Delhi High Court
Matrix Infosoft Pvt. Ltd. vs Planman Tecnologies (India) Pvt. ... on 28 November, 2018
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved On: 12.9.2018
Judgment Pronounced On:28.11.2018
+ O.M.P. (COMM) 38/2016
MATRIX INFOSOFT PVT. LTD. ..... Petitioner
Through: Mr. Pramod B. Agarwala with Mr.
Aayush Agarwala, Advs.
versus
PLANMAN TECNOLOGIES (INDIA) PVT. LTD...... Respondent
Through: Mr. Hem C. Vashisht with Mr. Rahul
Malik, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
RAJIV SHAKDHER, J.
1. This petition filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereafter referred to as "1996 Act") is directed
against the award dated 8.10.2015.
2. Briefly, the challenge to the award arises in the background of the
following facts:
3. The petitioner, who, is the owner of the premises described as: Plot
Nos. A-4 and A-29, Sector - 9, Noida, admeasuring 1600 square meters,
which includes a building constructed thereupon, admeasuring 38,000 sq.ft.,
(hereafter referred to as the "subject property") had entered into a
Memorandum of Understanding dated 20.6.2007 (in short „MOU‟) with the
respondent.
3.1 As per the terms of the MOU, respondent was required to pay a sum
of Rs.28 lakhs per month in respect of the subject property. Furthermore,
O.M.P. (COMM) No.38/2016 Pg. 1 of 18
the respondent was also required to deposit a sum of Rs.1.40 Crores towards
security. The tenure of the MOU was five (5) years with a leeway of
extending it by another four (4) years. The MOU, however, provided for a
lock-in period of sixty (60) months.
3.2 An important aspect of the MOU was that the burden of obtaining the
Completion Certificate from the New Okhla Industrial Development
Authority (in short the "Authority") was placed on the petitioner. The
petitioner was required to obtain the Completion Certificate and all attendant
permissions on or before 15.7.2007; which was also the deadline by which
the petitioner was required to hand over the subject property to the
respondent.
3.3 A default clause was also provided in the MOU, which stipulated that
in case the petitioner failed to discharge its obligations before the deadline, it
would refund not only the initial consideration of Rs.28 lakhs (which was
paid at the time of the execution of the MOU), but would also have to pay an
equivalent sum by way of penalty.
4. Thus, two things, which were crucial in forging the MOU were: first,
the petitioner‟s obligation to hand over the building, complete in all respects
along with the requisite permissions, such as Completion Certificate, by
15.7.2007; and second, the burden placed on the petitioner to execute a lease
deed.
5. The record shows that the petitioner failed to meet the deadline, and
accordingly, vide communication dated 13.8.2007 sought extension of time
till 15.9.2007.
5.1 The respondent, based on the request made by the petitioner, extended
the deadline till 15.9.2007. Evidently, the petitioner could not meet this
O.M.P. (COMM) No.38/2016 Pg. 2 of 18
extended deadline as well and therefore, once again, wrote to the respondent
on 15.9.2007 in that behalf. In this communication, the petitioner put forth
two options before the respondent: first, that the MOU could be kept alive
and the subject property could be handed over to the respondent by the
petitioner as and when it obtained the Completion Certificate and all
permissions as stipulated in Clause (7) (f) and (g) of the MOU. Second, that
the MOU could be called off; in other words, terminated.
5.2 In order to show its bona fide with respect to the second option, the
petitioner enclosed a cheque in the sum of Rs.28 lakhs in favour of the
respondent. The purpose being that if the first option of keeping the MOU
alive was not acceptable, the MOU could be brought to an end and the
cheque could be encashed.
5.3 It appears, the respondent chose the first option given by the
petitioner. This was conveyed by the respondent vide communication dated
17.9.2007 and accordingly, the cheque for Rs.28 lakhs was returned to the
petitioner. However, in this communication the respondent emphasised that
the petitioner would obtain all the necessary permissions at the earliest and
not approach any other party for leasing out the subject property.
