Delhi High Court
Parsvnath Developers Ltd. vs Delhi Metro Rail Corporation ... on 3 July, 2018
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 3rd July, 2018
+ O.M.P. (COMM) 262/2018 & IAs 8404-05-06-07/2018
PARSVNATH DEVELOPERS LTD. ..... Petitioner
Through: Mr.Vijay Nair, Mr.Shubham Paliwal,
Advs.
versus
DELHI METRO RAIL CORPORATION LIMITED ..... Respondent
Through: Mr.Ankur Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
IAs 8405-06/2018
Exemption allowed subject to all just exceptions.
IA 8407/2018
This is an application seeking declaration that the petitioner has
complied with the requirements of Section 34 (5) of the Arbitration
and Conciliation Act, 1996. As the respondent has appeared, the
compliance of Section 34(5) of the Act is duly noted.
Application stands allowed.
O.M.P. (COMM) 262/2018 & IA 8404/2018
1. The petitioner has filed the present petition under Section 34 of
Arbitration and Conciliation Act, 1996 (hereinafter referred to as the
'Act') challenging the Arbitral Award dated 17th March, 2018 passed
OMP (Comm.) No.262/2018 Page 1
by the Arbitral Tribunal consisting of three Arbitrators. By way of
the Impugned Award, the Arbitral Tribunal has inter alia upheld the
notice dated 9th April, 2012 terminating the Concession Agreement
dated 25th February, 2005 executed between the petitioner and the
respondent on the ground of misuse of the space allotted to the
petitioner under the Concession Agreement.
2. The dispute between the parties is in relation to the Concession
Agreement noted above whereby the respondent had granted to the
petitioner the right to access, develop, finance, etc. the site at
Seelampur Metro Station. The concession period was for 12 years
and the possession of the site was handed over to the petitioner on 15th
March, 2005.
3. It is the case of the petitioner that upon development of the site,
the petitioner vide its letter dated 8th August, 2009 forwarded a draft
Sub-Licence Agreement that was proposed to be executed by the
petitioner with one M/s Ashima Securities Pvt. Ltd. which provided
for usage of the space as a banquet hall.
4. The said draft agreement had been forwarded by the petitioner
to the respondent in due compliance with clause 2.3.3 of the
Concession Agreement, which is reproduced hereinbelow:-
"2.3.3 The Concessionaire shall prepare a draft
Standard format of the sub licence agreement or arrangement
which the Concessionaire will be required to sign with the sub
licensee for the use of the Project Facility. The Concessionaire
shall furnish the draft of such deed to DMRC for modification
or suggestion. DMRC shall be entitled to incorporate such
clauses as DMRC may consider appropriate to protect
DMRC's interest. The Concessionaire shall enter into sub-
OMP (Comm.) No.262/2018 Page 2
licence arrangements as per the Standard format with the
convenants stipulated by DMRC and the Concessionaire shall
not incorporate or change in any clauses in the Deed that
would have any adverse effect on the convenants incorporated
by DMRC. In case of any deviation from the above-mentioned
Standard draft of the deed in any particular circumstance,
which supersedes or adversely affects DMRC's terms and
convenants, the prior written consent of DMRC shall be taken
before entering into any such agreement with a sub-licensee."
5. It is the case of the petitioner that in spite of receipt of the draft
agreement, the respondent did not raise any objection thereto, giving
rise to a legitimate belief in the petitioner that the said usage was
permitted under the Concession Agreement.
6. Counsel for the petitioner submits that based on such belief, the
petitioner executed the Sub-Licence Agreement with the said M/s
Ashima Securities Pvt. Ltd. on 1st October, 2009 who started using the
premises for banquet services to the knowledge of the respondent.
7. The respondent, however, vide its letter dated 17th February,
2011 raised an objection against the petitioner using the premises for
banquet services and later terminated the agreement vide its notice
dated 9th April, 2012. The petitioner in turn advised the sub-licensee
to stop the usage of the premises for banquet services vide its letter
dated 23rd April, 2012.
