NATIONAL HIGHWAYS AUTHORITY OF INDIA vs. BBEL-MIPL (JV)

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Judgment reserved on 26 July 2017
st
Judgment delivered on 1 September 2017
+ FAO (OS) 141/2017
NATIONAL HIGHWAYS AUTHORITY OF INDIA ..... Petitioner
Through: Mr.Abhijat,
Dr.Maurya Vijay Chandra,
Mr.Nikhil Parikshit Advs.
versus
BBEL-MIPL (JV) ……. Respondent
Through: Ms.Kiran Suri, Sr. Adv. with
Mr.Hitendra Nath Rath, Adv.
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT
% 01.09.2017
C. HARI SHANKAR, J.
1. This appeal, under clause (c) of Section 37(i) of the Arbitration
& Conciliation Act, 1996 (hereinafter referred to as “the Act”)
rd
impugns order, dated 23 November, 2016, whereby the learned
Single Judge has dismissed OMP 350/2015, filed by the appellant
herein under Section 34 of the Act, per consequence affirming award,
th
dated 27 February, 2015, passed by the learned Arbitral Tribunal
adjudicating the dispute between the appellant and the respondent.
2. The challenge, before the learned Single Judge, as well as
before this Court in appeal therefrom, is limited to the issue of
whether price adjustment, claimed by the respondent and allowed by
FAO(OS) 141/2017 Page 1 of 27



the learned Tribunal, was available to permanent works referred to in
the Bill of Quantities (hereinafter referred to as “BOQ”), in the
contract entered into between the appellant and the respondent, or was
applicable only to variations.
3. The learned Single Judge has noticed the fact that the said issue
was not res integra , having been decided in an earlier dispute between
the appellant and M/s KMC-RK-SD (JV), with respect to the same
work forming the subject matter of the present appeal, as, prior to
awarding the said work to the respondent, the appellant had awarded it
to M/s KMC-RK-SD (JV). The learned Single Judge has observed
that the dispute regarding availability of price adjustment on
permanent works referred to in the BOQ, had arisen between the
appellant and M/s KMC-RK-SD (JV), which had been decided by the
learned Arbitral Tribunal, constituted in that case, in favour of M/s
KMC-RK-SD (JV), holding the claim for price adjustment, on
permanent works under the BOQ items, to be sustainable in law.
4. The said award was challenged, by the appellant, before this
Court, vide OMP No.1043/2013, which was dismissed by the learned
nd
Single Judge vide order dated 22 October, 2013. Appeals filed,
thereagainst, were successively dismissed, by the Division Bench of
st
this Court (vide judgment dated 1 April, 2014 in FAO(OS) 139/2014)
th
and by the Supreme Court (vide order dated 17 November, 2015 in
SLP (C) 20155/2014).
FAO(OS) 141/2017 Page 2 of 27



5. The issue having thus been concluded up to the Supreme Court,
the learned Single Judge dismissed OMP 350/2015, filed by the
appellant, as already noticed hereinabove.
6. In view of the fact that the issue appears to stand concluded, we
had queried of Mr. Abhijat, learned Counsel for the appellant, as to the
error which, in his perception, exists in the impugned order of the
learned Single Judge. The response of Mr.Abhijat reveals that his
nd
grievance is essentially against the earlier judgment, dated 22
December, 2013 of this Court in OMP 1043/2013 ( NHAI v M/s KMC-
st
RK-SD (JV) ), and dated 01 April, 2014 in FAO (OS) 134/2014
( NHAI v M/s KMC-RK-SD (JV) ). The response of Mr. Abhijat was,
essentially, that the learned Single Judge, while deciding OMP
nd
1043/2013 ( NHAI v. M/s KMC-RK-SD (JV) ), vide order dated 22
October, 2013, had erroneously relied on an earlier judgment dated
th
08 March, 2010 in OMP 362/2008 ( NHAI v M/s Unitech-NCC JV ),
which related to a dispute between the appellant and M/s Unitech-
NCC JV (hereinafter referred to as “Unitech”) - which, in the
submission of Mr Abhijat - was distinguishable on facts and in law.
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7. Be it noted, here, that the judgement, dated 08 March 2010, in
NHAI v Unitech , was, in fact, carried in appeal, by the appellant, vide
FAO (OS) 338/2010 ( NHAI v Unitech ), which was dismissed vide
th
order dated 30 August 2010. The appellant carried the matter
upward, to the Supreme Court, vide SLP (C) 201/2011, which was
tagged along with a number of similar SLPs [including SLP (C)
20155/2014 ( NHAI v. M/s KMC-RK-SD (JV) ) supra ]. All the said
FAO(OS) 141/2017 Page 3 of 27



