructure is necessary in view of the argument of learned counsel for respondent that claimant in its aforesaid letter, did not attribute any delay in sanctioning the building plans. The contention overlooks the fact that claimant in its letter dated February 2, 2010, referred to the delay of respondent and other authorities in granting requisite sanctions to the plans. Be that as it may, it has already been found as matter of fact that delay is not only attributable to claimant but also to respondent and other governmental agencies.
110. Respondent in its reply/show cause notice dated December 29, 2009, dealing with the letter of claimant dated September 7, 2009, informed the latter that there can be no relaxation in the disposal conditions and performance security will be forfeited /encashed in accordance with the terms and conditions of allotment in case of failure of respondent to complete the construction of the hotel within the prescribed period. It is important to note that respondent in its letter did not dispute the fact that the infrastructure facilities mentioned in the letter of claimant were not available.
111. In response claimant by its representation dated February 02 2010 reiterated the fact of lack of infrastructure facilities and other delays. The letter to the extent relevant to the issue relating to infrastructural facilities reads as under:
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 47 of 74 Sub: Reply to the Show-Cause-Notice dated 29.12.2009 issued by DDA-Hotel Plot 6B, CC, Mandawali Fazalpur Sir, As you are aware the Hon'ble Delhi High Court vide its th Order dated 25 January, 2010 has directed us to file reply to the show cause notice dated 20.12.2009 (copy of Delhi High Court Order enclosed) by which were threatened that the performance security in the form of Bank Guarantee given by us could be enchased due to delay in completion of the project at hotel plot no. 6B, Community Centre, Mandawali Fazalpur, Delhi. In compliance of the said direction, this reply is filed for your kind consideration as under:
i. [...]
2....... precious time was consumed because of the uncertainty/confusion about the FAR. As you are aware the initial FAR was 150, but in the given circumstances, it was thought proper to increase the FAR to 225. However, the said enhancement of FAR was first rejected at your end on 24-11-2008, but after the formal Notification issued by the Government of India, we were asked in the midway as late as on 06-03-2009 to submit the requisite proposal/building plans with the increased FAR.
3. We faced further hurdles because as per the Tender Document, our plot being located in a Community Centre, it was clearly understood that the necessary development of the Community Centre would take place and the basic facilities thereby would be available for the project. As no steps were taken for the development of the Community Centre and we started facing the hurdles of non- availability of electricity, water, sewerage, approach road and other development related works, we held innumerable meetings with LG, Chief Minister, Chief Secretary, the Vice Chairman, Principal Commissioner, Engineer Member, Director (Building), Chief Engineer (EZ), etc. **
4. In the said meetings it was clearly indicated that under the given scenario it is practically impossible for anyone to OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 48 of 74 complete the project in the stipulated period. We conveyed our concerns in the clearest words to the Lt. Governor, the Chief Minister, the Chief Secretary, the Vice Chairman, the Principal Commissioner, the Director (Building) and other and requested that necessary indulgence be granted.
We were assured that the hurdles would be removed and necessary follow-up actions would be taken by the various departments.
5. However, in spite of the assurances, no follow up action was taken. Your attention is drawn o the meeting held on 10.11.2009 with the Principal Commissioner in which apart from the Hoteliers, all the concerned chief Engineers were present. Each one of them gave specific assurance that the hurdles, namely, various facilities lacking in the Community Centre like finalization of water supply scheme, sewerage line, building of the electricity sub- station, development of the approach roads and the overall development of the Community Centres would be immediately attended to. However, there is hardly any effective steps taken regarding the said basic infrastructural facilities.
6. Despite all hurdles and teething problems faced by us including delay in various approvals and clearances from various Government Authorities, like DUAC, CFO, Airport Authority of India, DPCC, etc. we went ahead with the construction and would reach quite advance stage of completion of project. In fact, in another three/four months we are sure we would be able to complete/operationalise project provided the needful is done by the concerned agencies. You would appreciate that the project cannot be completed in case we have been given the facilities like water, sewerage, electricity, road, etc. which are not in existence even at this belated in our plot site.
7. Our plight can be visualized by the simple fact that we have approached the DJB, they have conveyed that the DDA had not even prepared water supply scheme for the Community Centre and we were further informed that after deposit of the required infrastructure fund, the scheme should be released to DDA and it is DDA, who would make available the water connection to us. We still OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 49 of 74 are groping in dark and no water supply has been made to us till date.
8. Similar is the plight relate to the electricity supply as even on this date, the Electric Sub-Station (ESS) has not been built in the Community Centre, as a result of which no power is available to us either.
9. Further neither the road nor have other related development facilities been provided to us.
All the problems narrated hereinabove are in your thorough knowledge having been discussed in innumerable meetings and we were banking upon your assurances of remedial action. However, we were shocked and surprised to receive the communicated dated 29-12- 2009 threatening to invoke the performance security by encashing the Bank Guarantee only on the ground that the period of 24 months has lapsed. This was totally an unfortunate and uncalled for action as this distorts the facts as if the delay is attributable to our inaction or slackness in completion of the project, which you are fully aware is not the case.
