M K Enterprises vs. Delhi State Industrial And Infrastructure Development Corporation Limited

Facts

M K Enterprises (Petitioner) participated in an e-auction floated by Delhi State Industrial and Infrastructure Development Corporation Limited (Respondent) for a commercial plot in Narela Industrial Area. The Petitioner deposited EMD of Rs. 13,86,000 and later 20% of the bid premium (Rs. 1,80,24,000) plus GST. Disputes arose regarding the plot's location, leading to arbitration. An award dated April 15, 2021, directed the Petitioner to deposit the balance amount of Rs. 7,07,10,000 within 90 days and the Respondent to allot the plot as specified. Subsequent disputes over plot conditions persisted. The Respondent issued a show cause notice for cancellation and forfeiture of EMD, followed by a letter on October 12, 2022, granting a final opportunity to deposit the balance amount (Rs. 800,66,967 including interest) within 90 days, failing which allotment would be cancelled and deposits forfeited. The Petitioner filed a writ petition seeking compliance with the award and restraint against further demands.

Held

The Court held that both parties were willing to abide by the arbitral award dated April 15, 2021. The award clearly stipulated the Petitioner's obligation to deposit the balance amount and the Respondent's obligation to allot the plot at the specified location. The Petitioner was aware of the plot's status before making initial payments. Consequently, the Court directed the Petitioner to deposit the balance amount of Rs. 7,07,10,000 with the Respondent on or before March 15, 2023. Upon receipt of this deposit, the Respondent was directed to comply with the remaining directions in the arbitral award, including allotting the plot after demarcation within one month of the deposit. The Court clarified that if the Petitioner failed to make the deposit by the stipulated date, the Respondent would be free to proceed in accordance with law and recover interest on the due amounts. The writ petition was disposed of in these terms.

Key Issues

1. Whether the writ petition is maintainable for enforcing an arbitral award against a public body, or if the Petitioner should approach the Executing Court? (Mixed question of law and fact, turning on the maintainability of writ jurisdiction for award enforcement and the nature of the Respondent's obligation). Petitioner's arguments: The Respondent, being a public body, must abide by the arbitral award. The Petitioner has no remedy in the Executing Court and thus, the writ petition is maintainable. Respondent's arguments: The arbitral award has culminated the proceedings. If implementation is sought, the Petitioner ought to approach the Executing Court in accordance with law. The writ petition is not maintainable.