National Highways Authority Of India vs Atlanta Infra Assets Limited Formerly Known As Balaji Tollways Limited
- Court
- Delhi High Court
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 11.08.2026
Judgment pronounced on: 04.11.2026
# CNR No. DLHC010037122017
+ O.M.P. (COMM) 27/2017, I.A. 6628/2018, I.A. 8715/2024, I.A.
17060/2025, I.A. 29910/2025, I.A. 30313/2025 & I.A.
1234/2026
NATIONAL HIGHWAYS AUTHORITY OF INDIA
.....Petitioner
Through: Ms. Tanu Priya Gupta and Ms.
Khushi Sharma, Advs.
versus
ATLANTA INFRA ASSETS LIMITED FORMERLY KNOWN
AS BALAJI TOLLWAYS LIMITED .....Respondent
Through: Dr. Amit George, Mr. Chirag
Shroff and Mr. Zubin John,
Advs.
# CNR No. DLHC013429322016
+ O.M.P. (COMM) 51/2017
ATLANTA INFRA ASSETS LTD. .....Petitioner
Through: Dr. Amit George, Mr. Chirag
Shroff and Mr. Zubin John,
Advs.
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
.....Respondent
Through: Ms. Tanu Priya Gupta and Ms.
Khushi Sharma, Advs.
# CNR No. DLHC010925302018
+ OMP (ENF.) (COMM.) 58/2018, EX.APPL.(OS) 629/2019,
EX.APPL.(OS) 1015/2019, EX.APPL.(OS) 3839/2022,
EX.APPL.(OS) 1218/2023, EX.APPL.(OS) 2074/2024,
EX.APPL.(OS) 415/2025, EX.APPL.(OS) 1018/2025,
EX.APPL.(OS) 452/2026 & EX.APPL.(OS) 3776/2022
ATLANTA INFRA ASSETS LTD. .....Decree Holder
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 1 of 77
Through: Dr. Amit George, Mr. Chirag
Shroff and Mr. Zubin John,
Advs.
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
.....Judgement Debtor
Through: Ms. Tanu Priya Gupta and Ms.
Khushi Sharma, Advs.
CORAM:
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT
% 04.11.2026
O.M.P. (COMM) 27/2017 & O.M.P. (COMM) 51/2017
A. INTRODUCTION
1
1. The present dispute arises out of a Build Operate Transfer
2
highway concession awarded by National Highway Authority of India
3
to Atlanta Infra Assets Limited for widening and improving
approximately 40.8 km of the Nagpur–Kondhali section of National
Highway-6 from two lanes to four lanes, at a project cost of Rs.168
crore with NHAI for grant of Rs.57.11 crore.
2. The present cross objections under Section 34 of the Arbitration
4
and Conciliation Act, 1996 have been filed both by Atlanta and NHAI
challenging the Award dated 29.09.2016.
1
“BOT” hereinafter
2
“NHAI” hereinafter
3
“ATLANTA” or “Atlanta” hereinafter
4
“the Act” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 2 of 77
3. Shorn of unnecessary details, this is a case of competing
attribution of delay, where each side seeks to place responsibility for
the prolonged completion of the project upon the other. Additionally,
the present controversy also pertains to award of substantial
prolongation compensation to ATLANTA by the Arbitral Tribunal.
4. ATLANTA attributes the delay to NHAI, whereas NHAI
maintains that the delay was occasioned by the ATLANTA’s own
shortcomings. The dispute, therefore, essentially turns on the question
of causation and responsibility for the delay for the 1021 days delay in
5
achieving the Provisional Commercial Operation Date and the
consequential award of prolongation compensation in favour of
ATLANTA.
5. As the scheduled COD of 05.12.2008 had already lapsed and the
project remained incomplete, ATLANTA had begun raising its claims
before the Independent Consultant and NHAI from 12.03.2009.
6. Thereafter, on 04.09.2011/07.09.2011, ATLANTA formally
sought amicable resolution, which was a contractual precondition to
arbitration under Article XXXIX of the Concession Agreement.
7. The dispute further crystallised when NHAI levied damages for
delayed PCOD and continued to attribute the delay to ATLANTA.
After the contractual resolution mechanism failed, ATLANTA invoked
arbitration on 29.11.2012 under Clause 39.4.
5
“PCOD” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 3 of 77
B. FACTUAL MATRIX
8. Following dates are relevant for the purpose of adjudicating the
matter:
“i. 09.12.2005 – Execution of the Concession Agreement.
ii. 06.06.2006 – Appointed Date and commencement of the
Concession Period
6
iii. 05.12.2008 – Scheduled Commercial Operation Date /
stipulated date for completion of the Project
v. 22.09.2011 – PCOD achieved
vi. 1021 days – Delay in achieving the PCOD beyond the
stipulated COD”
9. The delay in achieving PCOD was 1021 days. The concession
period was 20 years from the Appointed Date.
10. The following clauses of concession agreement dated 22.11.2005
are relevant to the issues of present controversy.
“1.2 Interpretation
In this Agreement, unless the context otherwise requires,
(k) the schedule to the Agreement form an integral part of the
Agreement and will be in full force and effect as though they were
expressly set out in the body of the agreement.
1.4 Priority of Contract Documents and Errors/Discrepancies
1.4.1- The several documents forming this Agreement are to be
taken as mutually explanatory to one and, unless otherwise
expressly provided elsewhere in this Agreement, the priority of the
following documents shall, in the event of any conflict between them,
be in the order they are set out;
(i) this Agreement;
(ii) all other documents forming part of this Agreement.
6
“COD” hereinafter
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 4 of 77
i.e., documents at (i) above shall prevail over the documents at (ii)
above.
1.4.2 In case of ambiguities or discrepancies within this Agreement,
the following shall apply:
(i) between two clauses of this Agreement, the provisions of the
specific clause relevant to the issue under consideration shall
prevail over those in other clauses;
(ii) between the Clauses and the Schedules, the Clauses shall
prevail, save as otherwise expressly set forth in Clause 1.4.1;
(iii) between the written description on the Drawings and the
specifications and standards, the latter shall prevail.
II. SCOPE OF PROJECT
2.1 The Project shall be executed on the Site, which is described in
Schedule 'A' of this Agreement. The Scope of the Project shall
include performance and execution by the Concessionaire of all
design, engineering, maintenance of the Project Highway as
described in Schedule 'B' and Schedule 'C' of this Agreement. It shall
include improvement, operation and maintenance including
strengthening and widening of existing 2-lane road to 4-lane dual
carriageway from km 9.200 - km 50.000 of NH-6 (Nagpur -
Kondhali Section) in the State of Maharashtra in accordance with
the Specifications and Standards set forth in Schedule 'D' and
operation and maintenance thereof in accordance with Schedule 'V'.
It shall also include the performance and fulfilment of other
obligations by the Concessionaire under this Agreement.
The Concessionaire shall undertake its obligations at its own cost
and risk.
CHAPTER-III OBLIGATIONS AND UNDERTAKINGS
IX. OBLIGATIONS OF THE CONCESSIONAIRE
9.1 The Concessionaire shall, at its own cost and expense, observe,
undertake, comply with and perform, in addition to and not in
derogation of its obligations elsewhere set out in this Agreement, the
following:
(xxiv) after receiving possession of the Site or part thereof, ensure
that such Site remains free from all encroachments and take all steps
necessary to remove encroachments, if any;
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 5 of 77
(xxviii) work in optimizing the use of existing Right of Way handed
over to them. Identify and submit proposal for acquisition of
additional land in accordance with the requirement of concerned
State Government revenue department or the relevant LA Act, and
pursue with the GOMH for early accomplishment of Land
Acquisition;
(xxix) make all necessary arrangements for accomplishing the tasks
of physical removal of the encroachments at his own cost;
(xxx) cut the trees and carry out compensatory afforestation and
assist NHAI in obtaining the environmental clearances and permits
for the Project Highway and shall do all legwork required in this
connection;
(xxxi) carry out shifting of utility services.
X. OBLIGATIONS OF NHAI
10.1 NHAI agrees to observe, comply and perform the following:
(i) enable access to the Site to the Concessionaire, free from all
Encumbrances, in accordance with this Agreement;
(ii) permit peaceful use of the Site by the Concessionaire as licensee
under and in accordance with the provisions of this Agreement
without any let or hindrance from NHAI or persons claiming
through or under it;
(ix) operate and maintain the Project Highway during the
Development Period, at its own cost and expense, in a manner that
the level of service is at no time inferior to the level prevailing on
the date when bids were received for this Concession;
(x) observe and comply with its obligations set forth in this
Agreement;
(xi) take all necessary steps towards accomplishment of acquisition
of additional land. NHAI shall bear the cost of additional land;
(xii) coordinate with GOMH authorities for completing the legal
requirements and maintaining law and order during removal of
encroachments by the Concessionaire;
(xiii) provide necessary support to the Concessionaire in obtaining
necessary clearances/permissions/permits in respect of tree cutting,
compensatory afforestation, shifting of all types of utility services,
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 6 of 77
construction of ROB/RUB on Railway lines and rehabilitation and
resettlement;
(xiv) bear all expenses as per demand note raised by the concerned
government or other agencies in respect of environmental
clearances, tree cutting, compensatory afforestation, shifting of all
types of utility services, construction of ROB/RUB on Railway lines
and rehabilitation and resettlement;
(xvi) obtain all necessary environmental clearances/permissions in
respect of Environmental Clearances.
XII. DISCLAIMER
12.1 The Concessionaire acknowledges that prior to the execution
of this Agreement, the Concessionaire has, after a complete and
careful examination, made an independent evaluation of the traffic
volumes, Specifications and Standards, Site and all the information
provided by NHAI and has determined to the Concessionaire's
satisfaction the nature and extent of such difficulties, risks and
hazards as are likely to arise or may be faced by the Concessionaire
in the course of performance of its obligations hereunder.
12.2 The Concessionaire acknowledges and hereby accepts the risks
of inadequacy, mistake or error in or relating to any of the matters
set forth in Clause 12.1 above and hereby confirms that NHAI shall
not be liable for the same in any manner whatsoever to the
Concessionaire, the Consortium Members or their associates.
CHAPTER-IV
PROJECT DEVELOPMENT AND OPERATIONS
XIII. USE AND DEVELOPMENT OF THE SITE
13.2 NHAI hereby grants to the Concessionaire for the Concession
Period the right and licence to enter upon all real estate comprised
in the Site briefly described in Schedule 'A' and to survey, design,
engineer, procure, construct, operate and maintain the Project
Highway including the Project Facilities in accordance with the
provisions of this Agreement. Such right and licence of the
Concessionaire to use the Site shall be subject to:
13.2.1-…………
13.2.2-…………..
Clause 13.5.1 - Existing Right of Way :
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 7 of 77
Existing Right of Way to the Site shall be made available to the
Concessionaire pursuant hereto by NHAI free from all
encumbrances and without the Concessionaire being required to
make any payment to NHAI on account of any costs, expenses and
charges for use of such sites for the duration of the Concession
Period, save and except as otherwise expressly provided in this
Agreement. NHAI shall procure for the Concessionaire access to the
Existing Right of Way, free from encumbrances, not later than 150
(one hundred and fifty) days from the date of this Agreement.
Provided, however, if NHAI does not enable such access to any part
or parts of the Existing Right of Way for any reason other than a
Force Majeure Event or breach of this Agreement by the
Concessionaire, NHAI shall pay to the Concessionaire damages at
the rate of Rs. 1000 (Rupees One Thousand) per month per 1000
(one thousand) sq. meters or part thereof, if such area is required
by the Concessionaire for Construction Works. Such damages shall
be raised to Rs. 2000 (Rupees Two Thousand) per month after COP
if such area is essential for the smooth and efficient operation of the
Project Highway. Provided further that the Completion Certificate
or the Provisional Certificate, as the case may be, for the Project
Highway shall not be affected or delayed as a consequence of such
parts of the Existing Right of Way remaining under construction
after the Scheduled Project Completion Date.
Clause 13.5.2 - Additional Right of Way:
Additional ROW shall be made available to the Concessionaire as
per the Handing Over Schedule 'H' free from all encumbrances and
without the Concessionaire being required to make any payment to
NHAI on account of any costs, expenses and charges for the use of
such AROW for the duration of the Concession Period, provided the
Concessionaire has fulfilled his obligations pursuant to Clause 9.1
(xxviii). On or after the Appointed Date, the Concessionaire shall
commence, undertake and complete all Construction Works on the
Project Highway in accordance with this Agreement.
CHAPTER-VII
SUSPENSION AND TERMINATION
XXX. MATERIAL BREACH AND SUSPENSION
30.1 If the Concessionaire shall be in Material Breach of this
Agreement, NHAI shall be entitled, in its sole discretion and without
prejudice to its other rights and remedies under this Agreement
including its right of Termination hereunder, to (i) suspend all or
any of the rights of the Concessionaire under this Agreement
including the Concessionaire's right to collect and appropriate all
Fees...
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 8 of 77
XXXI. COMPENSATION FOR BREACH OF AGREEMENT
31.1 In the event of the Concessionaire being in material default of
this Agreement and such default is cured before Termination, the
Concessionaire shall pay to NHAI as compensation all direct
additional costs suffered or incurred by NHAI arising out of such
material default by the Concessionaire, in one lump-sum within 30
(thirty) days of receiving the demand or, at the Concessionaire's
option, in 3 (three) equal semi-annual instalments with interest @
SBIPLR plus 2% (two percent).
31.2 In the event of NHAI being in material default of this Agreement
and such default is cured before Termination, NHAI shall pay to the
Concessionaire as compensation all direct additional costs suffered
or incurred by the Concessionaire arising out of such material
default by NHAI, in one lump-sum within 30 (thirty) days of
receiving the demand or, at NHAI's option, in 3 (three) equal semi-
annual instalments with interest @ SBIPLR plus 2% (two percent).”
11. Following were the issues framed before the Arbitral Tribunal:
“1: Compensation on account of delay in handing over existing
row(EROW).
(a): Whether the delay in completion of the work was caused on
account of breaches of terms and conditions of the Concession
Agreement (CA) and act of omissions by the Claimant or by the
Respondent?
(b): Whether Concessionaire has submitted any programme/ plan in
the first year of commencement of work?
(c): Depending on answer to Issue 1(a) and (b) above, whether the
Claimant is entitled to Claim Nos. 1, 3, 4, 5, 6, 8, and 10 and if so,
to what extent?
2(a): Whether the Respondent delayed payment of the maintenance
work for a period of 40 months?
2(b): If the answer to 2(a) is in the affirmative, whether the Claimant
is entitled to get interest on delayed payment as claimed by it in
Claim No. 7, and if so, for what amount?
3(a): Whether the Respondent unilaterally reduced toll length and
toll fees dehors the terms of the CA?
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 9 of 77
3(b): If the answer to 3(a) is in the affirmative, whether the Claimant
is entitled for compensation on account of loss in Toll revenue due
to reduction in toll fee as claimed in Claim No. 9 by it, and if so, to
what extent?
4(a): Whether the Respondent has delayed the disbursement of
Grant in terms of conditions of CA?
4(b): If the answer to 4(a) is in the affirmative, whether Claimant is
entitled to Claim No. 2, and if so, to what amount?
5: Whether the claims made by the Claimant are time barred?
6: Whether the Claims made by the Claimant are not maintainable
on the facts and in the circumstances of the case?
7: Whether the Claimant is entitled to interest and cost as claimed
by it in Claim Nos. 11 and 12 respectively?”
C. FINDINGS OF THE ARBITRAL TRIBUNAL
12. In order to decide the above issues, the Arbitral Tribunal instead
of deciding issues forming every claim in isolation, at the outset,
determined the overarching questions concerning responsibility for the
1021-day delay i.e. (i) timely availability of the Additional Right of
Way, (ii) compliance by ATLANTA with its obligations relating to land
acquisition under Clause 9.1(xxviii), (iii) attribution of delays arising
from forest land and shifting of utilities, (iv) NHAI’s entitlement to levy
damages under Clause 15.4, (iv) the existence of any valid right of
termination, (iv) and the effect of the ATLANTA’s alleged failure to
submit a revised construction programme.