We have always been targeting to complete the project and even at this stage we assure you that we can complete within three/four months.
112. As is apparent claimant had asserted in the letter that it had approached DJB for providing water connection to the hotel plot but it was conveyed that respondent did not even prepare water supply scheme for the community centre, and after its preparation and deposit of the requisite amount in the infrastructure fund, scheme will be released to respondent and respondent will give water connection to the hotel. The letter also stated that even electric substation for the community centre had not been constructed by respondent and as such no power supply was available to claimant. The letter averred that neither roads nor were other related development facilities provided to claimant. It was emphasized in the letter that the hotel site being located in Community Centre, it was clearly understood that necessary development would take place but no steps were taken, consequently claimant OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 50 of 74 faced hurdles due to non-availability of infrastructural facilities.
113. In contrast respondent by its reply dated March 11, 2010 to the representation of claimant stated that a sum of Rs. 1,73,93,598/-was deposited with the DVB.
Furthermore, it was stated that institutional complex in Mandawali Fazalpur had been electrified as per the report of the SC Electrical of DDA. It also mentioned the following status report with regard to the following facilities:
"water supply: available and handed over to DJB sewerage: available and handed over to DJB SW drain; available and handed over to DJB Roads: exist. Dense carpeting is required."
114. The fact that the development works like sewer line, water line and S.W. Drain were not in place even on July 15, 2010 is evident from the letter of the Executive Engineer, Eastern Division No. 5 of respondent. The letter reads as under1:
Dated: 15.7.2010 To Sh. Sanjay Aggarwal M/s S.S. Infrastructure F- 109, Aditya Arcade Community Centre, Preet Vihar Delhi-110092.
Sub: Vacation of area surrounding plot no. 6- B in scheme Community Centre at Mandawali Fazalpur The development work like sewer line, water line, S.W. Drain including road path and other development works are to be starting soon around the hotels.
It is therefore requested to remove your all building material and jhuggi lying on the D.D.A. land on which the development works to be carried out. Hence, it is requested again to vacate the area immediately.
An early action will be appreciated.
Executive Engineer OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 51 of 74 Eastern Division No. 5 D.D.A
115. Thus, the claim of the respondent as per its letter dated March 11, 2010 regarding the availability of aforesaid facilities, stands negated by the letter of its Executive Engineer dated July 15, 2010, which explicitly states that development work like "sewer line, water line, S.W. drain including road path and other development works" are to be started soon around the hotel. Since, the works were to be taken in hand, claimant was asked to remove the building materials and jhuggi belonging to it as the development work was to be carried.
The above stand of respondent regarding availability of infrastructural facilities is further nullified by its own21 letter dated May 5, 2013, whereby claimant was asked to deposit the following charges for being providing with the infrastructure facilities:
For sewerage connection Rs. 62,217/-
For water supply connection. Rs. 63,035/- For storm water connection Rs 58,145/-
116. The aforesaid letter of respondent written three years after March 11, 2010, shows that the aforesaid facilities were not provided to the hotel. The letter did not categorically deny the assertion of claimant that Mandawali Community Centre was not developed as such claimant was facing the impediments. The claim of respondent in its said letter dated March 11, 2011 that facilities of sewerage, water and storm water connections were available to hotel appears to have been made without proper examination of the position at the site of the hotel. In the earlier letters of respondent there was no demand for the aforesaid amounts from claimant for providing the said essential facilities. Learned Counsel for respondent had argued that it was not the responsibility of respondent to provide the Infrastructural facilities but letter of respondent reflects otherwise. In case it was not the responsibility of respondent, why respondent required claimant to deposit the aforesaid amounts for providing the said facilities. It is interesting to note that RW1during his cross examination did not state that it was not the responsibility of respondent to OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 52 of 74 provide the said facilities. It only stated that he does not know about it. The relevant part of the cross examination is set out as under:
Q.26. I say that it was the obligation of the DDA to provide electricity connection at the site. Is it correct?
Ans. I do not know.
Q. 27. Is it correct that the DDA did not provide the electricity connection at the site till 2013? Ans. I do not know.
Q. 28. Who was supposed to provide sewerage connection, water supply and storm water connection at the site?
Ans. I do not know.
Q. 29 I say that it was the obligation of the DDA to provide sewerage connection, water supply and storm water connection at the site. What have you to say?
Ans. I do not know.
Q. 30 Is it correct that the DDA did not provide sewerage connection, water supply and storm water connection at the site till 2013? Ans. I do not know.
Q. 31 Shown letter dated 03.05.2013 by Executive Engineer, ED-5 DDA to claimant. By this letter DDA had directed the release of sewerage connection, water supply connection and storm water connection subject to conditions mention therein. What do you have to say? Ans. I am not aware of this letter.
Q. 32 Can you verify on the next date whether the document Mark 'X' exists in the records of DDA?
Ans. I will check and report on the next date of hearing.