th
SLPs were dismissed by a common order, dated 17 November 2015,
with a caveat, however, that "the question of law raised" was "kept
open to be agitated in an appropriate case". Mr Abhijat,
understandably, places considerable reliance on this caveat, to contend
that the issue still looms large, inviting consideration on merits and
that, therefore, we have, as it were, a tabula rasa before us.
8. Mr. Abhijat would, in other words, seek to assert that, as OMP
1043/2013 ( NHAI v. M/s KMC-RK-SD (JV) ), had been dismissed by
th
erroneously placing reliance on the earlier judgment dated 08 March,
2010 in OMP 362/2008 ( NHAI v. Unitech ) and the question of law
was ultimately left open by the Supreme Court, it was open to this
Court to re-examine the entire issue and assess whether, in fact, price
adjustment would be claimed by the respondent on items of work
referred to in the BOQ, or only on variations.
9. (For ease of allusion, the decisions in NHAI v. Unitech and
NHAI v. M/s KMC-RK-SD (JV) are referred to, hereinafter, as
" Unitech" and "KMC" , respectively.)
10. It would only be fair, to Mr Abhijat and the stand so assiduously
canvassed by him before us, to scan the pronouncements of the
learned Single Judge and the Division Bench in Unitech and KMC ,
and the order of the Supreme Court dismissing the SLPs preferred
thereagainst, to assess their true import and consequence.
(i) The Unitech case:
FAO(OS) 141/2017 Page 4 of 27



th
(a) The judgement, dated 8 March 2010, of the
learned Single Judge, commences with the cautionary
note that " if this petition is accepted, the effect would be
that a perfectly valid, equitable and just interpretation of
the contractual clause which entitles price vaciation and
escalation in the contract spread over for completion in
32 months, is sought to be set at naught by the
petitioner."
(b) The grievance, of the appellant (who was the
petitioner in the said case as well), with the arbitral award
under challenge in that case, was to the decision, therein,
" to amend the obvious error arising in the contract and a
typographical mistake in the same, whereby price
variation and escalation was seemingly to be given only
on deviation in the work, but not on the original quantity
of contracted work as per the BOQ items." The dispute
in Unitech (supra) was, therefore, substantially the same
as that arising in the present case.
(c) The learned Arbitral Tribunal, in Unitech (supra) ,
held thus:
"The price adjustment clause is applicable to all
items of work. The reason is that in long term
contracts the increase in the price and cost of
inputs into the BOQ items during the period of
execution is so uncertain and the Contractors are
not excepted to bear such uncertain extra burden."
(Emphasis supplied)
FAO(OS) 141/2017 Page 5 of 27



This rationale, of the learned Arbitral Tribunal, was held,
by the learned Single Judge, to be "unexceptionable".
(d) The learned Single Judge proceeds to observe that
the dispute arose because of Clause 70.3 in the contract,
which read thus:
“ 70.3 Adjustment Formulae (page 261 of
the Contract):

The adjustment to the Interim Payment
Certificates in respect of changes in cost
and legislation shall be determined from
the following formula:

Pn= A+b Lm/Lo+C Mn/Mo+d Fn/Fo+ e
Bn/Bo
Where,
“pn" is a price adjustment factor to be
applied to the amount for the payment of
the work carried out in the subject month,
determined in accordance with Sub-clause
60.1 (d), where such variations and day
work are not otherwise subject to
adjustment”.

