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2006 DIGILAW 92 (DEL)

KAVITA ENTERPRISES v. AIRPORTS AUTHORITY OF INDIA

2006-01-17

BADAR DURREZ AHMED

body2006
BADAR DURREZ AHMED, J. ( 1 ) THESE objections have been filed under section 30 and 33 of the Arbitration Act, 1940 (hereinafter referred to as the said Act) by the petitioner/claimant in respect of the award made by the sole Arbitrator Mr R. V. Narayanan on 10. 12. 1997. The award was filed and in view of the provisions of Section 14 of the said Act notices were issued and it is on the basis of that the petitioner filed his objections on 05. 01. 2002. Essentially, the petitioner has objected to the findings of the arbitrator in respect of claims 1 and 4. His claim Nos. 2,3 and 5 have been partly allowed and he has no dispute with the findings of the arbitrator and the amounts awarded under those heads. ( 2 ) THE entire dispute pertains to an agreement entered into between the petitioner and the respondent [airports authority of India (AAI)] for the running of the Car Park at Terminal No. 1 of the IGI airport, New Delhi. In essence, the agreement was that the petitioner / claimant would manage the Car Parking facility at the said terminal No. 1 and would collect car parking charges from the persons who park their vehicles in the alloted area. In return, the petitioner / claimant was to pay a fixed monthly licence fee of Rs. 2. 25 lakhs to the aai. The agreement commenced on 10. 09. 1992 and was to be for an initial period of one year subject to further extension on a 10% hike in the licence fee. the agreement entered into between the parties contained a clause whereby either party could terminate the contract by giving three months notice without the necessity of assigning any reasons. One particular clause of the contract has a material bearing on the decision in this case and that is clause No. 14 which reads as under:-" The fact that the car park cannot be operated on IGI Airport for sometime because of strikes, lock-out or any other reason shall not render the agreement null and void and authority shall not be liable for any compensation. " ( 3 ) THE aforesaid clause is material inasmuch as the petitioner s claim No. l pertains to the purported loss suffered by the petitioner to the tune of Rs. " ( 3 ) THE aforesaid clause is material inasmuch as the petitioner s claim No. l pertains to the purported loss suffered by the petitioner to the tune of Rs. 3 lakhs as a result of the unprecedented strike by the pilots of the indian Airlines from 12. 12. 1992 till the end of february, 1993. According to the petitioner, because there was a strike, the passenger movement was greatly hampered as a result of which the number of persons who utilised the car parking facility was greatly reduced as a result of which the petitioner was not able to collect a sufficient amount of parking charges and, therefore, he had a loss of profits. According to the petitioner / claimant, this loss of profit was attributable to the respondent (AAI) and they were liable to compensate the petitioner / claimant for the same. The details of the aircraft movement and the passenger movement during the months of April, 1992 to March, 1993 have been set out in the award itself and the same are reproduced hereinbelow:- Date Aircraft movement Passenger movement April 92 2355 258031 May 92 2487 287187 June 92 2332 262578 July 92 2285 255885 Aug 92 2114 244262 Sept. 92 2107 235291 Oct. 92 2139 258154 Nov. 92 2121 268119 Dec 92 1516 171187 Jan. 93 1310 152554 Feb. 93 2216 219230 Mar. 93 2654 258707 . 25636 871185 ( 4 ) AS rightly pointed out by the Arbitrator, the figures of both the aircraft movement and passenger movement for the months of december, 1992 and January, 1992 were substantially lower than the other months. The Arbitrator also held that this drop in the aircraft movement and the passenger movement could not be attributed solely to seasonal features and, therefore, were related to the strike undertaken by the pilots of the indian Airlines. However, the learned Arbitrator held that if one took an overall picture of the entire period, then, it would become clear that the passenger movement excepting september, 1992, December, 1992 to february, 1993 had exceeded the average passenger movement by a good margin and, therefore, the contractor (the petitioner) was expected to bear the fluctuation in the profit caused by this reduction in the passengers. In this view of the matter, the Arbitrator rejected the petitioner s claim No. 1. In this view of the matter, the Arbitrator rejected the petitioner s claim No. 1. I find that such a finding can also be sustained on a different reasoning altogether and that is that clause No. 14 of the Agreement specifically provided that AAI would not be liable for any compensation on account of the car parking being inoperative for some time because of a strike, lock-out or any other similar reason. In the present case, of course, the car park facility was not completely out of operation. It is only that the passenger movement had suffered a reduction. When, even if there is a complete stoppage in the operation of the facility, clause No. 14 provides