Delhi High Court
M/S S. S. Con- Build Pvt. Ltd. vs M/S Total Property Maintenance ... on 1 April, 2019
$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 300/2018 & IA No. 9252/2018
Date of Decision : 1st April, 2019
M/S S. S. CON- BUILD PVT. LTD. ..... Petitioner
Through: Mr.Jayant K. Mehta &
Mr.Saurabh D. Karan Singh,
Advs.
versus
M/S TOTAL PROPERTY MAINTENANCE LLP & ORS.
..... Respondents
Through: Mr.Manish Sharma, Mr.Kirish
Gandhi & Mr.Ninad Dogra,
Advs. for R-1.
Mr.Ashish Dholakia &
Mr.Kishore Kumaar, Advs. for
R-3
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This petition under Section 34 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred to as the 'Act') has been
filed by the petitioner challenging the Arbitral Award dated
19.02.2018 passed by the Sole Arbitrator adjudicating the disputes that
have arisen between the parties in relation to the Management and
Lease Deed dated 14.09.2015 executed between the parties.
2. The learned counsel for the petitioner confines his challenge to
a very limited aspect. He submits that the Arbitrator having held that
specific performance of this Agreement cannot be granted and proper
relief of respondent no. 1 shall be in form of damages, has proceeded
O.M.P. (COMM) 300/2018 Page 1
to grant damages in favour of respondent no. 1 without there being
any evidence for substantiating the same on record. He has drawn my
attention to paragraph 39, 40 and 43 of the Award which are
reproduced hereinbelow:-
"39. In light of my findings given above I now deal with the
claims and counter claims.
Claim No.1. Seeks quashment of letter dated 03-03-2016
terminating the lease deed being illegal and void being in
violation of the terms of the registered lease deed.
Claim No.2. Seeks declaration that the lease deed dated 14-
09-2015 is validly executed and is subsisting and the
claimant is entitled to have free ingress and egress to the
leased out area at all times.
In these claims I hold that the MLD in question remains valid
and binding on the parties and unilateral cancellation of the
said deed by R1CO is illegal and non est.
40. The relief sought by the claimant to have ingress and
egress to the property subject matter of the MLD virtually
seeks specific performance of the lease. I have carefully
examined the matter and various grounds taken by the
respondents in showing the deed to be void ab intio or in any
case voidable and I hold this is not a fit case for grant of
relief of specific performance as granting damages, it being a
commercial deal, would be proper relief to the claimant.
xxxxxxx
43. Claim No.6. Seeks award of damages.
The claimant has claimed that it would have been able to sub
lease the property at the rate of Rs. 85 per Sq. Ft. in case it
had not been deprived of access to the property by R1CO.
O.M.P. (COMM) 300/2018 Page 2
There is no evidence available on the record from which one
could determine the quantum of damages but keeping in view
that the lease was for 20 years I consider that a lump sum
amount of damages should be Rs. 10/- Per Sq, Ft. per month
for ten years only as it is not possible to hold that the whole
property could have been sub leased in one go. The amount
comes to Rs. 4,03,59,600/-.
Claim No.7. Award of interest pendent lite and future interest
at the rate of 18% pa
As the claim for damages is being settled now so there is no
reason to award any pendente lite interest."
3. He places reliance on the judgment of this Court in Fitness
First India Private Limited ('FFIPL") vs. Ambience Developers and
Infrastructure Private Limited, 2019 SCC OnLine Del 6794 and of
the Supreme Court in Kailash Nath Associates v. DDA & Anr. (2015)
4 SCC 136 to submit that for award of claim of damages, it was
incumbent on respondent no. 1 to have led evidence to substantiate the
said claim. He further places reliance on the judgment of the Supreme
Court in Associate Builders vs. DDA, (2015) 3 SCC 49 to contend that
the Award being unreasoned as far as quantification of damages is
concerned, the same is liable to be set aside.
4. On the other hand, the learned counsel for respondent no. 1
submits that respondent no. 1 claimed damages at the rate of Rs. 85
per sq. ft. During the pendency of the arbitration proceedings, on an
appeal filed by respondent no. 1 before this Court, being ARB. A.
(COMM) 45/2016 titled Total Properties Maintenance LLP v. S.S.
Con Build (P) Ltd. & Ors., the petitioner, as recorded in order dated
14.03.2017 passed in the said appeal, itself had offered to deposit a
O.M.P. (COMM) 300/2018 Page 3
sum of Rs.120 per sq.ft. in order to secure the interest of respondent
no. 1. He further submits that in the Counter Claim filed by the
petitioner, the petitioner had claimed an amount of Rs. 29.60 lakhs per
month as damages. Keeping in view the above two figures, the
Arbitrator cannot be held to have acted unreasonably in awarding
damages only at the rate of Rs. 10 per sq. ft.
5. I have considered the submissions made by the learned counsels
for the parties. A reading of paragraph 43 of the Award clearly shows
that there was no evidence led by respondent no. 1 in support of its
claim for damages. In absence of any evidence being led, it is not
discernible from the Award as to how the Arbitrator has arrived at the
figure of Rs. 10 per sq. ft. as damages awarded in favour of respondent
no. 1. The offer of Rs. 120 per sq. ft. as recorded to have been made in
order dated 14.03.2017 is stated to be made without prejudice and
subject to the outcome of the arbitration proceedings. In any case, it
was for the Arbitrator to have considered the same and if felt relevant,
awarded damages on basis thereto. From the difference in the two
figures, that is Rs. 120 per sq. ft. (as offered by the petitioner in the
said order) and Rs. 10 per sq. ft. (as awarded by the Arbitrator), it is
apparent that the Arbitrator has not been influenced by the said offer
of the petitioner.
6. As far as the Counter Claim is concerned, the petitioner had
based the figure in the Counter Claim on the purported loss of interest
on the alleged cost of construction of the portion that had been leased
to respondent no. 1 under the Management and Lease Deed. Again
that would have no effect on the claim of respondent no. 1.
O.M.P. (COMM) 300/2018 Page 4
7. Section 31(3) of the Act obliges the Arbitrator to give reasons
for his Award. The Arbitrator cannot act at his whims and fancies in
awarding damages. While the Arbitrator, in awarding damages is
expected to have some amount of discretion and play in the joints, at
the same time, atleast some evidence has to be led by the party
claiming such damages before the Arbitrator and the same has to be
considered by the Arbitrator while awarding the damages. In the
present case, the respondent no. 1 has not led any evidence in support
of its claim before the Arbitrator and the Arbitrator has given no
reason for awarding such damages in favour of respondent no. 1.
8. I may also note the submission of respondent no. 3 who,
drawing reference to the Award on claim no. 3 and claim no. 5,
submits that the said claims made by respondent no. 1 had been
rejected by the Arbitrator. In my view, once the said finding is not
under challenge before me either by respondent no. 1 or the petitioner
or the respondent no. 3, I need not state anything further on the same.
9. No other arguments have been raised by any of the parties to
this present petition.
10. In view of the above, the award of damages as awarded in
paragraph 43 and 45 of the Impugned Award in favour of respondent
no. 1 is set aside. The petition is allowed in the above terms, with no
order as to cost.
NAVIN CHAWLA, J
APRIL 01, 2019/rv
O.M.P. (COMM) 300/2018 Page 5