On the next date the witness appeared for further cross- examination but ignored the fact that he was required to OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 53 of 74 answer question no. 32 and report about the letter of Executive Engineer. Thus, it can be safely presumed that the authenticity of the said letter of Executive Engineer DDA dated May 03, 2013 was not disputed by the witness.
117. It does seem to the Tribunal that it is not in the domain of respondent to provide infrastructural facilities but surely it was its responsibility to undertake works in and around the Community Centre so that civic authorities charged with providing facilities were able to extend them to the hotel. It was also the responsibility of respondent to intercede with the authorities to provide the hotel with the said essential facilities. It was common concern of claimant, respondent, DUAC, CFO and civic authorities that the hotel was completed before the stipulated date for Common Wealth Games. The responsibility to discharge their duties and do their bit cannot be shunned on excuses and on the basis of reading certain clauses of the agreement divorced from ground reality. On behalf of respondent it was vehemently argued that respondent was not responsible for providing infrastructural facilities. In making this argument respondent overlooked clause 3.11(1) of the agreement, which states that 'DDA/MCD will supply water at the Ground level. The clause gives the sense that respondent was to intercede with the concerned agency to supply water to the hotel at least before the stipulated date of completion i.e., January 3, 2010.
118. There is no quarrel with the argument of learned counsel for respondent that as per precedents, the terms of the agreement were required to be complied with by the parties but in the circumstances, respondent was not right in placing the entire blame on claimant for failing to complete the hotel by January 3, 2010 in terms of clause 3.14. Respondent cannot overlook its own contribution to the delay and that of other authorities.
119. It was contended that since the plot was sold on as is where is basis, claimant was not entitled to urge that no infrastructural facilities were in place as an excuse for failure to complete the hotel within the stipulated period. In support of his submission learned counsel cited the decision of the Supreme Court in Punjab Urban Planning and Development Authority and Ors. vs. Raghunath Gupta OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 54 of 74 and Ors., (2012) 8 SCC 197 and decision of the Delhi High Court in Sunlight Project Pvt. Ltd. vs. DDA & Ors., W.P. (c) 685/2008 decided on 06.01.2017.
120. The decisions cited by learned counsel have no application as there is a qualitative difference between the fact situation of the instant case and the fact situation in which the aforesaid decisions were rendered. It is difficult to imagine how respondent expected the hotel to be completed without the aforesaid infrastructural facilities. No customer will walk into the hotel without the availability of the facilities. It was not an ordinary hotel that was being constructed. It was meant for visitors coming from inside and outside the country to view Common Wealth Games. The prestige of the country was involved. The fact that plot was sold on as is where is basis does not imply that infrastructural facilities will be created by the owner of the hotel. It cannot be expected to provide street lights on the road leading to the hotel. It cannot be expected to install a grid station for the electricity needs of the hotel. It cannot be expected to lay water pipes from the civic source to the hotel. The essential services for running the hotel are to be provided by the concerned authorities. Such works cannot be dumped on the owner of the hotel just because of the "as is where is clause" in the tender document and conveyance deed. A five star hotel was supposed to be built on site and it was to be equipped with the requisite infrastructural facilities. Even an ordinary hotel would not be able to run without the necessary infrastructure facilities. No hotel can be completed and operationalised without the availability of water, electricity, drainage system and the approach road.
121. Learned counsel for claimant submitted that there is nothing on record to show that the construction of the hotel was ever stopped because of lack of sanctions/requisite NOCs. Therefore, claimant cannot complain about the alleged delay in grant of sanctions/NOCs. The learned counsel overlooks the uncertain conditions which prevailed at the site. Even excavation and construction upto plinth level was at the risk and cost of the claimant. The delay in sanctions is fraught with the fear of demolition in case the construction is not in sync with the sanctions granted eventually at a OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 55 of 74 later date. It is paradoxical to expect a hotel to be completed and operationalised without the infrastructural facilities. In view of the aforesaid discussions it was the cumulative delay of claimant, respondent and the other authorities upto the stipulated date of completion and even thereafter, which had the potential to impede the completion and operationalisation of the hotel.
122. Having dealt with the question of delay, Tribunal proceeds to deal with claims & counter-claims.
Claim no. 1: Claim for business losses in the sum of Rs. 7 crore on account of delay
123.Claimant had moved an application for withdrawal of claim no. 1. In fact, claimant has not filed affidavit by way of evidence. There being no evidence in support of the claim and claimant having itself made an application for withdrawal of the claim. The claim is rejected as withdrawn.