13. The findings related to above issues constituted the factual and
contractual foundation for the subsequent claim wise adjudication.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 10 of 77
14. Accordingly, after deciding these common issues, the Tribunal
proceeds to conclusively examine ATLANTA’s entitlement under
Claim Nos. 1, 3, 4, 5, 6, 8 and 10 in light of the observation already
reached. These relevant findings which formed the basis of claim wise
adjudication by the learned Arbitral Tribunal are reproduced below:
“7.04 The Claimant made an allegation about a
discrepancy/tampering in one of the documents relied upon by the
Respondent, and in that respect stated, “The Claimant, in the
interest of transparency and justice, intends to initiate appropriate
proceedings separately”. It has been noted that the Respondent is
silent about the allegation. Under the circumstances the matter of
tampering, if any, has not been adjudicated by this Tribunal.
7.05 The Respondent, during the course of arguments, did not
press the issue as to whether the Claims were time barred or not.
Issue no. 5 therefore stands deleted.
7.06 The Concession Agreement Article XXXIX “Dispute
Resolution” provides for the procedure of Amicable Resolution and
thereafter Arbitration in accordance with the Arbitration and
Conciliation Act 1996. It appears that the Claimant had raised
disputes, attempted for amicable resolution and thereafter invoked
arbitration.
Inviting reference to the provision of the Limitation Act, 1963, it has
been noted that the Claims, allowed hereunder, are not time barred
under the circumstances of the cases.
8.01 The Claimant contended that the Respondent employed the
Independent Consultant (IC) after a delay of approximately 140
days. As the activities of Construction are to be done with prior
approval/ consent of the IC the delay in appointment of IC had
caused delay in execution of important activities. The Clause 20.1
of Concession Agreement (CA) says that the IC is to be appointed
not later than 120 days of the date of Agreement, i.e., on or before
08.04.2006. But the IC was appointed on 29.08.2006.
8.02 In accordance with the provisions of the Contract, the
schedule of handing over of the Site was mentioned. In terms of
Clause 13.5.1 of the Concession Agreement "... NHAI shall procure
for the Concessionaire access to the Existing Right of Way, free from
Encumbrances, not later than 150 (one hundred and fifty) days from
the date of this Agreement. Provided however, that if NHAI does not
enable such access ...." In view of such provision it appears that
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 11 of 77
NHAl had agreed to handover the Existing Right of Way 30 days
before the Financial close. In terms of Clause 13.5.2, "Additional
Right of way shall be made available to the Concessionaire as per
the Handing over Schedule 'H' free from all encumbrances ...", and
as stated in the Schedule 'H' the Additional Right of Way was agreed
to be made available within 12 months from the date of signing the
Concession Agreement. Accordingly, it was agreed by the parties
that the Additional Right of Way was to be made available before
expiry of approximately 6 months from the stipulated date of
Financial Close subject to certain obligations to be fulfilled by the
7
Claimant pursuant to Clause 9.1(xxviii) .
8.03 It has been noted that the "Appointed date" means the date 180
days after signing of the Concession Agreement and shall be deemed
to be the date of Commencement of the Concession period. The
Respondent contended that, as the conditions precedent are to be
satisfied before the Appointed date, the very declaration of
Appointed date as 06.06.2006 is an indication that the obligations
from the Respondent side are fulfilled for the commencement of
work. The Claimant, citing the provisions of clauses 13.5.1 & 13.5.2,
Schedule “A”, Site handing over Schedule “H”, Article X i.e,
Obligations of NHAI etc., has contended that it was the failure of the
Respondent which resulted in non-availability of Site in accordance
with the Schedule given in the Contract.
8.04 In accordance with the Concession Agreement Clause
13.5.1, the Existing Right of Way, free from encumbrances, was
required to be made available to the Claimant not later than 150
days from the date of the Agreement. Accordingly, the latest date of
making available the Existing Right of Way was 08.05.2006.
8.05 The Claimant contended that the Respondent handed over
the Existing Right of Way on paper on 12.01.2006, but actually the
Site was full of encroachments/structures/ utilities which were not
possible to be removed resulting in non-availability of land on
Existing Right of Way in accordance with the Schedule 'A'. The
Respondent contended that the Claimant failed to appreciate the
true meaning of the word 'encumbrances', which, as per Agreement,
means any encumbrances such as mortgage, charge, pledge, lien,
hypothecation, security interest, assignment, privilege or priority of
any kind having the effect of security or other such obligations and
shall include without limitation any designation of loss payees or
beneficiaries or any similar arrangement under any insurance
7
9.1(xxviii) work in optimizing the use of existing Right of Way handed over to them. Identify and
submit proposal for acquisition of additional land in accordance with the requirement of concerned
State Government revenue department or the relevant LA Act, and pursue with the GOMH for early
accomplishment of Land Acquisition
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 12 of 77
policy pertaining to the Project Highway. As stated by the
Respondent, the Claimant has failed to understand the meaning
of the word encumbrances and attempted to establish that
encumbrances are same as encroachment which is not correct.
Inviting reference to the Clause 9.1 (xxiv) the Respondent contended
that it was the responsibility of Claimant to remove all types of
encroachments/ structures/utilities. The Clause 9.1 (xxiv) reads as
follows:
"IX. OBLIGATIONS OF THE CONCESSIONAIRE
9.1 The concessionaire shall at its own cost and expense observe,
undertake, comply with and perform, in addition to and not in
derogation of its obligations set out elsewhere in this Agreement, the
following:
(i)
….. ……
(xxiv) after receiving possession of the site or part thereof, ensure
that such Site remains free from all encroachments and take all steps
necessary to remove encroachment, if any" (emphasis supplied)
The Respondent submitted that they had extended necessary
administrative support by writing number of letters to district
administration and police authorities. Respondent stated, "In any
case, the bogey of encroachments or physical obstructions is grossly
exaggerated and there are plenty of fronts available to begin with
and also to progress very well.... EROW was very much available
between chainage +33.600 and +34.150 and +47.000 and +48.500
since the same was handed over long ago. As said earlier, the
problem of encroachment or physical obstructions pertains to only
5.41 Kms out of 40 Kms and nothing prevented the Claimant to take
up the work on the remaining lands."
8.06 After perusing the other correspondences made by the
Independent "Consultant and the Respondent, it has been found that
there was a delay in removal and shifting of some of the utilities,
religious structures etc., from the existing carriageway due to non
availability of Additional land where those could be relocated. But
as discussed in the succeeding paragraphs the Respondent has been
held responsible for the delay in acquisition/ handing over of the
Additional land for AROW.
8.07 Therefore, the Respondent is being held responsible for the
delay in shifting and relocation of such utilities for which additional
land was necessary, and in turn responsible for delay in completion
of the Project.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 13 of 77
8.08 In accordance with the Agreement the Respondent was liable
to pay damages to the Claimant for delay in handing over the
Existing ROW. In the Contract documents the Respondent had
included Schedule A i.e., Site of the Project wherein the average
land width of Existing Right-of-Way (ROW) was mentioned at
different old chainages. It was envisaged that additional land would
be required to complete the Project. The available Av. Land width
on EROW (old chainage) was mentioned in the Schedule A with a
8
disclaimer that the Respondent shall not be held responsible for any
inaccuracy in the information provided. With regard to the
Claimant's quantification of area of EROW the Respondent stated,
"Table in Pg. 10 of SOC is not proved; quantification statement in
Pg. 70 of SOC, Annexure-l, is not proved by any authentic record or
joint measurement". It appears that all over the length of the
Existing ROW, except for the chainages where realignment of the
road was required, some activity/ work was possible to be taken up
by the Claimant depending upon the actual width of land available
on EROW. It has also been noted that at the portion, where the
realignment was to be done, the (non) availability of EROW was
irrelevant. It is a matter of fact that there was inadequacy and/or
mistake in the data made available by the Respondent about the
average land width available on EROW. But the Claimant by the
Disclaimer referred above had agreed not to make liable the
Respondent for such mistakes/ inadequacies. Under such
circumstances the Claimant cannot be held entitled for any damages
on account of non-availability of EROW during the period of
construction. Besides, there is no record stating essential
8
3 XII. DISCLAIMER
12.1 The Concessionaire acknowledges that prior to the execution of this Agreement, the
Concessionaire has after a complete and careful examination made an Independent evaluation of the
traffic volumes, Specifications and Standards, Site and all the Information provided by NHAI and
has determined to the Concessionaire's satisfaction the nature and extent of such difficulties, risks
and hazards as are likely to arise or may be faced by the Concessionaire In the course of performance
of its obligations hereunder.
12.2 The Concessionaire acknowledges and hereby accepts the risks of inadequacy, mistake or error
in or relating to any of the matters set forth in Clause 12.1 above and hereby confirms that NHAI
shall not be liable for the same in any manner whatsoever to the Concessionaire, the Consortium
Members or their associates.
Schedule A, 1.2, Disclaimer
The data presented in this schedule is for an initial understanding and guidance of the
Concessionaire. The data Is based on DPR prepared by the design consultant during 2002-2003.
NHAI will not be responsible for any Inaccuracy in the Information provided and shall not be liable
for or be bound by the data used by the Concessionaire in evaluating the project viability. The
concessionaire will carry out his own independent surveys for assessing actual position of the project
corridor.
The concessionaire acknowledges that prior to the execution of this Agreement, the Concessionaire
has satisfied himself (based on his own Independent assessment) of the survey data, specifications
and standards, site and all information provided by the NHAI. The concessionaire acknowledges
and accepts the difficulties, risks and hazards likely to arise during the course of performance of his
obligations hereunder.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 14 of 77
requirement of any area on EROW for the smooth and efficient
operation of the Project Highway after the Provisional COD.
In view of the above it has been held that the Claimant is not entitled
to its Claim No. 1 and the same is being rejected.
8.09 The Claimant referred to a letter written by The Respondent
on 07.12.2010, which stated:
"Optimization of Existing Right of Way:
It is identified the stretches where the 4-laning works (only) can be
carried out by the Concessionaire by optimizing the use of existing
ROW. As can be seen from the following table, the Concessionaire
can complete 4-laning works for a length of 36.571 Km. out of a
total length 40.441 Km. within existing ROW.
The list of works, which require additional land, is as of 30.11.2010
follows.
Item Location Unit Total
Qty
1 Main
Km. 16.000 to Km. 16.500 BS;
Km. 33.280 to Km. 34.440 BS;
Km. 46.920 to Km. 48.300 BS;
Km. 3.04
Carriageway
2 Service
Km. 9.200 to Km. 12.950 BS;
Km. 13.950 to Km. 14.300 RHS;
Km. 14.300 to Km. 16.300 RHS;
Km. 18.350 to Km. 16.300 BS;
Km. 21.700 to Km. 22.450 BS;
Km. 23.300 to Km. 24.000 BS;
Km. 25.900 to Km. 27.000 BS;
Km. 29.700 to Km. 30.400 BS;
Km 33.500 to Km. 34.500 BS;
Km. 47.400 to Km. 49.100 BS;
Km. 21.07
Roads and
structures in
service road
portion
3 Underpass Bazargoon village Nos 1
4 Flyover At Kondhali Nos. 1
5 Truck lay By Nos 6
6 Bus Lay By Nos. 12
The Concessionaire could have completed all the other works except
the above, well within the Schedule Project Completion Date.”
8.10 In view of above it appears that sufficient width of land to
accommodate the entire width of the Project facilities was not
available within the actual existing ROW. The Respondent
contended that "for construction of 4-Lane Project Highway, 23 m
to 30 m width is quite adequate". But, it has been noted that the
Schedule B of Concession Agreement, the typical cross section
drawings TCS 1 and TCS 2, shows the required formation width of
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 15 of 77
Project Highway as 24.000 meter and 45.000 meter respectively
which exclude the sloping portion of the embankment, the side
drains, facilities like Truck lay by, Bus bay, land width required for
plantation if any, etc. In view of this it does appear that considerable
area of additional land (Additional Right of Way-AROW) was
required to be acquired to accommodate the proposed Project
facilities.
8.11 The Site handing over schedule as per Schedule H of the
Agreement has been reproduced below:
“Schedule-H
II. SITE HANDING OVER SCHEDULE
The Site shall be handed over as below from the date of signing the
Concession Agreement:
Stretch Length Remarks
(Refer Design
Chainage)
Existing ROW
40.441 Km Within
one
month
Additional
Land wherever
required for the
Project
Highway
including Land
for Base Camp
Within
12
months
Note: The above Handling over Schedule is subject to
accomplishment of all obligations of the Concessionaire as
mentioned in the Request for Proposal(RFP) Document.”
The Respondent contended that "even without fulfilling these
requirements, Respondent had handed over above land in the interest
of the project." But it was not clarified which obligations of the RFP
Document was not fulfilled by the Claimant.
8.12 It is undisputed fact that the required Additional land was not
available to the Claimant in accordance with the Schedule H.
However, the Respondent contended that the delay in acquisition of
the Additional ROW was consequential to the lapses of the Claimant
and the Respondent was not responsible for the delay.
8.13 The Scope of the Project has been stated in Schedule 'B' of
the Agreement. Clause 8.1 of Schedule 'B' reads as under:
" 8 Pre-Construction Activities
8.1 Land Acquisition (LA)
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 16 of 77
The additional land acquisition in few isolated stretches is
foreseen on this project. The cost of LA as intimated by the
concerned agencies shall be borne by NHAI. However, the
Concessionaire shall be involved pro- actively in this regard
submitting relevant LA proposals as per NH Act- 1956 and
pursuing the matter with the concerned State Govt. Revenue
Departments and the concerned private people whose land
is to be acquired. NHAI shall provide all necessary
administrative support in this regard."
The provisions of the Chapter-Ill of the Agreement, i.e., Obligations
and Undertakings are as follows:
"IX. OBLIGATIONS OF THE CONFESSIONAIRE
9.1 The Concessionaire shall at its own cost and expense
observe, undertake, comply with and perform, in addition to
and not in derogation of its obligations elsewhere set out in
this Agreement, the following:
(xxviii) work in optimizing the use of existing Right of Way
handed over to them. Identify and submit proposal for
acquisition of additional land in accordance with the
requirement of concerned State Government revenue
department or the relevant LA Act, and pursue with the
GOMH for early accomplishment of Land Acquisition;"
8.14 After perusing the Statement of Defense and other documents
submitted/ relied upon by the Respondent, it does appear to us that
the Claimant did not commit any default in performing its obligation
to optimize the use of the existing ROW.
8.15 The Claimant had submitted a Land acquisition proposal to the
Respondent on 13.06.2006 stating, "Dear Sir, Please find enclosed
the details (3 sets) of land to be acquired for the above Project. The
survey numbers along with area statement to be acquired are
indicated therein. You are requested to take early action for 3a &
3A Notification please". After perusing the said proposal dated
13.06.2006 along with the maps and statements showing village,
Taluka, Dist, Survey no., area required in hectors, and type of land,
it has been observed that the Claimant had identified the additional
land required and submitted the LA proposal in line with the
requirement under the NH Act 1956. The names of villages
mentioned by the Claimant were, 1 Wadi, 2 Vad Dhamna, 3
Surabuldi, 4 Gondkhairi, 5 Chichbhuvan, 6 Pethdongari, 7 Linga, 8
Mohegao (Khu), 9 Mohegao (Bhu), 10 Satnavri, 11 Panchnavari, 12
Bazargao, 13 Chakdoh, 14 Ringnabuldi, 15 Hardoli, 16
Panjarakate, 17 Dudhala, 18 Kondhali. However, the Claimant had
submitted the said proposal on 13.06.2006 i.e., 6 months and 4 days
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 17 of 77
after the date of signing the Concession Agreement. It was also
noted that the additional land was required to be handed over by the
Respondent within 12 months from the date of signing the
Concession Agreement subject to the fact that the Claimant had
fulfilled its obligation under Clause 9.1(xxviii) of the Agreement
(Refer Clause 13.5.2 reproduced below).
