NEW DELHI MUNICIPAL COUNCIL  Vs APPLAUSE HOSPITALITY SERVICES PVT. LTD AND ANR

O.M.P. (COMM) 532/2020 Page 1 of 7

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 532/2020
NEW DELHI MUNICIPAL COUNCIL ….. Petitioner
Through :Mr. Anil Grover , Sr. Standing
Counsel with Mr. Yoginder
Handoo, Advs.

Versus

APPLAUSE HOSPITALITY
SERVICES PVT. LTD AND ANR ….. Respondent s
Through Ms. Leena Tuteja, Mr. Ishaan Chawla and Ms. Diksha Bhatia, Advs.
CORAM:
HON’BLE MR. JUSTICE C. HARI SHANKAR

(Video-Conferencing)
O R D E R (ORAL)
% 22.01.2021
3. Inasmuch as, the petition is by way of challenge, under Section
34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred
to as “1996 Act”), to an award of the learned arbitrator, exchange of O.M.P. (COMM) 532/2020

1. Issue notice. Ms. Leena Tuteja, learned counsel for the
respondents, accepts notice.

2. Counter affidavit, if any, be filed within a period of four weeks
with advance copy to learned counsel for the petitioner, who may file rejoinder thereto, if any, within a period of two weeks thereof.

2021:DHC:252O.M.P. (COMM) 532/2020 Page 2 of 7

pleadings is not necessary. The Registry is, however, directed to
requisition the arbitral records from the learned arbitra l tribunal and
have the same placed on record prior to the next date of hearing. A
copy thereof would also be provided, by email, to learned Counsel for
the parties.

4. Renotify on 15th April, 2021.

IA 10239/2020 (Section 151 CPC)

1. For the reasons stated in the application, delay in re -filing of the
petition is condoned.

2. The application is allowed and disposed of.

IA 10237 /2020 (Section 36(2) of the Arbi tration and Conciliation
Act, 1996)

1. Mr. Anil Grover, learned Senior Standing Counsel for the
NDMC submits, at the very outset, that he is restricting his prayer for
stay to the direction qua Claim IV of the respondents, who were the
claimants before the learned arbitrator. The said direction, as
contained in the operative part of the impugned award, may be reproduced.
“Claim IV: Allowed.

(i) The Claimants are entitled to carry on the
business of Eating lounge/Bar from the Commercial
Area of the project site subject to statutory
permissions;

2021:DHC:252O.M.P. (COMM) 532/2020 Page 3 of 7

(ii) The show cause notice -cum -sealing order dated
25/02/2016 is contrary to the Concession Agreement
and is illegal. The sealing of the Eating Lounge was
illegal and in breach of the Concession Agreement;
(iii) The Respondent shall permit the Claimants to
operate and carry out commercial activities from the Project Site, in terms of the Concession Agreement, without hindrance.”

2. Mr. Grover has, essentially, sought to challenge the afore –
extracted directi ons of the learned arbitrator on the ground that, as per
the Master Plan for Delhi, 2021 ( hereinafter referred to as “ MPD
2021 ”), the area in question, forming subject matter of controversy ,
was not a “District Park”, as it was less than 25 hectares and the MPD
2021 requires a District Park to be in excess of 25 hectares. He,
however, acknowledges the fact that in the Concession Agreement,
between the petitioner and the respondents, the area in question was described as a District Park. This fact also sta nds acknowledged in the
short notes of the written submissions filed by the petitioner -NDMC
before this Court, in which it is averred that the “erroneous
statement”, in the Concession Agreement, to the effect that the project
site was a District Park , could not operate as an estoppel against the
petitioner. He submits that the reference, in the Concession
Agreement, to the project site as a ‘District Park’, was immaterial, as the NDMC was not empowered to grant concession against the law.
3. It is also a cknowledged that the completion plans of the
respondents were sanctioned by the NDMC, treating the area as a
District Park. Again , on this point, too, it is sought to be contended
2021:DHC:252O.M.P. (COMM) 532/2020 Page 4 of 7

that the sanction ed completion plans could not override the MPD
2021.

4. Mr. Grover also sought to submit that, much prior to the
execution of the Concession Agreement, the premises of the
respondents were sealed on 25th February, 2016, on the ground that an
eating house could not be run in a ‘District Park’. Ms. Leena Tuteja, learned counsel for the respondents, however, traverses this
submission of Mr Grover, and asserts that the sealing of the premises
which took place in 2016 was not on the ground that the Eating House was in an area which was not a District Park, but, rathe r, on the
allegation that the respondents were serving liquor . Moreover, she
points out that, consequent to the sealing of the premises, the
respondents moved an application under Section 17 of the 1996 Act, before the learned arbitrator, which was allowe d by him on 5
th June,
2018, and that the appeal thereagainst, preferred under Section 37(2)
of the 1996 Act, by the NDMC, was withdrawn by the NDMC itself
on 20th
“23. From the above, it is evident that the understanding of June, 2018 and the premises were de -sealed.

