A long-running tussle over delayed possession of commercial office premises ended with the Delhi High Court refusing to grant Senior Advocate Chander Mohan Lall a higher compensation package from real estate developer DLF Home Developers Ltd.
A Division Bench comprising Justices V. Kameswar Rao and Vinod Kumar dismissed Lall’s appeal, thereby affirming an earlier ruling that upheld an arbitral award granting compensation at the rate of ₹25 per square foot per month for the delay in handing over the property.
Dispute Rooted in 2006 Commercial Space Agreement
The conflict stemmed from commercial office space buyer agreements signed between the parties in May 2006. Lall argued that the final instalment under the agreement became payable only after DLF formally informed him that it had secured the occupancy certificate from the Delhi Development Authority.
According to him, although the occupancy certificate had been obtained in 2009, DLF communicated this fact only in 2011. He maintained that the delay deprived him of possession for several years and sought damages at a substantially higher rate of ₹200 per square foot per month from June 2009 until possession was eventually delivered in November 2014.
DLF, however, took the position that possession could not be transferred because Lall had not cleared the final instalment and certain other dues.
Arbitrator Found Fault on Both Sides
The disagreement eventually landed before an arbitral tribunal. The arbitrator concluded that DLF was obligated to notify Lall about the receipt of the occupancy certificate and failed to establish that such communication had been properly delivered.
As a result, compensation was awarded at ₹25 per square foot per month for the period between June 10, 2009 and January 12, 2011.
The tribunal, however, declined to extend damages beyond that date, finding that both parties contributed to the subsequent delay.
Single Judge Expanded Compensation Period
When the award was challenged, a single-judge Bench modified it in part. The Court directed DLF to continue paying compensation at the same rate until actual possession was handed over and also struck down a direction requiring Lall to pay interest on ground rent from February 2011 onwards.
Division Bench Finds No Reason to Interfere
Before the appellate Bench, Lall contended that the contractual clause limiting compensation to ₹25 per square foot per month was never intended to shield a builder whose own negligence caused the delay. He argued that the provision applied only in situations where the developer abandoned the project or was otherwise unable to deliver possession within the stipulated period.
The Court was not persuaded.
Observing that appellate scrutiny under Section 37 of the Arbitration and Conciliation Act is limited, the Bench held that the arbitrator’s interpretation of the agreement could not be described as unreasonable or perverse.
The judges further noted that Lall had not successfully established his claim for higher damages. Documents relied upon by him, including lease deeds and property market material, had not been proved in accordance with legal requirements. Since both the arbitrator and the single judge had rejected the claim on factual grounds, the Division Bench found no basis to revisit those findings.
With those conclusions, the appeal was dismissed, bringing the litigation over the delayed handover to a close.