"Clause 13.5.2 Additional Right of Way Additional ROW
shall be made available to the Concessionaire as per the
Handing over Schedule 'H' free from all encumbrances and
without the Concessionaire being required to make any
payment to NHAI on account of any costs, expenses and
charges for the use of such AROW for the duration of the
Concession period provided Concessionaire has fulfilled his
obligations pursuant to Clause 9.1 (xxviii). On or after the
Appointed date, the Concessionaire shall commence,
undertake and complete all Construction works on the
Project Highway in accordance with this Agreement."
8.16 From the voluminous correspondences submitted by both the
Claimant and the Respondent few extracts have been reproduced
below:
On 08.05.2006 the Claimant wrote, "Please find enclosed a copy of
Gazette Notification issued by Gazette of India under 3(a) for the
above project which include 8 villages. We have sent another letter
to NHAI dated 06.12.2005 copy enclosed, seeking for inclusion of
additional villages. So far no action has been taken by NHAI HQ.
We now enclose list of structures involved for acquiring/removal in
the stretch KM 9.00 to 50, for further necessary action in the matter
please."
On 18.10.2006 a Notification under Section 3(A) was published by
MOSRTH notifying a total area of 484725 sqm.
On 08.12.2006, during the Review meeting between Independent
Consultant, Respondent, and Claimant, it was recorded that "9. The
Land Acquisition matters (3A) has been published in the local
papers on 18/11/06;... and 13. The Concessionaire informed that
there is no FOREST LAND involved in the land to be acquired for
widening of the project."
On 11.01.2007 the Respondent wrote to the Superintendent of Land
Record, Spl. Land Acquisition Officer (General), and S.D.O. Arvi,
"It is brought out by our Concessionaire that, there is huge
mismatch/ discrepancy especially in Nagpur district in respect of
existing Right of Way (EROW) as per EROW plans available with
PWD (the then project caretaker organization) & road width data
available with TILRs. It indicates that last acquisition is not being
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 18 of 77
considered by TILR while preparing new acquisition details... In
view of above, please ensure that the existing right of way marked is
correct while preparing J.M.Sheet."
On 17.01.2007 the Respondent wrote to the Claimant, "It is
regretted to note that you have chosen to remain absent despite
undersignees request during one of our very crucial stage of Land
Acquisition i.e., "3C Hearing of Objections" which has resulted in
postponement of the date for 2nd time which is nothing but gross
non compliance of concessionaires obligation as per C.A. Cl no. 9.1-
xxviii...."
On 25.01.2007 the Claimant wrote to the Respondent referring a
letter dated 17.01.2007, "... We assure that we will take care of all
necessary precautions while executing the work."
On 10.10.2007 a Notification under 3(D) was published notifying a
total area of 97686.80 Sqm against 484725 sqm in 3(A).
On 28.08.2008 the Respondent wrote to SLAO confirming that the
land measuring on higher side as per the JMR were entirely deleted
in the notification 3D. The Respondent stated that a supplementary
notification under 3A was in progress.
On 19.02.2009 the Respondent replied to Claimant's letter dated
22/01/2009, stating "... Since, the Land acquisition plan including
draft 3(a) Notification and 3(A) Notification proposal were initially
prepared and submitted by the Concessionaire, the responsibility for
omission of name of village Waddhamana from land acquisition in
3(a) Notification and its amendment, 3(A) Notification and 3(D)
Notification lies with the Concessionaire only..."
But, as stated above, the name of village 'Vaddhamana' was there in
the Claimant's proposal for LA dated 13.06.2006. Thus, it appears
that the allegation of the Respondent vide its letter dated 19.02.2009
was not correct.
8.17 The Respondent described about the status in the light of the
provisions of the NH Act 1956 and contended that the Claimant was
responsible for the delay in acquisition of AROW. The Respondent
stated, "Land acquisition under NHAI Act 1956 is initiated with
notification under section-3(A) of the Act. This notification should
contain details of the land to be acquired with brief description. It
was the responsibility of Concessionaire to prepare a draft which
has to be issued as notification under 3(A) of the Act in the official
Gazette. Claimant had prepared 3(A) Draft Notification for a land
area of 485600 Sqm. The same was published. Next step in the land
acquisition is to conduct survey and measures, take levels, setting
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 19 of 77
out boundaries and intended lines of work etc., under section-3(B)
of NHAI Act 1956, by any authorized person of the Central Govt.
and in this case it is the Claimant himself. Once this exercise is
complete, public objections are invited under section 3(C) of the Act.
Thereafter, Competent Authority under section-3(D) would declare
vesting of land in Govt. of India and this gives right to enter the land.
Relevant provision reads as under:
'3-F- Right to enter into the land where land has vested in
the Central Government-
Where the land has vested in the Central Government under
section 3-D, It shall be lawful for any person authorized by
the Central Government in this behalf, to enter and do other
act necessary upon the land for carrying out the building,
maintenance, management or operation of a national
highway or a part thereof, or any other work connected
therewith."
In our view the NH Act 1956, Sec.3D is not to be read independently
and has to be read along with Sections 3E, 3G and 3H of the Act. It
is after the compensation payable to the land owner is determined
(Sec.3G) paid to him (Sec.3H) that provision of Sec.3E come into
operation. Sec.3E provides for power to take possession of the land
so acquired regarding which compensation has been determined
and paid to the land owner. It is only after when compensation has
been paid to the land owner that competent authority may by notice
in writing direct the land owner or any other person who may be in
possession of such land to surrender or deliver the possession
thereof to the competent authority or any person authorised by it in
this behalf within 60 days of the service of notice. If there is failure
on the part of the land owner or any other person in possession of
land then possession can be taken over by competent authority with
police help by using force.
8.18 The Respondent submitted that "in the process of verification
under section 3(B), it was found that draft notification prepared by
Claimant under 3(A) is defective. Detail of one Revenue village was
totally missing and several new areas of land were added during
3(B) process which was not included in 3(A) Notification. With the
result, 3(D) notification could be finalized only for 94,105 Sqm as
against 485600 Sqm notified under section 3(A). This clearly betrays
how negligent the Claimant was in preparing such an important
notification. As said earlier, it is the duty of Concessionaire under
section 9.1(xxviii) to submit the proposal for acquisition of
additional land in accordance with the relevant Land Acquisition
Act. If this is the type of proposal prepared by the Claimant, it is
amusing how the Claimant could allege that there was delay on the
part of NHAI in giving the additional land. Respondent further
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
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submits that to cure the above defect, it had taken 30 months to re-
notify and acquire the deficit land. Therefore, it is incorrect to allege
that respondent is liable for delay incurred for curing the defects of
Claimant." The Claimant while denying the contentions of the
Respondent put them to the strict proof as to the allegation that the
draft of notification under section 3(A) was defective, missing of one
revenue village, addition of several new areas of land. The Claimant
has also put the respondent to strict proof as to the allegation that
as result of omission and commission by the Claimant, the 3D
notification could be finalized for 94105 sqm as against 485600 Sqm
and that there was no valid reason behind taking 30 months time to
re-notify and acquire the deficit land by the Respondent. The
Claimant submitted that the draft 3D notification prepared by the
Claimant contained the statement of area 485600 Sqm which was
scrutinized and forwarded by the IC and the Project Director of the
Respondent to the Respondent's HQ in New Delhi for Issue in the
Gazette. The Claimant contended that the HQ of the Respondent at
New Delhi deleted the land measuring on higher side as per the JMR
viz.a.viz 3A notification. The Claimant had referred to its letter
dated 03.03.2009 in this regard.
8.19 After perusing the various correspondences with regard to
acquisition of land for additional ROW, it appears to us that the
Claimant had performed its obligation towards identification and
submission of additional land and submission of LA proposal in
accordance with the NH Act/relevant LA Act, and pursued with the
GOMH for early accomplishment of land acquisition.
8.20 It has also been noted that the Respondent had undertaken the
obligation to take all necessary steps towards accomplishment of
acquisition of additional land in the following provision of the
Concession Agreement:
"X. OBLIGATIONS OF NHAI
10.1 NHAI agrees to observe, comply and perform the following:
(i) enable access to the Site to the Concessionaire, free from all
Encumbrances, in accordance with this Agreement;
(ii) permit peaceful use of the Site by the Concessionaire as
licensee under and in accordance with the provisions of this
Agreement without any let or hindrance from NHAI or persons
claiming through or under it;
…….
…….
(x) observe and comply with its obligations set forth in this
Agreement;
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
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(xi) take all necessary steps towards accomplishment of
acquisition of additional land. NHAI shall bear the cost of
additional land;"
8.21 Under the circumstances it appears to us that the delay in
acquisition of additional land (AROW-Additional Right of Way)
required for the Project was due to the procedural activities and
delays at different stages of the GOMH and the Respondent for
which the Claimant cannot be held responsible.
8.22 The Required AROW at Km. 16 to Km. 17 for proposed
realignment of 4- lane Highway included certain area which was
under possession of the Forest Department. The Claimant contended
that The Respondent did not disclose the existence of Forest land
and referred the Schedule 'A' of the Agreement. The Concession
Agreement, Schedule 'A', clause 2.4, Table A-3: Abutting land use,
says,
SI
No.
Section (old chainage) Land Use (Sqm)
Ch.
From
(Km)
Ch. To
(Km)
Road
Length
(Km)
Left Right
3 15.000 16.000 1.000 Agriculture Agriculture
4 16.000 16.200 0.200 Agriculture Agriculture
5 16.200 16.900 0.700 Agriculture Agriculture
6 16.900 17.100 0.200 Agriculture Agriculture
7 17.100 17.600 0.500 Agriculture Agriculture
8 17.600 20.300 2.700 Agriculture Agriculture
9 20.300 22.100 1.800 Agriculture Agriculture
10 22.100 44.100 22.000 Agriculture &
Forest
Agriculture
& Forest
8.23 Referring to an MoM dated 09.01.2007 the Respondent
stated, "Claimant was at first categorical in the meeting held on
09.01.2007 that there was no forest land to be acquired for working
of the project as stated". But, the MoM held between the Respondent
Project Director, Claimant, Consultant Team leader on 09.01.2007
paragraph 7.0 says, "The Concessionaire reiterated their stand that
there is FOREST LAND involved in the land to be acquired for
widening of the project". Thus, it appears to us that the Claimant
was not at fault with regard to their intimation about Forest land by
MoM dated 09.01.2007.
8.24 It appears from the correspondences that initially the
Claimant was under the wrong information that no forest land was
required to be acquired for the proposed Project Highway. The
Respondent on 17.01.2007 informed about the Forest land. The
claimant submitted the requirement of land within the Forest land
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 22 of 77
on 22.03.2007 requesting the Respondent to take necessary action.
Thereafter due to different procedural delays the land was possible
to be made available on 03.09.2009.
8.25 The Article IV, Conditions Precedent, of the Concession
Agreement includes the following provision:
"4.1 Conditions Precedent
Save and except as provided in Articles IV, V, and XXII, the rights
and obligations of the Concessionaire under this Agreement are
subject to the satisfaction in full of the following conditions
precedent to be fulfilled on or before Financial Close unless any
such condition has been waived as provided in Clause 4.2:
(b) the Concessionaire shall have been granted way leaves required
in connection with the Project including:
(i) right of way of the existing alignment of the Project Highway free
from all encumbrances;
(ii)rights of way from public roads to the Site; and
(iii) permission/ license to enter upon and utilize the Site for the
construction pursuant to and in accordance with this Agreement.
(c) The Concessionaire shall have been granted all Central
Government clearances and permits under the Applicable Laws
relating to environmental protection and conservation from the
Ministry of Environment and Forest;
4.2 Any of the conditions precedent set forth in Clause 4.1, save and
except condition of Sub-clause (b) and (c) thereof, may be waived
fully or partially by NHAI at any time in its sole discretion."
Accordingly, it has been noted that the above paragraph (c) is
mandatory and cannot be waived by the Respondent or any other
Authority.
8.26 From the Drawings attached with the Agreement it has been
noted that in between Km. 16 to Km. 17 a realignment of road was
envisaged by the parties at the time of entering into the Agreement.
8.27 The Claimant referred to the Respondents' letter dated
17.01.2007, which, inviting reference to Forest Dept. letter dated
06.01.2007, states, "Please find enclosed herewith ref. letter
received from forest dept. You are hereby instructed to remain
within project boundaries & not to cross the forest boundaries." The
contents of the Forest Dept. letter dated 22.02.07 addressed to the
Respondent's Project Director has been given below:
Signature Not Verified
Signed By:GUNN
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"As you are aware, widening of existing 2-lane road to 4-
lane National Highway no. 6 passing through Nagpur Forest
Division involved the forest as well as non Forest lands. For
acquisition of Forest Land, you have not submitted any forest
proposal under forest conservation Act 1980 to this Division
so far and even not intimated to this Division and started
works on Non Forest land. As per guidelines issued by the
Ministry of Environment & Forest Govt of India, 'If a project
involves Forest as well as Non Forest land, work should not
be started on Non-forest till approval of the Central Govt.
for release of forest land under the Act has not been given.'
Therefore, it is requested to stop the work immediately and
submit a proposal under forest conservation Act 1980. In
case of any delay on your part for submitting the Forest
proposal this Office will not be responsible."
8.28 The Respondent contended that it was the Claimants' duty to
identify the forest land and to assist NHAI to get necessary
clearance. As stated earlier the Claimant had identified the
requirement of additional land and intimated to the Respondent on
13.06.2006. It was noted that according to the Agreement the
Claimant was responsible to submit LA proposal in line with the NH
Act, concerned State Government revenue Department, or the
relevant LA Act, and pursue with the GOMH for early
accomplishment of Land acquisition. It was also noted that the
Claimant was not responsible for the forest land acquisition as it
was under the control of the Central Government and the Ministry
of Environment and Forest (MoEF).
8.29 The Respondent further contended that "the Claimant
prepared a faulty proposal for acquisition of 2.75 hectres while the
requirement was 4.75 hectres.... Initially, Claimant prepared
proposals for removal of forest cover at 14 Kms to 18 Kms on Left
hand Side (LHS). Later this was found to be incorrect and forest
land was existing only between 16 and 17 Kms on RHS. This led to
lot of delay in getting the permits for cutting the trees in the Forest
Land. There is total failure on the part of the Concessionaire to
approach the Forest Department at the earliest possible time for
identification of forest land in the total Project Corridor..."
8.30 The Claimant stated, "The Respondent's contention that the
Claimant prepared a faulty proposal for the acquisition of 2.75
Hectres while the requirement was for 4.75 hectres is again devoid
of merit since the Claimant had initially proposed acquisition for 45
Mt. width by optimizing for four lane carriageways plus
embankment slopes and 3 Mt. from toe for utility carriageway. This
could easily accommodate the proposed four lane carriageway.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 24 of 77
However, the same was amended at the instance of the Respondent
to acquire 60 Mr width considering future expansion."
8.31 It appears to us that the Claimant had initially proposed to
acquire 2.75 hector land considering the minimum land area
required to accommodate the Instant four lane road Project, but, the
Respondent for its future provision sought proposal/approval for
4.75 hectors.
8.32 In view of the circumstances, the terms of the Agreement,
evidence on record, and submission of the Parties it has been held
that the Respondent is responsible for the delay in acquisition of the
forest land which was required for the proposed Project facilities.
8.33 It is apparent that at some locations the shifting of utilities and
avenue plantation were delayed due to delay in acquisition of
additional ROW where these could be relocated/planted. As the
delay in acquisition of additional land has been found to be
attributable to the Respondent, the delay in shifting of these utilities
and avenue plantation, for which additional land was required, also
stands attributable to the Respondent.
8.34 As per the Concession Agreement Clause 23.1 The Respondent
agreed to provide to the Concessionaire cash support by way of an
outright Grant of Rs. 57.11 Crores.