6. Since, the petitioner was not able to obtain necessary permissions
which were necessary for closing the transaction, in particular, the
Completion Certificate, the respondent vide an e-mail dated 30.10.2007,
informed the petitioner that its management had taken decision not to
continue with the MOU.
6.1 In addition thereto, the respondent sought refund of Rs.28 lakhs given
to the petitioner at the time of execution for the MOU.
6.2 Pertinently, the respondent, at this stage, gave up its demand for being
O.M.P. (COMM) No.38/2016 Pg. 3 of 18
paid the penalty amount and other damages incurred by it.
6.3 Evidently, the petitioner vide its e-mail dated 6.11.2007, informed the
respondent that it was examining the contents of its e-mail dated 30.10.2007
and that it would send its response sooner than later.
7. On 23.11.2007, the petitioner informed the respondent that due to a
change in the Government, it would not be in a position to obtain the
Completion Certificate in quick time and that given the difficult
circumstances in which it was placed, it should consider granting further
time to obtain the Completion Certificate. The petitioner also made it a point
to convey to the respondent that because of its earlier communication dated
17.9.2007, it was not looking for allotting the subject property to other
prospective tenants.
7.1 It is important to note that e-mail dated 23.11.2007 was addressed by,
one, Mr. Sushil Jain on behalf of the petitioner to Mr. Sudhir Gupta,
employed with the respondent. The e-mail was sent at 2.52 p.m. and the
petitioner obtained a revert to the same at 2.59 p.m. from Mr. Sudhir Gupta,
carrying the following pithy message:
"Thanks for your mail. We are still with you."
8. Apparently, on 11.12.2007, the petitioner informed the respondent
that the Authority had taken a decision in its favour and as a result of a
change in scenario, it had applied for a Completion Certificate, which would
be made available to the respondent in the next ten (10) to fifteen (15) days.
Via the very same communication, the petitioner also sought from the
respondent its I.T. Project Report in order to enable it to obtain necessary
permission from the Authority for leasing out the subject property.
9. It appears that, in and about 22.2.2008, the petitioner deposited a sum
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of Rs.1,70,90,365/- as compounding fee to obtain the Completion
Certificate.
9.1 This fact, according to the petitioner, was conveyed to the respondent
on that very date.
9.2 The petitioner further claims that it received a Completion Certificate
from the Authority on 26.2.2008. It is further averred that information with
respect to the same was conveyed to the respondent on the very next date,
that is, on 27.2.2008.
10. The petitioner, apparently, was pursuing the Authority to grant
permission for leasing out the subject property. In this behalf, the petitioner
avers that it wrote to the respondent on 3.3.2008 that it should provide
information sought for, in its communication with it, to obtain the said
permission from the Authority.
10.1 Evidently, the respondent via its Company Secretary, Ms. Preeti
Khattar, supplied the information sought for via a return communication of
even date, i.e., 3.3.2008.
10.2 It is the petitioner‟s stand that on 3.3.2008, it received a permission
from the Authority to lease out the subject property. The permission,
apparently, had a validity period of ten years.
10.3 According to the petitioner, this information was furnished to the
respondent on 4.3.2008.
11. According to the respondent, vide e-mail dated 5.3.2008 it enquired
from the petitioner as to whether it had obtained a No Objection Certificate
(NOC) from the Pollution Board.
11.1 In response to query, the petitioner, seemingly, informed the
respondent that as per the Uttar Pradesh Government I.T. Policy, no NOC
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was required to be obtained.
11.2 Furthermore, the petitioner appears to have called upon the
respondent to finalize the lease deed as it had discharged its obligations
under the MOU.
11.3 The record shows that in the e-mail dated 7.3.2008, the petitioner
appears to have noted that as per its telephonic conversation with Mr. Sudhir
Gupta (a representative of the respondent), 10.3.2008 was fixed as the date
for firming up the language of the lease deed.
