South Delhi Municipal Corporation v. M/S Pkss Infrastructure Pvt Ltd

NAVIN CHAWLA, J

JANUARY 08, 2018 Nk

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + Reserved on: 23rd November,2017 Date of decision: 8th January, 2018 SOUTH DELHI MUNICIPAL CORPORATION ..... Petitioner Through: Mr.Anil Airi, Sr. Adv. with Ms.Kamakshi Verma, Ms.Biji Rajesh, Mr.AmineshBhardwaj and Mr.Gaurang Kanth, Advs. versus M/S PKSS INFRASTRUCTURE PVT LTD ..... Respondent Through: Mr.Kirti Uppal, Sr. Adv. with Mr.Pawan Kr. Bansal, Adv. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 1. The present 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 19th March, 2014 passed by the Sole Arbitrator (hereinafter referred to as the "Impugned Award"). 2. The disputes between the parties arose out of a contract of work of procurement of a contractor by M.C.D for Toll Collection at border points from specified commercial vehicles entering Delhi at M.C.D approved rates for a specified period of three calendar years. The contract contemplated the payment of pre-decided sum of money as Toll Page 2 Collection to the Petitioner divided into thirty six equal installments and the payment of the said sum was irrespective of the actual collection generated by the contractor. 3. The Consortium of Companies under the name and style of M/s P.K. Hospitality Services Private Limited JV emerged as the highest bidder for an amount of Rs. 606,60,78,660/- and was issued a provisional award letter dated 15th May, 2008. 4. A formal agreement dated 13th May, 2009 was later executed between the Petitioner and the Respondent, the Respondent being incorporated by the consortium. 5. Disputes having arisen between the parties in performance of the obligation under the above agreement, the same were referred to the Sole Arbitrator for adjudication resulting in the impugned award. 6. The first challenge of the Petitioner is to the grant of a sum of Rs. 15 Lakhs to the Respondent on account of Petitioner's failure to remove the infrastructure left by M/s Banas Sands, the erstwhile contractor and/or in acquiring the said infrastructure and handing it over to the Respondent. The Sole Arbitrator, in its Impugned Award, has found the Petitioner to be in breach of its obligation to remove the infrastructure of the erstwhile contractor namely, M/s Banas Sands and has therefore, awarded a sum of Rs. 15 Lakhs to the Respondent as damages against a claim of Rs. 35,46,68,116/-. 7. It is submitted by the learned senior counsel for the Petitioner that the Arbitrator has wrongly rejected the reports and photographs filed by the Petitioner showing that the infrastructure of the erstwhile contractor was being used by the Respondent thereby resulting in gain to the Page 3 Respondent inasmuch as otherwise the Respondent was under a contractual obligation to develop the Toll Plazas. It is further submitted that, initially the Petitioner may have been in default in insuring removal of the infrastructure by the erstwhile contractor, however, later when it sought to remove the same, it was the Respondent who requested the Petitioner not to do so as it was negotiated with the erstwhile contractor for purchase of the existing infrastructure. It was further submitted that the Arbitrator having found that the Respondent had failed to prove the loss suffered by it on account of the default of the Petitioner, could not have awarded a sum of Rs. 15 Lakhs to the Respondent without such evidence of loss. 8. I have considered the submission of the learned senior counsel for the Petitioner, however, I am unable to accept the same. It is not disputed that as per Addendum Item No. 3 to Clause 11.1 (Provision of Facilities), the duty to take away the existing assets of the erstwhile contractor, M/s Banas Sands, was that of the Petitioner. It is further not disputed that the said infrastructure was not removed till April 2009 by the Petitioner and / or M/s Banas Sands, in spite of complaints by the Respondent.