It was the contention, of the appellant in that case, that,
by virtue of the underlined portion of clause 17.3 supra,
escalation could be granted only on items of variation,
and not on the original items/quantity of work agreed
upon. In other words, the appellant contended that
escalation and price variation were permissible only qua
the derivation/extra work done. The same clause has
FAO(OS) 141/2017 Page 6 of 27



been pressed into service, by the appellant, in the present
case as well.

(e) Para 5 of the judgment of the learned Single Judge
in Unitech (supra) notes that the appellant relied upon
clauses 60.1 and 70.3 to contend that price variation and
escalation could not be granted, and that contract had to
be interpreted as a lump sum contract in the original
contracted value only. Paras 24 to 29 of the award, in
the present case, reveals that the appellant chose, before
the ld. Arbitral Tribunal, to rely on the very same clauses
60.1 and 70.3 of the contract.

(f) Para 7 of the judgment of the learned Single Judge
in Unitech (supra) proceeds to record the finding, of the
learned Arbitral Tribunal, to the effect that there was an
error in clause 70.3 of the contract, and that escalation
could not be limited to variation items preferred to in
clause 60.1 (d). In the present case, too, paras 61, 64 and
65 of the award of the learned Arbitral Tribunal hold that
clause 70.3 could not be interpreted in such a manner as
would limit the contractor‟s right, to the escalation, to
variations alone.

(g) It is important to note, in this context, the fact that,
in arriving at the said conclusion, the learned Arbitral
FAO(OS) 141/2017 Page 7 of 27



Tribunal significantly relied, in paras 61 and 62 of its
award, on the earlier decisions of this Court in KMC
(supra) and Unitech (supra) . The said para merits
reproduction, in extenso , thus:
“61. The reading of Sub-Clause-70.3 and
the definition of Pn, as dealt with earlier,
also has an inbuilt lacuna that “determined
in accordance with Sub-Clause-60.1(d),
where such variations and day work are not
otherwise subject to adjustment” is patently
wrong and inapplicable because day work is
included in Sub-Clause-60.1 (e). In the case
of National Highways Authority of India
Vs. M/s. KMC-RK-SD (JV) OMMP
No.1043/2013 decided by the Hon’ble High
Court of Delhi in an identical contract has
upheld the contention of the Claimant, that it
is necessary to interpret the Clause -70.3. In
para 7 of the judgment, the court held “It is
pertinent to note that this is only one of the
many other reasons cited by the arbitral
tribunal, as why, it chose the interpretive
route as against literal application of
Clause-70.3 of COPA”. Therefore we
consider it as appropriate to interpret the
Clause-70.3 in such a manner as to
harmonize the Contract and remove the
ambiguity.

62. In National Highway Authority of
India Vs. Unitech-NCC JV OMP
th
No.362/2008 decided on 8 March 2010
by a single judge of the Delhi High
Court, the issue was absolutely identical
as regards the clauses of the Contract in
the present case before us and in appeal
FAO(OS) 141/2017 Page 8 of 27



by the NHAI against an award in favour
of the Respondents therein, the High
Court upheld that the Sub-Clause-70.3 of
the Contract is just and appropriate to
have been interpreted by the Arbitral
Tribunal as entitling the Contractor for
price adjustment on the BOQ Items and
finally dismissed the appeal of the NHAI.
It would be of use to reproduce the
observations of the single judge under
Para-9 of the judgment “Can it be
contended, that in a Contract which is
valued approximately of Rs.146 Cr and
performance of which is over 32 months
there ought not to be price
variation/escalation clause? If the
Contract is so interpreted to deny the
price, variation/escalation, then, in fact
the same would mean that the Contractor
would, in fact, pay out of his pocket
because there would be little or no profit
margin once there is an increase in the
inputs of Contract such as labour,
material, fuel & Bitumen. Possibly the
Contractor may even end up paying out of
his pocket. In my opinion, the
interpretation which is sought to be
placed upon Clause-70.3 as per the
original form thereof containing a typing
mistake therein would lead to absurdities
and which interpretation therefore has
been rightly eschewed by the Arbitration
Tribunal”.

