Delhi HC Rejects Advocate's Plea For Market-Rate Compensation For Delayed Possession Of DLF Office Units

The Delhi High Court has recently dismissed an advocate's appeal seeking higher compensation for the delayed possession of four commercial office units purchased from DLF Home Developers Limited.

A Division Bench of Justices V. Kameswar Rao and Vinod Kumar upheld compensation at ₹25 per sq. ft. per month. The Court rejected the plea to enhance it to ₹200 per sq. ft. per month on the basis of alleged market rental rates.

"The interpretation given by the learned Arbitrator to Clause 11.4... has been accepted by the learned Single Judge. We do not find the interpretation given by the learned Arbitrator to be unreasonable or perverse for us to interfere in this appeal," the bench ruled.

The appeal was filed by advocate Chander Mohan Lall. He had purchased four office units from DLF under agreements executed in May 2006.

Under the agreements, possession was to be delivered within 36 months. The agreements also provided compensation of ₹25 per sq. ft. per month in certain cases of delay.

Lall argued that the final instalment became payable only after DLF informed him that it had obtained the Occupancy Certificate. According to him, that communication was received only on January 12, 2011.

DLF disputed the claim. It maintained that possession could not be handed over because the final instalment and certain other charges remained unpaid.

The dispute was referred to arbitration. Possession of the units was eventually handed over in November 2014 after proceedings before the High Court.

In an award delivered in March 2018, the arbitrator held that DLF had failed to prove that it informed Lall about the Occupancy Certificate before January 12, 2011. Compensation was therefore awarded at ₹25 per sq. ft. per month from June 2009 to January 2011. Interest was also granted on the compensation amount.

The arbitrator, however, found that both sides had contributed to the delay after January 2011. Compensation for that period was therefore denied.

Lall challenged the award before the High Court. A Single Judge partly accepted the challenge and extended the compensation period until possession was handed over in November 2014. However, the Judge upheld the arbitrator's interpretation of the compensation clause and retained the rate of ₹25 per sq. ft. per month.

In the present appeal, Lall sought compensation based on prevailing market rentals.

The Division Bench was not persuaded. It noted that the documents relied upon to establish higher rental values had not been proved in accordance with law. The Court also found no reason to interfere with the arbitrator's interpretation of the agreement.

The appeal was accordingly dismissed.

For Appellant (Chander Mohan Lall):  Advocates Nancy Roy, Ananya Chug and Annanya Mehan.

For Respondent (DLF Home Developers Limited): Senior Advocate B.B. Gupta with Advocates Vishnu Kant and Karan Jain.