Delhi High Court
Dcm Ltd. vs M/S. Aggarwal Developers Pvt. ... on 25 May, 2023
NEUTRAL CITATION NUMBER.:2023:DHC:3696
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 25.05.2023
+ O.M.P. (COMM) 487/2019
DCM LTD. ..... Petitioner
Through: Mr. Rakesh Tiku, Senior
Advocate with Mr. Mukesh
Gupta, Mr. Aman Gupta and
Ms. Pratishtha Malhotra,
Advocates (Mobile No.
8826729170).
versus
M/S. AGGARWAL DEVELOPERS PVT. LTD.
& ORS. ..... Respondents
Through: Mr. Sanjay Manchanda, Mr.
Manjit Moorjani, Advocates for
R-1, 2 (Mobile No.
9810137294).
Mr. P.S. Bindra, Senior
Advocate with Mr.
Bhuvneshwar Tyagi, Advocate
for R-3.
CORAM:
HON'BLE MR. JUSTICE PRATEEK JALAN
PRATEEK JALAN, J. (ORAL)
%
1. By way of this petition under Section 34 of the Arbitration and
Conciliation Act, 1996 ["the Act"], the petitioner challenges an award
dated 12.07.2019, passed by a learned sole arbitrator, adjudicating
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
disputes between the parties under agreements dated 27.11.1993 and
13.12.1994 ["the Agreements"].
2. The Agreements were for acquiring, transfer and sale of land in
Mangar, Delhi-Haryana Border and in Village Chakkarpur, District
Gurgaon, Haryana. The detailed terms of the Agreements need not
detain us as the question raised by Mr. Rakesh Tiku, learned Senior
Counsel for the petitioner, is confined to one point - whether the
learned arbitrator has correctly found that the petitioner had waived a
claim for interest upon an amount of Rs. 8.05 crores due from
respondent No.1.
3. The learned arbitrator formulated the following three issues for
his consideration:-
"Points to be determined
19. The learned counsel on both sides stated and submitted that the
question of interest was the only issue which requires
determination by this Tribunal. In this context and the basis of the
arguments advanced by the learned Counsel for the parties, it is
essentially to be determined as to:-
(i) Whether ADPL was under a liability to refund the amounts
advanced to it by DCM along with interest thereon?
(ii) If so, has the interest been waived on account of the letter dated
09.11.2005 and the two letters dated 20.03.2006?
(iii) If not waived, at what rate and till what date(s) the interest is
to be paid by ADPL to DCM?"
4. On issue No (i), the learned arbitrator found in favour of the
petitioner that respondent No.1 was liable to refund an amount of Rs.
8.05 cores alongwith interest thereupon @ 18% per annum. However,
the petitioner was found disentitled to an award in these terms, on the
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
basis of a finding against it on issue No (ii). The learned arbitrator
found that interest had been waived by the petitioner by virtue of a
letter dated 09.11.2005, addressed to a director of respondent No.1
(arrayed as respondent No.2 to this petition) by Dr. Vinay Bharat
Ram, who was then the Chairman and Managing Director of the
petitioner-company.
5. Mr. Tiku submits that the aforesaid conclusion of the learned
arbitrator is patently illegal and based on a complete misreading of the
evidence of Dr. Vinay Bharat Ram, who was examined as CW-3. He
submits that the petitioner, in its pleadings before the learned
arbitrator, and Dr. Vinay Bharat Ram, in his affidavit by way of
examination-in-chief, had unequivocally denied the aforesaid letter.
According to Mr. Tiku, the burden of proof on the question of waiver
ought to have been placed upon the respondents, who failed to
establish it to any plausible degree of satisfaction. Mr. Tiku submits
that the cross-examination of Dr. Vinay Bharat Ram does not bear out
an unequivocal admission so as to constitute waiver on the part of the
petitioner.
6. Mr. Sanjay Manchanda, learned counsel for respondent Nos. 1
and 2 and Mr. P.S. Bindra, learned Senior Counsel for respondent No.
3, submit that the aforesaid contentions are beyond the scope of
consideration under Section 34 of the Act, as they call for re-
appreciation of evidence. They point out that the petitioner did not
take a categorical position in pleadings that the letter dated 09.11.2005
relied upon by the respondents was forged or fabricated, and neither
was such a position taken in the examination-in-chief of Dr. Vinay
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
Bharat Ram. To the contrary, they submit that the cross-examination
of Dr. Vinay Bharat Ram bears out the conclusion recorded by the
learned arbitrator.