(h) Having thus analysed the factual, and legal
panorama which stood unfolded before him, the learned
Single Judge proceeded to declare the award, of the
FAO(OS) 141/2017 Page 9 of 27



learned Arbitral Tribunal, to be impervious to
interference, in the following terms:
“For an award to be against the contractual
provisions, the Award has to be violative of
an obviously meaning clause of the Contract
but which has been perversely preached by
an absurd interpretation by the Arbitrators.
If there are various clauses, and a
harmonious construction of the clauses read
with the intendment of the Contract, is done
by the Engineer and so adopted by the
Arbitrators, then, it cannot be said that the
Award in any manner violates the
contractual provisions. Also, further I do not
find any perversity whatsoever in the Award.
In fact, if there is perversity, it is in the
arguments as raised by the petitioner
(NHAI) because what is sought to be argued
is not only perverse but would also lead to
absurd conclusions”.

(i) It was in these circumstances that the learned
Single Judge, in Unitech (supra) , concurred with the
decision of the learned Arbitral Tribunal, in that case.

(j) FAO (OS) 338/2010, preferred by the appellant
against the judgment of the learned Single Judge in
Unitech (supra) was dismissed, by the Division Bench of
this court, in the following terms:
“Having articulated this appreciation of
law, it would be illogical for us to enter into
a detailed dialectic upholding the views of
the Arbitral Tribunal with regard to the
FAO(OS) 141/2017 Page 10 of 27



interpretation of the contract vis-à-vis the
claim for escalation on the BoQ contained
in the contract. We uphold the detailed
reasoning of the learned Single Judge in the
impugned Order which, in turn, had
appreciated the conclusion of the Arbitral
Tribunal. No perversity has been detected by
the learned Single Judge as also by us. We
affirm that the contract envisages payment
of escalation on BoQ spelt out in the
contract as well as on deviations on BOQ
and extra work subsequently placed by the
Appellants on the Respondents. For these
reasons, the Appeal is devoid of merit and is
dismissed along with pending application
with additional costs of Rs.30,000/-”
(Emphasis supplied)


(k) We would be failing in our duty if we omitted to
note the fact that, in Unitech (supra) , the Engineer in
charge of the work had supported the claim of the
contractor, opining that price escalation was available on
all items including BOQ items whereas in the present
case, the Engineer has rejected the claim of the
respondent. Mr.Abhijat, predictably, drew our attention to
this distinction. We are, however, not convinced that the
applicability of the judgment in Unitech (supra) can
depend on whether the Engineer supported the case of the
contractor, or not, as the right of the contractor, to
payment, necessarily requires to be determined on the
basis of the terms of the contact, and cannot be made
FAO(OS) 141/2017 Page 11 of 27



dependent solely on the opinion of the Engineer. The
distinction, therefore, though superficially apparent, is
effectively reduced to a distinction without a difference.
(ii) The KMC Case:
(a) Before venturing to discuss the orders passed by
the learned Single Judge and the Division Bench of this
Court in KMC (supra) , notice deserves to be taken, at the
outset, of a candid admission, in sub-para (b) of para 4 of
the present appeal filed by the appellant, to the effect that
KMC (supra) dealt with the same contract which is
subject matter of the present proceedings . The said sub-
para (b) of para 4 of the present appeal reads as under:-
“On 11.06.2013, an arbitral award was
passed in arbitration proceedings between
NHAI and KMC-RK-SD (JV) in respect of
claims by the contractor for price
adjustment on Permanent Works in the Bill
of Quantity. The aforesaid arbitration
proceedings related to the same contract
package, for which the respondents bid for
after the termination of the contract of the
previous contractor (KMC-RK-SD (JV). In
the said arbitration proceedings between
NHAI and KMC-RK-SD (JV) the stand of
NHAI was that that price adjustment was
not applicable to Permanent Works. This
stand was rejected by the arbitral tribunal.
It is pertinent to mention that in this case
and the leading case in the matter viz. NHAI
Vs. UNITECH-NCC, one of the main
contentions of the parties was that the NHAI
circular no.49/2006 clarifying the price
FAO(OS) 141/2017 Page 12 of 27



adjustment policy on permanent work was
an attempt by NHAI to alter the contract
unilaterally and without any basis in law. It
is also pertinent to mention at this juncture
that the case between the parties in this
appeal, this issue does not arise at all, as the
NHAI policy circular was well known at the
time of execution of contract between NHAI
and the Respondents herein.” (Emphasis
supplied)