that AAI would not be liable for any compensation, then there is all the more reason to hold that the aai would not be liable when there is only a partial reduction in the passenger movement and consequently in the car park charges collected by the petitioner. Therefore, on this count also, the conclusion arrived at by the learned Arbitrator is sustainable. ( 5 ) INSOFAR as the petitioner s claim No. 4 is concerned, it pertains to the ground of the interest, pre-suit, pendente lite and future interest which the petitioner has claimed at 25% on all its claims. The learned Arbitrator has held that the petitioner / claimant is not entitled to any interest in view of the fact that the strike caused by the Indian Airlines pilots was not on account of any apparent fault on the part of AAI and, therefore, he held the claim of interest to be untenable. The learned counsel for the petitioner submitted that even if pre-suit interest is not granted, then, at least pendente lite interest and future interest could be granted. In support of his submissions, he relied upon the decision of this court in the case of Babulal Barwa Vs. Delhi Development Authority and others: 63 (1996) DLT 35 and Shiv Singh vs. N. P. C. C. Ltd: 1998 (1) Arb. LR 660. Both these decisions point to the power of the court to grant interest even though the arbitrator has not awarded interest. Delhi Development Authority and others: 63 (1996) DLT 35 and Shiv Singh vs. N. P. C. C. Ltd: 1998 (1) Arb. LR 660. Both these decisions point to the power of the court to grant interest even though the arbitrator has not awarded interest. There is no dispute with the principle that the court can grant interest even though the Arbitrator has not granted the same while passing the award, the fact of the matter is that whether the petitioner is entitled to interest. The Claim no. 2 which has been partly allowed to the petitioner is in respect of reduction of the licence fee for the period of the strike whereunder the petitioner suffered a drop in its collections. The Arbitrator has been alive to the situation that the petitioner did suffer on account of the reduced passenger movement and on this account, he has already given relief to the petitioner by awarding him a refund to the extent of rs. 1,82,770/- from the licence fee already collected by AAI. The learned counsel for the petitioner states that the petitioner is entitled to interest on the same even during the presuit and pendente lite period. I-do not agree with this submission in view of the fact that when the question was determined by the arbitrator that the petitioner would be entitled to refund, the Arbitrator was conscious of the situation and being conscious of the situation, after giving a relief to the petitioner, he has decided not to grant interest for the pre-suit and pendente lite period. Therefore, i would not like to interfere with the Arbitrator s decision with respect to this claim also. ( 6 ) INSOFAR as the interest (post-suit) is concerned, the question has to be looked at from a different perspective. The award was made on 10. 12. 1997 and within a year, i. e. , on 12. 12. 1998, the AAI sent a letter to the petitioner stating that they have accepted the award and they are ready and willing to make the payment as determined by the arbitrator provided the petitioner gives his no claim certificate in exchange thereof. For some odd reason, the petitioner did not reply to this letter and ultimately filed its objections to the award after a period of about three years, i. e. , on 05. 01. 2002. For some odd reason, the petitioner did not reply to this letter and ultimately filed its objections to the award after a period of about three years, i. e. , on 05. 01. 2002. It is pertinent to note that AAI had agreed and offered to pay the awarded amount to the petitioner on 12. 12. 1998. The learned counsel for the petitioner submits that this was a conditional offer and, therefore, it should not come in the way of granting interest to the petitioner. I am unable to agree with this contention raised by the learned counsel for the petitioner inasmuch as if AAI s offer was a conditional one, there was nothing which prevented the petitioner from sending a reply to the same and making it known to AAI that he was not willing to accept the conditional offer but was willing to accept the payment. No such reply is on record. Therefore, the time period that has elapsed thereafter will not enure to the benefit of the petitioner. However, for the period from the date of award till 12. 12. 1998 when the offer was made, the petitioner is entitled to interest. Accordingly, I dispose of these objections by rejecting the petitioner s objections with regard to Claim No. l and by partly allowing his objection with regard to claim No. 4 inasmuch as the petitioner would be entitled to interest from 10. 12. 1997 to 12. 12. 1998 @ 12% per annum. Subject to this modification, the award is made a rule of the court. It is made clear that the petitioner would be entitled tq future interest @ 12% per annum till the date of actual payment on the amount as indicated above. This application as well as the suit stand disposed of. .