5. In any event, it appears that the sealing of the premises had
nothing to do with the question of whether the premises were located
in an area which was a ‘District Park’ or otherwise.

7. The learned arbitrator did take stock of the contention, of the
NDMC, that the area in question was not a Distr ict Park. In this
regard, para 23 of the impugned award reads thus:

2021:DHC:252O.M.P. (COMM) 532/2020 Page 5 of 7

the parties with regard to the nature of the project site was
that it comprised of the musical fountain area, the Children’s
Park area and the parking area as indicated in Map 1.1 to the said schedule 1 of the Concession Agreement. It is also clear
that the project site had a total area of approximately 20,200
SQM. Furthermore, it had been represented by the
Respondent that there was a cap of 20% of the area for
commercial use. In other words, the Claimants could utilize approximately 4040 SQM for commercial activities such as
eating lounges, kiosks and other activities permitted under the
Concession Agreement. It is on this basis that the Claimants
had submitted its bid which had been accepted by the
Respondent. It was also represented by the Respondent and
accepted by the Claimants that the Project Site was a District
Park as per MPD 2021. This is the foundation of the bid
submitted by the Claimants and the Concession Agreement.
The contention of the learned counsel for the Respondent that
the project site is not a District Park as per the MPD 2021 is
not correct. It would be evident from the discussion below
that DDA, the auth ority responsible for ensuring compliance
with MPD 2021, had also referred to the project site as a
District Park, as indeed, does the relevant Zonal Development Plan. Since the DDA also approved the plans,
the Respondent cannot be heard to say that an Eating Lounge
is not permitted at the Project Site. In any event, the
Respondent had before and at the time of executing the
Concession Agreement clearly and categorically represented
that the Project Site was a District Park and commercial
activities in an area upto a cap of 20% of the total area could
be carried out.”
(Emphasis supplied)

8. Clearly, therefore, the learned arbitrator has noticed the
contention of the petitioner that as per MPD 2021, the area in question
was not a District Park. He has rejec ted this contention on the
following four grounds :

(i) The DDA, being the authority responsible for ensuring
compliance with the MPD 2021, had referred to the project site
2021:DHC:252O.M.P. (COMM) 532/2020 Page 6 of 7

as a District Park.

(ii) The Zonal Development Plan of the area also referred to
the project site as a District Park.
(iii) The plans of the area stood approved by the DDA, so that
the respondents could not be heard to say that an eating house
was not permissible at the project site .

(iv) Even in the Concession Agreement executed by the
petitioner, the project site was represented as a District Park, in
which commercial activities over an area upto 20% of the site could be carried out.

9. Clearly, therefore, the learned arbitrator has held against the
petitioner, specifically on th e contention that the project site was not
located in a District Park , by referring to the material on record. This
finding, even if it is to be assumed, arguendo, not to be correct on facts, cannot, prima facie , merit interference under Section 34 of the
1996 Act, in view of the law enunciated by the Supreme Court in
Ssangyong Engg. & Construction Co. Ltd. v. NHAI
1
10. The learned arbitrator has, inter alia , relied on the covenants of
the contract between the NDMC and the respondent. An arbitrator,
being a creature of the contract, cannot decide contrary to the , which
represents the authoritative legal position as it exists today.

1 (2019) 15 SCC 131
2021:DHC:252O.M.P. (COMM) 532/2020 Page 7 of 7

convenants thereof. One of the select circumstances in which a Court
may interfere with an arbitral award, under the 1996 A ct, is that the
award is contrary to the terms of the contract between the parties.
What Mr Grover exhorts this Court to do is to interdict the operation
of the impugned award for having decided the issue of whether the project site was located in a Distr ict Park, or not, in accordance with
the contract between the parties. This, prima facie , is impermissible.

11. In view thereof, it cannot be said that the petitioner has been
able to make out a prima facie case, as would justify interlocutory
interdict ion with the directions issued by the learned arbitrator qua
Claim IV of the respondents.
11. Resultantly, the prayer for interim stay is rejected.

11. The application is dismissed.

C. HARI SHANKAR, J
JANUARY 22, 2021
r.bararia

2021:DHC:252