8. In view of the above facts, the dispute between the parties was,
whether the petitioner was allowed to use the premises for banquet
services in terms of the Concession Agreement. The answer to this
lies in the interpretation of clause 4.3.2 and 4.3.3 of the Concession
Agreement which are reproduced hereinbelow:-
OMP (Comm.) No.262/2018 Page 3
"4.3.2 The nature of the activities and facilities
that can be allowed at the Project site is as under:
• Departmental Store, Discount Store, Hypermarket
• Restaurants, Fast Food Stalls, kiosks
• Offices, Banks, ATMs
• Computer Training Centres,
• Showrooms for Consumer goods like Garments,
Electronics / electrical Items, general utilities, etc.
4.3.3 The Concessionaire may use or allow the use of
the Project Facility for other activities which are not envisaged
in Clause 4.3.2 above, only after prior written approval of
DMRC."
9. The Arbitral Tribunal, by its Impugned Award has interpreted
the terms of the Concession Agreement and has held that in terms of
clause 4.3.2, the petitioner was not allowed to provide banquet
services and the petitioner required written permission for the same
from the respondent under Clause 4.3.3 for the Concession
Agreement. The Arbitral Tribunal further relied upon the fact that for
another similar Concession Agreement executed between the parties
with respect to Kashmiri Gate Metro Station, the petitioner had
applied for such permission which had been granted by the respondent
on 26th September, 2008. The Arbitral Tribunal therefore, holds that
the petitioner was aware that such banquet activity is not permitted in
the premises, except on grant of an express permission for the same
from the respondent.
11. The contention of the petitioner that as the restaurant activity
was permitted in terms of clause 4.3.2 and the activity being carried
out by the petitioner was in fact akin to the same and therefore,
OMP (Comm.) No.262/2018 Page 4
allowed, was also rejected by the Arbitral Tribunal. In this regard, the
Arbitral Tribunal placed reliance on the Delhi Municipal Corporation
(Property Taxes) Byelaws, 2004, and the Delhi Master Plan, 2021 to
hold that there is a distinction between the usage of premises as a
restaurant and as a banquet hall.
11. I have considered the submissions made by the counsel for the
petitioner, however, I am unable to agree with the same. Clause 4.3.2
of the Concession Agreement gives an exhaustive list of permissible
usage of the premises. It is not an inclusive or illustrative which can
be expanded by the licencee on its own. In fact clause 4.3.3 of the
Concession Agreement clearly provides that for any other usage of the
premises, the concessionaire would have to take separate written
approval for the same.
12. The petitioner was well aware of these conditions and in fact, as
noted by the Arbitral Tribunal, for the Kashmiri Gate Metro Station
sought such approval which was granted by the respondent.
13. The plea of the petitioner that in certain other tender
documents, especially with respect to Nehru Place and Vaishali Metro
Stations, the respondent had clearly spelt out the activities which are
prohibited or restricted and, therefore, in the absence of such
condition, no such prohibition can be implied in the present
Concession Agreement, cannot also be accepted. The Concession
Agreement has to be interpreted on its own terms and as noted above,
once an exhaustive list of usage is given in the Concession
Agreement, there is no scope of expanding the same by taking any
benefit from some other tender document.
OMP (Comm.) No.262/2018 Page 5
14. In any case, this being a matter of interpretation of the
Agreement and the Arbitral Tribunal having interpreted the same in a
particular manner, which can by no stretch be said to be unreasonable
or perverse, this Court in exercise of its powers under Section 34 of
the Act cannot interfere with the same.
15. As far as the plea based on submission of draft Sub-Licence
Agreement and lack of objection thereon by the respondent is
concerned, it also cannot be accepted. In view of Clause 4.3.2 read
with Clause 4.3.3 of the Concession Agreement allowing only
prescribed usage of premises and prohibiting others, except "after
prior written approval of DMRC", there cannot be a presumed
approval or approval implied through conduct.
16. In view of the above, I find no merit in the present petition and
the same is accordingly dismissed with no order as to costs.
NAVIN CHAWLA, J
JULY 03, 2018
RN
OMP (Comm.) No.262/2018 Page 6