Claim no. 2:
124. Under this claim claimant claims a sum of Rs. 63,55,000/-. Claimant had furnished performance bank guarantee for a sum of Rs 63,55,000/- by the Axis Bank at the instance of claimant. The bank guarantee was invoked by respondent, whereupon claimant filed an application under Section 17 of the Arbitration and Conciliation Act, 1996 for interdicting respondent from encashing the bank guarantee. Initially an interim order was granted by the Hon'ble Delhi High Court in favour of claimant. The Delhi High Court while constituting this Tribunal ordered that the application of claimant under Section 9 of the Arbitration and Conciliation Act, be treated as an application under Section 17 thereof , and be dealt by the Tribunal. On consideration of the matter, the Tribunal was of the view that claimant did not make out the case for confirmation of the interim order. Accordingly, the interim order was vacated and it was directed that the amount that may be realised as a result of encashment of the bank guarantee by respondent be kept in a fixed deposit, during the course of the proceedings, which shall abide by the final outcome of the matter. Since, it has been determined by the tribunal that the parties and the other authorities that OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 56 of 74 were responsible for granting approval/sanction/NOC have contributed to the delay, respondent was not entitled to encash the bank guarantee. Accordingly, respondent shall release to claimant an amount of Rs. 63, 55,000/- realised. As claimant had also contributed to the delay in completion of the hotel, it shall not be entitled to interest that may have accrued on the fixed deposit. Accordingly, an award in the sum of Rs. 63,55,000/- is passed in favour of claimant and against respondent with interest @ 9% from the date of the award till the realisation of the amount.
Re costs. Claimant shall bear its own cost.
Counter Claim No. 1125. Under this counter claim respondent claims that it is entitled to claim and claimant is liable to pay the amount of performance bank guarantee of Rs. 63,55,000/-. It has already been held that claimant, as well as respondent and other authorities have contributed to the delay in completion of the hotel. Accordingly, Counter-claim 1 is rejected.
Counter Claim no. 2
126. Under this counter claim respondent claims interest on the proceeds of the performance bank guarantee. As already pointed out, respondent was permitted to encash the bank guarantee and was directed to keep the same in the fixed deposit. Since, claimant had also contributed to the delay in completion of the hotel, it shall not be entitled to interest that may have accrued on the fixed deposit. Therefore, respondent shall be entitled to retain the interest accrued on the proceeds of the bank guarantee.
Counter claim no. 3
127. Under this counter claim, respondent claims recovery of all charges as may be payable by claimant according to law and as per policy as and when project is completed. Respondent has neither given any details of the charges nor has led any evidence in support of its counter claim. Accordingly, the counter claim no.3 is rejected.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 57 of 74 Counter claim no. 4
128. Under this counter claim respondent claims interest on the amount claimed under the aforesaid counter-claims. The subject claim is rejected, since counter claim nos. 1 & 3 have been rejected.
Counter claim 5 regarding costs
129. Respondent shall bear its own cost."
44. During arbitration proceedings, the respondent/ claimant filed the statement of claim whereas the petitioner /DDA filed the counter claim. The main contentions in the claim petition raised by the claimant/ respondent that considering the urgency of the project, on 14.01.2008, claimant had requested DDA to issue NOC for building plans, however, DDA took more than one month which was actually issued on 20.02.2008 and permitted to claimant start the digging/ excalvation work limited to the basement. however, cautioned that no structure/ construction will be raised till the building plans were sanctioned. Vide letter dt. 22.02.2008, the claimant requested the DDA to arrange for infrastructural facilities including electricity, water sewerage, road range, water etc. and thereafter number of reminders were also given to the DDA and other agencies and also by the Common Wealth Budget Association, however, no action was taken. The Conveyance deed was also provided by the DDA after consuming the precious period of two months. The DDA granted permission to take up the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 58 of 74 construction of hotel building upto plinth level on 11.04.2008 and physical possession was given on 15.05.2008. The DDA had consumed the precious period in handing over the possession execution of conveyance deed, thus, deprived the check time in utilizing towards constructual activities.
45. The other plea raised is that original tender documents envisaged 150 FAR but considering the shortage of room for common wealth games, the Govt. of India vide notification dt. 12.08.2008 notified that increase in FAR from 150 to 225, however, DDA had not conveyed the permission to increase the FAR as per decision of Govt. of India. The claimant on 25.09.2008 sent the communication that the construction had reached the plinth level and it would be difficult for claimant to continue further construction without the FAR status known to it. The DDA remained non-responsive, therefore, the reminder on 07.10.2008 was sent, however, DDA on 24.11.2008 rejected increase in FAR. Thereafter, on 04.03.2009 claimant represented to LG, Ministry of Urban Development and Vice Chairman of DDA to resolve the issue of addition of FAR. Thereafter, DDA on 06.03.2009 asked claimant to submit the requisite proposal of building plan for increasing the FAR. In view of Govt. of India notification dt. 26.02.2009, thereafter FAR was increased from 150 to 225.
46. In the meanwhile, the claimant also made communication for infrastructural facilities. Delhi Jal Board also informed the claimant that DDA is required to submit water supply OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 59 of 74 scheme which it had not submitted. The claimant as well as the Common Wealth Budget Association requested DDA to extend the completion time, however, the DDA instead the extending time, threaten to encash the performance security on 29.12.2009, thereafter, the writ petition was filed. The Hon'ble High Court on 25.01.2010 directed the claimant to reply to the show cause notice of DDA and the claimant in reply pointed out number of latches on the part of the respondent including delay in approval and clearance by various authorities like DUAC, CFO, Airport Authority of India, BPCC, non-availability of electric sub-station and most importantly delay in increased FAR 150 to 225. The said reply was rejected by the DDA vide order dt. 11.03.2010 and forfeited the performance security, therefore, raised claim no. 1 for compensation of Rs. 7 Crores for delayed period and claim no. 2 for direction not to encash or in alternative refund the bank guarantee.