(b) The dispute, in KMC (supra) , stands encapsulated
nd
in para 2 of the judgment dated 22 October, 2013 of the
learned Single Judge in that case, thus:
“The dispute in the present petition is
admittedly related to one singular issue. The
issue being: whether the respondent is
entitled to payment towards price
adjustment on all items of work referred to
in the Bill of Quantities (in short BOQ). In
other words, was the respondent rightly
awarded price adjustment in respect of
value of permanent works by the arbitral
tribunal. It is the respondent’s stand that
the price adjustment in terms of clause 70.3
of the Conditions of Particular Application
(in short COPA) would apply only to
“variations” and “day works” . (Emphasis
supplied)

(c) The finding of the learned Arbitral Tribunal, in
KMC (supra) , stands recorded, thus, in para 2.1 of the
judgement:
FAO(OS) 141/2017 Page 13 of 27



"The arbitral tribunal, after a detailed
analysis of the material placed on record
and perusal of the terms and conditions of
the contract obtaining between the parties,
came to the conclusion that when clause
70.3 of the COPA is read along with
clauses of the tender and bid data
documents, and other relevant clauses of
the COPA, the price adjustment is
applicable to the entire work comprising of
all BOQ items, including variations and
day work except where such variations and
day work are otherwise not subject to price
assessment." (Emphasis supplied)

(d) At the pre-bid meeting, in KMC (supra) , the
contractor raised a query as to whether price escalation
would be applicable to all BOQ items. The appellant
responded, to the query, in the following terms:
"The Price Adjustment provision as stipulated
under clause 70 of the Contract (COPA) shall
remain unchanged. No change in Contract clause
is acceptable ..."

In the present case, too, the respondent queried, at the
pre-bid meeting, regarding the availability of price
variation on all items, to which the reply, of the
appellant, was " as per contract ". Clearly, the
clarification, by the appellant, on the issue in
controversy, in the pre-bid meeting, in the present case,
was as laconic as in the case of KMC (supra) . On the
face of it, we find the reliance, of the appellant, on this
FAO(OS) 141/2017 Page 14 of 27



"clarification", purportedly provided by it, to the
respondent, at the pre-bid meeting, inexplicable.

(e) As in the present case, in KMC (supra) , too, the
claim for price escalation on all items, including BOQ
th
works, was submitted, by the contractor, only with the 6
Interim Payment Certificate (IPC). This aspect also
assumes significance, as one of the submissions
advanced by the appellant, to defeat the claim of the
respondent, in the present case, is the delay, on the part
of the latter, in claiming price variation.

(f) The Engineer, in this case, rejected the claim of the
contractor. Here, too, the situation obtaining in KMC
(supra) parallelises that obtaining in the present case.

(h) The learned Arbitral Tribunal held the contractor,
i.e. KMC, entitled to price variation on all items,
including BOQ items of work, following the judement, of
the learned Single Judge of this Court, in Unitech
(supra) .

(i) The judgement of the learned Single Judge, after
noting the above facts, proceeds, in paras 6 and 7 thereof,
to record as under:
FAO(OS) 141/2017 Page 15 of 27



"I am of the view that principally the matter
in issue before the arbitral tribunal was one
which related to the interpretation of the
provisions of the contract having regard to
the background circumstances, the tender
documents and the provisions of the
contract. This exercise, in the instant case,
had to be carried out by the arbitral tribunal
given the ambiguity in the terms and
conditions of the contract obtaining
between the parties, in particular clause
70.3 of the COPA. The arbitral tribunal
inter alia took into account clause 14.4 of
the ITB and clause 14.4 of the bidding data
and held that the price adjustment was
available with regard to all items of the
BOQ and not restricted to variations and
day work. With the help of other
provisions of the COPA, it concluded that
price adjustement under clause 70.3 of the
COPA was not restricted to variations and
day work, but took into account all items of
the BOQ. The reasoning given by the
arbitral tribunal is contained in paragraphs
6.3 to 6.19 of the impugned award. To
avoid prolixity, I propose to extract only the
conclusion of the arbitral tribunal which
reads as follows:

'...6.19 We, the Arbitrators
unanimously hold on a conjoint
reading of ITB Clause 14.4 read with
corresponding provision in Bid Data
and 31.4 of ITB, Sub-clauses 70.1,
70.2, 70.5, 70.7, 60.1 and 60.2 of
COPA, and other relevant provisions
in Conditions of Contract that all
these clauses/provisions are
FAO(OS) 141/2017 Page 16 of 27



consistent and provide that price
adjustment is payable on the entire
work comprising of all BOQ items
including Variations and Day Work
except where such Variations and
Day work are otherwise not subject
to adjustment. All these Sub-Clauses
corroborate one another and are in
complete harmony except for Sub-
Clause 70.3 for its restrictive
provision which has ambiguity and
errors as explained in foregoing
paras. A mere inconsistent entry in
sub-clause 70.3 cannot override and
ignore other qualifying clauses in the
contract. On the other hand, this
appears to be against the genuine
intention of the Employer of
allowing price adjustment on
permanent works (BOQ) in all
contracts as a policy ... ' "
(Emphasis supplied)

(j) Having recorded as above, the learned Single
Judge, in KMC (supra) , proceeded to hold, in para 7 of
his judgement, thus:
"7. There was decidedly an ambiguity in
clause 70.3 of the COPA , in particular, that
which related to the application of the price
adjustment factor qua the amount
crystallized for the payment of work carried
out in the subject month which, in terms of
the said clause had to be determined, if read
literally, in accordance with, sub-clause
60.1 (d). However, as correctly reasoned by
the arbitral tribunal, "day work" was
required to be valued separately under
FAO(OS) 141/2017 Page 17 of 27



clause 60.1 (e) of COPA and not under
sub-clause 60.1 (d). In these
circumstances, in my view, there arose
definitely a case for interpretation. It is
pertinent to note that this is only one of the
many other reasons cited by the arbitral
tribunal, as why, it chose the interpretative
route as against literal application of the
provisions of clause 70.3 of the COPA."
(Emphasis supplied)


(k) The learned Single Judge proceeded, thereafter, to
hold that intepretation of the contractual provisions fell
within the province of the learned Arbitral Tribunal, and
that any error, even if existing, was not amenable to
correction, by the court, unless it was apparent on the
face of the record. This legal position is trite, and
warrants no elucidation.

(l) Significantly, thereafter, paras 9 to 11 of the
judgement of the learned Single Judge, in KMC (supra) ,
proceed to record thus:
"9. Apart from the above, in respect of
the provisions of the very same contract, a
Single Judge of this court in the case of
National Highways Authority of India vs.
Unitech-NCC Joint Venture has repelled
this very contention advanced by the
petitioner. Pertinently, the matter was
carried in appeal to the Division Bench.
The Division Bench vide judgment dated
30.08.2010 passed in FAO (OS) No.
FAO(OS) 141/2017 Page 18 of 27



338/2010 has sustained the view taken by
the learned Single Judge.

10. The submission of Mr Kapur that the
present case on facts was distinguishable
from facts which arose in the case referred
to above, is according to me untenable, for
the following reasons:

(i) First, the resopondent had
been awarded contract to execute the
balance works in respect of a
rescinded contract qua which this
court has already rendered its ruling.

(ii) Second, the response to the
query raised by the respondent,
simply conveyed that the terms and
conditions of the contract qua price
adjustment would remain
unchanged. Since an ambiguity
prevailed, according to the
respondent, in terms of clause 5.2.1
of the contract, it was entitled to seek
a clarification which it did by taking
recourse to the route provided under
the contract.