8.35 Inviting reference to a letter dated 10.09.2007 the Claimant
stated that they requested the Respondent to release the first tranche
of Grant amounting to Rs. 27.16 Crores, which was paid by the
Respondent on 20.02.2008. The Claimant stated that the delay to the
extent of 5 months was attributable to the Respondent only. Inviting
several other correspondences, the Claimant stated that there was a
delay of 7 months in releasing the second tranche of 14.90 Crores,
delay of 3 months in releasing the third tranche of 12.33 Crores and
non-payment of the fourth tranche Rs. 3.43 crores till date. The
Respondent contended that the first three tranches were paid well in
time after making sure of compliance of contractual obligations. The
first tranche was delayed, as contended by the Respondent, due to
inadequate documentation furnished by the Claimant. The
Respondent stated that the fourth tranche of Rs. 3.43 Crores was
held back and was adjusted towards the liquidated damages and
50% share of IC's remuneration payable by the Claimant. It further
stated that, once damages have been imposed according to the terms
of the contract, due amounts are recoverable from the amounts of
concessionaire available as due to the Claimant. The Respondent
contended that there was nothing illegal or un-contractual for non-
release of the fourth tranche of grant.
Signature Not Verified
Signed By:GUNN
Signing Date:06.11.2026
16:43:00
O.M.P. (COMM) 27/2017 & conn. Page 25 of 77
8.36 The Scheduled project completion date was 05.12.2008. The
Provisional COD was achieved on 22.09.2011, l.e., after a delay of
1021 days. The Respondent contended that the delay was solely
attributable to the Claimant and therefore the Respondent had
rightly imposed the Liquidated damages as well as other damages
in accordance with the provisions of the Concession Agreement.
8.37 As discussed above it has been held that the Respondent was
solely responsible for the delay in acquisition of additional land for
execution of the Project highway. The Respondent's delay in
acquisition of additional ROW had caused the delay in achieving
PCOD by the Claimant. Therefore, imposition of any damages
against the Claimant on account of the same delay would not be
justifiable.
8.38 Under the circumstances it is being held that the delay in
completion of the work was caused on account of breaches of terms
and conditions of The Concession Agreement (CA) and acts or
omissions by the Respondent as the Respondent NHAI had failed to
acquire the AROW which was required to accommodate the
proposed Project facilities within the time mentioned in the schedule
given in the Agreement”
15. Having gone through the above finding, it is pertinent to note that
Atlanta’s challenge is confined to the portions of the Award adverse to
it i.e. principally the rejection under award of Claims 3, 4, 5, 6, 7 and 9,
the interest awarded under Claim 2, the rejected post PCOD
components of Claim 6, and the computational/clerical errors which it
had sought to correct under Section 33.
16. NHAI, on the other hand, challenges the Award insofar as it
allows Claims 5, 6 and 8, principally by assailing the Arbitral Tribunal’s
finding that the 1021 days delay and non-availability of Additional
9
Right of way were attributable to NHAI.
9
“AROW” hereinafter
Signature Not Verified
Signed By:GUNN
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17. Since, both the parties have partially challenged the arbitral
award, this court would restrict its examination relevant to the
controversy raised by the respective party, needless to say, with the lens
of section 34 and to the extent of disputed portions.
D. DISCUSSION AND FINDINGS
18. Claim No. 6 was Atlanta’s claim for prolongation related losses
arising from the extended construction period. This court is of the view
that as Claim No. 6 is the most direct consequence of the Arbitral
Tribunal’s finding that NHAI was responsible for the entire 1021-day
delay and it also raises the threshold question of whether ATLANTA
deserves any compensation for prolonged execution of the concession
agreement, claim no.6 ought to be pivotal for adjudication at the
threshold.
19. On Claim No. 6, the Arbitral Tribunal’s approach was that
Atlanta was entitled to compensation for the additional costs caused by
the prolonged construction period, but not to the full amount claimed.
20. The Tribunal first accepted Atlanta’s basic case that the project,
which was scheduled to be completed by 05.12.2008, continued until
PCOD on 22.09.2011 because NHAI had failed to make the required
AROW available in accordance with the contractual schedule.
21. It treated this as a material default by NHAI. On that foundation,
it examined separately the three components of Claim No. 6 i.e. (i)
overheads/profit, (ii) plant and machinery, and (iii) price escalation.
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22. For the first component, Atlanta claimed Rs.69.19 crores towards
loss of overheads and profit arising from the EPC Contractor’s extended
stay.
23. Atlanta’s case before the Arbitral Tribunal was that the EPC
Contractor had mobilised its establishment, senior personnel and
resources on the assumption that construction would finish within 30
months, but because the project continued for another 34 months over
and above the stipulated 30 months, it was forced to maintain that
establishment and lost the opportunity to deploy its resources profitably
elsewhere.
24. However, the Tribunal accepted only the additional overhead
aspect. It specifically declined to compensate the aspect of anticipated
profit, reasoning that the EPC contract had continued and had not been
illegally terminated.
25. According to the Tribunal, loss of anticipated profit did not
require reimbursement and it considered “obvious” that the EPC
Contractor would have incurred additional overhead costs by remaining
on site for the extended period. The Tribunal accepted Atlanta’s
statement that it had to compensate the EPC Contractor for those
additional costs. It therefore treated the additional overhead expenditure
as a direct loss to Atlanta.
26. The Tribunal did not accept Atlanta’s own computation of Rs.
69.19 crore. It referred to the Emden and Hudson formulae and to the
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judgment of the Hon’ble Supreme Court in McDermott International
10
v. Burn Standard , observing that such formulae could provide a
reasonable method of assessing delay damages.
11
27. It then referred to the MoRTH Standard Data Book, which
contemplated approximately 8% overhead for road projects. Therefore,
the Tribunal, instead of relying on the Atlanta’s alleged EPC contract
value of Rs. 207.63 crore and its substantially higher overhead
percentage, used the Rs. 168 crore “project cost” appearing in the
Concession Agreement and adopted an 8% rate. Its calculation as can
be curled out from the Award was as follows:
“In our opinion the Respondent had committed material default
under the Contract by not handing over the AROW in accordance
with the schedule given in the Contract, which caused delay in
completion of the project. Therefore, we are of the opinion that the
loss towards underutilization of plant, equipment and machinery
for extended stay is a direct loss incurred by the Claimant arising
out of such material default by the Respondent. It has also been
noted that the Claimant had given cogent reasons and method of
calculating the loss incurred towards underutilization of plant,
equipment and machinery for extended stay. The Claimant had
claimed that the total cost of deployment of plant, equipment and
machinery was 10% of the value of work awarded to the EPC
Contractor. In our opinion the cost of deployment of plant,
machinery and equipment could be considered as 8% of the total
project cost mentioned in the Agreement to meet the ends of
Justice. Considering the project cost of Rs. 168 Cr., the Claimant
has been held entitled to the following amount on this ground.
Estimated project cost = Rs. 168 Cr.
Stipulated time for completion = 30 months.
Estimated cost of deployment of plant equipment and
machinery = 168 X 8% = Rs. 13.44 Cr.
10
(2006) 11 SCC 181
11
Ministry of Road Transport and Highways, Government of India
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Plant, equipment and machinery deployment cost per
month = 13.44/30 = Rs. 0.448 Cr per month.
Extended stay compensation was claimed for 34 months.
Additional cost due to deployment of Plant, equipment
and machinery during the period of extended stay = 34 X 0.448 =
Rs. 15.232 Cr.
With regard to extended stay after the PCOD it has been
noted that the Claimant had started collecting toll for 39.841 Km
of road out of 40.441 Km and the value of the work to be done
under punch list B has not been indicated by either party. As such
the claim for the loss due to deployment of Plant, equipment and
machinery after 22.09.2011 is not admissible in favour of the
Claimant. It has also been noted that the parties had agreed by
mutual consent to complete the balance work under punch list B
under a supplementary agreement dated 22.09.2011.
The Claimant submitted that the EPC Contractor had
incurred additional cost on account of escalation in prices of
material, POL, Labour, etc., for the work executed during the
extended period from 05.12.2008 to till date. The Claimant
contended that the delay was attributable solely to the Respondent.
The Claimant claimed Rs. 15.74 Cr on this ground and stated that
part of the amount had already been paid to the EPC Contractor.
The Respondent had flatly denied the Claim as well as the
calculation submitted by Claimant in Annexure 6(C), however,
there was no comment with regard to the weightage of different
cost components and rate of increase of different inputs during the
extended period. As such the reply of the Respondent has been
considered as vague and not admissible.
We are of the opinion that the Respondent had
committed material default by not acquiring the required land on
AROW in accordance with the schedule given in the Contract. This
has caused delay in completion of the project requiring the
Claimant to execute part of the work during the extended period of
05.12.2008 to 22.09.2011. We appreciate that the market price of
different inputs had increased and additional cost was incurred for
the same. The method of calculation submitted by the Claimant
appears to be reasonable except for the values of work executed
during the extended period. It has been noted that the Respondent
vide its reply para 8.0 stated, “It is submitted that the work
executed as on scheduled project completion date (SPCD) is hardly
58.76%.” As such considering the total project cost as Rs. 168 Cr.,
the amount of price escalation for executing the work beyond the
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Stipulated Project Completion Date (SPCD) has been calculated
as follows:
Total Project cost = Rs. 168 Cr.
Executed upto SPCD 58.76% of 168 = Rs. 98.71 Cr.
Value to be executed after SPCD = 168 - 98.71 = Rs. 69.29 Cr.
As per the Claimant the value of work executed after SPCD =
41.152 + 56.374 = Rs. 97.526 Cr., for which Rs. 15.747 Cr has
been claimed.
Proportionately the Claimant has been considered as entitled for
a compensation of (15.747/97.526) X 69.29 = Rs. 11.18 Cr.
As discussed above, the Claimant has been held entitled to a
compensation of Rs. 15.232 Cr. + 15.232 Cr. + Rs. 11.18 Cr. = Rs.
41.644 Cr.
Inviting reference to Clause no. 31.2 of CA, the rate of interest
admissible to the Claimant is SBI PLR plus 2% w.e.f. PCOD till
15.08.2016 (date of Award). The Interest works out to Rs. 32.64
Cr.
Thus the Claimant becomes entitled to compensation for a total
amount under the claim no. 6 i.e., loss of overheads, loss of ROE,
increase of rates during extended period, under-utilisation of
machinery and equipment, etc., amounting to Rs. 41.644 Cr + Rs.
32.64 Cr. = Rs. 74.284 Cr”
28. Thus, against Atlanta’s Rs.69.19 crore claim for
overheads/profit, the Tribunal allowed only Rs.15.232 crore towards
additional overheads and did not separately allow loss of profit.
29. The Tribunal also rejected Atlanta’s request for continuing
overhead damages of Rs. 1.88 crore per month after PCOD. Its
reasoning was that after 22.09.2011 Atlanta had begun collecting toll
on 39.841 km of the road and neither party had established the value of
the remaining Punch List B works and, importantly, under the
Supplementary Agreement dated 22.09.2011 the parties had mutually
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agreed that the balance Punch List B works would be completed
subsequently. Therefore, the Tribunal considered additional overheads
after PCOD inadmissible.
30. The second component concerned underutilisation of plant,
machinery and equipment. Atlanta claimed Rs. 25.39 crore for the
same, asserting that machinery and equipment deployed for the project
remained tied up and remained committed to the present project, during
the extended period because of NHAI’s delay. It also sought continuing
damages at Rs. 0.69 crore per month after 01.10.2011.
31. NHAI had specifically disputed this claim. Its case was that the
project was itself delayed because Atlanta had not deployed adequate
plant and machinery. Therefore, Atlanta could not simultaneously claim
that its machinery was underutilised. NHAI also disputed whether
Atlanta had actually paid the EPC Contractor the claimed amount and
asserted that there were no proper cost records establishing the plant
and machinery deployed or the amount of actual loss.
32. The Tribunal nevertheless accepted Atlanta’s entitlement in
principle. It reasoned that because NHAI had committed a material
default by failing to provide AROW in time, the resultant extended
deployment or underutilisation of machinery was a direct loss arising
from NHAI’s default. The Tribunal also stated that Atlanta had
provided “ cogent reasons and method ” for calculating that loss.
33. However, again the Arbitral Tribunal did not accept Atlanta’s
figures. Atlanta had apparently calculated machinery deployment cost
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at approximately 10% of the EPC work value. However, the Tribunal
instead considered 8% of the Rs. 168 crore project cost reasonable “ to
meet the ends of justice .” Consequently, it applied exactly the same
calculation as for overheads.
34. Thus, against the Rs.25.39 crore claimed by Atlanta, the Tribunal
awarded Rs.15.232 crore for plant, machinery and equipment.
35. The third and the last component was price escalation. Atlanta
claimed Rs.15.747 crore for increases in the prices of materials,
POL/fuel, labour and other inputs because a substantial part of the work
had to be executed after the Scheduled Project COD of 05.12.2008.
36. The Tribunal accepted Atlanta’s entitlement to escalation in
principle. It expressly found that NHAI’s failure to provide AROW
caused the project to continue into the extended period and stated that
it appreciated that market prices of various inputs had increased during
that period. It also considered Atlanta’s method of calculation broadly
reasonable.
37. However, Arbitral Tribunal disagreed with the value of work on
which Atlanta had calculated escalation. Atlanta’s calculation assumed
that Rs.97.526 crore worth of work had been executed after the
Scheduled Completion Date and claimed Rs.15.747 crore escalation on
that basis. The Tribunal instead relied upon NHAI’s own pleading that
only 58.76% of the work had been completed by the Scheduled Project
Completion Date.
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38. Ultimately, the Tribunal allowed Rs. 11.18 crore under the
escalation component.
39. The principal amount awarded under Claim No. 6 was
consequently Rs. 41.644 crore.
40. The Tribunal then applied Clause 31.2 of the Concession
Agreement and awarded interest at SBI PLR + 2%, calculated from
PCOD until the date used by it for the award computation.
41. It calculated interest at Rs.32.64 crore. Consequently, the total
amounted awarded along with interest was Rs.74.284 crore under
Claim No. 6.
Rival Submissions before this Cour t
42. Ms. Tanu Priya Gupta, learned Counsel appearing for NHAI
submitted that there is no proof that Atlanta actually suffered or paid
the alleged losses under Claim No.6.
43. According to her, Claim No. 6 substantially represented losses
said to have been suffered by the EPC Contractor, which was a separate
entity. Further, Atlanta did not prove that it had actually paid, or had
become legally liable to pay, those amounts to the EPC Contractor.
44. According to Ms. Gupta, a third party’s alleged expenditure
could not automatically be treated as Atlanta’s own loss.
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45. Ms. Gupta submits that NHAI had specifically objected that there
were no proper EPC records such as proof of actual overhead
expenditure, plant and machinery cost/deployment details, or other
cogent material substantiating the amounts claimed. she has
vehemently contended that despite recording these objections, the
Tribunal proceeded to award compensation.
46. It was further submitted that the Tribunal referred to Hudson and
Emden formulae and McDermott (supra) while assessing overhead
losses. Ms. Gupta raises the objection that Atlanta itself had not made
its claim on the basis of those formulae and according to her, the
Arbitral Tribunal introduced a new methodology of its own to construct
the damages instead of deciding the claim on the evidence actually
produced.
47. Succinctly put, contention of NHAI is that a normative
percentage or formula could not establish that Atlanta had actually
incurred those losses in the first place as the existence of the loss had
first to be proved independently and then only the quantum of losses
could be assessed.
48. The next plank of submission raised by Ms. Gupta is that the
Tribunal treated NHAI’s failure to provide AROW as the material
default causing the extended period and, on that basis, regarded
overheads, machinery costs and escalation as compensable direct
losses.
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49. Ms. Gupta challenges that foundational finding and submits that
Atlanta itself was responsible for delay because of inadequate
mobilisation, manpower, machinery and progress. Therefore, according
to NHAI, the very basis for awarding prolongation costs under Claim
No. 6 disappears if the delay finding is set aside.
50. Per contra , Mr. Balbir Singh, learned Senior Counsel appearing
for Atlanta submits that Atlanta supports the Tribunal’s finding that it
was entitled to compensation under Claim No. 6. However, he
challenged the reduction and computation of the amount awarded,
including the 8% methodology, and the rejection of post PCOD
continuing losses coupled with interest calculation.
51. Mr. Singh submitted that although the Tribunal accepted its
entitlement to prolongation compensation, it wrongly restricted
overheads under Claim 6(A) by applying 8% to the Rs. 168 crore
project cost, instead of considering the higher EPC contract value of Rs.