12 The petitioner claims that thereafter, on 7.3.2008, for the first time,
the respondent conveyed to petitioner that it wished to discontinue the deal
for the reason that it had found an alternate premises. The respondent
appears to have communicated that this step was taken as there was delay in
closing the transaction in issue.
12.1 Accordingly, as noticed above, the respondent sought refund of a sum
of Rs.28 lakhs given at the time of execution of the MOU.
13 Given this stand of the respondent, the petitioner requested that a
meeting be convened to discuss the issue at hand. The respondent, however,
vide communication dated 20.3.2008, after referring to the meetings that
were held with the representative of the petitioner, conveyed that the issue
was discussed with its Board of Directors, whereupon, a decision was taken
to adhere to its earlier position, which was, that it did not wish to take the
relationship any further.
14 This response propelled the petitioner to have notice dated 31.3.2008,
served upon the respondent. Via this notice, the petitioner demanded under
various heads, a sum of Rs.9,23,70,854/- from the respondent.
14.1 It appears that since the petitioner had brought an advocate in the fray,
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the respondent decided to adopt the same approach. Accordingly, via its
advocates, vide communication dated 26.4.2008, it responded to the
petitioner‟s notice dated 31.3.2008. In this communication, it was conveyed,
on behalf of the respondent, that its management had taken a decision not to
continue with the MOU; something, which was conveyed to the petitioner
via communication dated 31.10.2007 as well. Furthermore, the respondent‟s
advocate adverted to two other aspects: firstly, the respondent was not in
possession of the subject property, and secondly, the respondent disputed the
fact that it had ever seen or received communications dated 11.12.2007,
30.1.2008, 22.2.2008, 27.2.2008, 3.3.2008, 4.3.2008 and 6.3.2008.
14.2 Not to be left behind, the petitioner issued a rejoinder dated 5.6.2008.
15 Since, the dispute had erupted between the parties, this Court, was
approached by way of a petition under Section 11 of the 1996 Act, for
appointment of an Arbitrator.
16 Consequent thereto, on 08.10.2015, the duly appointed Arbitrator
rendered the impugned award.
17 It is in the background of the aforesaid broad facts and averments that
arguments in the matter on behalf of petitioner were advanced by Mr.
Pramod B. Agarwala, while those on behalf of the respondent were
advanced by Mr. Hem C. Vashisht.
18 Mr. Agarwala‟s submissions can be, broadly, paraphrased as follows:
(i) Firstly, the finding returned by the learned Arbitral Tribunal that the
termination of the MOU was valid was erroneous for the reason that the time
was not of the essence when the parties had first executed the same.
Furthermore, even if, it is assumed that it was of the essence to begin with, it
ceased to be so, as was evident upon perusal of communications dated
O.M.P. (COMM) No.38/2016 Pg. 7 of 18
15.9.2007 and 17.9.2007.
(i)(a) The communication dated 15.9.2007 gave two options to the
respondent: firstly, to continue with the MOU and secondly, to bring the
MOU to an end and to encash the cheque in the sum of Rs.28 lakhs, which
represented the money that the respondent had paid at the time of the
execution of the MOU. The respondent chose to continue with the MOU
and thereby, agreed to the condition put forth by the petitioner, which is that,
the possession of the subject property would be given by the petitioner as
and when it received the relevant permissions. The petitioner, in lieu thereof,
had agreed not to engage with other prospective tenants. The aforesaid
circumstances, as also, the step taken by the respondent of returning the
cheque in the sum of Rs.28 lakhs demonstrated that time was not of the
essence of contract. In this behalf, reliance was placed on the judgment of
the Supreme Court in Hind Construction Contractors vs. State of
Maharashtra, (1979) 2 SCC 70 as well as Associate Builders vs. Delhi
Development Authority, (2015) 3 SCC 49.
