O.M.P. (COMM)/340/2016 of ADHAR BUSINESS CARE (P) LIMITED Vs DELHI METRO RAIL CORPORATION LTD.

* IN THE HIGH COURT OF DELHI AT NEW DELHI+ O.M.P. (COMM) 340/2016 ADHAR BUSINESS CARE (P) LIMITED

..... Petitioner Through : Mr Rakesh Kr Khanna, Sr Adv with Mr Davinder Grover, Ms Shefali Jain, Mr Joy Bhardwaj, Ms Anandita Sharma, Advs.

versus

DELHI METRO RAIL CORPORATION LTD.

..... Respondent

Through : NEMO.

CORAM:

HON'BLE MR. JUSTICE VIBHU BAKHRU

O R R% 27.07.2016

IA No.8792/2016

Exemption allowed subject to all just exceptions.

Application stands disposed of.

O.M.P. (COMM) 340/2016

1. This is petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act') inter alia impugning the Award dated 21.06.2016 passed by the Sole Arbitrator (hereafter 'the impugned award')

2. The Petitioner was allotted 29 kiosk sites by the Respondent by Letter of Award dated 16.04.2010 and the Petitioner paid sum of ₹16,22,031/- as advance licence fees, advance maintenance charges, refundable security deposit and advance service tax for all 29 kiosks. However, subsequently, the Respondent only gave the possession of

O.M.P. (COMM) 340/2016 Page 1 of 5

12 kiosks and that too belatedly. It is also the grievance of the Petitioner that the Respondent delayed in providing electricity supply to the kiosks and, therefore, the Petitioner could not use the kiosks for period of six months of the licensed term. The disputes raised by the Petitioner were referred to the Sole Arbitrator, who has since passed the impugned award.

3. Mr Khanna, learned senior counsel appearing on behalf of the Petitioner submits that although the Arbitrator has accepted that withholding 17 kiosks from the Petitioner was not justified, but he has not awarded any damages on account of loss of profits. He further submits that some of those kiosks had been licensed to other entities at higher licence fee. According to Mr Khanna that itself indicated that the Petitioner had suffered losses and was entitled to be compensated for loss of profit.

4. Mr Khanna further submits that it was an admitted position that the electricity supply was delayed by period of six months and, therefore, the licence period for the said kiosks should have been extended at least by period of six months.

5. I have heard learned senior counsel for the Petitioner.

6. Perusal of the award in question indicates that the Arbitrator has accepted the Petitioner's contention that by withholding possession of 17 kiosks by the Respondent was unjustified. It is also seen that the Arbitrator has awarded compensatory damages for the expenditure claimed to have been incurred by the Petitioner in respect

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of those 17 kiosks. Further, the Arbitrator has also awarded interest at the rate of 10 per cent per annum on the amount paid by the Petitioner, towards the 17 unallotted kiosks, which remained unadjusted against other dues. However, the Arbitrator has not considered it to be fit case to award damages. In so far as the extension of the licence term is concerned, the Arbitrator has awarded sum of ₹ 2.00 Lacs for the delay in providing electricity connection; these are the compensatory damages calculated by assessing that the expenditure incurred by the Petitioner is to be amortised over the entire licenced term. The Arbitrator noted that the contract specifically proscribed extension of the licence term on account of hindrances and accordingly has not awarded extension of the licence term.

7. I find no infirmity with the aforesaid view. The scope of the interference in an arbitral award is very limited and the grounds on which an award can be set aside are spelt out in Section 34 of the Act. The petitioner seeks to place his case under Section 34(2)(b)(ii) of the Act, that is, the impugned award is in conflict with the public policy of India.

8. The expression 'in conflict with the public policy of India' has been examined by the Supreme Court in Associate Builders v. Delhi Development Authority: (2015) 3 SCC 49, wherein the Supreme Court explained as under:-

"It must clearly be understood that when court is applying the "public policy" test to an is applying the "public policy" test to an

arbitration award, it does not act as court of appeal and consequently errors of fact cannot be corrected. possible view by the arbitrator on facts has necessarily to pass muster as the arbitrator is the ultimate master of the quantity and quality of evidence to be relied upon when he delivers his arbitral award. Thus an award based on little evidence or on evidence which does not measure up in quality to trained legal mind would not be held to be invalid on this score1. Once it is found that the arbitrators approach is not arbitrary or capricious, then he is the last word on facts. In P.R. Shah, Shares & Stock Brokers (P) Ltd. v. B.H.H. Securities (P) Ltd., (2012) 1 SCC 594, this Court held:

"21. court does not sit in appeal over the award of an Arbitral Tribunal by reassessing or reappreciating the evidence. An award can be challenged only under the grounds mentioned in Section 34(2) of the Act. The Arbitral Tribunal has examined the facts and held that both the second Respondent and the Appellant are liable. The case as put forward by the first Respondent has been accepted. Even the minority view was that the second Respondent was liable as claimed by the first Respondent, but the Appellant was not liable only on the ground that the arbitrators appointed by the Stock Exchange under Bye-law 248, in claim against non-member, had no jurisdiction to decide claim against another member. The finding of the majority is that the Appellant did the transaction in the name of the second Respondent and is therefore, liable along

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with the second Respondent. Therefore, in the absence of any ground Under Section 34(2) of the Act, it is not possible to re-examine the facts to find out whether different decision can be arrived at."

It is with this very important caveat that the two fundamental principles which form part of the fundamental policy of Indian law (that the arbitrator must have judicial approach and that he must not act perversely) are to be understood."

9. I am unable to accept the contention that the impugned award can be stated to be not in conformity with the public policy of India. The Arbitrator is the final adjudicating authority and even if it is assumed that the Arbitrator has made an error, the same is not liable to be corrected or interfered with unless, it falls within the limited scope of Section 34(2)(b)(ii) of the Act, which is not so in this case.

10. Accordingly, the petition is dismissed.

IA No.8837/2016

In view of above order, this application does not survive and is dismissed.

JULY 27, 2016

VIBHU BAKHRU, J

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