Adwel Advertising Service & Anr v. South Delhi Municipal Corporation

NAVIN CHAWLA, J DECEMBER 01, 2017 RN

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + OMP(COMM) 382/2017 & IAs 12478-80/2017 Reserved on: 22nd November, 2017 Date of decision: 1st December, 2017 ADWEL ADVERTISING SERVICE & ANR. ..... Petitioners Through: Mr.P.V.Kapur, Sr. Adv. with Mr.Sandeep Grover, Mr.Vimal Nagrath, Ms.Pankhuri Bhardwaj, Ms.Kaveri Gupta, Advs. versus SOUTH DELHI MUNICIPAL CORPORATION ..... Respondent Through: Mr.Sanjay Poddar, Sr. Adv. with Mr.Gaurang Kanth, Mr.Govind Kumar, Mr.Shivam Goel, Advs. CORAM: HON'BLE MR. JUSTICE NAVIN CHAWLA 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-Adwel Advertising Service & Anr. challenging the arbitral award dated 22nd May, 2016 passed by the Sole Arbitrator in Arbitration Case no. 14/2011 titled as M/s Adwel Advertising Service & Anr. vs. SDMC. 2. The Sole Arbitrator, by way of the impugned award, has directed as under:- 57. In view of the findings given above, I make the award as follows: Page 2 (i) That the Claimants shall pay Rs. 5,01,650/- (Rs. Five Lakhs one Thousand Six Hundred Fifty) to the Respondent. (ii) That the Claimants shall pay costs of Rs. 2,00,000/- to the Respondent. (iii) That the Claimants shall pay simple interest at the rate of 9% per annum on the amount aforesaid till the time payment is made. (iv) That the Respondent shall bear the cost of stamp fee of Rs. 700/- (Rs. Seven hundred) only. 3. The dispute between the parties relates to allotment of Toilet Block site No.14 located at Andheria Mor, near Kissan Haat, M.G.Road, New Delhi (hereinafter referred to as the 'site') vide allotment letter dated 8th November, 2007. The award of work was for construction/maintenance /operation of toilet block at the said site against advertisement rights thereon. The physical possession of the site was handed over by the respondent to the petitioner on 3rd June, 2008. In terms of allotment, the petitioner was to pay a monthly licence fee of Rs.2,26,500/- after a period of 3 months, which was considered as the incubation period. The period of the contract was one year. 4. The petitioner had paid an amount of Rs.11,57,500/- to the respondent towards security deposit, performance security, caution money, in addition to the earnest money of Rs.1 lac thereby making a total of Rs.12,57,500/-. It is admitted case of the parties that no further amount was paid by the petitioner to the respondent. 5. The respondent, claiming a default of payment of licence fee, issued a show cause notice to the petitioner on 22nd April, 2009 and finally terminated the agreement by way of cancellation letter dated 15th May, 2009 raising a claim of Rs.13,99,389/- against the petitioner. Page 3 6. The petitioner, under Claim no.1 sought reconciliation of the accounts with the respondent and further contested the claim of the respondent for interest over delayed payment. The Arbitrator has held that as the respondent failed to reconcile the accounts and give a detailed breakup of the demand raised, period for which interest has been charged for delayed payment etc., the respondent is not entitled to claim any interest on delayed payment. 7. Claim no.2 raised by the petitioner was for a direction to the respondent to pay a sum of Rs.32,15,634/- along with interest @2% per month from 1st August, 2011 till the time of realization. This claim was premised on the submission that the contract had been illegally terminated by the respondent, therefore, the petitioner was entitled to refund of Rs.12,57,500/- deposited by it as security deposit etc. mentioned above along with Rs.10 lacs that was claimed as having been spent on the construction of the toilet block and interest on the above amounts till 31st July, 2011. This claim of the petitioner has been rejected by the Sole Arbitration and is under challenge in the present petition. 8. Along with rejection of the above claim, under challenge is the allowance of the counter claim o