(ii) Secondly, though the respondent vide its communication dated
30.10.2007, had communicated its intention to terminate the MOU, its later
communication dated 23.11.2007, conveyed to the petitioner that the
respondent was desirous of continuing with the MOU. Based on this
representation of the respondent, the petitioner continued with its efforts to
obtain a Completion Certificate and necessary permissions for leasing out
the subject property. In support of this contention, reliance was placed on
the communications dated: 11.12.2007, 22.2.2008, 27.2.2008, 3.3.2008,
4.3.2008, 5.3.2008 and 6.3.2008.
(iii) Thirdly, the stand taken by the respondent that the petitioner‟s
O.M.P. (COMM) No.38/2016 Pg. 8 of 18
communication dated 23.11.2007 was with a person who was not authorized
to make a commitment on behalf of the respondent was not correct as was
demonstrable from the testimony of, one, Mr. Naveen Chamoli, that is, the
sole witness of the respondent. The argument advanced on behalf of the
respondent that the communication, purportedly, had by the petitioner with
the representative of the respondent could not be relied upon, as those
communications were in fact exchanged with an unauthorized person - was
a flawed submission, for the reason that though those persons were in the
employment of the respondent, they were not produced for cross-
examination by the respondent. In other words, the respondent had held
back the best evidence warranting an adverse inference being drawn against
the respondent by the Arbitral Tribunal.
(iv) Fourthly, the respondent erroneously relied upon the sole testimony of
Mr. Naveen Chamoli (C.W. 1) in support of its case, who, admittedly had no
personal knowledge of the subject transaction. The evidence was, therefore,
wholly inadmissible on account of the same being in the nature of hearsay
evidence. The Arbitral Tribunal had failed to notice this aspect of the matter
as also the case law cited in support of this submission.
(v) Fifthly, the Arbitral Tribunal had failed to deal with the contentions
raised by the petitioner. The award is, therefore, unreasoned and, hence,
falls foul of Section 39 (3) of the 1996 Act. The Arbitral Tribunal had failed
to adopt a judicial approach and thereby had committed a serious irregularity
in dealing with substantial issues. The award deserved to be set aside for this
reason alone. In this behalf, the provisions of Section 68 of the United
Kingdom Arbitration Act were relied upon; in particular, emphasis was laid
down on the fact that as per the United Kingdom Arbitration Act, an award
O.M.P. (COMM) No.38/2016 Pg. 9 of 18
can be set aside on the ground of failure of the Arbitral Tribunal to deal with
all issues put before it. This, according to the learned counsel, ought to be
treated as a serious irregularity. The learned counsel urged the Court to
adopt the same test and if found to be applicable in the facts of the instant
case, to set aside the award on this singular ground.
19 In support of his contentions, Mr Agarwala placed reliance on the
following judgments:
(a) Chander Kant and Co. vs. Delhi Development Authority, (2009)
164 DLT 657; and
(b) Associate Builders vs. Delhi Development Authority, (2015) 3
SCC 49.
20 As against this, Mr. Vashisht, on behalf of the respondent, largely
relied upon the findings returned by the Arbitral Tribunal in support of its
stand.
20.1 It was contended that the respondent never took possession of the
subject property, since, neither the Completion Certificate nor the necessary
approval was obtained from the Authority to lease out the subject property.
The petitioner, on its own showing had applied for a Completion Certificate
only on 11.12.2007, by which time, the respondent had terminated the
MOU, that is, on 30.10.2007.
20.2 Attention of the Court, in this behalf, was drawn to the e-mail dated
11.12.2007, sent by the petitioner. The reliance placed by the petitioner on
the e-mail dated 23.11.2007, issued on behalf of the respondent by, one, Mr.
Sudhir Gupta, to demonstrate, that the respondent was desirous of keeping
the MOU alive was misconceived, as Mr. Gupta, who had issued the said
communication was neither directly nor indirectly concerned with the MOU,
O.M.P. (COMM) No.38/2016 Pg. 10 of 18
nor was he a person, who, had been authorized by the respondent to deal
with the petitioner.