47. In reply to the claim, the DDA raised the plea that there are several relaxations were granted like permission for construction of building upto plinth level, pending clearance from statutory bodies like CFO and DUAC, conditional waiver of prior to sanction charges for construction of building beyond plinth level, subject to that the hotel is operationalized before Common Wealth Games, approval by technical committee to forward the revised building plans with additional FAR to CFO and DUAC, permission granted for construction before plinth level and above plinth level without formal approval of building plan.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 60 of 74
48. The permission for construction of building below plinth level pending statutory clearances were granted on 11.04.2008. The approval of CFO and DUAC was received on 10.06.2008 and 31.12.2008. After receiving the compliance of building plan was released on 24.09.2009. With regard to approval of building plans with (225 FAR). During approval, certain violations were noticed, therefore, SCN was issued and after supply of correct drawings. On 20.06.2011, corrected building plans were submitted by claimant. The claimant deposited the fees and other charges on 31.10.2011.
49. As far as infrastructural facilities are concerned, all services are expected all available alongwith the completion with the hotel project. The services cannot be made available prior to completion of hotel project because the same are inter-connected works and make get damaged in the intervene period during construction. The senior officers of DDA during various meetings informed that various basic amenities would be available as and when required and would not be linked with the pace of construction. On issue of additional FAR, it is clarified that it was solely the decision of the claimant whether to avail or not to avail the additional FAR which becomes available during the execution of the contract. The claimant is liable to bear the consequences of delay arising from its decision to avail of the additional FAR. The DDA is not responsible for the delay and also raised the counter claim.
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50. The Ld. Arbitrator vide impugned award dt.
17.07.2023 observed that as per clause 3.14 of the tender document, hotel is to be completed and operationalized within 24 months of issuance of demand-cum-allotment letter dt. 04.01.2008 i.e. the hotel is to be completed and operationalized by 03.01.2010. The date of completion is the date when the completion certificate is obtained by the claimant. The hotel, however, not completed and operationalized by 03.01.2010, therefore, the question to be determined regarding the responsibility of the delay. The delay analysis by the Ld. Arbitrator is under two phases. Phase-1 with cover the stage upto sanction of building plans of the hotel with the FAR 150 and the Phase-2 the period commencing with the notification of Govt. of India dealing with FAR 225 and ending with the letter of DDA dt. 03.05.2013.
51. In analysis of Phase-1, the Ld. Arbitrator agreed with the arguments of the petitioner/ DDA that it is the responsibility of claimant to seek and obtain the approvals from the concerned authorities, however, also observed that where the delay in granting approval of the NOC was on the part of the respondent and other concerned authorities then the claimant cannot be loaded with it.
52. The Ld. Arbitrator analyzed the delay attributable to the claimant, DDA or other authorities. Ld. Arbitrator observed that as per the tender documents, without payment of entire bid amount, execution of the conveyance deed, delivery of possession of plot and sanction of building plans were not entitled to excavate the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 62 of 74 land and to construct upon it upto the plinth level but the concessions were granted, however, despite concessions, it took time for permissions to come. It take more than 4 months for permission to come for upto the construction of plinth level. It is also clarified in letter dt. 11.04.2008 by the DDA that in case any changes were effected by the authorities in the building plans, the construction will have to be rectified at the risk and cost of the claimant. The DDA cannot be explain the delay of 4 months in granting the permission to construct building upto plinth level.
53. Ld. Arbitrator observed a delay of 32 days in submitting the building plans and other documents by the claimant(with FAR 150) but not observed any delay on the part of DDA in forwarding the same to CFO and DUAC. The CFO vide letter dt. 15.04.2008 communicated to DDA certain shortcomings, however on 09.06.2008 granted approval to the building plans with observations and took around 2 months to accord the approval of building plans. The DUAC vide letter dt. 29.04.2008 to claimant's Architect requested to ensure the submissions of the documents as per guidelines. Ld. Arbitrator also observed that it is difficult to understand the piecemeal scrutiny of the documents by the DUAC or its staff over a period of 4 months and the time spent in resolving the issue of mis-match was on account of respondent/DDA and DUAC. The issue relating to the layout plan of the community centre was clarified by the claimant's Architect vide letter dt. 24.09.2008, however, DUAC held meeting on 15.10.2008 but OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 63 of 74 communicated the outcome to the respondent and claimant vide letter dt. 19.11.2008 after delay of 34 days. On submissions of corrected drawings vide letter dt. 29.12.2008, DUAC forwarded the drawings to the DDA. The DUAC in letter dt. 19.11.2008 regarding proposed placement of Ashoka Trees and Architectural elements of the roof level could have been intimated earlier. The building plans were forwarded by DDA on 04.04.2008 but these observations were communicated on 19.11.2008 after a period of 7 months. Ld. Arbitrator observed that in case the DDA shared the said information in time with DUAC then much time would have saved. The claimant is required to submit the fresh drawings as per letter dt. 05.01.2009 of the DDA, pursuant to which, on 09.01.2009 the claimant submitted the drawings. Thereafter, there is some information was not found complete which was completed and then on 24.03.2009, the building plans with FAR were sanctioned, subject to submission of NOC by BSES.
