Delhi High Court
Delhi State Industrial ... vs M/S Roshan Real Estates Pvt. Ltd. on 1 May, 2015
Author: Badar Durrez Ahmed
$~13
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 01.05.2015
+ FAO (OS) 243/2015 & CM No.7983/2015
DELHI STATE INDUSTRIAL INFRASTRUCTURE &
DEVELOPOMENT CORPORATION .... Appellant
versus
M/S ROSHAN REAL ESTATES PVT. LTD. ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Moni Cinmoy, Advocate
For the Respondent : Mr Sandeep Sharma, Advocate.
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SANJEEV SACHDEVA
JUDGMENT
BADAR DURREZ AHMED, J (ORAL)
CM No.7982/2015 (exemption)
Exemption is allowed subject to all just exceptions.
CAV. No.437/2015
The learned counsel for the respondent/Caveator is present
The caveat stands discharged.
FAO (OS) 243/2015 & CM No.7983/2015
1. This appeal is directed against the order dated 05.02.2015 passed
by a learned Single Judge of this Court in OMP 1671/2014. The said
OMP was a petition under Section 34 of the Arbitration & Conciliation
Act, 1996 (hereinafter referred to as "the said Act") and was in respect of
an Award dated 12.09.2014 passed by a learned arbitrator. The
respondent had been awarded the work for construction of Academic
Building, Fashion Centre and Hotels at National Institute of Fashion
Technology, Hauz Khas Institutional Area, New Delhi by a Letter of
Acceptance of Tender dated 06.04.2010. The project did not take off.
The case of the respondent was that because of the delays in sanctioning
of drawings etc., the respondent incurred costs and damages as also loss
of profit. The learned arbitrator held in favour of the respondent and
against the petitioner.
2. The only point which requires our attention in this appeal is with
regard to the quantum of loss of profit. There is no dispute that some
loss of profit was occasioned to the respondent. The dispute is with
regard to the quantum. According to the appellant, the learned arbitrator
had, merely on the basis of an estimate, which was not supported by any
evidence, awarded 2% of the value of the work as the loss of profit. The
contract value was Rs 27,40,70,627/- and 2% of the same came to Rs
5,41,81,412/-. This is what was awarded by the learned arbitrator.
3. On this issue of 2% of the contract value being awarded on account
of loss of profit, the learned Single Judge held as under:-
"14. It is seen that the aforementioned decision
was not in the context of challenge to an Award
under Section 34 of the Act. The scope of
interference by the Court with an arbitral Award
has been considerably narrowed down by the
Supreme Court in several decisions, including Oil
and Natural Gas Corporation Ltd. v. Western
Geco International Ltd. (2014) 9 SCC 263 and
Associate Builders v. Delhi Development
Authority 2014 (13) SCALE 226. None of the said
decisions have been discussed in the aforesaid
decision of the Madhya Pradesh High Court in
Mukesh Kumar Singhal (supra)1. In any event,
the Court finds that the learned Arbitrator has
adopted a reasonable approach after noting that the
Respondent did deploy personnel and machinery
pursuant to the award of the work.
15. The Court does not find any merit as regards
the objection to Claim No. 2 on account of losses
and damages due to idling of engineering staff,
establishment, watch and ward is concerned. The
Arbitrator adopted a reasonable yardstick in
proceeding to award an amount accordingly. The
determination by the learned Arbitrator of the
other claims of the Respondent also does not call
for interference. The impugned Award is neither
against the public policy of India nor shocks the
judicial conscience warranting interference under
Section 34 of the Act."
4. As pointed out above, it is the case of the appellant that in the
absence of any evidence, the learned arbitrator could not have awarded
2% of the contract value only on the basis of an estimate on account of
loss of profit. On the other hand, Mr Sandeep Sharma, appearing on
behalf of the respondent submitted that the claim was to the extent of
10% of the contract value. He further submitted that an OMP has also
been filed by him challenging this aspect of the matter that the learned
arbitrator has not awarded 10% of the contract value but has only
awarded 2% of the contract value. That petition is OMP No.44/2015
which is pending before the learned Single Judge.
5. Insofar as the present appeal is concerned, we do not find any
2006 (3) RCR (Civil) 180.
infirmity either in the conclusion arrived at by the learned arbitrator or
by the learned Single Judge. It is very clear that there is no dispute with
the finding that there was a loss of profit occasioned on account of the
acts of omission/commission on the part of the appellant. The only
dispute is with regard to the quantum of the loss of profit. As pointed
out above, the respondent's claim of 10% of the contract value that has
been rejected by the learned arbitrator on the ground that the stand taken
by the respondent is ambivalent in the sense that at one point of time the
respondent had even gone to the extent of claiming 20% of the contract
value. Therefore, the learned Arbitrator rejected the claim of percentage
of loss of profit as set forth by the respondent. There being no other
quantifiable measures for arriving at a figure, the learned Arbitrator then
estimated a figure on the basis of 2% of the contract value assuming that
normally the profit margins were within the range of 5% to 7%. We feel
that the appellant cannot have a grouse with the quantification of 2% of
the contract value as the loss of profit. The figure arrived at by the
learned Arbitrator and confirmed by the learned Single Judge is not
unreasonable and, as such, would not shock the conscience of this Court.
Therefore, in our view, no interference is called for.
6. The appeal is without any merit. The same is, therefore, dismissed.
There shall be no order as to costs.
BADAR DURREZ AHMED, J
SANJEEV SACHDEVA, J
MAY 01, 2015/st