207.63 crore and the actual overhead/profit claim placed through
Annexure 6(A).
52. According to Mr. Singh, once the Tribunal accepted that the EPC
Contractor remained deployed during the extended period because of
NHAI’s default, the compensation ought not to have been artificially
curtailed by adopting a lower normative base.
53. Under Claim 6(B), Mr. Singh challenged the Tribunal’s
decision to again restrict compensation to 8% of Rs. 168 crore, resulting
in Rs. 15.232 crore.
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54. Mr. Singh relied upon NHAI’s own Policy Matters i.e. Technical
Circular dated 17.01.2013, which contemplated 15% of project cost for
plant, machinery and spares, whereas Atlanta itself had claimed only
10%. Mr. Singh therefore contended that reducing the claim to 8% was
unjustified once the Tribunal had accepted that underutilisation of
machinery was a direct consequence of NHAI’s default.
55. Mr. Singh further challenged the Tribunal’s refusal to award
continuing compensation after PCOD on 22.09.2011. It had claimed
continuing overhead damages of Rs.1.88 crore per month and
continuing plant/machinery damages of Rs. 0.69 crore per month from
01.10.2011 until COD/change in scope, on the ground that the EPC
Contractor was still required to remain mobilised for Punch List B
works because the entire AROW had not been made available.
56. According to him, commencement of toll collection over 39.841
km did not eliminate the continuing costs of maintaining resources for
the unfinished works.
57. Under Claim 6(C), Mr Singh contended that Atlanta had claimed
Rs. 15.747 crore towards additional costs of labour, material, POL and
other inputs during the prolonged period, but the Tribunal
proportionately reduced this to Rs. 11.18 crore by adopting Rs. 168
crore as the project cost and recalculating the value of work executed
after the Scheduled Completion Date. It was contended that the
Tribunal, having accepted both the fact of escalation and NHAI’s
responsibility for the prolongation, ought to have allowed the amount
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actually demonstrated as paid/payable to the EPC Contractor rather
than substituting its own reduced computation.
58. Lastly, according to the Learned Sr. Counsel, the manner in
which interest was calculated on Claim No. 6 was challenged. Atlanta’s
original claim sought 18% per annum compounded monthly, whereas
the Tribunal awarded interest at SBI PLR + 2% and restricted the
relevant period/computation. Atlanta therefore seeks correction/re-
computation of interest consistent with the amounts which, according
to it, ought properly to have been awarded under Claims 6(A), 6(B) and
6(C).
Analysis
59. This court believes that before adjudicating whether Atlanta is
entitled to claim No. 6 at all, it is important to decide the threshold
question as to who was responsible for the 1021 delay prolongation
from the scheduled COD of 05.12.2008 to the PCOD of 22.09.2011.
60. The Tribunal held that the delay was essentially attributed to
NHAI because NHAI failed to make the required additional land
available in accordance with the contractual schedule, which in turn
delayed utility shifting, realignment, and completion of work. On that
basis, the Arbitral Tribunal treated claim no. 6 as losses flowing from
NHAI’s material default.
61. The following reasoning was given by the arbitral tribunal on this
aspect , the relevant extract of which is reproduced as follows:
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“8.04 In accordance with the Concession Agreement Clause 13.5.1,
the Existing Right of Way, free from encumbrances, was required to
be made available to the Claimant not later than 150 days from the
date of the Agreement. Accordingly the latest date of making
available the Existing Right of Way was 08.05.2006.
8.05 The Claimant contended that the Respondent handed over the
Existing Right of Way on paper on 12.01.2006, but actually the Site
was full of encroachments/structures/utilities which were not
possible to be removed resulting in non-availability of land on
Existing Right of Way in accordance with the Schedule ‘A’. The
Respondent contended that the Claimant failed to appreciate the
true meaning of the word ‘encumbrances’, which, as per Agreement,
means any encumbrances such as mortgage, charge, pledge, lien,
hypothecation, security interest, assignment, privilege or priority of
any kind having the effect of security or other such obligations and
shall include without limitation any designation of loss payees or
beneficiaries or any similar arrangement under any insurance
policy pertaining to the Project Highway. As stated by the
Respondent, the Claimant has failed to understand the meaning of
the word encumbrances and attempted to establish that
encumbrances are same as encroachment which is not correct.
Inviting reference to the Clause 9.1 (xxiv) the Respondent contended
that it was the responsibility of Claimant to remove all types of
encroachments/structures/utilities. The Clause 9.1 (xxiv) reads as
follows:
“IX. OBLIGATIONS OF THE CONCESSIONAIRE
9.1 The concessionaire shall at its own cost and expense
observe, undertake, comply with and perform, in addition to
and not in derogation of its obligations set out elsewhere in
this Agreement, the following:
(xxiv) after receiving possession of the site or part thereof,
ensure that such Site remains free from all encroachments
and take all steps necessary to remove encroachment, if any”
(emphasis supplied)
The Respondent submitted that they had extended necessary
administrative support by writing number of letters to district
administration and police authorities. Respondent stated, “In any
case, the bogey of encroachments or physical obstructions is grossly
exaggerated and there are plenty of fronts available to begin with
and also to progress very well. … EROW was very much available
between chainage +33.600 and +34.150 and +47.000 and +48.500
since the same was handed over long ago. As said earlier, the
problem of encroachment or physical obstructions pertains to only
5.41 Kms out of 40 Kms and nothing prevented the Claimant to take
up the work on the remaining lands.”
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8.06 After perusing the other correspondences made by the
Independent Consultant and the Respondent, it has been found that
there was a delay in removal and shifting of some of the utilities,
religious structures etc., from the existing carriageway due to non-
availability of Additional land where those could be relocated. But
as discussed in the succeeding paragraphs the Respondent has been
held responsible for the delay in acquisition/handing over of the
Additional land for AROW.
8.07 Therefore, the Respondent is being held responsible for the
delay in shifting and relocation of such utilities for which additional
land was necessary, and in turn responsible for delay in completion
of the Project.
8.08 In accordance with the Agreement the Respondent was liable
to pay damages to the Claimant for delay in handing over the
Existing ROW. In the Contract documents the Respondent had
included Schedule A i.e., Site of the Project wherein the average
land width of Existing Right-of-Way (ROW) was mentioned at
different old chainages. It was envisaged that additional land would
be required to complete the Project. The available Av. Land width
on EROW (old chainage) was mentioned in the Schedule A with a
disclaimer³ that the Respondent shall not be held responsible for any
inaccuracy in the information provided. With regard to the
Claimant’s quantification of area of EROW the Respondent stated,
“Table in Pg. 10 of SOC is not proved; quantification statement in
Pg. 70 of SOC, Annexure-I, is not proved by any authentic record or
joint measurement”. It appears that all over the length of the
Existing ROW, except for the chainages where realignment of the
road was required, some activity/work was possible to be taken up
by the Claimant depending upon the actual width of land available
on EROW. It has also been noted that at the portion, where the
realignment was to be done, the (non)availability of EROW was
irrelevant. It is a matter of fact that there was inadequacy and/or
mistake in the data made available by the Respondent about the
average land width available on EROW. But the Claimant by the
Disclaimer referred above had agreed not to make liable the
Respondent for such mistakes/inadequacies. Under such
circumstances the Claimant cannot be held entitled for any damages
on account of non-availability of EROW during the period of
construction. Besides, there is no record stating essential
requirement of any area on EROW for the smooth and efficient
operation of the Project Highway after the Provisional COD.
8.09 The Claimant referred to a letter written by The Respondent
on 07.12.2010, which stated:
“ Optimization of Existing Right of Way:
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It is identified the stretches where the 4-laning works (only) can be
carried out by the Concessionaire by optimizing the use of existing
ROW. As can be seen from the following table, the Concessionaire
can complete 4-laning works for a length of 36.571 Km. out of a
total length 40.441 Km. within existing ROW.
The list of works, which require additional land, is as of 30.11.2010
follows.
Item Location Unit Total
Qty
1 Main
Km. 16.000 to Km. 16.500 BS;
Km. 33.280 to Km. 34.440 BS;
Km. 46.920 to Km. 48.300 BS;
Km. 3.04
Carriageway
2 Service
Km. 9.200 to Km. 12.950 BS;
Km. 13.950 to Km. 14.300 RHS;
Km. 14.300 to Km. 16.300 RHS;
Km. 18.350 to Km. 16.300 BS;
Km. 21.700 to Km. 22.450 BS;
Km. 23.300 to Km. 24.000 BS;
Km. 25.900 to Km. 27.000 BS;
Km. 29.700 to Km. 30.400 BS;
Km 33.500 to Km. 34.500 BS;
Km. 47.400 to Km. 49.100 BS;
Km. 21.07
Roads and
structures in
service road
portion
3 Underpass Bazargoon village Nos 1
4 Flyover At Kondhali Nos. 1
5 Truck lay By Nos 6
6 Bus Lay By Nos. 12
The Concessionaire could have completed all the other works except
the above, well within the Schedule Project Completion Date."
8.10 In view of above it appears that sufficient width of land to
accommodate the entire width of the Project facilities was not
available within the actual existing ROW. The Respondent
contended that “for construction of 4-Lane Project Highway, 23m
to 30m width is quite adequate”. But, it has been noted that the
Schedule B of Concession Agreement, the typical cross section
drawings TCS 1 and TCS 2, shows the required formation width of
Project Highway as 24.000 meter and 45.000 meter respectively
which exclude the sloping portion of the embankment, the side
drains, facilities like Truck lay by, Bus bay, land width required for
plantation if any, etc. In view of this it does appear that considerable
area of additional land (Additional Right of Way-AROW) was
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required to be acquired to accommodate the proposed Project
facilities.
8.11 The Site handing over schedule as per Schedule H of the
Agreement has been reproduced below:
“Schedule-H
II. SITE HANDING OVER SCHEDULE
The Site shall be handed over as below from the date of signing the
Concession Agreement:
Stretch Length Remarks
(Refer Design
Chainage)
Existing ROW
40.441 Km Within one
month
Additional Land
wherever required
for the Project
Highway including
Land for Base
Camp
Within 12
months
Note: The above Handing over Schedule is subject to
accomplishment of all obligations of the Concessionaire as
mentioned in the Request for Proposal (RFP) Document.”
The Respondent contended that “even without fulfilling these
requirements, Respondent had handed over above land in the
interest of the project.” But it was not clarified which obligations of
the RFP Document was not fulfilled by the Claimant.
8.12 It is undisputed fact that the required Additional land was
not available to the Claimant in accordance with the Schedule H.
However, the Respondent contended that the delay in acquisition of
the Additional ROW was consequential to the lapses of the Claimant
and the Respondent was not responsible for the delay.
8.13 The Scope of the Project has been stated in Schedule ‘B’ of
the Agreement. Clause 8.1 of Schedule ‘B’ reads as under:
“8 Pre-Construction Activities
8.1 Land Acquisition (LA)
The additional land acquisition in few isolated stretches is
foreseen on this project. The cost of LA as intimated by the
concerned agencies shall be borne by NHAI. However, the
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Concessionaire shall be involved pro-actively in this regard
submitting relevant LA proposals as per NH Act-1956 and
pursuing the matter with the concerned State Govt. Revenue
Departments and the concerned private people whose land
is to be acquired. NHAI shall provide all necessary
administrative support in this regard.”
The provisions of the Chapter-III of the Agreement, i.e., Obligations
and Undertakings are as follows:
“IX. OBLIGATIONS OF THE CONCESSIONAIRE
9.1 The Concessionaire shall at its own cost and expense
observe, undertake, comply with and perform, in addition to
and not in derogation of its obligations elsewhere set out in
this Agreement, the following:
(xxviii) work in optimizing the use of existing Right of Way
handed over to them. Identify and submit proposal for
acquisition of additional land in accordance with the
requirement of concerned State Government revenue
department or the relevant LA Act, and pursue with the
GOMH for early accomplishment of Land Acquisition;”
8.14 After perusing the Statement of Defense and other documents
submitted/relied upon by the Respondent, it does appear to us that
the Claimant did not commit any default in performing its obligation
to optimize the use of the existing ROW.
8.15 The Claimant had submitted a Land acquisition proposal to
the Respondent on 13.06.2006 stating, “Dear Sir, Please find
enclosed the details (3 sets) of land to be acquired for the above
Project. The survey numbers alongwith area statement to be
acquired are indicated therein. You are requested to take early
action for 3a & 3A Notification please”. After perusing the said
proposal dated 13.06.2006 alongwith the maps and statements
showing village, Taluka, Dist, Survey no., area required in hectors,
and type of land, it has been observed that the Claimant had
identified the additional land required and submitted the LA
proposal in line with the requirement under the NH Act 1956. The
names of villages mentioned by the Claimant were, 1 Wadi, 2 Vad
Dhamna, 3 Surabuldi, 4 Gondkhairi, 5 Chichbhuvan, 6
Pethdongari, 7 Linga, 8 Mohegao (Khu), 9 Mohegao (Bhu), 10
Satnavri, 11 Panchnavari, 12 Bazargao, 13 Chakdoh, 14
Ringnabuldi, 15 Hardoli, 16 Panjarakate, 17 Dudhala, 18 Kondhali.
However, the Claimant had submitted the said proposal on
13.06.2006 i.e., 6 months and 4 days after the date of signing the
Concession Agreement. It was also noted that the additional land
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was required to be handed over by the Respondent within 12 months
from the date of signing the Concession Agreement subject to the
fact that the Claimant had fulfilled its obligation under Clause
9.1(xxviii) of the Agreement (Refer Clause 13.5.2 reproduced
below).
“Clause 13.5.2 Additional Right of Way Additional ROW
shall be made available to the Concessionaire as per the
Handing over Schedule ‘H’ free from all encumbrances and
without the Concessionaire being required to make any
payment to NHAI on account of any costs, expenses and
charges for the use of such AROW for the duration of the
Concession period provided Concessionaire has fulfilled his
obligations pursuant to Clause 9.1 (xxviii). On or after the
Appointed date, the Concessionaire shall commence,
undertake and complete all Construction works on the
Project Highway in accordance with this Agreement.”
8.16 From the voluminous correspondences submitted by both the
Claimant and the Respondent few extracts have been reproduced
below:
On 08.05.2006 the Claimant wrote, “Please find enclosed a copy of
Gazette Notification issued by Gazette of India under 3(a) for the
above project which include 8 villages. We have sent another letter
to NHAI dated 06.12.2005 - copy enclosed, seeking for inclusion of
additional villages. So far no action has been taken by NHAI HQ.
We now enclose list of structures involved for acquiring/removal in
the stretch KM 9.00 to 50, for further necessary action in the matter
please.”
On 18.10.2006 a Notification under Section 3(A) was published by
MOSRTH notifying a total area of 484725 sqm.
On 08.12.2006, during the Review meeting between Independent
Consultant, Respondent, and Claimant, it was recorded that “9. The
Land Acquisition matters (3A) has been published in the local
papers on 18/11/06; …. and 13. The Concessionaire informed that
there is no FOREST LAND involved in the land to be acquired for
widening of the project.”
On 11.01.2007 the Respondent wrote to the Superintendent of Land
Record, Spl. Land Acquisition Officer (General), and S.D.O. Arvi,
“It is brought out by our Concessionaire that, there is huge
mismatch/discrepancy especially in Nagpur district in respect of
existing Right of Way (EROW) as per EROW plans available with
PWD (the then project caretaker organization) & road width data
available with TILRs. It indicates that last acquisition is not being
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considered by TILR while preparing new acquisition details … In
view of above, please ensure that the existing right of way marked is
correct while preparing J. M. Sheet.”
On 17.01.2007 the Respondent wrote to the Claimant, “It is
regretted to note that you have chosen to remain absent despite
undersignees request during one of our very crucial stage of Land
Acquisition i.e., “3C - Hearing of Objections” which has resulted in
postponement of the date for 2nd time which is nothing but gross
non compliance of concessionaires obligation as per C.A. Cl no. 9.1-
xxviii ….”
On 25.01.2007 the Claimant wrote to the Respondent referring a
letter dated 17.01.2007, “… We assure that we will take care of all
necessary precautions while executing the work.”
