Delhi Development Authority vs Sanjay Tyagi

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 05.10.2026
# CNR No. DLHC010479402026
+ FAO 329/2026 & CM APPL. 68922/2026
DELHI DEVELOPMENT AUTHORITY .....Appellant
Through: Mr. Sanjay Vashishtha, SC with
Mr. Siddharth Goswami,
Advocate.

versus

SANJAY TYAGI .....Respondent
Through: Mr. Armaan Verma, Advocate

CORAM:
HON'BLE MR. JUSTICE MANOJ KUMAR OHRI

JUDGMENT (ORAL)
CM APPL. 68924/2026 (delay in re-filing)
1. By way of the present application, the applicant/appellant seeks
condonation of delay of 52 days in re-filing the appeal.
2. For the reasons stated in the application, the same is allowed
and the delay of 52 days in re-filing the appeal is condoned.
3. Accordingly, the present application stands disposed of.
CM APPL. 68923/2026 (exemption)
1. Allowed, subject to all just exceptions.
2. The present application is disposed of in the above terms.
FAO 329/2026 & CM APPL. 68922/2026 (stay)
1. The present appeal under Section 37 of the Arbitration and
Conciliation Act, 1996 (hereinafter the “Arbitration Act”) has been
Signature Not Verified
FAO 329/2026 Page 1 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36

preferred by the appellant, i.e. the Delhi Development Authority,
assailing the judgment dated 10.03.2026 passed by the learned District
Judge-01, South-West District, Dwarka Courts in ARBTN No.
5/2025 , whereby the petition of the appellant under Section 34 of the
Arbitration Act against the arbitral award dated 11.01.2025 was
dismissed. The challenge is confined to the interest and costs granted
under the impugned award to the respondent/ Sh. Sanjay Tyagi .
2. Briefly stated, the facts stated in the statement of claim were
that the appellant conducted an e-auction on 28.07.2016 for the
allotment of kiosks on a monthly licence fee basis. The respondent
participated in the same and was declared the highest bidder for kiosk
nos. 1, 2 and 6 at Model Plaza, Sector-12, Dwarka, New Delhi . The
appellant thereafter issued offer letters allotting the concerned kiosks
to the respondent at a licence fee of Rs.10,536/- per month for each
kiosk. The offer letters required the respondent to deposit six months’
advance licence fee, and recorded that possession would be handed
over only after receipt of the same. The respondent deposited
Rs.3,12,921/- towards security money and advance licence fee. The
possession letters dated 27.02.2017 made the licence fee payable from
the date of physical possession, provided for interest @ 15% per
annum on delayed payment of licence fee, and requested the
appellant’s Executive Engineer to hand over physical possession “ after
completion of electricity, water, sewage system including other
facilities ”. Physical possession was never handed over, and vide letters
dated 19.08.2021 and 30.11.2021, the appellant cancelled the
allotment on the ground that the respondent had neither taken
Signature Not Verified
FAO 329/2026 Page 2 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36

possession nor paid the licence fee.
3. The disputes were referred to arbitration. The respondent
claimed, inter alia , a declaration that the termination was illegal,
possession of the concerned kiosks, and interest on his deposit, while
the appellant raised a counter claim for licence fee along with future
interest @ 12% per annum. The learned Sole Arbitrator held that the
appellant had undertaken to provide basic amenities before handing
over possession, that the respondent was justified in not taking
possession in their absence, that no licence fee had fallen due, and that
the termination without a show cause notice was illegal. The plea of
the appellant that the allotment was on an “as is where is” basis was
rejected along with its counter claim. With respect to issue no. 7
concerning the entitlement of the respondent to costs and interest, the
learned Sole Arbitrator, invoking Section 31(7) of the Arbitration Act,
granted interest @ 12% per annum on the amount deposited from the
date of the possession letter, i.e. 27.02.2017, till the handing over of
possession. The respondent was also held entitled to the costs of the
arbitral proceedings.
4. The appellant accepted the findings on all other issues and
challenged the impugned award under Section 34 of the Arbitration
Act only qua issue no. 7, primarily on the grounds that, being a public
authority, it would suffer an erosion of public money, and that the
interest and costs awarded were excessive. By way of the impugned
judgment, the learned District Judge dismissed the appellant’s Section
34 petition, holding that the learned Sole Arbitrator had given valid
reasons, and that the appellant had retained the respondent’s six
Signature Not Verified
FAO 329/2026 Page 3 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36