7. Having heard learned counsel for parties, I am of the view that
the impugned award does not call for interference in the limited scope
afforded by Section 34 of the Act. The case of the respondents with
regard to waiver turns upon a letter dated 09.11.2005, addressed by the
Chairman and Managing Director of the petitioner to a Director of
respondent No.1. The communication has been reproduced in
paragraph 27 of the award as follows:-
"Dt. 9th Nov. '05
Dear Ramesh Ji,
As agreed, I am authorizing Sh. Ashwani Singhal, the
bearer of this letter, to meet you personally and collect from you
the amount of Rupees Six Crores Five Lacs towards full and final
settlement of our account in respect of Manger and Chattarpur
agreements between DCM ltd. and your company.
Kindly square off this transaction before this financial yearend.
With warm regards
Yours truly,
Sd/-
Vinay Bharat Ram"
8. The aforesaid communication was referred to in the reply filed
by the respondents in the arbitral proceedings, to support their
contention of waiver of interest. It appears from the documents on
record that it was thereafter produced in the arbitral proceedings on
12.05.2008, when the purported signatory - Dr. Vinay Bharat Ram
was present. In the rejoinder filed by the petitioner on 06.11.2008, the
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
letter dated 09.11.2005 and the proceedings before the tribunal on
12.05.2008 have been described in the following terms:-
"It is denied that the parties mutually agreed that the
principal amount which was advanced to the respondent No.1
should be returned. It is further denied that the Respondents shall
also pay an amount of Rs. Sixty lacs towards agreement in respect
of Mangar Land. It is denied that as per the understanding
reached between Sh. Vinay Bharatram and the respondent No. 2,
a letter dated 09.11.2005 was written by Mr. Vinay Bharatram,
wherein he requested for the refund of Rs. 6.05 crores towards
full and final settlement of accounts between the Claimant
company and the respondent No. 1. No such understanding was
ever reached between Mr. Vinay Bhartram and Mr. Ramesh
Chandra Aggarwal. Mr. Vinay Bharatram never wrote any letter
dated 09.11.2005 for and on behalf of the Claimant and/or on his
personal behalf to the Respondents agreeing for a refund of Rs.
6.05 crores in full and final settlement of accounts between the
parties. The letter dated 09.11.2005 is not admitted. The Claimant
had filed an application for production of the original letter dated
09.11.2005 and some other original letters. Copies of which had
been filed by the Respondent before the Hon'ble Arbitration
Tribunal. The fact with regard to the production of the originals of
the said letters was discussed by the parties before this Ld.
Tribunal during its hearing on 02.05.2008. With consent of the
parties, a hearing date was fixed on 12.05.2008 for inspection of
the original letters by Mr. Vinay Bharat Ram and some Directors/
officers of the Claimant. During the hearing on 12.05.2008 the
Respondent's counsel had produced two letters one of which was
dated 09.11.2005 and other letter was dated 20.03.2006.
***** ***** *****
Similarly, as regards the letter of 09.11.2005, Dr. Vinay
Bharat Ram had inspected the original of the same and stated
that he was not in a position to either state whether he had signed
or not signed the letter. This was particularly because he said that
he did not sign such important letters unless they were typed on
his letter heads and further that the format of the letter was not
the one that he adopted for writing such letters. For example, he
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
stated that he would not mention the date as 'Dt'. He also stated
that he did not recall signing such a letter. The original letter dated
09.11.2005 was marked Exbt. 'B' and was initiated by the
Arbitration Tribunal."1
9. Dr. Vinay Bharat Ram thereafter filed his evidence by way of
an affidavit dated 19.02.2010. In the examination-in-chief, Dr. Vinay
Bharat Ram denied having written the letter dated 09.11.2005 to the
respondents, requesting the refund of Rs.6.05 crores towards full and
final settlement of accounts between the petitioner and respondent
No.1, on behalf of the petitioner or on his own behalf. As far as the
proceedings on 12.05.2008 are concerned, Dr. Vinay Bharat Ram
stated as follows:-
"7. The deponent submits that at no point of time during the said
meetings the parties mutually agreed that the principal amount
which was advanced to the respondent No. 1 should be returned.
The Claimant had never agreed to pay an amount of Rs. Sixty lacs
towards agreement in respect of Mangar Land. I state that I never
reached any understanding with respondent No. 2, Sh. Ramesh
Chandra Agarwal in this regard. I state that I never wrote letter
dated 09.11.2005 to the respondents, wherein I had requested for
the refund of Rs. 6.05 crores towards full and final settlement of
accounts between the Claimant company and the respondent No.
1 as is been alleged by the respondents. No such understanding
was ever reached between me and Mr. Ramesh Chandra
Aggarwal. I never wrote any letter dated 09.11.2005 for and on
behalf of the Claimant and/or on my personal behalf to the
Respondents agreeing for a refund of Rs. 6.05 cores in full and
final settlement of accounts between the parties. The letter dated
09.11.2005 is not admitted. That I never wrote any letter dated
09.11.2005 for and on behalf of the Claimant and/or on my
personal behalf to the respondents agreeing for the refund of Rs.