On 10.10.2007 a Notification under 3(D) was published notifying a
total area of 97686.80 Sqm against 484725 sqm in 3(A).
On 28.08.2008 the Respondent wrote to SLAO confirming that the
land measuring on higher side as per the JMR were entirely deleted
in the notification 3D. The Respondent stated that a supplementary
notification under 3A was in progress.
On 19.02.2009 the Respondent replied to Claimant’s letter dated
22/01/2009, stating “… Since, the Land acquisition plan including
draft 3(a) Notification and 3(A) Notification proposal were initially
prepared and submitted by the Concessionaire, the responsibility for
omission of name of village Waddhamana from land acquisition in
3(a) Notification and its amendment, 3(A) Notification and 3(D)
Notification lies with the Concessionaire only …”
But, as stated above, the name of village ‘Vaddhamana’ was there
in the Claimant’s proposal for LA dated 13.06.2006. Thus, it
appears that the allegation of the Respondent vide its letter dated
19.02.2009 was not correct.
8.17 The Respondent described about the status in the light of the
provisions of the NH Act 1956 and contended that the Claimant was
responsible for the delay in acquisition of AROW. The Respondent
stated, “Land acquisition under NHAI Act 1956 is initiated with
notification under section-3(A) of the Act. This notification should
contain details of the land to be acquired with brief description. It
was the responsibility of Concessionaire to prepare a draft which
has to be issued as notification under 3(A) of the Act in the official
Gazette. Claimant had prepared 3(A) Draft Notification for a land
area of 485600 Sqm. The same was published. Next step in the land
acquisition is to conduct survey and measures, take levels, setting
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out boundaries and intended lines of work etc., under section-3(B)
of NHAI Act 1956, by any authorized person of the Central Govt.
and in this case it is the Claimant himself. Once this exercise is
complete, public objections are invited under section 3(C) of the Act.
Thereafter, Competent Authority under section-3(D) would declare
vesting of land in Govt. of India and this gives right to enter the land.
Relevant provision reads as under:
3-F- Right to enter into the land where land has vested in the
Central Government-
Where the land has vested in the Central Government under
section 3-D, It shall be lawful for any person authorized by
the Central Government in this behalf, to enter and do other
act necessary upon the land for carrying out the building,
maintenance, management or operation of a national
highway or a part thereof, or any other work connected
therewith.’”
In our view the NH Act 1956, Sec. 3D is not to be read
independently and has to be read along with Sections 3E, 3G and
3H of the Act. It is after the compensation payable to the land owner
is determined (Sec. 3G) paid to him (Sec. 3H) that provision of Sec.
3E come into operation. Sec. 3E provides for power to take
possession of the land so acquired regarding which compensation
has been determined and paid to the land owner. It is only after when
compensation has been paid to the land owner that competent
authority may by notice in writing direct the land owner or any other
person who may be in possession of such land to surrender or
deliver the possession thereof to the competent authority or any
person authorised by it in this behalf within 60 days of the service of
notice. If there is failure on the part of the land owner or any other
person in possession of land then possession can be taken over by
competent authority with police help by using force.
8.18 The Respondent submitted that “in the process of verification
under section 3(B), it was found that draft notification prepared by
Claimant under 3(A) is defective. Detail of one Revenue village was
totally missing and several new areas of land were added during
3(B) process which was not included in 3(A) Notification. With the
result, 3(D) notification could be finalized only for 94,105 Sqm as
against 485600 Sqm notified under section 3(A). This clearly betrays
how negligent the Claimant was in preparing such an important
notification. As said earlier, it is the duty of Concessionaire under
section 9.1(xxviii) to submit the proposal for acquisition of
additional land in accordance with the relevant Land Acquisition
Act. If this is the type of proposal prepared by the Claimant, it is
amusing how the Claimant could allege that there was delay on the
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part of NHAI in giving the additional land. Respondent further
submits that to cure the above defect, it had taken 30 months to
renotify and acquire the deficit land. Therefore, it is incorrect to
allege that respondent is liable for delay incurred for curing the
defects of Claimant.” The Claimant while denying the contentions
of the Respondent put them to the strict proof as to the allegation
that the draft of notification under section 3(A) was defective,
missing of one revenue village, addition of several new areas of
land. The Claimant has also put the respondent to strict proof as to
the allegation that as result of omission and commission by the
Claimant, the 3D notification could be finalized for 94105 sqm as
against 485600 Sqm and that there was no valid reason behind
taking 30 months time to re-notify and acquire the deficit land by the
Respondent. The Claimant submitted that the draft 3D notification
prepared by the Claimant contained the statement of area 485600
Sqm which was scrutinized and forwarded by the IC and the Project
Director of the Respondent to the Respondent’s HQ in New Delhi
for issue in the Gazette. The Claimant contended that the HQ of the
Respondent at New Delhi deleted the land measuring on higher side
as per the JMR viz-a-viz 3A notification. The Claimant had referred
to its letter dated 03.03.2009 in this regard.
8.19 After perusing the various correspondences with regard to
acquisition of land for additional ROW, it appears to us that the
Claimant had performed its obligation towards identification and
submission of additional land and submission of LA proposal in
accordance with the NH Act/relevant LA Act, and pursued with the
GOMH for early accomplishment of land acquisition.
8.20 It has also been noted that the Respondent had undertaken the
obligation to take all necessary steps towards accomplishment of
acquisition of additional land in the following provision of the
Concession Agreement:
“X. OBLIGATIONS OF NHAI
10.1 NHAI agrees to observe, comply and perform the
following:
(i) enable access to the Site to the Concessionaire, free from
all Encumbrances, in accordance with this Agreement;
(ii) permit peaceful use of the Site by the Concessionaire as
licensee under and in accordance with the provisions of this
Agreement without any let or hindrance from NHAI or
persons claiming through or under it;
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(x) observe and comply with its obligations set forth in this
Agreement;
(xi) take all necessary steps towards accomplishment of
acquisition of additional land. NHAI shall bear the cost of
additional land;”
8.21 Under the circumstances it appears to us that the delay in
acquisition of additional land (AROW- Additional Right of Way)
required for the Project was due to the procedural activities and
delays at different stages of the GOMH and the Respondent for
which the Claimant cannot be held responsible.
8.22 The Required AROW at Km. 16 to Km. 17 for proposed
realignment of 4-lane Highway included certain area which was
under possession of the Forest Department. The Claimant
contended that The Respondent did not disclose the existence of
Forest land and referred the Schedule ‘A’ of the Agreement. The
Concession Agreement, Schedule ‘A’, clause 2.4, Table A-3:
Abutting land use, says,
SI
No.
Section (old chainage) Land Use (Sqm)
Ch.
From
(Km)
Ch. To
(Km)
Road
Length
(Km)
Left Right
3 15.000 16.000 1.000 Agriculture Agriculture
4 16.000 16.200 0.200 Agriculture Agriculture
5 16.200 16.900 0.700 Agriculture Agriculture
6 16.900 17.100 0.200 Agriculture Agriculture
7 17.100 17.600 0.500 Agriculture Agriculture
8 17.600 20.300 2.700 Agriculture Agriculture
9 20.300 22.100 1.800 Agriculture Agriculture
10 22.100 44.100 22.000 Agriculture &
Forest
Agriculture
& Forest
8.23 Referring to an MoM dated 09.01.2007 the Respondent
stated, “Claimant was at first categorical in the meeting held on
09.01.2007 that there was no forest land to be acquired for working
of the project as stated”. But, the MoM held between the Respondent
Project Director, Claimant, Consultant Team leader on 09.01.2007
paragraph 7.0 says, “The Concessionaire reiterated their stand that
there is FOREST LAND involved in the land to be acquired for
widening of the project”. Thus, it appears to us that the Claimant
was not at fault with regard to their intimation about Forest land by
MoM dated 09.01.2007.
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8.24 It appears from the correspondences that initially the Claimant
was under the wrong information that no forest land was required
to be acquired for the proposed Project Highway. The Respondent
on 17.01.2007 informed about the Forest land. The claimant
submitted the requirement of land within the Forest land on
22.03.2007 requesting the Respondent to take necessary action.
Thereafter due to different procedural delays the land was possible
to be made available on 03.09.2009.
8.25 The Article IV, Conditions Precedent, of the Concession
Agreement includes the following provision:
“4.1 Conditions Precedent
Save and except as provided in Articles IV, V, and XXII, the rights
and obligations of the Concessionaire under this Agreement are
subject to the satisfaction in full of the following conditions
precedent to be fulfilled on or before Financial Close unless any
such condition has been waived as provided in Clause 4.2:
(b) the Concessionaire shall have been granted way leaves required
in connection with the Project including:
(i) right of way of the existing alignment of the Project Highway free
from all encumbrances;
(ii) rights of way from public roads to the Site; and
(iii) permission/license to enter upon and utilize the Site for the
construction pursuant to and in accordance with this Agreement.
(c) The Concessionaire shall have been granted all Central
Government clearances and permits under the Applicable Laws
relating to environmental protection and conservation from the
Ministry of Environment and Forest;
4.2 Any of the conditions precedent set forth in Clause 4.1, save and
except condition of Sub-clause (b) and (c) thereof, may be waived
fully or partially by NHAI at any time in its sole discretion.”
Accordingly, it has been noted that the above paragraph (c) is
mandatory and cannot be waived by the Respondent or any other
Authority.
8.26 From the Drawings attached with the Agreement it has been
noted that in between Km. 16 to Km. 17 a realignment of road was
envisaged by the parties at the time of entering into the Agreement.
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8.27 The Claimant referred to the Respondents’ letter dated
17.01.2007, which, inviting reference to Forest Dept. letter dated
06.01.2007, states, “Please find enclosed herewith ref letter
received from forest dept. You are hereby instructed to remain
within project boundaries & not to cross the forest boundaries.” The
contents of the Forest Dept. letter dated 22.02.07 addressed to the
Respondent’s Project Director has been given below:
“As you are aware, widening of existing 2-lane road to 4-
lane National Highway no. 6 passing through Nagpur Forest
Division involved the forest as well as non Forest lands. For
acquisition of Forest Land, you have not submitted any forest
proposal under forest conservation Act 1980 to this Division
so far and even not intimated to this Division and started
works on Non Forest land. As per guidelines issued by the
Ministry of Environment & Forest Govt of India, ‘If a project
involves Forest as well as Non Forest land, work should not
be started on Non-forest till approval of the Central Govt.
for release of forest land under the Act has not been given.’
Therefore, it is requested to stop the work immediately and
submit a proposal under forest conservation Act 1980. In
case of any delay on your part for submitting the Forest
proposal this Office will not be responsible.”
8.28 The Respondent contended that it was the Claimants’ duty to
identify the forest land and to assist NHAI to get necessary
clearance. As stated earlier the Claimant had identified the
requirement of additional land and intimated to the Respondent on
13.06.2006. It was noted that according to the Agreement the
Claimant was responsible to submit LA proposal in line with the NH
Act, concerned State Government revenue Department, or the
relevant LA Act, and pursue with the GOMH for early
accomplishment of Land acquisition. It was also noted that the
Claimant was not responsible for the forest land acquisition as it
was under the control of the Central Government and the Ministry
of Environment and Forest (MoEF).
8.29 The Respondent further contended that “the Claimant prepared
a faulty proposal for acquisition of 2.75 hectres while the
requirement was 4.75 hectres. … Initially, Claimant prepared
proposals for removal of forest cover at 14 Kms to 18 Kms on Left
hand Side (LHS). Later this was found to be incorrect and forest
land was existing only between 16 and 17 Kms on RHS. This led to
lot of delay in getting the permits for cutting the trees in the Forest
Land. There is total failure on the part of the Concessionaire to
approach the Forest Department at the earliest possible time for
identification of forest land in the total Project Corridor …”
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8.30 The Claimant stated, “The Respondent’s contention that the
Claimant prepared a faulty proposal for the acquisition of 2.75
Hectres while the requirement was for 4.75 hectres is again devoid
of merit since the Claimant had initially proposed acquisition for 45
Mt. width by optimizing for four lane carriageway plus embankment
slopes and 3 Mt. from toe for utility carriageway. This could easily
accommodate the proposed four lane carriageway. However, the
same was amended at the instance of the Respondent to acquire 60
Mtr width considering future expansion.”
8.31 It appears to us that the Claimant had initially proposed to
acquire 2.75 hector land considering the minimum land area
required to accommodate the instant four lane road Project, but, the
Respondent for its future provision sought proposal/approval for
4.75 hectors.
8.32 In view of the circumstances, the terms of the Agreement,
evidence on record, and submission of the Parties it has been held
that the Respondent is responsible for the delay in acquisition of the
forest land which was required for the proposed Project facilities.
8.33 It is apparent that at some locations the shifting of utilities and
avenue plantation were delayed due to delay in acquisition of
additional ROW where these could be relocated/planted. As the
delay in acquisition of additional land has been found to be
attributable to the Respondent, the delay in shifting of these utilities
and avenue plantation, for which additional land was required, also
stands attributable to the Respondent.
8.34 As per the Concession Agreement Clause 23.1 The Respondent
agreed to provide to the Concessionaire cash support by way of an
outright Grant of Rs. 57.11 Crores⁴.
8.35 Inviting reference to a letter dated 10.09.2007 the Claimant
stated that they requested the Respondent to release the first tranche
of Grant amounting to Rs. 27.16 Crores, which was paid by the
Respondent on 20.02.2008. The Claimant stated that the delay to the
extent of 5 months was attributable to the Respondent only. Inviting
several other correspondences the Claimant stated that there was a
delay of 7 months in releasing the second tranche of 14.90 Crores,
delay of 3 months in releasing the third tranche of 12.33 Crores and
non-payment of the fourth tranche Rs. 3.43 crores till date. The
Respondent contended that the first three tranches were paid well in
time after making sure of compliance of contractual obligations. The
first tranche was delayed, as contended by the Respondent, due to
inadequate documentation furnished by the Claimant. The
Respondent stated that the fourth tranche of Rs. 3.43 Crores was
held back and was adjusted towards the liquidated damages and
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50% share of IC’s remuneration payable by the Claimant. It further
stated that, once damages have been imposed according to the terms
of the contract, due amounts are recoverable from the amounts of
concessionaire available as due to the Claimant. The Respondent
contended that there was nothing illegal or un-contractual for non-
release of the fourth tranche of grant.
8.36 The Scheduled project completion date was 05.12.2008. The
Provisional COD was achieved on 22.09.2011, i.e., after a delay of
1021 days. The Respondent contended that the delay was solely
attributable to the Claimant and therefore the Respondent had
rightly imposed the liquidated damages as well as other damages in
accordance with the provisions of the Concession Agreement.
8.37 As discussed above it has been held that the Respondent was
solely responsible for the delay in acquisition of additional land for
execution of the Project highway. The Respondent’s delay in
acquisition of additional ROW had caused the delay in achieving
PCOD by the Claimant. Therefore, imposition of any damages
against the Claimant on account of the same delay would not be
justifiable.
62. Thus, it can be made out that the focal point of the reasoning
given by the Arbitral Tribunal is that Atlanta had performed its
obligation as per the contractual mechanism i.e. to identify and submit
proposal for additional land and pursue the State Government for land
acquisition.
63. The Arbitral Tribunal relied on Clause 10.1(xi), under which
NHAI had to “ take all necessary steps ” for acquisition and it concluded
that the acquisition delay arose from procedural delays of the
Government of Maharashtra and NHAI for which Atlanta could not be
held responsible.
64. Ms. Gupta has challenged these finding alleging that the arbitral
tribunal ignored the vital evidence indicating Atlanta's own delay
pertaining to AROW.