20.3 It was further submitted that the respondent could not have taken
possession of the subject property till a Completion Certificate had been
obtained and all other requisite permissions had been taken for occupying
the subject property. It was emphasised that the respondent, after
30.10.2007, had not entered into any communication with the petitioner. In
order to demonstrate that this was so, reliance was placed on paragraph 10
of the reply to the counter claim filed by the petitioner.
20.4 Mr. Vashisht further contended that the MOU provided that
correspondence exchanged between the parties could only be carried out
through an authorized representative. Therefore, according to the learned
counsel, reliance by the petitioner on correspondence carried out with an
unauthorized representative of the respondent cannot be used by the
petitioner to further its cause. The termination notice dated 30.10.2007 was
never revoked by the respondent nor was there any request made in that
behalf by the petitioner.
20.5 The argument advanced on behalf of the petitioner that the Arbitral
Tribunal did not deal with the submissions advanced on behalf of the
petitioner was misconceived, as the Arbitral Tribunal had dealt with all
relevant submissions.
20.6 This Court while adjudicating upon a petition under Section 34 of the
1996 Act cannot exercise the powers of an appellate Court. In other words
the Court would refrain from re-examining and reassessing the material,
which was placed for consideration before the Arbitral Tribunal. The award
passed was rooted in the material placed on record. The award, thus, needed
O.M.P. (COMM) No.38/2016 Pg. 11 of 18
to be sustained, as the petitioner has failed to demonstrate that the view
taken in the impugned award was not a plausible view. In support of its
submission, learned counsel for the respondent relied upon the following
judgments: MCD vs. Jagan Nath Ashok Kumar & Anr., AIR 1987 SC 2316
and Food Corporation of India vs. Joginderpal Mohinderpal & Anr., (1989)
2 SCC 347.
Reasons
21 I have heard the learned counsel for the parties and perused the
record. What emerges therefrom and over which there is, largely, no dispute
is as follows:
(i) Firstly, the parties had entered into an MOU on 20.6.2007. At the time
of entering into the MOU, the respondent paid a sum of Rs.28 lakhs to the
petitioner.
(ii) Secondly, as per the terms of the MOU, it was the petitioner‟s burden
to obtain the Completion Certificate and all other permissions from the
Authority on or before 15.7.2007 (See Clause 21(c) of the MOU).
(iii) Thirdly, the subject property could not be occupied till such time the
petitioner had obtained the Completion Certificate, the Occupation
Certificate and the approval of the Authority for entering into a lease
transaction.
(iii) (a) Inferentially, the aforesaid also brings forth the circumstance that the
subject building was incomplete and/or not fit for occupation at the time
when the MOU was executed.
(iv) Fourthly, the fact that the petitioner sought time is evident upon a
perusal of the communication dated 13.8.2007 and 15.9.2007, addressed by
the petitioner to the respondent.
O.M.P. (COMM) No.38/2016 Pg. 12 of 18
(v) Fifthly, the respondent, in fact, based on an earlier communication
dated letter 13.8.2007, extended the timeline till 15.09.2007 to enable the
petitioner to discharge its obligations under the MOU. In fact, the
respondent made it clear that if there was a default, the petitioner would be
liable to pay a penalty in the sum of Rs.28 lakhs.
(v) (a) This communication, in fact, demonstrated that as between the
parties, time was of the essence.
(vi) Sixthly, the petitioner, realizing that it was not in a position to
discharge its obligations by 15.9.2007, on 15.9.2007, gave an option to the
respondent to dissolve the MOU and receive back the sum of Rs.28 lakhs,
which had been remitted to it at the time of execution of the MOU.
(vi) (a) The respondent on its part, chose to grant further leeway by writing
to the petitioner that it would keep the MOU alive, provided it obtained the
necessary permissions at the earliest. It is in this context that the respondent
returned the cheque in the sum of Rs.28 lakhs.
(vii) Clearly, since the petitioner was not able to make any progress in the
matter, despite nearly six(6) weeks having elapsed, on 30.10.2007, the
respondent decided to terminate the MOU.
