Delhi High Court Sets Aside Claim Of Rs.15 Lakh Awarded By Arbitral Tribunal Due To Lack Of Evidence

Additionally, the court held that the respondent had not placed any evidence on record to establish the cost of such construction. Therefore, the amount awarded against Claim no.2 was without any evidence and thus may be set aside.

Brief Facts:

The present dispute arises with respect to a Compromise Agreement (“Agreement”) entered between the parties. The appellant decided to build a Multi-storeyed Group Housing Complex in his property. However, the respondent has illegal and unauthorized possession of some portion of the appellant's property. Also, the respondent had raised illegal construction in that portion of the appellant's property. Thereafter, the appellant filed a suit seeking a decree of permanent injunction restraining the respondent from raising any illegal construction. Subsequently, the court also passed an order restraining the respondent from raising any construction.

Then, the parties entered into a Compromise Agreement whereby the appellant agreed to deliver 6% of the total land built-up area in the aforesaid project to the respondent. And the respondent agreed to pay all development and betterment charges as may be levied by any government authority. The Agreement also provided that in case the Multi-Storey Group Housing project is abandoned, the area of the plot measuring 435 square yards which was in possession of the respondent, would be reverted to him and the Agreement would be rendered null and void. Then, the Hosing Project was abandoned but the plot was not returned to the respondent.

The dispute was referred to arbitration by the Supreme Court since an arbitration clause was present in the Agreement. The Arbitral Tribunal passed an award in favour of the respondent directing the appellant to hand over the possession of the land to the respondent. Aggrieved by the impugned award, the appellant filed an application under Section 34 of the Act to set aside the impugned award. However, that application was rejected by the court and then the appellant filed an appeal under Section 37(1)(c) of the Act.

Observation of the court:

The court observed that the in the civil appeal, both the parties jointly requested that the disputes arising from the Agreement be referred to arbitration. The Supreme Court acceded to the said request. Thus, the appellant's claim that the reference was invalid, is clearly insubstantial. After having persuad the Supreme Court to refer the disputes to arbitration, it is not open for the appellant to now question the validity of the reference.

Further, the court noted that it is not disputed that the construction as raised on the subject land had been demolished. The only question raised by the appellant was regarding the compensation awarded in respect of the said construction. Concededly, the respondent had not placed any evidence on record to establish the cost of such construction. Therefore, the amount awarded against Claim no.2 was without any evidence and thus may be set aside.

Moving further, the court held that the impugned order to the extent that the Arbitral Tribunal has allowed the respondent's Claim no.2 and awarded damages quantified at ₹15,00,000/- plus interest is concerned, the same is set aside.

Case Title: MOHD AMIN DECEASED THROUGH LRS versus MOHD IQBAL DECEASED THROUGH LRS

Case Number: FAO (OS)(COMM) 81/2024

Counsel for the Petitioner: Mr S.S. Jauhar, Advocate.

Counsel for the Respondent: Mr Sanjay Bansal, Mr Pushkar Sood, Ms Swati Bansal, Ms Vaishali Gupta and Ms Ayushi Bansal, Advocates.

Date of Judgment: 20.11.2024

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