11. The other contention of Mr Kapur
that the respondent did not raise an issue
with regard to price adjustment till it filed
th
the sixth (6 ) IPC, is also misconceived, in
my opinion, for the reason that the
respondent was entitled, under the terms of
the contract, to raise the issue with the
engineer, which it did, and thereafter, if
necessary, escalatye the issue with the DRB
and, if not satisfied, by invoking the
FAO(OS) 141/2017 Page 19 of 27



arbitration agreement obtaining between
the parties. As a matter of fact, as noted by
the arbitral tribunal as well, the respondent
was entitled to, as a matter of fact, wait till
the conclusion of the contract to raise the
issue of price adjustment vis-a-vis all items
of the BOQ."
(Emphasis supplied)

(m) The Division Bench of this Court, when
approached by the appellant by way of FAO (OS)
139/2014, disposed of the appeal by the following brief
order:
"This appeal is directed against the decision
of a learned single judge delivered on
22.10.2013 in OMP 1043/2013. The
appellant had filed the said OMP under
Section 34 of the Arbitration and
Conciliation Act, 1996 challenging the
award passed by a three Member Arbitral
Tribunal on 11.06.2013. The learned single
Judge while rejecting the petition had
noted in paragraph 9 that the very
contentions which were raised by the
learned counsel for the appellant before
him had been considered in earlier casers
including the case of National Highways
Authority of India vs Unitech-NCC Joint
Venture and those contentions had been
rejected by the learned Single Judge. The
matter went in appeal to the Division
Bench which by a decision dated
30.08.2010 in FAO (OS) No. 338/2010
reported in 178 (2011) DLT 496 (DB)
upheld the view taken by the learned Single
Judge. There are several other decisions of
FAO(OS) 141/2017 Page 20 of 27



this court also interpreting clause 70.3 of
Conditions of Particular Application
(COPA). All those decisions have
interpreted the said clause in a manner
contrary to what is being urged by the
learned counsel for the appellant.
Following those said decisions and in
particular the decision in the case of
Unitech-NCC Joint Venture (supra), the
present appeal is also dismissed."

(Emphasis supplied)

(iii) The order of the Supreme Court:

Special Leave Petitions filed against the orders of the
Division Bench of this Court in Unitech (supra) and
KMC (supra) , were clubbed with several other SLPs
apparently involving similar issues, and disposed of, by
th
the Supreme Court, vide a common order, dated 17
November 2015, which read as under:
" Dismissed.
The amount that is deposited by the
petitioner before the Registry of this Court
shall be returned to the petitioner along
with accrued interest, if any, for being
disbursed to the respondents-herein at the
earliest.

The balance amount, if any, shall be paid by
the petitioner within three months‟ time from
today.

However, the question of law is kept open
to be agitated in an appropriate case.
FAO(OS) 141/2017 Page 21 of 27




The cost imposed by the High Court is also
deleted.

Pending application(s), if any, is/are also
disposed of.”
(Emphasis supplied)


11. The judgements in KMC (supra) and Unitech (supra) , when
read conjunctively, and vis-a-vis the present case, make it apparent
that it was the same work which the appellant had, successively,
contracted to Unitech, KMC and, later, the present respondent. We
may regard this as indisputable, as, on facts at least, the decisions in
KMC (supra) and Unitech (supra) have clearly attained finality -
irrespective of the import of the “caveat” entered, by the Supreme
th
Court, in its order dated 17 November 2015, regarding the “question
of law”, on which Mr Abhijat understandably pegs his case.

12. In view of this factual position, if we were to accept the stand of
the appellant, or even accord it serious consideration on merits, we
would be going against the grain of the decisions in KMC (supra) and
Unitech (supra) , which deal with the self-same contract, and the self-
same dispute, with which we are concerned, albeit with earlier
contractors. Such an approach would render any decision, by us,
inconsistent with the decisions in KMC (supra) and Unitech (supra) .
What Mr Abhijat would have us hold, therefore, would be that, in
respect of a single contract, successively awarded to three contractors,
we should hold the third contractor to be entitled to price adjustment,
FAO(OS) 141/2017 Page 22 of 27



or escalation, only on items not mentioned in the BOQ, i.e., on
variations, even when it has been held, by co-equal benches, that the
two earlier contractors were entitled to price adjustment on all works,
including BOQ items, and not merely on variations. We are,
therefore, being exhorted to adopt a view clearly inconsistent with the
views taken by earlier Division Benches, of this Court, in KMC
(supra) and Unitech (supra) .