6.05 crores in full and final settlement of accounts between the
parties.
Emphasis supplied.
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
8. I state that during the hearing 12.05.2008, the respondents
counsel had produced the original of an alleged letter dated
09.11.2005 purported to have been written and signed by me. The
said alleged letter is addressed to Respondent No. 2 as
"Rameshji". For the first time I had seen the original of the said
letter. After inspecting the original of the same I had stated that I
was not in a position to state whether I had signed or not signed
the letter. I had stated so because I do not sign such important
letters unless they were typed on company's letter heads or on my
personal letter heads. Further the format of the alleged letter dated
09.11.2005 was not the one that I adopt for writing such letters.
For example, I do not mention that date as 'Dt'. I stated that I do
not recall signing such a letter. Even at the time of the signing
and filing the present affidavit, I do not recollect signing any
alleged letter dated 09.11.2005."2
10. Dr. Vinay Bharat Ram was produced for cross-examination on
06.05.2011. He tendered the aforesaid affidavit in examination-in-
chief. The relevant contents of his cross-examination are reproduced
below:-
"Qn. No. 1 I draw your attention to paragraph 7 of your
affidavit dated 19.2.2010 wherein you have stated that letter dated
9.11.2005 is not admitted. Your attention is also invited to the
minutes of the proceedings of 12th May, 2008 where it is recorded
that "As regards the letter dated 9th November, 2005, Dr. Vinay
Bharat Ram has inspected the original of the same and says that he
is not in a position to state whether he has signed or not signed the
letter." It is further recorded in the minutes that Dr. Vinay Bharat
Ram states that he does not recall signing such a letter. My
question to you is whether the original letter dated 9.11.2005,
which has been seen by you in the proceedings today, bears your
signatures or not?
Ans. By looking at this document which is the letter of
9.11.2005, of which I have the original in my hand now, I say
that the signatures on this document resembles my signatures.
Emphasis supplied.
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
(Volunteered: They would have been my signatures if the
contents of the letter had been credible)
Qn. No. 2 Please clarify what you mean by the word
'credible'
Ans. The contents of the letter and the language used therein
do not typify the language I use for such kind of a letter. As for
example, I would not write "Dt" For the word "Date". Also, I do
not sign blank sheets of paper nor do I sign a letter which is not on
my letter head or the letter heads of one of the Companies in which
I hold shares. (Volunteered: The document is of 2005 and is too
recent for my memory to be hazy about it.)"3
11. The learned arbitrator has dealt with the effect of this letter in
paragraphs 28 to 30 of the impugned award in the following terms:-
"28. On reading the said document, it is apparently addressed to
Mr Ramesh Chandra Agarwal of ADPL and has apparently been
issued by Dr Vinay Bharat Ram. The latter, in his affidavits by way
of evidence or in the course of cross-examination has not
specifically denied his signature. He has only raised doubts about
his signature on the said document on account of the alleged
'credibility' of the said document. It must be remembered that he
has also categorically stated that he does not sign blank sheets of
paper. He has also not stated, and it is also not the case of DCM
that his signatures had been obtained on a blank sheet of paper by
ADPL and the same was misused by ADPL. On the other hand, he
has stated that the signature on the letter dated 09.11.2005 is
similar to his signature. It is clear from these circumstances that
DCM has been unable to establish, and the onus was on them, that
the letter dated 09.11.2005 which has been produced by ADPL is a
false, fabricated or forged document. In all likelihood and
probability, the said letter dated 09.11.2005 was signed by Dr
Vinay Bharat Ram. The content of the letter may have been drafted
by someone else but it was voluntarily signed by Dr Vinay Bharat
Ram.
29. This being the position and since his signatures have
admittedly not been obtained in blank papers, the contents of the
Emphasis supplied.
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
letter dated 09.11.2005, albeit not typically in his style of writing,
have to be attributed to Dr Vinay Bharat Ram. They clearly
indicate that the amount of Rs 6.05 crores had been settled between
him and Mr Ramesh Chandra Agarwal of ADPL towards full and
final settlement of their account in respect of the said Agreements
between DCM and ADPL.
30. From the schedule of payments made by ADPL to DCM as
indicated in paragraph 13 above, it is evident that a sum of Rs 2
crores had been refunded by 02.07.1996 out of the total advanced
amount of Rs 8.05 crores. This left a balance of Rs 6.05 crores.
This is the very sum which is mentioned in the letter dated
09.11.2005. It is further evident from the table of payments set out
in paragraph 13 hereinabove that after 09.11.2005, ADPL cleared
the balance amount of Rs 6.05 crores through 13 payments
beginning from 15.02.2006 and ending on 20.03.2006. On the
latter date, the final payment of Rs 15 lacs was made."