(viii) This decision was, accordingly, communicated to the petitioner and as
a consequence, the respondent demanded the return of Rs.28 lakhs, which it
had paid to the petitioner at the time of execution of the MOU.
22. To my mind, if the aforesaid facts and circumstances are taken into
account that there is no doubt that time was of the essence when parties had
entered into the MOU and it continued to remain so even thereafter, as the
respondent persisted to demonstrate urgency in the matter by calling upon
the petitioner to close the transaction as early as possible with the added
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threat that if it failed to do so, it would be liable to pay a penalty in the sum
of Rs.28 lakhs.
22.1 Therefore, the argument advanced by Mr. Agarwala, to the contrary,
which is, that time was not of the essence is clearly untenable.
23. The alternate argument advanced by Mr. Agarwala, which is, that
time ceased to be of essence, is an argument, which is based essentially on
the contents of e-mail dated 23.11.2007 and the communication exchanged
thereafter between the parties i.e. communication dated 11.12.2007,
22.2.2008, 26.2.2008, 27.2.2008, 3.3.2008, two letters of even date, i.e.,
3.3.2008, 4.3.2008, 5.3.2008 and 6.3.2008.
23.1 Based on the aforesaid communications, it was sought to be argued on
behalf of the petitioner that time ceased to be of essence. Interestingly, the
stand of the respondent in respect of aforesaid communications is that these
communications were addressed by the petitioner to persons who were not
authorized to act on behalf of the respondent.
23.2 This argument, to my mind, needs to be tested. To test the argument,
one would have to go back in time and look at the manner in which the
parties engaged between themselves prior to 30.10.2007. In this behalf, one
needs to look at the MOU, and the letter dated 15.9.2007, issued by the
petitioner to the respondent.
23.3 Clauses (1) and (2) of the MOU read with Clause 21(d) would show
that the correspondence between the parties could be exchanged only
between authorized signatories. As per Clause (2) of the MOU, clearly, Mr.
Naveen Chamoli was the authorized signatory of the respondent. Therefore,
any communication of significance, which had an impact on the MOU ought
to have been addressed by the petitioner to the respondent via Mr. Naveen
O.M.P. (COMM) No.38/2016 Pg. 14 of 18
Chamoli.
23.4 The petitioner being cognizant of this fact, on 15.9.2007 addressed a
letter to the respondent for extension of time via Mr. Naveeen Chamoli.
Likewise, the respondent‟s e-mail dated 30.10.2007, whereby, it conveyed
its Management‟s decision to terminate the MOU was addressed to the
petitioner‟s authorized representative, that is, one, Mr. Sushil Jain.
23.5 However, the correspondence exchanged between the parties after
30.10.2007, to which I have made a reference above, is addressed to Mr.
Sudhir Gupta and not Mr. Naveen Chamoli, the designated authorized
signatory of the respondent under the MOU. The MOU, admittedly, was
executed by Mr. Naveen Chamoli on behalf of the respondent, and likewise,
on behalf of the petitioner, by one, Mr. Sushil Jain.
23.6 It is because of this reason that on 30.10.2007, when, the respondent
decided to convey its Management‟s decision to not pursue the MOU and
seek refund of Rs.28 lakhs given to the petitioner by the respondent at the
time of execution of MOU, the said communication was addressed by Mr.
Naveen Chamoli on behalf of the respondent to Mr. Sushil Jain, who was as
indicated above, the authorized signatory of the petitioner.
23.7 Therefore, the correspondence which, according to the petitioner,
extended the time for discharge of its obligation as per the MOU ought to
have been addressed to Mr. Naveen Chamoli and not Mr. Sudhir Gupta.
