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TMI Blog2004 (4) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... .3.1987 for acquisition of the entire property. On 10.3.1987, declaration under sections 6 and 17 of the Land Acquisition Act was published. Aggrieved, the respondent herein filed CWP No.2385 of 1988, which was allowed by the High Court by judgment dated 4.2.1991 and Shri T.V.R. Tatachari, former Chief Justice of Delhi High Court was appointed as sole arbitrator to determine the damages w.e.f. 10.3.1987, payable by Delhi Administration to the respondent in respect of the property. The SLP taken out against the said judgment by the appellant was dismissed by this Court vide order dated 21.3.1991. Appellant was, however, allowed time to vacate the property by 31.3.1993. On 18.11.1991, the arbitrator made and published the award directing the appellant to pay damages at the rate of ₹ 5,81,770/- per month w.e.f. 10.3.1987, to which objections under sections 30 and 33 of the Arbitration Act, 1940 were filed by the appellant. The said objections were dismissed by the learned single Judge on 12.7.1995. Being aggrieved, the appellant appealed to the division bench of the High Court. By the impugned judgment dated 22.1.1999, the High Court dismissed the appeal. Against that judgment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty was not illegal but permissive particularly when this Court permitted the appellant to continue in possession till 31.3.1993 and, therefore, the respondent was not entitled to claim mesne profits but it was only entitled to rent. In this connection, it was further contended that prior to 10.3.1987 the property was under acquisition and, therefore, it fell outside the provisions of Delhi Rent Control Act. However, when the requisition period expired on 10.3.1987, the said property came under Delhi Rent Control Act w.e.f. 10.3.1987. This property was taken out from the purview of the Rent Act w.e.f. 1.12.1988 vide Delhi Rent Control (Amendment) Act, 1988 and, therefore, the damages for the period 10.3.1987 to 30.11.1988 could be assessed only on the basis of rent and not on income/profit method. It was further pointed out that the arbitrator has awarded damages for built-up area @ ₹ 15/- per sq. ft. per month (carpet area) by comparing the said property with the property at 2/10, Ansari Road, Darya Ganj, New Delhi. However, the respondent did not prove its claim. No valuation report was relied upon in support of its claim; no valuer was examined and no assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be calculated. In support of the rates, respondent had examined three witnesses and on the basis of their evidence, the arbitrator has assessed the damages. Learned counsel submitted that the quantum of damages is assessed on the basis of marketability of the property on the date when possession ought to have been handed over to the respondent and in cases where the property is in occupation of a trespasser, damages cannot be based on rental basis. It was also urged that for computing damages for illegal occupation, after 10.3.1987, rent payable by the appellant during the period of requisition cannot be taken into account and, therefore, the arbitrator was right in quantifying the damages on the basis of the market value of the property on 10.3.1987. In this connection, it was submitted that in fact the appellant had agreed before the arbitrator to the rate of ₹ 15/- per square feet for covered area and for open area, the appellant had left the rate for calculation purposes to the arbitrator and, therefore, these questions need not be reopened or re-agitated before this Court in this appeal by way of special leave under Article 136 of the Constitution. In this connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act has not been considered by the arbitrator. In the municipal records, the value of the building which is in dilapidated condition was shown at ₹ 27700/- which was 10% of the original cost, which fact has also not been taken into account by the arbitrator. Similarly, there was no reason for the arbitrator to assess damages for open larger spaces @ ₹ 10/- per sq. ft. per month when these open spaces form part of the main building for which damages were assessed @ ₹ 15/- per sq. ft. per month. The respondent did not submit the valuation report in support of its claim for damages. No valuer was examined on behalf of the respondent-claimant. In the present case, buildings were old and their age has not been taken into account by the arbitrator particularly when the said property is sought to be compared with the property situated at 2/10, Ansari Road, Darya Ganj, New Delhi. No sale instances have been put in evidence. The evidence of three witnesses who were examined on behalf of the respondent was not cogent and reliable for the purposes of assessing the damages. These three witnesses were laymen and they were not experts on valuation. The arbitrator has not taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a sum of ₹ 6.5 crores (approximately) as damages. In the case of K.P. Poulose v. State of Kerala Anr. reported in [AIR 1975 SC 1259] it has been held by this Court that an award can be set aside when an arbitrator has mis-conducted the proceedings. Misconduct refers to legal misconduct which arises if the arbitrator on the face of the award arrives at a decision ignoring material documents. In the case of Trustees of The Port of Madras v. Engineering Constructions Corporation Limited reported in [AIR 1995 SC 2423] it has been held by this Court that in the case of a reasoned award, the Court can interfere if the award is based upon a proposition of law which is unsound in law and which erroneous proposition of law vitiates the decision of the arbitrator. The error of law must appear from the award itself. In the present case, the arbitrator was required to assess damages by applying correct principles of valuation. As discussed above, on facts of this case, damages were required to be assessed for use and occupation of the premises after 10.3.1987 by the appellant under the orders of the Court. The rent method for assessing damages has not at all been considered by the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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