DELHI DEVELOPMENT AUTHORITY vs DG ESTATE PVT. LTD.
$~18
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 167/2023, I.A. 8395/2023
DELHI DEVELOPMENT AUTHORITY …..Petitioner
Through: Mr. Vaibhav Agnihotri, ASC with Mr. Karanjot Singh Mainee and Mr. Abhishek Das, Advs.
versus
DG ESTATE PVT. LTD. …..Respondent
Through: Mr. Ajay Kumar, Adv.
CORAM:
HON’BLE MR. JUSTICE C. HARI SHANKAR
O R D E R
% 02.09.2024
1. Issue notice.
2. Notice is accepted on behalf of the respondent by Mr. Ajay Kumar, Advocate.
3. Reply be filed within four weeks with advance copy to learned Counsel for the petitioner, who may file rejoinder thereto, if any, within four weeks thereof.
4. Re-notify on 20 November 2024.
I.A. 8395/2023
5. By this application, the petitioner seeks stay of operation of the impugned award dated 8 December 2022.
6. In the impugned award before the arbitrator, the respondent, as the claimant, had raised seven claims, whereas the petitioner had raised four counter claims.
7. The respondent had also furnished performance bank guarantee to the petitioner during the course of the performance of the contract.
8. The arbitral tribunal has rejected claim 1. Claim 2 was given up by the respondent. Against claim 3, the learned arbitral tribunal held that the bank guarantee furnished by the respondent was not liable to be enchased by the petitioner. And directed accordingly.
9. Against claim 4 and 5, the learned arbitral tribunal has awarded, to the respondent an amount of ?17,59,782/- along with simple interest @ 7% per annum from the date of award till realisation. Claim 6, which is for costs, has been rejected.
10. All the counter claims of the petitioner have been rejected.
11. As such, the only executable content in the impugned award is the decree of ?17,59,782/- along with simple interest @ 7% per annum from the date of award till the date of payment, passed in favour of the respondent and against the petitioner and restraint against the petitioner encashing the performance bank guarantee furnished by the respondent.
12. Following the judgments passed by the Supreme Court in Manish v Godawari Marathawada Irrigation Development Corporation1, Toyo Engineering Corporation v IOCL2 and Sepco Electric Power Construction Corporation v Power Mech Projects Ltd3, which hold that, in the case of money awards, ordinarily the execution of the award has to be subject to deposit of the awarded amount, stay of execution of the impugned award shall stand stayed on the petitioner depositing, with the Registry of this court, the amount of ?17,59,782/- along with simple interest @ 7% per annum from the date of the award till the date when the amount is deposited with the Registry of this Court, within a period of six weeks from today.
13. Apropos, the performance bank guarantee furnished by the respondent, the arbitrator has, in any case, restrained the petitioner from enchasing the bank guarantee.
14. Mr. Ajay Kumar submits that in these circumstances, the original bank guarantee should be directed to be deposited with the Registry of this Court. The submission is well founded and does not result in any prejudice to either side.
15. As such, the petitioner is directed to deposit, with the Registry of this Court, the original performance bank guarantee provided by the respondent.
16. The application stands disposed of accordingly.
17. Mr. Agnihotri, learned Counsel for the petitioner further prays that the performance bank guarantee may be directed to be kept alive, so that, in the event, the petitioner ultimately succeeds in his Section 34 challenge, it would be able to encash the bank guarantee, which would not be possible if the bank guarantee were to be expired in the interregnum.
18. There is justification in Mr. Agnihotris contention. However, it would not be proper for this Court to burden the respondent with the expenses of keeping the bank guarantee alive, especially when the respondent is the successful litigant before the arbitrator.
19. As such, subject to the petitioner bearing the expenses required to keep the bank guarantee alive in the event of the bank guarantee expiring during the pendency of these proceedings, the respondent is directed to ensure that the bank guarantee remains alive.
C.HARI SHANKAR, J
SEPTEMBER 2, 2024/aky
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12018 SCC OnLine SC 2863
22021 SCC OnLine SC 3455
32022 SCC Online SC 1243
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OMP (COMM) 167/2023 Page 4 of 4