Delhi High Court

Manpreet Singh & Co. vs North Delhi Municipal ... on 12 September, 2014

Author: Deepa Sharma

* IN THE HIGH COURT OF DELHI AT NEW DELHI
+                         OMP No. 1084/2014
%                     Judgement Reserved on: 08.09.2014
                      Judgement pronounced on: 12.09.2014


      MANPREET SINGH & CO.                               ..... Petitioner
                          Through:    Mr.B.L.Chawla, Adv.


                          versus


    NORTH DELHI MUNICIPAL CORPORATION ..... Respondent
                  Through: Mr.Sunil Goel, Mr.Pranav Sapra and
                           Mr.Varun Chawla, Advocates
CORAM:
HON'BLE MS. JUSTICE DEEPA SHARMA

JUDGMENT

1. The petitioner, by way of this petition, has challenged the award dated

04.06.2014, whereby his claim was rejected and the counter-claim of the

respondent was allowed.

2. The admitted facts of the case are that the respondent had invited

tenders for allotment of multi-level underground parking at Asaf Ali Road

vide NIT dated 11.10.2010 for a period of two years, renewable at the end of

first year with enhancement of monthly licence fee by 10% for the second

year. As per the site plan, the total area of the site was 112,500 square

metre. It is also the undisputed fact that the site was offered on "as is where

is basis" and the tenderers were given an opportunity of examining the site

before making the bid and to submit the bid after taking into consideration

the existing situation/position and condition of the site on inspection. The

petitioner submitted his bid for the site and offered the monthly licence fee

of Rs.12,81,717/- and his bid was accepted by the respondent by way of a

provisional offer letter dated 15.12.2010. This provisional offer was

accepted by the petitioner.

3. By accepting this provisional offer, the petitioner had, thus, also

accepted all the terms and conditions which were part of this provisional

offer and the contract. This provisional offer letter clearly stipulates that the

parking site was being allotted on "as is where is basis" and that MCD

would not be responsible for any declining in the potential of the customers

at the parking site for any extraneous unforeseen reasons whatsoever. Any

claim for remission on the basis of harm to business interest or extraneous

unforeseen conditions/reasons shall be summarily rejected by MCD and

licensee shall not be entitled to make any claim/remission on that account.

After the petitioner completed all the formalities, the site was allotted to the

petitioner for two years and the possession was handed over on 01.01.2011.

The duration of the contract was to expire on 31.10.2012, but it was

extended by one month vide letter dated 05.02.2013. The

petitioner/claimant, however, continued to run the site till 01.04.2013,

despite non-extension of the contract period. The possession of the site was

officially taken over by the respondent with effect from 02.04.2013.

4. The petitioner, thereafter, had raised a claim. His contention before

the learned Arbitrator was that as per the site plan, which was part of the

agreement, the total area of the site was 1,12,500 square metre, but the

actual area of the site was 33,500 square meter. He had also contended that

at the time of delivery of the site about 225 unclaimed vehicles were lying

dumped in the parking lot and the facility of electricity was not brought at

the site and it was also being used unauthorizedly by the staff and the

visitors of the respondent, without payment of parking charges. He also

claimed that the drainage system at the site was not working and the

basement used to get flooded with water in rainy season and the claimant

had to make arrangement for pumping out the water at his own cost and

expenses. He had claimed a sum of Rs.1,55,37,153/- by way of

compensation on account of these defaults on the part of respondent. The

interest on this amount was also claimed along with litigation expenses.

5. The contention of the respondent before the learned Arbitrator was

that in the NIT, the respondent had made it clear to the public that the offer

was on "as is whereas basis" and an opportunity to examine the site before

making any bid was also provided and it was advised to make the bid,

keeping in mind the existing position of the site. Their contention was that

there was no violation of the terms and conditions of the contract/agreement

by the respondent and so the petitioner was not entitled for any

compensation. They have claimed a sum of Rs. 35,36,544/- on account of

the fact that the petitioner had continued to stay at the site beyond the

licensed period and had illegally and unauthorizedly use the place from

01.02.2013 to 02.04.2013, without payment of monthly licence fee and

hence is liable to pay the said sum for the unauthorized use of the site.