54. In the analyses of delay for Phase-2, the Govt. of India vide notification dt. 12.08.2008 notified increase in FAR from 150 to 225. The claimant thereafter vide letter dt. 25.09.2008 requested to intimate the status of enhanced FAR and emphasized that the construction shortly reaching to the plinth level and necessary infrastructure needs to be created according to revised FAR. However, vide letter dt. 24.11.2008, the request for increase of FAR was rejected. The said rejection is found to the contrary of notification dt. 12.08.2008 then the claimant made representation.
OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 64 of 74 The Govt. of India on 26.02.2009 issued another notification which clearly provided norms of 225 FAR and 40% ground coverage for hotels. The DDA on 06.03.2009 asked claimant to submit the requisite proposal, however, after delay of 4 months, the claimant on 07.07.2009 submitted the revised plan. Thereafter on 03.08.2009, the claimant was asked to furnish the documents, however, the claimant vide letter dt. 16.11.2009 submitted fresh drawings after receiving NOC from Airport Authority. Thereafter, on approval of other agencies i.e. CFO and DUAC, the saga of approval ends on 31.10.2011 and Ld. Arbitrator observed that all the parties contributed to the delay.
55. Ld. Arbitrator observed that no one can singly be attributed with all the delays in completion of the project. Ld. Arbitrator for arising the said findings has examined the relevant letters and clauses, and this court in present jurisdiction cannot re- appreciate the evidence. The findings and the observations of the Ld. Arbitrator regarding the delay on the part of the claimant, DDA or other agencies do not appear at all unreasonable or wrong. This court has not power to substitute its own views over the findings of the Ld. Arbitrator. The Ld. Arbitrator in detail analyzed the delay in granting sanction in terms of FAR 150 and then FAR 225.
56. Another contentions raised by the claimant regarding the infrastructural facilities were not in place until April, 2013 and because of lack of those facilities, it is not possible to complete and operationalize the hotel. The Ld. Arbitrator also considered the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 65 of 74 contention of the DDA that the claimant is in the knowledge of clause 3.2.1 of the tender as well as clause 4 of the conveyance deed which itself suggests that the claimant must have satisfied before accepting tender with the status of infrastructural facilities. The said plot is on the basis of "as is where is basis". The Ld. Arbitrator after considering the various communications observed that the Delhi Jal Board conveyed that the DDA did not prepare the water supply scheme for the community centre and after its preparation and deposit of requisite amount in the infrastructure fund, the scheme will be released to the DDA and DDA will give water connection to the hotel. The letter also suggests of no electric sub-station for community centre constructed by DDA, no power supply, no roads or other developmental facility, however, the DDA in its reply dt. 11.03.2010 stated that they have deposited a sum of Rs. 1,73,93,598/- with DVB and furthermore, as per report of SE electrical of DDA, the said area will be electrified.
57. However, considering all the letters and communications, the tribunal observed that it is not in the domain of DDA to provide infrastructural facilities but surely it was the responsibility to undertake works in and around community centre so that the civic authorities to charge with providing facilities were able to extend to the hotel. The responsibility cannot be shunned on excuses and on the bare reading of certain clauses of agreement divorced the ground reality.
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58. Ld. Counsel for the DDA submitted that the Ld. Arbitrator not appreciated the fact that the responsibility of providing the infrastructural facilities is not on the DDA. It is categorically mentioned in clause 3.21 that the plot is "as is where is basis". Furthermore, the senior officials of DDA during meeting have time to time communicated the said fact to the claimant and other hoteliers. However, merely on the basis of this clause, the claimant cannot be faulted in writing to the concerned authorities to provide the infrastructural facilities for construction and operationalization of the hotel in time. The concerned authorities like Delhi Jal Board also written that till date, no water scheme has been proposed by the DDA. The DDA is obliged to discharge its duties to facilitate the claimant to obtain the infrastructural facilities from the concerned departments. Merely on the basis of clause 3.2.1, the DDA cannot be discharged from its responsibilities.