12. The learned arbitrator has, thereafter, rejected the contention of
the petitioner that the signatory was not authorised to waive the
aforesaid claim on behalf of the petitioner. It is noted that he was
earlier the Chairman and Managing Director of the petitioner-
company and was its Chief Executive Officer. The learned arbitrator
has also dealt with the contentions of the parties with regard to the
accounts maintained by the petitioner, in which the aforesaid sum is
shown to be recoverable "with interest" before 1999, but not after. The
conclusion on this aspect is contained in paragraphs 40 and 41 of the
award in the following terms:-
"40. Considering the rival contentions on this aspect, it is clear
that initially DCM did consider that the amount of Rs 8.05 was
recoverable from ADPL 'with interest'. In 1996, the recoverable
amount came down to Rs. 6.05 crore on account of refund of a sum
of Rs 2 crore. Even the balance figure of Rs 6.05 was shown to be
recoverable 'with interest' in 1997 and 1998. Thereafter, from 1999
onwards, only the principal amount of Rs 6.05 crore was shown as
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
recoverable and not the interest amount. The explanation offered
by DCM for dropping the provisioning for interest, because it did
not expect ADPL to pay interest, in fact, supports the plea of ADPL
that interest had been waived by DCM and that this arrangement
had been ultimately formalised in the letter of 09.11.2005 of Dr
Vinay Bharat Ram. The fact that DCM did not expect that ADPL
would pay interest but would, in all likelihood, refund the balance
sum of Rs 6.05, indicates that, in the circumstances, DCM would
be content to receive the sum of Rs 6.05 crore to close the account
with ADPL even if it did not receive any interest.
41. In this backdrop, it is evident that the letter of 09.11.2005
represents the thinking, understanding and commercial expediency
of the management of DCM. For this reason also, it is difficult to
agree with the submission of the learned counsel for DCM that the
said letter of Dr Vinay Bharat Ram, who was the Chairman and
Managing Director of DCM, was without the authority of DCM."
13. Having regard to the cross-examination of Dr. Vinay Bharat
Ram reproduced above, I do not find the conclusion of the learned
arbitrator to be implausible, as suggested by Mr. Tiku. The learned
arbitrator noted that Dr. Vinay Bharat Ram has not denied his
signature but, in fact, stated that the signature on the document
resembles his signature. The elaboration in answer to question No.2 is
that the language used in the letter dated 09.11.2005 is not the
language normally used by him. However, looking to the cross-
examination as a whole, the conclusions in the impugned award
cannot be said to be so perverse or fanciful as to invite the interference
of this Court under Section 34 of the Act. The appreciation of
evidence is a matter within the domain of the learned arbitrator, who is
the sole judge of the quality and quantity of evidence. Interference of
the Court under Section 34 of the Act is permitted only if the
conclusions are so implausible that no reasonable person could have
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
reached them. Reference may be made in this connection to the
judgments of the Supreme Court inter alia in Associate Builders vs.
DDA4, Ssangyong Engg. & Construction Co. Ltd. vs. NHAI5 and PSA
SICAL Terminals (P) Ltd. vs. Board of Trustees of V.O. Chidambranar
Port Trust Tuticorin6. The petitioner has been unable to make out a
case that meets this high standard.
14. Mr. Tiku submitted that the learned arbitrator ought to have
read the cross-examination in the light of the pleadings of the parties
and the examination-in-chief of Dr. Vinay Bharat Ram. To my mind,
the purpose of cross-examination is to challenge the veracity of the
case made out by the opposite party, so as to elicit the true state of
affairs. To rely upon the pleadings or examination-in-chief, even in the
light of cross-examination which brings out a contrary picture, would
render the process of oral evidence futile. In any event, as stated
above, the task of appreciation of evidence, is well within the province
of the learned arbitrator. I am, therefore, unable to accept this
submission.
15. Mr. Tiku lastly submitted that the respondents having asserted
waiver, it was incumbent upon them to discharge the burden of proof
in this regard. This submission also does not commend to me in the
facts and circumstances of this case, where the fact of waiver is found
to have been proved on the basis of a communication addressed by the
petitioner to the respondents. The learned arbitrator finds on evidence
that the document is credible, not doubtful or fraudulent. In fact, this
(2015) 3 SCC 49, paragraphs 31 to 33 and 52.
(2019) 15 SCC 131, paragraphs 38 to 40.
2021 SCC OnLine SC 508, paragraphs 41 to 45.
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
NEUTRAL CITATION NUMBER.:2023:DHC:3696
conclusion has been reached on the basis of the evidence of the
petitioner's own witness.
16. In view of the aforesaid conclusions, I do not find occasion to
interfere with the impugned award.
17. The petition is, therefore, dismissed.
PRATEEK JALAN, J
May 25, 2023
'vp/udit'/
Signature Not Verified
Digitally Signed
Signing Date:27.05.2023
18:12:43