23.8 I must, at this stage, point out that, once, prior to 30.10.2007, the
petitioner had, on 13.8.2007, written to the respondent, to extend the original
deadline fixed to obtain the Completion Certificate by 14.8.2007, albeit, via
Mr. Sudhir Gupta. Importantly, the request made, though not in line with
terms of the MOU obtained ratification as it was responded to on behalf of
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the respondent by its authorized signatory, that is, Mr. Naveen Chamoli. On
14.8.2007, Mr. Naveen Chamoli extended the deadline as requested by the
petitioner till 15.9.2007. Pertinently, this communication was addressed by
Mr. Naveen Chamoli on behalf of the respondent to Mr. Sushil Jain, who, as
indicated above, was the authorized signatory of the petitioner.
23.9 Therefore, the argument that time ceased to be of the essence, in my
view, is a submission, which is erroneous and hence was rightly rejected by
the Arbitral Tribunal.
24. It is in this context that the Arbitral Tribunal, correctly, drew an
inference that after the termination of the MOU on 30.10.2007, the
petitioner‟s communication dated 23.11.2007 even though addressed to Mr.
Naveeen Chamoli, the authorized signatory of the respondent was within
seven minutes, replied to by Mr. Sudhir Gupta via an email of even date,
who had no authority to rescind the termination letter dated 30.10.2007.
25. The petitioner, it appears, somehow, through an unauthorized
personnel, though employed with the respondent, kept the matter in play till
such time it obtained the Completion Certificate and all necessary
permissions to lease out the subject property. The ploy, it appears, did not
work as on 20.3.2008, even Mr. Sudhir Gupta on behalf of the respondent
reiterated the decision taken on 30.10.2007, which was to terminate the
MOU.
26. Given these circumstances, I find no difficulty in accepting the
findings returned by the Arbitral Tribunal that the petitioner was in breach
of its obligation under the MOU, which led to its termination.
26.1 Therefore, the necessary consequences of the same would be, which is
that the Arbitral Tribunal did, was to direct the petitioner to return the sum
O.M.P. (COMM) No.38/2016 Pg. 16 of 18
of Rs.28 lakhs to the respondent alongwith interest. The Arbitral Tribunal
proceeded to grant interest on the sum of Rs.28 lakhs at the rate of 12%
from the date of filing of the statement of claim till the date of the award and
thereafter, future interest at the rate of 18% per annum till the date of
realization.
26.2 Since, there is no suffix following the rate of interest, it would be safe
to assume that the interest awarded is a simple rate per annum, an aspect
which emerges upon a bare perusal of the statement of claim as well.
26.3 Pertinently, no cavil has been raised in this behalf by counsel for
either party.
27. The other submissions advanced on behalf of the petitioner by Mr.
Agarwala, which is, that the Arbitral Tribunal failed to consider its counter
claim and dismissed the same in limine, to my mind, are also unsustainable.
27.1 The counter claims lodged by the petitioner were predicated on the
stand taken by the petitioner that time was not of the essence, in that the
respondent by its conduct, which was reflected in the communication
exchanged between the parties had conveyed to it that it would wait till such
time, the petitioner was able to obtain the Completion Certificate and
requisite permissions for leasing out the subject property.
27.2 However, as noticed above, since the Arbitral Tribunal had come to
the conclusion that the time continued to be of the essence and that the
petitioner was in the breach of the obligations as stipulated in the MOU,
there was no reason for the Arbitral Tribunal to discuss in detail the counter
claims lodged by the petitioner since it would have been an empty formality.
28. Therefore, the two judgments relied upon by the petitioner, before me,
to my mind, in the facts obtaining in this case, would have no applicability.
O.M.P. (COMM) No.38/2016 Pg. 17 of 18
While the proposition of law set forth in Hind Construction as well as in
Chander Kant cannot be quibbled with, they would have no applicability to
the facts and circumstances obtaining in the instant case.
29. Thus, for the foregoing reasons, I find no merit in the captioned
petition. The petition is, accordingly, dismissed. Costs will follow the result.
RAJIV SHAKDHER, J
NOVERMBER 28, 2018/pmc
O.M.P. (COMM) No.38/2016 Pg. 18 of 18
