M/S S.S. Infrastructure vs Delhi Development Authority
2013 Latest Caselaw 5307 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 19.11.2013

+                         ARB.A. 24/2013

M/S S.S INFRASTRUCTURE                         ..... Appellant
                   Through: Mr Ajay Kumar, Adv.

                          versus

DELHI DEVELOPMENT AUTHORITY                                ..... Respondent

Through CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

RAJIV SHAKDHER, J

IA No. 17921/2013 (Exemption)

1. Allowed subject to just exceptions.

Arb. A. 24/2013 & IA No.17920/2013 (Stay)

2. This is an appeal filed under Section 37(2)(b) of the Arbitration & Conciliation Act, 1996 (in short the Act) against the order of the learned sole arbitrator, Hon'ble Mr Justice Anil Dev Singh (Retd.), dated 22.10.2013. The said order was passed by the learned arbitrator on an application filed by the appellant herein under Section 17 of the Act. The net effect of the impugned order is that, the appellant's prayer for injuncting encashment of the bank guarantee in issue, which is valued at Rs. 63.55/- lacs, stands rejected.

3. To be noted, the appellant is one of the many bidders, who in the wake of the Common Wealth Games, 2010, had submitted its bid for

purchase of a plot to build a hotel. It is not disputed that the appellant furnished a successful bid in the sum of Rs. 12.71 crores for a commercial plot located at: Plot No. 6B, at Community Centre, Mandawali, Fazalpur, Delhi, admeasuring 1416 sq. mtrs. (hereinafter referred to as the property in issue).

3.1 The terms of the allotment, admittedly, required the appellant to construct a hotel within twenty four (24) months. There was, admittedly, a delay in the construction of the hotel, on the property in issue. 3.2 It is in pursuance of the agreement obtaining between the parties that a bank guarantee, in the sum of Rs. 63.55 lacs, was furnished by the appellant, in favour of the respondent, on 16.07.2008. Since, according to the respondent, there was a delay in the construction of the hotel, the bank guarantee in issue, was sought to be encashed.

4. In view of the aforesaid circumstances, the appellant had filed a petition under Section 9 of the Act, which was numbered as OMP No. 421/2010. In the first instance, an interim order dated 21.10.2011, was passed in favour of the appellant, in the said OMP. 4.1 There is no dispute that the matter was referred to the sole arbitrator, who passed the impugned order in terms of the directions issued by this court, on an application being moved by the appellant under Section 17 of the Act.

5. The only ground advanced by the learned counsel for the appellant to assail the order of the learned arbitrator, is that the hotel could not be completed within the stipulated time as water and sewerage connection was not provided by the Delhi Jal Board. In this behalf, the learned counsel for the appellant has drawn my attention to paragraph 35(ix) of the impugned

order.

6. To be noted, the learned arbitrator after discussing the law pertaining to the bank guarantees, has come to a conclusion that the appellant's case does not fall within any of the three exceptions, which could have persuaded him to grant an injunction in favour of the appellant. The sum and substance of the arbitrator's reasoning is that: the allegation made by the appellant, including the allegation referred to above, would require trial. It is in these circumstances that the stay granted by this court, in the first instance, was vacated by the learned arbitrator. The reasoning of the learned arbitrator is contained in paragraph 36 of the impugned order. I find no error in the impugned order.

7. I have dealt in great detail, with a similar matter, in Arb. A. No. 22/2013, titled: Jaksons Developers Pvt. Ltd. vs Delhi Development Authority; decision in respect of which was rendered on 29.10.2013, as also in, Arb. A. No. 26/2013, titled: M/s Indogreen International vs DDA. The decision in this case is dated: 13.11.2013.

8. Before I conclude, I may also note, quite curiously, the appellant has failed to file the reply, which the respondent has filed before the learned arbitrator. This fact was brought to the notice of the learned counsel in Jaksons Developers Pvt. Ltd. case. I had to requisition a copy of the reply from Mr Ajay Kumar, whereupon the defence taken by the respondent was noticed. Yet again, in this case, the reply of the respondent has not been filed. Mr Ajay Kumar, learned counsel for the appellant, says that the captioned appeal was filed prior to the decision in Jaksons Developers Pvt. Ltd. Surely, Mr Ajay Kumar could have, after a decision was rendered in Jaksons Developers Pvt. Ltd., made an attempt to file a copy of the reply.

To be noted, a perusal of the stamp affixed on the captioned appeal would show, however, that it was filed on 07.11.2013, which was well after when a decision was rendered in Jaksons Developers Pvt. Ltd. case. Be that as it may, this is an aspect which should have come to the mind of Mr Ajay Kumar, irrespective of, the observations made in the Jaksons Developers Pvt. Ltd. case.

9. The appeal and the application for stay are, accordingly, dismissed with costs of Rs. 50,000/-. The costs shall be deposited with the Prime Minister's Relief Fund, within two weeks from today.

10. List before the Joint Registrar for compliance on 19.12.2013.

RAJIV SHAKDHER, J NOVEMBER 19, 2013 kk