6. On the basis of these facts, the learned Arbitrator had formulated the

following issues:-

"1. Whether the claimant remained in possession of the parking site unauthorizedly from 01.02.2013 to 02.04.2013? If so, its effect? OPD

2. Whether the site was allotted to the claimant on "as is where is" basis? If so its effect? OPD

3. Whether the claimant is entitled to the relief claimed in para 14 of the petition? OPD

4. Whether the respondent is entitled to the counter-claim as claimed in the reply to the claim petition? OPD

5. Relief."

The learned Arbitrator had given findings on each and every issue.

7. The petitioner vide this petition has challenged the said award on the

grounds that the learned Arbitrator has wrongly interpreted the terms of the

tender for allotment of the site and has also wrongly applied the ratio of

judgments of the Courts referred in the award on the facts of the case and

that he has also not appreciated clause 10 of the terms of the allotment,

requiring MCD to provide map of space allotted and it is further contended

that finding of the Arbitrator that the petitioner was in unauthorized

possession of the parking site from 01.02.2013 to 01.04.2013 is wrong and,

therefore, award is liable to be set aside.

8. Heard.

9. It is settled principle of law that an award cannot be set aside if the

Arbitrator has discussed every aspect, including the case law with

adequately elaborate and convincing reasons in the award. Illegality for

purpose of setting aside the award must be capable of going to the root of

the matter. Trivial illegality cannot be termed as contrary to public policy

(Reliance placed on findings in the case of Prathyusha Associates Vs.

Rashtriya Ispat Nigam Ltd., 2006 (1) ALT 691 (DB).

10. It is also a settled principle of law that a Court does not sit in appeal

over the award of an arbitral tribunal by re-assessing and re-appreciating the

evidence. It can be challenged only on the grounds mentioned in section 34

(2) of the Act. (Reliance placed on findings in the case of P. R. Shah Shares

& Stock Broker (P) Ltd. Vs. M/s B. H. H. Securities (P) Ltd. & Ors., 2012

(1) SCC 594.

11. In the case of Sudarshan Trading Co. Vs. Govt. of Kerala, (1989) 2

SCC 38, the Supreme Court has clearly held that the Courts are not required

to examine the award in order to find out whether the arbitrator had acted

correctly or incorrectly. Also in the case of Ispat Engg. & Foundry Works

v. SAIL, (2001) 6 SCC 347, the Supreme Court has held that there exists a

long catena of cases through which the law seems to be rather well settled

that the reappraisal of evidence by the court is not permissible.

12. In the case of Oil & Natural Gas Corporation Ltd. Vs. Saw Pipes

Ltd., 2003 (5) SCC 705, the Supreme Court has clearly held that the

illegality in the award must go to the root of the matter and if the illegality is

of trivial nature it cannot be held that award is against the public policy.

Award could also be set aside if it is so unfair and unreasonable that it

shocks the conscience of the Court. Such award is opposed to public policy

and is required to be adjudged void.

13. The award can be interfered with only on the grounds enumerated

under Section 34 (2) of the Arbitration and Conciliation Act. Learned

counsel for the petitioner has failed to point out any procedural error

committed by the learned Arbitrator. The petitioner has not challenged the

award on the basis that the award is against any public policy of India.

Learned counsel for the petitioner has failed to show that the award is

patently wrong or it suffers from such illegality which goes to the root of the

award.

14. The claim of the petitioner before the Arbitrator was that he was given

less area than what was shown in the site plan, which was part of the NIT,

by which the bid was called for by the respondent for allotting the site on the

basis of the licence fee. The findings of the learned Arbitrator are also based

on the terms and conditions reduced in writing between the parties by way

of the agreement clauses, which clearly postulates that the site was offered

on "as is where is basis" and the opportunity for examining the site before

making the bid was also given and the learned Arbitrator had reproduced the

relevant clause of the provisional offer letter in the award. It is reproduced

as under:-

"The parking site is being allotted on "as is where is basis". It is made clear that MCD will not be responsible for nay decline in the potential of the customers at the parking site for any extraneous/unforeseen reason(s) whatsoever. Any claim for the remission on the basis of harm to business interest on as extraneous/unforeseen conditions/reasons whatsoever, shall be summarily rejected by the MCD without any kind of response to the licensee and the licensee shall not be entitled to make any claim/remission on that account"