59. The Ld. Arbitrator rightly observed that it is paradoxical to expect the hotel to be completed and operationalized without the infrastructural facilities. The contentions of the counsel for the DDA/ petitioner that this observation of the Ld. Arbitrator is patently illegal and in violation of terms and conditions of the contract. The Ld. Arbitrator found that the DDA is responsible for facilitating the claimant in obtaining the infrastructural facilities which cannot be at all held to be patently illegal or in any way violating the terms and conditions of the agreement. This court in present jurisdiction cannot interfere upon the merits of the OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 67 of 74 observation. The contentions of Ld. Counsel for DDA that the delay attributed to the other authorities like DUAC, CFO etc. cannot be held against them without their being the party. This contention do not have any merit as the Ld. Arbitrator observed the delay on the part of other authorities on the basis of communications on record. The Ld. Arbitrator have appreciated the days of delay on the part of various authorities as well as claimant and the DDA on the basis of the communications which is part of the evidence on record. There is no infirmity in calculation of delay in this manner.
60. Ld. Counsel for the petitioner/ DDA raised the objection that the Ld. Arbitrator ignored clause 3.9 which places responsibility of obtaining the approvals on the claimant and furthermore, clause 3.14 mandates time is essence of the contract and clause 3.2.1 has categorically mentioned that the plot is standard "as is where is basis". However, the Ld. Arbitrator cogently dealt with all the three clauses in context of the present contract and the execution of the contract. The Ld. Arbitrator dealt with all the objections of the DDA and I found no ground to infer anything to the contrary.
61. Ld. Counsel for DDA submitted that all the hoteliers were informed during number of meetings that amenities would be available to them as and when they required but the same could not be link with the pace of the construction. There is nothing specific pleaded that what kind of amenities linking with the pace of OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 68 of 74 construction had been provided by the DDA and there is nothing also pleaded or shown on record that the infrastructural facilities as sought by the claimant is not at all linked to the pace of construction and operationalization of the hotel as mandated under the contract. Mere completion of ritual on the part of senior officers of the DDA during periodical meetings that the time could not be extended is not enough.
62. Ld. Counsel for the DDA also raised the objection that the enhanced FAR was optional and any delay because of FAR is to be because of the claimant himself. It is not disputed that the facility of enhanced the FAR was notified during the contract and the said facilities also available for the present contract by which the number of rooms were to be increased. This facility for the purpose of enhancing the space or accommodating the guest/ sports person who participate in CWC games. Therefore, merely because initially this enhanced FAR is not the part of the contract do not in any manner deprive the claimant not to use the said facility because it can cause some delay. Ld. Arbitrator rightly considered the aspect of enhanced FAR causing the delay in completion of the contract.
63. On overall appreciation of material on record, I do not found any illegality leave aside the patent illegality in the impugned award passed by Ld. Arbitrator. The present award is not against to the public policy. The Ld. Arbitrator passed the award after proper appreciation of material on record, and this court also OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 69 of 74 cannot re-appreciate the case on merits. No ground made out to interfere in the impugned award.
64. Scope of interference under section 34 of Arbitration and Conciliation Act with Arbitrator's award is very limited. The Court would not be justified in reappraising the material on record and substituting its own view in place of the view taken by Arbitrator. Once the Arbitrator has applied his mind to the matter before him, the Court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the Arbitrator would prevail as held by Hon'ble Supreme Court in the case of Navodaya Mass Entertainments Ltd. v. J.M. Combines reported in (2015) 5 SCC 698.
65. Hon'ble Supreme Court in the case of 'Sutlej Construction Ltd. v. State (UT of Chandigarh) reported in (2018) 1 SCC 718' has held that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the court and would not include what the court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice. Paragraph nos. 10 to 13 of the said judgment are extracted below:-
"10. We are not in agreement with the approach adopted by the learned Single Judge. The dispute in question had resulted in a reasoned award. It is not as if the arbitrator has not appreciated the evidence. The arbitrator has taken a plausible view and, an in our view, as per us the correct view, that the very nature of job to be performed would imply that there has to be an area for unloading OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 70 of 74 and that too in the vicinity of 5 km as that is all that the appellant was to be paid for. The route was also determined. In such a situation to say that the respondent owed no obligation to make available the site cannot be accepted by any stretch of imagination. The unpreparedness of the respondent is also apparent from the fact that even post-termination it took couple of years for the work to be carried out, which was meant to be completed within 45 days. The ability of the appellant to comply with its obligations was interdependent on the respondent meeting its obligations in time to facilitate appropriate areas for unloading of the earth and for its compacting. At least it is certainly a plausible view.
11. It has been opined by this Court that when it comes to setting aside of an award under the public policy ground, it would mean that the award should shock the conscience of the Court and would not include what the Court thinks is unjust on the facts of the case seeking to substitute its view for that of the arbitrator to do what it considers to be "justice".
12. The approach adopted by the learned Additional District Judge, Chandigarh was, thus, correct in not getting into the act of re-appreciating the evidence as the first appellate court from a trial court decree. An arbitrator is a chosen Judge by the parties and it is on limited parameters can the award be interfered with. 13. The learned Single Judge ought to have restrained himself from getting into the meanderings of evidence appreciation and acting like a second appellate court. In fact, even in second appeals, only questions of law are to be determined while the first appellate court is the final court on facts. In the present case, the learned Single Judge has, thus, acted in the first appeal against objections dismissed as if it was the first appellate court against a decree passed by the trial court."