13. Is this advisable?

14. One of the cardinal principles governing judicial thought, and
decision making, is consistency. Often, it has been held that the
greatest virtue of the ideal adjudicator is not correctness, but
consistency. In a little known decision, K.S. Radhakrishnan, J. (as
His Lordship then was), while sitting singly in the Kerala High Court,
expressed this thought unequivocally, albeit a trifle radically, in the
following words, in Joy v Regional Transport Authority, 1999 (105)
ELT 275 (Ker) :

FAO(OS) 141/2017 Page 23 of 27

(Emphasis supplied)

Needless to say, it would be folly to read the last sentence, in the
above extract, in isolation; however, the principle which
Radhakrishnan, J., has so emphatically - and, in fact, empathetically -
reiterated, is laudable, and is the essence behind the hallowed doctrine
of stare decisis ( stare decisis et non quieta moevre ; meaning, meaning
“ to stand by and adhere to decisions and not disturb what is settled”) .

15. Referring to the well-known precedent in Sub-Inspector
Rooplal v Lt. Governor, (2001) 1 SCC 644 , the Supreme Court
underscored the need for consistency in judicial pronouncements, in
Govt. of A.P. v A.P. Jaiswal, (2001) 1 SCC 748 , in the following
words:
“ Consistency is the cornerstone of the administration of
justice. It is consistency which creates confidence in the
system and this consistency can never be achieved
without respect to the rule of finality. It is with a view to
achieve consistency in judicial pronouncements, the
courts have evolved the rule of precedents, principle of
stare decisis etc. These rules and principles are based
on public policy and if these are not followed by courts
then there will be chaos in the administration of justice,
which we see in plenty in this case. This Court in the
case of Sub-Inspector Rooplal v. Lt. Governor, (2000) 1
SCC held thus: (SCC p. 654, para 12)
„ At the outset, we must express our serious
dissatisfaction in regard to the manner in which a
FAO(OS) 141/2017 Page 24 of 27

this to say, in Manganese Ore (India) Ltd v Regional
Assistant Commissioner of Sales Tax, (1976) 4 SCC 124 :
FAO(OS) 141/2017 Page 25 of 27

(Emphasis supplied)

17. We, too, have, with us, the advantage of recent
pronouncements, of this Court, on identical disputes, regarding the
very contract with which we are concerned, albeit vis-a-vis
predecessor-contractors-in-interest. The said decisions are recent in
point of time. They, therefore, constitute “very valuable precedent”,
and we are unable to glean any “extraordinary or special reasons”
which should persuade us to depart therefrom.

18. Any such departure, moreover, would also result in the citizen-
contractor becoming totally unsure of the legal position. It would
result in the litigant harbouring the perfectly legitimate apprehension
that, were he to approach this Court with a similar dispute, the
FAO(OS) 141/2017 Page 26 of 27



outcome would be totally unpredictable. This is destructive of the
very fabric of law, and has to be avoided at all costs.
19. Not much, in our view, deserves to be made of the reliance, of
th
Mr Abhijat, on the caveat, in the order dated 17 November 2015, of
the Supreme Court, in the SLPs emanating from KMC (supra) and
Unitech (supra) . The Supreme Court, in unambiguous terms, not
only dismissed all the SLPs before it; it also directed payment, to the
contractors, of the amounts deposited by the appellant in court.
Clearly, therefore, in the facts obtaining before it - which, as
repeatedly emphasised hereinbefore, were identical to the facts
obtaining in the present case - the Supreme Court felt the decision of
this Court to be unexceptionable. We are in the realm of similar facts,
and, therefore, have to adhere to the same view.
20. Respectfully following the decisions of this Court in Unitech
(supra) and KMC (supra) , we, therefore, dismiss this appeal.
21. No costs.

C.HARI SHANKAR, J.
ACTING CHIEF JUSTICE
September 01, 2017

neelam

FAO(OS) 141/2017 Page 27 of 27