months’ licence fee without handing over physical possession of the
concerned kiosks.
5. Learned counsel for the appellant contends that the rate of 12%
per annum has no rational basis, that the learned District Judge
wrongly upheld it with reference to Section 31A(2) of the Arbitration
Act, which deals only with costs, and that the post-award interest
deserves to be reduced. Insofar as costs are concerned, it is contended
that costs of Rs.5,00,000/- were awarded without any documentary
proof.
6. Per contra , learned counsel for the respondent supports the
impugned judgment and submits that the appellant has retained the
advance licence fee deposited by the respondent since 2017 without
ever handing over possession, and that the interest and costs have
rightly been granted.
7. I have heard the learned counsels for the parties and perused the
record.
8. The scope of interference in an appeal under Section 37 of the
Arbitration Act is well settled. The Supreme Court in MMTC Ltd. Vs.
1
Vedanta Ltd. held as under:
“ 14. As far as interference with an order made under Section
34, as per Section 37, is concerned, it cannot be disputed that such
interference under Section 37 cannot travel beyond the restrictions
laid down under Section 34. In other words, the Court cannot
undertake an independent assessment of the merits of the award, and
must only ascertain that the exercise of power by the Court under
Section 34 has not exceeded the scope of the provision. Thus, it is
evident that in case an arbitral award has been confirmed by the
Court under Section 34 and by the Court in an appeal under Section

1
(2019) 4 SCC 163
Signature Not Verified
FAO 329/2026 Page 4 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36

37, this Court must be extremely cautious and slow to disturb such
concurrent findings. ”

9. Tested on this anvil, the plea of the appellant raised before the
learned District Judge that it is a public authority does not advance its
case. None of the grounds under Section 34 of the Arbitration Act
turns on the status of the party against whom an award is made. The
appellant entered into a commercial arrangement with the respondent
and is bound by the consequences of its breach like any other
contracting party.
10. Insofar as interest is concerned, the appellant, by its own offer
letters, made the deposit of six months’ advance licence fee a
precondition for handing over possession, and by its own possession
letters, made the licence fee payable only from the date of physical
possession. The respondent deposited the amount, possession was
never handed over, and the appellant has retained the money ever
since. Interest in such circumstances is nothing but compensation to
the respondent for having been kept out of his money. As regards the
rate, Section 31(7)(a) of the Arbitration Act leaves it to what the
arbitral tribunal “deems reasonable”. The appellant itself stipulated
interest @ 15% per annum on delayed payment of licence fee, and
itself sought interest @ 12% per annum in its counter claim. The very
same rate can hardly be called unreasonable when awarded against it.
11. It is true that the learned District Judge has referred to Section
31A(2) of the Arbitration Act while upholding the grant of interest.
However, the impugned award expressly traces the grant of interest to
Section 31(7) of the Arbitration Act, and the conclusion of the learned
Signature Not Verified
FAO 329/2026 Page 5 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36

District Judge stands on the retention of the licence fee without
handing over possession. This imprecise reference cannot be held to
vitiate the impugned judgment in its entirety. The appellant has failed
to show any circumstance warranting modification of the post-award
interest beyond reiterating that the rate is high.
12. With respect to costs, Section 31A of the Arbitration Act vests
the arbitral tribunal with the discretion to determine whether costs are
payable and their amount. The learned Sole Arbitrator has duly
recorded reasons for granting costs, namely that the respondent was
precluded from commencing his business while the appellant retained
his money. Whether the costs so awarded are reasonable is a matter
within the discretion of the learned Sole Arbitrator, and no ground has
been made out before this Court to warrant interference with the
exercise of such discretion.
13. Considering all the above, this Court finds no infirmity in the
impugned judgment or the impugned award. Accordingly, the present
appeal is dismissed.
14. The pending application is also disposed of in the above terms.


(MANOJ KUMAR OHRI)
JUDGE
OCTOBER 05, 2026
nb
corrected and released on 19.10.2026
Signature Not Verified
FAO 329/2026 Page 6 of 6

Digitally Signed
By:NIJAMUDDEEN ANSARI
Signing Date:19.10.2026
17:33:36