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65. The law pertaining to ignoring of vital evidence is settled. The
Apex Court in the decision of Ramesh Kumar Jain v. Bharat
12
Aluminium Company Ltd. (BALCO) , has observed the following on
the aspect of ignorance of vital evidence:
“35. Considering the aforesaid precedents, in our considered view,
the said terminology of ‘patent illegality’ indicates more than one
scenario such as the findings of the arbitrator must shock the
judicial conscience or the arbitrator took into account matters he
shouldn’t have, or he must have failed to take into account vital
matters, leading to an unjust result; or the decision is so irrational
that no fair or sensible person would have arrived at it given the
same facts. A classic example for the same is when an award is
based on “no evidence” i.e., arbitrators cannot conjure figures or
facts out of thin air to arrive at his findings. If a crucial finding is
unsupported by any evidence or is a result of ignoring vital evidence
that was placed before the arbitrator, it may be a ground the
warrants interference. However, the said parameter must be applied
with caution by keeping in mind that “no evidence” means truly no
relevant evidence, not scant or weak evidence. If there is some
evidence, even a single witness’s testimony or a set of documents,
on which the arbitrator could rely upon or has relied upon to arrive
at his conclusions, the court cannot regard the conclusion drawn by
the arbitrator as patently illegal merely because that evidence has
less probative value. This thin line is stood crossed only when the
arbitral tribunal’s conclusion cannot be reconciled with any
permissible view of the evidence.”
66. It could be well understood that the apex court held that a Section
34 court cannot interfere merely because it considers the evidence
weak, or capable of supporting a different conclusion. The apex court
has reiterated that interference is justified only when the arbitral
tribunal’s finding cannot be supported by any reasonable or permissible
reading of the evidence on record.
12
2025 INSC 1457
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67. Briefly put, if the tribunal’s view is one that a reasonable person
could reach, the award must stand, even if the court would have reached
another view, but where vital evidence is ignored to such an extent that
the tribunal’s conclusion becomes logically incompatible with the
record, the finding may be treated as perverse or patently illegal. The
apex court observed that the thin line is crossed only when the arbitral
tribunal’s conclusion cannot be reconciled with any permissible view
of the evidence.
68. In view of the above, this court has to be decide whether the thin
line, as understood above, is crossed by the learned Arbitral Tribunal
while concluding that the delay in handing over AROW is attributable
to NHAI.
69. In order to ascertain, whether the thin line has been crossed, let
us examine closely the findings of the arbitral tribunal on this particular
aspect. This court shall examine the evidentiary and the factual route
taken by the arbitral tribunal and try to understand whether such a view
could be adopted.
70. In paras 8.06 and 8.07, the Tribunal noticed from the Independent
Consultant’s and NHAI’s correspondence that shifting of utilities and
religious structures had been delayed because there was no additional
land available to relocate them. It then said that, since NHAI was being
held responsible for acquisition/handing over of that additional land,
the consequential utility-shifting delay and therefore the delay in
project completion would also be attributable to NHAI.
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71. The Tribunal then addressed NHAI’s argument whether
substantial work could be done within the Existing ROW, it considered
NHAI’s letter dated 07.12.2010 saying that approximately 36.571 km
out of 40.441 km could be four-laned within the existing ROW.
However, after examining the contractual scheme, the Tribunal held
that the existing width was not sufficient to accommodate the entire
project facilities. It noted that the contractual formation widths
themselves did not include other requirements such as embankment
slopes, side drains, truck lay-bys, bus bays and plantation. From this, it
was concluded that a considerable quantity of AROW was genuinely
required for completion of the contracted project.
72. In para 8.12, it recorded that it was an “undisputed fact” that the
required additional land was not available to Atlanta in accordance with
Schedule H. NHAI blamed that the delay in acquisition resulted from
Atlanta’s own lapses. Thereafter, the Tribunal examined as to who was
contractually required to do what.
73. Under Schedule B, Clause 8.1, additional land acquisition was
expressly contemplated. The cost of acquisition was to be borne by
NHAI. Atlanta was required to participate proactively by submitting the
relevant land-acquisition proposals and pursuing the matter with the
State Government/revenue authorities, while NHAI was to provide the
necessary administrative support.
74. This was reinforced by Clause 9.1(xxviii) as Atlanta had
obligations concerning optimisation of the existing ROW, identification
of the additional land, preparation/submission of the acquisition
proposal and pursuit of the acquisition process. Importantly, therefore,
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the Tribunal did not proceed on the basis that Atlanta had no role
whatsoever in land acquisition.
75. However, Clause 13.5.2 provided that the Additional ROW was
to be made available to the Concessionaire in accordance with Schedule
H, free from encumbrances, subject to Atlanta having fulfilled its
Clause 9.1(xxviii) obligations.
76. NHAI specifically argued before the tribunal that Atlanta had
prepared defective acquisition proposals and that those defects delayed
acquisition.
77. The Tribunal went on to examine that allegation against the
correspondence and ultimately held that Atlanta had performed its part
of the contractual bargain as it had (i) identified and submitted the
additional land requirement, (ii) submitted the Land Acquisition
proposal in accordance with the relevant acquisition legislation, and
pursued the Government of Maharashtra for early acquisition.
78. Having perused the findings arrived by the learned Arbitral
Tribunal, this court is of the considered view that in lieu of the
contemporaneous record, particularly the letter dated 03.03.2009, it
cannot readily be contended that the finding of the learned Arbitral
Tribunal attributing the delay in acquisition and availability of the
Additional Right of Way (“AROW”) to NHAI was based on no
evidence or was rendered by ignoring vital evidence.
79. The tribunal had factual basis for the case that the Concessionaire
had identified and submitted the requisite land acquisition proposals
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and that the subsequent discrepancies and delays in the statutory
acquisition process, including the variation between the area notified
under Sections 3A and 3D, were attributable to NHAI and/or the
concerned governmental authorities.
80. Thus, the Tribunal had material before it on the basis of which it
could reasonably conclude that Atlanta had discharged its contractual
obligations relating to identification, submission and pursuit of the
acquisition proposal, and that the subsequent delay in making the
AROW available was not attributable to Atlanta.
81. In such circumstances, a challenge to this finding would, to that
extent, tend to involve a reappreciation of competing evidence rather
than establish a case of a finding rendered without evidence or in
disregard of vital evidence.
82. Additionally, even if this court feels that a different view is
possible on the same record, or the evidence is weak, or capable of
supporting a different conclusion, the same would also not attract this
court's interference under the limited scope of interference under
section 34 of the Act. As discussed above, interference is justified only
when the arbitral tribunal’s finding cannot be supported by any
reasonable or permissible reading of the evidence on record.
83. Having gone through the material based on record, this court is
of the view that the findings rendered by the arbitral tribunal was based
on and are plausible from the record placed before it. It is rather difficult
to subscribe to the view that the reasoning adopted by the arbitral
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tribunal was an impossible one or is divorced from the material placed
on record.
84. Thus having affirmed, the tribunal's attribution of delay to NHAI
for providing AROW, this court shall proceed to examine the next plank
of NHAI's submissions.
85. With respect to Claim No.6 , NHAI contended that Atlanta has
not proved any payments being made to the EPC contractor and the loss
was incurred by the EPC contractor and not Atlanta.
86. On the other hand, Atlanta contended that Annexure 6(A)
contained the details of amounts paid to the EPC contractor, and CW-1
also gave evidence regarding those payments. It is further contended
that NHAI cross-examined CW-1 on the EPC claim and his alleged
interest, but did not successfully discredit his evidence.
87. In view of this contrasting stance, the issue which needs attention
is that whether the existence of the underlying loss, if any, was proved
or not.
88. This court is of the view that there was at the very least, some
material showing that the EPC contractor had actually mobilised
resources for the project i.e. Manpower, machinery, site establishment
and senior personnel. The Independent Consultant’s correspondence
was relied by the learned tribunal to support the fact that mobilisation
had taken place and that the contractor was working on the project.
89. Additionally, the project admittedly continued well beyond the
original deadline. In these circumstance, Tribunal had already found
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that this prolongation was attributable to NHAI, and as a consequence
it could possibly infer that resources which had been mobilised for 30
months had to remain deployed for a substantially longer period.
90. It cannot be said that the above finding existed in a vacuum, as
rightly argued, CW-1 gave evidence that the EPC contractor had
incurred such additional costs and that Atlanta had compensated or
borne those costs. That evidence may be criticised but it was still
evidence before the Tribunal. Further, annexure 6(A) gave a
computation of the overhead/profit claim, the quality of such evidence
can be argued but it was nevertheless material placed before the
Tribunal identifying the loss claimed and its basis.
91. Thus, the thin line of “no evidence” doesn't seem to have been
breached or crossed by the arbitral tribunal.
92. Moving to Sub-claim 6(B) related to compensation for the
alleged under-utilisation of plant, machinery and equipment during the
prolonged construction period. Atlanta’s case was that the EPC
contractor had mobilised the necessary machinery for completion of the
project within the original 30-month period, but because completion
was delayed for reasons attributable to NHAI, that machinery had to
remain deployed for much longer without being fully productive,
causing additional financial loss. Atlanta quantified this at about Rs.
25.39 crore on a 10% basis and also relied on the fact that its own claim
was lower than the 15% figure reflected in NHAI’s later technical
circular.
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93. NHAI, on the other hand, disputed both the fact and quantum of
the alleged under-utilisation, contending that Atlanta had not proved
which machinery remained idle or under-utilised, and that Annexure
6(B) was only an internal computation unsupported by any records.
NHAI also maintained that available work fronts existed and therefore
mere continued presence of machinery did not establish NHAI caused
loss.
94. Admittedly, the Tribunal did not accept Atlanta’s 10%
computation as such, but treated prolonged deployment of machinery
as a direct consequence of NHAI’s delay and awarded approximately
Rs.15.23 crore by applying an 8% rate to the Rs. 168 crore total Project
Cost.
95. The question to be determined in this subclaim is whether there
was material before the Tribunal from which it could reasonably be
deciphered and inferred under-utilised deployment attributable to
NHAI.
96. Insofar as sub-Claim No. 6(B) is concerned, there exists a
recognizable evidentiary route before the learned Arbitral Tribunal for
arriving at the conclusion that the Respondent had suffered loss on
account of the prolonged deployment and under-utilisation of plant,
machinery and equipment.
97. The record, as relied upon by the ATLANTA, indicates that the
EPC Contractor had mobilised the requisite plant, machinery,
equipment and manpower for execution of the project within the
stipulated period. ATLANTA had relied upon its contemporaneous
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request seeking release of the EPC Contractor until the entire AROW
was made available, which request was allegedly not accepted by
NHAI.
98. These circumstances, taken cumulatively, constituted material
from which the Tribunal could infer the existence of loss arising from
prolonged and unproductive deployment. The absence of machine
utilisation records, vouchers, invoices or other primary accounting
material may bear upon the weight or sufficiency of the evidence, but
would not, by itself, render the finding one based on “no evidence”.
99. On the aspect of quantification, the law governing the assessment
of damages by an arbitral tribunal is well-settled. In McDermott
International Inc. v. Burn Standard Co. Ltd. (supra) the Supreme
Court held that different formulae may be applied depending on the
unique circumstances of a case. Consequently, choosing the appropriate
method of computation, with due regard to the facts, falls entirely
within the domain of the arbitrator.
13
100. In NHAI v. Patel-KNR (JV ) , this court held that a standard
formula may validly be adopted for quantification provided there is
sufficient empirical material to apply it.
14
101. In Batliboi Environmental Engineers Ltd. v. HPCL , the
Supreme Court interfered with an award for idle machinery where the
amount had been fixed merely on the arbitrator’s ipse dixit , without
disclosing any reason or basis for the figure, it was emphasised that
13
2018 SCC OnLine Del 9089
14
(2024) 2 SCC 375
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complete absence of justification for the method of computation renders
the quantification vulnerable.
102. Thus, it could be well understood that while mathematical
precision is not required and the arbitrator enjoy considerable latitude
in adopting a reasonable methodology, the figure ultimately awarded
must have an intelligible and rational nexus with the evidentiary
material on record and cannot be an unexplained or arbitrary estimate.
103. Applying the same to the facts of the present case, the learned
Arbitral Tribunal did not award lump sum under sub-Claim No. 6(B)
on its whims and fancies.
104. This court is of the view that the Tribunal took note of Annexure
6(B) and the ATLANTA’s pleaded methodology, and thereafter
moderated the ATLANTA’s proposed 10% machinery component to
8% of the Rs. 168 crore Total Project Cost.
105. It then worked out the deployment cost at Rs. 13.44 crore for the
stipulated 30-month period, i.e. Rs. 0.448 crore per month, and
multiplied the same by the 34-month extended period to arrive at a
figure of Rs. 15.232 crore. Thus, unlike a case where the arbitrator
merely selects an amount without any disclosed basis, the impugned
Award can be said to have at the very least some foundational basis. In
the considered view of this court, quantification in the impugned award
is difficult to be characterised as unsupported by an any intelligible
evidentiary route.
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106. Now, coming to the third aspect of claim no.6, Claim No. 6(C)
concerned price escalation during the extended period of the project.
107. Under Claim No. 6(C), the Tribunal awarded Rs. 11.18 crore
towards price escalation during the extended period, as against
Atlanta’s claim of Rs. 15.747 crore.
108. NHAI attacks this finding on the ground that the alleged
escalation was not proved by contemporaneous evidence of actual
increase in the prices of material, POL, labour or other inputs, and that
Annexure 6(C) was again, just like sub-claim A and B, merely a self-
generated computation. According to NHAI, the Tribunal could not
infer escalation merely from the fact that work continued during the
extended period and thereafter devise a proportionate formula based on
the Rs. 168 crore Total Project Cost and the figure of 58.76% work
completed.
109. Atlanta, on the other hand, attacks the Award from an opposite
direction. It contends that once the Tribunal accepted that NHAI was
responsible for the delay and also accepted that escalation had actually
been incurred during the extended period, there was no justification for
reducing the claimed amount of Rs. 15.747 crore to Rs. 11.18 crore by
substituting NHAI’s 58.76% progress figure and proportionately
recalculating the claim.
15
110. In K.N. Sathyapalan (Dead) by LRs. v. State of Kerala , the
Supreme Court held that where one contracting party fails to discharge
its obligations and such failure has a direct bearing on the work to be
15
(2007) 13 SCC 43
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executed by the other party, the arbitrator is competent to compensate
the latter for the additional costs incurred as a consequence thereof. The
Court expressly recognised that escalation in the prices of materials,
labour and transportation during an extended contractual period may be
awarded even in the absence of an escalation clause where the extension
is attributable to the employer.
111. Thus, it is settled that once prolongation is caused by the
employer, and the consequential incidence of escalation are established,
the arbitral tribunal enjoys latitude in quantifying the resulting loss,
provided the methodology adopted is intelligible and founded upon
material available on record.
112. In the present case, the learned Arbitral Tribunal had already
found that the extended period from 05.12.2008 to 22.09.2011 resulted
from NHAI’s failure to make the requisite AROW available and further
accepted that the prices of material, POL and labour had increased
during such extended period, thereby resulting in additional cost.
113. The Tribunal, however, did not mechanically accept Atlanta’s
claim of Rs. 15.747 crore, instead it took NHAI’s own pleaded figure
that only 58.76% of the work stood completed as on the Scheduled
Project Completion Date, and determined that the remaining 41.24% of
the Rs. 168 crore Total Project Cost, i.e. approximately Rs.69.29 crore,
was required to be executed during the extended period, and
proportionately reduced Atlanta’s escalation claim from Rs.15.747
crore, calculated on Rs.97.526 crore of work, to Rs. 11.18 crore by
applying the formula Rs.15.747/Rs.97.526 × Rs.69.29.
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114. Having examined the findings of the arbitral tribunal on the
same, this court on the evaluation of the material relied upon by the
arbitrator is of the considered view that no interference is warranted
under the limited jurisdiction of section 34 of the Act.
115. The learned arbitral tribunal was well within its domain to
calculate the damages and adopt a methodology. The methodology
adopted by the learned Arbitral Tribunal does not seem to be one which
is not reconcilable or plausible with the facts and the record.
116. In view of the aforesaid reasons, the findings of the learned
Arbitral Tribunal pertaining to claim no.6 are upheld in their entirety.
Claim No. 5: loss of toll revenue caused by the delayed achievement
of PCOD.
Findings of the Arbitral Tribunal
117. Claim No. 5 was Atlanta’s claim for loss of toll revenue caused
by the delayed achievement of PCOD. Atlanta’s case was that, had the
project been completed by the Scheduled COD of 05.12.2008, it would
have commenced toll collection much earlier and since PCOD was
achieved only on 22.09.2011, allegedly due to NHAI’s failure to make
the required AROW available, Atlanta lost toll income during that
extended period.