15. He has also produced the eligibility clause for participation in the

tender as under:-

"a. The tenderer shall inspect the parking site which will be given on "as is where is basis" and may obtain necessary clarification, if any regarding the same to satisfy himself fully before offering bid for the same.

b. The tenderer should bid the amount by considering its entire potential to attract customers MCD will not be responsible for any decline in the potential of the customers at the parking site for any extraneous/unforeseen reason(s) whatsoever. Any claim for the remission on the basis of harm to business interest on extraneous/unforeseen conditions/reasons whatsoever, shall be summarily rejected by the MCD without any kind of response to the licensee and the licensee shall not be entitled to make any claim/remission on that account."

16. The Arbitrator, basing his findings, on the terms of provisional offer

letter and the terms and conditions of the eligibility for participation in the

tender, has given its finding that since the claimant had accepted the bid on

"as is where is" basis, the claimant is precluded from raising any dispute in

regard to alleged loss as the site was occupied by the claimant with open

eyes. The learned Arbitrator has also relied on the findings of this Court in

the case of S.K. Pandey vs. MCD & Ors.189 (2012) DLT 476, where the

expression "as is where is basis" has been discussed and interpreted. He has

also relied on the findings of the Supreme Court in the case of UT

Chandigarh Admn. Vs. Amarjeet Singh (2009) 4 SCC 660 and Punjab

Urban Planning and Development Authority vs. Raghu Nath Gupta and

Ors. (2012) 8 SCC 197. 14. In the case of Punjab Urban Planning

(supra), the Supreme Court has discussed its findings in its earlier judgment

of UT Chandigarh Admn. (supra), wherein the Supreme Court has referred

to its judgment in Municipal Corporation, Chandigarh vs. Shantikunj

Investment (P) Ltd. (2006) 4 SCC 109 and had reproduced the relevant

paras as under:-

"19. ... In a public auction of sites, the position is completely different. A person interested can inspect the sites offered and choose the site which he wants to acquire and participate in the auction only in regard to such site. Before bidding in the auction, he knows or is in a position to ascertain, the condition and situation of the site. He knows about the existence or lack of amenities. The auction is on `as is where is basis'. With such knowledge, he participates in the auction and offers a particular bid. There is no compulsion that he should offer a particular price.

20. Where there is a public auction without assuring any specific or particular amenities, and the prospective purchaser/lessee participates in the auction after having an opportunity of examining the site, the bid in the auction is made keeping in view the existing situation, position and condition of the site. If all amenities are available, he would offer a higher amount. If there are no amenities, or if the site suffers from any disadvantages, he would offer a lesser amount, or may not participate in the auction. Once with open eyes, a person participates in an auction, he cannot thereafter be heard to say that he would not pay the balance of the price/premium or the stipulated interest on the delayed payment, or the ground rent, on the ground that the site suffers from certain disadvantages or on the ground that amenities are not provided."

17. The Supreme Court in Punjab Urban Planning (supra) has given its

findings as under:-

"We may reiterate that after having accepted the offer of the commercial plots in a public auction with a super imposed condition i.e. on "as is where is" basis and after having accepted the -terms and conditions of the allotment letter, including installment facility for payment, Respondents cannot say that they are not bound by the terms and conditions of the auction notice, as well as that of the allotment letter."

18. It, therefore, is clear that the learned Arbitrator has acted as per the

law, while giving its findings and has taken into consideration the law of the

land laid down by the Supreme Court and, therefore, it cannot be said that

the findings of the learned Arbitrator on issue Nos. 1, 2 and 3 suffer with

any illegality. As regards the findings of the Arbitrator with respect to issue

No. 4 is concerned, there is no dispute to the fact that the petitioner remain

in possession of site till 01.04.2013 and from 01.02.2013 to 01.04.2013, he

has no extension letter of the agreement in his favour. He, therefore, was

unauthorizedly in possession of the site and these findings of the learned

Arbitrator are not contrary to the terms and conditions of the agreement

between the parties or of any existing substantive law.

19. It is apparent that the award of the learned Arbitrator does not suffer