66. The scope of interference with an arbitral award under Section 34 of the Act has been considered and discussed by Hon'ble Supreme Court in a judgment rendered in the case of OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 71 of 74 'MMTC Ltd. v. Vedanta Ltd. reported in (2019) 4 SCC 163' . Paragraph nos. 11 to 14 of the said judgment are extracted below:
"11. As far as Section 34 is concerned, the position is well-settled by now that the Court does not sit in appeal over the arbitral award and may interfere on merits on the limited ground provided under Section 34(2)(b)(ii) i.e. if the award is against the public policy of India. As per the legal position clarified through decisions of this Court prior to the amendments to the 1996 Act in 2015, a violation of Indian public policy, in turn, includes a violation of the fundamental policy of Indian law, a violation of the interest of India, conflict with justice or morality, and the existence of patent illegality in the arbitral award. Additionally, the concept of the "fundamental policy of Indian law" would cover compliance with statutes and judicial precedents, adopting a judicial approach, compliance with the principles of natural justice, and Wednesbury reasonableness. Furthermore, "patent illegality" itself has been held to mean contravention of the substantive law of India, contravention of the 1996 Act, and contravention of the terms of the contract.
12. It is only if one of these conditions is met that the Court may interfere with an arbitral award in terms of Section 34(2)(b)(ii), but such interference does not entail a review of the merits of the dispute, and is limited to situations where the findings of the arbitrator are arbitrary, capricious or perverse, or when the conscience of the Court is shocked, or when the illegality is not trivial but goes to the root of the matter. An arbitral award may not be interfered with if the view taken by the arbitrator is a possible view based on facts.
13. It is relevant to note that after the 2015 Amendment to Section 34, the above position stands somewhat modified. Pursuant to the insertion of Explanation 1 to Section 34(2), the scope of contravention of Indian public policy has been modified to the extent that it now means fraud or corruption in the making of the award, violation of Section 75 or Section 81 of the Act, contravention of the fundamental policy of Indian law, and conflict with the most basic notions of justice or morality. Additionally, sub-section (2-A) has been OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 72 of 74 inserted in Section 34, which provides that in case of domestic arbitrations, violation of Indian public policy also includes patent illegality appearing on the face of the award. The proviso to the same states that an award shall not be set aside merely on the ground of an erroneous application of the law or by re-appreciation of evidence.
14. As far as interference with an order made under Section 34, as per Section 37, is concerned, it cannot be disputed that such interference under Section 37 cannot travel beyond the restrictions laid down under Section
34. In other words, the court cannot undertake an independent assessment of the merits of the award, and must only ascertain that the exercise of power by the court under Section 34 has not exceeded the scope of the provision. Thus, it is evident that in case an arbitral award has been confirmed by the court under Section 34 and by the court in an appeal under Section 37, this Court must be extremely cautious and slow to disturb such concurrent findings."
67. In the case of 'Maharashtra State Electricity Distribution Company Ltd. v. Datar C.C.L. Ltd. reported in (2018) 3 SCC 133' it has been held by Hon'ble Supreme Court that "the proposition of law that the Arbitral Tribunal is the master of evidence and the findings of fact which are arrived at by the arbitrators on the basis of evidence on record are not to be scrutinised as if the Court was sitting in appeal now stands settled by catena of judgments pronounced by this Court without any exception thereto."
68. Ld. Arbitrator has passed the award upon consideration of material placed before him. There is nothing on record that the relevant material is not placed before the Ld. Arbitrator. There is nothing perverse or patent illegality in the findings of the Ld. Arbitrator.
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69. The Ld. Sole Arbitrator has drawn inferences and conclusions after the factual appreciation in the light of the legal principles. The views of the Ld. Sole Arbitrator can not be found fault with only for the reason that some other views can emerge by appreciating the same set of facts and evidence, until and unless it is shown that such a view is totally obnoxious and unsupported by the sound legal principles.
70. This Court cannot substitute its own views or the views of the parties with the view taken by the Ld. Arbitral Tribunal, if the view taken by the Ld. Arbitrator is not in conflict with the settled legal position. There is nothing to suggest that the findings and conclusions rendered by the Ld. Arbitrator are per-se perverse, illegal or non- sustainable or against public policy.
71. Accordingly, the present petition under Section 34 of the Arbitration and Conciliation Act as pressed into service by the petitioner is therefore not sustainable within the scope and ambit of the provision, therefore, liable to be dismissed and accordingly dismissed and disposed of.
72. File be consigned to record room after necessary compliance.
AJAY Digitally signed by AJAY KUMAR KUMAR JAIN Date: 2024.09.30 JAIN 16:57:37 +0530 Announced in open court (Ajay Kumar Jain) on 30th September, 2024 District Judge, Comm-03 South-East, Saket Courts, Delhi OMP (COMM) 95/2023 Delhi Development Authority Vs. M/s S. S. Infrastructure Dt. 30.09.2024 74 of 74