118. The Tribunal ultimately accepted the basic entitlement of
ATLANTA, and assessed the projected lost toll revenue at about Rs.
69.26 crore. However, the tribunal pragmatically reduced it by 50%
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because Atlanta had not separately quantified the operation and
maintenance expenses it would have incurred while earning that toll,
thus, resulting in about Rs. 34.63 crore as principal. Thus, the total
amount along with interest, under Claim No. 5 has been roughly
calculated for an amount of Rs. 61.77 crore. The relevant findings on
this claim are as follows:
“10.05 Claim no. 5 :- ON ACCOUNT OF LOSS OF TOLL
REVENUE FOR THE DELAY IN ACHIEVING COD (I.E., FOR
THE PERIOD FROM STIPULATED COD 05.12.2008 TO
ACTUAL COD 04.10.2011)
The claim pertains to loss of toll revenue by the Claimant due to the
delay in achieving COD for the material default committed by the
Respondent by not making available the additional ROW in
accordance with the Schedule given in the Agreement. The Claimant
stated that it had envisaged, as expressed in the financial document,
an earning of toll revenue totalling to Rs. 70.11 Crores as below:
Net amount of toll revenue
Period from Period to
as claimed (Rs. In Crores)
05.12.2008 31.03.2009 6.73
01.04.2009 31.03.2010 23.41
01.04.2010 31.03.2011 25.66
01.04.2011 03.10.2011 14.31
Total (Rs.
In crores)
70.11
The Respondent denied the claim contending the same as fanciful,
fictitious and anything mentioned in financial documents cannot be
the basis for estimation of loss of toll revenue.
It has been noted that the Respondent had committed material
default under the Contract by delaying availability of the requisite
area of AROW by 6 years or more and thereby causing impossibility
for the Claimant to achieve PCOD before 22.09.2011, which was
stipulated to be achieved on or before 05.12.2008. Therefore the
delay in achieving PCOD was 2 years 9 months 17 days (1021 days).
It has also been noted that although the date of start of toll collection
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is being delayed by 1021 days due the delay in achieving PCOD
which is attributable to the material defaults committed by the
Respondent, the end date of period of Concession i.e., 05.06.2020
remains unaltered in accordance with the terms of the Contract
between the Parties. Therefore the Claimant is being deprived from
collecting the toll revenue during the period 05.12.2008 to
22.09.2011, i.e., 1021 days on account of the delay attributable to
the Respondent. It is also a matter of fact that in the same period of
1021 days the Claimant had saved the cost towards operation &
maintenance of the Proposed Project Highway.
In terms of the Contract if NHAI commits material default, it will
compensate the additional direct cost incurred by the Claimant on
account of the default.
But, the loss of opportunity to earn toll revenue cannot be calculated
like a direct cost incurred by the Claimant. However, the Claimant
having undertaken a BOT Contract had obviously considered to be
compensated towards the cost of execution of the Project, other
direct costs, interests, and expected profit out of the toll revenue
only. In this case due to the material default committed by NHAI by
not handing over the AROW within the stipulated time the Claimant
has been deprived from earning the toll revenue for the initial 2
years 9 months 17 days (1021 days) which could have compensated
part of its cost of execution, other direct costs, interest, and profit.
Under the circumstances we are of the opinion that the Respondent
NHAI is liable to compensate the Claimant on account of loss of
opportunity of earn toll revenue for the said period from 05.12.2008
to 22.09.2011.
It has been noted that there is no agreement between the parties from
where the loss of opportunity to earn the toll revenue could be
calculated. However as admitted by the Respondent, the Financial
documents submitted by the Claimant envisaged certain break-up of
toll revenue. Apart from flatly denying the claim against loss of
opportunity to earn the toll revenue, stating it to be fictitious &
fanciful, NHAI did not say anything of material justifiable to
contradict the claim.
Under the circumstances, it has been held that the Claimant is
entitled to the following compensation-
Toll revenue from 05.12.2008 to 31.03.2009 = Rs. 6.73 Cr.
Toll revenue from 01.04.2010 to 31.03.2011 = Rs. 23.41 Cr.
Toll revenue from 01.04.2010 to 31.03.2010 = Rs. 25.66 Cr.
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Toll revenue from 01.04.2011 to 22.09.2011 = 13.46 Cr.
Total = Rs. 69.26 Cr.
The Claimant did not give any figure about how much he would have
saved towards cost of Operation & Maintenance of the Proposed
Project Highway for the delay in achieving PCOD by 1021 days. In
our view half of the above amount shall meet the ends of justice.
In view of above the claimant will be entitled to a compensation of
Rs. 34.63 Cr. The Claimant will also be entitled to interest @ SBI
PLR plus 2% w.e.f. 22.09.2011 till 15.08.2016 (date of Award). The
interest works out to Rs. 27.14 Cr.
Thus the Claimant is being held entitled to Rs. 34.63 Cr. + Rs. 27.14
Cr. = Rs. 61.77 Cr., on account of loss of opportunity to earn toll
revenue under Claim no. 5.
Rival Submissions
119. On behalf of NHAI, it is submitted that the award under Claim
No. 5 proceeds on conjecture rather than proof. According to NHAI,
having itself noticed that the alleged loss of toll revenue could not be
determined as a direct cost under the contractual framework, the learned
Arbitral Tribunal nevertheless adopted the toll projections contained in
the Respondent’s financing documents and projected Profit and Loss
Statement, which were merely estimates prepared at the stage of
financial closure and had been specifically disputed by NHAI as
fanciful and fictitious.
120. According to NHAI, the Tribunal effectively reversed the burden
of proof by accepting those projections merely because NHAI had not
produced a competing calculation.
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121. It is further contended that the figures relied upon in the Award
contain apparent inconsistencies and unexplained entries, thereby
undermining the reliability of the computation itself.
122. NHAI also assailed the Tribunal’s decision to reduce the
projected revenue by exactly 50% towards unquantified operation and
maintenance expenses, contending that the figure was adopted without
any evidentiary or mathematical basis and merely “ to meet the ends of
justice ”.
123. Lastly, NHAI submits that actual toll collection had commenced
on 04.10.2011, prior to filing of the Statement of Claim, and therefore
actual toll data constituted the best available evidence for testing the
projections.
124. Per contra , on behalf of the Atlanta, it is submitted that the
Tribunal’s quantification under Claim No. 5 was founded upon cogent
documentary and oral evidence and does not warrant interference under
Section 34.
125. According to Atlanta, the project was awarded on a BOT basis,
under which toll revenue constituted the principal means of recovering
the Concessionaire’s investment and meeting its operation and
maintenance expenses, and the projected toll revenues therefore formed
an integral part of the project’s financial viability.
126. According to Atlanta, the projections relied upon by the Tribunal
were not unilateral figures prepared for the arbitration and formed part
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of the Lender’s Appraisal Note and financing documents submitted to
NHAI under Clause 9.5 of the Concession Agreement well before
disputes arose, receipt whereof was duly acknowledged by NHAI.
127. Atlanta contends that such contemporaneous financial
projections constituted relevant and reliable material for assessing loss
of toll revenue. It is further submitted that NHAI did not place any
alternative methodology for revenue computation before the Tribunal
and merely denied the claim, and that CW-1’s evidence regarding the
financing documents and projected toll revenue was not effectively
controverted in cross-examination.
128. According to Atlanta, the Tribunal did not mechanically award
the entire projected revenue of Rs. 69.26 crore, according to them, the
tribunal made a substantial 50% deduction to account for operation and
maintenance expenditure which would otherwise have been incurred,
thereby awarding only the net opportunity loss on a conservative basis.
Analysis
129. Having perused the record, and the rival submissions made
before this court, the limited issue which warrants this court's
consideration is whether the learned arbitral tribunal correctly estimated
the toll revenue.
130. It is already ascertained above that an arbitral tribunal is entitled
to estimate and quantify a proved loss on the basis of relevant
contemporaneous material and a reasonable methodology, and a
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Section 34 Court cannot substitute its own assessment merely because
another computation may appear preferable.
131. Needless to state, interference would arise only where the
quantification lacks any evidentiary foundation, or proceeds on
irrelevant material, ignores vital evidence, or is so arbitrary or irrational
that it ceases to be a permissible assessment of damages.
132. Keeping in mind the above settled principles, the quantification
under Claim No. 5 cannot be said to have been undertaken in the
complete absence of material, since the learned Arbitral Tribunal relied
upon the Lender’s Appraisal Note and the financing documents
containing projected toll revenues, which had been prepared
contemporaneously at the stage of financial closure.
133. According to this court, the Tribunal had relevant material from
which the probable toll revenue during the period of delayed
commercial operation could be estimated, and the mere fact that such
figures were projections rather than actual receipts would not, by itself,
render the quantification impermissible.
134. It cannot be ignored that the Tribunal did not award the entire
projected revenue of approximately Rs. 69.26 crore but reduced the
same by 50% on the footing that Atlanta would necessarily have
incurred operation and maintenance expenses, had the tolling
commenced during the relevant period, thereby awarding
approximately Rs. 34.63 crore as principal.
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135. The limited and relevant enquiry under Section 34 remains
whether the Tribunal’s estimation, viewed in light of the
contemporaneous financial projections and the material before it,
possessed a rational evidentiary nexus. This court exercising Section 34
jurisdiction cannot undertake a fresh calculation merely because
another methodology or a different percentage of deduction may appear
more accurate.
136. Although this court cannot deny that better quality evidence may
have been available i.e. actual toll collection data, having become
available after commencement of tolling.
137. However, the mere availability of better evidence does not by
itself justify interference by a court exercising Section 34 jurisdiction.
The arbitral tribunal is a master of the quality and quantity of evidence.
It is very well settled that as long as the Tribunal’s finding represents a
possible view on the record, the Court cannot reappreciate the record
merely because it considers another source of evidence more reliable.
138. Thus, in the considered view of this court, no ground of
interference is made out on the findings of claim No.5.
Claim No. 2,8 and 10
139. As far as Claims 2,8 and 10 are concerned, since the foundational
finding
attributing the AROW delay to NHAI has been upheld, there is
hardly any scope to interfere with the Tribunal’s consequential findings.
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140. Thus, no interference is warranted in award of Claim no. 2,8 and
10.
INTEREST AWARDED
141. As regards the award of future interest, NHAI contends that out
of the total awarded amount of Rs. 145.214 crore, approximately Rs
63.65 crore already represents pre-award interest, and therefore, the
grant of future interest at 18% per annum on the entire amount
effectively amounts to interest upon interest.
142. It is further contended that the rate of 18% is excessive and
disconnected from prevailing commercial rates.
143. Per contra , Atlanta submits that Section 31(7) of the Arbitration
and Conciliation Act empowers the Arbitral Tribunal to award interest
in the absence of any contractual prohibition and that the unamended
Section 31(7)(b) itself contemplated post-award interest at 18% per
annum. Reliance was placed upon Deepa Bhargava v. Mahesh
Bhargava, (2009) 2 SCC 294, and NHAI v. R.N. Shetty & Company ,
(2015) 220 DLT 19.
Finding of the arbitral tribunal
144. The Arbitral Tribunal, having awarded an aggregate sum of
Rs.145.214 crore, comprising principal and pre-award interest, directed
payment of future interest at 18% per annum on the entire awarded sum
until payment.
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145. Thus, the issue is whether the grant of post-award interest on the
aggregate amount, including the pre-award interest component, and the
rate of 18% disclose any ground for interference under Section 34 of
the Act.
Analysis
146. The law pertaining to the grant of post-award interest on the
aggregate amount, including the pre-award interest component, is well
settled.
16
147. In Hyder Consulting (UK) Ltd. v. Governor, State of Orissa ,
the Supreme Court, while interpreting Section 31(7) of the Arbitration
and Conciliation Act, 1996, held that the expression “ sum directed to
be paid by an arbitral award ” under Section 31(7)(b) includes not
merely the principal amount but also the interest awarded under Section
31(7)(a) for the period preceding the award.
148. The Supreme Court clarified that once such interest is awarded,
it becomes part of the aggregate sum payable under the award, and post-
award interest may consequently be granted on that aggregate amount.
149. Adverting to the facts of the case, the Arbitral Tribunal awarded
an aggregate sum of Rs. 145.214 crore, which included approximately
Rs. 63.65 crore towards pre-award interest and directed payment of
future interest at 18% per annum on the entire awarded amount.
16
(2015) 2 SCC 189
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150. In view of the law laid down in Hyder Consulting(supra) , the
inclusion of the pre-award interest component in the sum carrying post-
award interest cannot be characterised as patently illegal.
151. Further, the unamended Section 31(7)(b) expressly contemplated
post-award interest at 18% per annum, unless the award otherwise
directed. Therefore, subject to the applicability of the unamended
provision and the absence of any relevant contractual restriction, neither
the grant of post-award interest on the aggregate awarded sum nor the
rate of 18% per annum, by itself, furnishes a ground for interference
under Section 34 of the Act.
152. Thus, NHAI's challenge to the interest awarded is hereby
rejected.
Summary & Conclusion
153. As regards the attribution of delay in providing the Additional
Right of Way (AROW), the said finding is based on the Tribunal’s
assessment of the documentary and other evidence before it. It cannot
be said that the finding is based on no evidence or that it is one which
no reasonable person could have arrived at. Accordingly, no ground for
interference under Section 34 of the Arbitration and Conciliation Act,
1996, is made out.
154. As far as Claim No. 6(A), pertaining to overhead expenses and
loss of anticipated profit, is concerned, the finding of the Arbitral
Tribunal does not exist in a vacuum. CW-1 had adduced evidence in
support of the claim, and Annexure 6(A) contained the computation of
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the amount claimed. The quality, and probative value of such evidence
may certainly be questioned. However, it cannot be said that there was
no material whatsoever before the Tribunal. The Arbitral Tribunal is the
final judge of the quality and quantity of evidence, and the distinction
between a finding based on insufficient evidence and one based on no
evidence must be maintained.
155. As regards Claim No. 6(B), concerning the underutilisation of
plant, machinery and equipment, the choice of an appropriate method
for assessing damages falls within the domain of the Arbitral Tribunal.
The Tribunal is entitled to adopt a reasonable formula for
quantification, provided that the methodology bears a rational nexus
with the material placed on record and is not arbitrary or wholly
speculative. In the present case, the Tribunal, adopted its own
methodology for determining the amount payable. The methodology
cannot be characterised as so unreasonable from the record as to warrant
interference under Section 34.
156. Insofar as Claim No. 6(C), relating to price escalation, is
concerned, the Tribunal had already found that the execution of the
project was prolonged on account of delays attributable to NHAI. The
Tribunal independently assessed and applied its own computation and
awarded a reduced amount. The finding thus reflects an application of
mind to the evidence and the circumstances of the case. It cannot be
said that the award under this sub-claim suffers from such patent
illegality as would justify interference under Section 34.
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157. As far as Claim No. 5, pertaining to loss of toll revenue, is
concerned, the Tribunal relied upon the financial projections and other
material placed before it to assess the loss suffered by the Claimant.
Although better or more reliable evidence, including actual toll
collection data, may have been available, the mere availability of such
evidence does not, by itself, constitute a ground for setting aside the
award. The Court, while exercising jurisdiction under Section 34,
cannot substitute its own assessment of the quality of evidence for that
of the Arbitral Tribunal.
158. As regards Claim Nos. 2, 8 and 10, the principal challenge raised
by NHAI proceeds on the foundational contention that the delay in
providing AROW was wrongly attributed to it. Since the finding of the
Arbitral Tribunal attributing such delay to NHAI has already been
upheld, the challenge to these claims, insofar as it is founded upon the
said contention, cannot survive.
159. Accordingly, the challenges raised by NHAI are rejected.
160. The impugned Arbitral Award as a consequence is upheld.
161. The present petitions are disposed of in the aforesaid terms.
OMP (ENF.) (COMM.) 58/2018
162. List on 06.01.2027.
OM PRAKASH SHUKLA, J
NOVEMBER 4, 2026 /gunn/at
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