Delhi High Court Upholds Arbitral Award in DLF Dispute
The Delhi High Court has dismissed an appeal by Senior Advocate Chander M Lall, who sought increased compensation from DLF Home Developers Limited for delays in the handover of commercial office spaces. The Division Bench comprised of Justices V Kameswar Rao and Vinod Kumar upheld the decision of a single judge, which supported an arbitral tribunal’s ruling to award Lall damages at a rate of ₹25 per square foot per month. Lall had argued for a higher rate of ₹200 per square foot per month from June 2009 until possession was granted in November 2014.
Background of the Dispute
The dispute originated from agreements executed on May 31, 2006, for the purchase of retail and commercial office spaces. Lall contended that the final payment was contingent upon receiving notification from DLF that it had obtained the necessary occupancy certificate from the Delhi Development Authority. Although DLF received this certificate in 2009, Lall claimed he was only informed in 2011.
DLF countered these claims by stating that Lall delayed taking possession due to unpaid instalments and other charges. The disagreement eventually led to arbitration, where the arbitrator found DLF responsible for not duly informing Lall about the occupancy certificate. Consequently, damages were awarded to Lall at ₹25 per square foot per month from June 10, 2009, to January 12, 2011. However, the arbitrator did not award additional damages beyond this period, citing mutual delays by both parties.
Court’s Decision
The Delhi High Court’s single judge later altered the arbitrator’s decision, directing DLF to compensate Lall at the same rate until possession was transferred. Additionally, the single judge annulled the requirement for Lall to pay interest on ground rent from February 2011.
In his appeal to the Division Bench, Lall contended that Clause 11.4 of the purchase agreement, which prescribed compensation at ₹25 per square foot per month, should not apply to delays caused by DLF’s negligence. He argued that the clause was intended for instances where the builder failed to complete the project or deliver possession within the agreed timeframe.
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However, the court declined to overturn the tribunal’s interpretation of the contract, stating, “We do not find the interpretation given by the learned Arbitrator to be unreasonable or perverse for us to interfere in this appeal under Section 37 of the Act.” The judges further noted that Lall was unable to substantiate his claim for higher damages with adequate proof, such as lease agreements and MagicBricks printouts.
The ruling concluded, “The finding of the learned Single Judge is that the appellant has failed to prove claim for higher damages, and as such, the claim was denied by the learned Arbitrator.” Consequently, Lall’s appeal was dismissed.
Lall represented himself in court, alongside Advocates Nancy Roy, Ananya Chug, and Ananya Mehan. DLF was represented by Senior Advocate BB Gupta and Advocates Vishnu Kanth and Karan Jain.
